>> the consumer is being very purposeful in their spending. >> consumers have not been shopping as much. >> it is a sensitive period. >> if you look at the retailers who are winning in this environment, it is those who are truly giving back value to the consumer. >> where there is innovation, consumers are going. announcer: this is "bloomberg surveillance" with jonathan ferro, annmarie hordern and lisa abramowicz. >> from new york city, good morning. this is "bloomberg surveillance."

if you are wondering why your hosts look a lot better, that is because we do. jonathan ferro, annmarie hordern and lisa abramowicz are taking the day off coming off of the holiday, yesterday, thanksgiving day here in the u.s. katie greifeld, i hope you are ready for today because we have a lot to talk about. kaite: it is hard to be president for thanksgiving dinner. >> i did not even go to bed. it was like waiting for santa claus. what other treats do we have? katie: a great month for equities. we will see how the rest of the year goes. >> 5% gain on the s&p 500. you would not know it given some of the set of his of your hearing in the market.

katie: shaping up to be the second best month of the year but we will see how today goes. it is a shortened session but we are one tense of the way away from having the best year. >> 6:00 a.m. in new york. 12:00 noon right now in berlin. asian markets have closed. chinese markets are higher on the day. the weakness we saw in japan and north korea. u.s. holding their own, slightly elevated on the day. 0.3% on the nasdaq and the s&p. russell 2000 looks like it might be a charge. a big part of that is the cyclical rotation we have been seeing ever since the u.s. election. katie: it is interesting. there was some talk about whether we would see the trump trade stall out. it seems like it is coming back. you take a look at the currency market and the dollar having its worst week in quite a few weeks.

it is interesting, these different pockets of the markets and what are the drivers. you cannot paint with a broad brush stroke. >> the big drivers are global drivers as well. heading into the final trading month of the year, we will catch up a little bit later with christian nolting from deutsche bank. to get his outlook. . nora wittstruck will talk about the financial impact of the incoming trump administration. nadia martin wiggen will talk about the opec-plus meeting that is delayed. what will you do with the next three days? katie: it is a bummer. i had it on my calendar. i had my alarm set up. we will have to wait longer to see what their production plans are. romaine: someone who did have her alarm set this morning is vonnie quinn. she is outside of macy's flagship store in manhattan.

we are keeping an eye on the kickoff to the black friday season. people are actually upside in 30 degree weather on november 29? vonnie: it is a beautiful, crisp morning and yes, they were. macy's opened two minutes ago. the line has already gone in. it is not like black friday's past. there were those customers who wanted those extra doorbuster deals. of course, the gift cards that macy's gives out to the first 100 customers at the day. do not let this fool you. we will see a record number of customers today across america. 131.7 million according to the national retail federation. two thirds of those will be in stores. it is fascinating. the cadence of black friday has been changing over the years. you don't really need to go into the store on black friday or any

day this weekend. all of these days are mostly available online. those retailers like target, walmart, they are competing for those dollars very strongly this season. there are five fewer days in the holiday shopping calendar this year. each of these retailers wants those boosts -- boots in the door. on a 35 degree morning on 30 5th street, they got some of them. katie: this is a shortened holiday season. i have been complaining about it. i want to put up my tree but i have to wait until thanksgiving. talk to us about what this means for macy's specifically. macy's came out with early results and the news that one of their employees hid $154 million of expenses. this seems like a company who needs good news right now. mark malek -- vonnie: that is true.

we are expected full results for macy's. the stock is down 20% this year. analysts are still positive on macy's. it is a plan to return to sustainable growth next year that is on track and the new ceo is doing that job. for example, it is concentrating more on the marketplace, bloomingdale outlets. it is extending the refresh of namesake stores. it is going ahead with closing those 150 stores. there is a lot more in the works than just the deliveries scandal . 130 plus million dollars was part of a $4 billion expense for macy's. investors want to know that everyone in management is in control so that they know what is going on. at all times. . the dollars that are being expended and invested in the company.

romaine: we will be interested to see the results of this investigation and the results from the most recent quarter. we will check in with vonnie quinn later to see what she will buy. just about 26 shopping days until christmas. a quick clarification, nothing is stopping you from putting your christmas tree up. katie: there is one huge obstacle. my husband, who is watching right now. he is really militant. you have to wait until after thanksgiving. i disagree. romaine: i am with you. christmas starts when you want it to start. a lot of people are already looking into 2025 dividing outlooks for what investors should be watching. joining us now christian nolting , global chief investment officer at deutsche bank. we talk about this idea of a rally in 2024 that caught a lot of people by surprise not just in the u.s. but globally. a lot of questions about how

sustainable that is. what do you say? christian: if i look at the beginning of 24 there were so many risks and probably no one expected double-edged growth or even in the 20's for the s&p 500. we have the same ideas and thoughts for 2025. you cannot take out geopolitical risks. today we were talking about ukraine for example. if i look at the earnings of the company, the valuation of the market, we think there is somewhere to go so we do not forecast another 20% plus year. if so, i have nothing against this but we are forecasting the s&p to end in upside. romaine: there is one way to look at this market through the fundamental lens. you mentioned geopolitics. this will be a wildcard for next year and beyond with some of the russians we are seeing in china with regard to tariffs and north

america with regard to tariffs. i do not know what is going on with european politics. how should global investors view that? christian: from that perspective, you cannot rule that out. you need to think what kind of trends that comprise, where does it start or where do we go from there. what we are seeing in the u.s., the u.k. and china, there is a high level of fiscal spending. given all of this, that should continue into 2025 as well. that is one thing. if you look through the graphics , that is all a little bit inflationary plus tariffs are somehow inflationary. from that perspective, we take this into account. that might not be negative for the equities side. geopolitics could have higher volatility. there could be some impact on the bond side.

if you look at the 10 year treasuries, we could imagine them a bit higher, maybe 30 basis points. we would not be surprised to see that in the time horizon. katie: i find it interesting the disconnect from the equity market and what you are seeing in the bond market. it seems like the long end of the yield curve is not talking to the s&p 500 and vice versa. 30 basis points, it seems that possibly the s&p will rally past that. at what point do yields rise to a level where even the equity bulls need to pay attention? christian: this year, the more we were closer to 5% on the 10 year, the more nervous the equity market god. -- got. if you see real yields rising, that would even at lower levels impact the equity market but there would be some correlation.

in 24, we had a drop in the beginning of august. then correlations between equities and bonds did work and that was different from 2022 for appeared to look at the metrics and correlations, even 2025, that could make a lot of sense. katie: i want to talk more about geopolitics because one of the persistent questions out there, how do you hedge geopolitics? if you look at risk assets, the equity market, you get a 1% to 2% drawdown. oil cannot seem to hold a bid sustainably. how do you think about geopolitics and do you even bother hedging at this point? christian: i can tell you one thing. the big thing in the market is what we call the unknown unknowns. if an unknown is known in geopolitics, that is not news but the outcome is unknown at this point in time. what we try to do is to say what is the impact of a trade event

in the market, something that really brings the market down and you can hedge with liquid puts on ndc's that is what we do successfully. you do not need to hedge the old portfolio. you need to be able to find out what risk you need to take. you can hedge something much more cheaper appeared we do this with liquid assets. romaine: do we have any concern that we have not seen more downside hedging in this market? christian: one reason why volatility and equities is so low is a lot of people do hedging. that is nothing new. you need to be consistent with it because if you say i just hedge the first three months and after something happens, so you need to say what do i want to hedge, may be only the tail end of the portfolio. romaine: christian nolting at

deutsche bank kicking us off on "bloomberg surveillance." black friday, you probably have not done any christmas shopping. i have done most of my shopping already. katie: that does not surprise me. you seem like someone who really gets ahead of things. romaine: i try to. i got a lot of solicitations in my email for discount. katie: so you get those emails and you look at them? romaine: i do. i think i bought a bridge in thailand. i have to wire $2000 before the end of the show. we will talk about the trump trade and those trump policies. nora wittstruck is coming up in just a second. you are watching "bloomberg surveillance."

romaine: 26 days until christmas. less than 50 days until the inauguration of a new president in the united states. mexico is issuing a warning to president elect trump that his threats of 25% tariffs would cost the u.s. economy 400,000 jobs and increase the prices for american consumers. trump using the threat to combat the flow of drugs and undocumented migrants across the border. his transition team said this. joining us is nora wittstruck, chief analyst at s&p global ratings. . . nice to see you. i hope you had a good thanksgiving. nora: thank you for having me. romaine: the markets will have to prepare for volatility when

it comes to the political space. the president has not even been inaugurated. the president in mexico is still new and they are already going back at it in a similar fashion that we saw in 2017. nora: our economists released that forecast and did indicate very preliminary although we do not know what the president elect really going to do with tariffs but they are also looking at the fact that the tariff rate could go up to 25% which is up from where it currently is. we are watching that. they are watching that. romaine: is there a way to quantify the impact? sheinbaum throws out the numbers but it is hard to know what that impact would be. everyone can look at 25% versus what it is now and you look at autos and certain commodities and other goods and services and

you would assume those prices would go up dramatically. nora: that could be absolutely true. i am not an economist. i am not really sure. we are still watching how a lot of the details of tariffs play out. at the end of the day, you would think that higher tariffs could definitely weekend -- weaken gdp growth. katie: part of the conversation is immigration. trump has made it very clear that he wants to halt the flow of migrants into the u.s.. he has said that there are concerns that there could be mass deportation. talk us through the potential impacts on the inflationary landscape. nora: our economists indicate that labor supply particularly from immigration was up about 1.6% on average over the last 12 years. as we can all remember, it may be some of our restaurants were not operating at full staff right after the pandemic or

there was construction jobs that might have been delayed as a result of lack of labor supply. really, immigration has been a surprise on the upside for the economy and actually helped growth in the u.s. be double what we thought it would be at the beginning of 2024. it is about 3% this year versus 1.5%. it has helped inflation. it has helped the labor market become more loose which has helped calm personnel costs particularly for government and not-for-profit enterprises. there is a potential for us to return to a tighter labor supply market and that will probably return inflation a little bit higher. katie: earlier this week we were talking to etf iq and he is

bearish and supporting the labor supply that immigration has brought down labor costs. you make an interesting point that tighter border policies could reduce costs for governments that have faced higher social service expenses. there is a bit of good news here. nora: that's right. what we think is that tighter security could have positive impacts for supportive -- supporting credit metrics. there could be some dampening of growth and higher labor costs but new york city is a perfect example. when there was a huge flood of immigrants coming in and asylum-seekers, the cost for them was creeping up to $5 million. -- $5 billion. they have revised it down to $3 billion. there could be some savings relative to those costs if there is tighter border security under the trump administration. romaine: i am curious about the

implementation. there has been talk that the president has power to do a great deal through executive order without relying on congress. we have heard from local government officials whether it is governors or mayors saying that they have a failsafe to push back on that. should i believe that? nora: i am not sure. i have not heard that. that is a great point. definitely i think there could be more state influence over overall policy objectives. that is something we are watching given the unknown of how the scope and implementation details will play out in regard to tighter border security. katie: really appreciate you making time for us. appreciate you making the early trip into the studio. that is nora wittstruck of s&p global ratings. romaine: what else would she be doing on a black friday? katie: hopefully just washing television. -- watching television. nora: i think so. katie: thank you.

politics in new york city earlier this week, matt miller spoke with former hedge fund manager whitney tilson on his top issues and his focus on crime and immigration. >> where we went awry and this is a great example of my campaign, a lifelong democrat against a centrist democrat and the radical left, hijacked our city and took us too far to the left. we have additional in legislation that made it impossible for local law enforcement if they arrested someone who committed a violent offense, let's say they are a venezuelan gang member. this happened last week. it was the seventh time he has been arrested this year. this is crazy. on his first arrest, local

police should have turned him over to ice and they should have deported him on the next plane to venezuela, obviously. because of this crazy legislation that went too far in 2018, it is contributing to the violent crime spike here in new york. i am going to roll back the sanctuary city back to the way it was for decades. i have no interest in helping the trump administration try to deport 12 million illegal immigrants who mostly have been here for quite a while and are hard-working and contribute to the economy and are not committing crimes. let's focus on the dangerous ones and get them out. matt: how do you run as a democrat? it seems as though that party on the left has dismissed the narrative that any of these immigrants cause a spike in violent crime. yet, here in new york, you have definitely seen crime run

unchecked. the police have not been able to do much about it and the homeless and drug addiction problems seem worse than ever as well. >> it is a big problem. only 37% of new yorkers surveyed believe their neighborhood is safe. that is down from 50% in 2017 and is reflecting the reality that just before the first year of covid when everyone was shut down, crime has spiked back up. nothing like it was 31 s ago. it is up and people are voting with their feet. 500,000 people, 6% of our population, the second verse of any large city in the country since the year 2000, i agree with the majority of new yorkers. the city is heading in the wrong direction. that is why it is important to turn it around via a centrist business oriented democrat like your founder, mayor bloomberg.

look what has happened in the city since career politicians have gotten in and screwed it up. katie: that was whitney tilson, current new york city mayoral candidate, speaking to us on wednesday. part of his pitch, currently he is the only business democrat in the race. he has been a lifelong democrat but in his words, the radical left has taken over so he wants to take that back. romaine: i forgot that eric adams was still there. he intimated that he might run again. katie: that would be interesting. romaine: you look at the deal and you have what the people want and you think about how eric adams got elected a few years ago. his opponents were talking about social issues and other things. he was in certain pockets of new york city trying to address crime and that is what got him elected. some states -- some say that might have helped him international elections. katie: a big proponent of his

campaign was being tough on crime. that would argue that did not go according to plan. it is interesting to see whitney tilson take up the same messaging and talk about how he wants to make the streets and the subways safer. romaine: good thing that you caught up with him. that will be a big topic of conversation as we get closer toward the primary elections next year here in new york city. meanwhile, we will go global with a check on what is going on in the oil space. crude, oil, brent and wti heading for a monthly decline. some people say that the trend could reverse. nadia martin wiggen will be joining the program in just a second. you are watching "bloomberg surveillance" here on black friday.

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romaine: welcome back to "bloomberg surveillance." in today for lisa abramowicz, jonathan ferro and annmarie hordern. we will carry the torch for them. the start of the holiday shopping season here in the u.s. the national retail federation saying 183 .4 million shoppers will be looking for deals between now and cyber monday. 131 million shoppers expected to shop in stores and online today alone. are you one of them?

katie: on not. i went to banana republic on tuesday. 40% of cashmere. a total coincidence. now is the time to go. romaine: did you get something? katie: four sweaters. you think about the relevance of black friday. i was getting deals earlier this week. it is more of a state of mind. romaine: it was black friday week and now it is black friday month. inventory levels and why you should not inspect those 40% discounts. a lot of retailers are sitting on lower inventory levels than what they were last year, particularly company like best buy, kohl's, target. they are not necessarily bloated with inventory. katie: target earnings were a great reminder we are not out of the woods yet. a lot of companies don't have it

down pat. it will be interesting to see stories about that. bubbles up during this particular black friday. and the breakdown between in-store and online. romaine: there's talk about people stocking up on things because everyone is afraid of tariffs that could go up under the trump administration. that will raise the price of everything. katie: i'm sure jerome powell loves to hear that. romaine: buy your french wine and apparel now. joe biden is trying to push back on the terror threats, telling reporters on thanksgiving he hopes trump rethink his tariff plans and is counterproductive. he warns of damage to relationships between canada and mexico. i appreciate that biden is trying. do you think trump will listen to him? katie: i think trump is busy at mar-a-lago. elon musk was there.

romaine: he has not left apparently. does he not have a house anymore? katie: he has many houses but none are his primary residence. interesting to see what is being used as a negotiating tactic when it comes to these tariffs. are we going to get 25% tariffs on canada, mexico? a lot can happen between now and inauguration day. romaine: we already know some of the nominees on the economic and trade front. not sure any of those folks will be is willing to compromise. katie: scott bessent was supposed to be a moderating pick. some of trump's most dramatic impulses would be reined in. i don't know if that holds up. romaine: there were some optimism with that pick with regards to softness in the dollar. we had dollar strength coming

out of the election. people think trump's policies will be inflationary. bessent may provide a counterbalance. overnight we saw the japanese yen breach the key 150 level as inflation data out of tokyo raised beds the boj will hike its rates in december. the currency there the strongest since october. that's that the fed will cut. remember the carry trade? katie: vaguely. romaine: i was an expert for about five minutes katie: every three to four months we have to freak out about it and then it comes down. romaine: we will pivot to the oil space. a lot of oscillations there tied to what is going with iran. we are learning that iran today was inspected hold talks about its nuclear program with the u.k., france and germany. the european union set to mediate in geneva. joining us from london is bloomberg iran and middle east reporter to talk more about what we know.

has the meeting started and when does it start and more importantly, what should we expect out of it? >> we have not been given any timings at this stage. we know that iran -- the deputy foreign level will be meeting with officials from france, germany and the u.k., the so-called e3 countries in geneva. these are preliminary talks about iran, not just a nuclear program but there is a lot going on with iran at the moment in the middle east. there is a lot of moving pieces in the background geopolitically, not least of all this cease-fire between israel and hezbollah in lebanon that seems very fragile at the moment. the fact that netanyahu has said the cease-fire in many ways allows israel to now focus on iran. he has said that a number of

times and repeated it either overnight or this morning that he wants to focus on iran. the incoming trump administration has signaled it believes, to quote michael waltz, iran is the root of all the problems in the middle east. there is a lot going on for iran. this meeting will be important in terms of the way that the europeans and the iranians can air ideas about how to best position themselves ahead of the trump that administration. katie: let's talk about that administration more. it is not even an all eurasian day. -- inauguration day. he's making moves on the global stage. you think back to the first trump administration and how it handled iran. what can we extrapolate out for the second trump administration? golnar: the first trump administration had massive

consequences for the islamic republic. one of the biggest foreign set pieces of the trump administration was the withdrawal and effective dismantling of the landmark nuclear deal that was negotiated under the obama administration. the repositioning on iran's economy. there is more of a mixed message coming this time based on trump's nominations so far. we have people like marco rubio who are very hawkish on iran. neoconservative. that does not mark a massive departure from mike pompeo and john bolton. at the same time, there are elements within the trump team that are critical and scathing of the pompeo approach.

we see that maybe in his decision to nominate tulsa gabbard, a staunch noninterventionist and we can call her even anti-neoconservative on some fronts. there is a question mark over how trump will assert himself in terms of iran. i think the mood music is that he is probably going to europe that maximum pressure strategy in the beginning. it is up to the iranians to an extent to see how they manage that. if they can get an effective back channel to trump that circumvents those more hawkish neoconservative voices. romaine: bloomberg reported for us looking at iranian mediation talks in geneva. we will keep our eye on the oil markets, on brent and debbie ti. -- wti. looking to close at the month

with a negative sign in front of them, down about 1% on wti crude fractionally -- crude, fractionally on brent crude. concerns about a trump administration policy for the world. nadia joining us now. i want to start with the opec+ meeting that was scheduled and then pushed back a couple more days. what does matter is why. there seems to be in fighting going on behind the scenes with regards to quotas. what do we know? nadia: thank you for having me. the delay means they are not all deciding exactly what to do. they have been taking a wait and see approach every month to see if they will be actually providing more oil into the market. they leave it almost to the last day before the crude needs to start loading. when we compare versus last december, they did not have an official communique.

we had various delegates dripped feeding information to the markets in the market took it negatively. we had angola leave opec plus and there was no comment. the market was very disappointed in the result last year. there is pressure to be more united this year. the outlook now is tough. the majority of analysts see an oversupply coming next year. then we see compliance has been weak in the group led by russia and other countries. they need to get everyone lined up. romaine: that is what i'm curious about. you have to look at this meeting through the lens of what could happen in the u.s. next year. you have administration basically promised to increase output. i'm not sure how to achieve that but that is what they promised. if you factor that into your forecast, how much wiggle room to the saudi's and opec+ have to actually increase production at

this stage? nadia: in our view we don't think they need to increase production, especially when you look towards the month of april. we see a big oversupply coming in the second quarter. things to look that bad in the first quarter because we have come from a situation where we have drawn inventories this year. the fourth quarter is outperforming expectations in terms of demand. it is not such a bad situation. with the u.s. administration is promising in terms of oil coming out of the u.s., we see additional growth coming out of the u.s. probably 400,000 barrels a day year on year, which is not a huge number. where the support is coming from is on the natural gas side. we have had a lot of associated gas that has been basically wasted where you make one dollar per barrel of oil. with higher gas prices we see

the infrastructure export more lng coming, we see that you can get four dollars or five dollars support on a barrel's equivalent basis. for a producer that produces both oil and gas, they can do more and produce more going forward. that is part of the story but also other producers that are really putting the pressure on opec. katie: the uae, the increase slated to begin in january. approaching quickly. we are talking about supply. this has been a supply-driven market for so long. i want to talk about geopolitical risks. we were talking about this at the top of the hour. it seems difficult to price in a risk premium here. do you see that changing in the future? nadia: if we start with where we were, the risk premium has pulled back in oil.

the call skew is still there to the upside but much lower than where it has been. going forward, it depends. what is the view on iran? right now iran is quiet. that is why the risk premium has gone away. what does the trump administration plan to do there? when you look at the were escalating, the closure of the strait of hormuz, that would be catastrophic and really escalate oil. that is not a realistic base case scenario at this point. when we look at the near-term, even if trump were to sanction iranian oil and the lm where they can work is by -- and the only way that can work is by convincing china to no longer buy iranian crude, not an obvious thing, opec plus has enormous spare capacity. they can replace that immediately. when it becomes interesting is

if trump were to also sanction russian oil and gas. if we look at his tariff idea with canada and mexico, if he were to go forward with that, 25% tariffs on canadian oil. canada exports 3.8 million barrels per day to the u.s. katie: that is what i morning about. you think about canada's biggest export to the u.s., it's oil. it is energy. what would it mean for canada? what would it mean for the u.s. if we did see that 25% tariff enacted on the first day of trump's new time in office? we have just about a minute left. nadia: it would be catastrophic to canada. although canada has built additional export pipelines, specifically to go through the west coast of canada, they have increased production. that is a production -- they are

extremely dependent on exporting through the u.s. when that export line breaks we have seen massive discounts the canadian crude topping $20 a barrel. this is a negotiation tactic by trump to make canada work with what he wants to see. that is on the drug side, immigration, things like that. canada has to find a solution because they are stuck. it would be catastrophic for u.s. refineries, which means gasoline prices would have to go up. it does not make sense as a policy but as a negotiation tool it does. romaine: we will have to leave it there. great to catch up with you, nadia wiggen. a closer look at the oil and energy market. a closer look at what is going on over there in europe. euro area inflation climbing. concerns about budgets and france and broader in europe.

the economic landscape in question. vasileios gkionakis will join us in just a second. you are watching bloomberg surveillance. ♪

romaine: you are watching "bloomberg surveillance" on this black friday. romaine bostick with katie greifeld. futures marginally higher. .3% on the s&p futures. we don't see it on the board but the russell 2000 futures up 1%. this get that -- gets back to the idea of outperformance. katie: we have been following closely on "open interest." the small caps the big winner in the trump markets? we will see how sustainable that is if inflation fears come to pass. we have heard that would be

pretty hard for these companies with a high debt loads. romaine: this is a truncated session in the u.s. today. the cash markets open at the normal time, 9:30 a.m. in new york, but they close early. 1:00 p.m. the bond market shutting gun at 2:00 p.m. asian markets closed with the shanghai composite up more than 1% on the day. european markets going here, fractionally higher with stoxx 600 up about .1%. we want to turn to what could come out of the ecb in the next couple weeks with christine lagarde suggesting to the financial times -- not bloomberg -- the financial times that the eu should negotiate, not retaliate as fears grow of a trade war under a new trump administration. vasileios gkionakis joins us now over at -- we look at the economic conditions in europe

and how this economic conditions could be affected by the incoming administration's policies in the u.s. let's start on trade. we went down this rate before. we had a taste of how it could play out. will it play out differently this time? vasileios: it depends on the current role the tariffs -- the tariff announcements are to play. if you use it as a negotiating tool, you can be optimistic in the sense that eventually there is going to be some sort of a negotiation breakthrough. on the other hand, if you think of them as something which is more structural, more permanent in terms of shifting policy and global trade or finance tax cuts in the u.s., in that case the actual tariff implementation is a real threat.

it will definitely dent eurozone and global growth and trade. romaine: this comes at a time where there is some fragility and the broader eurozone economy independent of what is going on with the u.s. i'm curious what the reaction function would be on the monetary policy side or the fiscal side to buffer the economy. vasileios: it's an interesting question. we have the president of covid -- precedent of covid. in general, on a global scale we have entered a phase in which you like loser policies for public necessity -- looser policies for public necessity. i think the real possibility you get negative shocks cushioned by looser fiscal policy.

as far as monetary policy, central banks will raise inflation. inflation can play out differently depending on the scope, the size, the timing implementation of tariffs, as well as if there is retaliation or not. it is pretty difficult. one would think if there is no retaliation, then the filtering through from growth will -- look, moving into more globalization produced this inflationary effects. it is natural to expect a move backwards and away from it. it will have a net-net inflationary impact. therefore, i think there is a lot of uncertainty about the inflationary effect. katie: there are a ton of big

important questions out there, including when it comes to tariffs. will we see retaliation? when you look at the bond market, the boone market -- bund market, what is your best case for how this plays out in the eurozone? vasileios: look, there are a lot of -- a large number of parts that are moving in the opposite direction. there is the pricing in of expected growth. after the u.s. election, we have had a significant lowering in eurozone yields which was the opposite from what we saw in the rest of the markets. the way i think about this is that i think we will be in a period where yields will be slightly higher compared to the past because there will be looser fiscal policy.

in the case of the euro zone i think there is a lot of expectations built in to ecb monetary policy easing. we have the terminal rate price above 1.7%. inflation of 2%. that implies the real policy rate could be -- historically, you have real policy rates in negative territory whenever you have a deeply outcome. i don't think that is the case right now. eventually, we will see our repricing higher. -- a repricing higher and that will imply a shift higher in yields. romaine: vasileios, we will leave it there. vasileios gkionakis looking ahead to the next ecb decision that occurs on december 12 with the expectation we do get the fourth cut of the year out of christine lagarde and company. katie: interesting to hear

vasileios talking about the threat of higher inflation. it is a global phenomenon, at least when you look at the developed markets. romaine: wasn't there a big mission accomplished banner? we were supposed to be moving on. katie: cut rates no matter what happens, but here we are. inflation moving higher in the u.s. and europe. romaine: the broader question about the global economy. we talk about the cracks we have seen for quite some time in the bifurcation between europe and asia and here in the u.s. katie: i anchor the show called "open interest." we like to pretend it is just the u.s. the u.s. outperforms. romaine: the stock market higher in futures trading. the regular open at 9:30 a.m. early close at 1:00 p.m. for u.s. stock markets. michael o'rourke, judy dempsey, jill standish and so much more.

happy birthday, brian baumgardner. "bloomberg surveillance" from new york. ♪ i can't believe you corporate types are still at it. just stop calling each other rock stars. and using workday to put finance and h.r. on one platform. tim, you are a rock star. using responsible ai doesn't make you a rock star. it kinda does. you are not rock stars. (clears throat) okay. most of you are not rock stars. oooh. data driven insights, and large language models. oh, that's so rock roll. it is, right. he gets it. yeah.

♪ ♪ ♪ something has changed within me ♪ ♪ it's time to try defying gravity ♪ ♪ ♪

(ominous music) (bubbles rising) (diver exhaling) (music intensifies) (diver yells) (shark roars) - whoa. (driver gasps) (car tires screech) (pedestrian gasps) (both panting) (gentle breeze) - [announcer] eyes forward. don't drive distracted.

>> the consumer is being very purposeful in their spending. they have not been shopping as much. >> this is a happy period for the consumer but a sensitive period. >> it is those who truly are getting back real value -- giving back real value to the consumer. >> this is "bloomberg surveillance," with jonathan

ferro, lisa abramowicz and and reporter. -- annmarie hordern. katie: this is "bloomberg surveillance." i'm alongside romaine bostick. katie greifeld here. lisa, jon, annmaire, they are all gone. -- annmarie. romaine: where the anchors of this network. the open and the close. katie: we could have met in the middle. we did not need to come here at 6:00 a.m. a big focus on the consumer today and the markets. it has been an incredible month. an incredible year. a lot of questions about what comes next. romaine: we talk about the election induced rally in the u.s. it picked up steam once trump got the victory. that has waned a little bit. people taking stock of things. this is the final trading day of the month. there is a typical rebalancing that started a couple of days ago prior to the thanksgiving

holiday. some pretty big gains in the market at the right time. katie: for november, 5% higher. for the year, a total return basis, up 27%. it is amazing. we will unpack all of that. romaine: how was your thanksgiving? who came to your dinner? anyone famous? donald trump at elon musk at his side and sylvester stallone. elon musk said they discussed his 1993 "demolition man," which of all the things i would talk about, all the movies he has dug, "-- done, "demolition man"? katie: i have not seen that when a particular. romaine: i'm not sure i would ask about "demolition man." "rocky" maybe. "first blood" they drew first blood. katie: that is the energy we

need on this black friday. romaine: are you supposed to be introducing somebody? katie: i'm working to think of a segway here. coming up, michael o'rourke of jones trading. we will talk about the fed. when in doubt, the fed will cut is his view. jill standish joining us. black friday the topic of conversation. we will talk with lenea guiss about the record number of travelers this holiday season. this is supposed to be an all-time high for black friday and thanksgiving traveling. romaine: you talk about airline fares being elevated, a lot of concerns about the consumer and whether they are stretched and willing to spend on something that is discretionary. for a lot of folks thanksgiving travel is less discretionary, unless you're like us where we just sit and new york. katie: we had to wake up early again. for a lot of people that is a staple. let's talk about the markets. u.s. futures in the green.

it will be a shortened trading day but the s&p 500 on pace for its strongest month since february. let's break it down with michael o'rourke of jones trading. mike, we were talking about the incredible gains we have seen this year. 27% on a total return basis. you think about last year, more than 20%. is this as good as it gets when you think about 2025? is it possible to get double-digit gains of this magnitude again? michael: i would be surprised if we did. i believe it is as good as it gets. right now there is a lot of enthusiasm out there postelection. everyone is hoping for the regulation -- the regulation -- deregulation, tax cuts. you wind up with a very expensive s&p 500. there are some attractive groups

out there. the multiple in the market, the s&p 500, the expensive part is what the big mega cap trillion dollar companies. you have to be more selective. i think there is great investment opportunities out there but i would not be so much in the s&p 500 as an index itself. i would look down for stock pickers to find those opportunities out there. katie: you have to be selective in the market. we hear over and over that this is a very expensive market, a very expensive s&p 500. we also hear valuations are a terrible timing tool. how do you factor that in when you're evaluating the market, the expansiveness? -- expensiveness? michael: usually miss out on gains. you have to look for those

places that are less expensive and offer more value. i still think the banks have had a great run, especially postelection. they have led the market for the past two or three years. we had a minor banking crisis. there is more upside there. energy has lagged. valuations are the most attractive sector in the market. i think it is more about allocating new funds to those places that are less expensive and not chasing the momentum. romaine: i'm curious. we talked about chasing momentum and something a little less fundamental. what do you think about the general risk on appetite we have seen with some of the more speculative corners of the market? you talk about the run-up in bitcoin. right now up to percent. $97,000. a lot of of the pockets of the market people had pushed to the side earlier this year for a variety of concerns.

when you see the animal spirits come back out, what is the momentum driving that? michael: the momentum is amazing out there. it is on par with 1999-2000. you are looking at an environment where we have had high interest rates since the beginning of last year. for two years we have had the fed funds rate above 4%. we have still had strong economic growth where gdp averaged 2.9%. the fed says we are at maximum employment. they have turned around and started cutting rates. you had the election. you had all these bullish incidents and catalyst coming together fueling the animal spirits. the microstrategy story is impressive. here is a company whose business model is selling stock and debt in the capital markets to buy bitcoin. now you have other companies replicating that strategy. as long as the capital markets are open they can continue to do

that but that is not a business model. it shows the fed wanting to cut rates, they are asleep at the wheel not realizing there are multiple companies doing this, using the capital markets to buy bitcoin. romaine: can we talk about that? a lot of people derided what seiler did when he turned a software company into a proxy on bitcoin. in hindsight there's a lot of method to that madness. the fact he was able to basically borrow at next to nothing interest rates and then leverage that out for some pretty phenomenal gains. the last time i checked he made this the second-best performing stock in the russell 1000. why can't that be replicated? it worked for him. michael: it could absolutely be replicated. that is my point. that is how financial conditions are. how easy they are. there are companies out there doing that. i could probably -- there are 10

i know of offhand that are the bitcoin treasury strategy. companies sell stock into the marketplace and turn around and buy bitcoin with it. it is happening. it shows how easy financial conditions are. you have a federal reserve they don't know where the neutral rate is yet they want to continue to cut rates. i think the fed is asleep at the wheel. they are missing what is going on in the equity market and financial markets. that liquidity is abundant out there. it is easily replicated both -- replicatable. that is your funding strategy. katie: we will talk about the more serious stuff. what it means that the fed is asleep at the wheel. i want to talk more about crypto. you talk about how other companies are replicating the microstrategy model. you think about the u.s. government. there is talk of a bitcoin strategic reserve.

it sounds like you are looking at this skeptically. this is not making you a crypto bull. michael: it's funny. you look back at warren buffett's 2011 letter in his comments about gold. this is an asset that is not an income producing asset. it doesn't make anything, doesn't grow anything. it is a speculative asset you are just betting on people paying more for. it has been a great trade. beyond that, i have a hard time identifying how you model the cash flow from something like that other than you are betting on price appreciation and people paying higher than you are. i don't think that is speculation. i don't think it is investing. romaine: we will have to leave it there. michael o'rourke at jones trading. the phenomenal run we see a bitcoin. you have been all over that. gold having a pretty good run,

up 29% in the spot prices on a year-to-date basis, which anyone would take in any year. not quite bitcoin levels. katie: physical bitcoin is what we are calling gold now. romaine: were you a bitcoin person and then became not a bitcoin person? katie: i spent a lot of time on television and print writing a talking about bitcoin. it's an interesting space to cover. i would not call myself a huge believer. it is not my day job. i think crypto is interesting in terms of -- i look at it as the purest risk appetite. it's a great way to actually measure euphoria in the market. look at bitcoin. can't seem to break $100,000 but is getting close and that tells you a lot. romaine: a year ago you were seeing sam bankman-fried paraded off in handcuffs and everyone thought the bitcoin trade -- the crypto trade was over. you look at the rally in stablecoins and now everyone

euphoric because the trump administration promises to be a lot friendlier to this industry and the current biden administration. katie: you can't really ignore it. you think about the people pro crypto elected to congress. donald trump himself. i don't know if he is a true believer but he says firmly things about crypto, about bitcoin. we will get a new head of the sec. we will see what happens. you have to pay attention for better or for worse. romaine: this is how i get to brag i bought two bitcoins for the low price of $90 for both. that included the fees. i sold them around 200 and i thought i was the smartest human being on the planet. here i am still working for bloomberg surveillance. katie: on black friday. romaine: 7:00 a.m. now. i'm starting to wake up. where is the camera? it is like a circle here, right? we are just in 2d. this is 3d. katie: you have to be on your toes. at least we don't have to stand

up. coming up, russia. we will go around the world. russia gearing up for a new round of strikes on ukraine at a time in american support seems uncertain. we will bring you the details next. this is "bloomberg surveillance ." ♪

katie: looking back to "bloomberg surveillance." a little over two hours away from the start of trading on this black friday. markets green on the screen. s&p 500 up about .3%. the euro gaining some ground against the dollar. pretty muted still. holding above 105. the bond market, a bit of a bid sending 10-year treasury yields

down about five basis points. camped out around 420. i remember when we were at 450. you look at crude. still down about .2%. we look at the geopolitical landscape. russia is targeting ukraine's power system and a new round of airstrikes. it is the 11th time infrastructure has been attacked in the country this year. it comes when the future of american support is uncertain. joining us from warsaw is peter.talk about putin striking decision-making centers. >> we are seeing quite an escalation of the conflict in the past few months, especially since the election in the u.s. lori got some clarity on what

will happen next. both sides are trying to get as much of an upper hand before we get to the inauguration day. what we have seen in the last few weeks is the escalation in terms of the u.s. -- biden at mr. risch and decided to provide ukraine -- administration has decided to provide ukraine with more weapons and allow kyiv to strike targets inside russia using western provided weapons. these are u.k. provided storm shadows. deployed his new type of ballistic missile. it hit one of the targets in ukraine. we heard yesterday from president putin that he is ready to and looking at potential targets.

decisions are being made. the importance of this new missile he deployed is very clear. this is a type of weapon that can actually have a nuclear payload. we already saw that last week the parliament was evacuated because there was a fear of this kind of attack. it is putting ukraine on the back foot at this point. romaine: with regard to the nuclear fear, not only a nuclear payload but the idea that if you use enough of these bombs, even without the nuclear payload the potential damage could have a similar effect as a nuclear attack. is that correct? piotr: exactly. that is the major concern. when we talk about this new weapon, this new missile, it doesn't seem like ukraine has defenses capable of stopping it. that is where the concern is. we have seen in the last few

days we are talking about missile attack and drone attacks that are targeting energy infrastructure. the temperature has dropped quite significantly in ukraine. they are facing power cuts. in the nuclear risk we have to remember ukraine relies on nuclear energy for 40% of its electricity. we sell reports that ukraine had to cautiously cut off nuclear power plants from the grid to make sure it is not at risk. we are on the brink there in a risky situation as the escalation continues. katie: really appreciate your reporting. piotr joining us from warsaw. let's contain the conversation with judy dempsey.

it is great to have you with us, judy. put us into the shoes of european leadership right now. confronting the possibility of less american support for ukraine, the possibility of increased tariffs here. how does one prepare for that? judy: it is difficult. there are 70 unpredictabl -- so many unpredictabilities. the special envoy in ukraine full try to conduct negotiations. secondly, if the trump administration does reduce its military support for ukraine, will the europeans be ready? there's a shortage already. the nordic countries are supplying is much as they can. other countries are running short. some other countries of the eu are a little reluctant. they are not really prepared but they have been warned of the day

after when donald trump enters the white house. maybe ukraine is depending on the europeans for more military support. it will be difficult to muster this quickly. katie: let's talk about the possibility of tariffs. we joke about french wine and german cars, but you think about the balance of the european economy right now. particularly the car industry which has been under some pressure here. how much would tariffs hurt? how should we be thinking about that? judy: tariffs are an enormous worry for the outgoing german government in particular in the incoming one, whoever that would be. the real issue is that donald trump has a kind of difficult relationship with germany. the tariffs, 10%, it is very high. trade between the eurozone and

the united states is about $450 billion a year. this increased over the times when trade between europe and china started to decline. the europeans are increasingly relying on the u.s. market. you slept tariffs on it, it will be very difficult for them. the other key point is that how the german automobile industry will react. we have seen announced closures for volkswagen. the steel industry will lay off workers. the german manufacturers will probably go over to the united states, which is what donald trump would like. if that happens it could have a negative effect for the economies of europe. it means more job losses and less competition. romaine: i'm not unsympathetic to the challenges europe faces in the face of a new donald trump administration. there are a lot of questions from the u.s. wins as to why

your --l lens as to why europe was not prepared for this. we are talking about what seems like a surprise to them. judy: in the sense of the ukraine issue? romaine: ukraine, tariffs. judy: everything. to use a terrible phrase, the writing has been on the wall. the europeans do talk a lot. talk about competitiveness and diversification from china but they are not prepared for the tariffs. secondly, we really have to remember the european economies are not only going to be hit by tariffs, they are going through a period of deindustrialization because of the chinese influence. what china has done for electric

cars, for instance. the whole element of digitization, ai. europe is incredibly slow to embrace these and that's another contribute a factor for being unprepared for this new kind of transatlantic relationship. romaine: it raises the question about how common the common eurozone is. a collection of countries that have not really acted in commonality for quite some time. i don't think they ever did but they put up a good facade for some time. with regards to france, germany, eastern europe, there is not a lot of consensus. how do you get to a solution? judy: it is very difficult. from what we have seen in the last 10 years, it's increasing role of the member states versus the executive commission. now france, germany, the netherlands, they are all looking after the national

interests. if you look after the national interest, you downgrade or make the whole idea of the european union weaker. there is no talk about integration. there is no discussion about what is necessary completing a banking union. the european union as an economic project and a political project has really slowed down. there is no leadership either in berlin or paris or other countries to say let's put our national interest behind us and try to integrate the european union further so we can deal with new challenges coming from washington, china and russia and india. katie: really appreciate you taking the time. great to get your perspective. that is judy dempsey of carnegie europe. we are 10 weeks away from the inauguration. romaine: i have lost track. it is coming up on january 20. it has to happen by then. there's a transition team that's

been quick on the draw with regards to naming its pix and nominations. -- picks and nominations. we will know the contours much sooner than we did in 2017. katie: a lot of details. romaine: are you going to be in the administration? there are a lot of tv stars. katie: they are coming from one network. i did not get the call. it is black friday. a big focus on shopping and the consumer and retail. we will continue the conversation with jill standish on the outlook this black friday. that conversation is coming up next. this is bloomberg. ♪

♪ ♪ ♪ something has changed within me ♪

♪ it's time to try defying gravity ♪ ♪ ♪

katie: welcome back to "bloomberg surveillance." i'm katie greifeld. let's get you a quick check on your futures. can't imagine there's a lot of volume but we have some gains. s&p 500 of about .3%. same story if you look at the nasdaq 100. big tech names above .3%. we were talking about this earlier, the small caps resplendent. russell 2000 currently higher about 1% in the premarket. two hours away from the cash open. let's get you some morning movers with manus cranny.

manus: $37 billion worth of bitcoin locked inside microstrategy. another salvo approach. we thought it would be $2.6 billion worth of proceeds. look that is near $3 billion. there is a warning from peter schiff. he says microstrategy is the great short. the flags the risks about repaying some convertible bondholders. you actually want to take on more. look at peabody energy. coal assets around the world. it is a little skittish. peabody energy anybody to buy anglo american's steelmaking business. we ran the story of them raising over $2 billion in debt. there is a level of discomfort. 2016, this company filed for bankruptcy. here we are taking on more debt to buy new assets. a little bit of pressure.

everyone is trying to understand the outgoing president's administration policy on china and restrictions on technology. the crackdown on semiconductors to china. less tight than the market anticipated. this is about supply chain into huawei. that is the state of plano. as we know -- state of play now. as we know, it could all be shredded and restarted. katie: a lot to look forward to, manus cranny. thank you very much. under surveillance, the bloomberg dollar index snapping eight weeks of gains. the traders apparently raising their bets that president-elect donald trump will take a more practical approach to tariffs. not sure where that notion came from. we did hear mexican president claudia sheinbaum downplaying a potential trade war after a phone call with trump this week that gave a little bit of relief to the mexican peso. it's been a dramatic move. romaine: this gets us back to

the crazy volatility was sought during the first trump administration and the reminder don't delete anything alyssa comes out of the big man's mouth -- unless it comes out of the big man's mouth. do you know it's in his head? katie: i'm not privy to that. you have to wait and see until it actually becomes policy. romaine: we will see if he takes a more practical approach. as of the word you used? katie: practical. targeted. thoughtful. exactly. let's move on from currencies to cryptocurrencies. romaine: go ahead. katie: let's talk about the bitcoin etf's. they are heading for a record monthly inflow. this is related to trump. trump optimism specifically. we have seen the etf subtracting $6.2 billion so far this -- etf's attracting $6.2

billion so far this month. we were talking about how this is a supply and demand driven market. because there is no fundamentals it is also technical. romaine: supply and demand is a big part of that. that is where the speculation is. not only with the crypto from the administration but the ideas about a crypto strategic reserve and these other things. that exasperates the supply and demand issue. maybe that's a reason for their run-up. microstrategy is one of the best-performing on the russell 1000. katie: michael salie will try to buy everything the bitcoin. we will see if he gets there. romaine: remember when everyone thought he was crazy? some people think he is crazy now. katie: crazy like a fox perhaps. romaine: he put the money where his mouth is and shown he was not necessarily crazy. katie: microstrategy has been around for decades. interesting to watch the reinvention of the company and michael sailor. romaine: i cover the company

what it was a software authority before they had trouble with the authorities the first time around. katie: when you wrote on a typewriter. romaine: i miss those days. katie: technology is cyclical. black friday kicking off in the u.s. retailers are hoping to see the most shoppers on record over the thanksgiving weekend. let's get into it now because joining us outside of macy's at herald square is bloomberg's vonnie quinn. the sun is up and it seems pretty cold out there. what do the lines look like? vonnie: it is a fresh 31 degrees with a wind chill. that is a factor. people tend to not commence much when it is so freezing. we are getting a little trickle of rain. we have had a steady trickle of customers into this iconic macy's on 35th street, herald square. we are expecting data from the national association of retailers saying there would be

a record number of people going in stores today. 131 point 7 million u.s. consumers expected to shop. two thirds of those, 66% will walk into a store some kind across the states. it is hefty when you think about it. we are looking for an increase of 2.5% to 3.5% and spending. not the 3.9% we saw last year. pandemic savings drawn down and household debt at a record in the third quarter, that is pretty impressive. until you think about next year and the possibility of tariffs. perhaps it might be wise to get your shopping done this year if the tariffs do indeed get put on the goods. romaine: i don't know if you had a chance to go inside the macy's and do shopping for yourself. what are the discounts like this year? there was a lot of talk last holiday season that retailers did not have to discount as much because inventory levels were under control. it looks like this year -- i don't know.

are things different? vonnie: i walked around this macy's. you see a lot of 40% offs. you have to do research to see if that is the cheapest we can have for these particular items. typically apparel or something along those lines. romaine: where did you get that code from? depakote -- coat from? vonnie: this is from last year's black friday sale. analytics has done the calculations. out of 18 categories, electronics will be discounted the most. that's expected to be discounted 30%. toys down 27%. appliances -- you are looking for that ninja blender for the kitchen. 18%. there are categories. the word on the street is don't buy unless you see those items discounted at least that much. katie: you have got to be

disciplined. vonnie quinn reporting outside of macy's. braving the cold. romaine: 18%? i don't get out of bed for less than 20%. katie: you have some big black friday sales. what is top of your list? romaine: i mother actually was to go shopping in 30 degrees weather. that is what i'm doing after the show. katie: by some new coat -- buy some new coats. jill standish joining us now. retailers have good reason to be cautiously optimistic, which is interesting. we talked about all these headwinds potentially coming at retailers next year. what is the case for optimism right now? jill: in our survey which we did right before the holidays, people said they will spend upwards of 4% more this year compared to last year. that is the optimism. the cautious is about the fact everyone is looking for a deal. you heard the other

corresponded's point -- correspondent's point. katie: black friday is really a state of mind. it never ends. i was out on tuesday getting great deals as well. this bleeding out of the bounds of black friday, what does that ultimately mean for retailers? it seems like it is just persisted discounting. jill: agility -- persistent discounting. jill: agility. you have one less week because of thanksgiving felt. i will start doing my discounting early so i can get people shopping early. ai has been on the pitch for a long time in retail. retailers were planning out when to put things on sale. that hopefully will help them make sure they don't lose margin over this period. it's being worked out through advanced technology. romaine: i'm curious how much

some of the retailers can prod the consumer into buying certain things. some of us have a hard time figuring out what to buy for loved ones. what gifts do they really want. some retailers have taken a more creative approach to put out these gift bags and create other experiences in their store to plant the seeds in your head for the more extensive stuff. what are they doing? jill: this year is the rev cure ration and recommendation. -- curation and recommendation. there is a bunch of places where people are getting suggestions. some of the curation is not just in the store, it happening with technology. think about if you're online and all of a sudden this little pop-up comes that says do you need any help, who were you

buying for, what are you looking for, what is your budget. those types of recommendations will be what the future looks like in retail. instead of you trying to search, people are trying to help you make it easier for you. romaine: with regards to physical stores, the idea of the physical stores trying to find ways to get people back in. we were checking with macy's and herald square in new york which really decks out the store. you go to that store to see the displays and hopefully by something along the way. bloomingdale's across from bloomberg headquarters also has these pretty expansive displays. are we seeing the stores in brace that more? there have been some stores that are pulling back. jill: stores are back this year which is fantastic. he heard that stat that says there's a bunch of folks that will be shopping in stores this year. there is that retail shopping fun. do you get together with your friends and go to stores. it is not so much about the

decorations as about the feeling on black friday and cyber monday. it will be about curatio n, recommendations and store staff. front-line workers of and part of the equation. you can have the best discount, the best promotions, the best assortment and that person behind the till is not in a good mood it can really change your opinion of the retailer. front-line workers are also something retailers are taking care of this year. katie: great point. service matters. i thought this was interesting. retailers are focusing on inspirational content, which can improve sales according to your data. what is inspirational content though? jill: i talked a little about ai. ai has been used a lot of times with figuring out your assortment, how best to make sure the supply is right and how to get it to the store.

you are using all sorts of ai for doing curation around your ads and promotions. now because of advanced technology, the way you advertise is also being inspirational. you could have more tailored advertising to consumers now, which is fantastic. a lot of it is because of genai. that is what i mean by inspirational. gift ideas, suggestions, recommendations. that is on the pitch this year. it is the year of curation. i like to say, where do people get their inspiration? do they look at instagram? from going on the website of the retailer? most retailers are saying i have to play a big role in making sure eyeballs come to my website. how do i get them there? maybe i have ads on instagram to click through to come to my website. romaine: it's about tantalizing folks. jill standish, a closer look at

the holiday shopping season which ostensibly kicks off today here on black friday. it kicked off days if not weeks ago. scarlet fu had a chance to catch up with the ceo of bloomingdale's about the holiday season and the future of the department store model. >> models are focused. that is one big difference. the flagships will have a bright future in the next 10, 20 years. it is not a problem at all. the problem is managing such a large footprint. that can be a challenge sometimes. bloomingdale's, we have a chance to beat in prime locations. we have a limited footprint. we have more potency than threats in the future. i think the department tour model has a bright future but it has to reinvent itself from the perspective of the customer but

also brand partners. we need to rethink the model from this point of view. scarlet: are there too many stores in the u.s. overall? >> when you look at the market data, the overall market is slightly growing. the penetration of online is going up. the average productivity in the u.s. there will be some losers. that is why you have to challenge yourself and reinvent your model to remain relevant for your customers and also for your partner. romaine: i have to ask you, when you look at other retailers, it doesn't have to be a direct competitor, houthi u.n. be most? when you walk -- who do you and envy more? oliver: i think bloomingdale's is doing it right. i was surprised.

there's a lot of engagement of the customer. the relationship we are building with the customer and partners is good. we can do better in the future. there are a lot of inspirations from competitors and others, whether in terms of service, in terms of brand mix, there are a lot of inspirations in retail and beyond retail. i will give you any names but i have a lot of sources of inspiration in the u.s. and abroad. i think we should not be too domestic focused. there are trends happening somewhere in the world. romaine: you think maybe what we see abroad in terms of their approach to the department store and retail overall, you think that will be palatable to u.s. audience? oliver: unconvinced about that. we have to bring the best of both worlds. we need to bring something different for the customer. the customer is ready for something different, more inspiring. we can get it from some of the countries, some of the other

models in the world. romaine: part of my conversation with bloomingdale's ceo oliver bron. we filmed that right at the start of this big promotion they had with "wicked." they had this big opening night where they have the stars of "wicked." it was very beautiful. katie: that was the start of their promotion, bloomingdale's. "wicked"'s promotion has been going on forever. romaine: i feel like i have seen it. are you seeing this movie? katie: i see a lot of clips on tiktok so i feel like i have already watched the entire movie. romaine: there are two parts to it. i will wait until the second one comes out and then them together. katie: that's not a bad plan. i feel like i have to watch it. romaine: i have never seen the play. it is the wizard of oz but not? katie: it is in the same

universe. romaine: it is like a prequel? when you found out that anakin was darth vader? katie: i'm not a huge star wars both. -- buff. i don't even play in that sandbox. romaine: damien says "demolition man", underrated. one of the best performances by wesley snipes. katie: i got a tweet to that effect and i would trust anyone on the internet. put that on your viewing list. "demolition." man." we will speak with linnea geiss at pdi technologies. that conversation is up next. this is "bloomberg surveillance ." ♪ ♪

(♪♪) what took you so long? i'm sorry, there was a long line at the thai place. you get the sauce i like? of course! you're the man! i wish. the future isn't scary. not investing in it is. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com 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.

katie: welcome back to "bloomberg surveillance." a quick check on the markets. still green on the screen. i don't know how much volume there could possibly be but the s&p 500 higher about .2%. we were a little higher a while ago but still counts. you look at the euro-usd. romaine: i do not know why you are poo pooing u.s. futures. katie: you could flip this into the best month of the year. you don't get out of bed for what? less than 18% of a discount. this does not thrill me. romaine: we have been talking about this, these incremental moves in the market. sometimes it is healthy to get the rally. sometimes it is these fractional gains that matter most. katie: you are a good anchor

because you sell the small moves. romaine:'s and that the plot of "wicked?" good anchor, bad anchor. katie: please don't. we would have to reach pretty far. aaa expecting record-setting travel numbers this week. estimating nearly 80 million people are traveling 50 miles or more for thanksgiving. joining us now is linnea geiss, convenience retail analyst and coo of p technologiesdi -- pdi technologies. you write that this is the cheapest thanksgiving holiday for gas prices since 2020. locus they would actually got us to these levels -- walk us through what got us to these levels? linnea: consumers are experiencing the cheapest gas prices, good news for everyone hitting the road. 72% of gasbuddy says they are

traveling. some of it is driven by overall economic slowdown and demand factors. the consumers out there are still a little skittish. for convenience retail operators are looking to entice to consumers to come into their stores and the more competitive environment and it's driving down prices for everyone. romaine is there a -- my uncle, good morning ed, he lives on the board of indiana and illinois. he goes across the border to get his gas and other illicit things and the drives back across the border. is that still a thing? linnea: absolutely. it is a huge trend. you can find deal shoppers on the internet telling you where to find the cheapest gas. you nailed it. your uncle is quite smart. gas tax is different from state to state. sometimes when you're looking to be on the road you want to make sure you do your research to understand whether or not you will find a better discount by

crossing the border. katie: you push it to the limit until you have 10 miles left. i have to accept any price i can get. i need to take a page out of -- learn from your uncle. let's talk about what could happen next year. there's a lot of consternation over potential tariffs on mexico and canada. what could the impact on the gas picture be coming into 2025? linnea: there is so much uncertainty. many things are interconnected. we do import a significant amount of crude from canada. that impact would be felt by any part of the supply chain that experiences that impact. we have modeled internally roughly a 25% tariff could increase prices as much as $.30 to $.70 per gallon, especially in the great lakes and midwest region and down into the rust belt. katie: great perspective. that is linnea geiss of pdi

technologies. it's been two hours. can you believe it? romaine: somehow we have made it this far without falling asleep. i don't know how they actually do this every morning. do they actually wake up every morning at 2:00 or 3:00 in the morning? katie: they must feel constantly jetlagged. romaine: abramowitz actually lives near me. i avoid eye contact when i see her on the street as you normally do when you see coworkers. katie: must be somewhere chic. romaine: she always has those fancy shoes on. are they good for walking around new york city? katie: you have to be careful. wendi tilson was to clean it up. don't go anywhere. we have a great final hour coming up. we have eric fisch. rounding it out with kristina hooper of invesco. romaine: happy birthday, russell

wilson. katie: thanks for tuning in. this is bloomberg.

>> the consumer is being very purposeful. in their spending. >> consumers have not been.

shopping as much. >> this -- >> this is a happy period for the consumer but a sensitive period. >> it is those giving back real value to the consumer. >> where there is newness in innovation, consumers are going. >> this is "bloomberg surveillance" with jonathan ferro, lisa abramowicz, and annmarie hordern. romaine: from new york city, for our audiences worldwide, good morning. this is "bloomberg surveillance ." romaine bostick alongside katie greifeld. jon, lisa, annmarie have a day off. a happy day right now in equity markets. factional gains on the day in futures markets, but we are closing out the month higher and that simply by 5%. katie: big time, big month for the equity market, potentially just of the year. roughly 2000 up 0.9%. looking at the month-to-date forecast for small caps come up

to .5% through wednesday's close, the best month in about a year. romaine: you look at the gains we saw on the month and even this morning, like volume. the cash session for equities opens as normal at 9:30. stocks will shut down at 1:00 p.m., the bond market closing at 2:00. when you look at individual movers, we were talking earlier about microstrategy. you are seeing big movements in a lot of the semiconductor equipment stocks, news out of china that they may not be as retaliatory in this tariff tit-for-tat, particularly in the semi space. katie: that would be good news. we are trying to track the contours of what new tariff regime would look like and what the ultimate effect on the stock market and on actual people would be. you think about the semi conductor space in particular, really the lifeblood of this

market. it's nice to have the broadening out, but you need tech participation. romaine: also a modest bid on bitcoin, on the back of what is shaping up to be a 38% run-up this month. i do not if you are following this morning, because there's a lot of money sloshing around in crypto. are you familiar with this? katie: i heard about the banana selling for $6.2 million. romaine: and it is not just a banana, it is a banana taped to the wall. that's the art, right? it's called absurdist art. this old for more than $6 million at southeby's. -- sotheby's. apparently, they bought the banana from some vendor on the street for $.25, $.30. this guy makes $12 an hour. the media tract hymns out --

tracked him down and said the banana you sold for pennies so for millions. katie: that feels mean. you could have left this man alone. but you hear stories like this, and you could -- romaine: i do not know what i am looking at here. i mean, i know it is a banana tape to a wall. but we went through this before. i guess art is whatever you want it to become and this is a form of art, and there are people with money to burn who want to take part in this absurdity. katie: you could make the case the entire crypto industry is a form of art, because it is just whatever people are willing to pay. at least for a single bitcoin, people are willing to pay a lot. romaine: i would have left to happen at this. the only other option i would have loved to be out was the one banksy one where they ripped it up. speaking of bitcoin, we talk about this idea of being it more art than science. it brought out the scientists as

the run-up continues. let's get the conversation going with michael green, chief strategist at simplify asset management. eric fisch of hsbc will talk about what is going on in the consumer space. and friend of the show, kristina hooper at invesco come also going to be talking with us as well. we begin this hour with michael green, the chief strategist at simplify asset management. thank you for joining us this black friday. we will let you get to shopping in a second. before we get to the broader market, i want to start with cryptocurrency for a bit, because this really has been one of the big raw murders of the risk on sentiment we have seen over the past few weeks. kind of started even before the election but picked up a lot of steam once people got a look at what is going to be a new trump administration in january. you see this momentum continuing? michael: i think the real question is does the buying continue? we have seen an incredible

innovation, classic financial innovation, with a single stock etf's that have powered entities like microstrategy over the past month or so. those seem to be running out of gas, and the financing costs associated with them give lie to the idea financial conditions are affected by what the federal reserve is doing now, but this is clearly one of those things indicative of people's expectations that the craziness is only going to accelerate as it relates to government spending or inflation or the risks associated with the trump administration. romaine: as people take a look at that and try to make bets in the crypto sphere, we have seen a lot of people looking for proxies to do that. record strategy was the proxy for quite some time. we started to see etf's come into this space, and we started to see more of an embrace not only by retail investors but by the institutional set as well.

you expect that to continue, do you expect the embrace of crypto to be through proxy vehicles rather than through the actual crypto asset itself? michael: i think this tells you something about the space, which is that there still is very little utility associated with the actual tokens themselves. ultimately, this idea of digitally native securities is incredibly important. it is an incredible innovation to think about changing away from our paper-based financial system to one really built around digitization and securities capable of having complex instruction sets embedded inside them. right now, we are to build enthusiasm for the that is clearly being driven by promotional activity. we see that from blackrock down to the extremes of the micro sellers. katie: let's talk about the single strategy single stock etf's. i want to jump into the weeds. as reported by bloomberg, you are seeing this really

interesting dynamic where they cannot get exposure through swaps anymore. they have to basically tap the options market. that has been a lot of concern about that, but i want to ask why. what is the end effect on the end client, or is this more a problem for the issuer's? michael: there are two separate components associated with it. one is clearly an issue for the issuer's themselves come in that their perspectives do not disclose the use of options. by tempting to maintain their investment mandate, moving into options, they are incurring costs and pursuing investment strategies that are not fully disclosed to the investors. that potentially creates liability in the future, should these begin to underperform. by my calculations, the financing costs are somewhere in the range of 5% to 10% per month at this point. while we debate should the fed cut by 25 basis points, we are seeing areas of the market being

propelled by speculation with interest rates closer to 100%. so it is not anything to do with the fed at this point, i would argue. the second issue you have is that financing costs, because it ultimately means these vehicles are facing a bleed associated with a failure of options to go further or deliver their volatility. that means the carrying costs are in that 5% plus, 10% area, meaning that the bitcoin market, there microstrategy market, has to continue to rise at nearly 100% a year in order for these products to breakeven. that is an incredible headwind, and a lot of the behavior we are seeing in these single stock levered etf's, i think ultimately will be treated as various forms of manipulation. in all likelihood, we will see this get pulled off the market in the future. katie: that will certainly be

dramatic. to put it simply, these are not meant to be buy and hold investments, the issuers themselves or tell you that. i want to talk about these relationships between these etf's and what it means for the actual microstrategy underlying stock. you see microstrategy trading at a record premium to bitcoin itself, and there are some theories out there that it is actually these leveraged single stock vehicles are driving that. michael: yeah, i don't think there's any question about that. if you look at the increase in premium that occurred, it happened almost homogeneously with the launch of the largest leveraged etf's, ms to you -- mstu being the ticker there. that clearly powered the separation. there is very little to debate around the allowed it to push it beyond bitcoin. that created is something that happened with grayscale bitcoin trust two years ago, in which a

premium it developed for grayscale bitcoin trust created demand for bitcoin care this is working almost in rivers. the premium for microstrategy is leading to micro strategy being able to issue shares and, in turn, buy bitcoin. it is a far less direct route but it is the same underlying effect that continues to push the stock and the coin higher at this point. romaine: i am curious, when we talk about this in the context specifically within the crypto sphere, do sum of the optimism bleed -- does some of the optimism bleed out into the broader market? michael: it is hard not to assume there will be implications associated with this. you have individuals feeling flash in the environment that will lead to them increasing their purchasing tivoli, so there are real-world feedbacks to this pair there is also feedbacks in the george soros

reflexivity components. this facilitates microstrategy in raising real cash in the form of convertible debt or issuance of fairs, which is used to purchase bitcoin. they could theoretically hold onto that and use it for alternative corporate purchases as we saw with stock like gamestop. so far, they seem to be much more aggressive in this market. romaine: michael green, & phi asset management, here on this black friday. when we come back, we will focus more on what's been going on with lines of shoppers outside the stores and the retail trends. but i think we have to take a moment here to pour one out for a trailblazer when it comes to sartorial elegance. katie: are we talking about a person? romaine: even better. we are talking about a shiba inu. bodi, you recognize this base pair this was a dog who came to

fame when his owner decided to dress him up in ralph lauren samples. this is a real dog in real clothes, and he looks better than both of us. he passed away, but he was at the ripe old age of 15. pretty impressive. katie: i wonder what happens to the account now. does it just live on without any new content? romaine: maybe they will be a bodhi 2.0. this is his time of year. he would be looking for those 40% off sales, those cashmere sales at banana republic. katie: bodhi the dog couldn't hang on for one last black friday? it is a really sad story. i think i finally find a use case for a out creating images for this dog. romaine: bodhi, pour one out for him. eric fisch at hsbc is stopping by. stick with us. this is bloomberg. ♪

romaine: "bloomberg surveillance " rolls on even as jon, annmar ie, and lisa decided not to come to work. i have your morning calls for the day. da davidson raising its price tag on planet fitness. the analyst pointing to membership growth and a monthly fee increase. shares fractionally higher in the premarket. next up, citi raising its price target on ulta beauty, this on the stock's balanced risk reward. shares unchanged here. finally, morgan stanley lowering its price target on kohl's, the analyst saying current strategy may have actually impaired the

business further. katie: you hate to see that. if you're current management, that has to hurt. romaine: kohl's, though shares under pressure. the damage in that stock has been done. maybe a turnaround story there. a lot will depend on how the holiday shopping season plays out. the holiday shopping season that kicks off about five days later than what it normally would. outside of macy's, flagship store, harold store, new york city, there's none other than vonnie quinn, who is standing by, keeping an eye on how many people are filing in and out of there. i do not know what that crash was pier 1 that santa clause coming down the city -- was that santa claus coming down the chimney? vonnie: that was a near city trashcan. but we are seeing a stream of customers into macy's. it started as a trickle and turned into something more. if you walk around inside, it is

pleasantly full. not a throng of people, by that tells you what the numbers i have been projected, the national retail association saying they will be a record number of shoppers this year. two thirds of those will walk into a store somewhere across the united states. that is a phenomenal number, when you think about the death of black friday has been called for many years now but is clearly still a tradition, still something sociable you do with friends and family. we have talked to many tourists from the west coast, from turkey, who just arrived to the city and want to go to macy's for their doorbusters and all of their black friday to cyber monday sales. katie: talk to us about that stat, 31 million expected to walk into a store. how does that compare to prior years, for example? vonnie: it is going to be a

record if that actually does come to pass. two thirds of 137 million, that is almost 35 million. if you think about what they are spending, that is important. we are looking for growth between 2.5% to 3.5%, down from the 3.9% growth rate we saw last year. it is healthy growth nonetheless, when you consider household spending is still holding up, but also household debt is going up as well. those pandemic savings are gone. one interesting full done was that's one interesting -- one interesting poll done, just 9% are planning to spend more than last year. there are all kinds of numbers floating around. we saw those company earnings. the companies that got it right for people in from all sorts of demographics and income dr. --

income brackets for those that did not got mixed up with inventory problems and did not attract those customers. we are seeing a discerning customer. romaine: vonnie quinn outside the macy's in herald square. and it wouldn't be a new york report without a trashcan being banged around in the background. we keep it rolling with eric fisch, hsbc u.s. commercial banking head of retail and apparel. you saw vonnie out there. the lines and as long as folks by online. -- buy online. put it together in aggregate people we see a better holiday shopping season? eric: what i am hearing for my clients is expected growth. we came into the season after an election where there was anxiety. coming out of that, stores immediately launched sales. as you mentioned, shorter holiday season, five days shorter than last year.

that created a bit of a sprint, and shoppers responded. romaine: i am curious as to what people will be buying. bloomberg has out its own gift buying guide, which includes anchoring for a few books to ava spoke globe that will cost more than $1500. will people spend for more lower end or middle-of-the-road items, or will days -- they splurge on something more discretionary or, like ava spoke globe, something fitly unnecessary? eric: in general, people are looking for value. regardless what price point you normally shop in, if you are a luxury shopper, we see a lot of people shopping to mass affluent. unlocking that perceived value is critical. romaine: i am curious on

off-price, though. does that mean they do not go to the department store or go to a t.j. maxx or something? can department stores not compete in that space? eric: now a lot of department stores have off-price channels. it is finding the brand names that you have come to trust but at that better value and lower price point. katie: i want to talk more specifically about luxury, because the narrative has been that luxury is resilient, sort of the last to crack. but we have seen some tremors. give us a specific channel check on how luxury actually is. eric: i will not lose a lot of sleep for the luxury sector. they have had some phenomenal years. i think we have reached a point where it is hard to come up over the phenomenal growth. at the same time, they have raised prices considerably, especially since covid, some almost doubling the price of their product. whether has created is a product

where the aspirational shopper who is buying up has been priced out of it. katie: basically, luxury raised too much for the aspirational shopper. how does pricing work at the luxury sector? you think about these bigger brands, talk about discounting all the time -- how sticky our prices when it comes to luxury? eric: great question. i think we will really see that play out now that the comps have not performed. in general, luxury brands is self-fulfilling, where you raise prices, which we tout some of the aspirational shopper, which makes it more scarce, which make them more desirable, which makes people want to buy it more. it is almost a virtuous cycle for them, but they have to live through some of these negative comps to give back to that. romaine: i want to talk about the technology involved right in the shopper experience. let's start with the way stores the ploy. we have seymour used of cameras, not just attract whether i walk

out the door with something i did not pay for, but also looking at how i am looking at it, whether i touch it, try it on. in theory, you put this together and have a better way to target me, as a consumer. eric: i think this is where ai comes in. if you think about a typical small store that may have six to eight cameras, you would have to have a full-time person there for surveillance for theft. ai can trigger when there is something suspicious, and at the same time, to your point, you have cameras that can notice where someone's eyes are looking, where they are glancing, we items they are looking at. aggregate that information and show real heat maps of where in the store to put the highest volume items, where people are really not going? there are opportunities to improve vision sees -- effi ciencies. katie: it is a little dystopian. we are causally being watched. the opportunity, as you say.

talk to us globally. you were talking about luxury, european luxury, but when it comes to global appetite for more u.s. centric rands -- brands, how does that shape up now? eric: it is a little bit of a contradiction, where we speak a lot about how the chinese consumer has slowed down a bit in purchasing. europe, as well, has been a bit of a staggered market. but the u.s. continues to perform well in those markets. the u.s. continues to be the cultural touchstone for the world, hollywood and the way we export culture. what that's created is opportunities for u.s. brands to continue to expand. sometimes, we get caught up in large, mature markets that are still great opportunities for new entrants. katie: usa, baby. [laughter] romaine: eric fisch over at u.s. -- hsbc, excuse me.

[laughter] i want to point out, we have a great live blog on the bloomberg terminal. one of our reporters is out at a macy's in bethesda, maryland. basically seeing only about 20 people showed up outside the store in bethesda, maryland this morning. they said the store still remained kind of impartial darkness, even after the doors opened. she said the busiest thing going on at the store is next door at the starbucks. katie: i would 100% believe that. that is some great on the ground color bloomberg news is providing. romaine: coming up, the takeover. the open and the close together as one, like the wonder twins. kristina hooper will be joining us after the break come over at invesco. you're watching "bloomberg surveillance." ♪

it's our son, he is always up in our business.

it's the verizon 5gme int. 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.

romaine: this is "bloomberg surveillance." we wait for the opening of the cash session in the u.s. markets. just about one hour away. s&p futures up by about .2% on the day. similar moves across the other parts of the major indices with the russell 2000 doing what it's done for the last few weeks, outperform the broader market. cyclical rotation. taking a look at the premarket trade and what be relatively light trading as well. an early close for the market. let's get to manus cranny who standing by with the morning movers. manus: there's a juggernaut --

we will get off of applied materials. you have less onerous galatian then what we thought -- regulation than what was going to be inflicted on supplies into china and the semiconductors business. all that can change as soon as donald trump comes the power in terms of what will happen with tech into china. a look at some of the other stocks which is applied materials. this is a rejection by the fda. one of the drugs, and application for a genetics disorder has been pushed back. rbc downgraded the stock to sector perform. down 75% of the moment. they need more data and a more convincing package to go back to the fda. a snapshot of what is going on in microstrategy. the vicarious trade on bitcoin.

we have five convertible bond issue so far. raising money for buying were bitcoin. it depends on if there is anything that can go wrong. this is a great short. this talk is a great short for him. few flags the risk on the repayments on those convertibles. the week after donald trump was elected, $217 million flew into the stock. there was a real velocity in terms of ownership. lots of narratives. bitcoin, deregulation. let's see what 2025 brings on the trade. good morning. romaine: good morning to viewers worldwide. talking about the market that looks like that is setting up for gains to close out the month of november. a month that has been stellar across the board. 5% gains on the s&p 500. i take that back. 10 of the 11 s&p sectors in the green for the month.

katie: you are close. what was the underperformer? romaine: health care, which is relatively unchanged. there is still a chance in the training session. katie: you think about this euphoria and optimism about m&a. health care is always named along with financials. you have not seen that enthusiasm come through in the stocks yet. romaine: a stellar month for financials. kbw bank index even better on the month. the final trading day of november. we head into december and 2025. let's get some insights out of kristina hooper over at invesco. happy thanksgiving. great to see you. kristina: great to see you too. romaine: a lot of questions now about whether the momentum we have been seeing in the u.s. equity markets carries over into december and 2025, or have we pulled forward some of those gains already?

kristina: the momentum continues. we will probably see a few spiders. -- sputters. i use 2016 as a guide. we saw a relatively strong rally that peaked in mid december. we still finished the year with significant gains from the starting period, election day. i think we will see a dissimilar scenario this time. certainly the idea of the regulation hasn't -- deregulation has unleashed some animal spirits. romaine: a lot of gravitating to small-cap, mid-cap and that cyclical space. the russell 2000 outperforming the s&p by a factor of two to one in this particular month. this has been the story unfolding for quite some time. people looking for a broadening beyond the mag seven that started off the rally this year it is something more broader but more importantly something that's more sustainable. do you see that rotation as sustainable? kristina: absolutely.

we have been anticipating this rotation for some time now, well before the election. it was based on our view that we would see the fed start to ease. we would see an economic read acceleration and 2025 and markets would discount that. this is playing out. it probably has gotten a nice kicker from the election and expectations around deregulation. it is not being stopped by any kind of concerns around tariffs or restrictive immigration policy. it is certainly moving ahead. i think it is very sustainable, although i think there are certainly risks we can't ignore. katie: let's talk about some risks. what could upset the apple cart here? one of the answers i get is maybe the bond market, specifically the long end of the treasury yield curve. we were having this conversation but it seems like the bond market and the stock market are talking to each other right now.

if you start to see the long end of the treasury curve rise, 10-year yields may be north of 4.5%, maybe approach 5%, what does this mean for the cyclical rotation and specifically this rally we are seeing in the small caps? kristina: i certainly think when you get yields that move that high, if they do that, that would put significant pressure on stocks. i think the greater pressure would be on tech names and what we consider to be longer duration assets. the reality is it could be problematic in general. the bigger issue is what it makes the government do. at what point does the u.s. government say we have a problem in terms of fiscal prudence? we need to cut the deficit. we have been here before. the simpson bowles commission a decade ago proposed some thoughtful ways to help solve --

not solve but ameliorate the kind of fiscal deficits we are running. i don't think the thing was passed by congress. we could come to a similar situation today. the question becomes how patient are bond investors? they have been but we know from other countries there are significant fiscal issues going on that could cause some very significant belt-tightening which could create headwinds for the growth picture. katie: you think about treasury pick -- secretary pick scott bessent. he has this 3, 3, 3 policy. one pillar of that is that he wants to cut the budget deficit 2028. the intention is there. do you have faith that something like that can be accomplished in this political climate? kristina: i think we want to be

as optimistic as possible. certainly i think the markets will reward any attempts to get there, even if we don't actually see 3% by 2028. it is certainly an admirable goal. i think it is easier said than done. what the simpson bowles commission found was there are so many sacred cows in the u.s. budget. while you can in good faith proposed a number of cuts that seem to make sense, there are a number of lobby groups and areas of interest that focus on supporting continued spending. romaine: that's a good point. i covered washington for a long time and people forget how much power some of these industries have over our lawmakers. they are not going to stand idly by as you cut into some of those cash cows. the broader question as to whether investors should worry too much about this in the here and now. there's talk about this idea of

wait until the policies are passed in congress. wait until they are implemented in the white house before you react to them. there still is so much uncertainty about whether these changes will never really see the light of day. kristina: i think that's right. you should be aware they could be on the horizon but we just don't know what kind of impact. we don't know the scope or the timing. we don't know the impact it will have. absolutely we should continue to invest. stay invested, stated diversify. just be aware. to a certain extent have blinders on. katie: you think about the past two years. 20% plus gains back to back. it is very rare to see that. you wrap it altogether. let's set expectations for 2025. what kind of gains could we be looking at? kristina: we could certainly see gains between 10% and 20% next year. that is very possible given the kind of environment we are set up for.

that assumes that tariffs are not applied, they are just threatened or are very temporarily applied. that assumes we don't have the kind of restriction -- restrictive immigration policy that sends 15 to 20 million people away. that could be very problematic for our labor pools which are already very tight, especially in certain industries. romaine: always great to talk to you. kristina hooper over at invesco. normally we talk later in the day but i got up early in the morning just for her. markets fractionally higher on the s&p. futures -- s&p futures. one of the big movers on a volume basis is supermicro. 3.5 million shares swapping hands. they were down 15% in the premarket. no news crossing the terminal now but certainly one to keep an eye on. now that a percent. katie: there's been speculation about whether it would be booted out of certain indexes.

i believe it was just added to the s&p 500 a couple of months ago. we will see if it stays in that one, in addition to the nasdaq 100. boy, has it been fun to follow the stock. romaine: we will continue to follow that. we are following all the shoppers who are supposed to be out for this black friday. keep an eye on the top line. great color out there, including a reporter who went to a jcpenney in new hampshire. accorded to her, it's an island of activity. that's a big talk here. how much are people spending and where they spending it? is the department store concept over? scarlet fu and i caught up with the ceo of bloomingdale's not too long ago and asked about the holiday season in the future of the model. oliver: the u.s. market is the biggest and most intense market for department stores. it's very exciting for us. the socially department stores. i'm thrilled to be here. i think we can do things

differently in the future. reinforcing the experience. reinforcing brands. there is room for improvement for the future. this is what we are working on a bloomingdale's. scarlet: you are in europe and asia. a lot of experience overseas. what have you noticed that is different or unique about the u.s. consumer versus those in europe and asia? oliver: they are used going to the department stores. the importance of department stores for the customer is very strong. when you compare to asia and europe, it is very strong. the relationship with the department store and with retail overall is transactional. we have to bring back more storytelling from brand authors to the customer. this is a perfect demonstration. romaine: talk about how you do that. you the word storytelling in the fashion industry. you need to give people a reason

to spend however much money on that handbag or shoes. telling a story. how do you do that, concept and a day and age where people are more transactional? they want to buy what they want to buy and leave the store, or pick it up and go home. oliver: you are not just buying a bag. you are buying a story. buying a social marker. you are buying something special that is more than just a product. we have to make sure the store experience -- we are bringing that to the customer. it's about that. it is about activations in the stores. you are not only coming to the store to buy. you want to meet people you like, see something different, leave excited. this is what we are working on now. we want to make it bigger and bigger to reinforce that a bloomingdale's. romaine: how transferable is that to other locations?

this is your flagship location. when you go to a store in texas or california, can you replicate this? oliver: that's a good question. it's about being bloomingdale's and a chain. it's not about the flagship. we want to be the local leader, the local destination. we have to cascade that to every store and customer. the team is working on. of course, it has to be relevant locally. romaine: given your background in europe and asia, are there plans for any sort of international expansion for bloomingdale's? oliver: i don't think so. we have a partner that is performing well. bloomingdale's in the middle east is a strong platform but is not a priority. we have a lot of opportunities in the domestic market. we think we can have strong growth in the future in the u.s. a new platform in any region is very challenging -- a new region

is very challenging. starting from scratch when you have mature department store brands in these regions is very challenging. romaine: what about the mix between the amount of sales you are getting from your brick-and-mortar locations and the amount you're getting from digital online sales? oliver: we are pretty much in line with our peers right now. the market is around 30% of sales. for the last two years the growth has been online. we are not jeopardizing the store sales right now. romaine: is that a different customer or the same customer? oliver: online now is the number one recruiting channel for new customers. we have the ability to transfer online customers to offline. you have the returns. you want to book or see what you will buy offline online. right now customers are channel agnostic. they don't care whether they are

shopping online or off-line. they want to see a product and experience bloomingdale's, whatever the platform. we are talking about more social shopping. whatever the channel, it's about engaging with the brand. scarlet: if you take a step back, and in contrast to what you see in europe and asia, the department store model has been struggling in the u.s. for a number of years. what is behind that? why is the department store model not doing as well as the u.s. as it could be in asia or europe? oliver: the models in asia and europe are flagship focused. that is one big difference. i think the flagship will have a bright future in the next 10, 20 years. it is not a problem at all. the problem is managing such a large footprint. that can be a challenge sometimes. at bloomingdale's we have the chance to be in prime locations and strong locations. we have a limited footprint.

more opportunities than threats in the future. the model has a bright future but it has to reinvent itself from the perspective of the customer but also from the brand partners. we have to be relevant for brand partners and rethink the model from this point of view. scarlet: how about the broader retail landscape overall? are there too many stores overall? oliver: when you look at the pure market data, the overall market is slightly growing. the penetration of online is going up. for sure, the average productivity per square foot overall in the u.s. is slightly decreasing. there will be some losers. it is why you have to challenge yourself and reinvent your model to remain relevant for your customers but also for your partners. romaine: i have to ask you. when you look at other retailers, and it doesn't have to be a direct competitor, houthi u.n. the most -- who do you envy most? i want to try to emulate some of this. oliver: i really think

bloomingdale's is doing that right. i'm sorry to say but it will not be my only answer. i was surprised. there a lot of engagement of the customer. the relationship we are building with a customer and with our partners is good. we can do better in the future. there's a lot of inspirations from our competitors but also from other models, whether it is service, in terms of brand mix, activations. there are a lot of inspirations in retail and beyond retail. i don't want to give you any names but i have a lot of sources of inspiration in the u.s. and also brought. we should not be too domestic focused because we can miss good trends happening somewhere in the world. romaine: you think maybe what we see abroad in terms of their approach to the department store and retail overall, that will be palatable to a u.s. audience? oliver: i am convinced about that. we have to bring the best of both worlds. we need to bring something

different for the customer. the customer is ready for something different, more inspired. we can get it from some of the countries or the other models in the world. romaine: our conversation with bloomingdale's ceo oliver bron. bloomingdale's underneath the broader macy's flagship. oliver took over about a year ago. his predecessor not running macy's, the total corporation. i don't know if you got a chance to get to the big macy's parade. it was raining. katie: there was no way i was physically going to go but i did watch on the television. it looks cold. really unpleasant. romaine: it is our tradition to go out there on thanksgiving morning. we woke up and saw the ring. maybe we will skip it. we did watch it. we watched how to copy. -- hoda. cal broker. -- al roker. i think it should be us. why did they get to do it?

katie: no one has raised their hand. romaine: i am raising my hand right now. that is on my bucket list will stop katie: thanksgiving 2025. romaine: only if it is not raining. the music starts to play. this is "bloomberg surveillance ." ♪

romaine: the opening bell in the u.s. equity markets a little more than 30 minutes away. futures finally higher on the day. .1% on the s&p 500. we give the diary for the week ahead on this friday. looking ahead to monday. ism manufacturing data plus the s&p global manufacturing pmi's. we are not a manufacturing economy anymore but we pay attention to the numbers. katie: we are a services-let

economy. -- services-led economy. romaine: we used to pay attention to joel's data. now not so much. tuesday, we get the jolts data. that will be the drumbeat to the official data later in the week. katie: there's more labor market data we get. romaine: like what? adp. that's right. i like this. segues. the adp private payrolls numbers. we will get a sense of the job numbers. the beige book, which actually isn't beige, anecdotal evidence of how people feel in various districts. katie: i know you read that cover to cover. romaine: i try to but it's a little boring. sometimes you get some nuggets and you find out more underneath the hood of what the headline numbers can tell you. you get to thursday and we get some headline numbers with the weekly jobless claims. katie: i'm excited to see those.

it is funny how every payrolls week -- i hope i didn't spoil it -- there is payrolls on friday. you get the steady drumbeat of labor market data and none of it matters. something you hear all the time is never trade on adp. often those two numbers don't actually talk to each other. romaine: that brings us to the official monthly payroll numbers. the economists estimates on the terminal, the median estimate is 200,000 jobs created. that's a big improvement from the 12,000 we got the previous month. that 12,000 very distorted by storms and a few other factors. katie: you basically have to put your hand over that month. it is so noisy. it was hard to get anything out of that. this time around it is the final payrolls print of the year. i believe the last one we will get before the december fed meeting. a lot of focus on the headline number, the rate of unemployment but also wage growth. a big question mark about mass deportation next year. that is definitely the thing to

watch. romaine: we are exceeding -- expecting to see some moderation on a year-over-year basis. the unpleasant rate inspected to tick up to 4.2%, the backdrop for a fed meeting. remember the fed? they have one more meeting this year. katie: it will be interesting. everyone knows they are going to cut rates. whether they should is a hot topic. i'm sure you're having that conversation all the time. romaine: we have a lot of hot topic conversations on "the close," my normal show. i'm not just doing this for free. we have to promote "the close." you do a show, "the open. " katie: "open interest." next time we don't have to hang out at 6:00 a.m. romaine: a lot of good guest on "bloomberg surveillance" when the team is back. cameron dawson, seema shah and dana telsey.

thank you for joining us on "bloomberg surveillance." happy birthday. ♪

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