>> we continue to think this is an environment of transformation rather than your typical cycle. >> rates are still beating flee above neutral. >> not only do you have fixed income concerns but equities are very expensive from a valuation point of view. >> i would say their own more winners than losers these days. >> you think you are set up for another double-digit return this year. >> this is "bloomberg surveillance" with jonathan ferro, lisa abramowicz, and annmarie hordern. jonathan: live from new york city, good morning, good

morning. bloomberg surveillance starts right now. coming into thursday on a four-day winning streak on the s&p 500 after printing another series of all-time highs. futures lower by almost .1% on the s&p. on the nasdaq down .15. tons of economic data at 8:30. jobless claims did -- jobless claims that america come in tomorrow the big one come the estimate around 215,000. lisa: a lot of people are looking at good news being good news as long as we do not torpedo rate cutting expectations. even with hawkish talk from jay powell yesterday, there was this feeling rate cuts could continue because the strength we are seeing in the labor market is not in tandem with inflation. that is the feeling right now. jonathan: chairman powell seems to have confidence in the

direction the committee is going in. we heard from chairman powell a few times over the summer. two stuck out, once in portugal and the other in jackson hole. at jackson hole very worried about unemployment. in portugal he talked about a strong economy and a strong economy given the time to get things right and that is the chairman powell we heard from yesterday. lisa: people can write in and tell me i am wrong, but this is al i heard him. we will cut next month but will probably not cut again. this is the gravitational force saying we can afford to be more cautious as we try to find neutral. it has been the broad-based consensus in the fed. jonathan: that cut might be dependent on the incoming data. december 18 the federal reserve. have to talk about price action elsewhere. bitcoin through 100,000 come up on the session close to 5%.

we are all looking at the selection of president-elect donald trump for the sec. annmarie: this is giving extra oomph to the bitcoin price and also the crypto community. he is tapping paul atkins and suggesting four years of a very light touch when it comes to likes of crypto firms or hedge funds. the crypto community as well as others on wall street have been welcoming this individual, especially since a lot of people in the financial community, in the crypto world, even democrats were saying they did not like gary gensler and were happy to say goodbye. lisa: one of the commentaries from people in the crypto sphere says the nomination of atkins added to the carnival atmosphere. we have risen 50% in bitcoin since donald trump was elected president. this has been a moonshot. who will get ahead of this trait

given the fact people seem amenable? jonathan: anyone but kinsler seems to be the take away from the crypto community. coming up we will catch up with max kettner. we will speak to simon french as france's government collapses, and sonja of ubs ahead of the latest payrolls report. we begin with the s&p 500 on course for its best year since 2019 after posting is 56 record close of 2024. the team it hsbc looking for the rally to continue. in 2025 re-retain a risk on start in her asset allocation. we think the outlook could resemble a 2017 style goldilocks backdrop. max kettner joins us for more. good to see you as always. you are looking for a powerful rally. can we put some numbers on that? max: particularly in h1 i think that will be powerful. we will still be overweight equities but across the equity

spectrum the most bearish you can get is neutral on the sector and on a region. when you look at the numbers you could see a 5% to 10% up in the first six months. the policy backdrop we have got with continued rate cuts, with the fed already starting to hint at some sort of discussion around an end of qt and all of these things on the regulation side, are they going to be the same or less? on the fiscal side will it be the same fiscal spending or more? taxes will be the same or less taxes. we have these revisions to the national accounts where real disposable income of households has been revised higher by almost $1 trillion. putting some numbers on we've been talking about how under the hood the u.s. consumer is doing much less well than we all thought. in reality it looks like real disposable income has been

around $800 billion higher than the first estimate. that ought to be good, particularly with election-related uncertainty subsiding. i can see that consensus, still calling for a deceleration of u.s. gdp growth to around potential 1.7 or 1.8 in the first half. that is too bearish and that means earnings expectations are too bearish. it is an extreme we supportive goldilocks backdrop. jonathan: in the first six months, what is it about the second half you are not committed to? max: i think i am too stupid to look further than six months to be honest. if we are honest in the second six months, there are a couple of things that could be upsetting markets. we could start to get to the end of the cutting cycle and then we talk about the neutral rate, is it perhaps a bit higher than we thought. that could be upsetting markets.

we have to deal with a 2017 tax cut. are they really going to be extended? is only half of them were the proportion? is it the income taxes or the corporate tax cuts? those kinds of discussions we have, that has the potential to temporarily upset markets, where is the next six months or eight months is super supportive. lisa: the difference between this type of goldilocks is it is not supporting rest of the world. the u.s. is in this extreme goldilocks while everyone else looks terrible. how long can that continue? max: had you known what is happening in europe what you've gone long european equities or long european credit? there is a potential in the first half where if we start to see the u.s. accelerating.

i 100% agree with you that this is a very u.s. centric goldilocks backdrop for make growth and inflation perspective, but i think there is also a basis for that to spread towards other asset classes in other regions. i think if we start to see things like super cool inflation start to trend down in the first half because we had these high readings in the first quarter of this year, there is the potential for that starting to go down a little bit in the first quarter -- in the first four months of this year. that would introduce a goldilocks backdrop that can extend to emerging markets, even emerging market rates. look at emerging-market credit. you would think emerging-market credit would be much more challenged. the reality is if you look at e.m. credit spreads they have been going down below 300 for the first time in two years. they are going towards the tight again. from a inflation backdrop, very

u.s. centric but we are already starting to see that extend to other asset classes and sectors. lisa: the extreme bullishness seems predicated on the idea of ongoing disinflation. we had the idea of inflation beast had been killed. rates are restrictive we heard from jay powell, though he does think he can afford to be more patient. what happens if they are wrong? is there a sign from ism services yesterday with prices paid increasing and you get this feeling investors and companies are reinvesting in their businesses. at what point can we be confident that inflation has been slayed? max: three months ago i would have agreed with you. three months ago you saw two year breakevens around 160. you saw inflation swap around 170. you saw the monthly fixing for february and march and april

approaching 1.5% on the year-over-year. that was the time when everyone else declared inflation did come including what you've been talking about, jackson hole. jackson hole was saying we are no longer worried about inflation, it is the labor market we are worried about. three months ago i would've agreed with you. what we have seen is a massive repricing of particular short end inflation expectations. what i would argue is there may be some inflation coming back but it is now in the press, very contrary to two or three months ago when it has been almost the other extreme. now we are approaching the highs in front anti-inflationary expectations we have last seen in april when the market was pricing in almost a third possibility of another rate hike by the fed. that is how extreme we have become. i would say from a pricing perspective, a lot has been repriced. particularly from an inflation

expectation -- from an inflation perspective, you look at the first four months. on the super poolside this year we had a .5, .7, and .9% month on month and the first free months of this most narrow underlying inflation measure of the fed. if that does not repeat or exceed it in the first three months of 2025, that should create a bit of disinflation. that should give the fed more comfort to cut rates. better growth with decelerating underlying inflation. a much more goldilocks can it become? annmarie: you say inflationary risks can come from tariffs and geopolitics in your note where you say what can go wrong. you also talk about the fact you think potential tariffs might be less than expected. why do you come to that conclusion? max: we have to wait for what is beyond the narratives and the daily tweets.

we have to wait for what comes out of it. the second thing is why we need to wait for that? the fed has clearly been saying we are not in the business of speculating. we are not in the business of maybe we will do that. they are clearly in the business of we will wait for the policy measures, we will wait for the proposals. once they are implemented then we will do our analysis and then we will react. from a financial market perspective that is a much more important thing. it is not so important what will happen on tariffs, what is much more important is how will it change the policy set up? i keep banging on about it that it is not the day-to-day politics, it is the policy set up that is more crucial. that is probably something more likely going to happen in the second half, not in the first half. we have to weigh what is definitively leak coming out of

that, not only for us, not to get too fixated on the 50-50 day-to-day politics, but also to assess how's it going to affect the policy set up. that is not something for the next six months. jonathan: we are all in the business of speculating and we will do just that. max kettner of hsbc. what we can do is identify potential points of tension. if you take the optimistic view for 2025, a point of tension is the difference between that and potential sequencing from washington, d.c.. we got a better feel for it this week that taxes might have to wait. if you were worried about not getting the good stuff for a while, that is what we're hearing from washington, d.c. and president-elect trump, he is ready to go day one on tariffs. i'm not sure they're ready to go on day one when it comes to taxes. annmarie: they are not. we heard that from senator thune , talking about they want to do immigration first.

taxes means may be mid 2025. when it comes to day one we have more insight on tariffs and what that discussion might look like. personnel is policy. peter navarro is back in the west wing. it will be howard lutnick at commerce secretary versus someone like scott besson and kevin hasek in terms of how they will implement policy when it comes to tariffs, blanket were negotiating tools. jonathan: they are ready to hit the ground running and deliver tariffs. equity futures little bit softer. with an update on stories elsewhere, let's cross over to dani burger. dani: president emmanuel macron is searching for a new prime minister after a no-confidence vote against his government was passed. emmanuel macron needs to find a premier who can pass a 2025 budget through a deeply divided parliament. it is the shortest tenure for any premier since 1958. emmanuel macron is expected to

speak at 8:00 paris time. bitcoin has touched $100,000 for the first time, getting a boost from donald trump's pick to lead the sec. crypto component paul kins wirral place gary gensler. the overall -- crypto proponent pol atkins oral place gary gendler. here's of american eagle plunging this morning 16.5% premarket. it issued a week holiday guidance and cut its holiday sales outlook. american eagle also reported sales which dropped about 1% from a year earlier. the company ceo said there was strong back-to-school demand but otherwise choppiness between those key periods. that is your brief. jonathan: retail is brutal right now. if you miss you get punished big-time. lisa: there is a question about whether you are cool, whether

you can manage through an influencer time of product drops in different types of social media influence and if you cannot the hammer drops. jonathan: dollar general reporting later this hour. we'll hear from kroger later this morning. up next, the french government collapses. >> marine le pen has decided it is better to precipitate a crisis than have a weak government. she probably thinks accelerating the political agenda is what is best for her at the moment. jonathan: that conversation is up next. live from new york city, good morning. ♪

ere ya headed? susan: where am i headed? am i just gonna take what the markets gives me? no. i can do some research. ya know, that's backed by j.p. morgan's leading strategists like us. when you want to invest with more confidence... the answer is j.p. morgan wealth management jonathan: equity futures on the s&p 500 negative 0.06%.

look out for jobless claims at 8:30 eastern and retail earnings reports through the next couple of hours. we'll hear from dollar general and kroger. under surveillance, the french government collapses. >> marine le pen has decided that it is better to precipitate a crisis than have a weak government. the calculation of michel barnier was marine le pen wanted to polish her image. she probably thinks accelerating the political agenda, trying to go after emmanuel macron is what is best for her at the moment. that is also the view of the extreme left. jonathan: the french government of michel barnier toppling after just three months in power following a no-confidence vote, marking the shortest tenure for french prime minister since 1958. joining us from paris is kriti gupta. what is the latest in paris?

kriti: shell barnier is out and emmanuel macron is in the spotlight but it is marine le pen all over the french newspapers. the idea that emmanuel macron has to solve the puzzle of which caretaker prime minister, potentially his eighth, can survive a no-confidence vote from marine le pen while also battling resignation calls from the far left. the trick is what happens to the budget because that is where the sticking point is. the budget does not increase a deficit. the most likely outcome will be a technocratic government in france, one that rules over the 2024 budget into 2025 and creates potentially inflationary costs for french consumers come increases taxes for a lot of the french household but then potentially because of the austerity decreases some of the deficit concerns as well and that is what is reflected in the markets. jonathan: fantastic reporting over the last few days. kriti gupta out of paris.

simon french joins us. we clearly have a political crisis, chaos in the government if you listen to the reporting this morning. how close are we to having a financial crisis? simon: we are a fair distance away. the playbook from the ecb standpoint is clear. it has its transmission protection instrument put in place a couple years ago. i expect ecb policy makers, if yields which are currently on the 10 year 85 basis points higher in france than they are in germany, that is about double their five-year average. that is not a stress point yet. policymakers should try to avert that economic crisis will try and have self-fulfilling commentary saying we have the toolkit come it is there bound -- it is there, we will try to keep a lid on yields. the market reaction this morning is pretty underwhelming,

suggesting that even without the commentary that is where market participants expect things to go. lisa: it might not necessarily be some immediate financial crisis getting baked into markets, but the slow bleed of not having readership for monster, with questions over the president himself and whether he is going to resign. what point does that way not only on french assets but the euro as it is not the only region facing political instability, it is also germany. simon: it is not without friends in terms of economic and political turbulence going hand-in-hand. you are right to say that even the instability, even the uncertainty has economic implications. while actually the first order of the impact on gdp of a less restrictive budget that was planned by michel barnier's government will be creative in terms of government spending. the size of the deficit expected

to be about 100 basis points higher, 6% of gdp next year as a result of the budget not passing. it is the private sector impact on investment consumption that is a bigger headwind than that is a tailwind. you can see our own expectations for growth are only 1% anyway in france next year. i think the downside risks have grown to that number. lisa: at one point paris was thought to be the alternative to london as the financial center after brexit and there was the feeling we have the stability that britain does not because of potentially separating itself from the rest of europe. has it just lost that upperhand completely as they face political instability and a pushback against that structure? simon: personal view, although brexit was a self-inflicted negative for london, and while there was analysis around the market cap of the french stock

market briefly exceeding the uk's stock market, i do not think it ever had that structural advantage. you are absolutely right. emmanuel macron has been on inoffensive to try to get financial sector jobs away -- you menu micron has been on a charm offensive to try to get financial sector jobs away from london. annmarie: a french minister told me yesterday that we are seeing the italianization of french politics. we are dealing with two court economies dealing with political instability. do you have concern this could be a contagion to the rest of europe in the periphery? simon: i do not think there will be too many people, certainly not marine le pen part of the french parliament that will be worried about an italianization if it is in borrowing costs.

spreads -- you talked about the expansion between german and french spreads. we have seen the spread narrowing in the italian government. i think stepping back from the slightly artificial spread environment driven by the ecb sentiment, the broader economic picture of a eurozone without any growth at all in the past 15 years has been germany. that is on its knees economically. to have any of the other major economic areas not participating, the growth picture is pretty bleak. jonathan: well set as always. simon french out of london. let's take two different perspectives. a market perspective, look at how the markets stopped responding to bad news in europe. euro stronger, french spreads tighter. i would put that one side and say let's take a more strategic look at europe. france is ungovernable which

means it is unreformable which means ultimately has to get worse before things start to get better. lisa: at this point has that been baked in and that is putting together the market view versus the political backdrop? is there also a good degree of hope that some of the crisis level of government dysfunction in the two biggest economies will force change. at a certain point you start hearing about the lack of austerity in germany. jonathan: a must watch interview. just hearing from the team that the joint architect of this governments devise, marine le pen has just set down for an interview with francine lacqua that is just wrapped up. we will bring you highlights in the next couple of hours. stay tuned. from new york, this is bloomberg. ♪ asking smart questions about opportunities like advances in healthcare. and how these innovations will create a healthier world tomorrow. better questions. better outcomes.

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jonathan: a four day winning streak on the s&p. 56 all-time highs on the year so far. still time to go before we close out 2024 pulled up equity futures down .5%. on the russell the small caps softer a similar amount. in the bond market yields were a little bit lower, putting some weight on the isom services read coming in at a three-month load -- at a three-month low. if you look at the so-called totality of the economic data, things still look ok. lisa: they look ok and have not

looked incredibly inflationary. yesterday it was just a small grind lower on the two year yield but it is important to note the two-year yields are now in a one-month low as people believe the federal reserve is interested in getting rates lower even though the economic data is fine. it is not robust and they want to adjust. jonathan: more data later at 8:30 eastern time for jobless claims and tomorrow it is payrolls friday. let's turn to this one. bitcoin. up close to 5% intraday. a clean break of 100,000. chairman powell calling it digital gold yesterday. lisa: this is been the moonshot that postelection. it is up 50% since donald trump was elected. we see this euphoria around paul atkins as the latest heading the

sec. a question about whether this opens the door to institutional to go wholesale into digital gold at a time gold is a diversifier for those worried about the balance of bonds. annmarie: mohamed el-erian says one of the biggest changes taking place in the u.s. is the emergence of a new counter elite that is much more comfortable with innovations and disruptions, it is pro-liberalization, deregulation's, and less risk-averse. we look at economic names around donald trump's pick, what he has done in terms of an olive branch to the crypto community, that is what is taking place right now. jonathan: crypto unleashed, bitcoin up close to 5%. the new york police department saying an investigation into the fatal shooting of unitedhealth group executive brian thompson in manhattan is ongoing. authorities calling it a brace and targeted attack. the shooter remains at-large.

annmarie: very scary what happened. what struck me is when you watch the video, this ceo is walking to into the investor conference alone. the authorities are saying this is that he targeted attack and his wife speaking to nbc news says there were death threats and targets. bloomberg has looked at other big companies. a much money they spent on security. this individual do not have private security even though authorities are saying this was a targeted attack. lisa: hundreds of corporate executive security officials got together on a conference call yesterday and i was reading about it, trying to figure out what we need to do. i wish i could've been a fly on the wall in that conversation because you can imagine this is the clarion call across wall street and corporate america. get your security in order. jonathan: is a tragic loss of life and there will be a massive re-think. any details we will be sure to share them with you. french president emmanuel macron

searching for a new prime minister after lawmakers passed a no-confidence motion against his government. bloomberg's francine lacqua sitting down with french national leader marine le pen. we will bring you that interview at 8:45 eastern time. that is the leader of the national rally party in france. lisa: and the person who has been calling for the no-confidence vote. a real question about whether she could run again based on cases against her. the bigger question is how long will this take before it gets resolved. it took a long time for emmanuel macron to get michel barnier in the door. the michel barnier method did not work so what comes in next? annmarie: and someone who can pass a budget in this deeply divided parliament. the reason the market is taking office in kind is they will pass a fiscal continuation law. the optics feel worse than what is going on under the surface. lisa, you made a great point to

simon french. in the short and medium-term. longer-term this can get messy. jonathan: this could get messy. the markets are not paying attention to it. we can talk about maybe the greater scope is in your for upside surprises. at the moment france is ungovernable and if you cannot govern france you cannot reform and if you cannot reform things will get worse before they get better. in europe things need to get a lot worse. france is not there yet. it is not bad enough for them to do the right thing and that is what is scary. lisa: the clock -- the consequences of that comes to businesses. that executive try to plan ahead for a continuation of policy. if you look at surveys in the u.s. the result that there was more focus on deregulation confidence -- at what point does the decline in business confidence start to weigh on the

economy because he did not know who you will be governed by. jonathan: may was full of happy talk. all of the business leaders met with emmanuel macron. happy talk. you many macron under pressure, it does not want to step down and -- if you will have them doing absently nothing at a time when the trajectory for germany is unclear, they are going up against serious changes. look at what is happening in united states of america. we have had a red wave, the majorities are small but they have majority where they need one. we have heard from the incoming treasury secretary talking about a global realignment. do you think europe is in a position to manage a global realignment when the core of europe, france and germany, is absolutely directionless?

what we heard from pamela gordon and simon french, what is the power of growth front the european economy? the ecb -- basically turned around recently and said if we cut interest rates now for something that is a structural problem it could be a waste of ammunition for when we need it. what does that tell you about what the ecb thinks is behind the downturn in economic growth? tobin: and how much are they at -- lisa: and how much are they expecting that to escalate. some said maybe she was trying to booster the euro at what promises to be a punishing time. how much of that is priced in? jonathan: this makes the job of the federal reserve sound easy. jay powell playing down tension with the trump administration, expressing confidence he can work with the treasury nominee, saying he is confident he will have the same kind of relationship with bessent is had with other treasury secretary's. annmarie: he said it will be business as usual. he also said something about

president-elect trump. remember when trump used to tweet at jay powell what he wanted the federal reserve to do. yesterday said jay powell said the president said the same thing to me privately as he said publicly. we should take trump at his word when he talks about jay powell. what we have heard so far is trump will keep powell in the job and powers saying it will be business as usual in terms of how i deal with institutions. jonathan: let's stick with politics. donald trump rounding at his economic team, naming former congressman billy long to read the irs, former georgia senator kelly laughlin for small business administrator, and paul atkins for his role of chairman of the commission. joining us is tobin marcus of wolfe research. a lot of focus on the atkins appointment. when we hear things like they are pro crypto come in practice what does that mean for policy? tobin: the big complaint about

the sec from a digital asset perspective was the so-called regulation by enforcement approach that gary gensler talk. that is more of issues for the smaller digital assets in terms of not being able to get clarity from the sec they wanted, either by train to go through formal channels or seeking forgiveness, not permission. from a bitcoin perspective, it has been able to thrive despite gary gensler's approach to the sec. i think that is obviously an animal spirits story. annmarie: what kind of u-turns can we see at the sec under atkins put in place by gary gensler? tobin: i think atkins will be broadly deregulatory across every axis. he talked about rolling back formal rules and has been critical of penalties imposed by the sec in the past, even when there are enforcement actions he will be tending to take a more lenient approach with and i towards not reducing competition and not imposing costs and

ultimately low through the shareholders. a lot of the formal rules that have faced the most criticism are already in litigation. there is already litigation against the market structure rules they put out earlier. i don't know how much it will be a story of formerly rolling back rules as much as sending a clear message we will not try to regulate through enforcement. you do not need to worry about what we will do. annmarie: we also know who will be filling in for jonathan kanter at the doj when it comes to antitrust and that is gail slater. what can you leave -- what can he read in and what she has said in the past about big tech companies and about how trump 2.0 might be a continuation of what the biden administration is doing? tobin: that is an interesting pick. more populist at the margin.

the clearest signal about what she stands for is what trump said about her announcement and what we can glean from her working for jd vance, which are focused on big tech in terms of the cross hairs. i do not see as much risk as the sectors that are not explicitly targeted as we saw under kanter in the biden administration. she spent 10 years as a staff attorney at the ftc. she is done some work for the tech industry so looking at her estimate you do not think she will be pitchfork wielding but the expectation based on what trump and vance are saying is we will see some populism. lisa: populism aside, a lot of businesses are looking at the agenda and saying this gives us a lot more confidence going forward in our business models. there were surveys done by different places, one showing that two thirds of business executives surveys are optimistic about the path ahead versus 26% of respondents in august.

do you think that is justified because of the deregulation and you think that is a commentary on the regulatory regime before? tobin: it is fairly typical to see dramatic reversals in business sentiment on transitions. generally republican leadership -- some of the surveys have a very strong partisan balance to them. i think that is not terribly surprising. sentiment swings tend to be bigger than the activity swings. in both cases we are seeing stronger animal spirits. our expectation heading into the trump administration or the possibility of a trump win is the good news would be frontloaded on some of the priorities like deregulation that are clear and were potentially adverse news is backloaded in terms of what happens with tariffs. in terms of what happens with the fiscal package where we need to wait to see where the risk land. jonathan: backloaded -- lisa:

backloaded and that people are talking about how this will be a first-order priority when trump takes office to put tariffs on. i wonder how much you will that impact sentiment? we have been talking about how much investors are aware of that, the idea of tariffs coming in and not just being a negotiating tool. what is your take? how much of the people you speak to taking it seriously? tobin: i think things are priced in from a market perspective. even people taking it seriously, it is challenging to figure out what are some of the single name trades. there is a lot of -- there are a lot of conversations about what that might look like. there is a lot of uncertainty and i think people need to see it to believe it. jonathan: tobin marcus of wolfe research on the outlook for policy under the incoming president. i keep going back to the same thing. sequencing. based on what we are hearing, it

is tariffs first and taxes later. it might be a problem for people who are optimistic about the policy mix. lisa: the policy news is frontloaded and backloaded be these other policies like tariffs that will be first-order priority, unless you consider what we are experiencing now is the frontloading of a policy shift before he takes office. annmarie: sometimes i'm confused why people think tariffs will be back of mind and second in nature because donald trump is already talking about them. he is going on truth social and inviting negotiations because you have justin trudeau flying to mar-a-lago, you have the mexican president getting on the phone with him. tariffs will be first in the sequence. jonathan: based on what we are searing or what we are hearing, they are top of mind. equity futures totally unchanged. very near all-time highs. let's get you update on stories elsewhere with dani burger. dani: donald trump is set for his first network interview since winning a second term.

nbc announced kristen welker will interview trump on friday with the full video transcript said to be released on meet the press this sunday. according to nbc the exclusive interview with trump in september 2023 was his only network sit-down interview during the 2024 campaign. the yen strengthening after one of the bank of japan's most dovish board members said he is stumbling out a hike later this month. the board member told media he is not against rate hikes. he also told local business leaders it is important to make decisions based on data. the boj's next meeting comes december 19. opec-plus is set to hold a virtual meeting to discuss delays to its plans to boost oil production. faltering demand in china and high supplies from the americas. some opec-plus members have criticized the groups long-term strategy, singing has boosted rival supply and reduce their share of the global market.

that is your proof. jonathan: crude oil a little bit lower. down -- wti crude 68.43. chair powell taking a cautious approach. >> the labor market is better and the downside risks appear to be less. we can afford to be more cautious as we try to find a neutral. jonathan: that conversation is up next. you are watching bloomberg tv. ♪

♪♪ ♪♪ the black friday sale is now on. visit sandals.com or call 1-800-sandals jonathan: here is the constructive view from jim caron of morgan stanley. open market is not missing everything. everyone knows tariffs are coming but the markets do not

think it will be as bad as people fear. the markets may see positives. it's tariffs are targeted it could help on manufacturing and cap ex." lisa: when it comes to mexico and canada the consensus is those are negotiating tools but when it comes to tariffs that is blanket consensus. even policymakers talking maybe that is what is going on. jonathan: equity futures on the s&p -.5%. yields higher by a single basis point. the 10 year pushing 4.20 again. chair powell taking a cautious approach. >> the economy is strong and stronger than we thought it was going to be in september. the labor market is better and the downside risks appear to be less. growth is stronger than we thought and inflation has come in a higher. the good news is we can afford to be a more cautious. as we try to find neutral.

jonathan: here is the latest. jay powell acknowledging the strength of the u.s. economy. ubs writing "we expect nonfarm payroll expanded 250,000 in november. our estimate includes a rebound of overt 40,000 two to returning strikers and over 60,000 due to recovery from storm affected regions of the country." sonya joins us this morning. how strong is strong tomorrow morning? >> is 250,000 even strong? >> that is exactly right. a lot of what we are expecting is the rebound from the prior month's. if we see an average of 150,000 k gains in the last months does that strong, is that week, is that right? we would argue it is just about right. jonathan: chariman powell says things are strong and since things are strong we can were

more cautious as we try to find neutral. translate that for two weeks time? sonia: two weeks they will still lower the rate by 25 basis points. if you take the accurate of what they have said -- if you take the aggregate of what they have set we think they are setting up for a pause. lisa: is that the take away? they will cut three times next year, they are setting up the pause in december and they want to bring rates down but they will move more slowly. is the news over? annmarie: we are expecting -- sonia: we are expecting them to not cut in january, to continue to talk broadly the trajectory is down for rates. is the fed really the main game in town at this point in time? we have the term premium up by 50 basis points since the cut in september. we also have credit spreads that are narrower and equities that are higher. is this for the markets about

the fed largess at this point or is it about other things? lisa: not to get x -- not to get x extensional but it is thursday. we understand whatinflation? we understand what causes it? we understand whether tariffs will be inflationary or deflationary at a time when that will be the driving market forces next year? sonia: there has been a lot of discussion about inflation surprising on the upside. we think there'll be inflation numbers before the meeting. we think there is going to be a bit of upside surprise in these numbers, primarily from used vehicles and insurance and apparel prices. these are all volatile as well. broadly speaking the labor market is roughly in balance, no longer a source of inflationary pressures as the fed has said and we do not get more supply-side shocks, inflation should continue on the trajectory to 2%.

that said we have the threat of tariffs coming up so that could change things. annmarie: lisa will be existential and i will be cynical. the fed cuts the week before the election and they cut the week of the election and you say they will be on pause after the election. how political does that look if they decide not to cut in december? sonia: our guess is they want to be as far from political as possible. it is how little they want to discuss potential fiscal changes, not just the tariffs but also the deregulation, which arguably is influencing expectations of financial conditions in markets. annmarie: if they come out with a pause and chair powell goes into the press conference he will be asked about why are you cautious and it goes back to the change of policy in washington. sonia: potentially, but look at what he is already set out for yesterday when he talked about a much stronger employment has been than they feared in september. jonathan: i will do what michael mckee would do, defend the federal reserve.

it is an original moment for bloomberg surveillance. i think the data gives the fed cover and if they did anything wrong it is the unemployment rate shooting higher. they got it wrong on the labor market. things have turned out to be ok and i think the data gives them the cover two if they want to. they can say it was there and it was not there. lisa: this is the reason why they are telegraphing it now and the reason why summative people believe it is baked into markets. we will be on hold and will be more cautious and we are doing it for obvious economic regions. the beige book covered it. it came in strong with people increasing optimism. confidence picking up postelection. you did not see that inflationary picture, you did not see people accepting higher prices. jonathan: the data is more than convenient, it is perfect. it gives them a reason to slow down at a time they might need

to. they don't know how close they are to neutral. everybody is guessing. looking ahead to next year, completely depends on how the tariffs are calibrated. as jim caron of morgan stanley suggested, it could be a positive for the u.s. economy. might be a boost to inflation. nobody knows that either. use the analogy he loves to use, you are in a dark room and the room just got darker slowly. lisa: and dennis lockhart said yesterday in a conversation, don't screw it up. that is the feeling of the federal reserve. next year, how can they even model that? what models to they follow. how do you get forward guidance? what we do with that? jonathan: kevin walsh does it for you. sonia, it is good to see you. up next, nouriel rabini and kathy jones of charles schwab.

the second hour of bloomberg surveillance is up next. ♪

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

>> the u.s. economy still has significant advantages versus the rest of the world. >> the fed is correcting normalized rates. >> higher rates is not good for bond prices. >> i don't think the fed is in a position to cut for with the market is priced for. >> we think the fed will cut in december but next year's cuts are in jeopardy.

>> this is "bloomberg surveillance" with jonathan ferro, lisa abramowicz, and annmarie hordern. jonathan: we are still counting, 56 all-time highs in 2020 four on the s&p 500. equity futures down not even .10% on the s&p, the nasdaq a little softer and the russell down a little more than 1%. 90 minutes time, jobless claims in america. we have more fed speak. the big one is tomorrow morning. 8:30 eastern tomorrow when the payroll report drops, how much snapback will we get november from october? lisa: it is good news, good news. i would like to put this in perspective. again so far most 28%, the highest gain for a full year in the 21st century was 2013, post-e 30%. we are really close to that, so each of these incremental highs comes on the heels of better than expected economic data but

it speaks to a blockbuster year that has happened sequentially day after day. jonathan: i would add how unexpected that lackluster year was. this time last year, the average outlook was 4800 on the s&p 500. try 6000 yesterday, north of six k. lisa: it reminds me of a time when people thought about recession early this year. it heads to next year where everybody expects roses and gold necklaces, and there is a real question about whether they are overestimating positive shock that could come at a time when everyone has those beer goggles glasses. remember jeremy stein -- jonathan: richard fisher. lisa: whatever, sorry. jonathan: i remember the speech. lisa: [laughter] richard fisher. jonathan: i think it was him. we should have planned this, but we don't plan. let's talk about policy. you are looking up that speech.

anyway, let's get to this. tariffs, are they good or bad? jim caron of morgan stanley said everybody knows that tariffs are coming, but the markets don't think it will be as bad as many fear. they will see positives if tariffs are targeted and it could help manufacturing and. they said it is worth noting that manufacturing closed up when implemented in 2018 and offshore production slowed after that. it was not a manufacturing boost. that debate is ongoing into 2025. lisa: your questions -- annmarie: your questions if any of this will drive up oversee costs. think about trump 1.0 create the retaliatory measures that china used to go from soybeans in brazil and then the billions of dollars of the farmer's bailout that came from the federal government, and then the third is personnel policy. a name they are talking about is

when we know, peter navarro. if scott besson, once confirmed, tells the president you should use this as a negotiating tactic, who is going to run in after him? someone named peter navarro. jonathan: we got derailed. have we got confirmation? lisa: i'm going to resign. jonathan: it's sad i remember a speech from a decade ago. lisa: i got the date and the person wrong, richard fisher, 2014. jonathan: the sentiment is the same. lisa: a great parallel. he talked about quantitative easing in the low rates of 2013 putting "your goggles on investors by creating a line of sight where everything looks good. -- good." what are the beer goggles right now? jonathan: fantastic speech and really", perfect for the moment we are in. coming up, we discuss stoxx's entire, eric resnick and kathy

jones making a case for bonds in 2025. we begin with stocks following the s&p 500, the record of the year so far. we are looking ahead to the new year. some of trump's policies will increase growth and reduce inflation while others could be stagflation or a, so the impact on growth, inflation and markets depends on how much of the former versus the latter. nouriel: thank you. jonathan: how difficult does it make it to come within outlook when things are so difficult? nouriel: there is a lot of policy and disinflation and deregulating the economy. things like encase case of the production of fossil fuels and pressing down the price on

energy. the economic efficiency and so on. so those are the positives. over time, they could increase growth. we know they are other policies, but we know it will increase inflation, and intentionally, it is inflationary. in our view, there is an economic war with china first. if we have unfounded fiscal deficits over the next 10 years, that will raise questions about that growth. if you try to weaken the dollar, i think on the positive side, there are five policies, one is market discipline. and bonds will go higher and the stock market will correct and

then who cares about the bond market or the stock market. secondly, fed independence. if you follow policies, the fed may not continue to cut rates and they may even raise rates, going higher. and policy changes. on one side, there are people like scott bessette would like to escalate, and there are trade talks on china like peter navarro, so it depends who will be in power. jonathan: let's unpack some of that. big debate this morning. if it is targeted, could it be a good thing for the american economy? nouriel: if it is targeted, i would say that impacts on inflation are going to be modest, and maybe some of the reassuring of the rate occurring will continue with pressure on our trade patterns and say if you don't want tariffs, you have to bring more investment, semiconductors, all of those to the united states. so that is the escalating or the

de-escalate, but the more there was an impact on import prices, the more there is an impact on inflation, and then there is the risk of trade wars. if that occurs, it will be more negative and it depends on the size. peter navarro types of views on trade is not de-escalating. lisa: some people argue that we are in a wave of deglobalization that reverses disinflationary forces. the three decades following the mid-1980's, i'm wondering if that is true and if that is what we are seeing because there is quite a bit of trade. it is just going different routes. you can see overproduction from places like china will lower prices in certain places, even

if they don't in the u.s. are we overestimating the inflationary impact of a dramatic level on a lot of these tariffs? nouriel: the impact on high tariffs on the united states would be inflationary but when you think about the impact on growth and the rest of the world, it will be disinflationary because if there is a shock to the demand for the exports of europe, asia and china, then there will be excess supply. growth has weakened, and that leads to disinflationary, so the impact on the u.s. is inflationary and the impact on the rest is disinflationary. lisa: you used to be called dr. doom, are you retiring that mantle? nouriel: i always say i'm not dr. doom. i'm dr. realist. by the way, some are more secular and i think they impact technology and potential growth could be close to 3%, but the fact that we have seen growth of 2.5, two point 8% with inflation

falling is a sign that maybe growth is increasing and potential is increasing and we can grow faster with that inflation. annmarie: when it comes to tariffs to go back to the idea of the personnel, we know it jamison greer ask about china and hearing it to congress, he talked about strategic decoupling. do you expect that over the next four years between beijing and washington? nouriel: i do. one of the biggest risks is not just tariffs in general but the broader economic war against china. it is the longest complaints of the trump administration. they say china has been free riding on the trading system with government procurement policies, fbi policies, intellectual property rights, and a litany of other things, and also geopolitical. so the biggest risk is not just tariffs on china but how much it

will be confrontational and they could be quite aggressive themselves. annmarie: talking about these authorities that are telling local chip companies that you can no longer buy silicone from the united states, they are no longer safe or reliable. are we already in this moment you are describing? nouriel: anything having to do with tech is in the process of decoupling. anything related to ai or high-technology. hunter biden, there was supposed to be critical, so there is a risk with the trump administration that we make have a risk with china from decoupling and something that is much more severe. jonathan: does europe need to pick a side? nouriel: they will be in a tough position because geopolitically,

europeans are close to the united states, nato and so on, but they do a lot of trade and investment with china. under the biden administration, it was easier because there was a compromise about de-risking and decoupling. otherwise, that consequence is not just from trade, but from nato security. i think europe is already week. jonathan: how much worse could things get for the europeans? we have said france is ungovernable at the moment, and in europe, things have to get worse before they find solutions, how much worse to they need to get? nouriel: things are pretty bad already in europe. growth in europe is going to be in the euro zone less than 1% next year, so the reform will not occur anytime soon. there is a fragmentation between 27 countries, some would like

more integration, some would like yes. germany and france are politically unstable, so they will either see the latter or more from integration and common market, so it looks pretty dark for europe right now. lisa: so many people say it is priced in but we don't necessarily see a path out of here, an economic engine or the capability to counter it. at what point are we facing off with a potential dollar shock? yes, the euro is likely to weaken further, but what if it weakens dramatically as the ecb is forced to cut rates and the divergence widens? nouriel: there are many good reasons why the dollar may continue to strengthen. when is tariff, if it reduces the trade deficit, it will strengthen. two, you would like the dollar at the global reserve system's center and that implies he would

rather have a strong dollar than a weaker dollar. but the fact that u.s. is innovating and capital is flowing into the u.s., capital market and the stock market, all imply that the dollar over time should become stronger in the euro and other currencies should be weaker. the problem is that trump said a strong dollar led to american carnage, and people fear have a large trade deficit, and that some point we would like a weaker dollar. fundamentals imply stronger dollar, but eventually policy will find an agreement on currency, to say either you accept it you accept a 10% depreciation of the dollar. it is something that they are going to think about. not in the first two years, down the line. jonathan: we will pick up on

that story in a moment and talk about the currency market and bitcoin. bitcoin through 100 k. nouriel will be sticking with us. schedule an update on stories elsewhere with your bloomberg brief with dani burger. dani: to search continues for the man who allegedly shot and killed ryan thompson. -- police say he was specifically targeted but they don't have a motive yet. his wife said he had received threats before he was killed. police are offering $10,000 for information on the case. shares of dollar general rebounding to 2.25% when they reported third-quarter earnings that fell short of estimates. they cut their full-year guidance and results highlight ongoing difficulties at dollar general, which it brought back their ceo last year to focus on operations, but shares are down 40% already this year.

the makers of cognac and champagne are ramping up efforts to ship products to the u.s. ahead of tariffs. they have intentions to do the same for their champagne label. one story says that hennessey had already increased shipments by 10% annually. that is your brief. jonathan: a rush to secure dp. really quick, get a case. lisa: dp? really question mark is that what you call it -- really, is that what you call it? jonathan: next on the program, let's talk about real things. prepared to hit the ground running. >> think things are going to move the markets are, immigration, tariffs and fiscal. fiscal will remain loose. immigration numbers are going down, and tariffs are going up. it is possible unlikely that the magnitude of each of those things is higher than anticipated. jonathan: that conversation next

with bitcoin. record highs, up by more than 5%. we will get thoughts on that and just a moment. ♪

jonathan: equity futures unchanged on the s&p 500, bond yields up two basis points. under surveillance, trump's team preparing to hit the ground running. >> big things are going to move markets next year, immigration, tariffs and fiscal. fiscal will remain loose, immigration numbers are going down, and tariffs are going up. it is possible unlikely that the magnitude of each of those things is higher than anticipated. trump tariffs are trump's favorite tool and they're going up. that shock is the one that could be the largest next year and it

is not priced in right now. jonathan: president-elect donald adding his economic team, taking paul atkins to lead the sec and naming peter navarro as his trump trade advisor. bloomberg's jack fitzpatrick joins us from washington. is there a common thread between these elections? jack: i think there are 2, 1, deregulation and a conservative outlook, and two, a history with trump and loyalty to trump. you look at paul atkins on crypto and on the sec's portfolio, he has much more of a focus on deregulation then gary gensler, a sharp turn away from the biden administration's approach. navarro, clearly a history with trump, someone who declined to comply with the subpoena from the house january 6 committee and served four months in prison.

michael faulk and her is someone with a history with trump serving in the treasury department in the first term and had a significant hand and the ppp lows in the early stages of the pandemic. so a conservative outlook and history with trump and a loyalty to trump are the main takeaways from the recent picks. jonathan: jack fitzpatrick. he mentioned crypto. bitcoin pushing 103 k, up on the session by more than 5%. nouriel, you had a big move in bitcoin over the last several years. have you rethought the we think about what is happening? nouriel: not really. people talk about bitcoin being a cryptocurrency like the other ones but they are not really currencies. they are not a stable store value or scalable, bitcoin in the past went to 17, then to 16,

and then another 50% correction. stocks and others are highly volatile. but i think they may use bitcoin is legal tender. jonathan: i think this is where i would see separation between stocks and what is happening with bitcoin. there seems to be a preference and market participants believe this is the place to be if you're worried about the depreciation of the u.s. dollar. do you see a case for it? nouriel: not really because when the fed was essentially rising rates and inflation was higher, bitcoin was falling and the stocks are going higher in the fed is easing and inflation is

falling and bitcoin is going higher again, so it has not been a hedge against inflation. it looks like it is highly correlated and positive stocks. so it is not a traditional hedge like old with inflation rising or about de-dollarization. it looks like something that is highly correlated with equity, so it is not a hedge against inflation. lisa: you say parallel tracks to stocks, but at the same time, there seems to be something more concrete. you mentioned gold, and we are seeing that rally because of what john is talking about, that value outside of the u.s. dollar to protect against loss of fiscal dominance. do you see with a more institutionalized structure endorsed by a presidential administration there being a case for a crypto based store

value that could offset some of the risks of volatility in the dollar and the potential loss on the mountains of fiscal dominance down the road? nouriel: i'm not sure. if you're worried about inflation or the dollarization, they provide a good hedge and shorten treasuries, commodities like gold, precious metal, so there are not alternatives. the last few years, when inflation was higher, inflation was falling, and when inflation is falling, a coin is going higher, so it does not look negatively correlated. so it is a store value for some people, but if you would like to hedge yourself against that inflation, i think it is attached to real income or something of store value with a better hedge about risks people

worry about. annmarie: given the change of tone in washington, d think there could be retail adoption at any point? nouriel: yeah, and they're already has been, but my worry is that the regulation on crypto might be looser back to where they were before. now you get another best, so the risk is what we are going to go towards with that regulation. it is in a space that is quite shady, and that leads to a bigger bust down the line. jonathan: i would like to finish up with something positive looking to 2025, favorite region and economy, the place you are most optimistic about for next year? nouriel: it is a bit of a consensus, but i think the united states will outperform in terms of growth and equity markets. jonathan: we are hearing it repeatedly, it keeps coming back to america. lisa: it feels like this is the tina trade. there's no alternative at a time

where growth is concentrated in the world's biggest economy and maybe it is trickling out or not, but you also have yields here. jonathan: good to see you. bitcoin right now up by 5% and pushing 103 k. next on the program, eric resnick on job strength and the hospitality sector as we count you down to more jobs data. jobless claims about one hour away and then tomorrow, payrolls friday. the estimate around 220. the estimate currently is about 215. from new york, this is bloomberg. ♪ (♪♪) (♪♪)

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jonathan: equity futures right now, two hours away from the opening bell, negative by not even closing with a record high. close to .1%. with your morning movers, here is manus cranny. manus: crypto is on fire and bitcoin has lit up like an inferno, breaking through. this is a personification over at coinbase. is he going to have the opportunity to reduce the

enforcement actions or will he unleash new animal spurs that could drive more money into the etf's? $32 million so far, this has gone into the etf world, and crypto is up or bitcoin is up $1.3 billion, trillion dollars since the trump election. i think this is interesting. i designed for automation software. they are trying to make double-digit growth for next year but the reason we are down by 49% is the ceo says it is a tale of two markets. the ai bailout is like a rocketship rolling away, the reality is just doing fine, and doing fine is not good enough. this is about a temperance on the guidance. they will make a balanced growth, tailing off from a growth rate of around 15, 1, 5%. five below, this is about a new ceo and an upward momentum and

guidance. we will talk to the forever -- former forever 21 ceo. j.p. morgan upped the stock tone hundred $10 from 83. you have guggenheim, guggenheim at 140, morgan stanley at 120, so it is about the holiday season be off to a good start, as well. jonathan: manus cranny, enjoyed that, thank you. we'll catch up with him and 60 and its. under surveillance, president-elect trump announced more key economic pix, including paul atkins, the sec chair and billy long for irs commissioner. finance professor michael falcon under who served during -- michael faulkander. annmarie: you can see plano what is described as cabinet arrivals with the likes of peter navarro, jamison greer versus kevin hassett, michael faulklander.

they will all have the same hurdles as far as getting confirmed. we are still waiting to see what goes on with his defense pick. jonathan: both coming out of a closed-door discussion, emphasizing a willingness to work together. he has not really raised any red flags whatsoever from gop senators the last few weeks. annmarie: scott bessette is really going to be very smooth -- scott bessent is going to be very smooth. he's not giving a ton of details behind closed doors. people in the trump camp called him like he has a chilly charisma, and that is what he gave some of the journalists yesterday. jonathan: what does that mean, is that meaning he is called? i've met him, he's a warm guy.

lisa: competent for not caving to the requests? jonathan: so he is cold with journalists. annmarie: he's charismatic but not taking it over the line when maybe some others who have been named in his cabinet have. jonathan: i think i have got it. lisa: he is not howard let nick. that is basically it. jonathan: if that is the bar for charisma, then we are all miserable. lisa: one, just chilly. jonathan: bitcoin, exuberant. 100 k for the first time on the selection of paul atkins. the asset industry optimistic that trump will see crypto friendly policy and will halt government scrutiny. lisa: if you liked crypto yesterday, you may not love it today. it seems like a 50% rally that we have seen in bitcoin. it is a momentum trade that nobody would like to get in front of. if you start to get less regulation, what is the risk of a potential further escalation, further euphoria that is a kind of blast with.

jonathan: global markets are on fire. it correlated the most look global liquidity. lisa: you can make the president that it doesn't tell the future story and it is a question of hammering it down at home and with a lot of industry. i'm not one to throw a called sheet on bitcoin. in fact, maybe i need to bite at $103,000 -- buy it at $103,000. jonathan: markets are very focused on one thing tomorrow morning, and that is the payrolls report with the hospitality sector going into focus. bloomberg writing the following, as this sector has been the biggest drag on payrolls in past

november's, we think underperformance here will be a major factor in a disappointing headline print. eric resnick invests in travel and leisure and joins us now for more. good to see you. eric: great to see you. jonathan: how are things going? you manage the hospitality sector, what is the labor market look like at the moment? eric: if you step back, we are the longest private investor in travel. we believe in 25 billion assets of management, two thirds in equity, so when we look at that, i realized that there is leisure hiring, and we don't really see that. there is a resurgence of consumer confidence postelection where you alleviate the uncertainty, and we are seeing booking strong when we look into 2025, so we anticipate with whether their november jobs report is stronger not, i

suspect he will see hiring the next few months. before he continued -- lisa: before we continue, can you explain why the election impacted travel. we have been trying to understand it. eric: i was hoping you could tell me. it is an odd thing, but this is not specific to the selection. often in presidential elections, generally, consumers become less confident. i think it is the basics of uncertainty is unnerving. unnerving gives less confidence, and you don't spend as much and in that circumstance, we tend to delay a little bit. we saw a softer third-quarter and fourth-quarter of bookings going into the election. we have seen it rebound since. when we look to 2025, bookings are up by 15%. so we are very excited about that. it is odd to me. i cannot give you an answer. i wish i did. lisa: when you talk about hiring, i would like to stick on that, a key component of

people's confidence and their ability to keep traveling. how much easier is it to hire people now? i remember a time post-pandemic when it was incredibly difficult and you could not find people. in order to find someone, you had to find someone who did not work very hard after paying them $30 an hour after paying them $15 an hour. how different is it now? eric: it is very different. $15 an hour is probably more like $20. if you look across the industry, it is about 15, 20 over four or five years. that is meaningful wage inflation that has helped. right now we are staffed well above levels that we are typically staff that this time of year in terms of the pace of hiring going into the winter ski season, so we are 95% higher across the icon past, which is our ski pass that we created about seven years ago. lisa: no one -- go on. eric: over that time, we have

seen a dramatic ramp-up in demand for skiing. in the hiring this year has gone easier than it has probably any time since pre-pandemic. lisa: which raises the question about how sustainable this is going forward. this is all very positive and vacation plans are something we would all like to make, but i'm curious on whether you are getting to a place on what we hear from companies is consumers are pushing back against price increases. they don't want to pay that much more. hiring is pretty easy. people are plentiful in terms of availability, not demanding much more. does this speak over your decades in the past and industry have been tipping points when things are not quite as good? eric: i think the rate of growth has now stabilized to a more normal rate of growth. no doubt about that. we can also see that there's more luxury into the market that is growing faster than the lower end of the market. this past year, you have seen

three or 4% growth into the market and a couple percent of declines in the economy for the market. that speaks a bit of what you are going after. there is some pricing fatigue out there. i think the consumer is willing to pay. it all ends of the market, they would like to pay for service. you have to execute against that. if you don't, you will not be there in that industry in terms of market share. for us, we tried to gain effectively in terms of market share, and we value the consumer in terms of high-end servers so they feel like they're paying more for their vacation and they are getting more as a result. if we get that equation right, i don't think there is an inflection point where it is negative. i think we are in a 60 year cyclical trend of people spending more towards experiences over material goods. annmarie: when it comes to employment, how are you thinking about potential change of

policies and the crackdown of illegal immigration by the trump administration and what that could mean for the supply right now on the market? eric: it is a relevant issue. for us and in our industry, legal immigration policies are very important. creating vertical pathways for legal immigrants, giving them an opportunity to grow their career over time in the leisure and hospitality industry is an opportunity. we think -- we take very seriously to make sure our employees are legally here, and i don't think there is a broad issue in.our industry in that regard in industry but annmarie: annmarie: not the industry but the knock on effect. eric: we cannot protect exactly what is going to happen. if there were something that resulted in a meaningful pullback in that entry label -- entry-level labor market, that would have an effect in our industry.

but what we have shown, that could be inflationary. if that is the case, we have shown to our industry that we are resilient. look at covid, we managed a time of rapid inflation and came through healthier than when we went into it. jonathan: the covid tourism flows have shifted and geopolitics has been up and down. russian terrorism has disappeared in certain places. chinese terrorism is -- russian tourism has disappeared in certain places. chinese tourism has slowed. where would you like to have a prophecy? eric: i cannot give you a specific answer on prospective investments, but i would say that indian tourism is way up and china is down. middle eastern tourism is way up, russia is down. american tourism to europe is up, european tourism to the u.s. has come back actually quite robustly. japanese tourism is down to the u.s. all tourism to the trip -- to

japan is up. macroeconomics come into play there. we think of those short-term trends. when you look over the long term fundamentally, global tourism, global travel flows, if you will, all generally are pointed up into the right. yes, everything you said is true. for us, we are looking for those unique estimations that have broad appeal. ideally placed that we can take -- ideally a place that we can take a consumer. how do we create more appeal so that the growing tourism will come to our investigation? you do that is in the u.s., or the maldives. we are not particularly concerned about that. you have never had a lot of martial demand as far as properties, but you are right when you look at markets like france as a consumer, the russian travel in the market is down materially the last several years. lisa: i know you cannot talk

about prospective deals, but you can talk about the type you are interested in. you have been focused much more on debt. now you are shifting your focus equity investments. why? eric: i wouldn't say it is a shift. we deploy about $3 billion of capital. half in debt, half iniquity. last year, credit debt was up 50% and iniquity debt was. that is a gap between buyers and sellers on equity, offset by a tremendous amount of refinancing and there is pullback on the credit side. looking forward, we still see that same trend in credit but on the equity side, we see the real reason for optimism. we see initial conversations with banks and sellers increasing. debt availability is there, and interest rates are down 75 basis points with more coming. all of that bodes well for the equity market into the first

half of 2025. jonathan: before you go, i am an amateur restaurant and hotel critic. eric: i'm aware. jonathan: regulations on your fantastic property. eric: i highly recommend it. this self drive boats are fantastic. jonathan: did that, a beautiful thing. lisa: amateur. eric: thank you for being one of our passengers. jonathan: anytime, sir. jonathan: good to see you. eric: appreciate you having me on. jonathan: eric resnick. for those of you wondering, i paid full price. let's get you an update on stories elsewhere with dani burger. dani: president emmanuel macron is searching for a new prime minister after a no-confidence vote against his government was passed. he needs to find a prime minister who can pass a 2025 budget through a deeply divided parliament. francine lacqua sat down with le pen earlier this morning.

we will bring it to you at 8:45 a.m. u.s. business executives are more optimisti ao the economy and their business after donald trump's election victory. two thirds of those polled said they're confident about the economic outlook, up from 26% from in august and 43 from a year earlier. jetblue is cutting more unprofitable routes, including flights from jfk to miami, suspending services, some to europe. the airline says it is focusing on markets, attempting to restore profits after a blocked partnership with american air. that is your brief. jonathan: one from dani in 30 minutes. next on the program, next year's comeback trade. >> you see disinflation, weaker growth, and it might be a year of trade. jonathan: that conversation next, live from new york.

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jonathan: 10 year government bond yields picking up a touch, up by 44 basis points on the 10-year, 4.2167. jobless claims in about 40 minutes. the estimate on survey, 250, the previous week, 230. under surveillance, next year's comeback trade. >> we see disinflation, a bit weaker growth, earnings growth that is going to hit 15% next year, elevated equities, so you put all that together and we expected to be a bit more conservative in a year of comeback trade in terms of bonds. jonathan: here's the latest

volatility and policy pushing investors toward fixed income. a bumpy ride in 2025, writing the following, despite caution, we recognize volatility can translate into opportunities with high yields potentially providing investors with more income in stronger returns in the long run. we expect to find areas in the fixed income markets that can deliver solid returns in 2025. good morning. it is lining up to be pretty good, softening growth, lower interest rates, that screams bonds, can anything change on the policy side that might disrupt that? kathy: several things, tariffs, which have been discussed many times. so that is one thing, and then if you get counter tariffs and retaliation, we could get into an ugly trade war which would not be good. and immigration policy, if we really reduce the size of the workforce substantially through

deportations or distributing emigration, then we are looking at higher salaries. and shortages in some industries could be acute, like construction, warehousing is already expensive. when you look at tax policy, that is probably a 2026 issue, but if you got more tax cuts with the deficit rising, that puts more upward pressure on inflation if we are still running into a healthy economy, so those are up in the air. we don't know the dimensions of them but they are all possible risks. lisa: i remember when we were heading into the election, there was a thought that a red sweep would be catastrophic for bond yields and you would see 10 year yields strike higher, but it is the opposite as we have seen longer-term 10 year yields come in. do you that is a head fake and that basically people are worried about the wrong thing?

kathy: it is hard to interpret in a short time what is driving it. we do have much stronger data as it september, and the revisions to the september data, we looked like we were going into a slow with lower inflation. all sudden, the revisions to the employment numbers, all the numbers came in strong so that was part of what went into the election. and now there is relief, that we don't really have any to worry about but yeah, because we don't know what they are. lisa: i wonder if one of the most consensus trades at this year is going to get up and did not year. they live the idea of a steepening yield curve. they thought there would be longer-term yields that would be on a higher relative basis, are we looking at a reversal of that, the more fed officials talk about pausing and allowing

the economy to run and taking their time finding neutral? kathy: you could slow it down. i do think that it is the logical outcome of what we are looking at because normally you would have 60% of the time, you would have the fed funds rate about 100 basis points below the 10 year yield. we are not there yet. so as the fed lowers rates, if they do, you have the 10 year city where they are, and that would be reasonable outlook or a general outlook. but if the fed goes more slowly or stays here, that maybe a signal that they will slow down more and financial conditions might tighten, and that might set us back into inversion. i don't think that is the highest probability, but it is out there. annmarie: when you think about next year and you talk about the policy proposals, how important is the sequencing for you? kathy: it is important.

our best estimate is that we have tariffs first, and then we get some immigration and then the tax thing is down the road, and meantime, we have annmarie: the debt. january 1 -- the debt ceiling. annmarie: january 1. kathy: i think we can do with the tariffs if they are being used as a trade negotiation tool. if they are widespread and as high as anticipated or as discussed, then that might disturb the market quite a bit. right now, we are just concentrating on the debt ceiling. jonathan: how strong is the appetite for deficit spending? it is still pretty tricky. the jobs act needs to be extended and you have tax cuts, then you have deduction, as well. i'm not sure how far they are willing to go. i've seen little sign of that the next weeks. i understand we will find out more than extreme months, but some things just scream priority.

that is for sure. lisa: there is a lack of willingness to be completely fiscally profligate among a set of republican leadership, and that is where i'm looking. it is across-the-board pretty much. you are seeing on the margins, one or two representatives could take this. one was libby cantrell. historically, this is one of the slimmest majorities they have in the house. so you have congressman lawler, he would like salt. that is not in the package. jonathan: that settled the bond market down the past week or so. we will see how this evolves into next year. i don't know if it is too early to say happy holidays. lisa: why not? jonathan: happy holidays. lisa: christmas trees are out on all of the avenues. so we can start seeing happy holidays. jonathan: if i say merry christmas, you would criticize me. coming up, david the boebert's

-- davidlebov evanitz, seigerman , the third hour of bloomberg surveillance up next. ♪

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>> we continue to think this is the environment of

transformation, environment of the typical cycle. >> not only do you have concerns but equities are very expensive from a valuation point of view. >> you still have winners and losers but there are more winners these days. >> we it was set up for another double-digit return this year. -- next year. jonathan: all-time highs in the equity market, record highs on bitcoin. more all-time highs in store for the end of today. features almost unchanged. 56 on the s&p, nasdaq unchanged as well. jobless claims, looking for a number of around 215 thousand, basically in line with the previous week. more fed speak. we heard from chairman powell already. headline numbers look decent.

lisa: upside surprise after upside surprise which is why the u.s. economics is the highest level going back to april. it is not necessarily coming with the re-acceleration of inflation yet. that is the reason why people think the fed is going to cut rates and a couple weeks time by 25 basis points and basically say, next year we are not going to say anything and will probably pause. jonathan: business confidence is up from the election. consumer confidence is up from the election. now it is about policy, and sequencing. annmarie: kathy jones we heard from say taro's first and then tax cuts. what will that mean for record high after record high on the s&p 500. people say potentially one of the biggest checks and jonathan, you said this, part of trunk 2.0

will be the equity markets. thus the sequencing change if he wants to keep the rip roaring we see in the market. jonathan: antitrust and regulation is a key part. kroger reiterating the commitment to closing the albertsons merger. does that get easier with the incoming presidency? lisa: markets are treating it like it will get easier. i want to point out, this is quite the set of headlines because you have them committed to closing the albertsons merger when third quarter sales came in light and a narrow the forecast going forward just a little bit into a little bit of the downside could you look at this and wonder appearing it with walmart and some of the behemoths, do some companies have to get bigger to compete in a real way when consumers are feeling ok but not amazing.

jonathan: that is the argument they have been making and it is falling on deaf ears with the administration and we will see if it changes in the coming months. lisa: i will say if there is more of an acceptance of that, how much of a rush of m and a can you expect to see question mark -- to see? katie: we -- annmarie: we have an individual, one of the few people and maybe when the only in the biden administration that we like what she was doing. when it comes to the f test -- ftc, she will be out and that is the name we are waiting on. and while maybe it will be tough on tech, i imagine a grocery chain or handbag operation m&a deals, they are willing to fly through. jonathan: coming up, we will catch up with david lebovitz.

and evan seigerman as eli lilly clinches eight victory. and we will catch up with nela richardson. we look ahead to payrolls tomorrow. stocks at record highs as investors looking at data. david lebovitz from a portfolio prospectively in the -- and brace risk but focus on high-yield valuations and we have taken gains, redeploying capital in small and mid-cap u.s. equities. david joined us now for more. why go from credit to equity? david: when we look at the move in spreads following the election outcome and we came down to 255 on u.s. high-yield, we said, we feel like this is a trade where the return potential has been capped. all things considered, nothing

to shake a stick at with one third of the volatility of the s&p 500 limiting the upside. given some of the things you were talking about around the regulation, tax cuts, we wanted to lean more into the equity side where valuations are more attractive but we think there will be a direct benefit from policies that will come through starting. double-digit gains for small caps. jonathan: what you think about the themes? david: there are things going on with small caps. small-cap companies primarily for finance themselves with floating rate debt. the idea that the fed will continue easing, i think there are still a few more cuts the head, that will help the profitability of the bat. you are looking at a nominal growth environment that may not accelerate from where we are but should remain well supported and that should help with both top and bottom lines.

in the third thing being the underlying sector composition of that benchmark. you are a large weight in financials and specifically regional banks which if we get d regulation and financial services which seems likely, they will be the direct beneficiaries of that trend. lisa: at this point are you saying that equities look a lot better than anything in the debt space even when it comes to riskier debt? david: it is a function of going underneath high-yield. we put overweight high-yield earlier in the year it was predicated on the idea that triple c rated bonds would see depression. that has effectively been what we've seen range of the index level spread to such a low level. could we end up at 230, 225 at some point down the road? absolutely. when spreads are low and tight, they can stay tight for extended periods of time but it feels like particularly with some conversations we want to have more exposure to the upside than things like u.s. credit were giving us.

lisa: doesn't worry you that everything's on the same side of the boat? person after person is talking about euphoria and getting more risk on. honestly, we want as wrist on as we should have been two months ago. david: the bulls are definitely on parade. but the unique thing and it was mentioned in a note this morning that you look around the world and where else are you going to go? the profitability of u.s. companies is unlike anything else available to through the global equity market is the u.s. if you look at u.s. equities, you're underweight what has been working so well. that is not to say there won't be a broadening out down the road but when we think about what has been discussed on the campaign trail and what trump 2.0 will bring to the table, it is not a long only u.s. trade but long short. some of the policies,

particularly tariffs will be punitive. annmarie: so walls are going up and you want to be invested big in america. you talk about animal spirits, what you make on what is going on with crypto and bitcoin? david: there are a couple things going on. the risk on environment has supported bitcoin moving north of 100,000. the other thing going on is when you look at what is happening in the u.s. and what is happening in europe and asia, fiscal spending is very much a part of the conversation, whether it is china, germany easing off of the debt break or what we will get in the united states, i think this reflects some concern that over time government spending could go too far. it is not a different conversation from the one we had over the past 10, 15, 20 years, debt is too high and deficit is too big. but at the end of the day if you see another way playing it through portfolios is crypto and they just have a different lever

to pull. annmarie: is now the time to put your places in gold and bitcoin? david: the trend can be your friend for an extended period of time. frankly, i would be a little bit cautious there. a lot of this will come back to what the fed does in 2025. we think the fed will cut again in december and probably one or two in 2025 and then you are looking at u.s. rates that are fairly attractive. bitcoin and gold continuing to rise, some of that is dependent on rates coming down. i'm not sure the people who are buying those assets, particularly in the retail world have the appreciation for where rates. . jonathan: american airlines with a big rally in the premarket off of the back of this. the outlook for the fourth quarter, $.55 to 75, the previous range 25 to 50. it is southwest, american,

jetblue. the airline business looking better than expected. lisa: southwest raising revenue forecast because of the demand in travel and how much of this is payback due to the postelection certainty and they have a president people can travel. that is where we are at. you also see how some of the initiatives are paying off, with american air solidifying their relationship with citigroup as the sole credit card provider and trying to get that aligns because all of the airline companies and credit card companies. with jetblue, they are trying to cater to a higher end customer and that is paying off. will the -- the strategy shifts paying off. jonathan: is consumer sentiment back? david: consumer confidence is coming back and could well continue to improve. for a lot of people, inflation is still an issue. it is not necessarily about the annual rate but the cumulative

rate we have seen over the past few years. if you think of it being food, energy, housing, well above what you are seeing at the headline cpi index. i think it will come back, particularly if we get tax cuts and deregulation and markets continue to rise. the inflation issue is one where i don't think we can signal the all clear. jonathan: that shifts to the political shift in the country over the past few months. . equity features negative by not even .1%. with your bloomberg brief, let's go to dani burger. dani: the search continues for the man who allegedly shot and killed unitedhealth care ceo brian thompson. he was specifically targeted in the attack but they do not yet have a motive for the shooting. his wife said he had received threats before he was killed. police are offering $10,000 for information on the case. elon musk and vivek ramaswamy

headed to capitol hill to meet with republican lawmakers to discuss plans to slash at least $2 trillion from the federal budget. the two are heading an advisory body to cut costs. according to reports, and reason has been helping -- a new premier league top league had a tying goal and limits their lead over chelsea to seven points. arsenal defeated manchester university closing the gap in liverpool. the new loss for the first time under the new coach. jonathan: is why we did that because manchester united lost. if you are a liverpool fan, you might be wondering whenever we won why were you talking about it? lisa: honestly, not only a seven

point lead. people are really concerned about them. i think they have to lose two more games to not win the whole thing or something of that nature. annmarie: it is amazing. jonathan: he needs a contract. what is going on in your football club? lisa: the egyptian magician. what do i know about this? jonathan: up next, the morning calls. and evan seigerman, as the weight loss battle continues to heat up as we come you done to the opening bell one hour and 15 minutes away. equity features just about unchanged ahead of jobless claims in just about 15 minute'' time. ♪

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jonathan: getting closer to the weekend. i want to get to the weekend. 8:30 eastern jobless claims. tomorrow morning, all about payrolls. there is no other story. equity features just about unchanged on the s&p 500. no drama throughout the morning on the equity side. plenty of drama from bitcoin, another all-time high. bonds higher by two or three basis points. up to 4.2051 on a 10 year. citi raising on netflix. stop higher .1%. the second call from morgan stanley, under waiting the weaker environment on applied materials. the stock down 2.5%. bank of america hiking tesla to 400 noting confidence in ev

growth and robotaxi capability. up another .7% in early trading. eli lilly hospice weight loss drug winning over novo nordisk. they could feel modest commercial growth for both companies in the next generation of obesity drugs. let's get to 35 thousand feet and talk about the adoption of these. i'm sure in your world is busy. talk about the adoption and whether things have slowed or where you are still seeing the steep grove we saw over the previous year. evan: let's go back to three q results where we saw a bifurcation between eli lilly and novo. they were trying to draw demand in line with what you described. novo still had supply issues with assets like week ovi -- weg

ovy. let's talk about the date it, largely expected but eli lilly has data that can go out to physicians to say ours is better. what is important is that novo has a data read out by the end of the year and could be better by zetbond. we found a trial posted on the website for clinical trials showing that novo has a co-formulation. a lot of moving parts, very exciting. fourth quarter is important because companies got beaten up in 3q. jonathan: what is better about it, delivery, performance, more effective?

evan: weight loss. analysts and investors are looking for weight loss of at least 25% of one's body weight. zetbond is at 20%. on a tolerability perspective, it should be in line but could be slightly worse because you have another drug in their. lisa: how much is it how much weight you lose and how much is it tolerability. not feeling like you can eat. how much are you measuring this? evan: you are correct when you are taking these products, you don't want to beat nauseous and have g.i. issues. they do subside after time and usually associated with the titration. again, if you are doing that for six months, you have to feel good. we look at the tolerability profile as being important but

at the end of the day it is the weight loss because you don't want to just hit 12% if you really need the weight loss, you want to get to the 20% 25%. lisa: how much is the success of a drug contingent on the insurance profile could we heard about president biden talking about how we would like to see weight loss drugs covered under certain government insurance programs. is that one of the key variables with some of the studies and the success of one drug or another? evan: insurance coverage is very important. eli lilly and novo have good commercial coverage for we govy and zepbound. biden had a mental out saying they should cover the products for patients -- had a memo out saying they should cover the products for patients.

there are a lot of patients who are on medicare and medicaid who could benefit that could be a tailwind assuming that happens. there are some expenses associated with that. we will see what happens with the new regime change. annmarie: and rfk junior is an outspoken critic of these drugs, especially used for weight loss. how do you see potentially the proposal may be being used or totally dismissed by an incoming trump administration? evan: rfk want to be a head of the fda, which is good. these decisions are made by hhs, so that is dr. oz. i don't know what his exact views on this are but it seems to be a little bit more pharma friendly. if the biden administration can get this on board, it is hard to take things away from seniors when they have them. that is not popular. president elect trump's focus on

his popularity as well. annmarie: but he is also worried about government spending. if would cost taxpayers as much as $35 billion over the next decade. evan: a drop in the bucket. annmarie: what a drop in the bucket that they are looking to cut. why would they at on something additionally that was teed up for them by an outgoing democratic administration? evan: it is a drop in the bucket for what we spent on pharmaceuticals. i hear what you are a saying most definitely. what is key is to have a lot of savings because you are saving elsewhere assuming patients are on these drugs for a couple of years and in medicare but spending less elsewhere in medicare. i would also highlight that a lot of this is paid for by premiums in part d and it is

funded for premiums and in enrollees. so elon musk and vivek ramaswamy want to make cuts but cutting medicare and social security are very unpopular. lisa: just to finish where we began, we talked earlier this year that glp-1's would change the trajectory of markets and the health care in the united states and for food companies that would be selling less given the fact that people had lower appetites. why has that story gone away? evan: i don't think the story has gone away. i think that the wind has been taken out of the sales, shall we say. 2q was good for eli lilly. 3q wasn't. i need to see a positive going

into 2025. eli lilly and novo need to continue to grow and build the market. it is still a very large opportunity and growing. i think investors are always looking for what is next and hot but we need to see good posturing from these companies for 2025. jonathan: thank you, i enjoyed this. 40% of this country is obese. it is an and comfortable -- an uncomfortable situation. and of the negatives have been covered for a lot but there are some positives. you need to disrupt the story. it is ripe for disruption. lisa: you're talking about rfk junior? jonathan: i'm talking about obesity across the board. lisa: what is it going to -- what is going to cure it?

is it going after the food companies, the weight loss drugs? it is important to have a conversation about what measures are necessary on a adoption scale. annmarie: the question is whether or not the trump administration will take up the proposal. it is going to cost money and i understand evan's point to put the money and save later. it's proposal from an outgoing biden administration. it is going to be challenging politically to pick up. jonathan: let's focus on to the incoming administration, congratulations to bitcoin, over 100,000. annmarie: he said he will make america great again but i guess he is making bitcoin great again. jonathan: more data, up next. ♪

jonathan: we are 60 minutes away from the opening bell with equity futures unchanged on the s&p. in the bond market shaping up as follows. chairman powell suggesting once again this economy looks strong. data that might speak to that. yields are higher by two basis points in and around for 20 on the u.s. 10 year. on the two-year up by two basis points with your economic data this morning let's get across to mike mckee. >> a bit of a surprise, jobless

claims numbers. 224,000 from 215 basically a slight change up to the week before. there was a downside risk to numbers this time because last week was thanksgiving so maybe some of the offices didn't get out of file. we have to put this one aside in terms of the real strong signal on the economy saying we will check into it next week or the week after as we continue into the holiday season. these numbers get a little bit less reliable. continuing claims fall. down from 189. so we are seeing some progress of people getting jobs and the trade balance 73.8 billion significantly lower than the previous months 84 billion. 83.8 is the actual number. and it is lower than the anticipated number from the advanced number so that is good

news for fourth quarter growth. jonathan: we've been asking this question for the last couple of days, how strong is strong. is 250 strong, doesn't need to be bigger than that. michael: i don't think any one will move the fed one way or another because they know there will be a bounce back and it is hard to track. the unemployed and rate isn't affected by the hurricanes or the strikes. that will be more telling for the fed if we get a big number you will get a market reaction and i've seen estimates as high is 800,000 or more because no one really knows how to quantify the impact of the storms although we did see state employment figures go down in the five states that were effective it will be an interesting number. you have to look to cpi and ppi next week for more. jonathan: small upside surprise on jobless claims, 224 yesterday was to 15.

survey for the headline payrolls number looking for to 15 and it bounced back from that small 12 k from the month of october. with us around the table is nina richardson. what did you notice about the adp report. >> it was a healthy amount of job growth but it was mixed. we saw a lot of weakness in manufacturing and according to adp numbers dropped by 26,000, that is significant and we saw some softness on the services side. things that had been strong like leisure and hospitality took a step back. financial activities you think their position for these merger activity to come in with lower rates. hiring was lackluster. large firms do the bulk of the hiring. that's what happened in the recovery now large firms are basically owning the jobs market

and the final thing this is the most important lookit fed, a wage growth went up. that suggests -- >> what's driving wages higher. >> there is a tightness in the labor market in key sectors. it is not all growth. adp you match individuals with themselves so we are not as shaken by permutations in the labor market from month-to-month these are people who have been in the job market over the course of the year and for those people they are seeing an uptick in the wage growth. the catch is it is still not keeping up with inflation and the average print -- average. lisa: what are those areas in a time when i remember you said statistics professionals were really en vogue as a lot of businesses try to understand how to use artificial intelligence

and where to invest print what is it now? nela: first of all his long-term trends which means health care. 10,000 people a day have a birthday that takes them over 65. so we are retiring -- a retiring country. they need health care because health issues become more intense as you get older. that sector is growing and who would've thought health care would be the outperforming sector. if you are looking at the labor market like the stock market that is the value stock. the growth stocks are not performing as well so if you look at the statistician information technology, professional business services, they are not growing as much. what we are seeing is there are some merging fields. technology together creates a huge burst of job opportunities but they are not flowing through the labor market. >> how vulnerable do things feel

to you. i ask this because a lot of the data is messy. we got jobless claims ticked up a little bit. it's hard to know how accurate from month-to-month some of this data is pretty a pretty big revision in the prior month. are things feeling messier to you or less specific or do you feel like you have a pretty good handle? nela: i think there will be two head fakes. one was in october. the second head fake will be tomorrow. you will see a bounce back that won't tell them a -- the whole story of the labor market. the story is we are in a quiet period. there's not a lot of layoffs during this. how long that lasts is undetermined and what triggers it and which way whether it goes up or down is still undetermined. we are in a messy spot but i think you still see positive hiring that is healthy and can support this economy but we are

lacking the dynamism that pushes us into the next century in terms of new technology. i am still worried about productivity and softness in labor market in key sectors like manufacturing. >> donald trump is talking about tariffs, already negotiating with the likes of canada potentially about what those tariffs may look like on china and mexico. is that going to help the u.s. manufacturing base or hurt. nela: it is really too soon to tell. first of all we should take a step back. economics is not immutable. it is not like physics. it depends on the context of the economy and the retaliation of other countries. we don't know. and we won't know for quite some time but it will depend on whether those tariffs are placed on final goods or intermediate goods. it's really hard in the global economy to have a purely domestic manufacturing supply chain. and for those manufacturers that

require an rely on foreign goods that will increase their cost of production. so we are going to have a pretty unclear muddy picture of what that looks like but one place we can look is in the jobs data. if you see manufacturing higher, a rebound in this cyclical sector that should benefit from rate cuts and maybe will benefit from well-placed tariffs, who knows. then we should see a pickup in hiring. jonathan: good to see you. also a bloomberg tv contributor. looking ahead to tons of fed speak. have it and daily as well on the payrolls report. mike mckee is back with us pray we heard from chairman powell walk us through what we've heard from fed chair officials. michael: a lot of holding our options open talk.

they are trying to set up for data they do not have but the markets will have by the time the fed's meeting. they can comment on cpi or ppi but what they are saying is basically the economy is stronger, we have seen inflation sort of stick higher than our target it has not been moving down in the same way. overall the economy is in good shape. we don't have to move if we don't want to. we want to bring rates down some. so they could go either way depending on how the data goes but i think one of the more interesting aspects and this is something that was touched on here is companies sitting on the sidelines for right now. the fed knows that because they are talking to the ceos. companies don't want to make decisions on hiring and investment until they know what donald trump's plans are going to be. this will be something of a quiet period.

i rebound and jobs in november because of strikes and hurricanes but do we see a lot of new hiring? that will be an interesting question for these couple of months between now and when trump takes office. jonathan: michael mckee, thank you. leslie, good to see you. let's get to your expectations. loose fiscal, lower rates. to the first to challenge the third-party >> we are looking for lower rates but not something that is dramatic. we do think the consumer is strong and the labor market stays strong but her outlook for interest rates in 2025 is probably followed by the 4%. expecting this large decline in interest rates but one of the things we look at what we have these allocations in the rest of the market. is if in fact the fed continues to cut and people are concerned about this inflation. the market has a tendency to

speculate. it's forward-looking. if the fed cuts and we have interest rate higher i think that is the point of concern particularly when you have a market the equity in the fixed income market returns are now negatively correlated. if the interest rates move up and they decouple that's when you will have these price-sensitive buyers becoming concerned about that long and. lisa: what did people get wrong about republican policies that sound like they are on track being inflationary now people aren't really talking about it as though they will. leslie: the last time we were here we were talking about with markets pricing in devon the fact the betting markets had a big decision prior to the actual election. the expectation was if in fact you had this red sweep. one thing we talked about in november we seen interest rates go down. a lot of that was priced in particularly when you look at things like inflation expectations and the short end

decoupling coming down pray all the scenes were priced in. we've given a little bit of that back but i think it is too soon to say things like shortened inflation expectations will continue. i think they will probably stay where they are now may be the potential moving up. lisa: have we reached a point where the labor market is no longer the barometer that we get. that it is back to the inflation reads at a time when there is that one lever that could potentially push the fed in a more aggressive way to hold off on rate cuts or potentially move in the other direction. leslie: i think it is balanced. we do not look at the labor market, you do but the labor market is continuously strong. we saw the jolts data up for the first time since 2023 we have claims a little better today but still trending lower. i think people are worried on that inflation front particular given the fact that we are and it is our expectation that the

fed cuts in december and goes four times in 2025 that we have this re-acceleration and i think that's one of the focuses right now. lisa: we had david jp morgan on earlier saying earlier this year they were excited about high-yield bonds but expecting a compression and the lowest rated debts rise. now they are kind of done with that and they see that the trade is over. are you in the same place? leslie: absolutely pray when you look at high-yield bonds that was premium incredibly depressed. what's interesting about that sector. we had such a high demand within that sector for those yield hungry investors. even as volatility went up, spreads were very narrow so you did not see a lot of widening and that sector so we think high-yield we would prefer the higher-quality. you have that yield there's no question but there was premium being paid isn't adequate right

now. if the opportunity arises that high-yield went down we would be opportunistic because we don't think it can be moved materially wider. >> do you think this is basically the message right now adding into year-end you go with what's work, you don't go with much else, you kind of sit on your hand and you wait for momentum and you reassess next year when you have policies. leslie: those that are making money. i do think that is really sort of the overall. i think right now people have been in the camp where the market has been very volatile, the market, the move index has gone up and down. we have a lot of changing of narratives but at the end of the year i think people are tired of this speculation. they need to see what the policy is going to be. i think you have the have and the have-nots this year in terms of people being right and wrong on the side of the fixed income

but i think it will be quieter at the end of the year and the first quarter will be incredibly important. the second half of 25 >>. >>good to see you in great to catch up as always. an update on stories elsewhere this morning let's cross over dani burger. dani: sources told abc news a search warrant is being sought in connection with the suspect wanted in the fatal shooting of the night health care ceo brian thompson. sources telling abc police appear to be closing in on the identity of the alleged shooter. thompson was shot yesterday outside the new york hilton in midtown. police are offering $10,000 for information on the case. kroger shares this morning are off the lows still down about half a percent in the premarket. posting third-quarter sales that missed expectations all pointing to an uncertain economic environment. the grocer reiterated its confidence led -- regulars will

approve the acquisition of its rival albertsons. tiktok tripled its u.s. shopping sales to over $100 million print the company said it's after 165% annual increase in shoppers for the two days between black friday and cyber monday is the app faces a potential shutdown. that is your brief. jonathan: up next we set you up for the day ahead and bring you an exclusive conversation. francine lacqua sitting down with marine le pen. that conversation up next. ♪ so, what are you thinking? i'm thinking... (speaking to self) about our honeymoon.

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jonathan: the opening bell about 41 minutes away. equity futures negative by 1/10 of 1%. the s&p coming into thursday

lower on the nasdaq as well. let's turn to france where emmanuel macron is searching for new prime minister after lawmakers passed a no confidence motion. francine lacqua sat down with marine le pen and asked her if getting the deficit to 3% of gdp in 20 is far-fetched. >> getting to 3% in 2029i don't think is credible but i am not the only one. i don't think it's credible. once again these are promises and they know they cannot keep to them. in reality his budget worsened the deficit by 12 billion. if we don't make significant intelligent structural savings and we don't put in place the condition so companies can work, invest without being suffocated with extra taxes we won't get there. with these solutions we can succeed as quickly as possible to get back to a reasonable deficit even if 3% was on the back of an envelope. >> how fast could that be. >> it is a matter of a few

weeks. we will discuss it with the new prime minister and work together. explain where our red lines are. we cannot ask the french people to pay the bill for the mistakes of their leaders. he massively increases taxes and hits sick people, retired people. he hits everyone. once again there is zero savings from the state. that is inadmissible. jonathan: joining us is francine lacqua operated wonderful work as always. walk us through your big takeaways and what the next steps are. >> first of all we have to see who president macron appoints as prime minister. she was very clear in that interview it does not matter for her, she says who's prime minister. what matters is what points they want to push through and the budget so we need to watch out for three things. the prime minister could be nominated as soon as tonight. we know president macron in the past has taken his time.

what kind will she support for the next budget. she says they will find a way forward in the next two weeks so there is no government shutdown. what happens after that will we be in political crises with prime ministers falling until the legislative next summer and then the third question is what happens to the presidential election. the latest poll is 54% of the french now one president macron to resign. what does that mean. marine le pen is facing trials that could make her ineligible to become president of the next timeout. >> there is also this point that she made that essentially there is no case for emmanuel macron to quit under current conditions. it seems like that was pretty considerable statement considering some people were wondering whether she was going to push him to resign. what comes up, what is the implication in terms of her willingness to work with him. francine: first of all she was

very careful in saying she did not push him to resign, she also tried to understand whether his position she would've resigned. i think she is trying to strike a tone of being conciliatory and work in the institutions but i asked her what it would take. she'd would -- she did well in legislative elections. i asked what it would take for emmanuel macron to uphold some of those promises but she said if that were the case he should resign so she is not pushing for him to resign but i'm not sure there is a way that they would work together again hand-in-hand. jonathan: fantastic conversation looking forward to watching the whole thing. francine lacqua sitting down with marine le pen. you can catch their full conversation online at bloomberg.com and on the bloomberg terminal later on today. the euro settling down stronger today.

french credit spreads a little bit tighter over the last 24 hours. things have calmed down a little bit on the market front. on the political front we are deep into the unknown. >> at a time when marine le pen might have maybe been offering a conciliatory tone. maybe not. there was also this news earlier in the financial times that european countries are discussing a 500 billion euro joint project for common defense budgets so there are other things coming around as maybe there is a fire lit in certain sectors in the area. jonathan: we are of course counting you down to the opening bell about 36 minutes away. equity futures a little softer on the s&p 500 down a 10th or two. some morning movers its cross over to manus cranny. manus: drama in the crypto world. the personification of the

beneficiary i chose coinbase for a number of different reasons. stock is up since the election. the proposed new sec chair do for crypto. this is up by $1.3 trillion since the election and counting. we will look at the synopsis, the personification of what happens in a software company when you deliver into the ai world and semiconductors. a tale of two markets. they designed the electronic automation software. this is a tale of two markets print this is rocking paid it's the rest doing fine but it is not good enough. we know that in terms of the narrative for guidance and they are guiding down with growth and revenue and that tales from 15%. five below, banging away up 15%, of the new ceo can she deliver the marketing know how to drive this through. apparently the season is off to

a good start in terms of numbers. good morning. jonathan: good morning for the fifth time this morning paid appreciate it. here is the trading diary. richmond fed president tom speaking after the closing bell earnings from victoria's secret and lululemon. a big focus for rambo. lisa: maybe i will move on. jonathan: moving on from lulu? lisa: i don't know. a couple of other brands are in the running. i do wear my workout close to work jonathan: that's not where i was going with this. lisa: so i can run home. jonathan: tomorrow, sentiment and a big one. november payroll spread wednesday cpi, tuesday ppi. coming up tomorrow a fantastic lineup. lori calvo seen no of rbc.

mohamed el-erian of queens college cambridge and a whole lot more. thank you for choosing bloomberg tv. ♪ to go further, you need to be ready for what's down the road. as energy demand continues to rise, we're harnessing breakthrough innovations to increase production in the u.s. gulf of mexico. our latest deepwater development, anchor, produces previously inaccessible oil and natural gas, allowing us to deliver the energy we all need today so everyone can follow their own road. that's energy in progress.

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matt: after 56 records in arroyo, the s&p 500 at oma 6100. i matt miller. katie: bloomberg open interest starts right now. sonali: coming up, fed chair powell says the u.s. economy is in remarkably good shape. investors are paying attention to tomorrow's jobs report. matt: a record run,