matt: welcome to "bloomberg markets." i'm a matt miller. let's get a quick check of what is going on in the markets with the s&p 500 off by almost half a percent. the nasdaq falling a little bit more, .75%, as some of the bigger tech stocks lose ground. we have a volatility up a little, but with the vix under 14 it is fair to call this market subdued.

four-year yield approaching 4.20. midday movers on the equity side. we go to bailey lipschultz. bailey: comcast shares under pressure, the stock seeing the biggest drop since april. broadband subscriber losses of more than 100,000 in the fourth quarter with recent hurricanes causing 10,000 broadband losses. big m&a deal this morning, on the agreeing to buy interpublic. it would create the largest advertising company. shares falling on the news, the worst intraday drop since july. now the possible deal news. bloomberg news exclusive reporting that monda latest is exploring -- mondelez exploring an acquisition of hershey.

we would create a food giant with combined sales of $50 billion, although it would require the backing of hershey trust, with roughly 80% of the voting power. matt: thanks very much, bailey lipschultz looking at some of the movers. i want to focus on the last story. the news that mondelez is looking to buy hershey. bloomberg helped to break the news all weekend. crystal, fantastic scoop. what do we know here? it is a deal that has been considered in the past. >> it was considered in 2016 and one of those deals that is an evergreen idea. this -- what we know is that mondelez has preliminary approach to hershey. it would be a very, very big transaction, combining capri and kitkat.

it is a deal that comes with a lot of hurdles, markets, price, investor sentiment, regulation. matt: we have seen the run-up in prices is no headline, but it is happening just like it has for other consumer goods. the value of hershey when mondelez considered it in 2016 was more than $20 billion. the company was trading at the friday close for $35 billion. it is going to cost hershey has almost twice as much as it would have been then. do we know what premium they put on the deal? crystal: we don't have much color on price yet, but i would look at it this way -- if you look at the price compared to 2016, is one of a lot. 52-week high because of coco prices has come down significantly. is said we are timing accurate -- is it weird timing? it is always weird timing, but people do deals anyway.

with the change of administration antigovernment in pennsylvania -- and government in pennsylvania, there is the new attorney general coming in and the attorney general will have to sign off on the transaction given the unique hershey trust structure. there is a lot that needs to happen. matt: a lot of regulatory hurdles. this isn't the biggest chunk a deal that we have been talking about this year. --chocolate deal that we've been talking about this year. we have already one in mars. crystal: that is less about talking and more about cereal. it is a big market. consumers see it as a resilient market. you always see the consumer deals largely hold up. we are expecting 2025 to be a booming year for m&a. a lot of these deals that were in the back burner are being revisited with the expectation that regulation is going to be relaxed and that investors are

going to be more pro deal. also that the interest rates seem to have studied, or at least that the company has come to terms with what the interest rate environment is without certainty, the election -- with that certainty, the election, now that it is over, you will see m&a and consumers being the bright spots. matt: rates may not come down as much as expected. crystal, thanks very much. crystal tse on the potential combination of mondelez energy. geopolitical fears a factor in today's trading. the ubs group ceo spoke at the abu dhabi finance week about how the fears really haven't shown up in markets. >> all the geopolitical event haven't really triggered anymore chain of events and consequences. also financial markets. i think that one cannot be

complacent. the acceleration of geopolitical events coupled with potential escalation on the microeconomic front, tariff protections, it is definitely something that has to be watched. on the other hand, you see consumers and the economy quite resilient despite all the challenges. matt: for more on global markets we are joined by the global market strategist at j.p. morgan asset management. >> thanks for having me. matt: you like all of us were following every development in syria over the weekend. it was an incredible story, especially the pace with which it unfolded. it doesn't seem to be having that much of a fallout in the markets. we didn't see much of a fallout in the israeli wore or -- the israeli war or ukraine russian war. why don't these geopolitical events have more of a dampening effect in the s&p, for example?

>> such an important question. not to minimize the human told the these events have, for investors who want to focus on what the impact is for your portfolio. we pulled up all the major geopolitical events since the early 1970's starting with the opec oil embargo. some of them have been a complete surprise. the average drawdown that they created in the s&p 500 is 5.6%. it took 13 trading days on average to recover. markets are looking at these events and they think about what is the sensitivity to earnings. a lot of understood the channel of oil prices. the u.s. is a major oil exporter. our sensitivity to that is more diminished. geopolitics come there is always that risk. but we don't want to over

emphasize that were over cater to that. matt: it doesn't seem like -- this year we've had the collapse of the german and french governments and it hasn't affected the rates market in europe. we have another bullish call today. 7100 on gaza be 500. -- 7100 on the s&p 500. u.s. households are the highest allocation of stocks the 1950's. the same is true of international holders. who was out there to power any further run higher? stephanie: there are still signs of a decent amount of cash on the sidelines and i think that will gradually be deployed. this year we had uncertainty overhangs on elections. lower interest rates do help somewhat with moving and mobilizing some of the cash. i think that can help. we share some of the

constructive optimism. we think that next year's going to add another year to this economic expansion. we are not necessarily looking for the same degree of performance and equity markets on the top line level. expectations are that much more elevated for the mega cap tech companies. we are very excited as active managers underneath the hood for the bottoming out of opportunities we are seeing in ways we can take risks off the table and put it into other areas that have till wednesday behind them. matt: is it driven by ai -- bloomberg has estimated it is going to cost a trillion dollars to build infrastructure. moody's said to chile dollars in five years on capital expect -- $2 trillion in five years on capital expenditure. stephanie: ai theme very much intact and likely to continue to power the markets next year. the thing that is changing are

the beneficiaries. it will not be the one beloved semiconductor company. it will be the broader set of beneficiaries that are helping all of the infrastructure cycle to come to fruition. companies that are producing power, electrical equipment, data centers, nuts and bolts that make that happen. that is where we are excited to take risk. matt: great to have you with us. global market strategist at j.p. morgan asset management. china and u.s. tensions ramp up. the latest news from china. and centering on nvidia driving nasdaq down more than the s&p. this is bloomberg. ♪ so, what are you thinking? i'm thinking... (speaking to self) about our honeymoon. what about africa? safari? hot air balloon ride? swim with elephants? wait, can we afford a safari? great question. like everything, it takes a little planning.

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matt: this is "bloomberg markets ." i'm matt miller. time for the stock of the hour. we are looking at two tech stocks. oracle earnings preview, numbers after the bell. first i want to start with nvidia. by keppra joins us from washington, d.c., to talk about that. we see nvidia falling on is that china is probing nvidia over suspicions the chipmaker broke monopoly laws over the landmark 2020 deal. give us the details. >> let's turn the clock back. in 2020 nvidia spent $7 billion to buy this is really punk -- this israeli company. they won approval on a conditional basis that nvidia would not harm chinese companies. fast-forward with u.s.-china

trade tensions and economic tensions remaining height and escalating further as we await donald trump's arrival. we see beijing announce the opening of this investigation. it follows a series of moves by the u.s. and beijing on this closely contested front of high technology, especially in the ai space. matt: in terms of the fallout to china, it seems to me this is a company in nvidia that is under a lot of regulatory stress not to sell its product to the chinese. i imagine the chinese want nvidia's most valuable chips. aren't they worried they will curtail the flow of that technology into their industry? michael: that's a great question because it really is a two-edged sword. beijing really does need access to those advanced chips that nvidia's capable producing and

produces for the rest of the world. the biden administration about a year or two ago restricted the flow of nvidia's most advanced chips to china. they are no longer able to sell there. nvidia does derive 15% of its sales from the chinese market. it does have a presence there, and it is an important area of growth. china is the world's largest consumer of semiconductors. we have heard with the politburo meeting in beijing and abuses plan to counter u.s. -- an ambitious plan to counter u.s. moves to escalate on the trade front. we saw plans specifically detect to keep investing in the tech supply chain in china. that will refer directly to their plans to build out semiconductor manufacturing capabilities. matt: it's a fascinating story indeed. thank for giving us the details on it. mike shepard from bloomberg news out of washington. as promised, i'm turning to oracle.

those earnings expected after the bell today, and investors are expected to scrutinize the cloud computing business, which has massively grown in importance with ai. we are joined by anurag rana bloomberg intelligence out of chicago. anurag, this is a huge win for oracle. all of a sudden ai comes along to give this business a huge boost. and around -- anurag: you absolutely nailed it. one is them getting work from startups and companies experimenting with ai, and then companies like microsoft of tapping into oracle because they have excess capacity or demand right now and they are struggling for capacity. the entire cloud area is really seeing the boom of more ai workflows from enterprises. matt: in terms of ai, almost could we see this boost oracle's

revenue? i flicked and other products -- crm, for example, they have agents that are $50 boost to, i don't know, a $50 package. anurag: in the case of oracle, a few years ago oracle was having a hard time getting 4%, 5% topline. now we are expecting growth of 9, 10, 11%, most of that driven by the cloud infrastructure. the issue they could be facing is the shortage of nvidia chips. everybody's fighting for this chips because right now backlog is enough for everybody. the question is can they convert that into revenue and supply is going to be the biggest issue today discussed on the call. if there is no supply, that business is going to grow north of 50% complete is fairly impressive given the current market size. matt: by the way looking back i guess 15 is too generous, i'm looking at the salesforce story.

apparently the agents had an initial pricing boost of two dollars per conversation. how much is this going to drive business in the future? do you look at the potential of ai to double, triple revenue with companies like this? anurag: it is not going to be the total revenue of oracle doubling or tripling, it is going to be the cloud infrastructure portion. there is no reason it should not double the next few years. the question is how long it is going to take. if you look at it, either you can deploy these things on premise by your own ai servers, or you can go to one of the cloud providers, amazon web services, microsoft, google, oracle as well. each one of them will have a benefit that more and more companies are going to experiment trying to create their own applications and it is the best way to go find one of the cloud providers. matt: anurag, great stuff,

fascinating stuff. bloomberg intelligence senior technology analyst in chicago covering two ends of the spectrum. lucid making a long-awaited announcement that has the stock soaring. we will dig into the details with our detroit bureau chief. this is bloomberg. ♪

matt: this is "bloomberg markets ." i'm matt miller. let's look at upstart ev makers right now. a lot of movement in the stocks. lucid rising sharply after the company announced production has begun on its gravity suv. trading volume up one point this morning, triple damage for that time of day. rivian shares sewing after getting a buy rating from a new analyst covering the company,

putting a price target of $18 on the stock and says it's well-positioned to gain significant share of a massive market opportunity in the coming decade. here to break this down is detroit bureau chief david welch. it's funny, these are a couple of companies, lucid in particular, investors may have counted for dead at certain points. i wonder if this changes a lot, the production of the gravity suv, while important, they only make a sedan, doesn't seem to be enough to turn the tables on their cash needs, right? david: nope, it-- no it doesn't, but it's a start. they sell lucid air, the sedan, but by and large it's an suv market. big, roomy, all that thing. getting gravity out there, getting production started is big for them. it is still an expensive

vehicle, it starts around $90,000, $85,000. not huge volume for them, but it is a way to start building skill and getting higher volume and get -- than just selling a sedan price well over $100,000. lucid has plans to move dow the scalen -- they're called an entry luxury. they have not given a price. seems like $50,000, $60,000. if talked about a vehicle like that in the future. they could do some of these others as well. they're starting to get out of the starting bid. matt: i will be interested to see how it does, as an avid reader of the motor has. the air has gotten incredible reviews. from a driving perspective it is supposed to be a good vehicle. if ellicott the bloomberg ticker

-- if i look at the bloomberg ticker, they just burn through a ton of cash and need more. david: all of these companies do. the market looks at lucid because there is big ownership stake from the saudis. the saudis want to be in this business and they will keep the company going. in for a dime, in for a dollar. they will keep finding it until he gets able to stand on its own better. with rivian, they have higher volumes, and the research report says they see higher volumes in 2025. this company is able to cash in on the big future in ev's. they're a little higher on the production scale and they have raised money recently. both of them are going to be raising money from investors for a while because they don't make enough vehicles, no matter how much they sell them for, to keep

generating cash to expand folsom matt: how do you view the relationship with volkswagen? rivian got a $5 billion deal with volkswagen. only about a minute left, but do these company's come closer and closer together? david: i think they do. rivian needed cash. they got money from volkswagen. also, the part they didn't get into detail on, you will see sharing of engineering. go back to the early teslas when they had an ownership stake -- daimler had an ownership stake in the model s had all kinds of parts and the interior that came out of mercedes and you could tell. they start to share price with the basic stuff, engineering platforms, they can get to scale a lot faster in terms of better costs. it helps them out a lot because volkswagen doesn't have trucks and suvs and the market share isn't very much. if they could share that with rivian, it helps them both out quite a bit. matt: great having your

perspective. bloomberg news bureau chief in detroit david welch. i am matt miller. that does it for "bloomberg markets" this is bloomberg. ♪ it's our son, he is always up in our business. it's the verizon 5g home internet i got us. oh... he used to be a competitive gamer but with the higher lag, he can't keep up with his squad. so now we're his “squad”. what are kevin's plans for the fall? he's going to college. out of state, yeah. -yeah in the fall. change of plans, i've decided to stay local. oh excellent! oh that's great! why would i ever leave this? -aw! we will do anything to get him gaming again. you and kevin need to fix this internet situation. heard my name! i swear to god, kevin! -we told you to wait in the car. everyone in my old squad has xfinity. less lag, better gaming! i'm gonna need to charge you for three people.

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live from washington d.c. ♪ joe: the u.s. stairs into apartment, and the middle east. welcome to the class to show them politics does to the u.s. stairs into -- stares into a power vacuum in the middle east. welcome to the first to show them politics. welcome to the monday edition of "balance of power." the u.s.c.'s possibility for the slit in the fall of the assad regime and also the risks of a reconstituted threat. kailey: yeah, this cuts both ways. a side stepping down having taken refuge with his family in russia, there remain a lot of questions are -- us to who will assume power yes. hts, the group that led to the downfall of