scarlet: we are counting down to the last for decision of the year. friday midday modest losses of house equities -- across equities. companies, rallying on

broadcom, that stock soaring. we will check in. u.s. treasuries extending declines pushing yields higher. as a result, the yield curve diss inverting. the 10 year now more than the three month. the pound weakening after u.k. economy contracted a second month. midday movers equities. abigail: we will know later today the stocks added to the nasdaq 100. the annual reconstitution. palantir atop the list for many. shares up a little. investors want to see it happens. when stocks are added, you will

have managers adding to positions or lessening. equinox, a topic. microstrategy, there's a little controversy on if it is too pure of a play on bitcoin. when stocks are added, you can see greens. novo nordisk lower into the scoop. on the day down 2.5%, ozempic linked to a rare vision loss risk. patients should be aware, which seems like a significant risk. the weight loss had been popular. the big stock story, broadcom soaring up 20%, best day since

they hit public in '09. the quarter was ok. the ai forecast is boosting, the ai component business is growing 65% by '27, a $90 billion market. ai is alive and well. scarlet: thank you. details on what broadcom told us and what we can infer. ian king covering the company in the u.s. and across asia. the latest member of the $1 trillion club. it predicted demand in ai chips. give us a sense of scale.

we heard big numbers. does this put broadcom in the same league as nvidia? ian: we have two trillion dollar companies. the growth forecasted is sensational. the hint was $90 billion from the type of chip it helps companies make. nvidia's data centers will be more than $100 billion this year. broadcom is a strong second player but has a way to go. scarlet: what about the non-ai businesses, parts for cars, smartphones, internet access and software? is it generating profits?

ian: they have said we are through the bottom with those businesses. that would have been a major factor. frankly, if the ceo's projections are right -- who cares? these businesses are important but they are nothing compared to the expansion in the ai area. scarlet: the sideshow compared to the main show. under the ceos leadership, broadcom was known to be acquiring until the last couple years. do you expect it will go on a buying spree? ian: this is what he was asked yesterday. you are piling cash. he said no, the priority will be

to get the debt down. they acquired vmware. does this mean your policies change? no, if there is something there, we will still look. scarlet: old habits die hard. headlines tied to apple. they are switching away from broadcom to its own product. we heard about broadcom working with apple to create apples ai chip. how significant a driver for sentiment on broadcom? ian: prior to this, this would have been everything. a major topic. the ceo was like we have a long-term relationship with a major north american customer, as he refers to them. don't worry.

this is the latest twist in a difficult relationship. broadcom has stayed important to apple because it stayed ahead because apple struggled to replace it but the effort continues and apple's internal chip development efforts continue. that's the goal for the company. scarlet: appreciate your joining us. broadcom shares up 19% lifting the philadelphia semiconductor index. earlier, morgan stanley chief executive strategist spoke with katie greifeld. >> we are seeing inflation again. financial conditions are loose. that's the market. animal spirits picking up.

people are excited. that excitement has a negative consequence. inflation picks up. may the fed can't cut. that's the biggest risk to the multiple. scarlet: great to see you. how much of this will be determined by what the fed says next week? it will be data-dependent. >> we are all anticipating what will happen next week. there will be another cut as the market is indicating from the cpi. 2025. 4% gain in the s&p this year, 4%

the prior year. '25, more of a 10% increase in the s&p. we are bullish on markets. the tech sector, the mag seven have been an indicator of the s&p. there might be easing on the mag seven, 23% to 18% but it will be the 493 forgotten that will broaden out the sector. they were more like a 4% return. next year you're looking at 14%. if you take what you expect from the s&p, the fed continuing easing, there will probably be four cuts next year, 100, which continues to fuel the economy. combine, automotive and homebuying and if the fed keeps easing, that makes equity

markets bullish. scarlet: a lot of threads to pull on there. broadcom will see interest in growth in ai sales. do you expect more second-tier companies to become mag seven like? racquel: that's a big aspiration. you will broaden out the sector and make room. the key point is as a sector there are so many companies that will move up. you will see easing of the mag seven. they have had incredible returns. easing is not terrible. it is making room for others. scarlet: the s&p up 10% in '25, building on the gains, it will not be a straight line up. pretty volatile action to that

point. what does that mean in terms of where you want to be? racquel: we went through a year more focused on uncertainty. elections are over. the fed is easing rates. the slow easing for inflation. the opportunity lies in thinking about what is next. diversification and rebalancing is important. a new administration coming in. there are sectors we think will do well but you have to be ready. financials very high, tech, health care, industrial utilities. you have to pay attention to markets, knowing the importance of diversification. scarlet: with trump, there will

be priorities he's going to enact quickly. one could benefit you need bonds -- uni bonds? racquel: i call it trump federalism. limit of the federal balance sheet moving more local. state and local municipalities. additionally with the halo of potential tax cuts for corporate, not individuals, as well as deregulation, you put that combination, again markets incorporates will do well. corporate earnings were up 10% this year, anticipating 15% next year. we haven't priced in trump policies yet. diversification will be important. scarlet: you paint an optimistic picture. what are you worried about?

racquel: underestimating, what we hear from clients, last year, the fear of uncertainty. it is the fear of missing out. focusing on those sectors being able to make moves, staying invested in markets are important but not chasing every shiny penny. next year will be strong for ipo and m&a. it doesn't mean everyone will be great. you have to balance that. those are great opportunities that still requires intentionality of looking at sound core financials. scarlet: being discerning in 2025. thanks and happy holidays. coming up, wall street funds to smalltime day traders, those who dare to bet big on elon musk are

closing out the year with hefty payouts. 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. or, put the money towards a down-payment... ...on a ranch ...in montana ...with horses let's take a look at those scenarios. j.p. morgan wealth management has advisors in chase branches and tools, like wealth plan to keep you on track.

when you're planning for it all... the answer is j.p. morgan wealth management.

scarlet: tesla hired today after reports the trump transition team plans to remove rules on accident reporting for self driving vehicles. tracking the funds of who benefited. great to see you. funds benefiting from elon

musk's fortune, what are we talking? guest: mutual funds that go to retail traders. the most extreme example is destiny 100. it's gained a 500%. the interesting part is there is discrepancy between underlying assets and what people are paying for. you can see how excited retail investors are. they are having to pay 10 times the price of underlying assets. more traditional pickers, famous tesla bulls, they're having strong years. massive turn in fortunes based

on elon musk companies. scarlet: this feels tied to the idea elon musk has regained swagger. the net worth is about $4 billion, the first person with that level of wealth. what has changed in the fundamentals? denitska: we have not seen a big change. a lot of trades have moved with the trump trades, as his tutors of winning were increasing. after the electione

policies that will benefit tesla, the rapid rollout of ev's and the removal of the tax credits is beneficiary to tesla. a lot of the moves are based on policies. spacex is a big vehicle. scarlet: what about xai? spacex has a relationship with the u.s., tesla sells them ev's. what is x ai doing? denitska: we don't know if it is a policy thing. that's a new thing. we just had a valuation of 50 billion. rapid shift of fortune.

you can see every venture connected to elon musk has benefited. earlier this year, a lot of those companies were struggling. people that placed big bets with them were down for the year. the reversal of fortune is benefiting. scarlet: thank you so much. coming up, luxury real estate is back in business in new york city. a quickening trend in big ticket property sales. this is bloomberg. ♪

what does a good investment opportunity look like? at t. rowe price we let curiosity light the way. asking smart questions about opportunities like clean water. and what promising new treatment advances can make a new tomorrow possible. better questions. better outcomes. scarlet: the past couple years new york city's top property buyers sat on the sidelines waiting for the right moment.

november, 90 contracts were signed for deals over $5 million. paulina wrote this for bloomberg. we talk about november being pivotal. i know it is simplistic to point to the election but did that helped turn the tide? paulina: the surge in the new york city luxury market started before the election. for a while, luxury real estate shoppers were waiting for the right moment. when the fed cut in september, that created optimism around the economy and sent stocks up. people started shopping. as we saw from this november data, optimism around the

economy continued. 90 contracts to buy homes over $5 million in november, third-best november for sales in the past decade. scarlet: are people paying cash or borrowing? paulina: the segment we looked at, people who buy homes at $4 million and above, they are not as sensitive to mortgage rates or other financial barriers. they want to know they are making a smart purchase. we saw some reductions in the market. some new developments opened in the nyc market. if it makes more sense to borrow , they will do that. that moved the needle. scarlet: i was struck by one of

the anecdotes you included. a buyer who wanted to capitalize on the moment when rates were high. paulina: just like in the national u.s. housing market, new york has been quiet compared to the pandemic home buying frenzy. luxury real estate buyers still weren't happy where prices were at but when they realized mortgage rates might come down, there might be more competition in the market and they hoped to strike a deal while sellers were still willing to negotiate, while listings were sitting around. scarlet: appreciate you joining us.

that does it for this hour of bloomberg markets. equity markets under pressure, the s&p losing .5%. semiconductors holding on at the moment. this is bloomberg. ♪ where can nfl fans get a great deal that turns christmas day into game day? x marks the spot. the nfl is streaming christmas day games exclusively on netflix, and you don't want to miss a moment. gather round the game because nothing says holidays like family and football. now xfinity customers can add streamsaver including netflix, peacock, and apple tv+ for just $15 a month. stuff your stockings with tons of entertainment and tons of savings. bring on the good stuff. xfinity.

announcer: this is balance of

power. live from washington dc. joe: trump tax cuts may not bring growth some expect. new analysis today on the impact of extending the '17 cuts. it may sound contrarian as we dig into numbers. welcome to friday. you made it to the threshold of the weekend. this is a new wrinkle. kailey: the committee for responsible federal budget is seen as a nonpartisan group. there are those who would push back. the argument has always been the tax cuts he would like to see,

and we have an expiration in '25, the suggestion is you would offset revenue with tariffs but that we would grow our way out of this. the committee is saying not so fast. the growth will not be what has been suggested. joe: it would do almost nothing to grow the economy, which suggests the wall street is ahead of itself in the lead up to the trump administration. kailey: the president-elect at the stock exchange yesterday touting the economy and what he would like to do with taxes. he will be using the performance of equity markets as a benchmark. joe: a political tool he tends to prefer. asked yesterday if people should start buying stocks, he didn't say yes.

maybe we are nearing a peak. kailey: maybe we have more inside info. laura, if we could reference that we saw the taxes in 2017 and we did not grow our way out of those but his campaign would argue a pandemic got in the way but this suggests even with a pandemic or without one, you would not grow your way out. laura: the corporate stuff, deductions for investing in equipment, the corporate cuts provided growth. that is permanent. status quo. what is expiring are the things for individuals. the child tax credit, individual rates, tax deductions for small business owners. those cuts don't have that same economic boost.

they don't have the same feedback that shows up in numbers. there are reasons to do some cuts. democrats and republicans like to argue. the data is not there for growing the economy. joe: scott bessent, yet to be confirmed, the conversation is you are missing the forest for the trees. this is about an overall approach that includes lower energy prices, cutting red tape, tax cuts with tariffs, difficult to quantify. laura: this is early days. the cbo and committee for responsible federal budget are making assumptions. they are looking at the extension of '17. that will expire. what will it take to make that happen? trump talked about lowering the corporate rate yesterday. that upset democrats, not

something even some republicans want. there are lots of dials congressional republicans can turn. they just don't have enough things revenue raising that would offset cost. they have plenty of ideas on how to spend the money but how do we pay for it? kailey: dang math is a problem. laura: what else is new? broadly most of corporate america would be thrilled with a lower rate. i wonder about tech companies. kailey: we see a lot of activity for tech companies, the billionaires who lead them when it comes to their relationship with this administration. me donatingta -- meta donating to the inaugural committee and jeff bezos will go tomorrow

lotto -- will go to mar-a-lago. laura: we are seeing a lot of these pilgrimages. these donations are unique, they are large numbers. these companies, which tends to be a bipartisan effort, they did not donate during the election. we saw energy companies in 2017. now we are seeing everybody tripping over themselves to say look, donald trump, i want to work with you. there are threats of tariffs and potential for gains. this is how you play the game. joe: do they get a seat at the table? what do the bezos and the zuckerberg's get back? the elimination of tiktok? what's the ending? laura: they get a seat at the

table by donating $1 million. that is the access for the inaugural event. afterwards, as he is putting together ceo councils, crypto councils, ai councils, those will be the names that will be at the top of the list. in the first term, apple went to the trump administration and said this is why you need to exempt us from tariffs and they got it. you start building the relationship now. when you have a problem months down the line, this is how you play the game. kailey: i wonder how much this is about the personalities at the top, the individuals who are fabulously wealthy but not at the level of elon musk, who everyone has watched publicly get close to donald trump. if you are bezos with blue

origin, he's thinking, musk got in. i have to get in too? laura: especially when your competitor is slashing contracts. joe: army-navy game. ron desantis is there. speaker johnson will be there. mark zuckerberg. i'm guessing elon. laura: there will be a box full of surprises. pete hegseth unclear. he had a good week. not full support from joni ernst but he got a bump. we will see if desantis is able to bend his ear. kailey: i wonder if the only thing trump is interested in talking about is that senate seat vacated by marco rubio. laura: more reporting out that

this conversation is happening. laura trump stepped down from the rnc. she's unemployed. i think she's ok. she's in the market for something. trump likes to make trades. joe: a lot of stuff could happen inside the presidential suite in landover. are we going to figure out the congressional agenda during the game? this is the only venue for donald trump and mike johnson to talk? laura: congressional republicans are waiting for a sign from trump on what to prioritize. you have a big spat between the house and senate now. the senate wants to move on immigration. johnson will say look, we want to move on taxes. if we get sidetracked, this bill will never happen. senator john thune is saying we want to make sure the immigration happens.

congressional leaders and ceos have priorities. kailey: they have different realities. the majority for john thune will be more comfortable then mike johnson's at least until special elections fill vacancies. laura: a one seat majority is tough. a three seat majority, when you are trying to do big things like a tax bill with different provisions, there's a lot for republicans to like but several things people will not like. the state and local tax reduction is polarizing. the majority of republicans don't care. 6, 7, 8, they could lose their seats over it. what do you do? joe: maybe around halftime we will find out if it is tax cuts or the border. kailey: monitor truth social for

game updates. thank you. the denominator is how difficult the math is. it's difficult from a majority standpoint and to work out fiscally if you want to do so in a manner at least mildly responsible. how you can give this president-elect what he wants without widening the deficit? we need trillions of dollars. these difficulties are not unique to washington although they feel bad here. look to europe to see how hard budgeting is for everyone. joe: go back a week. the austerity budget jammed through the legislature, the prime minister, his government was vacated in a no-confidence vote days later. kailey: michel barnier is out. emmanuel macron naming a

centrist, leader of the democratic movement party, françoise, do you have a new face. they will face the same issues. joe: it emerged this morning françoise bayrou. following the no-confidence vote, a professor of french studies at george washington university, catherine thanks for joining. what does this mean? >> thank you for having me. this is an interesting and predictable choice. if you asked me who would be my top guests, i would say have said françoise bayrou. he is a political animal. he has known michel barnier for 40 years and reference to that in his introductory speech today.

french people remember him primarily for his 2007 presidential run. he lost. but he was a very important third-party candidate. he has been a leader of one of the main centrist, slightly right parties for decades. he was an early advocate of emmanuel macron, joining his team as early as february '17. he was one of emmanuel macron's initial ministers in '17, minister of justice. he was obligated to step down one month later for legal troubles, which i can come back to. he has been in the inner circle since the beginning. he's a close confidant to emmanuel macron. he's interesting because he's managed to tow the middle ground. he's not disliked. i use the double negative intentionally.

he's able to work across the aisle. i'm not going to say everyone loves him. people don't immediately come out the gate being ready to vote no-confidence in him again. kailey: i don't want to draw parallels that should not exist or simplified to suggest all democracies are similar but we went through something in the u.s. one year ago where a speaker of the house was ousted, mike johnson basically, no one seemed to have a problem with even if no one liked him. despite attempts to oust him, there wasn't the appetite to do it again. i wonder no matter who this next prime minister is, now we know, if there is going to be appetite for another no-confidence vote when the situation financially for france could become dire quickly? kathryn: interesting you mentioned that.

bayrou is a political animal who saw this scenario coming. in an august 18 editorial, he said he thought the next prime minister, who turned out to be michel barnier would be faced with such a divided government that he would fall and there would need to be a subsequent prime minister who would be able to do things because the appetite would have been lost for the contest, protest vote. it has not been a secret bayrou has wanted the job for many years. he is a fourth prime minister since '22 under emmanuel macron's second term. he seemed to have wanted this one year ago but maybe not as much this summer because he thought there would be a crisis that would lead to the need to rebuild and here we are. joe: how does bayrou win over

the left? kathryn: good question. he's going to have to manage the reputation emmanuel macron is bringing in with him. it bears noting the furthest left party was not invited to the conversation. the party has said they would move toward a no-confidence vote. he has a big flank to the left against him. he has a long working relationship with several ministers of leftist leaning and socialist leaning persuasions. several of those leaders from the socialists, communists and the green have said they would not censor him right away and one big concession they want is a promise from him not to use

recourse to the 49.3 in the constitution which is an executive order. as long as he agrees not to push legislation through without consulting parliament, they will continue to work with him they say. the priorities on the right side, marine le pen has laid down her priorities. she says we must revisit the question of retirement age. we have to be careful on social security and medical reimbursements. as long as he is willing to play ball, they won't proceed toward a no-confidence. interesting moment. he's being incentivized to follow the parliamentary process and a coalition of the center has agreed to support him if he is willing to do that. kailey: what will it take in terms of a budget since that was the issue for michel barnier and

will be an issue for him to make everybody happy? is that realistically possible? kathryn: good question. france is on track for a 6% budget deficit next year alone. eu regulations limit it to 3%. france is drastically above where it needs. there were controversial measures in the michel barnier budget. some of the health insurance and social security benefits. another thing being watched closely is his educational policies. theyrou -- bayrou was an educational minister in the 1990's. he spoke movingly in his speech on education and yet, the michel barnier budget proposed cutting 4000 teachers out of their jobs as a saving maneuver. we see these incredible divides

between what everyone is hoping to promise versus what is possible. i heard this exactly as you were speaking about the trump budgets before i came on. shockingly parallel. kailey: [laughter] joe: [laughter] kailey: no one has an easy time with budgets in the west. thank you so much. it puts things in perspective, no matter how broken the fiscal scheme seems to be in the u.s., we are not along. -- alone. joe: you are doing a good job connecting the dots between these important stories. we will find out what the relationship between the u.s. and france is during the trump administration. ♪

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joe: one week until the government runs out of money. the deadline december 20. counting down without a plan. friday the 13th, one week until we run out of cash. talk emerges this weekend, it may come from the army-navy game. kailey: legislating from the

sweet. joe: mike johnson will be there from the suite. this might be shorter than some are suggesting. we are lucky, maybe to get into february before there is another funding battle. kailey: the fiscal year these appropriations were supposed to address will be roughly halfway over. even if we wrap this battle, pretty soon a new one will start. it's about raising the debt ceiling, trying to get reconciliation packages past with border, energy and tax legislation. this will be a heavy to do list. the speaker of the house is going to be working with a majority of one? joe: you hear people suggest

there is no shut down in the works for the next week but the first quarter next year we could run into trouble. kailey: let's get into this with our political panel. we talk all the time about doing this dance all over again. they are choosing to kick the can to march, maybe two months after donald trump takes office, with a lot he wants to accomplish in the first 100 days. how problematic his this kicking -- is this kicking? rick: i don't think it will be an issue in march primarily

because it is in the rearview. it's a little silly. most of the effort in congress by then will be focused on the next funding year's budget and all the appropriations activity will be for the '26 budget. we have more intensity in the senate lined up. we have been talking about the five-day workweek in the u.s. senate to get things moving there. i think that will be matched by house tempo. we've been talking about the close margins of degree in the house and senate with republicans in charge and how complicated that will make things. as soon as they sign this cr before christmas, that puts it

in the rearview and buys you three months. all of a sudden, you're focused on a different set of numbers, new top lines and it makes the reconciliation on '25 not much more difficult. joe: some delay in crafting a short-term solution has been the request for disaster aid following the hurricanes in the southeast. reporting suggests tens of billions in aid will be included. the white house asked for $100 billion. these are a lot of red states. north carolina, tennessee, florida. why the fight over the money? >> it's indicative that you have a split in the house where you have people, most representatives, if not all want

to fund these but there is concern about the deficit. i have to disagree with rick since it is friday. this is a disaster for republicans. no way you move this to march or february, then it is clean sailing. let's not forget, there is zero room for the house to maneuver. they don't have the numbers. there's a possibility within the 100 days when you have donald trump and republicans anxious to move forward, a full agenda, if you have more democrats on the house floor then republicans on a given day, the idea that this will be smoother sailing going forward is not the case. they will have to fight this out next year. the problem for donald trump, i suspect he may give mike johnson

an earful this weekend, who knows, is the fact he has an agenda he has promised to the public. he is intent on living that. you can bet if it does not get through, he will point the finger at republicans in leadership. democrats cannot be blamed. republicans by january own d.c. kailey: we've seen democrats in this 118th congress get things over the finish line, doing so knowing the senate and white house were controlled by democrats. that's not the case now. i wonder if you think the democrats will play ball at all in the early days where there is a degree of difference, distance rather between what is taking place in the january to march, and then the midterms? jeanne: i think they will play

the ball but that means they will kick the ball and expect it to be kicked back. what will they get back from johnson? kailey: go navy. jeanne: what are they going to get in return for support? they will expect something. donald trump yesterday, corporate tax cuts down to 15%. those are huge numbers for corporations, the 10 largest in the country. how are they going to make that work? where are these cuts going to come from? democrats are in a position to say you cannot cut things we hold important. that means mike johnson, if he wants support will have to deal with them. this is a tough position for mike johnson who has the toughest job in d.c. in january. we thought the 118th was tough. joe: [laughter] yeid.

the interesting develop, mike johnson appears here to stay. that has changed a lot in the last six months. there was more concerned about the veracity of the speaker following mike johnson's short tenure but he has turned himself into a figure in the house in terms of the fundraiser and organizer. will that be challenged by having a majority will that be challenged by having a majority of one? rick: not really because donald is that the majority have to abide by. the reality is he was the most powerful man in washington last year. aside from the president, the leading ramp-up of the nation. he was the speaker of the house and nobody else has that kind of power. we are a hierarchal party. republicans salute when the president is a republican. you '