♪ >> welcome to "bloomberg markets." i am scarlet fu. donald trump just wrapping up his news conference while china faces internal and external cannot pressures against the backdrop -- economic pressures. here is where things stand. gains in equities powered by the big tech sector. the nasdaq 100 making another record high. also a new high, bitcoin is at

$107,000. continued excitement over trump's support for digital assets in the decision to include microstrategy. no movement right now in two-year yields before the fed decision on wednesday, policy makers expected to deliver a hawkish cut. the etf that tracks big cap chinese stocks falling. that lows beijing's failure to give details on the latest fiscal stimulus pledge. let's check in with abigail doolittle for movers on the equity side. abigail: you were just mentioning microstrategy. that inclusion in the nasdaq 100 was announced last friday evening. the annual rebalance will occur december 23. microstrategy up 5.9%. the gene sequencing company added.

palantir was added as well. both up huge on the year. palantir up more than 300% on the year. it is selling off a little bit on this news. maybe a bit of a sell the news reaction. super micro computer down a bit on the news. it has been taken out of the nasdaq 100. turning to a stop climbing the last three days, broadcom up more than 30% last week, a record week since the company traded publicly since 2009, up 25%, today gaining another 7.5%. the ai demand, folks still want in on it. it puts it right alongside nvidia. we all know what is going on with that stock. investors seem to think the same sustained rally may be had for broadcom. returning to the crypto space with bitcoin having all the positives, it seems to be

rising. lots of green on the screen for the crypto space. scarlet: thank you so much, abigail doolittle with our check on movers. president-elect donald trump and masayoshi son just spoke with his plans to announce softbank's investment. >> softbank will be investing $100 billion in america creating 100,000 american jobs at a minimum. >> my confidence level to the economy of the united states has tremendously increased with his victory. so, because of that, i am now excited to commit this $100 billion and 100,000 jobs. scarlet: for more on this developing story, let's bring in peter elstrom joining us from london.

the big numbers are $100 billion over the next four years, 100,000 jobs. where, specifically? peter: context is important. it was eight years ago when he met with president-elect trump and pledged he would invest $50 billion in the united states. what you are seeing is essentially double that pledge. eight years later, he is trying to do something similar. his financial circumstances are different. softbank eight years ago had a lot of money. they had been in the process of raising the vision fund. they made investments in we were, doordash, and a few others. now softbank does not have that kind of cash on its balance sheet so it is a bit of a bit of question how they will get that money and make those investments. his investment strategy has shifted. he is emphasizing artificial intelligence. he wants to put money into ai, into semiconductors, also the energy which is critical to the growth of ai in the future.

we still have to see exactly where the investments will go and whether he can reach the level of 100,000 jobs which is a big target for him. scarlet: absolutely. thank you for the important context of what happened eight years ago. with the $50 billion pledge eight years ago, do we know if you delivered on that? peter: he largely did deliver that money. he had this part of $100 billion in the vision fund he was ready to invest in start-ups. he already made a bunch of them. we work was probably the biggest beneficiary. there were scores of other start-ups that did get that amount of money. wework had tons of trouble. they ended up going bankrupt. that is symbolic of the problems they had in the vision fund and the pledge softbank was making at the time. it is not clear how it will play out this time. they will have to make those investments more carefully because they do not have a big pile of cash like last time, and

they are moving into a sector that is red hot right now so you are investing at the top of the market. scarlet: as you mentioned, context is important. mush eoc son is not the only big tech ceo making promises or pledges to donald trump and showing he wants to build a better relationship. you have mark zuckerberg, sam altman doing something similar. peter: the other tech companies putting money into the inauguration fund. they want to foster a better relationship with trump and the incoming administration. you are seeing a lot of this. $100 billion is a big commitment ahead of the election ahead of him taking office. we will see how that pays off for softbank in particular. a lot of m&a deals have been stop in the past because foreign buyers want to do certain

things. you could also probably cease pledges of investment that will be surprising for the trump administration as it tries to bring in domestic and foreign companies. scarlet: thank you, peter, in london. donald trump's election to another term has put upward pressure on the u.s. dollar. now, some wall street strategists are forecasting the u.s. dollar will peak mid-2025 and start to decline. some are protecting a 6% climbed by the end of the year. let's bring in vixen -- vince cignarella. walk us through the thinking on the dollar. >> i think what people are looking at are the trump

tariffs. initially, people think this will of the dollar. in the long run when you look at tariffs, you are looking at increasing import prices. you will increase cpi and inflation. the thought process is with inflation going up, you can buy dollars, the dollar is going up. the problem is you will see erosion in real interest rates. the underlying outlook is negative for the dollar. you will also see issues with the current account deficit as well. in the long run, you will probably see the dollar under pressure. we have already seen the dollar rise. we may be seeing significant resistance for the dollar to go up near term as well. scarlet: does president-elect

trump want a strong dollar or a weak dollar? >> every president says they want a strong dollar. in reality, a weaker dollar increases the ability for the u.s. to export. the problem is we are not really an export nation, we are a consumer driven import nation. in the long run, a stronger dollar does keep inflation lower. they always push for it. they say they want a stronger dollar. they will never undermine the treasury and say they want a weaker dollar. it would be kind of fun getting a comment like that from the administration, but they do not really do that kind of thing. scarlet: exactly. it has always been the policy of the treasury to say we support a strong dollar. in terms of how you are looking at the dollar when it comes to what the fed does next, we know the fed begins its two-day meeting tomorrow and if he is expected to deliver this hawkish cut on wednesday -- and it is

expected to deliver this hawkish cut on wednesday. what kind of weight does that have on u.s. currency? >> it is what people are expecting. there is expectation and reality. they are probably going to cut on wednesday. they do not really need to but they probably will just to not send a negative message to markets. i think we are going to see a cut wednesday that will take it down 25 basis points. i think we will see language about sticky inflation. if you look at import prices, they have been increasing since september. that has probably been the reason behind cpi slowing and moving up a little bit. we are still in the 3%, 3.3% range for cpi. that is well above the 2% target. we had comments from michelle bowman about a week ago saying yes that -- just that and why are we cutting rates we are

nowhere near 2%. if you think about inflation at 3.3%, we could get a fed funds rate at four .5%, there is no reason to cut. i think that takes january off the table and puts the 100 basis points traders are pricing in for next year in jeopardy. i think we might see the dollar short-term get a bid but i think longer term it will roll over. scarlet: consistent with rejections currency strategists are making. thank you, as always, vince cignarella. besides potential tariffs and the strength of the dollar, when you are looking at a country like china, it is also facing economic pressures at home. there is new data that shows retail spending to a surprise decline for the month of november in terms. it rose just 3% from the year prior, the slowest pace in three months, and it comes in the wake of major government spending incentives announced in china.

for more on all of this, let's bring in the chief economic strategist. that is a number people are looking at carefully because they want to see domestic spending. retail sales rising only 3% was a disappointment given it is a slowdown from 4.8% the prior month and far below what economists predicted at 5%. is there some kind of silver lining that may be the numbers do not capture? >> i think if you look at the november data, there are some technical factors. this year, we have the start of the online shopping promotion that put a lot of demand into october. that is why you see october growth is very strong. essentially, i think there is some payback due in november.

we are talking about a silver lining. if we exclude online sales, the off-line sales for consumer durable goods is still robust. autos, homes, appliances, and furniture. if you look through the volatility and combine october and november together, the average retail cell growth is around 3.9% -- sales growth is around 3.9%. you do see some recovery in consumption because of the policy support since late september. the recovery is not strong, it is still very fragile. scarlet: speaking of fragile recoveries, let's talk about china's housing market. that has been a drag the last three years. the latest data shows prices are still falling but perhaps not as much as before. where do things stand in terms

of making an upturn? >> at this moment, i do not think we will see a sharp change in the housing sector in sales or demand or investment given the massive oversupply of housing inventory. since september, the sentiment has improved a little bit. that is where you see the home sales data start to improve and the housing price improve a little bit. i think this could be rather short-lived because ultimately what matters to the housing market is the expectation for future housing price changes as well as the job and income prospects. i do not see that improving meaningfully at this moment.

i do not think this recovery will be sustainable. scarlet: ok, got it. we know the pboc has vowed to cut the reserve ratio requirement for banks at an appropriate time. what is an appropriate time given president-elect donald trump is talking about adding another 10% to tariffs on chinese imports into the u.s.? how does xi jinping maneuver? >> i think if you look at the latest data, china is facing sustained deflationary pressure. even talking about the recovery, it is mostly driven by supply side. that exacerbated the deflationary pressure. china needs to act on the monetary and fiscal side. i think they will come up with a measure to be announced next march.

near term, probably as monetary policy that is going to react. we are expecting interest rate policy rate cut in the coming weeks. i would say given our stronger u.s. dollar and less dovish fed and rising uncertainty, i would say the room for significant monetary easing is rather limited. also, the room for currency depreciation is also limited. fiscal support has to be in the driver's seat. scarlet: he has to walk a fine line. thank you so much, the asia-pacific chief economist at vanguard. coming up, microstrategy jumping today. it joins the nasdaq 100 and announced another big bitcoin buy. details next. this is bloomberg. ♪

♪

♪ scarlet: this is "bloomberg markets." i am scarlet fu. time for the stock of the hour. microstrategy higher after the nasdaq said it is adding the company to the nasdaq 100 index. microstrategy brought an additional $1.5 billion of bitcoin. our cross-asset reporter joins us with more. clearly, the new news is the inclusion of microstrategy into nasdaq 100. microstrategy is technically a software company. >> it has transformed into a bitcoin proxy hedge fund. it is what you would look at as a bitcoin play.

you have the co-founded was controversial b -- co-founder who is controversial but not shying away from it. bitcoin is edging higher around $106,000. it is impressive because he has long been ridiculed. it is kind of, who is laughing now? scarlet: it worked out for him. the market cap for microstrategy is almost 104 billion dollars which would make it the 50th biggest member of the nasdaq 100 which makes it influential. >> is going to sit in the middle. the nasdaq compared to the s&p is more mechanical. the s&p is more discretionary. there is a committee that is secretive. a lot of people are speculating nasdaq would be included. palantir is one of the companies added. but it is down today.

you can see how people are reacting to microstrategy being added. scarlet: when is the change? >> friday after market change or monday before the open. around $451 billion worth of etf's, around $22 billion of buying. it is the fifth largest etf and now will have microstrategy. scarlet: thank you so much without stock of the hour. coming up, the university of connecticut's endowment is shifting its strategy. it will sell almost all of the tech fund exposure. we will dig into how the huskies are investing, next. this is bloomberg. ♪

the best ai assistant isn't one that knows the whole world. it's one that knows your world. a custom assistant, built on watsonx with ibm's granite models, can leverage your trusted data, be easily trained on your workflows and integrate with your apps. it can be tuned to do just what you need. because the more ai knows about your world the more it can help you do. ibm. let's create. scarlet: the university of connecticut's endowment shifting from hedge funds towards etf's. this is not like they are shipping away from hedge funds,

this is -- shifting away from hedge funds, this is towards specific etf's. >> he said they are not finding good returns or good hedging in hedge funds and instead they are going to be mitigating risk through buffer etf's. they are keeping their exposure to long only hedge funds because he believes you can still find alpha in those kinds of strategies. in terms of what we want to use for a hedging tool, he is now using the etf which is cheaper than a hedge fund. scarlet: that has got to be a big driver. the cost of a hedge fund is very expensive versus etf's which tend to be less than 1%. >> these buffer etf's uconn bought charge about 80 basis points which is a lot different from the structure hedge funds employee. he also said, he called this

single-ticker hedging. instead of the endowment having to go to an institutional desk, now that they just have their heads in the etf, if they want to exit, they can intraday. scarlet: this is fascinating. as far as we know, uconn is the first endowment to do something like this. any sense of whether other endowments might go this route of moving away from hedge funds? >> i am not sure. if there are any endowments watching that would like to talk to me, i would be more than happy to discuss buffer etf's. this is the first i have heard of. certainly interesting and part of a broader move of institutional investors choosing etf's to do kinds of trades. i'm thinking bitcoin and commodities trades that were previously not available. scarlet: didn't sound more like he was souring on hedge funds or excited by etf's?

>> a little bit of both. but very much souring on hedge funds i would say. scarlet: that does it for this hour of "bloomberg markets." i am scarlet fu. keep it right here. we are looking at gains in equities and the nasdaq 100 at a record high. ♪ 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.

>> from the world of politics to the world of business, this is balance of power.

live from washington, d.c. >> it is the week of a government-funded deadline and we still have no-deal. welcome to balance of power on bloomberg tv and radio. i am kailey leinz. we will bring you the latest from capitol hill. an important conversation with the incoming chairman of the house financial services committee. congressman french hill will be with me in just a few moments. as trump's health and human services nominee takes to they'll himself, -- the hill himself, rick davis and jeannie. antony blinken wrapping up his trip to the region and says the u.s. has made direct contact with a syrian rebel group in the aftermath of the downfall of bashar al-assad's regime. we will have more with the center for politics. there is a lot we have to bri