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>> welcome to a simulcast of "bloomberg markets" across tv and radio. i am caroline hyde in london with paul sweeney in new york. tentative date on the markets. breaking news with november new home sales coming in shy of what was expected. consumer confidence well off what was highly anticipated. we are off on the s&p but only slightly. paul: i was looking at new home sales coming in light. we had a revision higher last month. new home sales, you have a mortgage rate between 6.5 and 7%. it is a tough sell to ask someone to leave their existing home with a 3% mortgage and go buy something in florida or austin at close to 7%. caroline: it is a tough sell and a global theme with interest rates, anticipating whether we

will get cooling anticipated. that was the shot to the market when the fed signaled maybe only two cuts and the rest of the market recalibrate's. we have cautious trading heading into christmas. interesting the volume is helped by chip names. paul: it is a holiday week. caroline and i will be here. a lot of other folks will not. we will see that in the trading volumes. might see moves in individual names. that tends to happen when you have lower volume. caroline: walmart shares extending the opening decline on the back of consumer confidence being pulled back. it is something we will beat debating with analysts and experts. paul: tom keene and i were just talking to dana telsey about nordstrom. there is a well-known name in the u.s. going private which highlights some of the challenges department stores continue to have as we close out

the holiday shopping season 2024. caroline: should we get to our first guest? paul: let's do that. caroline: with what is happening with consumer confidence. paul: emily is joining us from john hancock investment management. give us your thoughts as we think about 2025. in 2023 and 2024, 20%-plus returns, but can we expect in 2025? emily: the last we saw that was the late 19 90's. extraordinary stretch for investors. it all came on multiple expansion. the last 12 months earning growth for the s&p, it is modestly lower than two years ago. we have seen an incredible amount of sentiment driving markets higher. going into next year, things look pretty good. we are looking for positive earnings growth.

the economy is rick sell rating. the challenge is we are starting from an elevated starting point given we were trading at 22 times forward earnings. the high in the last 30 years is 24 so we could see more multiple expansion going into next year but we will need to see earnings beat the driver overturns. we think high-quality stocks in the united states can continue to deliver. we like the income available in high-quality bonds, especially given the backup we have seen in heels to close out 2024 -- in yields to close out 2024. paul: i am not sure we have seen a commensurate move up in earnings. how do you find valuation for the market? emily: it is tough. the growth index is trading at a premium. that is where the earnings are.

we do think earnings can deliver in that space but investors are paying a lot for those earnings. we want to diversify in areas that still offer quality but are trading at a reasonable price. that is our mantra into next year, quality at a reasonable price. we are finding it in u.s. midcap stocks trading at the cheapest valuations to large cap counterparts since the late 1990's. they are benefiting from onshoring trends. we think that is a longer-term theme that you are not overpaying for in this market. we want to be mindful of the speculative frenzy that has been building across markets to close out the year. we are fading those unprofitable areas. crypto. it is remarkable to see the risk-taking pervading markets to close out the year. our outlook next year is resist

turning up the volume and portfolios. it is about participating and embracing opportunities across equities and bonds without going over your scheme and taking risks. caroline: bitcoin at $94,000, way off the high. i want to get back to the breaking we started the show with and well on the december consumer confidence. it is not as high as the market anticipated. we were expecting 113. it comes in well below at 104.7. walmart currently off by more than 3%. what is the consumer outlook for you for 2025? emily: consumers are still it concerned about inflation. that is a problem, especially for the lower end consumer. we are hearing from retail names consumers are looking for alternatives that are cheaper. the high-end consumer is benefiting from the massive wealth effect that we are seeing. we just went from $40 trillion

market cap on the s&p 500 to $50 this year. there is a huge wealth effect pushing the services side of the economy higher. looking at the services pmi that came in last week at 58, that is remarkable. the consumer is on fire for the large part. certainly some challenges as consumers contend with inflation that is decelerating but still higher than pre-pandemic levels. caroline: let's go to some of the calls you got right. all in on the u.s. versus the rest of the world. how does 2025 look for european stocks, asian stocks, when the u.s. has been the story of over performance? emily: when we think about the decision between u.s. and non-u.s. equities, geopolitical risks comes into view.

that is harder to handicap. we identify the best relative economic growth in the best relative earnings growth. right now, the u.s. is seeing the best growth. we talked about the solid consumer, the pmi's, the business surveys being elevated. hard data is starting to catch up with the soft data in the united states as we are seeing improvement across labor markets, etc. overseas, not so great, especially the manufacturing sector really in trouble in europe. their services side is doing ok but not as well as the united states. that is translating to better earnings growth estimates in the u.s. analysts are penciling in about 15% earnings growth. that may be tough to get in the united states but it is about half of that overseas. finally, we think the dollar sees modest appreciation into the year. that would also speak to the overweight u.s. versus international stocks. paul: how important is the mag

seven for your outlook? it has been such a theme for 23 and 24. how about next year? emily: it is critical because of the market concentration. right now, we are seeing the biggest concentration in the top 10 stocks the s&p 500 in history. they represent 40% of the market cap. that is really going to be important. expectations are elevated. it is a tough starting point into next year. we still think they can deliver pay we like where the earnings growth is. i think there is some risk as we go into next year that the names have run so much that they might deserve a little bit of a breather and hopefully they can see greater breadth across markets in 2025. caroline: emily roland, always a joy, happy holidays. looking towards next year, it is already here when you think of the trump effect.

at the moment, we are hearing he is suggesting on sunday panama lowers its fees or cedes control of the canal. >> the fees being charged by panama are ridiculous, highly unfair, especially knowing the extraordinary generosity bestowed to panama, i say very foolishly by the united states, this complete ripoff of our country will immediately stop! it is going to stop. >> every square meter of the panama canal and its surroundings belongs to panama and will continue to be. the sovereignty and independence of our country are nonnegotiable. caroline: inauguration is not yet here. but we go to mike shepard in washington because the impact is clear ahead of that. what do you make of the latest feuding going on?

mike: this is yet another world leader being put in the crosshairs of donald trump even before he takes office. the president-elect is already taking on china, mexico, and canada, the three artist u.s. trading partner, over the flow of drugs into the u.s.. with china, also complaining they continue to engage in what he sees as unfair trade practices. that is a complaint echoed by the current administration. but it extends more broadly even to europe where he has been controlling leaders -- cajoling leaders and sometimes forceful terms that if they do not buy more u.s. oil and gas they could see consequences when it comes to tariffs. he has been using the word "tariff" a lot, even before the election. but since then, as a policy tool as well. this could be another area where

tariffs could come into player at least the threat of it. paul: it is interesting when you look at the incoming trump administration, what is the role of elon musk? it seems it is a prominent role. yet did not have the best of weeks last week talking about u.s. government shutdown issues. mike: if you are in the trump and musk camp, in a way, they would see this as a win because they got to alter the course of what was going on in congress and they got to flex and exercise that muscle even before the president-elect takes office. they jumped in at the left second after weeks of negotiation were upended by musk going into opposing the measure that was on course to pass and getting congress to make a few changes, not all of them, but a few changes, they sought, which shrank the size of the bill.

they drop a few provisions they thought were necessary and unrelated to spending at hand. they were able to alter the course of events even before they had the official power to do so. caroline: it is not as though the markets are celebrating the aversion of a government shutdown pretty s&p 500 has been down. dwell on the fed. mike: this is another target elon musk has brought up. in a post on x, he was saying the fed is too big, too many employees, it is overstaffed. and yet when you compare it sibling institutions in europe, it does not have nearly as many employees. there are 24,000 across the federal reserve system in the u.s., but that is 12 regional banks. a lot of people work to support the banks that serve customers

and businesses across the country. paul: thanks for joining us and giving us the latest on the end time trump administration making headlines as we knew that it would. s&p off 19 points. the nasdaq off 20 points. 10 treasury yields trading higher at 4.55% -- 10-higher at 4.55%. coming up, the nordstrom family is taking their store off the market. we are having the details on that coming up here we always look at retail, especially during the holiday season. this is bloomberg. ♪

paul: good monday morning. i am paul sweeney in new york city. caroline hyde in london.

this is a special edition of "bloomberg markets" on bloomberg tv and radio. let's take a check on nordstrom. up to 30% year-to-date. the retailer set to go private in a deal valued at over $6 billion. the northcom family -- nordstrom family will acquire all the stock not already owned by them. thank you for joining us in studio. why are they going private? >> we have nordstrom, a retail giant that has been struggling to compete with fast fashion and discount chains like t.j. maxx. we have the company saying they think they can do a better job navigating the tough retail landscape taking company private so they can focus on operations. caroline: what does that look like? does that mean cost cuts, job

cuts, a tougher period to come if you are part of nordstrom? emily: i think all of those things are on the table. this company was worth $50 billion in 2019, now it is going for $6.25 billion. the stock price has plunged 40% in the last five years. there is a lot that needs to change. paul: there is a lot of nordstrom's in the management team and ownership. how does the street view the family ownership in terms of being managers? emily: good question. i think the company has invested a lot in the rack business, the discount chain competing with t.j. maxx. i think they have seen a lot of growth from that in recent years. i think you may see more investment in that. that has been

better-than-expected. that is the part that competes with t.j. maxx. you have stuff that is very discounted. that is sort of what consumers these days are looking for when they are shopping. caroline: they sure are. let's talk about the mexican involvement. 70.1% will be held by the nordstrom family. a mexican department store owner is coming in and taking up the rest. does that about agility -- is that about agility, finding strategic investors who know how to operate? emily: i think it is also about the cash. this is a big department store chain in mexico. they are helping to finance the deal. caroline: money on the table always helps flexibility i am sure. great to have time with you. thank you so much, emily cohn, all over the story. let's talk about the retail

industry going into 2025. we get the ugly consumer numbers in terms of confidence today. we are pleased to welcome jennifer of bloomberg intelligence. push us forward as to what we are looking like. we have nordstrom signaling they want to go private. they need to rework and re-energize their business. how is the rest of the high street set up for 2025? >> good morning. one of the things we are looking at is the consumer is doing well, but where is their focus? the focus is on value. we are seeing across the industry a lot of retailers trying to reorient operations in a way that presents value to their core consumer. for nordstrom, you may see that pivoting in terms of the way they do assortment. for retailers like walmart and target, it is about pricing and selection. paul: there is a great story about that on the bloomberg terminal today.

the headline is a great headline. "kirkland for christmas." shoppers ditch logos for store brands. that goes to your value argument. how do you see that with the stores that you cover? jennifer: value is of utmost importance. private label had a great year in 2024. we see that momentum continuing in 2025. kirtland is costco's own brand. it is almost 35% of their sales. it is a trusted brand. to the point where consumers no longer think of it as private label alternative to national brands. they see it as a brand in and of itself. walmart, target, kroger, albertsons, these companies have all invested in private label the last several years. it is starting to pay dividends. it is value, novelty, and something consumers are resonating with. caroline: they have to be

leaning into all of the data points from digital and artificial intelligence. how is that something they are not displaying money into but getting rewards back? jennifer: when we look at the industry, last year, we made a prediction retail media would be up over 20%, the revenue associated with it, 2024, and it looks like we will exceed that. it is on pace to continue that momentum into 2025. retail media is advertising. it is the selling of add space, search results, and on digital products you see online as well as digital screens in stores. retailers have been unlocking the values of that and finding it is a link to bring high margin, very low overhead business, into the mainstream core. paul: that is a business i have experience with.

back in my banking days, we tried to finance a bunch of those companies because we felt like they captured customers at the point of buying. what a great time for video to be introduced in terms of advertising. what does it mean for the big retailers? what are the economics to the big retailers for this media? jennifer: this media carries a margin of 80%. when you think about retail staples, you are talking about operating margins in the 3% to 5% range. gross margins in the high teens, low 20's. the ability to have a revenue stream with such a high margin is very appealing to these companies. they have the data. they have all of this first party data that they can monetize. it really is a very effective partnering. one of the interesting things we are finding is there has always been historically investment from packaged food companies into retailers for placement on shelves and things like that. we are finding retail media is

incremental spend. that is an even bigger tailwind for retailers as they get deeper into the new revenue stream. caroline: everyone takes a leaf out of amazon's book in the end. i'm interested in the pure data and forecasting side. how are the companies forecasting into 2025? jennifer: it has been interesting. in 2023 and 2024, we saw some initial pilot cases of the use of ai to help with demand forecasting. we are seeing those pilot programs have been successful and are being more widely rolled out across organizations in places like kroger, walmart, and target. that means they are getting more efficient and smarter understanding when they need product and where they need product. that goes all the way back up the supply chain and makes them more efficient as an organization. that kind of cost-cutting

initiative is good from an operational perspective but it is also good for customers because it means what they want will be in the stores or online available at the time they want it. paul: what i learned from you a while back still shocks me. who is the number one supermarket in the united states? jennifer: that would be walmart. over 50% of walmart's's sales come from groceries. they hold a little over 30% of total market share in the united states which is significant. paul: and yet regulators will not let albertsons and kroger get together. jennifer: it is the end of a two-year saga. when we first heard the announcement of the merger, we thought it was good for both organizations. but in this instance, the ftc prevailed. the merger is now dead. kroger and albertsons will have to continue on their own individual strategies and we will see how that unfolds. caroline: jennifer, great to

check in with you on the all important look ahead to 2025 and the m&a deal that went sour. we push it forward. macroeconomic policy, the fed, we will be delving into that. what is the outlook for two cuts? will we see three? and elon musk's criticism of too much pork at the fed. this is bloomberg. ♪

paul: good monday morning. caroline hyde is with me as well. a special edition of bloomberg markets on bloomberg tv and radio. a quick check of these markets. s&p 500 off by about 12 points. the nasdaq off just fractional on the downside looking at the yield curve 10 year treasuries up about four basis points. 4.56% on the 10-year. looking at wti crude oil just fractionally off down below $69 a barrel. for tom keene i will call it bitcoin off about 1.9%.

$93,000 per token. $107,000 per token just a week or so ago so some big moves there. mary daly said she is comfortable with policymakers immediate projections of two interest rate cuts this -- next year. take a listen. >> it is about the data. we do not know what the economy -- incoming administration will do. new administrations no matter when they come always put a state of programs together and it is a policymaker i look at the net effects once i see clarity about what those policies will be. so i was focused on the incoming information and what it means for the outlook. today i feel we have policy and a good place and we are prepared for what comes before us. caroline: what happened that -- lisa: what caused the fed and yourself to become more

concerned about the stickiness in inflation. mary: the data happened. what has happened is there are two things that have occurred. the economy remains in a good place and the risk to the outlook are equally balanced between a risk to inflation or employment. we adjusted policy when we had confidence that inflation was heading down. and we adjusted policy some more to ensure we have a balance labor market that continues. but then the data on inflation had been coming in a little bit slower. i wouldn't even say sticky or stalled i would say the progress has slowed relative to what we wanted. and that's a typical pattern. it is bumpy. from 2.542.82 two it is just a bumpy path. >> at the same time some people are wondering if there was a stickiness. i'm looking at the cleveland cpi right now and it has ticked up for the month of december from november, there was this question of why did the fed cut

at all? mary: it is bumpy. earlier in the year we had two months of data and people said it is re-accelerating and then we had to come down. the most important thing for me was we needed to recalibrate policy. i saw this as a close call. was 75 enough to be the recalibration we were looking for. the right size policy to meet the economy we expect or do we need more. ultimately i determined that was the right -- 100 was the right level. now we have the recalibration behind us and we are in the next phase which is looking at the incoming information where we return to a more gradual pattern in the fed where you -- with a lot of uncertainty you wait watchfully and you see what transpires and make further adjustments. caroline: mary daly of the fed

there. gina is with us, macro perspectives president. once upon a time you are a key researcher the fed so point us into 2025 clarity we need. friday a bit of a relief in terms of the inflationary signals but we've been rocked by with the fed was telling us earlier. >> the messaging we got at the december meeting was sterner then expected with only two cuts in just a general tone of concern about inflation and i think when we look at the data that's, in it's fair for president daily to say it is the data had been disappointing on the inflation front. this wouldn't really have happened if there weren't risks to the inflation outlook and they can really put too fine a point on was likely to happen but every prong of the incoming trump administration could be

inflationary so you can see they release their assessment of risks to inflation and unemployment and the change in the upside risks to inflation really moved at the december meeting. we do not know the specifics on policy. yes we have to wait and see what materializes and feeds into the data, but there is a direction of travel of concern to the fomc broadly speaking. this was a big move across a lot of participants and they want us to be on watch for that. caroline: have you been running the numbers with the best case worst case scenario? we don't know the direction exactly of our policy will go but we've been on this rodeo before and there's been tough talk on tariffs in the past. julia: we did see them flow through into goods prices, the difference was we were in an environment in the first trump administration where inflation

was running low and in fact below the fed's target. so they could be very sanguine and patient and sort of accommodate the increasing goods prices that came with the trade war. this time we are in a different environment. they just reestablished credibility and brought inflation down not even to their target yet and so the threat of a round of tariffs and impulse into goods prices is more meaningful. the thing they will have to grapple with and we saw that in the last trade war is trade war's destroy demand. the spike in prices is not good for consumer purchasing power and is unlikely to be accommodated like it was for the pandemic with a lot of fiscal support two households directly. which helped the economy whether the inflationary shock during the pandemic and stay on track in the first trump

administration we saw the trade war dampen economic activity but the global manufacturing sector into a recession and the fed cutting rates in 2019 to take out some insurance against the manufacturing recession broadening into the surface sector. so very different circumstances that could weaken the economy. it could cause inflation and do both, and the fed mandates go in different directions and have to make a judgment. paul: tariffs are clearly an issue. what i've heard from a lot of folks is restrictive immigration policies perhaps force deportations, that impact on the labor market might be even more inflationary going forward, how do you view that risk. julia: absolutely and i think that is definitely something we are likely to see, that is one of the main promises of the campaign and we can already see the appointees and the plans

being put in place to implement this policy and let's not forget that immigration, the plentiful flow of immigration became a political hot potato during the election is unambiguously positive from a macro economic standpoint. we had abundant labor supply, it helped growth and demand, so immigration is good for the economy and to even just turn off the spigot let alone turn around and cast a shadow over the labor market and support some workers, it will change the macro environment and in areas where the most targeted population, the undocumented workers are employed, food services, construction, i have conversations with people in texas people in the real estate industry that are pretty worried about the availability of workers as early as next year,

as early as the spring building season. this could be very material and bring higher prices. it could also slow down building activity because you don't have the people you need. similarly for food, availability of certain crops and their prices would likely spike. leisure and hospitality another industry relies heavily on immigrant workforce, so we could see that ripple across numerous sectors in the economy and it could be by mid year we are seeing some material constraints and price increases on the back. paul: it kind of goes to that consumer confidence number today. that came in weaker than expected and the expectations looking forward were weaker than expected, that actually surprised me because i have been talking to guests since the election about a palpable sense of optimism in the country since the election particularly as it relates to economic outlook,

reduced taxes, so on and so forth. how do you think about the consumer confidence? did that surprise you? julia: i was digging through those details and the optimism depends on who you ask. you are probably talking to a lot of market participants who have experienced the rally and are looking forward to may be reduced regulation in the finance industry, may be some corporate tax cuts, but when you look at consumers there's a lot of uncertainty as to how this mix of tariffs and immigration is going to affect more the average consumer and when i looked, what was interesting you could see a political footprint here when you looked at it by region. the conference board does not have the breakdown by political party like the michigan sentiment does. you can clearly see some of the south confidence going up but the west in the northeast the confidence going down.

so you know we are 50-50 country, we always have been. some people are feeling better, some are feeling a lot worse. it depends on who you ask. caroline: what about stockholders. 2024 should've been one the maid feel -- made people feel good. bigger benchmarks and then it just tales off in the last couple of weeks so how is sentiment around being an asset holder right now? julia: that is what was interesting about the numbers. the expectations component not the present situation. we have been on quite a tear in the stock market and you all know that has been very concentrated in a handful of names that are related to the aia sort of euphoria, but now we are moving into the expectations meets reality phase of a change in administrations. so by the end of january we will know more about this mix of policies and some are growth

positive and some are growth negative. so different industries are going to experience that differently. the tax cuts, one of the things we just saw was the budget dogfight is that it is a lot easier to talk about tax cuts on a campaign trail than implement them in a very closely divided congress. and even within the republican party while they hold majorities in both houses, there is a lot of different views on the correct direction for fiscal policy. we sort of imagine it will take most of the year to legislate anything meaningful on the fiscal front. they want to push forward a border package early. we will see how that plays out. i assume they will be able to get a lot done but, again very different from last time. budget wise, the u.s. fiscal position is a lot worse than last time andmaneuvering is a lr

in their ability to enact something that will change the backdrop. it's more limited. >> how do you putting elon musk into your calculus here? julia: elon musk will be a noise generator at a minimum and certainly fighting for things that are good for his companies, but i think we also saw in the last week that he is not just going to get his way. he is going to talk a lot. do i think he will be successful limiting the v.a. health care system, i do not. he is going to run into the constraints. he is not an elected official. he does not have any sort of direct lever that he can paul and these elected officials have a lot of views about the programs they want to protect and their constituents that they want to serve.

i think it will be messy and loud and harder to extract the signal from the noise. >> currently has eyes are on the fed. absurdly overstaffed. we will see how -- julia: i looked at this number, the federal reserve entire system employees .012% of the workforce. that is tiny. what do we get for that? we get the banking system, monetary policy. >> we have to leave it there. good context, it is everything here. julia coronado. this is bloomberg. ♪

i graduated from southern new hampshire university. i always said i would go back to school when i had time. i went on our website, i spoke to an admissions counselor. we applied right then and there. that's when the journey really begins. going through the program, having the support that i had, really helped me understand what i can accomplish.

and i learned this just by taking classes at night while working a full time job. the resources at snhu were incredible. i think if i was back at the beginning, i would choose snhu all over again. paul: good monday morning. i am paul sweeny in new york along with caroline hyde.

a special edition of bloomberg markets. looking at these markets, red and green on the screen. the s&p off about 15 points, a quarter of 1%. the nasdaq is up three or four points just fractionally here. in the yield space the 10 year treasury about three basis points. 4.55% on your 10 year u.s. government security, the commodity space wti crude oil a little bit lower. gold just a little bit weak. let's look at the cruise business, carnivals initial outlook for 20 bolstered confidence at record levels in -- of approved demand will continue. speaking with carol massar. >> if you think about what was our booking activity how much activity do we generate so from the period of september through

the end of november, that beat last year. even though we had less to sell. we sold more at a higher price and at the same time we set a record for booking activity for the following year out so in this case 2026. things are moving really positively. this is broad-based. when we look back at 2024 and we look at our portfolio of world-class brands, we were higher mid-single digit to mid 10's percentagewise in our yields in the revenue we generate per person per day across major brands and our major trades. it is really gratifying, are global team has done a phenomenal job and really shout out to each and every one of them. >> why do you think this is happening? i am curious, tell us a little bit about it.

you do have a portfolio of brands and reaches across different consumers if you will of your brand. so give us an idea of why you think you are still seeing record bookings. >> there are so many reasons. the principal, i remember it being a year ago and talking about the price to experience ratio and the price to experience ratio of a cruise versus the price and what you pay for a land-based alternative is nuts. the value you get from a cruise for what we provide is night and day to what you can get online end and people are recognizing that. we are casting a net much wider into the general population for people who will now consider cruising as a vacation alternative. as a matter of fact in 2020 we had over 10% or more new to

cruise then we did the prior year. becoming more mainstream, breaking down myths in the value cap is there. we can still increase our pricing and be an incredible value. caroline: ceo of carnival cruises they are speaking with carol massar and tim stenovec. let's turn to autos because there is a big deal over in japan and it's not coming till 2026. there's also a lot to talk about in europe as well. we do it all with craig trudell. just take us over to nissan and honda. a deal done? >> this is going to play out over quite a while as you alluded to. the real questions about just how happy shareholders across the various companies involved are going to be with this. to put it plainly, this is really honda coming to nissan's rescue and that is sort of the

writing was on the wall in terms of looking at the terms the companies talked about in tokyo. hondo will take the lead in forming this holding company the nissan will be part of maybe mitsubishi motors will join and the big question is where does renault stand in this is nissan's biggest shareholder, will they be content to move forward with this deal. paul: how are honda and nissan positioning this. will this be competitive with the fords, of the gm's and the volkswagens. where does it want to be. >> in terms of scale it will be one of the bigger car makers in the world. if we just look at annual sales, maybe somewhere in the third or fourth margins but in terms of where it's directionally heading.

nissan in particular is shrinking in dramatic fashion. it's a b she motors is far and away the smallest of the three and there's real concerns about the state of nissan just to what extent hondo would want to sort of hitch its wagon to nissan given the track record it has had weird -- since we are talking about carlos ghosn leaving the picture. we have seen a steady deterioration in the state of that company and the product portfolio is not in good shape. there's not a whole lot of reason for optimism. so there's potentially a distraction within an industry. it's a truly competitive more so with the rise of chinese companies like byd. >> there's been significant disruption around the world for autos. the rising tesla and the united states. then coming into china. and then you think of europe and

you think of germany, that have been the beauty spot for all things autos. vw showing this time it's still hurting. >> we saw that towards the end of last week where for months now management has been pushing for restructuring of the vw brand which has long clearly been an issue for the company. it's just not been competitive. it has a thin profit margin, management wanted to nip that in the bud and really do something that is long overdue. they were not able to do that per they want to close as many as three plants, all the factories in germany for vw will remain open. but there is going to be some capacity reductions but i think we've seen the shares react in a way that sort of suggesting a bit of a letdown in terms of what management was pushing for versus what they were able to extract from labor which as we

now they are structurally extremely strong negotiating position in germany. >> as we step back from 2024 and think about 2025 what is the feeling within the global auto industry about how this evolution to electric vehicles will take place because i would argue 2024 wasn't necessarily a great year. it felt like momentum in certain parts of the world might have slipped a little bit. what is the feeling in the global auto industry about this transition to ev's? craig: i think that is an important point about the broader landscape where it is the case that the industry needs to move in this direction, regulators are really continuing to put the pressure on these companies to make that switch and yet we have a situation where the consumer really was reluctant in 2024 to your point we saw a real slowdown and momentum for electric vehicles.

spurring questions about just how markets have had a banner year. and i do think that's part of what's coming into play here for nissan is this is a company that years ago was actually in a pretty competitive position. it was out front with the leaf, that car sort of flopped though and the company has not really reinforced that band with competitive ev's and so i think we are seeing drastic measures to try and deal with this uncertain environment and future for this industry. caroline: governments taking drastic measures as well. think of the numbers from chinese imports into europe, absolutely curtailed at the back of this 35% tariffs by the eu. craig: absolutely right. government is likely behind this

honda nissan combination, you may see in europe some softening of targets we may see that in the u.k. as well in terms of co2 emissions reductions and mandates. it's definitely i think we are in for a turbulent 2025. >> thank you so much craig. all the autos for bloomberg news-based over there in london. again i just bought a car, the old-fashioned internal combustion engine but it some point i guess we will all be going electric. >> i have to say for my sins i have a tesla, so i'm helping from an environmental perspective. i do have the bumper sicker -- bumper sticker i get a lot of notes about. but it is notable that we are seeing this hybrid model in the u.s.. we are some hybrid conversations coming up when it comes to bond markets and stock markets.

there's a lot to discuss in the next hour of programming. ♪

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new york city. caroline hyde joins me in london paid welcome to a special edition of bloomberg markets on bloomberg tv and radio. looking at the markets, s&p 500 off about 15 points a quarter of 1% the nasdaq up about 12 points, the nasdaq off 300 points and 7/10 of 1%. in the bond market a little tick higher in yields about four basis points on your tenure so we are seeing at a 4.56%. wti crude oil. i am an expert on the u.s. oil and gas industry. we are below $69 a barrel. still making money. they would like to between 60 and $90 per barrel. that's what's happening there. let's check in and see what's happening underneath the hood on these markets. alex joins us in our bloomberg studio paid what you looking at. alex: we know investors have

been enamored with artificial intelligence stocks for the better part of the last two years but quantum computing emerging as the key thing to watch in 2025 as investors look for plays on the technology momentum outside of ai and semiconductors and some of the names in the space are doing exceptionally well even as the broader market slumps and looking at deep wave quantum, though shares are up more than 20%. quantum computing also up about 6% and this is largely being driven by optimism around alphabets capabilities, touting its optimism around the quantum computing ship as a breakthrough that has helped send alphabet about 30% off of it september lows and also sending some of its peers in the space higher as we are seeing today and quantum computing has kind of provided alphabet with a positive narrative as it lags behind some of its ai competitors and also squeeze -- deals with antitrust risks. among the top 20 stocks in the nasdaq.

i do want to point out this quantum computing theme is based entirely on potential at this point not on fundamentals pride if you look at deep wave quantum , it has a roughly $1.8 million market cap but only $9 million in revenue. >> 3 billion if you are forgetting is up 1000% over the trading year, and i get it from the exuberance around the willow chip. that really is some significant movement here and just retail, desperate to get in that are built around these quantum stocks absolute sensational. thank you to the production team forgetting a long-term chart up. dig into some of the trades out there. crypto into the next one because tether the key stablecoin is taking a chunk in a media company rumble which is right of center and has peter thiel

involved. >> investors are piling into anything that seems exciting even as we see market breadth deteriorating under the surface. looking at the move on the stock right now up nearly 95%, this is the most on record and this is after the -- they said it would receive a $775 million investment from the crypto company tether which of course makes stablecoins. rumble is set to use $250 million of that to strengthen its balance sheet and accelerate growth plans and will also use the remaining proceeds to fund -- that's when it buys back its stock from shareholders and news of the agreement came less than a month after rumble's board approved the purchase of $20 million worth of bitcoin. i like to read off the analyst commentary, oppenheimer they say the providers insiders and effective diversification without affecting share price. and that this -- selling primary

shares will further bolster the balance sheet without meaningful change to its strategy. >> i look at this for today the russell 2000 off about 7/10 of 1%. what's the concern of the market of just breath in the market rate is at all mag seven or is there breath in the market. >> for a while we are seeing breath starting to improve but of course last week we came off of 14 consecutive days of negative breath which is the longest streak on record and this is resembling elite stage cycle where the market is clearly getting very exhausted after two consecutive years of returns more than 20%, so right now trading on thin breath with the holiday season and investors mostly away from their desk. any kind of sign of potential disappointment like consumer confidence can weigh on investor

sentiment. paul: alex covers all the equity market for bloomberg joining us here in our radio studio. let's get back to a conversation on the broader markets and themes for 2025. we will do that with shayna. i have to start with valuation because we've seen 23, 20 4% move in the s&p 500 this year. i don't have my calculating -- calculator with me but i don't think earnings have gone up a commence her level. how stretched our way. >> it depends on what you are looking at. stretched in some areas mainly big tech but there are other areas that haven't participated in the rally as much. and those areas are more attractive. if you are more selective you can absolutely find attractive stocks with reasonable valuations in the market even today and we have seen a bit of

a selloff as well, so there is a little more for the picking in the last week or so. >> i'm going to go single main, don't worry if you don't want to comment. but i'm looking at 46 times future earnings is where nvidia trades for example. still above that three point $3 trillion market capitalization. however, many would still want to get into these names when you have analyst recommendations, still significantly more themselves in terms recommendations. zero sell recommendations on nvidia and 70 by recommendations. how do you fight that narrative even with valuation isn't stupid we are not looking at palantir levels of elevation. but you are still seeing valuations that are being questioned. shana: nvidia is always treated at a premium. it's always had strong momentum there are certain things you don't really fight against and

having a somewhat premium valuation but not on that one that is outrageous has never actually hurt you if you look at the history of stocks, trading 20% premium to the market or in this case i think the market is at 20 times so it's at a 50% premium. but that said, it is not necessarily something that is overly expensive and i like to remind people that your valuation metrics and future earnings is only as good as what it is based on. nvidia has done a good job meeting its earnings expectations and as long as that is the case, the actual valuation of the stock from its future earnings is probably more attractive and more reasonable than the 46 times we see today. >> revenue has been extraordinary when you are looking at previous this year. the extent they've risen. expect 130 billion to be brought in. more than double on the year on

your perspective. is there a broadening out to happening. we had such. what about breath and many of talked about other parts of the ai plane. money going into the energy sector. other chipmakers that are out there that can get caught up in the ai height. will we save that for the smaller tech industry. >> i would like to say yes but we have been saying that will be the case for a while. i've been a bull of marv elf for a while. but the first half of the year that stock did not look particularly good. it had not done well. but as we have gotten into these chip discussions and the development of the next stage of ai, they have completely changed course and has done quite well in the second half of the year. so we are starting to see a broadening out. broadcom is another one in the last few months has really seen a rally.

as people are looking for ways to play on the ai trend and get into names that maybe haven't participated recently, you also pointed out there is a name you brought up and one that i'm not even -- >> righetti. it's on the quantum computing side. again, moving into that ai quantum computing and ai are sort of cousins if you will. and the trend into needing more computing power and more energy all those things are true. there are number of names that have benefited from that that we don't talk about nearly as much. it certainly is happening and the breath of the market isn't there. in the last year. there's reason to believe we will start to see more breath in the market as we have continuing strong conditions in the u.s. and inflation is a little on the higher side but generally

speaking inflation around 3% advantageous. for stocks and earnings. there's a number of tailwinds i think will hopefully start to see improving the market. but certainly there's opportunities to play that ai quantum computing and beyond nvidia. >> did your investment outlook or maybe just the discussions you had with clients change materially the day after the election when we realized we could have a trump administration coming in again and a republican-controlled congress did that change outlook at all. shana: not in a meaningful way but they were more bullish and i think the vast majority of clients were relieved to see a second trump administration whether they will admit it or not. the general belief in the business community was trump's said he was better for business than a harris presidency. and generally speaking there was kind of a sigh of relief when we

had the election result. but i remain somewhat defensive in that the fed's comments and the fed outlook is not necessarily as conducive to a really lacks monetary policy but pushed stocks higher and there is still some concern inflation is completely under control. we seen treasury yields increase. we still have housing market issues so it is not a perfect economic scenario for continued bull market. but it is slightly better than it would have been otherwise. paul: given all that background, what is your key theme for 20 with your clients. shana: i continue to be an alternatives person. there is a number of single name stocks that i like. those are all names that we've talked about in the past, that

the end of the day i continue to believe the place to be going into 2025 especially with the fed outlook being the way it is in the bond markets reacting is more in the alternative space, finding opportunities in futures like cta and momentum based stocks or etf's. a little bit defensive with something like bta al. there are number of different names that are good to have in your playbook may be instead of fixed income. that will do better in volatile fixed income environments. those are how i'm positioning. that's my theme for 2025. more equity biased in 2024, but in 2025i'm a little bit more defensive but not using fixed income is my downside projection more focusing on using alternative strategies which can still get some upside if

positioned correctly and sort of deal with and dampen the volatility of fixed income markets which i think we will see quite a bit of next year. >> talking is cross asset and alternative trades as well. great to have you, so much. talking all things with shana there. let's talk about novo nordisk coming up we will be delving into the world of biotech. we are up 5% for the selloff that was hard on friday. getting into wide. this is bloomberg. ♪

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a special edition of bloomberg markets with bloomberg tv and radio. a quick look at the markets, mixed trading here. volume is 20% below average not to be -- not a real surprise given the holiday week. the s&p 500 off three points. the nasdaq up 68 points, 3/10 of 1%. yields slightly higher. 4.56% on four basis point spread the commodity space wti crude. gold a little bit lower as well. bitcoin off 2%. for the tom keene crypto check there. let's get back to look at big pharma here. particularly eli lilly. they will begin studies to see if it is blockbuster drugs are effective at controlling addictive behavior like alcohol abuse.

ceo dave ricks spoke with david rubenstein earlier at the economic club of washington. >> we have talked a lot about cardiovascular health and diabetes. but these medicines we think can be useful for other things we don't think about connected to wait. they are reducing the desire cycle. lest -- next year you'll see lily with large studies of alcohol abuse and the casino that -- nicotine use. we will also begin studies of anti-inflammatory conditions because you don't think about with weight but there is quite a strong signal of anti-inflammatory. beyond that we need to make informed -- we plan to be here another hundred 15 years plus and i mentioned my excitement, that's >> really the next frontier. >>have you thought about easing a death eating a lot, gaining weight, and --

>> i would like to avoid that. i wouldn't hesitate. >> yesterday you announced $15 billion stock buyback. many people criticized stock buybacks saying you should use your money to invest in your products and so forth. how do you respond to that. >> i don't understand that argument really. it's a way to essentially you give the people who own the shares the opportunity to sell at a higher price and get a return on the investment. i don't know why that's bad. i would also point out in our current situation we are spending almost more than anyone in the world already. we will spend $11.5 billion this year on research and development. the country of germany spends about 8.5 billion on all of its medical r&d. so we are at the nation-state scale on r&d. we have announced investments of $23 billion in new capital in

the united states for factories. we can go faster there are no more vendors to build faster than we are building right now. so we are turning some of the rewards investors deserve taking risk on the company seems a reasonable thing to do. >> dave ricks with our own david rubenstein. let's talk a little bit more about the fight against obesity. the whirlwind drugs that have sent shares parabolic of the last couple of years and then come down son -- come down some. we have a bit of a recovery on her hands today going up some five or 6%. we want to discuss why of course we are worrying about the weight loss market with this particular name and how much market they hold. madison, remind us friday's trade why it was so painful. madison: on friday, novo revealed long-awaited results for their next-generation obesity drug and novo had been

hinting and investors were hopeful that this drug could lead to 25% weight loss and the drugs that are on the market right now are around 15% weight loss. eli lilly is at around 20% weight loss. this 25% would really give novo nordisk an edge to keep its lead in this fast-growing hot obesity market and it fell short of expectations that investors had and fell short of the promises, early promises the company was making about the data and so the shares really plummeted on friday and there has been some recovery today as investors think may be the reaction was a little overblown. it goes to show how high the expectations are in this market and if you do not deliver on those you can get some consequences. >> speaking for a friend, wegovy delivered 22% weight loss in

eight months. the stuff works i guess. where are we on kind of getting to an oral type weight loss drug where you don't have to do the injections maybe just take a pill. that would seem like the next big focal point for this drug regimen. madison: that is the next big thing. eli lilly has a weight loss pill that is in the works in late stage trials in there should be some data in 2025 so that's a big thing to watch out for. we have some other spot -- smaller biotech companies that's developing weight loss pills as well and that is something that is going to be a big focus going forward, not just the most amount of weight loss, that 25% threshold but also pills that are easier to take, drugs that have less side effects than the ones that are currently on the

market. ones that could possibly take less frequently. the ones that are taken weekly now. there are things besides this percent amount of weight loss that are coming soon and that's one of the things that pills i think are kind of part of. >> what's so interesting is this market is so vast. 130 billion is what goldman sachs is estimating. but if you speak to david ricks and i was lucky to speak to him earlier in the year. he's very much of the persuasion this is now where they use that on other areas. we've worked out how to help the body and the longevity perspective of the mind is crucial. how do we see the focus on that for 2025. >> it is something we are seeing with lily for sure. they are taking their weight loss purchase and investing it into other areas and into r&d in that conversation with david in one of the big areas for lily is

neurodegeneration, they have an alzheimer's drug that just launched and they are looking to move it into earlier stages testing at earlier stages of the disease looking to the next generation alzheimer's products. lily is super interested in pain management right now. safer pain drugs and we have some biotech companies that are working on neurodegeneration alzheimer's and parkinson's so that will be a big focus going forward and lily is looking at how to take zep bound into other areas like inflammation or neuro--- novo nordisk is testing wegovy, they have an alzheimer's study going on with these glp ones. there's a lot of excitement about where glp ones can go and what kind of science that can unlock about the brain and aging and different neurodegenerative diseases. paul: i always joke my next life

i want to come back as a health m & a banker because it seems like everybody would come in and there's another health care deal. 2025 the companies you speak to them the sources you talk to is that expected to continue? madison: yes eight is. i think in all industries across the board there is some expectation but there will be may be a more deal friendly environment going forward. dave actually said in this conversation that he was at mar-a-lago with trump with the pfizer ceo albert perla as well so these conversations are going on already and getting in early with the incoming administration hoping to talk about their agendas and dealmaking and m&a is part of that. we will see what happens but there are some expectations the deal activity will continue going in to the new year. caroline: the merry-go-round of mar-a-lago continues. madison miller, thank you for

joining us today. fascinating about some of these biotech pharma stocks to track. paul may be in the current guys we should be an enemy backer around retail. we will be debating the future of retail, of consumer sentiment number coming in well below expectations for today. we have the sprinkling of deal activity happening with nordstrom, where does that happen in terms of going private braided we will be talking all things retail coming up next, we have the cfra vice president of equity research. from new york, from london, heading into christmas this is bloomberg. ♪

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paul: good monday morning. paul sweeny in new york city along with caroline hyde in london. a special edition of bloomberg markets simulcasting on tv and radio. look at the markets here, s&p 500 absolutely unched on the day. i know lisa abramowicz hates that phrase. up about 4/10 of 1%. 10 year treasury 4.56%. kind of muted moves there the index level. wti crude oil just below $69 per barrel, gold is a little bit

lower as well. let's talk big banks in the global investment banking. brian moynihan says u.s. consumers are still in good shape. >> the question is if you lower taxes, how stimulative are those activities. that's where the treasury secretary appointee has to figure it all out because he's got to call the balls and strikes. and he's a markets person pretty knows if it gets too far, we just ran the last fiscal year in the united states at deppe's -- operating deficit of 1.8 trillion which is the entire gdp of the country of australia. we have to realize the impact we have we don't get this debt in line. everything on one site has to be governed the offset whether it has that much effect. right now the economy is moving. consumers are spending. it's up around the holiday, it's up 5% for last year.

that's good and solid print that is not overheated at all. but it came off the lows in the summer where was nervous that they were to let the consumer drift too far down so between interest rates being felt a little bit on brown the election, the markets being up consumers are spending more for the holidays which is good for the general economy. keep mitigating not by overstimulating by keeping the good core economy going with deregulation activities, good tax policy, good immigration policy. i think they are working on them. >> you know so much about consumers here. bank of america given your relationships how was the consumer doing. i know they are spending but i've seen numbers to suggest they are borrowing more in the st. louis fed as of october the defaults are up as well. are you worried all about the consumer? >> if you say the levels of consumer credit card debt above what they were in 19, it's five

years later it should be where they are because the economy is bigger. if you look at a relative basis it still far below where was. in the credit was very good. if you look at the defaults they picked up in delinquencies. 2019 was a 50 year loan credit cost. 50 years we had to go back. we have to be careful about what we compare it to. credit quality consumer stability borrow, they feel a pinch of higher prices, a part of that is real and part of that was mental. if the price of eggs doubled its hard to tell everybody it's ok because they have more wages they will just never agree with us. that's the economy versus human beings. all things if they weren't -- spending a rational way your year for the last couple of weeks, 3.5 to 4% for november

and likewise it looks like that. it all comes back to one thing, a four point 1% unemployment rate. what could disrupt that, right now that's the condition of the consumer. wages were going up, feeling a pinch of inflation try to work that through with a good holiday season. what will hurt that worse is unemployment moving up. it's supposed to go, our team has at 4.3 next year. you and i have been for most of our business careers have been going just jumping over this over the moon if we thought unemployment was 4.3 for 2.3 years in a row. >> that was brian moynihan of the bank of america talking about his view of the consumer still pretty constructive there. we are joined by the cfra vice president of equity research. i know you cover from the retail

side of the equation the big-box retailers, they are a great place to look at those companies to get a sense of how the consumer is doing. what are you hearing from some of the companies about how this holiday shopping period is shaping up. >> i think retailers in general are cautiously optimistic for this holiday season. i say that because there are few there five fewer days between thanksgiving and christmas. we have the election this past year and that puts noise and some of the numbers. but consumers are spending and retailers are ready. inventory levels are solid. for this holiday season. deals and promotions are up and we know consumers are seeking value and really seeking those deal so overall consumers -- retailers are pretty cautiously optimistic this holiday season. >> so when you look at a day like today, walmart under pressure. is that a symptom of the consumer sentiment coming in less than expected and we are

worrying about the future rate or is it actually more a profit-taking exercise. >> i think it's a mix of both. we consumer confidence number today and also walmart has been the top stocks retail this year since probably a little bit of profit-taking. in general the consumer staples which includes walmart and costco, that's an industry that's a given we outperformed the rest of the consumer staples industry and the valuations are also up. those stocks have been significant outperformance this year and some of those stocks are complex for next year. walmart was our topic and consumer staples and amazon consumer discretionary is also one of our top picks. >> amazon training you're just trading record highs. costco one of the key points drags on the nasdaq and the benchmarks today hit by consumer sentiment over profit-taking.

but what gets us there paid what gets that performance in 2025 for the numbers and the companies you just singled out. >> one of the reasons we are really optimistic about these retailers is really on the margin story. it's not so much on sales and sales growth we still probably see low to mid 70 sales growth. but what investors are optimistic about is the long-term margin expansion story for the retailers. i say that because these retailers are diversifying their business. they're moving past core retail and getting to new revenue streams. as these e-commerce businesses grow for walmart and target, sodas or advertising revenue business. and advertising as you know is a much higher margin business inside of the store. and that's expanding the overall margins. companies like walmart are also getting two other revenue streams as they grow other third party supplier base and their

online marketplace. getting to health care, financial services they are also doing data analytics and monetizing rich data that they have. again these are much higher margin revenue streams for retailers so investors are looking really at the next three to five years and seeing that markets have historically been most retailers but that could change. that's partly why the valuations for these retailers have been this past year. paul: speaking for the big-box retailers taken as a group, where is the story in terms of store openings versus store closings. how was the footprint in the united states because it seems like every time i pull in there is the walmart, the costco. they seem to be everywhere. >> i would say it's somewhat of a mixed picture for the biggest retailers, walmart and costco and target they are still expanding for example. not only are stores expanding

but they are setting to grow out there sam's club business which has been pretty stagnant for the last six or seven years. costco is opening up about 30 clubs per year about half in the u.s. and half internationally. target is also expanding their store count. where i would say there's been a bit more closers or some consolidation is in the other discount space, dollar general, dollar tree. those retailers heavily expanded over the last five to 10 years and now they are rolling out on that expansion story. but their existing store base as well. both of those retailers are still expanding but at a slower pace. paul: how much of your amazon call is about the cloud? verses about the core retail story. >> one of the reasons amazon is

one of our top picks is it's another one of those margin free cash flow stories. there is still singing and upside for amazon. that starting to change for the local delivery costs in the e-commerce business which is allowing them to gain even more market share. they also have a huge advertising business historically advertising is tied to the e-commerce business but now they're getting it on prime video ads. they start out with a live sports business. and the advertising is a very high margin industry for amazon. their aws business, that business is seeing growth accelerate for the last three quarters now. it's not just driven by generative ai but also the legacy cloud business. if there's really a lot to like about amazon as well. when the reasons it's our topic is we believe in the next three

to five years we see significant margins as well as free cash flow growth. >> where is not to like? >> i think there is still some risks we have to keep an ion for next year, tariffs that's been one of the themes on these conference calls of the last quarter the potential tariffs and how that can be passed on to the consumer. there is a slow softening of the labor market. it is still strong but there is a gradual stop. and recently the fed has been more hawkish but there is some risk in 2025 in terms of further softness to the labor market. there's also inflation risk commodities are up, wages have been a drag on many retailers over the past few years and now there's concerns of immigration policies as well. there are some things to keep an ion but overall we are overall net positive.

>> there some idiosyncratic news as well we keep our eye on. we were talking earlier about nordstrom families basically taking the company private once again with the help of a key mexican retailers well. where are we seeing the opportunities to restructure, to rethink and even see a bit of m & a. the kroger deal did not work out but is there going to be that under the neck some administration for 2025. arun: certainly. for 2025 there seems to be were entering a more favorable regulatory environment. that's the consensus out there. i think we could see more consolidation within the retail space. i know albertsons kroger venture did not go through. but generally speaking retailers , their financial positions are relatively strong, balance sheets are strong. debt is relatively low. i think we could see some consolidation in the retail space, like i said the

albertsons merger did not go through but outside of the top 45 largest grocers there's a huge tail of smaller grocery companies out there in the united states. a lot of regional independent grocers out there. and a lot of them have been losing market share to companies like walmart and amazon and kroger. so i do believe there's, day opportunities and companies would be more receptive and more willing to take on m&a because of the favorable regulatory backdrop and generally stronger balance sheets. >> thanks for joining us, really appreciate that. cfra vice president of equity research talking about big-box retailers print the des screen 2.1 million employees. i'm guessing most of those are not in the corporate hq, i am guessing they are out in the stores and fulfillment centers. they employ a lot of people.

i wonder what their policy is on immigration and things like that because i'm guessing they depend on it for some degree. we will see how that plays out. it's what you hear from a lot of businesses saying this might be an issue if i can get ready access to these employees. >> just think about the real estate industry as well looking at those new home sales less than expected and people wanting to build which will be a key concern going forward. a lot about where the next administration is bringing investment in nai and technology and it's coming from japan. as a great bloomberg quicktake coming up inside the next quest to be the next nvidia. this is bloomberg. ♪

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reporting from london. a special edition of bloomberg markets. we are simulcast on bloomberg television and radio. the markets are a quiet holiday week as you would expect. stockmarket volumes traded today about 20% below normal levels. not really big moving on the indexes either. s&p 500 up about 2/10 of 1%. the nasdaq up a little bit better. the dow off 120 points a little bit of red and green there. on the yield space a bit of a lift we have the 10-year treasury yield up about four basis points. 4.56% and commodity space we let's take a quick look at wti crude it's off about 1.2% we are down $69 per barrel. bitcoin off 1.7%. $93,000 per token so we have a little bit of movement there in bitcoin. china's self-driving firm pony ai is looking beyond the u.s. to avoid tensions.

the ceo spoke with bloomberg about the growth of his company and the impact of u.s. sanctions against chipmakers in china preyed let's take a listen. -- in china. let's take a listen. >> it is nothing new. we have dealt with this for quite some time already. so for our strategy was and remains to be we will diversify our supply chain. and i think as the one more manufacturing chips coming out from either china will try to have more diversified supply chain to further de-risk our exposure to the geopolitical tensions. >> this is steve engle here. we met i believe at the beijing honor show this year.

and i did take a ride in one of the lidar and pony ai equipped toyota rumble cabs in beijing. i do understand your a company that had some robo trials in the bay area and also in multiple cities in china so you are kind of have an influence in both the united states and china. obviously but what was the main question is you took your company public in new york, what was the main concerns if you will, potential investors when you went on that roadshow with increased geopolitical tensions. >> surprising actually the geopolitical tension questions wasn't at the front and center of the investors but rather the investors actually more focused on the economic side of the robotaxi. people are really interested in figuring out when there will be a time for the robotaxi to be

actually launched -- large-scale deployed and be profitable. so i think the -- the good news is people really believe 021 has already finished and now it's the time for the autonomous driving companies to really go to the large-scale commercialization. >> what does that look like exactly james? right now you are in for the top tier one cities. what does that look like over the coming one to two years. i know you will focus efforts primarily in china, but talk about competitive pressures you face there as well. james: yes. especially if you are talking about the next two years, our main focus will be on the tier one cities of china and actually

just this year we also signed a deal to mass-produce upon his vehicles. so that means in the next two years we will have at least three models coming out of the assembly line will be launched into the tier one cities in china. so i think the year with the support desk with the full support of the regulations and the residents actually get more familiar with our services, i think we will have a much larger fleet and have a bigger coverage and hopefully the world will be able to actually have a much larger scale commercialization. >> james pang of pony ai there. and of course if we are going to talk ai we delve into the latest $100 billion bet coming from none other than masayoshi son. that surprise visit to mar-a-lago with president-elect trump. to announce that he would indeed

be taking another massive bet on ai here in the united states. in fact, he would double that. let's delve into that story with mark bergen who joins us in the big take setting up the context $100 billion bet is actually probably just a small part of really what he's already orchestrating preyed we knew back earlier in the year in february they were doing 100 million. -- $100 billion in chips. where is he looking to take ground? >> we have seen an absurdly large number, there's great reporting from my colleagues today inside of this ambitious plan which is to be the next kingmaker in chips. it is to being not just to replace nvidia but to skate where the puck he sees it going. he's looking at arm as softbank's largest holding, it is primarily now the chip design maker for mobile phones.

he is looking at potentially for an ai coming into our homes and offices and cars, edge computing. this is an opportunity that the numbers and the estimates can be as large as he makes them want to be paid he also has the capacity to borrow a lot of debt and spend a lot of money. >> this is a bit of a makeup story for masa son. he flashed a lot of money with his vision fun. a lot of those deals did not work out well at all. what's happened over the last several years as he gets back onto the stage here. >> some great reporting about that vision fund. those were massive in 2020 two. some pretty notable failures. we work the most famous one. he reported that he stopped attending some of the meetings he was famous for coming in and writing these checks with a very brief conversations with startup ceos. a lot of the intention your

seeing has shifted from cutting these large checks in the industries across the gamut and startups are focusing exclusively on ai and chips. and robotics. and i think that is sort of where he's hoping his legacy will be. >> probably many working would say i think the redemption story is clear when you look at our better arm and how the ipo went and how much value that is created for the company. they've also bought a bristol based company just where in the ecosystem of ai are they playing. is it the energy or application side, is it still the picks and shovels of chips? >> we have some interesting reporting talking about energy capacity and conversations with sam altman whose address that sort of shortage coming out, graph core in the u.k. is similar but they are not actually doing the manufacturing.

they have the sort of innovative design. it did not have much sales traction at all would our reporting was sort of central to the vision of the ai chips coming out as soon as 2026. i think less on the application side but just more of that devices and more spaces and kind of where you can imagine ai being. >> i/o is consider him a big player in ai because of that 90% investment in arm holdings. they designed some pretty cutting edge chips. is that the basis from which you will try to compete? >> softbank has a big stake in openai. we've reported he actually wanted to invest earlier. so we've seen that a lot with sam altman. there's been reporting run a

potential phone venture. i don't think arm is the be-all and end-all but it is certainly important to his strategy. paul: $100 billion gets your attention. standing alongside the president-elect, of those numbers will get it done for you. some great stuff, mark joining us from bloomberg news. looking to make a big investment in the u.s. market on the technology front, $100 billion over four years. president trump half jokingly said why don't you double that for 200 billion so we will have to see how that goes. coming up we will check in with the very smart guest who will be joining us, one of the smarter folks we talked to. he will give us his thoughts on these markets. s&p 500 up 16, the dow down 90 and the nasdaq up 120 points. that does it for caroline hyde

and myself. this is bloomberg. ♪ qu qu -left over? -yeah. oh, absolutely. (inner monologue) my kids don't know what they want. you know who knows what she wants? me! with empower, we get all of our financial questions answered. so you don't have to worry. empower. what's next.

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sonali: welcome to bloomberg television and radio. i'm sonali basak with the katie greifeld, and we are taking you home for the last full week of the year. katie: usually by 12:00 p.m. we are on our way out the door so this is a nice holiday treat. this is the 23rd of december, two short days until christmas. markets in the holiday mood, s&p 500 up .4%. volume nowhere to be found, but let's not focus on that. a little bit of green on the screen, led by big tech. nasdaq 100 up .7%, nice to see after a volatile couple of weeks. sonali: pretty amazing trade we are seeing set up to close out the year. we are flirting with 6000 level for the s&p 500 for so long, and we are still hanging out. a lot of analysts way ahead of that. we are not. [laughter] for the things leading us into

this week, ai trades, chipmakers, there is gainers. consumer-driven stocks are the laggards. that was the trade that started to build throughout the year. it got let go a little bit. let's see if it comes back in 2025. katie: there were surefire trades that broke a lot of hearts including at the benchmark level. let's get into it with alexandra semenova, equities reporter for bloomberg news. she tracks so carefully the year-ahead analyst targets. bring us back to the end of 2023 and what the expectation for the s&p 500 was. it is a lot different from where we are now. alexandra: i have to start out by pointing out we have been losing momentum the last couple of weeks, but it has been two consecutive banner years for the s&p 500 index, returns of more than 20% for only the fourth time this century. really incredible run that no one could have anticipated. to see that, you go into 2024,

strategists were estimating an average target of 4867 on the s&p 500. we handily surpassed 6000 before the pullback we got last week. it was the least bullish outlook since we began tracking these targets in 1999. now the benchmark is on track to post the biggest gap between strategist content is going to the year and where it actually ends. no one could have anticipated this ai momentum would continue. everyone thought the fed's interest rates would support the economy -- so the economy into a recession, and it didn't materialize. sonali: what is fascinating as you have been talking about a banner year, the s&p 500 up more than 20%, right now about 24%. two years in a row we are seeing it up or than 20%. that is the best run since the 1990's, at least. with that said, why do analysts

believe there is so much upside going into next year? is a good enough if you are not getting those gangbusters 20% returns? why not look at fixed income markets or elsewhere if you only think you are going to get 10%, which it sounds good but not if you think you will get better elsewhere? alexandra: what is interesting and an important part of the addictions is wall street is coming off wrong-way calls for two straight years in a row. remember in 2022 everyone was predicting a gain an instant we got this route no one saw coming. the only person who saw coming was morgan stanley's mike wilson, who made a name for himself with a call. last year everyone thought we would get a recession and instead we had gains of more than 1%. -- gains of more than 20%. no one could have anticipated we would get double-digit returns. going into next year, we are at a bit of a crossroads where strategists don't want to go against this bull run but has continuously burned because this

year they spent instead of front running the rallying, chasing it. goldman sachs revised its target four times, ubs the same thing. that is an unprecedented frequency of work revisions to their forecast. going to next year, all the targets fall around the 6600 lin e. that is a gain of roughly 10% from where we are. they are walking a well trodden path that is consistent with annualized returns on the s&p 500, and that is where strategists have always been. katie: that is what i find kind of funny because you could look at the 6600 level that wall street is around and say they learned their lesson not to be super bearish. but they are just batting for average, that is all they are predicting. alexandra: terribly, terribly burned. the fundamentals are still good, we are exciting earnings growth next year. the fed -- i don't think we know much about what the pace will look like, what the fed is

on track to keep easing monetary policy, the economy is doing well. they have no reason to go against it. we are at this pivotal moment, a crossroads where evaluations are readily stretch, we have no idea what the next administration will do in terms of policy. katie: is there anyone standing outside the pack either to the upside or downside saying i am standing outside consensus? alexandra: at this point no. katie: come on! alexandra: which is kinda for some. jp morgan has held onto its target of 4200. now they are predicting a gain. i had a conversation with the chief market strategist and he was saying that he thinks the risks are to the upside, that the economy is so strong that the ai rally will continue, which could be a concern because if you look at it from a contrarian perspective, you have someone who has been bearish for two years in rotering bullish. that is something to be wary of. katie: they did lose marco. sonali: new era over here.

the other part i found fascinating, you wrote about how we dealt traders lacked the peg --retail traders lagged t he peg, shocking given the run we have seen in the s&p 500. what happened? alexandra: it's pretty incredible when you think about it. retail traders were up 9.8%, according to data from jp morgan is standing when the s&p is up -- astounding when the s&p is up 25%. you look at the other years the s&p has been up this much, 2019, 2023, 2021, we traders posted returns of singular 9 -- similar magnitude. a lot of people were too allocated to bonds and missed out in the rally in equities. everyone was uncertain about the outlook going into the air. also, they weren't participating as much in the magnificent seven and playing on other names. katie: that's interesting. i think that would surprise a lot of people because i don't

know, the muscle memory is to think retail trader, they're going in on the yolo momentum. but you're talking about mom-and-pop, it sounds like, if you talk about to allocated to bondso. alexandra: exactly. when people think retail traders can they think the reddit army, but it is not necessarily those people. regular everyday investors who have a strategic portfolio allocation and think long-term. there was still too much allocation to fixed income and missing out on the gains. of course people still heavily allocated to cash money market funds at $6 trillion. sonali: what role did bitcoin play in all of us? alexandra: bitcoin had a momentous year. some of the retail army on the reddit side was allocating to those names, even taking a look at rumble after that announcement. katie: what is rumble? alexandra: it is a video platform and it received an investment from tether, and of

course people are piling into that, which is a testament to people being very enamored by these high-flying names even as market breadth deteriorates. katie: i need to read more about that because tether is a stablecoin. i didn't realize they would be in the investment business to that degree. sonali: it is going to be more interesting with their relationship with cantor fitzgerald and how they are expanding. 2025 is going to bring a new narrative for even the most stable of crypto assets. we thank you very much. alex somonova following all things equities and strategies. we will bring in the ceo and portfolio manager of infrastructure capital advisors. great day to have you to close out the year. we've talked all your about the direction of inflation. i want to talk about it as it pertains to consumer confidence. you are seeing from the report this morning, from the conference board, that the

confidence from the consumer is not being impacted by inflation, it is much more severely being impacted by politics. what will is not going to play -- what role is that going to play? >> happy holidays, thanks for having me and for themwe have a unique -- having me in. we have a unique view on can the -- consumer confidence. it's not that important bit if you at the average consumer, they don't know who the vice president is. a lot of people are not happy about the new president and that is weighing in, but it will not affect -- katie: it feels like if you take a look at survey-based measures of confidence, sentiment, ti's been -- it's been in the gutter on and off of the past two can, four years, heavily impacted by the pandemic. during that time we have seen this incredible bull run for the market. we were discussing with alexandra semenova how wall street is coalescing around 6600

for next year. what is your feeling heading into 2025? when you think abouttwo years straight of 20-percent-plus gains? jay: we remain optimistic but we are concerned about the current state of the market. with the investors are way too optimistic about economic growth, way too pessimistic about inflation. you are seeing this constant move up in the treasury. it's not good for the market. tech stocks are saving the market. our 7000 target is at risk you don't get at least stability in rates or probably even dropping down somewhere near 4%. you cannot justify 23 multiple with a 5% treasury. katie: if you think about the long end of the yield curve, about 4% and then some, we think are too optimistic about growth, it sounds like you're are building a bullish case for

long-end duration. jay: absolutely, although we are not saying catch that i've today. there could be rebalancing . the data to watch is the critical data, the housing sector. a little bit of weakness. today's treasury, 30-year mortgage is above seven. that is negative rousing. housing is what causes recession. 11 out of 12 post-world war ii possessions came from the housing sector. next recessions came from the housing sector. watch housing and watch housing starts is the stat we look. near as been a crash below 1.1 million in all -- there has been a crash below 1.1 million in all of those recessions. sonali: what is that mean for what you expected next year? do you think the fed will cut successfully, or do you think there's upside risk to rates? jay: they should cut 4 and the data will support that. the data to look for -- that is

why i said to catch the falling knife -- is pce. we got one good data point on friday, but when you look at the pattern, easy to look this up on the terminal, you will see rolling off .5 and other high pc data and shelter has gone down to .2. that is likely to continue, 18 months delayed. we, like a few other forecasters, are saying we will go down to 2.3 after the first quota. if we don't get that, we will probably be wrong about rates and we will be wrong about ro tating into the value sector. it will be like today's market. sonali: we have less than a minute here. i do want to double down go quickly on what you said about the housing world right now. how much does it matter? how much is there a spillover effect if you have mortgages above 7%? jay: we think it is super negative.

if you look at linares earnings, they missed earnings, and the rate rise has been quite rapid. we are not seeing it in the data. we are very concerned about housing. i would summarize that the best cure for higher rates is higher weights. that is why we think people are too optimistic about growth. katie: unfortunately not enough time to have to leave it there. really appreciate you coming into video for some happy holidays when you get there. coming up, we will look at the future of tech antitrust law under the new administration. this is bloomberg. ♪

sonali: welcome back to our bloomberg television and radio audiences. this is "bloomberg markets."

sonali basak and katie greifeld today. we are watching the moves happening in big tech, because under the biden administration, the world's biggest tech companies have been fighting regulatory battles including the antitrust front. privacy, national security, and competition. and can major tech firms spec anything different when it comes to president-elect trump's policies? lia, when you think about the changes ahead, there is some of this tone that we'll be tough on big tech. where will it exist and where won't it? >> the trump folks are definitely going to keep up with the pressure on and i trust f -- antitrust for big tech companies. the nominee to head of the justice department has long been a google critic and she has worked for a number of google critics. people expect her to keep up the pressure on google and continue

with the path of the biden administration to look at a breakup of the company. at the ftc, andrew ferguson is trump's nominee. he is currently a commissioner and has taken a pretty hard line on the tech companies. in a bunch of cases recently he has written about how we need to look at them more, particularly on the issue of censorship, censorship of conservatives online, and how they have too much power over freedom of speech. katie: this is interesting, because especially after trump was elected in november, it seemed like it was going to be a free-for-all, that you would get any deal done, this deregulation, especially when it comes to financials, was quite enthusiastic. what has donald trump himself said when it comes to big tech regulation? leah: he hasn't said a lot except that he thinks we do need antitrust in the tech area.

when bloomberg did the interview with him before the election, we did ask him a question about the google breakup, and he said he's not sure that google needs to be broken up, but that the government needs to do with something here. he's been pretty strong on that point in his first term and in the years since. sonali: what does this mean for the range of outcomes for google in particular? they're first in the line of fire here. leah: the big case, google search case, is going to go to a second trial over what the remedy is in the spring, and the judge in that case has given the trump administration an opportunity to potentially tweak that a little bit. the justice department has proposed that they the required to sell of chrome. it has a bunch of proposals that they have to show the data and have limits on ai. the trump team is probably going to keep up with that, if not make suggestions for tougher remedy.

the judge did give them an opportunity and march to offer their views if they want to take a slightly different tack from the biden administration. but we are looking at finding out if there is potentially going to be a google breakup in the first half of next year. katie: talk to us about the ceo lobbying efforts you are seeing on the part of these big tech companies, giving money to trump's causes but going to mar-a-lago. leah: we have seen a number of them take the trip down there. mark zuckerberg gave a bunch of money to donald trump's inauguration fun. tim cook dinner with trump and then trump said he is going to exempt apple from allete -- a lot of the tariffs he's looking to impose on china. there has been a big lobbying effort by the big tech ceos to push the administration in the direction they want. whether google is successful in doing that or whether mark

zuckerberg's donation ends up doing anything to the cases that are pending, we don't really know. facebook is set to go to trial in april over the ftc's case that is looking to break up the company and making them sell off instagram and whatsapp. they are heading towards a trial and could also end up with a breakup next year. katie: all right, leah, great reporting is always. let's keep the conversation going with adam epstein, the co-ceo of a search advertising company providing media solutions for advertisers and publishers, and has been advising the doj's antitrust team on their case against google. great have you in studio with us. we heard from alphabet on friday. they called to the chrome sale from that possibility, as an extreme remedy that is at odds with the actual law, and they said in the filing on friday their own remedy which would be

allowing competing browsers to make deals with search engines and device makers to preload multiple search engines, i would love to hear your reaction to that. does that go far enough, in your view? adam: it is an opening offer saying we will stop forcing competing browsers and device makers to have default exclusive deals for their search engine result page. it is not going to on its own create competition or unlock innovation that the core is looking for funding google to be in -- finding google to be a monopoly. katie: so it doesn't address the root cause, it doesn't create more innovation? adam: correct. it is a step -- google saying agreements with our partners are onerous and anticompetitive. the doj and the government have come up with more steps which would really allow for licensing to have a space for users were google result show up next to chatgpt, openai.

that is the future of search, the next-generation experiences going to be google commingled with other search results, especially genai, not something completely controlled by google. sonali: that's what i was wondering about. say you don't see a split up and nothing comes of all this, new look five, -- and you look 5, 10 years into the future. you already have an experience where you type in an query and you are given a whole host of options that you would not have gotten five years ago, or a year ago. what does that look like, and who is feeding you the information at the end of the day? adam: that's the question, it's a great question. the idea that we will all go to this in legacy search engine, one-size-fits-all, that is going to seem quaint in 25 to 36 months the idea that we will all go to a genai search provider and then checking on google to compare and contrast, there is no reason that apple or

duct -- duckduckgo couldn't provide that integrated experience except that they are prohibited by google. behavioral remedies are not quite as sexy as the divestiture, but from the consumer perspective, $50 billion in monopoly tax google is expecting from advertisers, having innovation on these pages curated by the actual providers instead of by google itself, that is the future. sonali: is there a scenario -- this is the capitalist way to go about it -- that the market fixes itself given all the competition coming up with generative ai? adam: right, exactly. google's licensing agreements do not allow the market to fix itself. they have these default agreements where they funnel every user to their search result page, and the judge is absolutely looking for the market to fix itself so advertisers can have transparency, users can have choice, in the browsers themselves can have a lot more control over curating that experience and having different providers competing for who has the best result. katie: let's go down the path of

the hypothetical and let's say that chrome was sold. who would be a potential buyer there? what would that look like? adam: that's what is difficult about this. it's a great headline, it makes a lot of sense especially if google will not comply with the behavioral remedies we were speaking about, that having a different ownership for chrome would be a great way to make sure they are in scented to comply with those frozen ones were in a world where chrome is being sold, controlling the sale and what that owner is going to do creates a lot of unknowns on its own. these are all initial offers, so google coming out very small change, doj coming out with a huge change, it might be that we meet in the middle, not too hot, not too cold. sonali: the trial is right around the corner and we have less than a minute. what comes next? what is your advice when it comes to the justice department's next moves? adam: what comes next is we have in march another shot to see what the opposed orders

there is going to be a trial in april where we are going to talk through all of these issues. i think that doj and the government have really been very thoughtful, talking to industry, they want to know what the right solution is. there this huge monopoly tax being extracted and if they can fix this industry and allow the markets to self-correct compare would be a huge win for everybody. sonali: happy holidays to you. adam epstein, he has been working with the department of justice to advise on this big case ahead. a lot going on in the world of tech and a lot going on in the we will bring that all to you next. this is bloomberg. ♪ (♪♪)

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katie: welcome back to bloomberg markets. our holiday special coverage. i'm katie greifeld. alongside sonali basak. let's take a look at the holiday markets. not much volume to speak up that we have green on the screen. s&p 500 right now up .3%. big tech is in charge with the nasdaq 100 up .6%. some of your biggest movers there, broadcom up 4.7%. we will get into that in a minute. the 10 is now knocking on the door of 4.6 percent, higher by

five basis points today. we are well within the danger zone we were talking about on open interest. sonali: i wonder if you need a new danger zone. the 5% level on high alert next year. it is interesting because you are seeing pressure on parts of the market. we were talking about consumer stocks being so loud the last couple of months. you are seeing that reversal. among the most loved consumer focus stocks were those cruise lines. today, the worst performer of the day, carnival, down more than 4% today. norwegian, not far behind, down more than 3%. these are companies that have been telling you things are good but the market is saying there has been a bit of a run up here. let's get more discerning about how we treat the consumer. darden restaurants down more than 3% today. interesting to see that consumer trade being hit. katie: also small caps, you talk about were small caps hurt,

russell 2000 down .3 percent today. let's look under the hood. sitting in studio with those is emily graffeo who covers markets for bloomberg news. what is going on underneath the surface? emily: a lot of tech underperforming, specifically in the chip space and not just broadcom, but it's cousin, qualcomm, on some company specific news. they had a positive trial verdict against arm on friday, who claimed the company had breached a license for chip technology. qualcomm prevailed in that trial, so shares have been up as much as 3.4 percent, biggest jump since november. all around the street, the verdict is said to be positive, giving qualcomm space to keep offering their cpus based on the technology they had. there is no near threat of disruption from we are seeing

shares of our lower. nvidia is higher, amd is also higher. the philadelphia stock exchange semiconductor index is up about two print set -- 2%. sonali: interesting to see that year-end did in the names that we continuously see love all year. broadcom is also the biggest gain in the s&p 500. amd right behind it. what do we know about some of the love being seen in that ai trade into year-end? emily: meda is higher as well. rosenblatt securities named meta as one of their top 25 picks. this is not a new trade. their analyst said that they are in the midst of an impressive and durable a i driven growth renaissance as it is driving up daily usage on facebook and instagram, altering traffic and increasing at efficiency.

meta now has more room to absorb investment. i don't think any analyst is looking to come up with a new investment team right now. we are pretty much talking about what we've been talking about all year, ai revenue and whether those big tech companies can prove in the new year that they are seeing returns on their investment. sonali: as our producer says, big tech, not to be confused by little tech. katie: think about what happened in 2023, up 194%. mark zuckerberg has been on fire. some on the cell so i think that his hot hand will continue. let's talk about nordstrom's. taking the chain private. the stock move, may be the actual story is more interesting than the stock move but what is going on? emily: this is a company that piqued pre-pandemic and never really seemed to bounce back from their pre-pandemic eyes.

annual revenues peaked at 15.9 billion in 2019, and since then, the stock over the last five years, down 40%. it was outperforming in the s&p year to date but the shareholders and the norstrom family looking at a longer-term view of this company and now deciding that it is not worth it to be public. also a lot of these department store chains have been reinventing themselves this year due to the growing competition of amazon and other online retailers. nordstrom, news today that they are going private in an all cash transaction. earlier we saw macy's closing a bunch of stores. saks fifth avenue bought neiman marcus. it is not too surprising to see this department store needs to be reinventing itself. sonali: i got made fun of my entire life were not being able to see it in the singular. emily: is it actually just

nordstrom? katie: katie: i said nordstroms. sonali: i cannot say it singular either. katie: looking at the headline now in my mind just refuses to accept that. sonali: this rumor has been going on for a while now, so to see the numbers come to fruition is interesting. you can see the market may have wanted more for their money. you are seeing their stock down on the day. katie: remember in 2018, the board rejected the families bid to take the company private at $50 per share, said it was too low. fast-forward to today, and nordstrom common shareholders will receive $24.20 in cash. it has been a rocky ride here. emily: the stock is now lower than that level at 24.12. sonali: the other fun facts, you initially saw the bond prices also drop on the take private opera, so that means into 2020

five, this is a deal story that we will be watching. emily, thanks for joining us here on the set for a story that we love. joining us now, we are going to bring in michael jaconi, cofounder and ceo of button, commerce optimization company. great time to talk to you about retail. when we think about the year-end and what is possible, how it may filter into 2025, optimism, the resilience you saw among consumers, is that going to hold up? michael: i think it is, and thanks for having me today. i have seen the trends in our data across the button platform continue to grow. the optimism we are seeing, you see the november retail report showing an uptick of .7%. increases in income or suspending with online sales being up 8.2% year-over-year.

mobile really leading that with a 10.7% year-over-year increase. the optimism is being represented by their wallets and what they are backing up with her holiday purchases. sonali: what does this mean in terms of how they are spending? one thing i think about, one of our financial correspondence here at bloomberg news, the consumer has a lot of credit card debt on their balance sheets. are people just maxing out to get through the holiday season? michael: you are seeing a sensitivity toward deals throughout this holiday. the holidays set records. one of the records was through the orientation deals. amazon had 30 days of deals going into the holidays. another winter holiday deal starting today with them. we are realizing that the consumer is deal-sensitive and pricing-sensitive but they are still willing to spend. we have not seen that slow down.

in fact, increasing period over period, even postelection, a bump on the button platform, which drove nearly $2 billion in commerce in november. 90% increase in shopping trips from the period prior of november and october, and seeing that lift to year-over-year, comparables are totally different. we think this is poised for a 2020 five that is really going to shatter the records we have seen broken every year because of this increased optimism, even the credit card debt is continuing to increase. katie: i want to talk about how politics and the potential for tariffs wrap into the retail conversation because we got u.s. consumer confidence figures out from the conference for this morning. beside the headline number come interesting to see that consumers are increasingly worried about tariffs. 46% expected to raise the cost of living, 20 one expect them to create more u.s. jobs.

there is a lot of crosscurrents there but when it comes to consumer confidence and actual retail spend, what do you anticipate? michael: i think it's a really interesting dynamic that will affect what the biggest online retailers are doing today. the majority of the products that you and i are looking at or buying, looking at the various marketplaces from amazon to walmart to target, a lot of these products are actually sourced in foreign markets. if you are buying from a marketplace seller based in china or in a foreign market, you will see these tariffs have a big impact and affect the consumer. there is reason to be concerned. this could have a shockwave through the economy if they are too high. i think the marketplace seller's, the real lifeblood of the internet economy, they will have to adjust their business tactics. you may see that trickle into impacts on retail media, one of the fastest forms of advertising

online, because these are fueled by a lot of these foreign sellers. katie: speaking of online advertising, i want you to unpack this might in your notes, that you are seeing the creator economy play a big role in driving sales for retailers. i am thinking influencers but what does that mean? michael: great question. a lot of people have seen the creator, someone taking a photo of themselves and posting on instagram. when you are really seeing emerge is the shifted media. if people used to look at how they would buy products and be influenced to buy products by looking at vogue or the new york times, you are seeing a new emergence of a media in the individual. the creator creating not just a photo of themselves but recommendations of what to buy, we are to travel. you are seeing an emergence in real driving economic value that you never saw before. partly because technology had not caught up to enable the ability to see what creators

were driving value. also because the user behavior patterns are changing. the creator economy, what we are seeing year-over-year, has driven over 300% increase in button's total traffic. more explosive growth than anything we have seen in our platform historically. and it is fueled by the dis- intermediation of what consumers are doing with their content. you will see that our marriage in 2025 as a very big component of how consumers are making decisions on what to purchase, where to travel, what services to engage with. sonali: what to purchase in particular, as someone who is a total sucker for buying things on instagram, how are you seeing things change? are there certain platforms that drive more traffic for whatever reason?

is it leading people to go to bigger and bigger retailers? one thing for myself, it has showed me a lot more independent brands. michael: it is so funny, i'm a sucker myself. i also fall victim to the nordstrom, nordstroms challenge. what you are seeing, what is so wonderful about what instagram has done, it's been able to use intelligence they have on us as consumers and shoppers to identify brands that are independent that we can connect to. what we have to realize is that amazon, walmart, target are also aggregating small independent marketplace merchants selling to us. even though we are buying from amazon, we are buying from someone who is probably a mom-and-pop or retailer who is building their own online store via the amazon, walmart, target platform. you are seeing those two things have an impact. whether it is you buying

directly from instagram. and largely the biggest trend that we have seen that are facing both seller and creator is the tiktok shopping revolution which has just been extraordinary on every dimension. obviously, we will wade into politics if we talk about this, but you are seeing a strong movement for the creator to connect to the seller and have the consumer that is adopting this application, using it at a rate that is totally startling in terms of historical patterns. katie: we have to leave it there. up against the clock. really enjoyed the conversation. that is michael jaconi, founder and ceo of button. this is bloomberg. ♪

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.

sonali: welcome back to our television and radio audiences. you are watching bloomberg markets. i'm sonali basak.

we are going to talk about what has become a massive global story in the world of deals and autos, and that is honda and nissan taking the first steps toward combining. the taking over nissan. it will take a long time but in the hopes of creating an automobile? not that can survive aggressive competition from china and u.s. automakers. bloomberg global auto editor craig trudell joins us not to talk about the first steps of what could be a long and messy road ahead. craig: it really is. this is a situation where these two want to set up a holding company. they are calling it a merger but it is really dead in name only. as you alluded to, honda is really taking over here, they will take lead on setting up this holding company, will appoint the majority of directors. the proof is in the putting in terms of these companies'

relative market value. honda is worth about four times what nissan is. we are really in a position in japan where nissan has been in this long, slow decline since the company took down carlos ghosn, was arrested. that was way back in 2018. they have been sort of lost ever since. katie: with that in mind, honda and a much better position than nissan, four times bigger, talk to us about what exactly honda gets from nissan that it couldn't do on its own? craig: i think honda has long lacked scale as a second-tier carmaker. it's a very strong company from an engineering perspective and that is what they are known for, but i would point to the word motor in the name. they have really been like a long time engine, gearheads.

they are quite behind in terms of the electric vehicle transition. in nissan, you have a company that at least saw around the corner years ago, at least got off to a start toward electric vehicles with the leaf at a time when tesla was just coming onto the scene. but they sort of squandered that. in terms of the positioning of these companies, this is a bet, combining, taking advantage of the scale, gives them a chance to ward off the rise of tesla in the u.s., byd and china. katie: we are talking about two japanese automakers that of course have a big presence in the u.s. what will happen to the honda and nissan brands? what does this mean for their lineups and what we may see on u.s. roads? craig: the u.s.'s question is a

big part of why this will be a challenging deal to close and take a lot of time. the likelihood that there will likely need to be a rationalization of dealers and franchise agreements in the u.s. these companies have a lot of overlap in terms of where they are strongest geographically, segments. they will have to be a lot of thorny decisions made about who stays and who goes. i think back to the days of daimlerchrysler, the ultimate quote unquote merger of equals that was anything but. that is part of what we can expect here, a really messy ordeal that is going to play out over the next year, year and a half. assuming all that goes well, these companies will be more competitive, but there's a lot of questions about how they get there and can they pull this off? sonali: thank you for the time.

i am glad that you asked about the branding. i want to know what will happen to the home of the tennessee titans. craig trudell of bloomberg news, overseas our auto coverage. i want to bring in some breaking news as well. looking at the situation in france as the new premier's for a new government is hit. we are looking at french president emmanuel macron appointing eric lombard as the new french finance minister. remember, this is just ahead of a bid to pass a 2025 budget that has already been highly contested and very much the reason, a budget dispute for the toppling of the prior government. now there is a new french finance minister that is going to be eric lombard. we will bring you more news from france as we get it. a lot of interesting things happening into the holiday season. katie: absolutely we will continue to follow the story with the french presidency

announcing a new cabinet. busy end of the year when it comes to global politics. let's talk about the global chip market, the subject of bloomberg's big take. the next big hope, taking nvidia's ai crown. when softbank's ceo made a surprise appearance at mar-a-lago, he made a promise to invest $1 billion in the u.s. over the next four years. the president-elect then joked that perhaps softbank would like to double that target to $2 billion, and son replied that he would try. let's bring in ian king, the co-author of this big take. two stories here, one about the global chip industry and the race to take on and maybe take market share from nvidia, and then there is the son and the softbank story and how much masayoshi son needs a win here.

talk about the convergence of those narratives. ian: that's a good way to frame it. masa has attached himself to all of the big trends in technology over numerous periods and he has identified this latest one, the ai opportunity, somewhere that he can redeem himself after the disappointment of the vision fund, all the money that he raised her there. he is not necessarily trying to compete with nvidia but he sees it as more of nvidia open her door to this new age of computing, so we can be the next one to a trillion dollar valuation. that is more of his focus. katie: let's talk about how he is doing that. arm holdings has a 90% stake. what is the vision for arm, how it would fit inside this industry along with nvidia? ian: absolutely the right way to

put it. we have his plans, ability to raise money, ability to sel things, but the chip industry isn't all about that. you need money, massive resources, but it's about experience, having these core groups of engineers and managers who know how to get this done. something that jen-hsun huang at nvidia knows how to get done. arm is going to be crucial if this attempt is going to get off the ground and make progress. he has the ceo of arm to help him understand the intricacies, understand that you did more than enthusiasm and money to be successful in this business. sonali: there i ask -- dare i ask, last time we spoke, we saw softbank plow hundreds of millions of dollars into the u.s. economy. what is going to be different if

anything this time around? ian: very good question. masa's critics would say that he is good at identifying bubbles, chasing into them. i don't know anybody who doesn't believe that ai is the future, is very important. clearly, it is already a material thing for the chip industry. it has already revolutionized the chip industry. plenty of people are saying there is way more room to go, more opportunity. he will be in competition against other companies but he has a property that is already solidly in place. therefore probably a bit more solid footing than perhaps throwing money at wework, one of these more tangential, if they're real investments he has made in the past. if he is prepared to put money into it in the long term, he has just as much chance as anybody. sonali: a minute left.

i want a quick note on the transition. you have the president-elect looking toward a new administration, looking at how to handle how the biden administration dealt with the chips industry, particularly as it pertains to china. how do you see the biggest difference playing out? ian: that is the thing, i don't think there will be a difference. if anything, the biden administration have become increasingly hawkish on china, used the chip industry to exert influence. hard to imagine from what we saw last time, the trump administration will be any different, if not more hawkish. at the moment, the consensus is we will see more tension. sonali: thank you so much for your reporting and don't miss his big take on bloomberg.com and the terminal about softbank's transition. coming up, that while the straits of 2024. how it sets up for a wild

straight ahead. we will bring in emily graffeo for that. this is bloomberg. ♪

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katie: welcome to ever tv and

radio audience is back to bloomberg markets. i'm katie greifeld. alongside sonali basak. bringing you home through the end of 2024. it been a wild year. at least markets are taking a little bit of a breather now. volume falling off of the cliff but we have some green on the screen. sonali: we have read on the screen, too. i was drawn to the red because you have an s&p 500 rebounding. .3% higher on the day. let hired by the nasdaq 100, and you are watching the 10-year yield way above the danger zone 4.50, now at 4.57. i want to look at one sector that have been going gangbusters all year long, crypto. not only far off that 100,000 level, you are now at 93,300 per bitcoin. it is leading other crypto stocks lower.

microstrategy is the worst performer in the nasdaq 100. the nasdaq shaking off the crypto pain. microstrategy down 5% this afternoon. coinbase also down 3.6% but let's be honest, these were huge gainers this year. what is a little relief? katie: pretty wild where you consider what bitcoin entered 2024 at 43,000 or so. it's been a wild ride not just in crypto but in every asset class. let's bring in emily graffeo from out across asset team. talk us through some of the wildest rates we saw in 2024. emily: i will start with bitcoin. for anyone that thinks this is just a trade that is on the fringes of wall street, it definitely came in the center this year. look no further than what the etf flows looked like. blackrock's bitcoin etf was the third-most inflows for any etf, right up there with the s&p 500. katie: it was like the most

successful launch ever. emily: i think we are safe to say that when you look at how many billions piled into that etf. even when you go a little bit more specific into the etf space, one of the really big traits was leveraged etf's, called a single stock etf's, katie, as you know. katie: dream about them. emily: amp up the stocks. nvdl is one that i think of. 200 million in assets at the beginning of the year. it peaked at 6.7 billion. it has come down a little bit as nvidia has come down but it goes 2x nvidia and just captured retail investor attention this year. it is up over 350%. 2x's nvidia's daily. sonali: 350 sounds like a lot but there were places where you saw against much larger.

the place where you saw 2100% payoff was an esoteric market in spain. talk about it. this was a bond issued by a bank that was taken over by another bank. what happened, who saw the trade? emily: an incredible chart from our ethics team. if you look at it, it's a literal vertical line up. 2900% gain in seconds. a bond was issued by a bank that was then taken over by a bank that was taken over by another bank. i guess when the note was issued, it just absolutely spiked up. it was a bank from santander. it was left for dead, back to life or a second, and then back down. santander never said why it made the payment. observer said it was related to

the tidying up of its balance sheet. sonali: you also had some concerns over weaker parts of the market, distressed commercial market trades, but you also saw people make money there. emily: even if you go to other parts of the world, international markets, china was a trade that was up and down all year. when you look at what their major stock market did for the full year, up 14%. pretty good considering that over the summer people were going in and out of china, a ton of volatility. that is underperforming the u.s. but not terrible. sonali: i just had to point out some of these more niche trades. that is what do people get paid for. katie: i will keep it simple, let's talk about cash. this has been a hot trade for years now. you have $7 trillion in money market funds despite all of the speculative fringes we've been

talking about. emily: that was a record, and this was supposed to be a year that rates were coming down from the people removing the cash off the sidelines. and yet, the fourth straight year that treasury bonds underperformed cash. you look at an index of u.s. treasuries, it gained .7% on average this year compared with a 5.1% return on t-bills. t-bill and chill worked again for the fourth straight year. sonali: thanks for keeping and i out all the wild trades, the ones that are obvious, the ones not so obvious. we are going out to priya misra, portfolio manager for jp morgan. a lot of people still wanting to hold cash going into 25. how do you think about the dynamics happening between cash markets, treasury markets, money markets, everything that feels safe but offers you a thanks f. i would say cash has felt good

for th rates aggressively, behind. we came into the market this year with seven rate cuts and cashed it better than treasuries. i would say let's take stock now. glad that you started with cash because for the first time after the fed cut last week, cash is yielding less than treasuries. if you look at the spread, we are in a soft landing, the economy is strong. you look at high-quality spread product, you are getting 5.5, 6%. you are going into high yield, high quality that we like. 7%. then you are looking at, if you are staying at cash at 4%, which is where fed funds is, you are giving up a few percentage points. fixed income, slightly longer duration, gives you income. we were just talking about these wild trades that too great.

in an environment where there is a lot of uncertainty, fixed income is giving you that diversification. we saw it a few times this year when stocks fell. what worked? longer dated fixed income. sonali: you look at the 10-year following to as low as 3.6 percent. then you see it now at four point 6% nearly, almost a full percentage point higher in a matter of months. what is the case for duration with that type of volatility, especially when you think there is more upside in yields here at the longer end of the curve? priya: a couple points on that. you talk about longer in. up until the 10-year, that is the area that we like, five to 10-year. when you go into the 30-year, term premium can increase, so you have to be careful on where you are on the curb. second point, valuation. in september, the market was

concerned around the labor market because we just had those two week payroll reports, concerned about how much more the fed can cut. we are pricing in only one more rate cut. the terminal rate is priced at around 4%. i can see a scenario where the fed cuts more. they just told us there is a lot of uncertainty, they think inflation will be sticky, but what if you don't get a progrowth policy early next year and inflation? we think disinflation forces are still in play. we look at valuation. there is value being created. it is hard to say that 4.6 is the absolute peak in the 10-year. as we get closer to a higher of 4.70 5, 5 percent, i think the equity market will start to pay attention to bonds again. that is where that mechanism will come in between bonds and stocks. bonds are still the diversifier, in an environment where the fed is heading lower, focus on the dual mandate. if you get weak data or you get

rates rising much more, people will look at risk-adjusted return and say if i can get 7% instable fixed income, isn't that better than buying the s&p which will give you maybe 10%? i think that calculation starts to come in. katie: a lot to dig into there. i look forward to a future where the markets are paying attention to the equity markets. it feels like they've been telling two different stories. you mentioned that you could see a case where the fed cuts more than expected. can you see a case where the fed actually hikes rates, is forced to raise rates in 2025? priya: the scenario of hiking requires progrowth and higher inflation. if you get fiscal easing somehow which i don't see next year at all, because the 2017 tax cuts expire at the end of next year. i think we will spend all of 2025 dealing with the debt ceiling, spending cuts, doge, or how do we pay for the tcja

extension and the additional tax cuts. let's say there is a moment in congress, that extend the debt ceiling and they give us big tax cuts early next year. in which case you are getting deficit-financed tax cuts, progrowth. that's a scenario where it is better growth and higher inflation, the fed could be talking about hikes. all of the other scenarios, i see either stagflation. it is not clear that the fed hikes. if you get tariffs or a big immigration pullback that resulted higher wages but lower growth, a lot of the other scenarios, i see a two-sided risk. the fed is nervous, they take a step off, already cut 100 points, calling it the recalibration phase, they stay on hold. i see them cutting a few more times but really cautiously because they are nervous about all the policy risks, what combination of growth and inflation we will get. katie: let's bring the

conversation to the corporate market. you think about the fed maybe cautiously cutting, you think about all the different crosscurrents you have on the fiscal side. how does that play out when it comes to ig and junk as well? priya: ig and the high quality market, we would classified as solid companies, good balance sheets. we look at what the debt they are having, they are not re-leverage them, paying off certain expenses, refinancing. the fundamentals look really strong. you will look at spreads and say they are really sprite. i say, yes, but for good reason. then you look at technicals. we talk about money sitting on the sidelines. money is coming into bond funds further out the curve. i still think there's a lot more chasing these all in yields if you are getting six or 7%. that is what is keeping spreads

type. do i think spreads will tighten a lot more? difficult to see a lot more tightening. but you get that additional one hundred basis points in investment grade corporate. the ccc part, i would stay away from. it is extremely idiosyncratic. dispersion is very high on that part of the curve. but the higher quality corporate sector i think is tight for very good reason. sonali: a minute left here. you were talking about the 30-year and the uncertainty around it. then you look at 30 year mortgages, 7%, high for a generation. what concerns do you have around the spillover effects of mortgages stating that high? priya: glad that you bring that up. for all the talk that the military policy is not restrictive, the housing policy is a key metric that it is restrictive. now with mortgage rates where they are, the housing market remains frozen. meaning people stay stuck -- it

is a good thing they are locked in with low mortgage rates but they are not moving out. this means less mortgage supply. housing remains a drag on the economy, maybe not enough to pull us into recession but it is a negative. we also like mortgage debt. you are not going to get a lot of that supply of mortgages. katie: great to see you of course before we end 2024. happy holidays when you get there. that is priya misra of jp morgan investment management. coming up, how the eu is regulating tech and some of the challenges they are facing in the new year with a new administration. this is bloomberg. ♪

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. katie: welcome back to bloomberg television and radio. sonali: we are looking at how

policymakers around the world have been grappling with the key trade-off between making sure firms don't dominate an industry and that those same firms have the incentive to innovate and grow and help drive the economy. it's a trait of made differently by the u.s. and the eu. max ramsey reports. >> the european economy is facing a slow agony as it struggles to compete with the u.s. and china, so said none other than the former ecb president mario draghi in september, pointing to sluggish growth and productivity. the numbers help show the scale of the gap between europe and the u.s. despite having a larger population, the european union's gdp sits at $19 trillion, compared to $29 trillion for the u.s. the stoxx 600 market cap is about 14 trillion dollars versus over $50 trillion for the s&p 500. one criticism has been that brussels' aggressive approach

to regulation especially with big technology companies has held corporate europe back versus its global rivals. the person at the center of this policy for the past decade is the eu's former competition commissioner. we spoke to her on her final day as the top antitrust enforcer. >> it has been sort of my drive in danish politics, european politics, to make sure that everybody has a fair chance of making it. making sure that the market provides for that, that the market serves customers. that has been the trend of these 10 years for me. >> it's a mantra that has resulted in some of the toughest rules for big tech. other the way to put it, if you cannot beat silicon valley at its own again, regulate it. she has overseen some of the most high-profile cases taking on some of the world's biggest companies and issuing over 25 billion euros in fines for

abuses of dominance and cartel violations. she won a record 13 billion euro tax judgment record against apple and oversaw one of the eu's landmark pieces of regulation, the digital markets act. we asked about her rise from danish politician to perhaps the most feared name in silicon valley. >> i don't really know how to prepare for being on the front page of one of the u.s. maine papers. it's important to figure out how to go with it. i came of course from executive positions in denmark. i was a deputy prime minister. several experiences as a minister. but i think the most important point is that you believe in what you do. the cases that we have fought that they have been fought with great work by the teams with very strong evidence. i think that is the kind of preparedness that you need. that you believe this is a strong case and you have something valuable to say. >> today, her legacy faces a

challenge from those who say regulation has hurt europe, stopping it from creating massive technology companies to rival the u.s. or china. we put this to a woman at the very heart of europe's tech scene. >> when i sum up u.s. versus europe regulation, i think europe definitely has the image and reputation of always wanting to regulate, and they are good at it. [laughter] regulation does, in some cases, slow things down, creates complexity in some cases, is not clear when the regulations are first coming out exactly what they apply to, what we need to do to comply with them. it can be quite difficult to navigate especially for young innovative companies that don't have a lot of resources and time to spend on those things. >> she takes a different view. >> we are talking about competitiveness. the paradoxes that you can have

competition without competitiveness but you cannot have competitiveness without competition. so really important to maintain that strive that everybody should be challenged. if you achieve a very strong market position, it comes with responsibility. so to some degree, i think a lot of people can newer themselves and what we are asking a market participant in their own lives. if someone is rich and powerful, they have responsibility. if someone is small with very few means, well, they should have a better chance of making it. >> this has informed the flagship technology regulation for the eu and by extension much of the world over the past 10 years. >> i think it's important here to see some regulation like the goods to market act is opening the marketplace. regulation like the ai act makes a i safe to use which means again it opens the market for many more use cases, where people may otherwise scare off.

katie: that was max ramsey. let's stick with europe and go to france for the latest on the country's new cabinet. emmanuel macron naming erica lombard as finance minister in the last hour. our correspondent is here with us from paris. what is the first item on the to do list for eric lombard? >> it will be for sure to pass a budget for next year, 2020 five. that would be the main task for this government really. it is very political obviously. it indicates the direction of the government wanted to take in terms of fighting against inflation, security. the budget for next year has not been approved so far. since emmanuel macron has been

dissolving the assembly this summer, taking down the assembly, he has no clear majority environment. three fourths, far left, far-right, and a centrist block. the centrist government has been toppled, so it is the second government since this summer. we will see if he has the capacity to pass this budget without being toppled, actually making a compromise with all the political groups. it is clearly not an easy task that he has ahead. sonali: what do we know about eric lombard? as you mention, this is a budget that has led to a lot of political fractions already. what might he do differently in terms of negotiating the path forward? beniot: he is not known by the french really. he has been a banker for a good part of his life, bnp,

generalis. previously he was the head of a public bank that deals with social housing. it could be seen as a left-wing figure. he has been with socialist governments before but still someone who is very plugged in in the economy. he wants responsible finance, wants to finance the fight against climate change. he has been known for saying there is too much inequality in france. the wealthy being too wealthy. that sort of thing. the good thing for him, he is not known, so he has not had fights with the far-right or the far left. he is sort of a neutral, maybe older figure. that is what he has for him. now, he will face the same challenges that the previous government has been facing. katie: we are getting part of

the new cabinet here. eric lombard named just this morning. what else should we be keeping our eyes on? beniot: it is a mix of politician from the left that are close to the left like former prime minister elizabeth born, another former prime minister, men well vals, although there are lots of veterans and figures who are also right wing ministers who were previously with macron. macron has been known to be a centrist, taking from all sides and creating personalities that are well known by the french. it doesn't give an impression of being a fresh or very new take on politics, to be honest. sonali: that is beniot berthelot

in paris. a lot going on in france right now. it is interesting. let's chat markets. we did start on a down day. we are seeing that turnaround. like volumes but generally optimistic view. katie: it is hard, on december 23, you have to take any mu with a grain of salt. when it comes to volume on the s&p 500, volume off by 25% from the 20-day trading average, but you see gains extended for right now. s&p 500 up .4% coming up with two straight weeks of losses. sonali: after this, i'm going christmas shopping. we will be talking about the consumer moving forward. this is bloomberg. ♪

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what i thought was a complete life was nowhere near complete, but it is now. learn about adopting a teen and adopt u.s. kids.org. all right. welcome back to bloomberg markets on tv and radio. of course it's the end of the year. so we're doing our simulcast. i think this is radio on tv rather than tv on the radio, because we're sitting in the radio studio, which we don't normally do. paper covers rock. yeah, yeah. not that it matters, truly, but in any case, we are looking at these markets. we're looking at green on the screen again. hard to see too much conviction. on december 23rd. but of course we're capping off an extraordinary year for the markets. and there's a lot of question marks heading into next year. question marks. and there are a few in

particular you and i have been talking about all morning. and that is those presented by torsten slok over at apollo. let's start talking through them. and you know what? we're also going to bring in bloomberg's alex semenova to talk about them with us too, because some of them are kind of a little more obvious, right. you know, the number one thing on torsten's list is tariffs coming a 90% chance that they're coming. he doesn't tell you how fast or drastically they're coming, but they're coming. yeah. yeah. and alex, i will be honest i saw that you tweeted this and it motivated me to open the email, which i did. but yeah, let's talk about that. the 90% probability on on tariffs but also on nvidia earnings disappointed inflated expectations. yeah. this list is certainly getting a lot of attention. obviously you know we know that we're going to have some tariffs on the way. the trump administration has been touting that for a very long time now. and then nvidia of course the expectations are so sky high that it is very likely that if they don't hit the mark on their results, that investors would, you know, will immediately find

an opportunity to sell. but the interesting risks that stood out to me here are the probability of a us recession at 0%. anytime you assign, you know, odds that are at either 0% or 100%. investors should be wary. i had one source i -- at me today and he said that if torsten is selling his recession odds, then i'm a buyer because this again, sometimes people see this as a contrarian take. and the beauty of torsten, torsten slok and apollos, who were talking about the beauty of his notes, is that they're so bite sized. they're just quick to the point. he doesn't really elaborate. i would love to hear what's behind the conviction for a 0% odds of recession in 2025. yeah, especially because, you know, we talked to jay hatfield a little earlier at infrastructure capital partners. he was talking about how he also doesn't see a recession, but he sees a growth slowdown. so there's a lot of nuance here, even if it's not a recession then do you have to worry? listen, guys, as somebody who had to frankly, embarrassingly hire three tutors to get through my statistics classes, i it's it's a tough one.

but what i love is not where there's 100% or 0% chance, but where there's something more in the middle. so he sees that there's a 40% chance that the u.s. ten year interest rate rises above 5% before midyear. that means, he believes, more than not, that it won't. right. but that 40% chance we're at 4.6% right now? yeah. you want to have a disagreement on wall street. you want to have people kind of crowding around the middle rather than two sides to a trade. i've heard before, people make money. and so we remember what happened when at some point we were pulling economists and people were expecting 100% chance of a recession. and that never materialized. so a 0% chance is something to be concerned about. and obviously that means that the risk of probability of a recession rising, that itself is going to be a risk. if that increases, that could be something that investors are watching and that could be disappointing. well, this marries nicely into something else that he sees 40% odds of. and he also did note that several of these risks can materialize at the same time, which is. hence we're not adding up to 100

here. but he said there's a 40% chance that the fed raises interest rates in 2025, and it seems like wall street is digesting. of course, that dot plot, the view that maybe the fed is only going to cut twice in 2025. but when it comes to actually talking about rate hikes, i feel like not a lot of people are pricing that in. yeah. not at this point. we saw investors recalibrating those expectations last week and of course got the worst day off, the worst fed day. i think, ever. was it? i think it was on a scheduled fed day. it was the worst performance for the s&p 500 since 2001. right. and so we're seeing some of the, you know, implications of that. if that continues to be a concern, that interest rates will go back up. and of course, that is going to disappoint equity markets, because in the year ahead outlooks, no one is really talking about rates being a big concern for investors at this t. and obviously they are. i want to go back to that kind of 90% chance here, because this is, i think, the most surprising that nvidia earnings disappoints inflated expectations. 90% chance we went into this

year. that being the golden trade of the year. there's another potentially golden trade brewing under the market, one that i need a little explaining of. can you explain to me what's going on with quantum? yeah. so quantum computing is the new hot topic going investors have been enamored to capitalize on that momentum outside of ai semiconductors, and this seems to be one of the sectors adjacent to that trade. if you look at one of the stocks today in that segment, if you rank quantum computing, each of more than 20% quantum computing, having an incredible run, and this is driven by optimism, the google parent said this ship is a breakthrough, and that helped at rise 30%. but i want to reiterate, because sonali explained an important point here, this is solely

trading on the potential of it, because if you look at the fundamentals that are not quite adding up, look at quantum, it has a roughly $1.8 billion market cap and $9 million in revenue. not a lot to show for it, but it has not stopped the stocks, up 1007% this year. >> a lot of fun between valuations and actual fundamentals. let's switch gears entirely and talk about hotels and resorts, talking big movers today come a skyrocket to the upside. alexandra: that stock is up about 20%, after an exclusive negotiation with hyatt hotels, including a potential acquisition. this is making investors quite happy. it's seeing its biggest intraday gain, the highest level in more than seven years, and hyatt says it is not intended to comment further on these discussions until they are finalized. i was looking at some analyst commentary.

one says no surprise because shares are undervalued. they said while it is supposedly a done deal, we see a greater likelihood than not that this transaction will be completed. >> m&a ipo rebounding, 75% chance, and in this season, i want to talk about another deal out there, in talks at the moment, nordstrom. what is going on here, because this has been a deal that a lot of investors are talking about, and you've seen the stop fluctuating but not to the upside. it is down almost 1.8% right now. alexandra: yeah. the nordstrom family is taking the company private. it is valued at 6.2 5 billion dollars, including debt, with the help of mexican retailer el puerto del liverpool. nordstrom, shareholders will

received $24.24 each share. they are thinking the retail chain will be much more successful. shares of nordstrom have had a pretty terrible run, down 40% in the last five years but when you look at the wessel 1000 indexed by comparison, it is about 8%. >> alex, we are thankful for you, that is alexandra semenova. we will broaden out and bring into our lead economist at morning consult. we will talk about what she is seeing under the hood. you think about what we are seeing, a load of this market has been driven by one-off desires of companies making strategic moves, where it has been really hard to get a read is the consumer. even though you've seen a lot of strengths, you have seen some companies still suffer from the bifurcation. you see in the consumer, where are the greatest strengths, where are the greatest

weaknesses? >> it is interesting, because we seem to be at a little bit of an inflection point. what we seen for sure over the last couple of years as you've kind of alluded to, there has been a pretty major bifurcation among consumers. that explains the gap between the pretty strong agricole numbers, you see retail sales and consumer spending versus what you are hearing from companies about declining foot traffic, things like that. one metric we've been watching very closely at morning consult, that we create with our data -- daily data come is the consumer index. that helps tell the story in 2024, from retailers in particular. over the summer, we saw a pretty good slump in the consumer health index, which tracks pretty closely with spending. it is sort of a macro indicator of consumer demand and spending momentum, and we saw a slump in the middle of the year at a time

when we were hearing certain stores, foot traffic a memorial price of the to like that, and it was driven in large part by those lower and middle income consumers, whereas higher consumers tend to prop up that topline value. we seem a bit of a turnaround in the past few months. we seem pretty strong recovery, happening not just among the higher income adults but in the lower and middle income cohorts as well. sonali: what you make of the consumer data this morning, the idea that politics is starting to play a bigger role? kayla: i was a little surprised by the results, because we have a daily sentiment index we look at, too. the questions we asked our more closely aligned with the university of michigan, which showed a little more of a stronger rating. but the conference numbers seems to show that consumers are pricing in a little bit of risk

in their assessments of the economy looking ahead to 2025. i say that because most of the drop that we saw in those companies board numbers were driven by expectations. it does seem like factors like tariffs are starting to weigh more in the consumer mindset, mainly because they are so primed to be concerned about inflation. price levels are still pretty high in the consumer perspective. katie: well, also you think about university of michigan poll we got recently, it shows a surge in the people who believe we should buy durable goods now to avoid higher prices in the future. conference board numbers we got today and details on how we got thinking about tariffs. are you thinking about evidence of people pulling forward evidence of a head of higher prices, ahead of tariffs, for example? kayla: in the retail data, for example, it is tough to distinguish exactly, because we did also, there are sort of

hurricane impacts in the auto sector, for example, durable goods. so it could be some having to do with hurricanes, some having to do with pulling for those purchases. what i can say is that consumers , we just surveyed them on how they feel about tariffs, and onnet, for all the different categories we asked about, including large durables, there was net opposition to adding tariffs, so it does seem to be something consumers are worried about. another finding from the survey was kind of telling for how people are looking at 2025 is that we asked about, you know, thinking back to 2018, the last time trump was in office enable minutes on tariffs what was consumers recollection of that? they did remember their costs increasing. that being said, they were expecting that if any of these policies that are put forward for 2025 go through, wisdom as you are saying, at least there's a 90% chance, there seems to be

pretty high audits odds, they are expecting that the impact will be much worse and much more inflationary on their household purchases. katie: interesting. kayla, we talked about this cost-conscious consumer all the time, where people are looking for discounts, for deals, but are there any areas where consumers are still willing to come of willing and may be looking to splurge? kayla: well, there is time sensitive which we trapped them and we look at that from a purchase that they consider, outside of a total loss. another type of behavior we are seeing for the elevated is trading down. i think that's why you've seen these differences, different store types, some are reporting like walmart, saying we are getting great foot traffic, higher earnings coming into the we are doing great, then target saying we are having slow sales, things are not going as well. so consumers trading down is a thing we are seeing. going back to the retail report, to me, when i saw that the

online sales, aside from auto, was the big driver in the increase in november, that tells me oh yes, that's a good place for consumers to compare prices, get the best bargain. so anyway are where consumers are, where prices are a more competitive, consumers are happy to have that relief. katie: a timely a conversation on december 23. kayla, great to have time with you. that is kayla bruun, senior economist at the morning consult. sonali: coming up, apple wants to take on amazon with a smart doorbell. more on that coming up next. this is bloomberg. ♪

sonali: welcome to our bloomberg television and radio on a sense

-- audiences, i'm sonali basak. you are watching "bloomberg markets." san francisco fed president mary daly said she's positive that there will be up to two interest rate because next year. mary: it's about the data. it's always about the data for me. we don't know what the incoming administration is going to do. the new administration, no matter when they come, always put a slate of programs together, and as a policymaker, i want to see the net-net. once i see clearly about what the policies will be. i will focus on the incoming information, what it means for the outlook. and today, i feel like we've got policy in a good place, the economy is in a good place, and we are prepared for whatever comes before us. lisa: what happened in the last three months that caused the fed to be more concerned about the stickiness of inflation? mary: well, the data happened. there are two things that

occurred. first of all, the economy remains in a good place, and the risk for the outlook are equally balanced between a risk to inflation or a lift to employment here that's where we wanted our goal to be. we adjusted policy, inflation was setting down. we adjusted policy some more to ensure we have a balanced labor market that continues. that is where we are. the data on inflation has been coming in a little slower. i would not even say sticky or stalled, i would say the progress is just low relative to what we would have wanted, but that is a typical pattern. it is bumpy as you get from, you know, 2.8%, 2.5%. lisa: if there was a stickiness, the cleveland cpi actually ticked up for the month of december from november, so what is this question, why did the fed cut it all? mary: sure, and, again, i will reassert, it is bumpy.

he remember we had the data, oh my gosh, it is accelerating, you focus on one month or two months. the most important thing for me as we need to for calorie -- recalibrate policy. with 75 to have the recalibration we were looking for, right size policy, or do we need more? ultimately i determined that 100 basis points was really the right level. now i feel we've got that recalibration phase behind us, and bring in the next phase, and the next phase is really looking at the incoming information. we return to a more typical pattern of gradualism for the fed. you have the uncertainty, adjusted policy rate, then you wait, see what transpires, and make further adjustments. katie: that was san francisco fed president mary daly speaking with bloomberg. you can find a full information on the terminal or online. let's switch gears back to tech,

because apple is considering challenging amazon's reign with a new smart device. that is coming from bloomberg's mark gurman. i'm pleased to say he joins us now. talk to us about your reporting and what you learned about this bid by apple. mark: yeah. thanks for having me. let's take a step back here. in february 2024, so actually earlier this year, apple cancel its self-driving car project. for years, this was supposed to be apple's next big thing after the iphone, after the ipad, right? after the vision pro, which obviously hasn't not had much success at this point. but they canceled that project and really pivoted into three new areas -- ai come of the smart home, and robotics. 2024 for apple was very strong for ai with apple intelligence. when i say strong, i mean in terms of their focus. they put a lot of eggs in the

robotics basket for 2024. they are working on and exploring human led robots, a tabletop robotic device that uses a new voice assistant, but more imminently for 2025, going into next year, the focus is all about the smartphone. the first device you will see from apple in that space is is what is known as a home bot. it is between six inches and seven inches, it looks like a squared ipad, you put it on your wall like you might put an adp security system, and you control all of your smart home appliances. for apple, that is the hub at the center. when they want to do is create an ecosystem of accessories around that hub. they have third-party accessories, but they are working on a few internally, and one coming to your point, is a new smart doorbell. this competes with ring and nest and other companies. it would have faced technology. that is the same technology for unlocking your iphone or your ipad. the idea is you can scan your face when walking into your

house to unlock your door just like you would to unlock your ipad or iphone. and like a third party, you can unlock that lock for smart home accessories. what does the arms race look like here, mark? if they are trying to compete with nest and somebody has already fitted their house with saying nest, the heating systems across their homes, why would they get a security system from apple? mark: apple has actually cooked up a solution to that in a partnership would amazon and google. there is a new standard called the red which helps devices from different companies for the smart home be interoperable and work closely together. then there is another protocol within the ecosystem called matter which is one of the language they all speak and connect. there is going to be a future

where apple, amazon, google, and smartphone devices from other companies are air going to be able to talk to each other. you will have a home, apple would prefer all of your smart home equipment is from them, but you could theoretically have a home where you are mixing and matching different hardware from amazon, google, apple, and they will all run on the same hardware to be interoperable so they will work together. that limitation to your point exists today but it really won't in the near future. katie: i want to talk about how investors are receiving this. apple shares hit an all-time high on friday, shares are up 33% on a total return basis. it is hard to look at that and say investors are unsatisfied. is this what wall street and of course the investment community is asking for, what do they want to see from apple in 2025? mark: the investment community is asking for big improvements in ai, but if i'm going to be

honest for second, it doesn't feel like the investment community cares or understands how her from behind apple is in artificial intelligence. the apple store is tied to how many iphones and hardware products they sell. at this point, it doesn't seem like consumers care too much that apple intelligence order -- is two or three years behind what we are seeing from openai, microsoft, other companies, even the ai engine from meta. investors don't care. investors care about the hardware. the hardware is not selling as well as perhaps it is anticipated but enough to buy the shares. apple investors have to understand there is no major hit coming from apple at this point. there is no iphone-sized next ballgame before apple. they have to understand that. sonali: aren't there a camp of investors that believe some of these other items are a distraction? if you are making laptops, what is the point in making a

doorbell? mark: it's not a distraction because in terms of revenue growth, you need a big new category. let's break this down mathematically. let's say investors, when they have dreams at night, they want a new $100 billion a year revenue category from apple. a single product. that is not going to happen. but they need to get to that dollar amount, apple knows this. the way to do that is to stack them. stack a bunch of smaller bets. so you can stack augmented reality with the smart home with a i hardware, with the doorbell, with other initiatives, foldable ipad coming in a few years, expanding the iphone models over the next three years. in terms of growth, it is adding a bunch of smaller bets, stack them up, like a skyscraper, and that is how you will get that $100 billion a year growth. sonali: thank you for your time.

happy, mark gurman. amazing reporting here. what i would really love is apple or another existing technology provider to control my car. [laughter] katie: i don't know, that feels kind of dystopian to me. i just want a dumb phone. well, i want twitter on my phone. i want my car to not have a brain. in any case, should we talk about these markets? we have green on the screen. take a look at the s&p 500, even looking at a half percent gain, evenly split when you take a look. we will see what happens between now and 4:00 p.m.. not a lot of volume. anything could happen. sonali: so far what has happened is we took that frown upside down, i suppose. we were in a down day but now up. a smooth way to end the year, just a couple days left, katie. one that was full of surprises. this has been bloomberg markets.

have a happy holidays. stick with us through the close.

>> happy monday, happy christmas

before christmas eve. i'm alix steel alongside vonnie quinn. you were on vacation for two weeks. welcome back. vonnie: i had to use up my days before the end of the year. five more trading days before the end of the year but we are essentially done right? alix: the s&p 500 up 5/10 of 1%. can we trust this price action when volume is so light? vonnie: last week was heavy volume but we are down 70% from friday's volume which will tell you where people have gone for the rest of the year. treasuries reacting to the higher for longer schema. bear in mind, if you had started the year where we are now and done nothing, nothing will have changed in your portfolio. alix: and really when you think

about it, usually you go on vacation and come back and everything is the same at this time you did miss stuff. the fed higher for longer scenario playing out. the 10 year yield up six basis points. you would not have expected that a few weeks ago. vonnie: i was in berlin so i was able to get service and i was sneaking a look because it was too fascinating. wednesday, thursday and friday in particular, you saw so many changes and at the end of the year, we are pretty much where we were last year. another 10% or more for the s&p 500. alix: were you on your terminal on vacation? vonnie: i was. alix: that say fine. we will get you updated on all of the markets and economic data and we have consumer confidence today. also we have some ceos talking

about demand and tariffs and what we are doing there. let's get a broader check on what we are doing in terms of fixed income. recent mcdonough is fixed on comes strategy at community bankers trust services. is this what we should keep expecting? >> thank you so much for having me. this is a perfect environment for that steepening trend as we have seen with the possibly new fiscal policies, with the new administration and chatter about inflation, serving to push up longer-term yields but two-year yields are locked to fed policy. those yields are going to continue to possibly come down, even well longer-term yields are going to be moving up. bear steepener is a moneymaking

trade 2025. vonnie: how many cuts are you assuming? i assume you are anticipating a pause in january. karissa: we think that two cuts is a reasonable place to go. keep in mind this percentage point of cuts we've had since september, that is the biggest set of cuts we've had in the noncrisis environment ever from the fed. this is a new territory, working on curving the inflationary environment post-covid. i think it is still reasonable to look for two but post 2025, there needs to be more convergence between fed expectations and market expectations because the market thinks the fed is done after that but the fed has more cuts priced in. alix: so you think the market view will be right and the fed will come to the market, hence the steepening trade? karissa: yes.

we think possibly two more and then done. the data needs to speak for itself, so that is what we are looking for going forward. vonnie: do you anticipate any kind of surprises when it comes to growth or any of the economic data or inflation data? karissa: inflation coming down, we seemed to have gotten stuck at the 2% level. we saw pce coming down but if you have the average over time, pce is still in the mid to high 2%. we still need to see that continue to come down for the fed to be comfortable with another couple sets of cuts but there are wildcards that could happen. inflationary policies in the new it administration. it is not clear to what degree that will pass. that makes a lot of sense for the fed to pause right now, and then see what happens after

january. alix: and really like after january 20. the bank of canada today, we got the minutes from their last meeting talking about how the uncertainty with the u.s. is definitely causing? 's when it comes to the loonie -- is definitely causing question marks when it comes to the loonie. they did look a potential tariff policy for that december 18 meeting. how do you look at it? karissa: i think there has been a real change and we are going back to the way things used to be but back in the greenspan days, he would chastise fiscal policy makers. this is too inflationary, etc. powell has moved from that. he has kept to the rate setting and not really dipped his toe into a pining on fiscal policy. i think we are seeing a return to that.

i think that last meeting must have been extremely contentious, the way the dot plot and expectations changed. the fact that that expectation of fed policy has fed into policymaker actions and forecasts. vonnie: we are really at the last mile here and it has proven to be difficult. karissa, characterize the year for us. was it a disappointment in the end, in the sense that we are where we were at the beginning of the year? karissa: it was a tough year. we thought we finally had -- we talked about the curve steepener, more of a bull steepener. we thought we were possibly headed towards quite a bit more slow growth, a possible recession when you have a curve as positive again but we ended up right where we began. as of today, bloomberg was up 1%

or something like that but it was a real roller coaster for not a lot of return. this is something that even in an era of higher neutral rates as we have seen the fed is resetting possibly higher, i think lower returns and fixed income in general is something we need to get use to as we try to figure out to what extent fiscal policy is going to impact growth and therefore rates. this is how it is going to be. alix: corporate credit, where is the sweet spot or where in the credit market do you like? karissa: excellent question. generally, corporate credit is too expensive. we like the systemically important banks. we think they will benefit from deregulation environments and the steeper curve as we discussed. finance spreads do carry a

premium. a few more basis points. that is where we would look. we also like mortgages. alix: you like mortgages. -- vonnie: you like mortgages. given that you are only anticipating two fed cuts for next year and it takes time for these things to trickle into the real economy, to those mortgage rates change -- do those mortgage rates change? karissa: it's a question of who is buying the mortgages and mortgage paper. the spreads remain compelling. we think that supports demand for mortgages from banks so that is part of why we continue to be positive on the sector. alix: thank you so much for joining us, karissa mcdonough, fixed income strategist, community bank trust services. let's get more on the currency

market in particular because if you have that bear steepener and higher yield in the backend, the dollar does really well and you can see the dollar index having a tremendous couple of weeks. -- is the bloomberg macro strategist and he joins us now. vincent, is the path of least resistance a stronger dollar but what does it break? vincent: it is going to break the yen unfortunately. when you look at yields in particular, this will come out on the block in about an hour. the last time we broke for .4% on the two-year, as a higher yield, yields went to 5% and that took the dollar 14 figures. we could see a dollar-yen around 1.72. i think it is a realistic possibility. when i talk to traders, everyone is scratching their heads in

terms of what they think interest rates are going to do next year but the reality of the situation, the majority of people really don't see an aggressive fed rate cut side -- fed rate cutting cycle at all. if anything, they see inflation picking up with potential tariffs and even without the tariffs, it is going to be a spending administration regardless of what musk does and we are going to see higher deficits and tax cuts. it is just not an environment where you usually see rate cuts happening. vonnie: if we did get something like that, a fed -- a yen above 1.70, that is 24 figures of the boj within just a few months. would you be able to handle that? vincent: they've handled worse. it depends on whether or not it is orderly, which it likely will be. i don't think the markets are going to attack the boj and try to ticket there, and a very aggressive or short space of time.

they are likely to do it sporadically and the boj tends to allow yen weakness or allow fluctuations in the currency when it's done over time and orderly. it is when it gets maddening when they intervene. i'm not saying they won't intervene. they probably will, to smooth things out, but realistically, the one central bank can't change the course of a currency. it is going to need coordinated intervention if that is what they want, and i'm not sure the other banks will participate in that effort. alix: what about the emerging markets? clearly brazil has been struggling. take a look at how many interventions they've had. what breaks on the e.m. side? vincent: brazil is definitely going to have some struggles. it is going to be interesting to see how mexico's peso performs to see what the trump administration has in store for

mexico. when you look at north america, you have to favor canada over mexico as much as the incoming president has said he wants to go after them with tariffs. use more likely he will do a deal with canada than with mexico. mexico has been a source of contention for him for some time. the mexican peso is going to have some issues. vonnie: what about in terms of correlation now that we are coming to the year-end? what can we say is new about correlation? the bloomberg dollar index really strengthening. bitcoin just above 9000 -- $93,000. gold is off of its highs but very close. what can we say relative to the u.s. dollar? vincent: you will probably want to like gold and bitcoin. while the dollar is going to outperform in the short run, if we do see tariffs, if we do see

the budget deficit increasing, you will see deterioration in the current count and that tends to weigh on the dollar. if we get inflation, even though we are going to see higher rates, you are likely to see lower real interest rates and that will eat away at the dollar advance as well. at some point after the first quarter, this bull rally will stall. we very likely could see the dollar you -- dollar lower by year-end. alix: always great to speak with you, that is vince cignarella of bloomberg news. members of the teamsters joining the amazon walk out in queens this past weekend. we will talk about amazon next. this is bloomberg. ♪

vonnie: welcome to bloomberg markets. we do have a rally on our hands. alix: santa claus rally but like

a tired one because volume is still light. s&p is up 5/10 of 1% and the nasdaq is up by almost a full percentage point, but it is not very broad. it is all about tech and chips leading the way. vonnie: exactly and it is a relief rally after the federal reserve decision last week really spun out of control inside the market. alix: let's take a look at amazon, up by about half a percent, but we are seeing continued targeting by the teamsters as strikes really expand. amazon workers, jfk and l -- and long island joined the strike. to get more on this, spencer sobered joins us from the seattle office. spencer, walk us through the scope and how it has changed. spencer: this is a very tricky thing to assess because the teamsters have more than one million members and they can

draw people into protest and picket outside facilities and that can have some affect alone, if they encourage delivery drivers who don't work for amazon directly but are members of unions to not make deliveries and not cross the line. the big question is how many employees are participating in that is where amazon is pushing back and saying it is mostly outside agitators, but they have been picketing outside several sites in several states, so they have good geographic distribution. does this just get into the psyche of the shopper around the holidays or are people going to say i was going to order something on amazon but maybe i should just run to the store in case this strike is creating disruptions even though amazon says there have been no disruptions. vonnie: has anyone done the math to tell us what each next marginal day of strike could potentially cost amazon given the teamsters have 1.3 million

people in their ranks? spencer: i haven't seen anyone try to do the math on that. that'll be something tricky that we likely would not see evidence of until after they report earnings next year. alix: what do the teamsters want? spencer: the teamsters want amazon at the staten island facility to come to the negotiating table because that is where the workers did vote a couple years ago to form a union and amazon has not negotiated with them yet, so that is a big thing. they are trying to organize other sites, trying to draw attention to this movement, and a big goal of this is to make workers feel empowered, that their labor means something, their decision to wake up in the morning and go to amazon and work for amazon has some value if enough of them band together and say we are not going to do it. that is the only leverage they

have and that's an important thing because there has been this labor agitation for years now and it gets tied up in the courts and the national labor relations board and it moves like molasses once it is at that stage and the teamsters want to show workers you can have a real taste of immediate results if enough of us stand together. that seems to be what they are hoping to do, get some kind of solidarity within the rank and file in amazon. alix: the -- vonnie: the teamsters are targeting several last mile delivery warehouses in georgia, illinois but also around here whether whether has been freezing. -- where the weather has been freezing. it is like elections where it depends on how many turnout. spencer: these are people who are delivery drivers so they are not like us sitting in a nice comfy office. they are pretty used to the co ld. asking a driver to join the

picket line when it's 20 degrees outside, that is not really a factor in preventing them from coming out. maybe it prevents some of the look you lose -- lookie-loos, but i don't see the weather affecting decisions to come out. alix: 12 degrees here, like 20 was a heatwave but now we are at 12. spencer, how does this wind up playing out? who holds the power in this which will indicate how long this goes on for? spencer: the balance of power has clearly been amazon and the biggest thing benefiting them is the churn in their workforce. people don't really see amazon as a full-time career and i think that is the biggest challenge for the teamsters is they have a lot of members who work for companies like ups and have good jobs and benefits and

they spend decades there, whereas amazon, you don't see that kind of tenure and if you are trying to recruit people into a union movement and they don't see themselves being there very long, that still gives amazon the power as long as they are constantly recruiting people and turning them out. it is tough to get a union movement going in a situation like that. vonnie: spencer soper, thank you so much. another company making news this holiday shopping season, nordstrom. the nordstrom family announcing they are joining forces with a mexican retailer to take nordstrom back private. shelly banjo in studio. the markets had a few hours to digest this. nordstrom shares down 1%. how is this being digested by investors in nordstrom? shelly: they've had quite a while to digest this, so the

stock has gone up in recent weeks. right now it is trading at about the price that was on offer for the take private deal. in general, people think this will be good for the brand of nordstrom in the sense that it will allow the family who owns nordstrom to focus on getting the retailer back on track without having to worry about the public markets but it is a huge discount from where it was a number of years ago. the stock has gone down quite a bit over the last five years and back in 2018, the family made a similar offer but much higher to take it private and this represents a steep discount to that. alix: what is the problem with nordstrom? why do they have to go private. shelly: it is a problem in general with department stores. department store sales have pretty much hlaved it -- halved in the last decade because more and more people don't see a need

to go into a store if you can buy everything you need on amazon. it used to be some of the higher end brands wouldn't be caught selling on amazon. that is no longer the case. you can buy anything basically on amazon. you don't need to go into some of these stores. a lot of these department stores forgot the whole in person shopping experience. the reason you go is you want that service and that requires people and labor and paying attention to the things your customers want. vonnie: do we know anything about the family or who might be put into positions of power within the structure? shelly: members of the family are running the business right now, the ceo and chief brand officer. the family goes back over a century in the company. it's been in the family for over a century. this time around they have a partner, this company which is a mexican retailer that is joining

forces. nordstrom will take a 61% stake. this company had already owned 10% of the shares but it is interesting that they are teaming up with this mexican retailer to see if together they can turn it around. alix: does this mean that nordstrom rack i will see more discounts or less? this is the real news we need. they are kind of expensive. shelly: nordstrom rack had something great going, competing really well with t.j. maxx and others that brought people in. all of a sudden they got rid of their big brands that were drawing people in the first place and it was cheaper goods and customers really recoiled at that. the last couple of quarters, they seem to be getting better and the hope now for this company is can you actually provide stuff that people want to buy? vonnie: some are doing it right and some aren't, so it is a case of putting the right business

plan into action. shelly banjo, bloomberg managing editor for business in the americas. nordstrom's up about 30% year to date, down 1.7% as this news has been percolating for a month. we will dig more into the year-end markets. a partner at kellan and family offices will join us with his market outlook for 2025. all of those outlooks for 2025 see the s&p 500 higher, by more than 10%. we will be looking into that next. this is bloomberg markets on radio and television. ♪ i graduated from southern new hampshire university. i always said i would go back to school when i had time. i went on our website, i spoke to an admissions counselor. we applied right then and there. that's when the journey really begins. going through the program, having the support that i had, really helped me understand what i can accomplish. and i learned this just

by taking classes at night while working a full time job. the resources at snhu were incredible. i think if i was back at the beginning, i would choose snhu all over again.

vonnie: welcome to bloomberg markets. on this day of low volume with good intentions, it is fair to say we have stocks rallying. we are finishing on the same theme that we started the year. alix: meta doing well and amd

along with micron. and rosenblatt securities highlighted them as one of their favorite stocks for next year saying in particular it would be a topic for the first half of next year in its position with artificial intelligence in the midst of the growth results. vonnie: and when we look at treasuries, we see a continued shift. the 10 year is up seven basis points. many asking themselves will we see it go down in the first half of the year. we will stay with the u.s. economy. san francisco fed president spoke on bloomberg on friday discussing her take on the latest cut by the fed and how the central bank views the economy as we close out the year. >> it is always about the data for me. we don't know what the incoming administration is going to do. new administrations always put a

slate of programs together and it is -- and as a policymaker i want to see the net net of the affects. i was focusing on the incoming information and what it means for the outlook. today i feel like we have policy and a good place on the economy is in a good place and we are prepared for whatever comes before us. >> what happened in the last three months that caused the fed and yourself to be concerned about the stickiness in inflation? >> the data happened. look at the data, two things have occurred. the economy remains in a good place and the risks to the outlook or equally balanced between risks to inflation and risks to employment. we adjusted policy. we adjusted policies somewhere to ensure we had a balanced labor market that continues. and then the data on inflation came in a little slower.

i would not say sticky or stalled. i would say the process has slowed only two what we wanted but it is a typical pattern. it is bumpy. you go from 2.5 to 2.8 and it is a bumpy path. >> if it was stickiness and i'm looking at the cleveland cpi which has moved up from november to december, there was a question -- why did the fed cut at all? >> i will reassert that it is bumpy. earlier we had two months of data and people said, it is re-accelerating and we had to come down. you cannot focus on one or two months. what is important to me is we needed to recalibrate policy. it was a close call. was 75 enough to be the recalibration that we were looking for? or did we need more? ultimately i determined that they 100 basis points was the

right level. now i feel like we have the recalibration phase behind us and we are into the next one. we are looking at incoming information and we can return to a more typical pattern of gradualism for the fed. we have practiced that. with uncertainty you adjust the policy rate and weight watchful he. you wait to see what transpires and then make adjustments. >> from september the it -- the expectation was that you would be cutting going into every markets. now, what are the criteria that you need to see you to decide to go back to cutting rates? >> as you saw from the sep, the median projection is two rate cuts year. it is not every meeting but two.

i was comfortable with the median. we have to remain agile. the thing that got us here was being resolute to achieve our dual mandate goals, price stability was our focus when inflation was high. employment has come into the frame so we are focused on both. we have to be agile. the world is uncertain so we pencil in two and as the projection gets further from when we made it, the accuracy of it falls so we will continually take in more information, consider it and every meeting, and your listeners should think about this, every meeting is live from the standpoint that you are discussing and debating on thinking. but my projection is that it will take many fewer rate cuts next year than we thought but i will watch the economy and see if it works out. >> when we went into the cutting cycle you were up front saying you were concerned about the labor market and we needed to make sure we did not lose the

gains we had. now, at least coming out of chairman powell's press conference, it sounds like the focus has shifted to inflation again. are you comfortable with that as the new phase he is talking about? >> i think about it as a new phase as well. i would characterize it differently. for a long time, we were focused almost entirely on inflation because the labor market was robust and inflation was 7, 6, 5. and then the labor market came into the frame. it doesn't mean we turned our focus to it totally it just means that after a long time of focusing only on inflation, we now had to focus on both. policy is already in the position that it is supporting both. when policy is restrictive it will continue to bring down inflation and will do so in a way that doesn't strangle the labor market, break it and give people lower in -- lower

inflation and then take their jobs. we are working towards the soft landing. alix: mary daly speaking through lisa abramowicz and michael mckee on friday after the fed decision. she is of the camp that it was the past inflation data that led them to cut but then you have to think about what is going to be the case next year in terms of tariffs. they updated their inflation forecasts and still cuts. vonnie: and this is still before the inauguration and whatever comes after that. no one knows the cadence or magnitude of any policy changes that might come into effect. some are worried saying the fed is showing a persistent lack of strategic policy moves. alix: that is what happens when you are super data dependent. our next guest says the key to leaving the markets is to focus

on over stories like artificial intelligence. i don't know what that means. thomas rayman joins us now in studio. thank you for coming in on a 12 degree day in new york. no happy -- no easy feat. what does focusing on over stories mean? >> investment over stories is something we borrowed from a recent book. it is like a canopy that surrounds the markets and dictates the outcomes. in -- and ai is one of those. ai is the starting point for what to expect. vonnie: why is that? haven't we had enough of that already? isn't quantum computing next? >> in our view it is evolving. it started with ai producers and then ai consumers and now ai proof of concept.

what we are seeing in the last year and a half is -- with the ai over story is you see it mentioned more and more in earnings calls. it is not just the mag7 embracing this. and they have the lead, they have had their valuations balloon. we are seeing it across the concept of ai and embracing it across the entire corporate landscape. one example is reddit. reddit is not an ai darling, it ipo'd this year and had a threefold gain in their price. they just earned a profit for the first time this year. how did they do it? they did it through ai, their user base is growing with 70 million users and it is growing because they are using ai to sell their content and change it into different languages. for the first time ever, reddit,

a name not often synonymous with ai has turned a profit in the fourth quarter. it took them 20 years but ai was the fulcrum point. you see it manifest in earnings. earnings through the third quarter, the s&p, 8% year-over-year growth. outperform. 77% of the companies outperformed. 34% of small-cap has year-over-year growth. you see it broadening into names like reddit. and this is the over story. ai producers, consumers and now proof of concept. vonnie: after ai, what else do you have as a theme or an over story in this market? it looks like there are no new ideas at the moment. >> monetary policy -- that is another one and we are still

seeing a dovish lien. the fed has to lean dovish for a variety of reasons. one is their credibility. they said not long ago that their policy would shift. for them to jump back after a few data points, that undermines their credibility. monetary policy is a centerpiece to how financial markets operate. that is one. number two is there is a $36 trillion problem that is the federal debt and a lot of it has to be refinanced at higher rates. that is something that has to come into the fed's calculus and is another reason why they should lean more dovish. and the third part is we do live in a two-tiered economy. the lower income strategist are still wrestling -- the lower income stratus are still

wrestling. the average credit card rate right now is 20% or more. they have cash balances that are smaller than that. we do have this two-tiered economy that has to factor into the feds calculus and how they proceed forward with monetary policy. all of those factors combine having us lean into a more dovish view. and we don't know precisely how this will play out over time. the consensus is that the fed will cut rates may be 25 or 50 basis points by this time next year but still, that is our anchor point for our decision-making. it is a somewhat more accommodative fed over time. alix: does that make you bullish on mid-caps and smalls? >> that has been one of our multiyear themes. over the last few weeks you are right, it has been a little choppy. if you look postelection, it has

a jolt. and for a variety of reasons. one is valuations. the small-cap relative to large cap from a 20 year relative discount. a 20 year relative generational discount relative to large-cap stocks will not unwind over the course of days, weeks, months. it is a multiyear resetting of valuations. and you have more naturalistic policy coming in starting january 20. and three, if cost of capital comes down, that favors small-cap companies which are predominantly lending at -- using floating-rate instruments. vonnie: how much are you thinking -- we don't -- we have some idea of the policy aspiration late for the incoming

administration would be. >> there is some tried and true -- we are living in a digital age with analog concepts that don't make a lot of sense. adherence to diversification is something that we routinely embrace. but it is time. a lot of our clients have decades long time horizons. they don't have to think about the vagaries of the market. the day to day shifts. they don't have to have a hyperactive mentality. and if, over time, you look at the s&p, there has never been a 20 year rolling period that it has been down. alix: thank you so much for joining us. thomas raymond, happy holidays. more coming up.

the ipo market will be hot next year. this is bloomberg. ♪

vonnie: i am vonnie quinn and welcome back bloomberg markets. alix: i'm taking a look at the s&p, around the highs of the session but led by tech. services and tech are the best performers. materials and staples are weighing on the s&p. venture global is liquefied natural gas exporters and they take natural gas, they freeze it and ship it to customers. it is a private company but it is enormous. jp morgan has a potential market cap at about 100 billion dollars. there is controversy. they filed for an ipo on friday. it could be one of the largest

ipos so far this year. i wanted to dig in to what that would look like a with the incoming trump administration. bloomberg senior markets reporter is with us, bailey. they did not give us a number which was a bummer but walk us through what we know. >> have a little patience. they will detail when they launch the filing how many shares they are selling and what that potential market value could be. we were talking to sources familiar with this in the fall and they are penciling and north of $3 million. that would be among the largest deal we have seen this year and even going back to 2023. 100 billion dollars includes debt so it is money on the equity value. but it is going to be one of the bigger deals that investors are expecting to see start marketing

quickly in the new year. vonnie: we know a lot about lng and the complex in general. this is a fascinating story because the founders were outsiders in houston and people didn't think they would be able to accomplish what they have and now there is the potential for them to be among the world's largest lng companies. alix: a little known fact -- when you start a facility, you -- you build a train and then you can export. what they did is they decided to put a bunch of trains online at the same time and become that and manufacture them in florence with baker hughes. it was a cut and paste. you create it and plop it down in louisiana and it is up and running. i am simplifying its. vonnie: but it sounds like an obvious thing to do. alix: and they went and

negotiated with suppliers. i will pay you three dollars for this bolt. a lot of that went on because they were unknowns. bailey is looking at us like that can we move on to the ipo market? what else do we know about the potential ipo market for next year? >> a lot of names have filed confidentiality -- confidentially. we are circling a number of names in the tech space. they have been preparing to file . chime also getting ready to go public. we have a number of companies that are far bigger than what we have seen going public and circling the first quarter of next year. vonnie: any notifications of companies that might have pulled their ipos for some reason? >> we have seen a number of

companies resetting their expectations. 2024 was written off around the elections. companies opting to kick the can down the road and go for 2025. the question going forward is do we see this go forward. on the chart we see a number of companies raising capital that we had not seen in the last few quarters. the question is -- if you are able to stay private like openai, what is the reasoning to go public? alix: i wondered --what will trigger the ipo? will it be used as an exit strategy for private equity or company saying -- i want to go public? >> private equity has a lot of companies that want to go public. we saw that playing out with a few firms in the last few months. micro is in the semi space.

it is a platform that the clock is ticking -- the clock is ticking. anchors are saying, get the puck on the ice. but for the few companies that are able to stay private, time is not of the essence and they can continue to wait it out. we are seeing the expectation that private equity will go quickly in 2025. alix: bailey lipschultz joining us. another area of the market is real estate stocks. maybe 2025 could be the year for a stock picker if you are investing in a rebound -- in re eds. the outlook is still questionable and murky particularly if the fed is going two out less than we thought that is going to cut less than we thought -- if the fed is going to cut less than we

thought it was going to. >> we have seen a massive pullback especially as they have been grappling with the high interest rate environment. looking at 2025, they are seeing a bit of a boost. this is due to a divergence between higher quality properties versus lower quality. i spoke to sources and analysts are positive on new york city in particular. slg is the best performing office read in the index. we see a big pickup in park avenue, an area that we saw blackstone and others flee during the pandemic. vonnie: huge winners and huge losers in this phase. we see some go out of business? >> that is a conversation that is ongoing. smaller private that people put

a lot of focus on especially if they are thinking about access to capital from small regional banks but publicly traded reads do have a lot of access to capital. they tend to have a bit of the more trophy asset. what are the properties considered class a buildings, we see that in terms of publicly traded reads. you won't see property -- those shares are down more than 80% this year. you will see other companies that are soaring. alix: here is my confusion. i feel like every real estate person i talked to is like -- class b office space is in great. but i have yet to talk to the other guy. who is the other guy? >> when you think about class a buildings, it is the building that is attractive. maybe it has a gym, floor to ceiling windows. but then you have other

buildings that are older and they have not had any renovations and updates. you will not see tenants clamoring to get into buildings like that when they are trying to draw their employees into newer buildings. vonnie: it is fascinating. a lot of the stores i see opening up on the major streets of new york, whether they are pizza stores or cupcake shops -- it makes me curious, will there be more coming into existence given that the fed is not going to cut as much now? >> that is interesting. the proximity and where the buildings are located. is there a shopping mall? people coming into the building, can they get lunch around the corner? that all feeds into what is considered to be a high-quality building. you do see reit's getting a lot

of capital. still a beaten-down sector but there are bright spots. alix: do we know what is up with all of the cupcake shops? vonnie: and ice cream stores. i'm not complaining. it is nice to have one every five seconds. alix: there used to be a lot of frozen yogurt places and now i think they have gone away and are replaced i and cupcakes. -- are replaced by banks and cupcakes. thank you for joining us. let's take a look at what is happening within the markets. we are around the highs of the session. check continuing the outperformance. vonnie: and not just tech but the semiconductors. you look at the semiconductor index, three stocks that are lower and -- i would have thought by now the market

might've digested that story and moved on but i guess there is still value to be had. we will see come earnings season -- and it starts in the middle of january. and we will get another fed decision, probably a pause again in january as well. two more hours of bloomberg markets to go. alix: a lot more to talk about. we get a view on tech. ♪

alix: happy monday and happy christmas christmas eve eve. we are about an hour away from the closing bell in the u.s. and volume is light but the s&p are around the highs of the session led by technology. small caps down 5%. mid-caps struggling to get a bid . equal weighted index going nowhere fast. it is all about tech. vonnie: the nasdaq is doing better than the s&p 500 bengs to the semiconductors stocks. treasuries we are seeing a move. the 10 year is at 45926, up more

than seven basis points. the 2 year yield has a three basis point move. the economic data perhaps not as good as expected but not terrible. mom alix: i should point out the 2 year yield auction, it went ok. we also get fines tomorrow so a lot of supply. vonnie: let's turn to the latest update on meningeal -- the 26-year-old's case. he pleaded not guilty to murder charges for the shooting of the united health care ceo. talk to us about what kind of a defense we are expecting the defendant to have. >> one of the main issues that his lawyer raised was whether

his -- her client was getting his right to a fair trial. we all saw images that circulated on social media and news outlets last week when it came to his arrival in new york city. he was handcuffed and wearing an orange jumpsuit surrounded by heavily armed police and even the mayor was walking behind him. that was the image his lawyer said was a reason to believe that he may not be presumed innocent in this case. she called the spectacle unnecessary and political. she complained to the judge about the right for a free -- fair trial for him. this seems like it could be one of the routes they might take -- this is not fair to him. the defense team is starting to build their case now. his lawyer also asked for a speedy desk everywhere all of the evidence is going to be presented across schemes and that is when this is going to get started.

there is an understanding how of how much evidence prosecutors have. they say they have a mountain including a gun, the fake identification and even the manifesto. these are all things he will have to defend himself against. alix: talk to us about how the state and federal cases are being handled. i assume prosecutors will want to avoid double jeopardy. how are they managing that right now? >> this is not uncommon in the legal world for state and federal authorities to bring charges. one example i can give to you right now is the police officer that shot george floyd. he was facing state and federal charges. it is not uncommon. the two sides choreograph how this will go and play out. in this case we heard prosecutors today say the state case was going to be the one to go to trial first so they get priority in this case.

federal prosecutors will be standing in the background and looking over the case to start. that will go to trial first. and those charges, the state charges, he faces in prison without the possibility of parole for first-degree murder charges. that is the first thing he will have to face. and the federal charges will come later. vonnie: talk to us about the support for the defendant at the courthouse and in general in the ether and whether that might impact proceedings in some way. >> i mean, there was as expected a lot of supporters outside the courtroom today. you could hear people calling "free luigi" and people were coming in support of this shooting against the united health care ceo. we have seen that play out in the last few weeks with a lot of people targeting their anger against the health insurance industry and praising him as a

full hero. this is not necessarily going to play out in the case but i think his lawyer is pointing to that as something that is worrisome and something that might become an issue when the jury is being selected in the case and whether the jurors will be the ones that are going to be deciding the case and whether they will have any issue with the health insurance industry. all those things will play out. it will be a murder case where you are seeing a lot of support for the defendant. alix: but in a weird way wooden those jurors help him? >> absolutely. that is where this is going to fall. how can the jury selection for this case play out in a way that is fair? either side is going to try to get a juror that will help them in this case. for luigi mangione there will be

a lot of people who might come out as vocally supporting him throughout the jury selection process but that doesn't mean the other side will agree to it which is how the selection process plays out. all of that will happen as soon trial starts. i don't know how soon that will be. there is no indication. we are still in evidence gathering mode. those are all fair points to raise. alix: thank you so much. let's move to bank of america ceo, brian moynihan. they had david westin at their offices last weekend they went through a bunch of conversations about politics as well as what the capital markets environment looks like or 2025 and what about u.s. consumers. we know it is bifurcated but what that looks like is something they discussed. >> the question is if you lower

taxes and use it to reduce the debt, how stimulative all those activities be? and that is where the treasury has to figure things out. he is a markets oriented person and knows if it gets too far out of line -- we just ran the last fiscal year in an operating deficit which equals the entire gdp of the country of australia. if we don't get this debt back in line, we don't realize the impact. one site has to be governed with the other side to offset it. consumers are spending. it is out 5% over the last year. that is good and solid and not overheated. but it came off the lows this summer when i was nervous they would let the consumer drift too far down. between interest rates being cut a little bit, the enthusiasm around the election, the markets

being up, consumers are spending more which is good for the general economy. we should not over stimulate but get a good core economy going with good the regulation activities, good tax policy. these are hard things they're worth working on. >> you know so much about consumers. how is the consumer doing? they are spending but numbers suggest are down. >> if you say that the levels of consumer credit card debt are bubbling over, it is five years later. the economy is 30% bigger if you look on a relative basis, it is still far below where it was. and credit was good then. if you look at the default, 2019

was a 50 year low in credit card cost it -- at our company. we have to be careful in what we compare things too. they feel a pinch from higher prices. part of that is real and some of it is mental. if the price of eggs double it is hard to tell someone it will be ok. they will never agree with us. they would not be spending money the way they are in a rational way at 5% year-over-year in the last couple of weeks if they did not feel confident. and it all comes back to one thing, 4.1% unemployment rate. what can disrupt that? a lot of things. but right now that is the condition of the american consumer.

they are employed. wages are going up. they are feeling a pinch of inflation. they are working through that and trying to have a good holiday season. what would hurt that is unemployment going up. but next year -- our team has it at 4.3% for year end next year. for most of our careers we would be jumping over the moon if we thought inflation would be 4.3% or less for two or three years in a row. vonnie: that was david westin speaking with brian moynihan. let's continue the conversation on markets. talking about targets for next year. let's bring in the chief investment strategist at janney montgomery. as we come down to the last few sessions of the year, do we see more of a return next year? what is your target on the s&p? >> i think we get more of the same. at the same time it will be an

even more uneven process and investors will have to strap in and experience volatility between now and the end of next year before seeing what we forecast. like you, it sounds like hurting a little relative to other strategists. we penciled in 6600 on the s&p. expecting more muted gains, certainly more than we had the last couple of years. it is unrealistic to expect another year like this. we still have investors -- rates, inflation, any number of different things that lurk out there. alix: what do you like and that call? is it all about tech, small caps? >> so much is dependent on the

small-cap rally as to where inflation and interest rates go. we know it is kryptonite for a company stocks. we had a bit of a tease with the small-cap rally that has given back pretty substantial gains the last few weeks. ultimately, if we see a more benign environment, maybe not substantially overweight but not rates that are trigger-happy and moving up in periods that would set the small-cap rally back. i think we will see good returns. the earnings profiles look particularly good but otherwise i think unless we have some disruption in the equity market where you have a more significant, sustainable rotation into cyclical sectors i still think it is going to be tech and tech related names that continue to be leadership. we know they rotated out of leadership in august only to

come back with a vengeance. a similar repricing has gone on especially with some of the magnificent seven names recently. making them more attractive than they were even a month ago. vonnie: the vix spiking to 28, it did that give you any pause as to how fragile the market might be? >> any number above 25 is a little spooky. i think it is indicative of the fact that valuations are rich. 22 more times than the s&p 500 leaving the market vulnerable to news that is not necessarily bad but less good than expected. if you look at the surprise index, it is weakening considerably over the last month which is indicative of expectations that are not bad but not strong enough. alix: thank you very much. the u.s. conference board numbers slipping to a five-month

low. we talk to someone behind the numbers, dana peterson will be joining us. this is bloomberg. ♪

alix: happy monday and welcome to bloomberg markets. you are kicking you off to a shortened a holiday trading. volume is thin but equities are around the highs of the session. vonnie: and that is with the nasdaq rebalancing. some stocks coming onto the nasdaq like microstrategy -- it is the last monday of the year. plenty going on. the nasdaq is -- at its highs it was up 1%. now .6%. alix: the russell not keeping pace. it is not a party for everyone. a lesson in life. vonnie: not all the time especially those holding

bitcoin. down $93,000. -- down $93,000 a coin. in a survey by the conference board 46% of respondents expected tariffs to raise at their cost of living. joining us now is the researcher behind the report. i mentioned those numbers. the present situation was fine coming in at 140.2. but expectations are down almost 11 points, down to 83.1. how concerned should we be? >> the present situation was only a tick downward but expectations fell backward after several months of improvement across all three components. business conditions, what they think about employment six months ahead and incomes. alix: was not shown on party lines at all?

i'm wondering because a lot of it was led by the tariff increase expectation, right? >> we did ask a special question about what consumers were thinking about in terms of policy for next year. many of them are concerned about tariffs and whether they will be inflationary or not. in the write-ins when we asked consumers what is the most important thing that will impact the economy, prices went to the top as well as inflation and not after that was the elections, presidents, and the word "terrorists" surged from zero to something notably positive. consumers are paying attention to politics. and they are curious to know what that will mean for their bottom lines. vonnie: it is more fodder for the federal reserve to continue to focus on or refocus on inflation again as opposed to the unemployment part of the mandate which it looked like

they had been swerving towards. >> it seems like something fomc participants, some of them according to chair powell, are looking at. it did fold in their expectations of what policy might look like next year and the impacts on the consumers. we have the debt ceiling rolling around. we have the tax for 2026 that will need to be dealt with. and there are threats of renewed or intensified trading wars -- trade wars because the tariffs were in place years ago and we could see more. that will impact consumers because companies have to pay the tariffs in the u.s. will pass on those costs to the consumer. alix: that is my question on that -- is it this data -- it was different from the rest of the surveys we have gotten on the consumer. i wonder why you think it is different? and why the feeling that the tariffs will be passed on to the

consumers. there was some stockpiling and buying now and not later because of tariffs but what did you make of the negativity in your report versus other surveys? >> looking at the headline. it is made up of five different indicators. two are about business. two are about the employment situation now and in the future and the other is about income. put them together, business, employment and income were down but the index itself does not reflect anything about politics. we are understanding the thoughts that consumers are interested in and some are concerned about from the special question we asked and from some the write-ins. all of the write-ins were pretty mixed. some are excited about what will happen next year and some were not. but consumers that just experienced a lot of inflation and prices are much higher now than they were before the pandemic, our focus -- are

focused on inflation and the risks around that come from things already putting upward pressure on inflation like insurance, labor costs from labor shortages and housing costs are not falling as fast as we want. there is also the potential for something that might be inflationary and 2025. vonnie: what did you make of the rest of the data out today? new-home sales were not as good as anticipated but still higher. >> when we asked consumers if they will purchase homes, we have seen a little improvement in the last six months but still pretty low. the good news is despite the fact that consumers are worried or thinking about the next year, they still plan to buy. they are still planning on buying cars, used and new. they plan to go on vacation a little less but if they go, they are looking to go on international vacations. and services -- they are still

looking at experiential services like going to the movies, streaming, hotels and restaurants. despite what they are worried about, consumers still think that right now it is easier to find a job and as long as they are working we think they will continue to spend and potentially that spending will lean against some of the downside risks we see for next year. alix: dana, we really appreciate you. back to one of my favorite stories. venture global is one of the biggest suppliers of liquefied natural gas and the u.s. and the company has filed for what could be one of the largest ipos of the year. last year we targeted the ipo market and now we want to target -- tackle the venture global market. we were expecting the ipo to happen. can you walk me through what kind of behemoth venture global could be with this ipo? >> currently venture global is

one of the largest u.s. lng exporters currently. it is starting its second plant now along the louisiana coast. once that facility goes online it will leapfrog to become the second largest exporter out of the u.s. vonnie: and there are other plants in the works as well. they are at the permitting point in that process and donald trump is happy with the permitting. if he gets his way when he becomes president, that will go ahead, right? >> yes, the expectation for venture global to continue to develop its projects was laid out in the filing released on friday. there is a third plant in the works and potentially a fourth and fifth in various permitting phases. alix: we also learned through the filing that venture global revenues were down significantly from the year before. can you walk me through the why

behind that? do we know anything about the decrease? >> the company is still constructing and completing its second project -- in order to export natural gas, super chill it in specialized facilities, it takes a massive amount of capital and infrastructure to complete. venture global says its facilities have been started up on time and in some cases ahead of schedule compared to its peers in the industry. it shows that these facilities require billion's of dollars of capital and the company is also just starting up. so does he fluctuations from year to year ahead of its filing will be interesting to see. vonnie: how does the price of actual natural gas apply to ipos and this company in particular? lng in america has been in the toilet for the last year or two.

>> it is an interesting dynamic when you think about a supply push coming out of the u.s. which has really pressed u.s. gas prices down. and lng exporters, in order to take the gas and send it abroad to asia and europe where prices are higher will say that is what has saved the u.s. natural gas industry which otherwise would have had prices much higher. lng prices globally have been volatile and vulnerable to significant changes because of geopolitical events particularly with the invasion of ukraine in early 2022. that sent prices skyrocketing in europe. they have come down since but as we go into 2025, it will still be quite uncertain. alix: ruth, we appreciate the hustle. thank you for joining us.

mom more coming up and we will talk more about bonds. this is bloomberg. ♪ think scaling your ai pilots is hard? think again. with watsonx, you can deploy ai across any environment. above the clouds and on lots of clouds. with your secured data on prem, in real time on center court and assisting bank tellers on the edge. watsonx helps you deploy ai wherever you need it. so you can take your business wherever it needs to go. ibm. let's create.

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>> this is vonnie quinn along with alix steel. welcome back to another update for equities and yields. it's been quite the ride all year long. we are basically where we started the year, but bond traders are bracing for 2025. it's been a roller coaster year for the treasury market. let's get to liz mccormick, who has more. the past five months, we have seen no cut from the fed. this recalibration in september. a quarter-point cut and now

again another approach on the part of the fed. looking away from the bond market, looking back, looks like we've got nowhere. >> it's kind of my scratching. it's like you said. if we said the fed is going to cut rates this month -- this much, you would say yields across the entire curve have to be a lot lower and they are not, you are noting the long end. chair powell has been asked about this. are you concerned about the rise in long-term rates as you have been cutting, he said we are watching but it hasn't gotten to be too much of a worry. but they continue to go up, like you mentioned. i had an investor say to me one day the last couple weeks, i really hope the fed does not cut anymore because somehow they are cutting and yields keep going up higher in the long end.

>> our most people still expecting the bears steepener to take hold? the backend to go higher because of growth questions and questions on terrace -- on tarrifs. is that the expectation? >> it could be even a little bit bullish on the front end. because on average, wall street is thinking to your yields will maybe go down 25 basis points or so next year, the forecast is the fed does cut a little more. we could see kind of the curve moving in different directions. overall people think the steepener one way or another is the trade. the steepener got super fuel after the fed cut the dot plot from signaling four cuts next year to two. the market head of the presidential election and

through it, we think maybe the economy will be stronger in the new administration and possibly inflation could come from the tariffs. we need more buffer, risk premium, more yields in the long end. then you are the fed cuts less, adding fuel to. >> things were confused last week because of the fomc happening the same week, we might've been getting a shutdown, but we did not get the shutdown and the treasury market had not been moving all that much on a potential shutdown, was that a surprise? >> for the market, not that it doesn't matter, no wonder -- no one -- wants the national guard to be closed. but for the market to trade it, it's not as easy and as direct as when the debt ceiling issue comes up. when we've had government shutdowns that are protracted,

economists are forecasting this is going to her growth -- hurt growth. we did not obviously get the shut down so it's hard to price in, is it going to be a long shut down or not? the market figured maybe they will come up with something, a short shutdown. it was not something like a tradable moment, it was just concerning and troubling. but it wasn't something people could really priced into the short end of the market or something like that. >> it does seem like investors are trying to understand and price in with the treasury looks like next year and were basically treasury will be issuing. janet yelling issuing more on the front end. -- janet yellen issuing more on the front end. when do we get clarity and what do you think happens? >> that is a topic i am very focused on. he said a lot of things and other folks criticize janet yellen issuing so many bills.

the treasury refunding is coming up early february where they lay out the plans for that issue is over the next couple months, most keep note on bond sales a study but we want to see if there's any signaling, to -- do they have in their statements something showing issuance mice start rising sooner than people expect? is there any indication of different focus on coupon bearing debt? we will see if they are not all painted and scott bessent is not confirm delicious assume his -- confirmed but i assume he is. >> what hearing is the biggest risks to the market? i say we finish the year as we started but at the same time there was a huge amount of volatility.

order traders afraid of that might lead to some kind of a temper tantrum type event or something like that? >> the biggest risk is kind of two-sided in a sense. people call it fiscal policy uncertainty. trump and his agenda and his team so far have signaled what they want to do but some of it, he can do on his own, much of it has to go through congress, even the republicans have control of both sides as a narrow majority. it could be a whole year. we could end up treading water for a whole year. maybe the tariffs start slower and there was a negotiating tool. may it is not so bad. i had a fund manager say to me i think is going to be a problem but i think is going to be way over a year down the road. but it could come a lot sooner. it will not get through congress quickly and tariffs are really

high, the worst case may be able see the long and really take off. i think more people laid out to me is fiscal policy uncertainty overall. the fed seems pretty clear but i guess maybe the fed is going to cut a lot more than these stocks. as always a fiscal policy and a little bit of uncertainty on how much the fed cuts next year. it makes you weary on both ends of the spectrum. >> such a pleasure. always good to chat with you, liz mccormick, chief correspondent for bloomberg news. our next guest says it is hard to see the 10-year treasury yield dropping much more from here. skyler weinert is the chief investment officer at regan capital. he joins us now. do you mean 4.6%? >> that's where we are at. with today's move, the ag is under a 1% total return for the year. we are looking at basically

another lost year for bondholders. if anything given what liz was talking about, we will potentially see much higher rates next year. we could see well into 5%'s, 6% on the long end of the curve. the jury is out on where the demand's going to come from for duration -- is a coming from foreign buyers? from insurance companies and pensions but are almost fully funded at this point? i don't think so. we don't talk about the mix in terms of moving away from bills and notes and bonds. that could potentially add even more pressure on the long end, letter loan inflation getting out of control again. >> are you saying there might be a lack of demand in general and that could impact pricing? >> i think the demand will show up once we had 5% -- hit the 5% handle again, we were there 13

months ago, basically last halloween. that's when demands caved in -- kicked in for the longer duration paper. we have seen a fast descent from three handle up to 4.60 now on the 10 years since the fed cut interest rates only three months ago. we have seen of -- we have -- seen a fast descent. buyers have not shown up. but also term premium. which is great. i think a steep curve is -- is extremely healthy for fixed-income investors. not only can we get a higher yield by taking on more risk, but you also benefit from potentially rolling down the curve. we have not seen that role down effect in 2.5 years now, you have to go back to early 2022 to get a roll down effect of going out in the curve. >> relate this to what would

happen in the equity market. presumably of the fed doesn't cut as much is because inflation is sticking. that will have certain repercussions for the stock market. or the fed has to come more than we think, that's also going to have repercussions in the stock market. >> a lot of the borrowers -- i'm talking about homeowners, corporations, state and local governments, we pulled forward so much the man, they've already borrowed so much money a really low rates, look at mortgage rates right now which are 675 yet housing is still going up in value. it is not really affecting borrowers in the economy because no one is showing that they need to borrow money. if anything, consumers and corporations are delivering. we have one of the healthiest as of the economy we have ever seen when we look at consumer and corporate balance sheets. if we get to that point,

the fed cuts one more time and they got to 4%, the backend gets a 5%, 6%, and i have received curve. that really helps out banks, and insurance companies, real estate buyers, people that want to free leverage. we will see a runway that can last another five years, through these borrowers, both consumers and corporations remembering -- relevering. . with that steib curve, there's a huge wind at our back. we will see some huge re-delivering here both through the fed cutting but also the beer state -- the bear steepener part of the curve, the backend going up in value. >> depending on their needs and so on, to take advantage of any opportunity that might come down

, with the scenario you just painted if it does come to pass? >> you want to stay in the one-to your part of the curve. that can be short duration fixed-rate paper but also flowing rate paper and you won't hear many fixed-income managers talk about buying flowing rate because they can't. most floating-rate bonds are not in indices and the ag or corporate ag or what have you. we are at a huge advantage at reagan where we can put two thirds of our investments in high-quality floating rate paper. so stay short, wait for the curve to steepen out. we have been telling folks this for years. went on till the curve is at least 100 basin points higher than what you can get paid on cash, you will get rewarded with higher yields, and you will also get rewarded with capital gains from rolling down the curve. so stay short, stay high-quality, stay floating rate. >> real quick, mortgage-backed

securities, what do you think about is? >> mortgaged backed securities have lives relative to corporate and municipal bonds. high-yield munis and corporate, we are staring down some of the tightest spread levels we've ever seen. yet mortgage facts are at some of the cheapest levels we have ever seen. why? because banks and the federal government stepped away from the table and they are not buying. they make up roughly half of the buyer base of mortgage bonds. so you're looking at double the spread that you can get on agency government guaranteed mortgage relative to investment grade corporate. average duration is about 7% for investment grade corporates. >> looks like we might have lost skyler there from reagan b or

you're just talking about how to manage that floating-rate left and where the opportunities are as we head into 2025 and the fixed income market. coming up, we will talk about the addition into the nasdaq 100 of microstrategy. we will hear from an interview recently with michael saylor on working with trump. also capital growth duration and what the future holds for microstrategy and what the future holds for crypto. crypto is down below $93,000? >> yeah, $92,000 right now. fascinating, isn't it? >> that's what you missed last week, 108,000. there was balloons, confetti. we will break that down for you right after this. this is "bloomberg markets." happy monday.

>> all come back. you are seeing a rally in the equity market.

focused on tight. particularly the semi's doing really well. small caps, mid-caps, and bitcoin under a little bit of pressure. >> and below $93,000 in coin. that drop of $15,000 is not as much as i drop one big one was lowered by those holding it definitely feel it that is for sure. >> one of the stops joining the s&p 500 is microstrategy. they are looking to join the s&p 500 which would be quite something. -- joining the nasdaq 100 today. microstrategy's snide men talked to bloomberg. let's get more on that interview with michael saylor. >> i met with a lot of people in

the incoming administration. i could not comment further than that. >> ok. i was going to ask about plans but is that i will ask you about whether or not you would be willing to serve in the trump administration in any capacity. bloomberg has reported that potentially could be a crypto advisory council. is not something you might be interested in? >> i am always willing to provide thoughts on constructive digital assets policy either in confidence or publicly. if i am asked to serve on some sort of digital assets advisory council, i am probably -- i probably would do so, yes. >> i also want to talk to you about microstrategy. your own plans. you announced plans to raise $42 billion over three years and you announced it back in october. but the rate you are going at,

you could fulfill that target by joint area. are you planning to lift that cap band lineup more facilities in the pursuit of more bitcoin? >> when we announced it, it was not clear how enthusiastic the capital markets would be but we got a really enthusiastic reception. after november 5 with the red wave, we saw a big sea -- c change in the political environment. we went faster than we thought we would go october 3 if. our goal is to continue to raise capital -- october 30. our goal is to continue to raise capital through fixed income markets. preferred stock or convertible bonds over other equity linked financings as long as it's created for we get to the 2021 n which is $22 billion in capital, we will revisit our capital plan and we will put in place and you plan, subject to market conditions at the time.

>> that was microstrategy's chairman michael saylor -- michael saylor there. bitcoins on another two point 25% -- 2.25% right now. nick carter of castle island ventures expect to bitcoins valley to continue to grow as governments embrace digital assets. >> certainly there will be immense changes in washington day one. the banking will -- debanking will end. the sec will end this hostile poster. all these things are immense work bitcoin -- per bitcoin. in terms of price action, it is hard to say. bitcoin is a volatile asset. long looking for bitcoin to match the market cap of gold. which would price bitcoin at

$900,000 a coin. >> $900,000 a coin. let's ask bloomberg's mike regan he thinks. he joins us now. what fundamentally changes even if there is regulation and friendly regulation even in place with bitcoin? >> what nick alluded to is one of the more important things. if we start to see governments, the u.s. and other governments actually treating bitcoin like what so many true believers believe it to be, digital gold, and actually buying it and holding it for their own reserves, that's a major game changer. i think that's what a lot of the bit bullish sentiment has been lately. that is not guaranteed. i think is going to be tough to get a bill through congress to do that. >> how does that even work? when not enough gold standard anymore.

-- in a gold standard anymore. we don't have a gold reserve. why would we have a big when reserve? >> the fed owns a lot of gold. i think the last time i checked the market price -- >> i'm humiliated i do not know this. >> you are right that it's not -- all of our currency is not backed up by gold. but fort knox still exists. it still holds a lot of gold. >> but we are holding at the back of the dollar. you would be holding bitcoin essentially for fun, no? what would it be backing up? >> the idea -- this is simply the advocate of the true believers -- is in the digital age, bitcoin is taking the place of gold as a store value, it's got a limited supply, you can't just create more and more of it in circulation. the amount of bitcoin on a dollar value that's created every year is less than the amount of gold that his mined. it is that scarcity that the

proponents believers will create some sort of value. -- that sort of value. i think it is something like 700 or $800 billion worth more of gold at the fed owns. the wyoming senator has able, with no cosponsors yet -- a bil l, with no cosponsors yet, she wants to sell some of that culture 5 million bitcoin -- gold to 5 million bitcoin, reshuffling assets. when you think about it, if the government comes out and telegraphs of the market we are going to sell this and by this, we all know what happens, the price of gold will go down in the price of big when will shoot up even higher. the numbers start getting difficult. ok, so you have a plan to buy a million bitcoin after five years, what happens year four when everyone is like, from a mergener perspective, we can see the issues with that.

>> if you buy one million bitcoin -- sorry, $100 million in today's price? >> you are talking about -- $100 billion worth of. liquid >> other central banks have been diversifying into gold just for that reason because they don't want to be too much in dollars, and want to diversify. they do it regardless of the price for the most part. non-dollar cost averaging to get a specific amount geared towards goal. why couldn't we just got to that? 1% of our reserves will be in bitcoin over time. >> in theory, anything is possible. they already own 200000 and change in bitcoin from the silk road criminal case, the seizure of that. and a bunch of other different crypto cases so the government does own a big chunk of bitcoin right now. , theoretically, years ago i

think we would roll her eyes on the idea of bitcoin being some kind of reserve asset, but it is hard to ignore the potential of it now for policymakers. selling the gold to buy bitcoin is going to be an uphill battle on d.c. you don't hear much support for it. donald trump loves gold. >> that's exactly it. who would be the custodian of this purported big when reserve? the federal reserve certainly -- big bitcoin reserve? the federal reserve certainly would not want it. >> i don't think she is named the custodian but maybe they would hire a coinbase or a galaxy to be the custodian. i think they use a few different custodians for what they own now. talking about that notion of, maybe the u.s. doesn't decide how to do this, what are some of the government does?

it really could be a game changer as far as how people really perceive bitcoin. certainly far away from the old days when it was just a bunch of tech nerds and libertarians. we are talking about possibly governments holding it. . el salvador tried to do it. >> did not work out so well for el salvador. >> there's a long list of arguments why not to do it. but here we are with donald trump was a big cheerleader for crypto and he's got a lot of influence in washington. >> thanks a lot. really appreciated. bloomberg's mike regan. i think i knew you were the team leader for cryptocurrencies but now i really know. we are cutting in the closing bell. we are around the height of the session. the nasdaq is up by 1%. the s&p of 20% pyramid and program -- andrew graham joyce's next on this monday.

like volubly very strong market action really led by tech outperformance. this is bloomberg. ♪

vonnie: welcome to a special tv

and radio edition of bloomberg markets. alix: we are just about moments away from the closing bell. we are kind of almost there. we are right around the highs of the session. the nasdaq up 1%. the s&p up .7%. the dow jones of .1%. volume is very light on this monday. vonnie: they were particularly happy last week good in the wake of the fomc decision. we had the rebalancing, the nasdaq 100 rebalancing. some companies that have their share of the benchmark lower like tesla, meta and broadcom. looking at stocks today, he would not know. alix: we've got about 270 stocks advancing into hundred 22 declining, pretty much mixed -- and 222 declining. pretty much mixed. tech and communication services

and health care outperforming. consumer staples, materials underperforming on the day. vonnie: maybe the christmas tree and mistletoe. alix: the tomato pesto pie, what is that? let's break down some more here with bloomberg's emily graffeo and alexander s. i've got to say the russell down by .2%, off the lows, but still underperforming. let's start with the gainers. let's go to emily. what have you got? >> the big news is honda. honda adr's were up 15%. the biggest jump since 2011 after honda and nissan signed a basic agreement to explore a merger. this would create a new historic force in the automotive industry and create a holding company to house the new entity.

the two japanese auto manufacturers assigned a basic agreement for merger talks on monday, held a joint media briefing in tokyo. qualcomm was up 3.8% in the biggest jump since november, closing up about 3.5% now. this was following a positive trial verdict against arm, the new scheme of writing but we are still seeing enthusiasm in the stock this morning -- this news came out friday but we are still seeing enthusiasm in the stock this morning. the stoxx index was also higher as well. analysts are saying that this positive trial verdict against arm where arm claimed in company breached a license for chip technologies but qualcomm won is going to be good for qualcomm, not so much for arm. plia hotel and resorts -- high-end hotel and resorts was absolutely on fire today, closing up almost 29%. we agreed to exclusively negotiate with hyatt hotels

exploring possible strategic alternatives which could include a possible acquisition. this is a hotel change that has -- hotel chain with resorts in mexico, the bahamas and dominican republic. alix: we should go. and you are in the market, you might be able to afford to take the rest of the year off and go to one of those. >> we need to figure it out. we need boots on the ground reporting. [laughter] vonnie: to look at this market, you might've thought that it was all a great story today but there were some decliners, as we were just saying, bitcoin was lower and bitcoin related companies were also lowered. 200 plus stocks were done in the s&p 500. >> speaking of bitcoinm microstrategy was a, downey .5

for -- down 8.5%. in announced that it had purchased an additional $561 million worth of bitcoin and an average price near last week's record high. this move is related to the fact that bitcoin has seen a big decline down from about 108,000 dollars to $93,000. this marks the seventh week in a row of purchases of bitcoin for the company. the valley remains closely tied to its underlying bitcoin holding, hence the move today. that's been a big risk for investors in the company. another big name i have on my radar that felt today's walmart. the cfpb basically sued walmart and branch messenger which is its fintech partner saying they require drivers to use expensive bank accounts without their consent, they open these accounts without the drivers even knowing they have that

lawsuit they are dealing with hence the move lower today. they allege the drivers were charged fees for transferring money unfazed daily and monthly limits on the -- limit withdrawals on their earnings. the last sector group of stocks i have been focus is the makers of devices of sleep apnea. for every loser, there's a winner and for every winter there is a loser, the approved eli lilly's drugs that bound to treat sleep apnea, hence the move slower and the names. eli lilly rose 4% on this. >> taking a look at the bond market. we did see a lot of action and selling across the curve. the 10 year yield is up by six basis points. the two-year option today came in pretty solid. $69 billion. tomorrow you get the five year

and thursday seven-year, $114 billion over the two days. higher yields, 4.58%. you think we will have some triggering happening and all that. vonnie: we will be keeping a close eye on that tomorrow. one more trading session before christmas and then for more trading sessions, we can make a bunch of money by the new year. thanks to emily graffeo and alex. let's continue the conversation with andrew graham, managing partner at jackson square capital. we've been talking about targets on the s&p 500 and how except for the full and other houses, they are much -- pretty much higher for next year. what are you looking for out of the s&p, which is up 50% over

the last two years? >> and fully valued on a forward multiple bases now. you're still at 20 times forward estimates and 2026. what we are trying to do is apply sort of a concern of earnings growth figure two above 9% which is conservative. it's less than consensus which is in the low 11%, 12%. .9% on top of that, maybe 6500 is a conservative target for us. for at least us, anyway. >> considering we have 6700 and some $7,000 calls, can't argue that would be conservative. what will be the biggest mover for the $6,500 call? d.c., the fed, or bottoms up? >> i expected to be policy from d.c. generally speaking we will go with the u.s. economic resilience theme still, no reason to doubt that.

we see that happening in a higher for longer rate environment reinforced, by supportive domestic policy more expansion of the business cycle, solid labor market still and a broadening ai cycle which is really important for viewers and listeners to pay attention to. pro-business policies, lower energy prices, stronger capital markets, more deal activity. but the past of the policy change will be bumpier than those people expect in the markets are vulnerable because a lot of the good news is price in . >> vonnie: many of our guests today talked about ai being a theme next year. there was no reason to suspect that it won't be a theme next year and a positive thing for the market. you have to wonder if something else will come along and ousted out of his preposition. may be quantum computing? >> i'm trying to not get distracted by the quantum computing thing. that is probably further out. getting back to the ai cycle,

which everybody is looking for monetization in places other than semi conductors and data centers, there's been a lot of emphasis in the media on ai scaling laws breaking down. i think that's wrong. i would not buy into that at all. i see these models getting faster. and our sense of monetization all over the place. there were certainly signs in the most recent earnings report. i expect to see the same thing prop up in sales in crm, salesforce report earnings in the summer. we see this growing and not slowing down. we expect software to be the primary beneficiary. alix: what names do you like? >> salesforce, and helps bob, workday.

at some point going forward, those are the bigger names. cybersecurity is also going to be a consistent theme. we see cyber art as a beneficiary with the benefit acquisition getting into a positive solution cycle, they have machine access, access management at the core of their business, and we see that as a potential winner going forward. we are trying to emphasize software over semi conductors. we think that is phase one of the ai cycle, phase two goes into software. we saw that show up in service now and we see that happening more and more the coming years. vonnie: presumably also looked at energy to power ai and all of that. you came away with the notion that perhaps there wasn't any value to be had there? >> absolutely, that is an area we are invested in.

vertive is the leader in data center cooling and liquid cooling, they have an opportunity to double their offerings in 2025. that's a stock that we like a lot. we are there. we just think the dispersion or the difference between the performance between semi and software is so wide right now, we think that cycle trends that way and we are trying to get more exposure into software specifically. alix: what denseness at a micro level and makes you worried for these kind of calls? -- macro level and what makes you worried for these kinds of calls? >> the fed meeting, the updated median 2025., consensus was looking for two or three rate cuts suggested by the dots and it was a not ambiguous two rate cuts, the pattern was centered

rate there in the middle and that was the thing that markets were most disappointed with. maybe a hawkish told. -- tilt. if the fed is less inclined to pause rates, there might be some disinflation progress, they will pause again in march. the next rate cut here is june. that said to offer some growth disappointment. if growth data disappoints, or something along those lines, i expect markets to be more sensitive given the fed is not as eager to could interest rates -- cut interest rates. i don't think it is a tailwinds. i think it is more of a floor. alix: good stuff. andrew graham, managing partner at jackson square capital, joining us on the markets. we have closed up on this monday. volumes, super.

the s&p is up .7%. the nasdaq 1% higher. the dow jones managed to eke out gains, up by .1%. even small caps closed off the lows of the session as the bond market wound up selling off. coming up, is the holiday season -- it's the holiday shopping season. what do tariffs mean for logistics companies? we have drew wilkerson joining us next, the ceo of rxo. we will ask him about how the acquisition of logistics has been going on the stock. we will figure out wh's g on with that as well. this is bloomberg markets. ♪

vonnie: you are watching bloomberg markets. i am vonnie quinn. time for a new splash with the latest from d.c.. bloomberg's news now anchor amy

morris joins us. amy: we begin with former representatives matt gaetz of florida, house investigators have released that long-awaited report which matt gaetz tried to blog, they found evidence that he paid women including his 17-year-old -- a 17-year-old girl sex and used to illegal drugs while in congress. they also found evidence he created a fake e-mail account from his capitol hill official congressional office for the purpose of purchasing marijuana. the report also accuses him of accepting excessive undisclosed gifts including a 2018 vacation to the bahamas. he continues to deny any wrongdoing, he says he lives a different life now. . 37 federal prisoners will have those sentences commuted. president biden uses presidential privacy powers to reduce their sentences to life without parole. the president did not commute the sentences of robert bowers, gel roof and joe, convicted of

terrorism, hate, and mass murder. the president believes the country has to stop the use of the death penalty on the federal level. panama's president has rebuffed donald trump's threat to reimpose u.s. control over the panama canal, saying that its shipping tools are not inflated and sovereignty over the waterway is nonnegotiable. trump's diplomatic hardball a month before his inauguration represents a new front in his attempt to ratchet up pressure on trading partners. alix: thanks, so much amy morris appreciate that. speaking of trading partners, certain logistics and shipping companies will have a really good view into what that actually winds up looking like. we wanted to get the take on the ceo of -- the take from the ceo of rxo, drew wilkinson. you have been really busy lately in september. he finally absorbed

coyote logistics. that was quite a hurdle. you are also looking at 2025 in terms of demand growth and tariff questions. the stock is down by money from percent since late november, what is going on with you guys, what are the highlights? >> we closed the acquisition of coyote logistics fairly fast. from the time of announcements when we close, we close with in a couple of months. this was a transformational acquisition for a transformational acquisition for us. i more than doubles are brokerage making us the third largest truck brokerage in north america and sets us up really good for growth. one of the things we looked at was the customer overlap. there was not a lot of customer overlap. we will get more exposure into particles that we were not a strong in like food and beverage. really excited. we are in the early days but so far it is far exceeding our expectations. vonnie: you look at the likes of these amazon strikes very closely i'm sure. what do you see for the future of labor costs and the potential

of disruptions like that down the pipe? >> transportation anytime there is disruption volatility, it creates a good thing in the transportation industry. you set yourself up in a position to be able to get spot loads and projects, because others are following off of it. the volatility is a good thing for our business. alix: volatility may be good, but questions and visibility on terrace may not be. how are you guys preparing for ? -- for next year? >> we are watching closely what's happening from a tariff perspective. overall long term, would it will drive more domestic transportation. the majority of our business, over 90% of our business is done intra u.s. the more you see on shoring into the u.s., that creates more transportation opportunities for

us to capitalize on. >> what are your margins like and how can you expand them? we saw fedex and the likes of usps and so on trying to do the same. when you're trying to make acquisitions, are there ways that you can cut costs? >> when you look at one of the things that we've been doing, we have been an early adopter in technology in the transportation industry. looking over the last decade, our margins have been the strongest on the industry because we have invested so much into these pricing algorithms that allow us to have optimal pricing to both the customer and interior. we will continue to focus on technology and use it as a way to expand our margin but also increase our employer productivity. if you look over the last 12 months, our employer productivity is up 15%. if we are able to be able to do it and increase our lows per person per day, ultimately that will increase our overall margins. >> when you look at a tariff

situation and you add that into your goals, who pays for those terrace? do you do it or the end consumer do it? if it's you guys, i would think that hurts your margins. >> that is still unknown. ultimately it would be hard for her not to be passed down to the end consumer if there was a rise in price that ultimately that would go back to the end consumer. it is something we're watching very closely. >> vonnie: what you do have precedent. our terrace last ameren and some of those don't not come off during the biden administration -- there were terrace the last time around and some of those did not come up during the last biden administration. >> there was a robust transportation cycle for us. there were highs and lows throughout the four years. but overall it was a strong transportation market. some of the terrace that you saw put on with china led to more

domestic and more u.s.-mexico trade. our mexico business has been up roughly 30%. whenever we saw businesses shift from china into mexico. alix: are you worried if we get tariffs on mexico that will mess you guys a? > we are watching a very closely. if there's more domestic volume that goes out there, that is a good thing for us overall, but obviously if we are hurting our trade partners to the north or the south, that is something that could have an impact on the volume and shifted to more domestic volume. vonnie: i'm sure gas prices impact you and how much your services are needed. how important is it for the likes of rxo that gas prices stay low? >> we watch fuel prices very closely but ultimately for us fuel prices are more of a pass-through from the customer to the carrier as a broker. alix: can we talk about your stop for a second? i appreciate you are the ceo, you're going to say, i don't know why the stock is down 25%,

we are fantastic -- but why is your stop down 24% the last month? >> overall if you go back and listen to the earnings call, we said this was going to be a muted peak season and we were one of the first essay -- the first to say that this would be a muted peak season. people are starting to watch the play out. what the stock does over the long term looking over the last 24 months, it is up over 20%. for a at the bottom of the cycle -- for a cyclical market at the bottom of the cycle, we have happy investors throughout the market and we are not watching the stock price on a day-to-day basis. we are watching to see what is able to do on a 1, 2, 3-year basis. >> you have seen continuing wars and the number of elections, we have seen huge geopolitical turmoil and changes and you compete with the global companies, with chinese companies and middle eastern shippers and so on i'm sure, how does the prospect of may be a calmer 2025 -- 2025 help your

business as a tailwind? >> remember we are largely a north american based company. we are doing is transportation that is largely a truck load and ltl across america so most of the companies you're referencing are not necessarily who we are competing with on a day-to-day basis. when you look at what it does, and bring stability to overall forecasting and it allows us to be able to forecast. if you go over the last three years, forecasting has been off, when you look at where people have projected volumes to come in for the industry overall. vonnie: thank you so much. a fascinating conversation. please keep in touch. i imagine it should be quite the year for you guys next year and for all freight brokerages and shippers in general as well. the ceo of rxo, thank you so much. i was looking at zim today, one of those volatile stocks around

the year, it kind of continue to go on. we sell that stock price something mental percent or something -- rises something like 12% or something. really fascinating to watch the logistics of the whole area. alix: and they will be sorely cycle with a really good read on the economy and was going on as well, so they have that micro-exposure, and on the flipside, even if you use domestic, it is going to be overall shipping rates and demand from where you source as well. vonnie: exactly. we will change the tone a little bit at the moment and we will be talking about elf on the shelf. did you ever do that? [laughter] we will talk about alix and her parenting in a moment. this is bloomberg. ♪

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vonnie: welcome back to bloomberg markets. retailers in the spotlight this holiday season as they always are but back in november romaine bostick and scarlet fu spoke with the bloomingdale'screased e outlook for the department store. let's have a listen. >> in asia and europe right now we are focused. that is one big difference. honestly i think the flagships will have a bright future in the next 10, 20 years. i think the problem here is managing. that can be a challenge.

at bloomingdale's we had the chance to be in prime locations. we have a limited footprint. we have more opportunity in the future. i think the department store model has a bright future but it has to reinvent itself from the perspective of the customer but also from our brand partners. we have to be relevant for our brand partners. scarlet: how about the broader real tail landscape overall? >> when you look at the overall market is slightly growing. the penetration of online is going up. so the average productivity overall in the u.s. is decreasing. so yes, there will probably be some losers. that is why you have to reinvent your model to remain relevant for your customers and your partners. romaine: when you look at other retailers, not necessarily a

direct retailer, who do you envy most? who do you just say, wow, they really got it right? >> first, i really think bloomingdale's is doing that right. i am sorry to say, that'll not be my only answer. but i was very surprised by the level of engagement of the customer. i think we can even do better in the future. but there are all sorts of inspirations, whether it is in terms of service, in terms of events and activations. a lot of inspiration in retail and beyond retail. i don't want to give you any names but i have a lot of inspiration in the u.s. but also abroad. we should not be too domestic focused because we will miss trends happening somewhere in the world. romaine: you think maybe what we see abroad is going to be

palatable to a u.s. audience? >> i am convinced about that. we have to bring the best of both worlds. the customer is ready right now for something different. we can get it from some of the countries or models in the world. alix: clearly saying bloomingdale's is doing everything right. fair enough. no holiday season would be complete without the iconic elf on the shelf. the company behind the timeless brand has in working all year round for entertainment value. every night santa's scout elves fly to the north pole to report to santa every day in december if children have been behaving or not. every day they wind up in a different spot to check out what kids are doing.

joining us for more are the cofounders and co-ceos of the lumistella company. happy christmas. this is always such a fun tradition if you have kids. how are things going this year? christa: it is busy. we like in our world to loading the sleigh on christmas eve. up until the last moment we are working hard to make sure children feel all of the love and all of the joy on christmas morning that every parent dreams for their family. vonnie: it is kind of genius. you took christmas and made it something you basically own. what is next for lumistella? christa: next year we are excited to announce we are launching our very first ever chapter about. children all over the world right us and say what to the elves eat, give us all the scoop

on how stantec became magical, and how did the elves get their magic. and so because we have become the source of that information and we are owning the world of santa claus, the chapter book is going to answer a lot of questions for those kids and we are really excited about that partnership with harpercollins. alix: i love it. as chief marketing officer, do you feel like elf on a shelf markets itself at this point or how much more work you need to do to be like, we need to have more penetration here. chanda: it is a little bit of both. certainly social media has taken on its own vibrato. but it is our job as a company to listen to our consumers and the best way to do that is through social media. that is how we continue to serve up new products. we also have a lot of questions people want answered directly from the brand. it can be anything from back

story-type russians about the santa-verse and the lore of all the other characters we have to offer, like elf babies, or our new little yeti, elf pets are super popular. alix: what is that? chanda: they are amazing. they each have their own animated special on netflix. elf pets teach children about faith, hope, and love. we imbue values parents love. they have their own jobs for santa claus and help him make his own journey on christmas eve using faith. vonnie: is there a part of coming up with all these day -- these ideas at which point you have to pay somebody for the ip? can you just tack yourselves onto the santa ethologists and own it without paying anybody?

how does that work? chanda: this year we launched the santa verse. it is the entire enchanted world of santa claus. it is every friend, every foe, an entire world of storytelling. every elf has its own story to tell. santa, mrs. claus, all the elf pets, they all have their own stories and each one is unique to every family. vonnie: but is there anybody out there that owns any of this or is it in the public domain? is there any copyright or, i don't know, estate of santa claus anywhere? chanda: we certainly have copyright and trademark protection on all the things that we work with santa claus to produce and come up with. but it is an amazing mythology. it is the greatest mythology of our time that no one has really taken the time to explain. nobody is in a better position

to do that than us. this amazing brand in 28 million homes around the world, people look to us for the answers. they want to know the mythology of santa claus and this entire world, this entire fantastical universe. it is our job as a company with 120 employees at all work for santa to answer those questions. alix: we have to ask the business questions along with the fun stuff. if we get any kind of tariff increase, how does that affect what you guys do? are you all manufactured in-house in the u.s.? walk us through that. christa: i had the pleasure of being on bloomberg a little earlier this year with vonnie and i explained that while we fully support our government's efforts to secure fair trade agreements, as balanced trade is great for everyone, in our case as a small to medium-sized business, tariffs can significantly impact a business like ours. small businesses, consumers are

going to bear the brunt of those costs. for us it is also because we can only bear so much. just like any supply chain crisis we were able to hold our own and to really stabilize our prices. but at some point it is going to have to pass on to the consumer. so absolutely is a company that sources and manufacturers our own goods and is ultimately in charge of our own supply chain, tariffs can hurt small businesses. the additional thing to think about is when you are looking at these tariffs and in this particular situation the companies that are going to benefit the most are the companies that are out in the world of counterfeit. they are the world of imposter and dupes. because they are not following any of the same laws or will that we are. their goods come in, usually small parcel package overnight, and that is how they are going out into the market. with companies like ours and other companies, these tariffs,

if they happen, could be very impactful. vonnie: how do you counteract those dupes? it is not even for sure that a huge website like amazon can really get rid of all of them. christa: it is a struggle for amazon. we have an entire team of people internally that work tirelessly to get cease-and-desist letters out and to ensure that rip is protected and that truly the real brands we have spent our life building are the ones you see when you search on their platform. we have struggled with this for years. it is something we spend hours and hours focused on. we have struggled with people landing on our adwords, buying them up and then you cannot find the actual products. it is something the industry is going to have to tackle and we have to tackle head-on. because impostors and dupes are dangerous pretty many of them are not safety tested. many of them are getting into

the hands and homes of families and it is absolutely bad for all of us when that becomes the case. alix: i think vonnie just really wants to know who owns santa. christa: w-- we do! alix: this is her quest now. chanda, if we take a look at your partners like netflix, how do you guys work with them throughout the year? are valuable are those partnerships to you? chanda: our partners are certainly a huge part of what we do. we want to offer the best in consumer product entertainment and experiences for our fans. and so relying on these partners, especially kellogg's, mcdonald's, they might offer an experience for families. we offer joyful family moments. so getting that toy in australia and the u.k. where that program is live as well as getting your

fun elf on the shelf serial, the kids love that. we help families create joyful family moments through these partnerships. they do scavenger hunts in the mall and things like that. these are vital partnerships. clearly entertainment for any kind of property like our own is invaluable. we have an elf story as well as all three elf pets we produced in-house all streaming on netflix. these partnerships are really valuable for us. you cannot have a global intellectual property and not have entertainment for children to answer all the questions they ask. it keeps us busy but we are honored to have it. vonnie: i think the ceo's take off from finland after 2:00 in the morning and then we can track them. i am curious what happens once santa is on his way for you guys. what is the next thing you do? christa: we are hopefully

asleep. we are much like the elves. we are really tired and we have worked really hard, 365 days a year to pull off the christmas season for our fans. so we are exhausted. our company and employees are exhausted. they have worked full time just like the elves do. hopefully everybody got a little bit of a break and in early january we are back at it again. vonnie: do the elves go on strike? it is going to be a big old corporate party with the elves and yourselves on christmas day. alix: if you have ever managed a child on christmas, you definitely have cocktails. really appreciate it. happy holidays to you. cofounders and co-ceos of the loomis tile company. really great stuff. my kids like counting down the moments.

it is not christmas. vonnie: it is a new-ish phenomenon. we definitely left biscuits and alcohol out for santa claus. alix: alcohol? vonnie: it was cold out there. it is cold out there today. somebody should let alcohol out for us. alix: coming up, nissan and honda set to merge in what could be the world's third-largest auto company. we are going to get more on why one former executive this shows nissan is in panic mode. we break down that conversation next. this is bloomberg. ♪ i earned my degree online at southern new hampshire university. after i graduated, i started a new job. i was finally able to realize my purpose and passion in life. pursuing my degree gave me so many opportunities to grow don't just think about yourself. think about the lives that you can really change.

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alix: nissan and honda are exploring a merger that would create a rival to toyota. but to a former chairman, the

deal is nothing but a desperate move. he spoke exclusively to bloomberg about this panic mode at nissan. >> it is a desperate move. it is not a pragmatic deal because frankly the synergy between the companies are difficult to find. there is practically no complementary between the two companies. they are the same markets, the same products. the brands are very similar. so in a certain way from one side, from nissan it is a desperate move to try and find a future. and from honda, if i understand well, they were not very excited about this move. but at the end of the day they are trying to figure out

something that could marry the short-term problems of nissan and long-term vision of honda. >> do you think honda is being pushed into this deal by the economy ministry rather than the value of the deal? carlos: without any doubt for me. having lived in japan for so many years i understand how influencial they can be. i can tell you from all the data they received for the last two to three years they have a cash problem, they have investment problems. they have really been hammered in the united states. they got practically out of europe. they have been challenged in china. there is no plan in front of it. i can tell you there is panic modeissan. >> you understand the metrics to get these organizations

together. is the government going to have to deliver backstops to honda to make this deal work? carlos: no. in a certain way they have to try to push on this deal. they must have some kind of benefit out of it. if not on the short term at least on the long term. that would be closely monitored to make sure the impact on japanese society will not be too big. when you have two companies of this size and practically in the same market with practically the same strengths and weaknesses, there are going to be a lot of costs to be taken out and a lot of duplication to be taken out. so this is going to be closely monitored. >> it is driven by the ministry of economy, so there is a political dynamic to this.

is this japan creating, putting two companies together to really try and stand up to the competition from china? is that part of the narrative here? carlos: without any doubt. it makes a lot of logic. today chinese automakers are on the winning side. they became, as you know, the largest exporter of cars. they are the largest makers of ev's. they are being successful in a lot of new technology. so in a certain way, yes, it is a defensive move that is going to be trying to shore up the japanese industry and avoiding a cataclysm, a social cataclysm in japan, and particularly to try and reinforce these companies on the foreign markets. vonnie: that was manus cranny speaking with carlos ghosn, former chio and ceo of the renault nissan mitsubishi

alliance. bloomberg pursuits is out with this list of go to places for 2025. joining us as the author of that list, travels are at bloomberg pursuits. i spent way too much time on this segment. it was fascinating reading through some of the destinations that are now possible to go to. we will get to some of the ones we know and love in a moment. my go to pick would have been algeria. i cannot wait to go. there is a visa you can get on landing now. >> this is one of the places that is fascinating, probably one of my top picks as well. algeria is a place besides the fact it is the largest country in africa, something people do not think about too much, it has been very closed to foreigners. they have had a very exclusionary atmosphere in terms of leisure visitation. they have been very guarded because of different chapters in

their history that were a bit difficult. it is a very stable society right now. dominated by oil in terms of economic drivers. however just like saudi arabia, they are starting to clue into the idea that oil is not the only pillar of a global economy at this point and they need to find different ways to very things up. so they are looking for leisure tourism, cautiously starting to open, especially for people interested in exploring the south of the country. beautiful saharan towns that look very spectacular. alix: do you get to go to all these places? nikki: for algeria we sent a wonderful writer. you can find an entire narrative she wrote about her adventures there and on bloomberg.com. we are lucky to have our bureaus in 65 countries around the world but also writers who do this very onerous work for us.

alix: i was trying to tack on, hey, do you need help? vonnie: we should really video these places. one of the other places that really fascinated me, greenland. you do in greenland? we might own it, soon. nikki: the capital of greenland is still a relatively small city and partially it is because it is hard to get there. just in the last month they opened their first international airport, mostly flight search from copenhagen. but we are going to see flights from right here in the new york city area. it will be about a four hour flight if you can believe that. iceland really opened up for adventures. appreciate these frozen tundra landscapes.

you can be there in the summertime in a t-shirt and jeans. but you can get there very easily in the coming months whereas before it was quite challenging. you can go dog sledding and see the northern lights. you can fish with your hands, like the local people do. a great food scene. alix: what about the upper eastside? what is up with that? nikki: we really tried to diversify this list in terms of places that are going to surprise you and go on your long-term bucket list, where it might take you a little while to get there, and also places you can conceivably hit in the months ahead. the upper eastside is an example of a place we will all likely have in our easy path. and we might well overlook because we have kind of been there and done that. but the trick to it this year is there is a lot of new hotel openings, restaurant openings. surprisingly allow the biggest

chefs in manhattan are opening up there the biggest projects there. even the most popular restaurant in miami has opened at a new big hotel. that restaurant is like, the scene-iest place to be right now. the upper eastside has a real injection of fresh energy. vonnie: so for the price of a weekend, even commuting from my own home to the upper eastside and doing all the things you said, i could probably get a whole kentucky vacation, and that is also on your list. nikki: we think about the kentucky derby which is not in lexington, it is a horse track 90 minutes away. but lexington has a beautiful horse track with all the same type of southern culture, all that tradition that is imbued in the culture there. it's also part of the bourbon distillery trail that exists throughout the state and it is a hub for all the bourbon tasting rooms as well as a really

interesting food scene comprised mostly of black-owned restaurants and black-owned distilleries. so you are getting kind of this interesting culture where the state is making a very strong effort to reconcile its past as part of the south of the u.s. with its present, which is a really diverse, modern city with a lot of really creative people who are now sharing the spotlight in a really interesting way. alix: that was really fun. it was great to read. definitely had some surprises. nikki ekstein of bloomberg pursuits, thank you very much. we still have programming tomorrow. the bond market closes at 2:00, we have a full day of trading going on. vonnie: so much money to be made and lost. alix: we had a rally underway here in the u.s. closing around highs of the session, all of it led by tech. we will be back with you tomorrow as we count you down to the holidays. that does it here for bloomberg markets. happy holidays. ♪

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