paul: all right, good tuesday morning, good christmas eve morning. alix steel, paul sweeney, special simulcast of "bloomberg markets." going to be pretty fun. alix: now you are in my world, tv. this is how we do things. everyone does intros, we read intros, tells us what to do. paul: but we still talk about the markets? alix: yeah. paul: very good. a little bit of a lift here, nasdaq is up 135 points. again, the last day before the christmas holiday has a bit of a lift to the markets. yields are pushing higher yet again. people talking about a 5% 10 year, i don't think they are far off. 4.2 6%, keep an eye on that. wti crude, a bit higher today,

just over $70 a barrel. again, i've been watching, so i know all about the oil and gas business in 70 is a good number. alix: he knows. he read the grid, he knows the grid, no he knows oil. but did you miss this? a five-year option at ♪ 1130 ♪ get excited. paul: does anyone get excited? alix: i'm going to break it and talk about it. one thing we are watching definitely is american airlines. how u that you are not lying right now? paul: absolutely. alix: they resumed operations after an hour long grounding during one of the nation's busiest travel days of the years. shelley, what happened? >> they are still trying to figure that out but so far they are attributing it to a technical glitch in a vendor who works with american airlines.

we have very little information as to what caused it, but we know that it lasted one hour, as you mentioned. so far, so good in terms of disruptions. right now we don't see a large number of delays. there were about 500,000 or so american airlines seats today as of 3000 flights in the u.s. so, it had the possibility to have a very big impact, but so far, so good. paul: has american airlines said kind of what happened? hoping it was a glitch as opposed to something nefarious, but i haven't really heard much out of american. >> they haven't said anything yet. they said they are working as fast as they possibly can in order to keep service operational. that's their number one priority, especially today, one of the biggest holiday travel days. about 30,000 flights nationwide

are expected by the faa today. the most important thing for all airlines i think is to keep people getting where they are going and going to where they want to go and he would think that if it was something big, they would have been grounded a lot longer than just an hour. alix: it's like the ripples. one flight is missed and then it was southwest, was it last holiday season? shelley, really appreciate it. no surprises in the market, but leading today is -- shocker, technology, but also chip stocks. up .6%, definitely outperforming . shares of taiwan semi having their best annual performance in 25 years, touching the record high, showing that the air trade is alive and well. caroline hyde joins us now. clearly, ai is a key trend from the last year. is it all the chipmakers, or did it broaden now? caroline: we keep hearing the

stop start about getting excited over software and the application layer of generative ai. like how palantir has been up into the right throughout the year, now entering the nasdaq 100. but going back to the chip sector is where the euphoria continues to play out. the stock having a nice day. but what has been really interesting is this play on the international side, people loving this contract chipmaker, you almost don't have to pick a winner. you can back the nvidia chips, tsmc makes them all. what's interesting is the u.s. investor base is so desperate to get in on this trade, they are paying a hefty premium for the u.s. to put up these depository receipts rather than locally in taiwan. his stellar performance for the hardware of artificial intelligence. will we start to pivot to the software a bit more? paul: that's exactly right.

caroline, i'm wondering, are investors going to ask -- what about the returns on these investments? we see you spending all this money on chips and data server farms, but what about return on investment? are we hearing that? alix: yeah. that is why we will suddenly get an addressable market number even though we can't even get where the revenue flow is going to go and nvidia has been the only one to return on that investment over the years. now it comes to the software play. meda has been doing a good job showing how their return on ai investment has worked out. their advertising presence has become so much more formidable. they can give the marketers so much more bang for their buck, using more generative ai than we have seen. but when you think about the amazons and alphabets plowing billions into data centers, you will still have to wait a year or two until we start to see the bang for the buck on the revenue

side. but we are already hearing from, you know, software makers, crm and sales force, really showing yes, demand is there. even though the narrative is still very early days and we are still trying to work out what agency will do for us in a generative ai way, they are saying that demand is building, people are adopting, revenues will start to climb throughout 2025. alix: love it. love that name. talking to someone yesterday who was investing in ai, they were going more on the reddit track. it now so many different ways to play it, some of the best performing stocks this year are the power generators helping to power these hyperscalers. caroline: yeah, power and energy, that's the infrastructure play. at the moment, we haven't been

able to keep chips cool enough. data centers allowing chips within them to keep them cool, you need the power for that and the innovation when it comes to liquefied cooling. you have the application there. reddit is a keen one. they have been able to sell and make deals with alphabet and openai, training to use the data and serve the date of much better, building generative ai within those reddit product and use it more. the new narrative i'm hearing more is how will quantum change generative ai and make the trading of data and use of data ever more powerful? quantum sparks have been unbelievable performers. you and i talked about righetti yesterday. alix: the trade seems to be -- paul: the trade seems to be broadening out. caroline hyde, thank you for joining us, cohost of "bloomberg

technology," over in london today. the tech heavy nasdaq is up .8%, tech leading us again in 2025? let's ask our next guest, nancy dowd. thank you for joining us here. looking at the performance of the s&p 500, broadly defined north of 20% in 2023, year to date in 2020 four, what did we do next year, what are you telling your clients these days? nancy: it's always hard to pick what will happen next year, but if i had to make a guess i would say that there will be more growth in technology next year. that is where the boom is occurring. but not without volatility. there's a lot of competition in the space and a lot of ups and downs. our best advice to clients is to make sure to check your stomach lining and make sure you can

handle that volatility. alix: which leads us, nancy, to the ai trade. if you are looking at a structural shift less dependent on the macro environment, you look at ai. where does the stack make the most sense for you? nancy: it's hard to predict. i can't comment on individual companies, but the tech sector as a whole is a great opportunity with long term in mind. it has to be for the longer term . the prospects are absolutely positive. that is what i would go with. if you are in it for 5, 7, 10 years or longer, there is no doubt that this is where the next boom is. paul: valuation, nancy, putting a lot of pressure on earnings growth in 25. how do you think about that relationship between valuation

and earnings growth in 25? nancy: i think it is something to be concerned about. some of these are a bit dreamy. but when you look at all of the economics around us, you know, there's a lot of bullishness and excitement and optimism, which is kind of nice for christmas eve. but there are some things to consider. you know, there is a lot a lot of noise about tariffs. a lot of noise about the geopolitical risk. unfortunately, that's not just noise, that's reality. but overall the bullishness seems to come from the prospects of tech stocks, deregulation, and the energy, the unleashing of energy. so, there's a lot going on that's very positive. my prospect for 2025 would be more positivity, but less growth than this year. alix: do you think we are still in a bull market?

nancy: i think so. you have to look at that year-to-date year-over-year returns and say this is a bull market. alix: what are you telling -- paul: what about fixed income? if they were in high yield or getting leveraged loans, eight point 5% returns is pretty darn solid. how about next year? how are you positioning fixed income? nancy: that's the trick here. the bond market isn't as bullish as the stock market, to put it that way. there's a lot more concerns on the fixed income side. a lot of the weariness and, i guess, thinking more about inflation, the potential of more inflation because of the tariff risks, we are not quite sure if the tariff risk is for real or if it is just going to be used as a negotiation tool and what the impact will be. we did have tariffs before, when

trump was president, and it didn't cause any inflation. that doesn't mean it won't cause it this time. i think that is something we have to be more cautious about. if you are getting a solid 8% return, i would watch the credit risk on that. alix: do you like the long end right now? nancy: a little more cautious on that. we are still watching what the fed is doing and where they end up. alix: what -- paul: what do you think the fed is going to do and how important is that to risk assets? nancy: mr. powell indicated the target inflation is expected to be reached by mid year 2025, which is pretty aggressive, but you know, they might actually do it. the reality, though, for the day

to day people is that inflation is here to stay. prices won't be going back down. they might not go up as much and some things will of course continue to go up. and there are the continual nonnegotiable expenses like food, gas, energy, heat, they all go up exponentially. alix: nancy, we appreciate that. that was nancy daoud. next, real estate, one of our most favorite topics. we keep hearing about real estate. will it find its bottom? will commercial real estate rebound? more on that, coming up after this. equity markets, estimated higher. this is bloomberg. ♪

paul: alright, i'm paul sweeney

in new york city alongside alix steel. this is a special edition of "bloomberg markets," on bloomberg tv and radio, i think that is simulcasting. new home sales in the u.s. rebounded last month as builders and consumers sealed on deals that were delayed by storms in the south and took advantage of heavy sales incentives. here is what bess freeman had to say about the market. >> all real estate is local. it depends on where you are and what the demand is. a place like palm beach, you put something on the market, a swarm of people want to buy it. but that's typically more high-end, expensive. connecticut, there's no supply. when homes go on the market, there is a rush of people lining up to bid on the homes. i think that once we have more supply, we are getting prices to come down. if sellers start up put their homes on the market and buyers get into it, there starts to be

fluidity intersecting, that's a healthy housing market that we didn't have 2024. alix: talking about palm beach and connecticut, i'm going to be selfish and talk about manhattan. >> we have a decent supply. the market in the city has been flat. high-end has done well. it usually does. look at wall street, the bonuses will be incredible. a lot of people are saying the stock market pushes or drives the real estate market here and it has been very frothy. people have been asking if a bubble is coming. we don't know. it's unclear to us. it's been moderate. it's been decent. i would like to see it pick up. there's a big portion of that has been cash. remember, mortgage rates don't necessarily impact our buyers and sellers as much, though it does play into it. >> when you think about the tension, the push and pull between renting and buying, you

are so close to the ground seeing people making that choice. is there a reason to wait and rent for now instead? >> they say that renting is more like dating, it's temporary, so if you don't like it, my friend is like your neighborhood right now, she says she's definitely moving out. like dating before you get married, right? if you want to commit to economic security and intergenerational wealth, by a home. if the stock market plummets in your coinage goes way down, you are just looking at your portfolio and going -- damm, i have less money, this stinks. buying a home in the value goes down, you have a roof over your head, you can eat, sleep, have dinner and fun, it goes up in value. we have to think about the housing market as a long-term investment and it is still the american dream, it's a commitment to your future. alix: that was the ceo of luxury

real estate brokerage joining us . let's get more on the housing market with drew reading. good to see you. all right, your predictions for 2025 for the housing market in the u.s.? backs as you imagine, the direction of mortgage rates will determine a lot of how things fair in 2025. in september we were looking at's -- looking at a lot of 6.1% with the optimism heading into next year, rates now about 7.1 percent with monthly payments being that much higher for buyers out there. we think it will be hard to build a lot of momentum with the affordability challenges in the market. we still think it can move higher in 2025 and the existing market will return to growth in the low to mid single digit range from an extremely depressed base.

we are coming off of back-to-back years of 4 million annualized, the lowest in a decade. off of the low for sure. we think that you will see similar growth with a backdrop favoring large, well-capitalized publicly traded builders with access to financing and land, access to trades compared to the smaller private payers who tend to rely on that regional local banking for financing. they have really struggled, struggled with the costs and availability of that capital, so we think you will see bifurcation of that growth playing out. paul: i want to ask you a 30,000 foot question. we are told that there is a housing shortage. is that true? and how did we get there? what are your building companies going to do about it? >> i think the issue right now is that there's a shortage of homes on the market. a lot of that has to do with the fact that people are locked into

much lower mortgage rates and are disincentivize to trade up to a new home and take on a higher rate. at the same time, remember that back in 2020, 2021, when money was cheap, people were going out and buying second and third homes with a boom in the airbnb market. the housing stock has been allocated in a different way than we have seen historically, contributing to a shortage. in terms of what the builders are doing, it's going to be hard for them to put a lot of new supply on the market, particularly as resale supply heats up. so, we think you will see new home production increasing in the low to single digit range, corresponding with what they see on the demand side. but we don't see that issue with housing being solved anytime soon. i loved that we talked about low rates. thanks a lot. this is my moment and then paul complains about not being able to refinance. it's a cool conversation.

so, we can move forward. the problem is, your builders, as paul calls them, they wind up building but it is still too expensive for them to buy it and they have to give incentives and it hurts profitability. how long does that part of the cycle last? that's a great point and one of our key themes for 2025. the use of sales incentives is that a multiyear high. a couple of months ago when we were looking out to 2020 five with mortgage rates coming down towards 6%, there was optimism that builders would be able to pull back on incentives to support margins into next year, but it has been exactly the opposite. we think that sales incentives will remain elevated and margins will come under pressure next year. but it's not just incentives. you have higher costs land running through the p&l with

tariffs and immigration policies adding to the margins of pressure being faced next year. paul: a home was just constructed right next to me down at the jersey shore. i'm guessing that it's -- it's swarming with workers, guessing some percentage are immigrants. what are builders telling you about tighter immigration policies in the reality around getting things built? >> there are estimates that immigrants make up 30% of the construction workforce with a large portion of them being undocumented. in the event that policy comes through next year to put a strain on that labor force, i think you will be seeing a pullback on production. you will be seeing cycle times, the amount of time from start to completion, they will elongate and that could pressure closings . at the same time, builders are going to have to fight more to attract the labor, so costs will

rise as well. alix: feels like a profitability squeeze on all ends. who in your universe can manage that? >> geography, we think that will become increasingly important. some of the markets struggling a little bit, like texas and florida where you are seeing more competitive supply, we think that builders in those markets may have to adjust prices and continue with elevated perspectives. geographically you are likely to see relative strength in the northwest and northeast. from a product perspective, with rates rising you have to think about who is the most impacted and as you expect it's the lower end entry-level homebuyer. they could remain under pressure with relative strength in the move up in a luxury segment. builders coming to mind are the toll brothers. alix: thanks a lot, drew.

paul: as his former boss, i noted he was in the office today, not working from home. mentally noted, i will put that alix: in his file. alix:and no one will read it and it doesn't matter. [laughter] there we go. paul: exactly. alix: coming up, rates at the federal reserve and transition mechanisms between the fed to the real economy. how should that play out next year? jennifer lee will be joining us. quick check here on the market. equity markets closing at 1 p.m., bond market closing at 2 p.m. the nasdaq, up by .8%. volume is superlight. january 7 kind of thing. this is bloomberg.

paul: good tuesday morning, good christmas eve morning, i'm paul sweeney alongside alix steel. special edition of "bloomberg markets," but why is it special? we are simulcasting, we can do that kind of stuff. volume is light on christmas eve, as you would expect. we have got some green on the screen across the board. s&p 500, that's good for .6%. the nasdaq is doing better, up .8% on the yield front. yields, grinding higher. that's how i would characterize

it. 4.6% on the 10-year treasury yield. wti crude is up, up $70 per barrel. tom keene is not here. i'm going to call that bitcoin up 3.9%. $97,500 per bitcoin. remember, we were at 107,000 a week ago, this thing is all over the place. alix: i love that you pointed out the 10-year yield. remember we started the year 100 basis points lower and now we are higher despite three rate cuts? go figure that out. part of that might be concerns over the budget deficit and borrowing, with the incoming trump administration facing the worst -- worst trajectory for federal bought up -- federal borrowing in modern-day history. david gura spoke with janet yellen about those concerns. >> i am concerned about the

fiscal outlook and i believe that deficit reduction is necessary to keep us on a sustainable fiscal course. president biden signed that into law, one trillion dollars of deficit reduction over the next 10 years. he did that in the agreement to raise the debt ceiling. our budget proposes an additional $3 trillion of deficit reduction over 10 years. i think it's necessary to make sure that our fiscal path is sustainable. now, congress hasn't really done anything to, you know, beyond what i've mentioned, to improve the fiscal outlook. i think that's a shame. i'm disappointed in that. i think congress needs to work hard on that. there is a threat going forward that many of the provisions on

the individual tax side of the jobs cut, job cuts and tax act, enacted by the trump administration and congress in 2017, they will sunset at the end of next year. many republicans have expressed a desire to keep all of those provisions in place. cbo said that would cause $5 trillion over 10 years. so, that really is -- so, that would be a blow in a situation where i believe in additional 3 trillion, not doing the 5 trillion, with 3 trillion more, is necessary. and if, if, if provisions are just extended, this will be a serious blow. without finding ways to pay for

them. we have proposed a lot of pay for costs that we think would fairly ask corporations, wealthy individuals, to pay their fair share with negotiated international tax agreements to create a level playing field worldwide for multinationals the united states has not yet joined, though many other countries have. that would be a revenue raising measure that i think would be very valuable. there is certainly more. so, i do hope that the new administration and congress, will if they extend steep -- extend features of j cta, find ways to pay for what they do and also make sure that the benefits go not to the wealthiest individuals, but to middle-class families. paul: all right, that was u.s.

treasury secretary janet yellen speaking of david gura, you can find the full interview online and on the terminal. let's continue this discussion with jennifer lee, senior economist. i've been on wall street since 1986. seems like we've been talking about federal deficits and the long-term debt of this country forever. is it ever really going to be an issue for markets, do you think? >> well come -- jennifer: well, good morning, and thank you for having me on today. yes, it's going to come home to roost at some point. when? i don't know. it's been going on for 40 years. how long? the first thing i thought about listening to janet yellen was -- the opposite is going on in germany, where they are trying to pry open the wallets. they can't even up the deficit more than 3.6%, let alone 5%.

it's a very different situation playing out around the world. certainly u.s. deficits can keep going at this pace. at some point it will come home to roost. the question is when and i don't know. alix: for you guys sitting in the airport, american airlines appears to have resolved their tech issues that impacted flights, so everyone can breathe a sigh of relief. here's another interesting one, banks are suing the fed over stress tests, sing the vacillating requirements are tough to manage. paul: that was the whole endgame thing. i'm with jamie dimon, enough is enough. alix: the financial index is up and i guess the point is -- it matters but when, how, and where on the curve? >> -- jennifer: you are already

dealing with issues of how they will carry over monetary policies. one year ago, if you remember, when we talked about rate cuts at one point, that obviously didn't pan out. we have slowed it down and change the cadence of how quickly they will be cutting rates. slowing down the pace. but anything could happen. there's even talk of a possible rate hike depending upon -- depending on what happens with tariffs. we are of course still leaning towards cut, just with a slower rate and slower cadence, of course. paul: jennifer, to what extent are you concerned about what could be some potentially inflationary moves by the incoming trump administration? whether it is tariffs or changes

in immigration policy, both of which some folks suggest could be inflationary. how much of a risk is that in your mind? jennifer: i'm going to say all of the above. on the tariff front, going back to the who, what, where, when, why thing. we know that he's going to put huge tariff on companies -- countries and profit. whether or not have a blanket tariff, like 10% to 20% on all u.s. imports, $3 trillion worth, how long that will last for and how much more the products will be coming from mexico and canada, europe as well. the products they are targeting will be inflationary. it's all about how u.s.

consumers fair and whether or not they will be buying these more expensive u.s. imports or will be moving away to potentially lower-priced products in the u.s.. or they could stop buying and we will have to wait and see how that pans out. on the immigration front, we know for an example that groceries in food, half of all workers on american farms are immigrants. if they are no longer available to work, you can see the prices of food also rise. all of this is, i think, quite inflationary. how much? we will have to wait. a stronger u.s. dollar will help to soften the blow a bit. it will also depend on the retaliation if there is retaliation. so many unknowns. jennifer: would your base case option for a hike to be different today than it might've been six months ago for 2020 five? like if it was 5% six months

ago, what is it now? jennifer: we were never in the hike category, but this is something with the potential of not being able to be ruled out. rates are still at very restrictive levels. they don't have to be this restrictive. we can see them coming down but not at such a fast pace. we already saw strong momentum coming in. we saw the most recent uptick for q3, gdp, the latest numbers on personal spending for november are pretty decent. core orders and durable goods are solid. we are still seeing a solid economy heading into the end of the year. but again, things are becoming more uncertain given the incoming administration and the potential impact through tariffs. there was a big drop in the consumer confidence survey.

i think that people are very uncertain about how things are going to play out. i think there is still room for rate cuts. rate hikes, i think, it's not likely but again, i won't rule it out. i think it would have to take something pretty significant for the fed to actually start raising rates. paul: the other side of the equation, of course, is the labor market. what is your view of the u.s. labor market here? jennifer: so strong, still healthy. fed chair powell at the last press conference mentions that. a 4.2 percent jobless rate is still historically low and we are still seeing decent wage gains on a monthly basis. .7% was still very strong. that is good news. of course, it is going to depend on what happens with all of the immigration.

deportation is going to be taking place in 2025. how much are we going to see a problem from the construction sector, in terms of farmers, that is going to have i think a big impact as well. it helps those who are still unemployed in the tight labor market. 1.1%, 1.2% is still historically low for a jobless rate. alix: despite the uncertainty, it feels like themes can stay, jay powell in his press conference and how good growth has been. u.s. exceptionalism, base case next year? jennifer: still looking at solid growth around 2% or so. still solid compared to what you are seeing elsewhere around the world. everyone has issues, obviously, but there are unique ones coming up in europe. with all the political strife, begot germany struggling to stay

out of recession. the u.k., as well, just got their numbers revised lower. a flatlining statement. potentially leading into negative territory in the fourth quarter. there are still a lot of issues playing out in europe. china is also struggling. we are waiting for them on the fiscal stimulus and monetary policy stimulus in order to fight the slowdowns they are seen domestically and on the international front. u.s. exceptionalism is still very much the main story right now. it's just of course there is still so much concerned with what happens with the incoming administration. it's a new phase, it's a new administration, a lot of it will be coming down and we have to be prepared for that. alix: good stuff. -- paul: good stuff. jennifer lee, thank you so much. that's a story that i don't think is well known in the u.s. by most people about how good the u.s. economy is relative to the rest of the world.

again, think about germany, france, china, that whole concept of economic exceptionalism -- yes, is inflation high? but look at the rest of the world, coming out of the pandemic, for better or worse it seems like our economy is way stronger than other developed economies. alix: like germany and its near stagnant growth with little upside. paul: i'm not sure that story is out there is much for the average american consumer. alix: i feel you. m&a for next year, everyone is super pumped. but then the u.s. steel nippon deal being blocked by the biden administration, that's ahead scratcher. we will break that down in a minute. this is bloomberg. ♪ 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.

paul: all right, good christmas

eve morning from new york city. this is a special edition of "bloomberg markets," streaming live on radio and television, that's a cool thing. i tell you, if i needed an m&a banker, our next guest coming up, i'm going to bring him in soon, paul taubman is the deal. looking at the markets here, s&p, .7%. the nasdaq, .9 percent. strong showing on christmas eve. like volume, as one would expect. treasury yields, 4.6%. crude oil is back above $70 per barrel. bitcoin, up, under $98,000 per token. coined after tom keene, i know he has continued interest in that. coming up, let's check in with pj t, paul taubman's firm. he's one of the leading m&a bankers on wall street and he cut his teeth on more -- with

morgan stanley. started at dean witter. one of the top bankers on wall street and he would be my first phone call if i needed an m&a banker. he says next year could be the second-biggest year for mergers and acquisitions in a decade. take a listen. paul: we are on the verge of a really big uptick in m&a. we came into 24 thinking the marketplace was too optimistic about 24. that there were a number of planks that needed to be built. a number of those have been built. we have gone through elections around the globe. we have seen rates coming down and a change in administration creating a more favorable regulatory review competition approach. private equity has gone there. the balance between investment and monetization is better in line. corporate is still active. we look at 2025 and we just

can't wait for it to get going. my prediction is, other than 2020 one, which was an aberration, this could be the best m&a in 10 years. >> how do you prepare for that? what does it mean in terms of the workforce that you need to prepare for something that could be the start of another cycle? >> well, we knew that ultimately we would be in another cycle like this. it's not just 2025. we knew we would be in a multiyear cycle. 22, 20 four, that's not the steady state environment for activity and it's why we are so aggressive in hiring these last 2.5 years. you can't hire today. we need to have planned for this and we plan for this. >> what does it mean for private equity outside of m&a? do you sell or go public at this

point? i mean, how many options are there next year? >> there's a multitude of options for optimization. dividend recaps creating capital through the credit markets. you have ipo's and continuation funds. if you are a private equity investor, you are looking at all of those options. the challenge with the ipo market is the shadow pipeline of companies owned by private equity firms looking to go public, it's enormous. for many of those companies, that first foray into the markets will be almost all primary, meaning there is very little capital return for the private equity firm. it's a multiyear process to monetize your steak. the preferred alternative is going to continue to be sales of companies or continuation vehicles. alix: that was the pj t ceo paul tabb been discussing m&a. obviously it's his job to be

optimistic. one area where people are not optimistic, nippon steel and u.s. steel, they proposed the acquisition of u.s. steel in today we got news that is even one step closer to being blocked after the security panel deadlocked on their final review and left of the decision with joe biden. for more we are joined by mike dorning. mike, is the deal totally dead? >> it's basically probably dead. biden has been clear that he has no interest with the deal going through. biden has been close with unions . that's an influential voice in the biden administration on top of the country becoming more protectionist and more wanting things to be made in the u.s. alix: so, what does this --

paul: so, what does this mean for u.s. steel? how did -- how much did they need to steal and where they go from here? >> i'm not a steel investor, but you have to go back and find someone else, i would not count on this going through. if you have been counting on this for six months. alix: if that's the case, when trump comes into office, could he reverse this if he wanted to? >> president trump will not reverse this. do not hold out your hopes that he will embrace japanese ownership of steel companies. there's always a chance that they could resubmit. there's ways of getting around these things if the president wants to help you. i don't think you would look to either biden or trump to help you on this. paul: so, this became pretty

political pretty quickly, mike. does congress care about this kind of stuff or do they say let the free market take care of it? >> congress does care about this kind of stuff, particularly because voters in pennsylvania care about this kind of stuff. this is just the worst possible transaction in this political climate. think about the name of the company. u.s. steel. nippon, everyone knows that that means japanese steel. the steel industry. this is one of the first industries trump put tariffs on to protect last time around. it's very identified with strength, steel, manufacturing, steel, building, steel frames. this is a gut connection to making america great again. the idea of a stronger, muscular country with strong manufacturing. you know, just having another

country, even if it might keep the jobs in america, it's hard to sell politically. and if you don't have the unions behind you, it's going to be really hard. alix: speaking of jobs, mike johnson, will he have a job through next year? >> the problem is, there's no clear candidate behind him. there are others that could step in, but there's no clear trump favorite. he is certainly in a tenuous position. president trump was unhappy that he didn't get the debt limit raised. president trump wanted the debt limit raised before he came into office, either for his entire term for the first two years of his term. speaker johnson actually didn't do the job the speaker is supposed to do, which is to listen to the political situation with the incoming president of his party,

congress, and try to come up with something that will work for everyone. either he didn't prepare trump for the likelihood that this wasn't going to work or he didn't take seriously that trump really wanted this. that said, it's a really, really tough job right now and it's going to get tougher. just ask kevin mccarthy, paul ryan, boehner, any of the prior republican leaders. now he's got an even smaller majority than they do and he has got a hard line right that is emboldened because they just defeated both speaker johnson and president trump on this just days ago. and they know no one can get penalized too badly and this congress, because if you lose two votes on the republican side, you're done with it. so, it's not an easy job and that might be the only thing that protects him.

it's hard to see other people doing better. that said, someone like steve scalise might be interested. tom ever, number three, might be interested. you would have to get trump and everyone else behind you. paul: that is the last job in washington dc. alix: who would want that? besides elon musk? >> a lot of ambitious people in washington. [laughter] paul: exactly. thank you so much, mike, for giving us the lowdown on what's happening or not happening with the nippon steel deal. president biden will opine on that sometime soon. getting a lay of the land on what this congress can get done. they have a majority, but it's a thin majority. the left and the right are pretty adamant about where they want to go. doesn't make that much of a difference in the middle ground. alix: 2026 elections are really

far away in the world of politics, using that as a threat is dicey as well. s&p around the highs of the session, up by .7%. ♪ d you ever worry we wouldn't get to enjoy this? [jeff laughs maniacally] (inner monologue) seriously, look at these guys. they are playing great. meanwhile, i'm on the green and all i can think about is all the green

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alix: happy christmas eve. looking to a special edition of "bloomberg markets." i do want to single out financials. the financials indexes up almost .8 percent, at the highs. this follows the headline at the banks are suing the fed over stress test, citing impact on capital levels, saying it is -- it's vacillating requirements make it tough. that is interesting, although let's be honest, it is not going to take a lot to move anything today. paul: it is not. we have volumes 35% below averages. pre-holiday trading is what we see. alix: it will probably be this way throughout the week. paul will be here to take you through all of that. let's get more here on these markets, particularly with what happened with american airlines this morning.

natalia, what is up with american airlines? how is the stock doing now that they have resumed everything? >> the stock is still down by less than -- yes, by 2%. the company grounded all domestic flights this morning. company said there was a technical issue. they did not specify what that was, but they said it impacted their ability to release flights. this is the last headline you want to see on a day like today. the company planned more than 3000 domestic flights, about 500 international flights. that technical glitch lasted for about one hour and then resumed those flights. overall it is a very busy day. the faa expects overall more than 3000 u.s. flights across all carriers, and personally i took american airlines on sunday, but i was very lucky that everything was smooth. alix: you are not taking anything today? paul: i'm not traveling.

again, my travel strategy is, only if i get paid will i hop on a plane. that is how i am going these days. alix: except when we go to ireland or italy. paul: aruba. skiing. what do we have on the chip stocks today? natalia: chip stocks are moving higher. we see stocks like broadcom are up by almost 3%. amd is also up by about 1%. this gain is driven by the u.s. biden administration's probes into chinese chips. this investigation is focused on the so-called foundational chips that are used in various industries, from medical devices , telecommunications, and this probe can potentially last for months. we can assume that the final decision will be made by donald trump administration. alix: before we let you go, on your day job you chopper -- you

cover flows. hedge funds are doing -- what hedge funds are doing, commodity trading, they are the trans-followers. what are you hearing from hedge funds in positioning right now? natalia: hedge funds had a really good year. best annual returns since 2020. he did a couple of really good trades. first of all, they sold tech stocks at highs before that selloff. it allowed them to have more dry powder to buy the dip. they also were really well-positioned ahead of the u.s. presidential election. now they posted more than 40% return. they are trying to be more cautious and then looking into 2025 january is typically a month where hedge funds are active. more long positions been short positions. however, this january can be different because what i hear from sources i spoke with, people are just waiting until donald trump is inaugurated. you will have more clarity on his policies, and then hedge

funds will be ready to pick up specific stocks. paul: very good. we appreciate that, as always. covering the markets for bloomberg news. i learned how to say coaches sheskey. it took me a while. alix: really insecure about the talley's last name for a long time. paul: thank you so much for bringing that news on the equity markets. we are trading higher this morning. let's break it down a little bit more with our next guest, lei qiu. alliancebernstein cio for thematic innovation equities. would you tell me what the medic innovation equities is? my boss would come up to me at 9:29 every morning and say, don't lose money. that is not thematic innovation equities, is it? what do you do? how do you guys look at the market? qiu: we look out and see the biggest trends in the market. it is our belief that the

secular trends, irrespective of economic outlook, will provide long-term growth for equities. if you think about it, wall street actually has consistently underestimated some of the biggest phenomena. for instance, iphone, how big it was going to be. or how big internet was going to be. if you look most recently, nvidia for that matter. if you look out and think, what makes a stock go up? it is consistently beat and raise estimates. if you capture the big stories, that is how we generate long-term return above the market for our investors. alix: think themes, paul. paul: johnnie cochran. alix: don't do that. that is also probably a fair point. based on those themes, all i hear is ai. i'm assuming ai is in your bucket. how do you think about it? qiu: well, i think ai is one of the most critical things we are thinking about these days.

when you look at 2024 ai was the dominant theme, but the theme was really what is enabling the ai infrastructure. that is why we have seen a lot of names, select few outperform the market. it is very concentrated. as we look further out in 2025 and beyond we think first of all enabling eight -- enabling ai infrastructure is still going to be here. especially with the fund from nvidia that is going to be a new product. there is a lot of pent-up demand. we also need to see the adoption of ai. what applications are using ai? we think the demand will remain strong. the hyperscalers capex will continue to go up, but the level of increase and slope of it is very dependent on the strength of demand. as we look through 2025 to 2026, how big the demand for ai is will become increasingly more important. so, we are looking for that and, that said there is some chatter

in the market about how we have reached the limit of ai and we really disagree. we think ai first and foremost is really about accelerated computer. it is about migration to the cloud, the next generation of digital grid. demand there remains strong. also we are seeing the evidence of broadening out. we see companies in the data layer, the companies that handle data analytics and storage, those players start to do well. and even the software sector we see select players adopting the ai agents. we are seeing those names. if the revenue for ai is big enough to move the needle those names will do well as well. paul: you know what i haven't seen that i have been used to seeing in my history? a big ipo that defines an industry. i'm thinking google for search. i'm thinking facebook for social.

that kids come out of the garage in palo alto or boston and they are the defining company for that new, transformative technology. should we expect something like that for ai? or is it all existing tech companies trying to migrate? qiu: there are quite a few unicorns. they are still public today. i'm not here to select certain names, but there are quite a few public companies we are watching closely that, should they become ipos, could certainly take us to another level. that said, these are already very large companies in the ai area. they are simply choosing to stay private for now, but we are watching them closely. alix: what are some other themes? of us your next top theme. qiu: what is interesting is a couple of things. one is even to stay on the topic of ai, within the ai infrastructure because of the physical constraint on the data

center side and the power constraint the companies are actually actively looking at their infrastructure and there is just no wrong way to play it, but there are multiple ways. you don't see one giant cluster of gpu's, but there could be a few of them, smaller, because of power constraint, but they all need to be connected. we are looking at communication equipment companies that play with in the data center and connect the data center. that is one area we think will see strength in 2025. other things we talk about, we talk a lot about tariff, inflation, and that is going to put inflationary pressure in the market. but one way to address that is automation. we are already seeing companies widely adopted that. it does not sound as topical as a consumer app, but it is being widely -- wild -- widely adopted. think that could be the killer app, the efficiency gain from ai that is already happening in the marketplace.

see very large manufacturing companies reaping billions of dollars of cost savings by using ai. ultimately you need more sensors, you need more internet of things. an area we also think will do well in 2025. paul: one of the things as a former banker i think about is m&a is that going to ramp up after some shallow years? maybe it is because we have a new administration. maybe it is because interest rates are coming down. we heard from paul taubman, the founder of pgt, optimistic about m&a. is that from an investor perspective something you can factor in as a theme across the injuries you invest in? qiu: it is certainly a possibility. it is very hard for us to call that m&a is going to happen or which ones will be taken out. but as we look with the current administration, the more friendly regulatory environment, i presume -- it is too early to

tell, we shall see. also in terms of how large companies have become, the size of the company and the balance sheet strength, you could see him being a theme, potentially, in 2025 and beyond. alix: what is one theme you think has gotten a lot of you are not buying? qiu: well, as an innovation investor i would say never say never. it is hard, but i think there are some things in the market that it is about stockpicking. it is less about a story. everybody can tell a story, but you have to find the right companies. so, i would be at the camp saying, there is a lot of innovation in the marketplace, but not everything is going to play out. because you need the right management, company, and product to ultimately deliver the right results. i would say not everything is created equal in terms of innovation and one has to be selective. paul: for innovation, some big

themes, do you care what the fed does or do you say, i can't worry about that, i'm not a stock, i'm not trying to time the market? qiu: i would say when the fed really makes a dramatic regime change, which is rapidly rising rates that we saw in 2022, those do impact long-duration assets. but as long as the fed operates within the band we, frankly, that is our going assumption and we just focus on stockpicking. as long as there are no dramatic shifts that would force us to change our discount rate. over a long period of time fundamentals do matter, and particularly in this area where it is about innovation, the secular growth, we don't care as much about accra economic outlook. alix: -- macro economic outlook. alix: thanks a lot. lei qiu, alliancebernstein. get this.

estimates project on most 120 million people widely traveling within 50 miles this holiday -- will be traveling more than 50 miles this holiday season. apparently almost 90% of them by car. actually i'm feigning ignorance but we would have been driving if our house had been ready. paul: you said it was going to be ready by thanksgiving, and here we are at christmas. memorial day. alix: ok, how about presidents' day weekend? let's start there. you going to talk more about the holiday chalices in. he will also bring you some of the interview with the jetblue ceo and get an up date on what is happening with american airlines. we are rolling a little bit off the highs of the session. yields still higher. this is bloomberg. ♪ 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

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you have to make it. and if you want a successful business, all it takes is an idea, and now becomes the future where you grew a dream into a reality. the all new godaddy airo. put your business online in minutes with the power of ai. paul: good morning, good tuesday morning, good christmas eve.

i'm paul sweeney, alongside alix steel. this is a special edition of bloomberg markets. we are doing a simulcast here. a little bit of green on the screen here. s&p 500 up 43 points. that is .7%. the tech-heavy nasdaq up 1%. we are on the 20,000 watch for the nasdaq would -- nasdaq. 10 year treasury yields a little bit higher. i'm not refinancing the mortgage anytime soon. oil will -- oil little bit higher here. i call that out for alix steel. and bitcoin up 4.75 percent, 90,000. a big risk-on move in the crypto space. folks, earlier this month jet lose ceo joanna geraghty sat down with bloomberg surveillance for an exclusive conversation that touched on the need for the airline to evolve. what they expect in the next

trump administration and the cost of doing business. here is a part of that conversation. joanna: as we think about the holidays, the summer time, that is where jetblue does its best. the troughs are definitely more challenging. we have reduced a lot of flying in the troughs. it is about balancing out that year and making sure when demand is high you are focused on trying to capture your share of demand. the trough is really reducing the losses. >> do you expect increased fares this year? joanna: we are hopeful we can keep fares affordable. it is more expensive to travel now because airport costs have gone up, labor costs have gone up. our great food comes at a cost. when you start seeing the grocery costs go up that means the food in an aircraft is going to go up too. we are trying to make sure that jetblue is an affordable fare for customers and accessible for a leisure customer. annmarie: there has also been

other constraints on the airline industry, getting the parts they need, the planes they need to fly, and next year are talking about we might get tariffs and potentially that might impact the supply chain. how are you prepared for that? joanna: jetblue has a unique situation. we have a number of aircraft sitting on the ground but are not able to fly because they are due for an engine expection. that is definitely headwind for jetblue. as you think about tariffs, it is a bit too soon to tell. we take a lot of our aircraft from alabama, but depending on tariffs we do have exposure in europe and canada. annmarie: the jetblue-spirit airlines potential merger was blocked. are you thinking about going at it again in this space? more mergers and acquisitions because there might be a lighter regulatory touch in washington? joanna: we are really focused on delivering our new plan. we want to see just thrive -- jetblue thrive as a company.

we are focused on flying into the places people now. we are focused on our standalone plan. annmarie: you may not dip your toes back into that space, but do you think this is going to be a more welcoming administration when it comes to things like mergers and acquisitions? joanna: it is hard to speculate because we don't know what the plan is going to be, but it is hard to see an administration that is worse than the ministrations we had, around antitrust. alix: yu ve announced a number of changes, including closing down certain operations in a number of cities. i believe you are going to cut some 50 routes. is it done? are there more to come? joanna: the network is always something that is evolving. we are not going to rest on our laurels. if a particular market is now producing results we are going to take a hard look at it. we are going to point those planes to a place where we can make money. we have got to become profitable, and that has made the need to make some tough decisions.

alix: that was joanna geraghty speaking with the bloomberg surveillance team. my 10-year-old loves jeb lu because of the tv thing and free headphones on every seat. paul: building a loyal customer. alix: she is like that, or business class. i have done something wrong in my parenting. let's get more on holiday travel, particularly with american airlines. we are looking at 120 million people traveling at least 15 miles -- 50 miles this holiday season. joining us now i she retailer. is everything ok? what is happening? >> thanks for having me, guys. we have seen the worst of it so far, as far as air travel goes. with american airlines calling for an hour-long ground stop across the country after seeing some technical glitches. it was brief and the airlines have not warned of any delays, but honestly any hick up in the

holiday commute could set people back in their schedules. that is really important, especially the day before christmas. aviation data provider cerium said the airline is sending out over 3000 domestic flights and about 81 international flights scheduled for the day. it is supposed to be a jampacked day, and that set some folks back. paul: a jampacked day on the roadways as well. aaa saying 90% of this travel is going to be by car. what are you hearing out there? are you seeing any weather issues out there any congestion issues? how is it going so far? sri: if you look outside and you are in new york, or any nearby states, you should see an inshore two of snow starting to stick. it is thick enough to potentially cause some delays on the road and the train tracks as travelers make their way back are. and even by rail. travelers should block out some

time to leave a bit earlier than planned if they can. alix: how are prices at the pump? is this going to cause people more? sri: i would imagine, but prices are actually a bit lower this holiday season. the trickiest part is going to be getting out there as the snow starts to stick and people are doing some last-minute travel ahead of christmas. paul: $3.75 to philip -- we hunted $75 to philip the beemer at the shore. alix: so we like this? anything with the three handle works for you? paul: it does. we are not in california where you have to spend all of those taxes. what are the airlines saying about their ability to handle this volume? there is nothing that gets me more aggravated than my plane takes off on time, it lands on time, and i sit at the tarmac because they don't have enough

people to again or something like that. what are the airlines saying about their ability to handle this travel? sri: tsa officials announced earlier this week they have added over 600 new officers to handle the very big volume of holiday travelers. and over on the roads that gridlock is going to be tricky today, and after christmas, and probably through the new year. port authority is suspending all emergency roadwork at the bridges. i know, good news. and additionally the path trains and mta subways are running on weekend schedules for both christmas day and new year's day. there is still some leeway for folks trying to get around. alix: tell me a fun fact. where are people going the most? or planes going? where is the most action this holiday season? sri: i would imagine it is always going to be new york, or

potentially somewhere warmer. there has been a lot of activity over in the northeast, especially on the corridor, with the trains. we just had those pretty bad hiccups yesterday with amtrak, and there were a lot of disgruntled customers. so, a lot of people are coming in and out of this hub in new york city. paul: i'm taking the train home to the swamps of jersey today. new jersey transit. i'm feeling good about it. they are working like crazy on that project. they are building bridges, roadway for the strength -- with the trains. alix: we need it. paul: we need it, but every time i go out there ac new progress. you can see there is another half mile of track. alix: i had seen laguardia under construction for 25 years. to the point i did not remember what laguardia was supposed to look like. sri taylor joining us to talk

about all things travel. americans, scheduled to fly, 500,000 seats on christmas eve, and the most master -- the most domestic partners, dallas-fort worth. paul: that is a monster airport. alix: they basically make all of the things you see in a restaurant. they have a really good read on the consumer and demand. what the company is doing to prepare for tariffs as well. will that be a drag on the industry? we are going to break that down. we are looking at the equity market around the highs of the session. we are also counting you down to a five-year option. paul is excited. the seven year happens on thursday. this is bloomberg. ♪

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alix: happy tuesday. happy christmas eve. i'm alix steel with paul sweeney. this is a special edition of bloomberg markets. taking a look at the equity market, the s&p is up. the nasdaq of percentage point up. the financials are also doing pretty well. a little off the highs of the session but nonetheless as banks sued the fed. paul: i didn't know that was a thing. alix: apparently now it is a thing. we are also taking a look at the bond market. and also watching the five-year auction. should be coming in at any moment's time.

economists have raised their projections for u.s. inflation makes you do tariff concerns last week the ceo of the food distribution giant cisco weighed in on those challenges now facing his industry. >> we are seeing a bit of a normal environment at the moment. the challenge that consumers are facing is the following. if you look at tech humility over the past two to three years menu prices we go into a restaurant or up about 30% to 40% versus 2019. i think that is the pain we are all feeling when we go to a restaurant. we are taking actions with our supplier community and with our business to help bring those prices down so we can help restaurants lower menu prices and still hit the profitability targets that those individual business owners are hoping to achieve. >> it seems like consumers looking for deflation are looking at a december alone where cocoa, coffee, up almost 40%.

more than 10% respectively. and there is something you could do to bring those prices lower. what exactly is it at the end of the day? do you see consumers shifting their preferences to goods that are cheaper? >> that is a great question. we view ourselves as part of the solution, not the problem. we have a four-part problem to increase the pain that consumer is feeling when they go out to eat. first and foremost is to work with our supplier community to bring down costs. we are the largest purchaser of food in the food away from home segment. leading with our suppliers to help them be more efficient, the frequency that we buy, competitive environments to have suppliers of products compete for our business so we can get to a lower price and pass that value and savings on to our customers so they can have a lower price. step two is the cisco brand. we offer a private label product in that product is very high

quality and enables our customers to save money. we save them time, save the money. it may surprise you that 50% of what we sell to a mom-and-pop independent restaurant is a cisco-branded product and we can lean in harder there. we call them swap and save opportunities. they can clear it through our 7000-plus person sales force to share that value with our customers, to educate them. if they swap they can say. number three is to take time out of the kitchen. help them with the opportunity to take labor costs out. we have prepared foods that we can lean in by coming in advance of it cutting the vegetables in advance in the kitchen and those prepared foods are a good opportunity for our customers to take labor costs. those of the two things that have increased most. the labor costs are up. we can help with providing was of those opportunities.

last but not least is lower cost alternatives. if one team is spiking we can help the customer understand, make the following changes through your menu, you can shift consumer purchasing to a lower cost of food. in the end consumers save money. paul: that was kevin hurricane, the ceo of cisco. you can find a full interview on the terminal or online. let's get back to these markets here. eric is a co-chief investment officer at sound income strategies. eric, i'm guessing by the name of your fund that your fund, income strategies, where do you like to get income? what is the best way for you guys to invest in income-producing assets? >> we also have eric litan, who is the bond guy. i'm focused on high-yield stocks, but we also do bond portfolios as well. basically it is looking for

attractive spreads or opportunities for improvement for me when i'm looking for are companies that have higher yields where there is some scope for improvement. basically the stocks are cheap, the yields are high, and we think the fundamentals should improve, or at least not deteriorate. alix: from that perspective you are describing small caps. there has been so many issues with the sustainable run in small caps because of the overwhelming macroenvironment and the questions around immigration and tariffs and taxes. how do you manage that? >> i will take the politics out of it. if you look at the centers this year -- i will speak about the s&p 500. you basically have had negative revisions in seven or eight of the 11 pretty consistently. if you take out the magnificent names the s&p is at negative eps

growth for 2024. so, it has really been a very narrow market. not so much driven by politics, but driven by the way the consumer is behaving. and also given by the rush in i.t.. people are spending money in the hopes that i.t. will lower their costs. but going forward instead of looking in the rearview mirror i think that will change. we will see a broadening out of the market and -- as the negative revision period in and we see positive performance broadly instead of just tech names. you're not just looking at small caps or mid-caps, but all caps where there is underperformance. if you look at the sectors you can see health care has been one of the weakest sect is, as well as material stocks, and basically anything having to do with energy. those are the softest areas where there might be an opportunity for a rebound. we try to be diversified and

look at things across all areas. paul: if my pet peeves is that technology companies -- and i always pick on apple because i get to talk to tim cook quite a bit. they've got this gushing -- that is a kyiv a term -- free cash flow every year. they can issue debt if they want to. and they buy back stock. and that is a wonderful thing, but they have little to no dividend yield. how do you think about that? if tim cook walked into your office today what would you tell him about dividend policy? >> there is a few things. dividends are inefficient relative to buying back stock. that is sort of tax policy. he is actually doing the right thing in investing in the company and buying back stock instead of paying dividends. our clients really want dividends because they like to get a check in the mail, but the amount of free cash flow apple

generates, they need to put it to work. they have some optionality. as a former corporate strategist on not going to pay a 4% or 5% dividend yield. investors would like it if they paid more, but he is behaving in a tax-efficient manner. the challenge with apple is it is very hard to grow. they have become a dynamic platform. they have pretty well saturated their markets, so they need to come up with some new things. whether it be software development, or some hardware platform for their software. that is hard to do when you are pretty much dominant in your core formfactor. alix: paul did not enjoy that answer. he would definitely prefer that dividend boost. paul: i'm going to stay on tim cook. alix: that is for sure. let's get to the idea of all of the money kind of sitting in money market funds for my money

in the high-yield savings account that is not so high-yield anymore. what does that go? or should that go? eric: you are singing my song. $7 trillion sitting on the sideline needs to find something productive to do as interest rates come down. unfortunately with inflation being stubborn we are seeing the fed being less likely to lower rates, which means more of it is going to be sitting in cash longer. we have a couple of funds. those are above what you could typically get in cash. we are going to get a bit more inflows, but the challenge you have for ordinary people is, what can ty do with the money? buying apple or the mag seven names, some of them at 50 times earnings, seems risky, to me.

even though they have tremendous free cash flow and a great businesses. it is just super expensive. that is why we believe there will be a shift to more value names and cheaper names in equities. but we are also seeing it in fixed income. a lot of people saying, you know what, instead of being on the ultrashort and maybe i will move out a little longer. paul: equity investors have just enjoyed two years back to back of north of 20% returns in the s&p 500. how are you guys approaching 2025? what are your expectations? what are the areas you guys are looking at? eric: only really index investors got that. if you look at what has driven the market has been all technology. or in consumer, where i consider amazon at technology company. web service is a big part of

their earnings. i consider tesla marvell technology company. you take those out everything else has underperformed. the growth index is up over 35% this year, led by tech and value stocks are up 15%. investors who have been in those areas have great returns. investors who have been elsewhere have had above average returns, but not as spectacular. in 2020 five the sledding is going to be harder for technology names because their growth rates relative to everything else are slowing down. so people are not going to pay those premiums to get that rare and superlative growth anymore. they are going to say, if i could get 15% on a stock i would pay that more than a high-expectation stock that has doubled in value over the last year. we expect more that to happen. in terms of sectors, i mentioned the three -- energy, materials,

and health care -- that have been the lowest performers. i think there is an expectation that has been reset. some of those are going to start to shine. the area i am most concerned about is the consumer. if you look at the latest consumer report, take out autos, the consumer was down. that shows the economy is weaker than what people are talking about. that is where there is more risk. the dot plots say you are going to get two more rate cuts. we think maybe three. because the consumer is weaker than people are talking about. it is just what your prior guest was talking about. the aggregate price increases have gone so far that even though inflation is slowing down people are struggling to pay. alix: i know you want to stay away from policy, but that is where policy counts. if we have tariffs, for example, that is going to affect what people might be paying, which

affects that lower income consumer, no? eric: i think tariffs are generally a bad idea. i think the administration in the past has used them as a cudgel to get people to behave the way they want them to. i think the biggest positive we have seen so far with trump team is that they may stop blocking m&a deals. if there is a greater free flow of capital you will have greater capital efficiency, and some of these cheap names will be acquired. alix: paul: do you expect that to continue in 2025? eric: this is a great year to be a banker. [laughter] paul: exactly. that is what they like to hear. alix: paul is a recovering m&a banker, so he is pumped to hear that. eric beyrich joining us, sound income strategies. i have to tell you, high-yield savings account, the issuers had no problem lowering that rate

for the fed cut the last few times. paul: they are good about that. yet the 30 year mortgage, 6.7% for a fixed mortgage. we will see how that plays out again. the 10 year treasuries sitting at 1%. how about that? alix: we are off the highs of the section -- of the session because we had a five year bond offering. the high-yield rate coming in higher than the prior auction did. there is still demand, but not that much volume at the moment. coming up, we are going to speak to the ceo of a company trying to serve as a new conduit between private capital, government, and critical mineral innovation. you will have a conversation next. 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. paul: i'm paul sweeney alongside

alix steel in new york city. a special edition of bloomberg markets. why is it special? we are simulcasting on bloomberg radio and television. we also have some green on the screen. the s&p 500 is up .8%. volumes are light, as you would expect. about 30% below average for the equity markets. the vix is now below 16. 10 year treasury yields are nudging higher. grinding higher, four point 61% on your 10 year. commodities, a little bit of a lift there. crude oil up about 1.5%. bitcoin, i'm calling it out again until somebody tells me not to. up 4.5%. so, back up against that 100,000 dollars level. we will keep an eye on that. the renewable energy industry faces an uncertain future when president-elect trump takes office. yesterday on bloomberg galvanize climate solutions co-founder tom

steyer made the economic case for why renewables are the path forward. tom: when we really look at international competitiveness for the united states of america, in electricity, cars, what we can see is the markets, business, economics are driving us to clean energy. that is where we are going. there is nothing political talk can do about it. that is what the costs say. that is international competitiveness. >> so the cost structure will make the move for us? which industries are going to make that case to the incoming white house? because they are looking at the energy industry, the oil production and gas companies, and is, you know, we are going to explore and look for oil in all of these places. the arctic, whatever. tom: for all of the industries manning electricity, they are going to want the cheapest, because that is a huge driver of how they compete internationally.

the cheapest electricity is going to be renewable. that is true here and around the world. when we talk about the idea of moving back to fossil fuels, the implication is somehow fossil fuels are cheaper. they are not. they are already more expensive. in 202386 percent of new electricity generation in the whole world was renewable. they were not doing it to be nice. it is all about international competitiveness and national security. the sun is going to keep shining. the wind is going to keep blowing. this is something that is going to be driven by business decisions. and honestly i think the trump administration will get behind it, because that is what is going to drive american competitiveness. alix: that is tom steyer making the case for renewable energy, and energy security, it is a top priority for the trump administration. resident elect trump as promising to increase energy production. he's going to tinker around the

edges when it comes to the ira, but one area where trip -- where president trump focuses on is minerals and to decrease our reliance on china. but that is a tricky spot. it is not easy to stick something in the ground, get something out of it, and sell it. drew horn is a former administration refers -- official and now part of greenmet. it is great to get your perspective. clearly this is an alix steel special when it comes to booking. basic stuff, what does greenmet do? drew: but we try to do is provide the connective tissue to drive the solutions forward to commercialization. obviously i worked on this issue as one of the leads for president trump during his last initiation. in the interim and time since we have been working on the private side to connect private equity, policy goals, public funding. there is a lot that needs to be brought together. what i saw in the white house

was a real gap in some of the connective tissue. greenmet tries to bring it together for business growth. it supports a lot of the national security needs of the united states right now. paul: where are some of these critical minerals that are part of some of these newer technologies? whether it is lithium or stuff i don't even know about? are they here in the continental u.s.? are there other parts of the world that are maybe not so friendly? explain that to us. drew: i will try not to quote my geologist too much, who loves to talk about how we have all of these resources inside the united states. paul: you do? cool. drew: depending on what levels of demand you are looking at. you can meet our demand and export materials if we were to deregulate and open up a lot of the processing and extraction. but they are located throughout the world as well too. we have looked across the planet. i have been to places such as greenland, all across south america.

obviously africa, central asia. and no doubt everyone knows there is a lot in china and under china's control across the planet too. which i think is something we should not necessarily see as a threat so much as a reminder that we need to have more of a leadership role from a u.s. perspective in this space. alix: where are the biggest funding gaps? there are three buckets i can put this in. one is finding the asset and developing it. one is refining that asset. in the other is transporting it. we do you play and where are the biggest gaps? drew: the biggest gap is in the processing midstream, if you will. there has been a lot of movement to develop things on the manfacturing site.d the oem the needs to be more done across the entire chain, but it is the midstream. we have been focusing on the last four years is partnering with the best u.s. and north american processing and

metallurgy companies, demonstrating that they can out-cost compete chinese -- let's just say, environmentally-damaging tactics currently. paul: i would assume under a trump administration that some of the permitting associated with mining these materials will be easier. is that the expectation in the marketplace? drew: i think so. that is the goal, and those of us in the private sector that are having some of these conversations and making recommendations on what would allow us to scale our advocating for that. we are not advocating for anything that does not make sense. you need permitting reform, you need immigration, materials are brought into our technologically-developing and advance, i would say, processing and metallurgy facilities. i will give you an example. we have a facility we are looking to help finance and build in texas. it takes a combination of rare earths and battery materials,

metals from canada and elsewhere we are looking to actually build into the supply chain. you need infrastructure to support projects like that. you also need funding to serve as a catalyst to bring in the private markets, which i think are on the verge of starting to jump in in major ways right now. alix: that is where you play. how do you get your funding? drew: we work with some of the forward-thinking institutional funds and entities across the u.s. marketplace. we do have partnerships and deals with some of the large oems from oil and gas, the defense and automotive. we have worked with a lot of the funds that are looking to be bullish in this area. we did early on a rare-earth deal that we partnered up with cerberus capital, right up the street, with. firms such as bears are looking forward at finding ways to move the ball in this space.

we get our funding from those partners. and from strategic, commercial manufacturers we work with as well. paul: what is the national security aspect to minerals, rare earths, refining it? what is the national security side? drew: interestingly enough a lot of people when they talk about this, they focus on it from an automated perspective. i like to say it is holistic, industrial, and technological in terms of what is needed. the defense component is the least-understood and most critical in terms of gaps when it comes to this story. everything, whether it is our fighter aircraft, our missiles, missile protection, satellites, everything needed for space force and everything you can imagine, highly dependent on all of these materials, right? permanent mandates -- magnets, which are absolute necessary. not just automotive's, but national security.

rare herbs. highly dependent on amounts of critical metals. we have unfortunately been importing the majority of them from china and russia and other entities out there we really do not want to rely on when it comes to protecting our own national security interest. we have the ability to provide our own solutions. i'm here to say i think we can actually do it with a good business case it -- business case in a more cost efficient manner. alix: are we going to buy greenland? should we? drew: we will support greenland and invest in all we want. i'm excited to see that move forward to a good place. alix: i did that for david whorton. he really wanted to get something on greenland there. we will take that. it was great to meet you. drew horn of greenmet. that wraps it up for us. i will see you in january. paul: have fun. enjoy christmas. alix: happy new year. sonali basak can vonnie quinn

will be -- vonnie quinn will be joining you. the market closes at 2:00. this is bloomberg. happy holidays. ♪

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vonnie: welcome to bloomberg markets here on this christmas eve. and hanukkah-eve as well. get a net brace for 2025. it is going to be more of the same. but at least today we are getting a santa claus rally. sonali: at least we could potentially end there to end the year. it is a short day in the markets, but we will bring you to the close today. vonnie: there are four more trading days on the year so they could be excitement. if we look at where the scoreboard is settling we are looking at an s&p 500 up .3%. nasdaq that is up 1%. very thin trading but that is not to discourage those of us who are watching the trade. i could have picked palantir, but all of the trump-related pixar higher. to illustrate that name, tesla up about 5% at the height. we also have nvidia. this is up about .9%.

arm and broadcom leading. it is a most like the stock market cannot think of any new ideas just yet. sonali: even if you have nvidia up, i don't know if you saw it just yesterday, you had torsten saying there is a 90% chance of seeing a downside surprise in nvidia if they do not meet that high hurdle next year. so far there are a lot of things to talk about. right after the market closes today, of course, in about an hour we have the bond market closing as well. you are looking at the bond market on a negative tear, if you well. you are seeing the 10 year here really fly past. max kettner at hsbc told us that was the danger zone. that 4.5% level. we are certainly watching that danger zone. vonnie: have you noticed

bitcoin? sonali: i sure have. it is incredible about it is a lot of people are away and celebrating their holidays and not noticing how far it has come off of the highs of this year in the middle of all of that excitement. we will see if january brings some new news. vonnie: do you think they are in macy's buying the last-minute gifts? sonali: as katie greifeld likes to call it, it is that window dressing, making sure they can take that lot set of profits. we are going to talk about another part of the markets here that have been generally on a tear, but in other parts certainly volatile to the downside. global commodity markets. i'm watching things like the price of eggs, which have recently surpassed their all-time highs. then also other places like gold and silver which in some ways have outpaced the s&p 500. we are going to bring in simon casey at bloomberg news who joins us here in studio.

eggs alone and the way this bird flu is also now impacted other areas of commodity markets, dairy farmers, what are you watching as you head into this season? simon: definitely watching meal prices, that is for sure. that story has got longer to run. another thing we saw this year, gold prices. old prices went to record on multiple occasions through this year. they broke through $2800 an ounce for the first time. if you talk to people on wall street they are bullish on gold going into next year. saul central bank buying. people buying again and generally as a historic, it is the historic allure of the metal as a guard against historic geopolitical upheaval and so forth. and other shocks. it still looks very attractive going into next year. a lot of people saying it could go above $3000. vonnie: that would be a fascinating move higher.

i'm so enthused by the eggs and milk story because that played such a role in the election and we talk about it as the inflation in the retail stores, but this is just regular inflation. and of course bird flu-related. simon: it is bird flu related when it comes to eggs and dairy. weather-related, look to coffee and cocoa. if you look at your today it is the top two performing commodities this year, coffee futures, coco futures. in both cases, dry weather in west africa, in coffee's case it is brazil. these are things you cannot really predict until you are in the middle of the growing season and you see the crops deteriorating rather rapidly. and so we could see that happen again next year. longer term these are trends associated with, change. so, these kind of supply-driven

commodity rallies are particularly surprising. can catch people out. sonali: it is interesting to look at these prices as we sit here toward a quiet holiday season. so much of this, eggs, dairy, cocoa, coffee, we are talking about food inflation again. at a time when a lot of people are counting on inflation to start moderating how does that commodity price fluctuation play into that broader inflationary story? at the end of the day it means people are going to be paying more the grocery store. at least in the near term. simon: if you look across inflation as a whole that food counts for relatively small proportion. he mentioned the election. that is key. people really notice these things. it is gasoline prices as well. prices at the pump this year have been under control. oil prices have been fairly subdued this year, and fact. but people notice these things, and absolutely the sticker price at the grocery store, i think

that is going to continue to be a story into 2025. sonali: the sticker price in the grocery store, how much does the prices at the pump updating our hope -- help the average american out there? if you are paying more for eggs but less for gas on average are you feeling a lot better about things going into next year? and do the prices at the pump at this level sticks? simon: i mean, you've got to say that gas prices probably matter more than a prices, but i think we are into the realms of psychology at this point. and what people's perceptions of inflations are -- inflation are versus reality. inflation has come down a lot since 2020, 2021. but it is very fresh in people's memories. vonnie: i have to ask you about the rise in electricity demand. who will what gets used to produce that and does that change in 2025? you have hydro, coal, gas, and that is going to affect prices too. simon: electricity demand in

this country has been stable for about 25 years, which is remarkable. economic growth offset by efficiencies. that story has come to an end in the last year or so. we have seen forecasts in ai i-related power consumption. whether you are a believer in ai or not, the tech companies are building this infrastructure. they are building data centers. this stuff is going to be supplied with electricity to some extent. to answer your question, it is all of the above. it is wherever the tech companies can pay up. have seen them pay for renewable energy, sign long-term agreements. we have seen them sign agreements for fossil fuel-powered, gas and coal fired power. have also seen them put money into longer-term projects for nuclear power, which could take many years to pay off.

any gap in demand is probably going to come from gas-fired power and that is the single biggest source of electricity in this country. it is relatively -- readily available. that is where it will come from. vonnie: keeping an eye on those natural gas prices as well. simon casey, thank you. not just commodities, but all of those energy sources as well. as we have been saying, the stock market is kicking off christmas and hanukkah week with a tech-driven rally. the surge comes amid a period when historically stocks tend to rise during the final trading days of december. joining us now is sam stovall at cfra. sam, when will this market get new ideas? it seems like we are finishing the year with the same ideas we came into it with. sam: i think that as we head into 2025 history reminds us that you want to let your

winners ride following an up year. maybe we are not going to get a whole lot of new ideas, at least early in the new year, because investors will be sticking with communication services, consumer discretionary, and technology, and avoiding a lot of the defensive areas, as well as energy and materials. we will see what kind of new news comes about once the inauguration takes place. vonnie: we saw a huge spike in the vix, one of those days, federal reserve-related. it was daunting because we had seemingly of calm market that was rising nicely, and everything changed in a couple of minutes. is there potential for that to happen around the inauguration? sam: investors were anticipating the fed to cut rates, but i think they were unnerved by the fact there was not a lot of confidence in what fed chair powell was mentioning, and a lot

of the rationale for cutting rates actually were reasons not to cut rates. i think investors were scratching their heads and realizing that december's inflation numbers will probably end up hotter than expected as well, and it will not be until we get into 2025 before the inflation rate resumes its downward trend. provided, however, that the new administration does not end up enacting policy that will actually elevate inflationary aspects. so, there is a lot of uncertainty out there and we will not find this out until president-elect trump becomes the president. sonali: what do you think about the set up for next year in terms of the types of trades that will do well? a lot of people look at the past and say, ok, nvidia is the big gainer. looking to next year you have seen for the last couple of months investors tried to reposition with various degrees of success. do you think some of those position changes, say going more

into mid-cap stocks, going into broadening trades in terms of sectors might be the way to go heading into next year? sam: i think there is definitely things to be considering because made an -- mid-and small-cap stocks are at a discount average -- relatives to their p/e ratios going back 10 years. ditto for emerging markets. i like to see that fundamentals tell you what, but technicals tell you when and how far. with the concern about interest-rate policy in 2020 five, the prospects for rates coming down on the long end as well, i think investors continue to be unconvinced that it is time to be moving into these underappreciated areas. maybe from a sector level we could see some slight rotation, but history does remind us that you had 300 basis points to the

market's return on average by holding the top three sectors from the prior year and add 500 basis points if you hold the top 10 sub-industries from the prior year. so, letting your winners ride does tend to be the best strategy following an up year. sonali: speaking of interest rate risks i wanted to draw out the fact that you are looking at a 10 year yield above 4.6%. if you looked at it in the beginning of last week you were below 4.4 percent. that is .2% higher. we only have a little bit of time here left, but how much risk is there left in the 10-year? >> i think the risk comes from the 10 year doing what most people are not expecting it to do. and i think creeping higher toward the 5% level is an area that investors are not happy with. of course, we were last at that level less than a year ago, so it is something we have been able to contend with and still

end up with greater than 20% price appreciation. so, looking back over the long haul the average 10-year yield is higher than 5.5%, so i think the old normal may scare people initially, but it could be something we could contend with going forward. sonali: sam, we thank you for joining us. that is sam stovall of cfra. on these markets, that are experiencing a little bit of a santa claus rally. coming up next we are going to switch gears. we are going to talk about the blocks office. we are going to talk about a lackluster weekend expected in movies. elaine low joins us next. this is bloomberg. ♪

sonali: welcome back to our tv and radio audiences.

you are watching bloomberg markets. i'm sonali basak. we're going to talk about the media business now because it has been a busy year for it. a long list of new stories had helped define the year and the media business itself is changing. tons of action at the c-suite. for more we are joined by chris palmeri, who covers media and entertainment for bloomberg. among the changes that we are seeing i am joined to this story, this idea that newsweek is looking at its fairness meter more and more to ask its own audiences what they believe is really fair at the end of the day. there has been a lot of concerns about bias in media. how is this going down? what is the broader reaction? >> the interesting take away was that 70% of the readers, you basically click at the bottom of the story. the you thought the story was fair or not, said the articles were fair. if you include mostly fair it is

about 86%. that is really a contrast to public opinion polls like gallup that find trust in the media is at an all-time low. 31% think the media really have confidence in what they read and watch. it kind of shows that if you ask about a specific article people may be tend to react to different way than the general feeling of, do i trust the media? vonnie: it is amazing. i have been getting offers for apps that do this. that tells me how conservative or liberal a particular opinion is or particular article. i'm wondering, do readers really care about this or is this a way for advertisers to shield their backs if they advertise on one publication or another and it is perceived to be a certain way? chris: newsweek said it does help them sell ads because advertisers are concerned, particularly issues like the israeli-palestine conflict. it is so contentious, you know,

they want to make sure their ads are in a friendlier environment. so, having this sort of tool, they said, helps them with that respect. it's is going to be a huge issue. obviously donald trump made it a big part of his campaign. has always made the media big parts of his campaigns. the incoming sec chair has spoken a lot about chair -- a lot about fairness in the media. he's going to tie deals like the paramount merger and station license renewals to whether or not organizations are being fair. and so, that is his definition of fair. this is going to be a big deal in 2025. sonali: what do you think this means for the bigger media companies? the ones with large cable networks that many of them have written down by billions of dollars this year? you see huge changes at the top of warner bros. discovery. you see it at the top of comcast as they look to reposition their companies. where does that worry about the

future of content playing in, as we see a change in administration? chris: i think the big takeaway media-wise in 2024 was the real, ascendancy of streaming and decline of traditional tv's. we saw obviously netflix had a huge stock price increase this year. we saw the first real profits from the streaming arms at disney, paramount, and warner bros.. as you mentioned, huge multibillion-dollar write-offs of the cable tv businesses of those three giants. streaming has won, and it creates challenges. how do you fund a newsroom, for example? a broadcast channel, when you have these pressures and people cutting the cable cord and fewer viewers? this is going to be something where we see probably in 2020 five everyone believes the trump administration is going to be friendlier.

this guidance merger probably will we will see warner bros., probably some activity. comcast spinning off its cable channels. it is going to be a year of deals. vonnie: chris, thank you for navigating the whole thing for us. that is chris palmeri from our los angeles bureau. it was a last lecture -- a lackluster weekend for the blocks office. -- boxx office. can sales pick up in the new year? elaine low joins us now. the industry is getting off of its feet again after covert shutdown and the strikes, so many things besetting the industry in the early part of 2024. what can we expect in early 2025 to keep some kind of momentum going in the industry? elaine: we started to see the green shoots of recovery in production and the number of tv shows getting made. i would say around late summer,

early fall this year. this year really got off to a much slower start if you ask anybody who lives and works in the industry out here. again, on the heels of two strikes, the actors and writers engaged in a labor stoppage last year. that is compounded by the fact that the industry has been engaged in a pullback from scripted tv. those things combined, and also on the back of the pandemic meant it has been a really couple of tough years for the industry. what we are expecting in 2025 is not exactly a flurry of activity in the beginning of the new year. there are expectations that things will be picking back up again and we are seeing some new deals being made. there is hope a player like paramount global will become a

robust buyer of tv shows. so, there is some hope that the industry will be able to find a new normal. vonnie: you were just speaking about the declining days of cable with chris palmeri and you mentioned it there. do we anticipate more of the same in 2025? elaine: in 2024, in some ways it marked the death of cable. this is an obituary that has been pre-written. with the markdowns at paramount global, that marks it for them. but it is a business that throws off an enormous amount of cash. these are still businesses that will be producing shows. that will be expected to contribute to the bottom line in 2025. i think it is just a matter of figuring out that new normal, that balance is in a streaming era most of these companies are focused on building out the streaming service audiences.

sonali: as that happens there has also been this fear under the surface, and you saw a very prominent in the writers strike, that ai would play a bigger and bigger role moving forward and anyone in the business sees that happening in real time. what does that look like heading into next year? elaine: we saw quite a bit of alarm just a month ago reported in our business newsletter. that the atlantic had built up a search tool that you could look through all of the scripts, to the number of tv and film scripts being used in these ai models. i was talking to folks who worked on the studio side, talking to writers about how they feel about 139,000 tv and film scripts being hoover drop to train these large language models, and it prompted the writers guild to put out a statement, to prompt studios to try and do something about these

copyrighted materials that are being used in these ai models. i think you are going to see more of a push for action. i think you might see more of the guilds try to nudge the studios to protect those copyrights, and certainly the studios themselves are no doubt working on things related to ai behind the scenes, though they are not particularly eager to chatter about them yet. sonali: we thank you so much for joining us. of course, it is a very busy year in the movie business. as we have been talking about, the studios changing in real time very quickly. that is elaine low, staff writer at the ankler. we're going to talk streaming next with mark douglas of mntn. i want to take a look at these markets. yes, low volumes, but the fact we are higher on the day, the santa claus rally did materialize after what was a very tough week last week. in fact, one of the worst we have had in months. vonnie: huge volatility last

week, and huge volume as well. yesterday's volume looked then, but that was compared with friday's outsized volume. today looks thinner, but there are moves here. if we look at bitcoin-related stocks, marathon up 5%. you could pick microstrategy. emmett looking at this right? is that up 8%? sonali: it is. it is almost -- it has almost erased all of its losses from yesterday. vonnie: bitcoin is almost at $99,000 a coin, guys. sonali: we are to talk next about the world of ai and how it is impacting content across the world. we are going to talk to mark douglas and talk about the streaming world next. this is bloomberg. ♪

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vonnie: welcome to our tv and radio audiences. i'm vonnie quinn alongside sonali basak. this is a special edition of bloomberg markets. proving to be an interesting day in markets so let's get a snapshot of where things stand. alex semenova has been keeping an eye on all the moves all day. less than one hour to go before the markets. >> certainly quiet but stocks probably higher. american airlines, of course very tough to travel during the holidays but particularly tough for anyone flying with american

airlines. they had to ground their flights early this morning for about one hour, so really delaying anyone trying to get home. they said it was a technical vendor glitch that caused the brief ground stop. of course, happening on one of the busiest travel days of the holiday season. it shouldn't really impact the company bigger picture but the stock is down right now. down about .3%. it was down as much as 5% in premarket trading. really. some of the bigger loss. vonnie: they got it fixed. i saw it this morning, i thought we would see pictures all day long but later it was done. sonali: when you see the glitches come up, a lot of it is technology issues. they said this was about an unspecified technology issue affecting their ability to release flights. i didn't realize how dallas-fort worth was that big of an origin airport, the busiest by far only

followed by charlotte and miami. vonnie: i would have thought chicago. sonali: not so fun if you are traveling today but amtrak canceled a number of a select range from washington to boston. everyone out there, please travel safe. another thing you are looking at, starbucks. this is interesting on the holiday season as well because we know they have had a lot of tension between labor and management all year long. now it is the new ceo dealing with an extended strike. alexandra: tension between management and employees not only all year long but since december 2021, workers have been fighting for more pay. there is a breeze to strike right now impacting around 170 cafes across the country. 5000 workers are involved in this in cities including boston, new york, philadelphia, all the

major cities. in philadelphia, they are even rallying some elected officials to help them in their strike. vonnie: it has that completely impacted the stock. would investors be happy to see a resolution at some point? paying people more in wages and benefits, or is this something that investors are not concerned about? alexandra: the stock is up 2% right now which is interesting. the ceo brian niccol is supposed to help negotiate with the union in good faith, so perhaps investors see promise there. since he took over september 9, the stock has increased 3% compared to a 10% decline for the s&p. he has experience dealing with these types of issues. sonali: another part of the market i want to talk about, you were talking about the santa claus rally, in the philadelphia

semiconductor index is real. what is going on in that sector? alexandra: another big day for big tech. they are now taking it home for us into the close of the year. semiconductor companies today rising. the philadelphia semiconductor index up .9%. broadcom, nvidia also rising. this is after news that the biden administration launched a probe into chinese-mage chips, the competition between the u.s. and china for chips has been incredibly challenging, so we are seeing some of those companies benefit from that news. still risk on with the ai euphoria continuing into year-end. vonnie: how much was people caught up guard broadcom move? it was a 25% move. since then, 11% on one day, 7%

to the downside, but it has been up. it has had a fantastic end of the year after stagnating. alexandra: analysts were calling it an nvidia moment for broadcom. we are seeing a new company deliver on ai and hopefully it does materialize on those promises of artificial intelligence sonali: alex, thank you for joining us here on set. all over the equity markets for us all the time. looking forward to seeing you again. we are going to switch gears and talk about a topic that has been impacting a specific part of the market, how streaming has been disrupting traditional business models in linear television. we are looking at the advertising spending trends because that is impacting how tech companies approach the space as well. data shows that the ad industry is estimated to have pulled in a trillion dollars in annual revenue for the first time and tech companies are getting a

huge chunk of it. we are going to bring in mark douglas, founder and ceo of mntn , who specializes in tv and advertising software. thinking about discussions we have had all year or surrounding political spending, talking about the dominance of amazon and netflix getting into different types of streaming, different types of viewing that it helped them capture more of that ad spend. when you look forward to next year, what will be the new story? what will be the latest that we see in terms of what seems like a parabolic move in this industry? mark: the big name is that all of the major streaming networks are streaming first now. you can see that, in meetings i had with networks during the year, they went from, what do they do about their linear business entirely focused on

streaming, and all of them see you -- disney, netflix, others -- see it as a real big growth opportunity for the first time in the industry in a long time. this industry is so dependent on a small number of large advertisers and now the customer base is broadening rapidly. vonnie: what will be the next catalyst for advertising? the election was huge but we need a new thing now. mark: espn going all in on streaming in 2025. that is a big deal. any sports content tends to do really well. you see netflix bringing wwe to netflix. that is only two weeks away. you will see a lot more sports content. i think disney and others are really stepping up in terms of the amount of content. it is ultimately all about sports right now. people, advertisers love sports content.

sonali: there was a specific ad i watched last night, i thought, this isn't the audience for that market. monday night football, i'm watching last night. did you see the advertisement, the sap ad about technology data centers, nuclear power, chro's needing to be in the conversation? you see a professional audience is being targeted through sports. sports is the vehicle for everything it feels like when you look at these ads being brought to the platform. what does that mean in terms of different companies trying to target different audiences? do you think that you will see different types of ads going on to these major sporting events because they are becoming ever more important to rich people? mark: two things happening. one, you have some advertisers who are still hooked on that big moment -- tomorrow, two games on

netflix -- but they are really attractive to reach and a lot of people at the same time. sports is one of the few opportunities to do that. at the same time, you have a lot of new small and midsize advertisers who are coming into the market for the first time and they don't care about big events, sports. they care about revenue for their business, they just want to reach that perfect person who will buy from them. both of those trends are growing at the same time. in this case, telling your candidate to buy sap software, unless you are the cfo of a company -- they are definitely going for let me reach as many people as i can. i think that will decline over time. the ability to target the right consumer is getting better and better on streaming. sonali: if it is so expensive to get that ticket on sunday,

monday night football, why not go to other places? line on instagram, for example, if you are trying to be more targeted in terms of where you are getting your viewers? mark: that is part of this bifurcation. these large advertisers are led by cmo's that are just uses that form a by media. but the average e-commerce site, we work with companies who would never place ads like that. their goal is to find that consumer who is going to buy literally that week, to reach them and put the product in front of them. comparing streaming tv to instagram in the way that you are saying, in this case, sap was clearly not. younger, digital buyers versus more traditional media buyers. they just attacked the opportunity different ways. vonnie: very easily break

up-able into the different demographics. the very oldest among us, perhaps newspapers and tv stations. mark: one thing to keep in mind, more people watch tv in a day than social media. 3.5 billion people worldwide use social media daily for an hour. five point 5 billion people a day watch tv daily for three hours. it feels like social media is the new medium, but it is a small and that you can swipe by really easily versus an ad. 6.5 inches on your phone versus 65 inches on your wall. tv is not only holding its own, it is making a comeback in terms of providing both the reach, the targeting, and the big screen with 30 seconds of time to get

your message across. that is really appealing, very appealing for advertisers to get that. vonnie: are the middlemen as important as they were, is there potential for advertisers to go directly to the broadcast outlets? mark: that is literally what mntn does, we provide a self-service solution mainly geared toward small and midsize businesses, but we have larger brains using our platform. i wouldn't say the middle man is gone because when you're spending big budgets, you want strategies around it. that is what the advertising holding companies do. increasingly, i would say a majority of the newer advertisers coming into the market do it themselves. they are coming in, i am used to doing this on instagram, google, and now i'll be used to doing it on streaming tv. the customers i kind of changing

at the same time the industry is. vonnie: any stadiums going to be renamed next year? sonali: the nissan stadium. [laughter] vonnie: who would be able to buy something like that, who would be the top names? mark: i don't have a name off the top of my head but a few years ago it was all about crypto naming stadiums. i don't think we will see that trend continue. if there is a new name, probably more traditional. vonnie: thank you so much, mark douglas, founder and ceo of mntn . looking forward to speaking to you again in 2025. we will continue to talk about this rally continuing at pace. 18 minutes left in the holiday shortened trading session, treating week. the nasdaq up by more than 1%, driven by bitcoin. 98,600 a coin.

sonali: if you bought a bitcoin yesterday for just under $94,000, you would have made a lot of money. [laughter] with your spare 90 $4000. i'm also interested in those sectors moving the s&p hired today because it is not those chip stocks that you saw yesterday, it is consumer discretionary stocks. financials, energy. some of the more or less loved sectors really steering the ship today. vonnie: in a moment, we will hear about china's tariffs and potential strike in january. a lot to think about when it comes to trade and supply chains, routes taken by various companies. this is bloomberg. ♪

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sonali: welcome back to our

bloomberg television and radio audiences. you are watching bloomberg markets. i'm sonali basak alongside vonnie quinn. we are going to talk about the shipping industry. it's been hit with numerous challenges throughout .24 and it's looking to face new challenges in 2025. that includes terrorist threats, geopolitical threats weighing on the industry. flexport ceo ryan petersen joined bloomberg earlier to talk about how he is charting a course for his company. ryan: people are trying to get goods in before a potential strike or tariffs. if you are concerned about those things, which you should be, you have the flexibility of your supply chain, you want to get them in as soon as possible to avoid the confusion. >> how much can we draw upon the 2016 election when it comes to mapping out the impacts of some of the tariffs we are talking about? ryan: we have seen this movie before in many ways. tariffs were not as disruptive

as people maybe expected them to be. they existed throughout all of human history, how governments have funded themselves, so people can adapt. it is not a huge shock. the big thing right now is the uncertainty. what is it going to hit, how? just this week, the president of mexico imposed large tariffs on imports from china. to everyone's surprise, that affected e-commerce warehouses who are not shipping into mexico but important to mexico in order to re-export those goods into the u.s. that is a big way that u.s. e-commerce is done, fulfillment centers in mexico. last night, the largest fulfillment centers in mexico had to email their customers and canceled their contracts. so a lot of american businesses are scrambling today to find new

fulfillment opportunities, new ways to serve their customers in the u.s., even though we had nothing to do with the u.s. government. >> that feels like a wild card. when something like that happens, how long does it take for a new normal to be set in place? >> the fun part about working in logistics, we all figured out there is no such thing as normal and we have to figure out whatever happens. every day it feels like a new thing between the strikes in the red sea, disrupting ocean freight, tariffs, drought affecting the panama canal. you just have to be very nimble if you want to run the supply chain in the modern world. >> going back to the terrace questions, the details, we don't know when or how much, but we know some form of tariffs are coming on imported goods into the u.s. and mechanics are pretty clear, reducing demand for these imports if you are

american. you also point out we have seen a decrease in ocean freight rates from china and that could be an offset. talk about what that might mean for goods imported from china and how manufacturers think about that? >> ocean freight rates have been high throughout the year, two to three times long-run historical averages. this is in a market where the supply side, the number of ships in their capacity has ballooned. huge deployment of new container ships, that as these carriers made a lot of money during covid , they reinvested that into new ships. one would predict with this huge surge of supply, the price would come down. the only reason that has not happened is the red sea, ships have to go around the southern coast of africa. if anything is to be done to allow container ships through the red sea, that would

instantly bring the price of ocean freight down by two thirds or so, maybe more. vonnie: that was ryan petersen speaking with us earlier today. let's talk about trade and the outlook for global trade in 2020 five as leaders scrambled to respond to president-elect trump's proposed tariffs. angela joins us from washington. can we say from 20 25 onward, globalization is on pause if not dead? >> i don't think we can declare globalization dead. it is too big of a force to go away with one presidency, albeit a very influential one. also keep in mind that president-elect trump, as we saw in his first presidency, is interested in interacting with other countries, leaders. he just met with justin trudeau last week. i don't expect everything to go

away but there could absolutely be a major shift in globalization, how it works, how the international economies interact with his coming into office again. vonnie: what are we looking at for the most likely scenarios of this changing of global trade? angela: he reiterated on the campaign trail he wants to first and foremost prioritize tariffs against china. he talked about up to 60%. he also said that tariffs of about 20% worldwide would be common under his next administration. he has talked about 25 percent tariffs on our closest trading partners in the u.s., mexico and canada. all of those numbers are much higher than what we see presently. we know from having covered donald trump before, in 2019 whe

president the first time, he did impose higher tariffs on other countries, and we saw a lot of those what does this mean for some of our neighbors? you saw some immediate reaction from the canadian government when it came to the reaction that canada would have to the terror threat. what does this mean for mexico and canada as we head into next year, their relationship as it is being forged with the united states and president-elect? angela: we saw a big reaction out of canada last week. like i mentioned, justin trudeau went to mar-a-lago with the ambassador to the u.s. and met in person, kind of a charm offensive before he takes office again. at the same time, the foreign minister for canada resigned in spectacular fashion. she had no desire to be involved

in working with a second donald trump administration, told trudeau as much, and she is no longer in her cabinet position. as far as mexico, president claudia sheinbaum has said she would also retaliate with higher tariffs if the u.s. does institute more against mexican goods. what we could see what both countries as well as other trading partners around the world, if the u.s. imposes higher tariffs, they will also impose higher tariffs, which means higher prices for u.s. consumers. sonali: what does it mean to the relationship of the u.s. and china given that so many supply chains are linked already? what is the tight rope that the president-elect has to walk? angela: with china, many other things in addition to tariffs. geopolitics, human rights, relations with other countries around the world. so many factors go into that relationship with china.

china is one of the u.s.'s biggest trading partners and a trade deficit between the u.s. and china is with the eu or mexico and canada. what we are seeing with china is they absolutely could impose higher tariffs on the u.s. but there is less of an effect if china does that then if the eu or canada takes the second steps. we could see canada moving more and faster in the direction it's already been going to closer relations with other countries, brazil, african countries, india, russia. these are all countries that china has deepened its relationship with over the years. if the trading relationship and other parts of the interaction between the u.s. and china become more tense, we could certainly see china looking elsewhere in the world or its closest relationships. vonnie: the dollar continues to strengthen but might there be a scenario in which the currency

participates more in global trade next year? angela: euro is a strong, stable currency. at one point, the pound was the standard for the world. look back to the greeks and romans. nothing is guaranteed. while the u.s. dollar is strong, in addition to the yuan, we don't know what the future holds. of course, we have an unpredictable president taking office, so we don't know exactly what he will do. sonali: thank you for joining us, angela greilling keane, head of what will be a busy year. that talk around trade and tariffs, and how it actually plays out at the end of the day. we have a lot more for you. we are bringing you to the close of the day. a fascinating trade under the surface. as vonnie is talking about,

that santa claus rally is back in play. we will bring you to the close. this is bloomberg. ♪

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

vonnie: those are the closing bell. welcome to a special tv and radio addition of bloomberg markets. sonali: we are here in bloomberg

world headquarters in new york. those closing bells, rain on the screen once again. vonnie: we got that santa claus rally. the s&p up 1.1%. we got a 1.1%. nasdaq up to 1.4% to finish the year, at least until the holiday part of the year. nasdaq 100 up 1.4% thanks to those chip stocks, bitcoin rallying as well. vonnie: we closed above that 6000 level, hovering below that, but a lot of sectors and individual movers that brought us here. vonnie: fascinating morning. let's get to alexandra semenova with been following all the ups and downs. >> really nice move on the nasdaq 100 index led by the stars of 2020 four, taking us into the home stretch of the year.

semiconductor companies gained as the body administration launched a probe into chinese chips, focusing on foundational chips used in various industries that u.s. officials say could be a national security risk. this saw some semiconductors rise today. broadcom, micro technology all up on the day. the philadelphia semiconductor index up .8% today, the third straight positive session for the index. the longest stretch since november. also up 22% this year, underscoring this incredible run in chipmakers and the ai euphoria that has driven us higher this year. i love up today despite the news, starbucks. chains across the country shut down an estimated 170 stars. that was less than the 300 that expected to shut down. the stock still rose 2.5 percent today perhaps on optimism that the two sides are nearing some sort of conclusion to the

disagreement that's been going on since december 2021. shares were down 10% last week, down eight straight session leading up to today, so perhaps the stock on overbought, hence the move to the upside. another story today is tesla. building on recent gains. it had a stellar run since the election. elon musk is of course close to trump and will serve in the administration, so that has been seen as benefiting the company. today's move higher comes after japanese carmakers honda and nissan announced plans to merge on monday. the deal would create a third largest car maker by annual sales. although this does he do competition in the carmaker industry, it doesn't seem to be a concern for tesla investors. tesla's are a lot more expensive than honda and nissans electric cars and more advanced in their self-driving capabilities. a stock is up about 7% today. sonali: to the point you were

making earlier, not a lot on the downside today. best performing sector that i saw was consumer discretionary led by tesla. even in that sector, you saw nike barely down, lennar barely down. what were you sitting on the downside today, why were they moving? alexandra: an interesting down move in and agriculture and real estate company based in california. they produce citrus and avocado. they fell today after they announced avocado volumes in 2025 below the 15 million they produced this year. sonali: avocado pricing has been a tough pill to swallow for a lot of people. thank you so much for your time. keeping an eye on these equity markets and everything moving under the surface. we are going to bring in mary robbins, chief investment

strategist at fifth third advisors. an interesting end of the year trade. back about that 6000 level on the s&p 500. we were talking to alex semenova about the bullishness still under the surface. s&p 500 looking to notch gains of over 20% but it is expected to bring in roughly 10% by next year. what is your expectation? mary: thanks for having me come great to be here. looking ahead to 2025, we see the year as one that will not be driven by traditional market cyclicality but more megatrends, secular themes. one of those themes is risk on. we have a very positive view going into the year ahead. that said, we are talking to investors and reminding them that volatility -- we will likely see 10% north

throughout the year but we will not end at that level. vonnie: what is the year-end play for you? here is the narrative. you could do that window dressing, profit taking at the end of the year, or you could look at these moments and buy the dip. certainly we saw a lot of dip buyers come in on low volume drive the s&p higher. would you take these moments to add some cards on the table? mary: great question. we take a long term on markets. we are not tying to time an intraday move. we try to be tactical from a tax standpoint for our clients. most of our tax loss harvesting is done but we are always opportunistic and tactical. that said, with a long-term lens. vonnie: tell us the difference between institutional and retail or is everybody doing the same thing? mary: i think there is still a

clear difference. retail is expanding. traditional retail is not your broker-dealer client anymore. traditional retail is really seeking out advice beyond just investments. they are looking at estate planning, trust powers, credit, a full suite of baking capabilities in addition to that portfolio. that investment portfolio is becoming more tailored to each client. whether that client has 500,000 or 50 million. vonnie: what do you do about the momentum trade? it is hard to ignore. at one point a friend part of the market and now seems to be the market. mary: it has been for some time, you are correct. that said, we are essentially equal weight momentum. we don't want to miss out on the momentum trade, but we think 2025 will be the year of quality.

we are looking beyond the mag seven, looking at high quality secular growers within sectors, as well as within fixed income. very high quality. individual portfolios of those securities should perform as long as they are diversified in balance but we are not necessarily overweight momentum. sonali: if you are looking for quality, one place that people are concerned about, in the face of higher interest rates, is the small and mid-cap space. you saw the bid come back to the russell 2000 today to the tune of 1%, even in the midst of a 10-year flirting with 4.6% all day. do you think the russell 2000 has the potential to still outperform in the face of higher rates, or would you be too cautious to get into it? mary: we are not cautious to get

into it but we are tactical. i would say within small and mid-cap, you want to be very careful. more than ever, more than even in large cat, you want to overweight quality. you are looking for companies with competitive advantages versus their peers, strong balance sheets with strong revenue growth, operating leverage. i would not be buying just the index, buying the 2000, i would be looking for active management within small cap. sonali: how then do you treat the winners of this year? you think about nvidia, a lot of the names that benefited from the ai trade. do you think they will see the same type of love next year or do you think investors are starting to take some profits, wait for another rationale here? what are they waiting for, to see that next meteoric run? mary: as we know, 2024 have been

an unprecedented year for nvidia. we have been overweight in nvidia and the mag seven have treated us well. without speaking to individual securities, we think there is a place in the portfolio for those momentum growers but it should not be one that is overweight. we have been encouraging our advisors to rebalance on strength. to opportunistically leverage losses in the portfolio and pare back some of those positions that have appreciated beyond the rain as we are comfortable with in each portfolio. it's a high quality problem to have, frankly. vonnie: i cannot help but go back to last week with the federal reserve, a bit of a surprise, the vix was at 28 and it felt like, we have been wrong about this market all the while. it's been totally fragile. of course, that all went away and we are nice and calm now.

how concerned are you that something like that could happen again soon, and may be the follow-up will not be quite so calming? mary: great question. we know we're in a market that has been driven by the fed. 2025, we will be any more risk on marketed by the policies of the incoming administration that are incredibly progrowth. a lot of that remains to be seen and markets don't love uncertainty, so we could see volatility throughout the year. we are really reminding our clients and advisors that volatility is healthy. we use volatility in days like we saw last week as an opportunity to put capital to work, put that cash on the sidelines to work. there is so much cash on the sidelines, 7 trillion or there about globally. we think that is a real tailwind for markets. over the long term we are staying invested. vonnie: s&p profit growth around

15% for 2025. is that too much good news priced in? mary: i think we will hit 15% during the year but i don't know if we will end at 15%. vonnie: higher or lower? mary: not a day trader here. [laughter] it will likely be lower at the end of the year. we don't necessarily fixate on specific targets for your rent or even intra-year but we focus on finding companies and building portfolios that have those sustainable advantages for our clients. sonali: ultimately, how are you thinking about one of the bigger stories of the year, the way the fed has been reacting to the economic data we have been seeing? the changing expectations that they will not cut as much as the market earlier expected. do you think this higher for longer narrative will start to

eat into the returns in the market? mary: i don't think it will. the incoming administration has such a progrowth bias, it will help to drive markets higher. inflation will likely be stickier than perhaps the market was anticipating. as it pertains to the fed, i think the market got ahead of itself, as it did around this time last year. you remember we were looking at six to seven rate cuts priced in and of course we didn't get that. i think we just got ahead of that fed meeting. frankly, our investment committee met the day before and we anticipated a move like that. we thought the fed could even pause and cut in january rather than doing the december cut. clearly, the cut but more cautious language, really sent a shock through markets. not trying to time the fed but being aware and cautious around fed meetings.

vonnie: happy holidays to you. mary robbins, chief investment strategist at fifth third advisors. we still have 48 minutes to go for the bond market. we are not done with the bond market yet. those equity traders out there, probably scratching their heads a little bit. sonali: roughly flat on the 10-year. but you are fairly elevated at 4.58. less than one hour to go but let's see where it ends. vonnie: stay with us. how a technical grinch almost stole christmas. more on the grounding at american airlines. this is bloomberg. ♪

vonnie: welcome back to bloomberg markets. i'm vonnie quinn alongside

sonali basak. great day for the markets. sonali: the bond market, the day is getting a little bit better but we are talking about a tough day this morning for some travelers. getting better, though. the faa expecting roughly 30,000 u.s. flights today. bloomberg television caught up with the jetblue ceo ahead of the holiday travel season and the outlook for their airline. >> as we think about the holidays, we think about the summer timeframe, that is where jetblue does its best because we fly to tese great destinations. we have seen some pricing pressure in the trust, so it's about balancing out the year and making sure that when demand is high, you are focused on trying to capture that share of the demand. >> do you expect to increase fares this year? >> we are hopeful to keep fares a that reflect the cost of service. it's more expensive to travel not because airport because have

gone up, labor costs. here is meaningful inflationary pressure for the airlines. our great food comes at a cost. we are really trying to balance it and make sure that relative to the other travel out there, that jetblue is an affordable care for customers. >> another constraint on the industry when it comes to getting the parts they need, actually getting the planes they need to fly. next year, people are talking about we may get tariffs and that may impact the supply chain. how are you preparing for that? >> jetblue has a deal with pregnant week -- pratt & whitney right now and there is not enough capacity to do those inspections, so that is definitely a headwind. as you think about tariffs, it is too soon to tell. we take a lot of our aircraft from alabama but depending on how tariffs come in, we have some exposure in europe and canada. >> the jetblue-spirit airlines

potential merger was blocked. are you potentially thinking about going at it again in the next four years, more mergers and acquisitions because there is a letter regulatory touch in to see? >> we want to see jetblue thrive as a successful standalone company. we have a brand that customers love, great product, great service. we are focused into flying into places where people know us. >> you may not dip your toes back into that space, but do you think this is going to be a more welcoming administration when it comes to things like mergers and acquisitions? >> hard to speculate because we don't exactly what the plans will be but it is hard to see an administration that will be worse than the administration we just had over antitrust. >> you have announced a number of changes including closing down certain operations in a number of cities. i believe you are going to cut some 50 routes.

are there more to come? >> the network is always evolving, so the majority are done but we are not going to rest on our laurels. if a market is not producing results, we are going to take a look at it, see if we can improve, and if not, we are going to point those planes to where we can make money. we have to be profitable, and that has meant some tough decisions. vonnie: that with the jetblue ceo earlier on. one of the busiest days of the holiday season did not take off quite as some had hoped. a technical glitch grounded all american airlines flights this morning. of course, the delay was really very annoying, unwelcome during a period where more than 40 million people are expected to fly. joining us for more on what to expect this travel season is eric rosen, director of content at the points guy. the american outage, do we know how much disruption it cost, are

things back to normal now, flights taking off as planned across all the airlines? eric: as you mentioned, the good thing, it only lasted one hour. american airlines requested that grounding and then it lifted it. we are likely to see cascading delays right now. things are working their way through the system. luckily for those connecting with an american flight, if your first flight was delayed, chances are your second one is, too, so we will not see many missed connections. as the day gets busier, we will likely see delays stretch more but it is unclear whether that effect will be prolonged or whether the system will get back to its normal schedule. vonnie: what are the top holiday destinations this year? eric: no surprise here. major metro centers including new york and los angeles. interestingly enough, japan has had a huge amount of search this year partly because of the

interest in the destination and partly because of the strong u.s. dollar. international destinations in europe has seen increased search as well with her daughter doing so well against the euro. if your holiday plans take you to another country, plans are you may be saving some dollars on what you are spending which is great news. sonali: interesting when you think about the way people travel and the competition for those travel dollars, card companies really risen to the front of the door to get those airport lounges, points where you need them. what trends are you seeing in terms of what consumers are getting for the buck? eric: right now, consumers are looking hard at what is in their wallet. we see those lines are airport lounges and you are thinking, is it worth paying $690 for this card? credit card will have to do a lot more to justify their customer's loyalty. remember, loyalty is a two way street. i give you my business, you give

me rewards in return. they have to make sure the value of those rewards is maintained. none of these last-minute devaluations like we have seen with some frequent flyer and hotel programs. they need to make sure that consumers are getting the value out of those perks. other things they can use like bonus points on streaming services, things like that. sonali: what is the smartest way you have seen points be used? what is the biggest advice you can give people as they are looking to travel this holiday season? eric: when it comes to using points, a lot of us tend to focus on squeezing every last penny of value out of that point, getting that emirates first class ticket or whatever it might be. we always tell people points are like another type of currency, one that does not gain value over time. my main piece of advice is accrue the points you need for a specific redemption you have in mind, whether it is a trip to

see grandma, going to disney world, beach vacation, whatever it happens to be. then restructure your strategy for the next trip. don't hang onto your points and miles. use them for the trip you want and then consider what to do next. vonnie: most recently, i got a very cheap, by points, international flight to berlin, it would only cost me something like 69 points. if i were to buy that with cash, it would have been 1500. why are points a good bargain at the moment? >> they certainly can be. you only want to do the calculation of looking at the dollar price and the looking at the points and miles price, making sure you are getting a belly that makes sense for you. depending on the currency, you want to make sure you are getting one or two cents in value. more or less when talking about hotel points. in the past few years, many

airlines and hotels have begun to dynamically price their awards and tickets. when the cash price of a night or airline ticket goes up in price, you are going to need more miles or points for that typically. that means it's hard to get those outsized value. but they do still exist. especially if you are looking at premium cabins, you can sign that reward space payment in january is a good time to get first-class and other rewards. after the holidays, you can still find some great values. sonali: thanks for joining us this holiday season, eric rosen, director of content at the points guy. earlier today, american airlines said it had to pause all u.s. flights. this was due to them saying was an unspecified technology issue. it now says in an email statement that the issue was due to technology tied to dxc

technology systems, the ground stop related to network hardware. a delay lasted for one hour but the issue has been resolved and flights, thank goodness, have been resumed. vonnie: dxc was down 2% in the regular session but maybe good that the market is closed. by thursday, people will have forgotten these delays. sonali: we are going to switch gears and talk about the holiday season in terms of retail. we are going to talk to michelle bacharach, founder of findmine. how retailers are using ai this holiday season. i still have a few more gifts to buy. vonnie: you are giving cash at this point. sonali: stick with us. this is bloomberg. ♪

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sonali: welcome back to bloomberg television. i'm alongside vonnie quinn and you are watching bloomberg markets. the market is closed but we are watching certain companies. interesting things happening under the surface for them particularly starbucks. paper is to strike shutting down 170 cafes with the workers union saying it expects the number of stores to be impacted to hit 300 check we are joined by emily cohen of bloomberg news. it is interesting to see this happen and during the holiday

season in particular. we know the workers and management have been having a lot of tension throughout the year but we are looking at a lot of new management. how you expect this strike to play out and the union relationship to be playing out? emily: five days ago, workers went on strike in three cities. since then strikes have escalated across the u.s.. the union has said its goal was to hit 300 cities but as of this morning that number was 170 seven does not seem like they are going to hit their goal especially it was 170 around 8:00 a.m. pacific time so after the country had experienced their morning coffee rush. i got about halfway to where they wanted to get. the union did say they expected to hit their goal so we will see if that plays out. it is a small percentage of

starbucks stores to keep in mind. 100 70 stores mean 98% of their stores were open and it was business as usual. in terms of going forward, they are in their last phase of bargaining. that is when the union and starbucks is negotiating the money part of the contract vonnie: the union walked away according to starbucks. emily: the starbucks as the union walked away prematurely but the union is saying they are going to go back to work tomorrow and are ready to start negotiating again. vonnie: not many coffees may have been not served because of this but gift card cells are important for starbucks bottom line. if you have not thought of a final gift not looking at sonali: a particular but you get a starbucks gift card no problem.

some of that will have been affected. emily: maybe. they definitely chose a big time of year for starbucks. people are out shopping. they are stopping to get lattes. they are thinking of buying gift cards. regardless of whether or not it hits the bottom line, that is something to be seen regardless. this definitely got a lot of attention for the union. it got a lot of headlines. we are talking about it right now. that is presumably one of the goals as well. sonali: a much does this impact the company if it does not impact a huge number of stores? what is the point really? emily: that is what starbucks is saying that they are holding the line that this is not impacting their business. but it definitely gets a lot of attention and there is a lot of social media attention for the union to people know it exists

and they know what they are fighting for so maybe that is a point. vonnie: starbucks line is pay and benefits included for breast is working 20 hours a week or $30 and an hour on average which sounds great but i would like to see a breakdown of that number. is the union attracting more employees across the united states? and when is the union getting bigger because of this? emily: union is growing. it represents 540 stores to that is still a small percentage of starbucks 10,000 company operated stores nationwide. it is about 10%, 5% of their stores. that number is growing. starbucks, $30 an hour, that is well above minimum wage. vonnie: that includes benefits. emily: starbucks says it is boosting paid parental leave for in-store workers, the union was claiming that is there asked.

birthparents at starbucks receive 18 weeks paid leave. that is unheard of in retail. if the union asked for that and they got it, that is a big win. sonali: speaking of union relations, let's recognize the new ceo had only taken over in september. what does this all of this say about his approach to labor? emily: he said he is willing to work with the union but this will be one of the big tests for him. outside of the union workers in general at starbucks are frustrated by the complexity of drink orders and what they say are understaffed stories and that is something brian niccol addressed on day one and he would be willing to talk to workers about. this is one of his number one challenges, the union and worker grapes in general. it will be interesting to see how he handles all of this. vonnie: it has been wonderful reading your reporting on all of

this. that is bloomberg's emily cohen. sticking with retail, brands are competing with companies for holiday shoppers. joining us to discuss this is michelle buck iraq, founder and ceo of find mine. i have to ask you to start with, how do you know me so well? i hold off on clicking if i can onto things and i try to be good about not accepting extra cookies and yet i seem to be targeted with the exact style i would go and pick. what are you doing to have that happen? >> clearly you and i are being targeted the same because i got the memo with red today. retailers and brands are trying to provide better customer service. what fine mind does is elevate your sensibility. if you think about all the people doing last-minute christmas shopping, they might

be walking by a beautiful window display that is curated and inspirational. it is hard to do that on line to our ai trains on what the editorial brand point of view is so we can deeply understand how that brand wants to elevate your sense of style and we can do that at scale by showing how every individual product how to where it should how to wear it in all the different trends and all the things happening on tiktok and of the moment. vonnie: some of your brands include gap, old navy, pack son, grayson and so on. you have a lot of retailers over there. are you saying take their vision and have it style itself or are you adding things to it and putting together customers personal information with the brand style? michelle: it is a steer of the above. personalization was a big topic in retail and technology went

deep on personalization. what ends up happening is if you follow the pattern of what the customer buys, they never get better we stay stuck in our rot. what the brand has is unique aspirational view for how stylish you could be. that helps you become a better customer for them because you by more frequently. what we are doing is we are personalizing to that consumer but we are helping brands editorial vision for how you can be a more stylish person come through so you end up buying more frequently. we increase 8% the repeat purchase rate of customers coming back to the sites which in retail most customers visit a website once and never come back. it has a big impact on the bottom lines. yuna lee: when you're talking to brands, how to they navigate some of these forces? you were talking about how do you know me so well, i am a total sucker for instagram shopping and i don't mind being told so much about what i might like to usually i do.

they are finding you one way or another. if you think about how they navigate the social media atmosphere and the way people are buying differently than -- i grew up in paramus, new jersey. kind of like the main country of malls. main city of malls. i can't never the last time i went there. how do you navigate the different ways people are buying online? >> people clamor to online in the industry because they were like what an inexpensive way relatively to having all this real estate but what people are finding is online is very expensive to operate not just from a cost of hosting and infrastructure and engineering resources and all the things go into it about customer acquisition cost is crazy high. meta and google are getting insane amounts of money from these brands and retailers to acquire those customers. one of the things we are helping

these brands to do is to avoid having to pay a paid advertisement by getting in on the organic conversations happening on social, by being on trend and of the moment so we can capture your attention. it is meaningful and you don't mind getting targeted that way. but at the same time not losing all this money to facebook and google because you are part of the organic conversation people are having on the social channels. sonali: what role do celebrities play because i don't think it was just beyonce this year but the cowboy chic came back in a big way. do you see that capitalizing on what taylor swift, what beyonce and other major celebrities have been doing is a big part of the story for those brands to capitalize on what people want? >> blake lively showed up to the super bowl earlier this year in adidas tracksuit with this crop

top and it was not available on the site. what a missed opportunity. celebrities do these drive-bys. people used to talk about opera engine a website and the website would crash. you have to be ready for those celebrity drive-bys and that might mean shopping your own inventory as a brand to a lot of brands are not able to react and produce cowboy color stuff immediately if they don't have it in inventory. a lot of the staff comes down to the combination. you might have genes. you might have a flannel shirt. by pairing them and creating a quickly page that is your landing page, you can capitalize on that trend. you might have manpower to do that for every single trend. vonnie: i should shut my own inventory. do you have any cowboy court? sonali: i have way too many cowboy court.

vonnie: what is your opinion on fashion, ai fashion models because there has been a little talk about whether they are a good thing, not so great a thing, whether they even work. >> there are two main issues with ai fashion models. models don't want their beauty training of the ai and using that to put them out of a job. that is a double whammy of bad for fashion models. there are issues around unrealistic and unattainable beauty standards which are already sort of unrealistic from what we are seeing on instagram but it is take into this next level so there is that societal ill. that is when camp or the other side of things is the quality of ai is not high enough quality to produce something that is photorealistic that what they call alyssa nations. that might be a sixth finger. it might be the eye that is droopy. maybe skin tones that don't

match because they are frankenstein monstering people together. all of those issues will get resolved in the next couple years but for the meantime, we are producing assets that are seen by 100 million consumers a month and most of those assets are getting produced in real-time. vonnie: you have raised something like almost $20 million by now which is great going. what is the plan for the next stage for findmine because there must be other companies competing with you. >> one of the big things i talked about earlier with respect to personalization being a huge trend come i think wrens are catching on the need to have a editorial point of view that is different than their competitors to survive to it if you are buying likings and all the brands look the same, you're going to buy the cheapest likings you can find to the way that brand survive and thrive in this paradigm of fierce competition, of changing customer journeys, of this into

mediating web experiences comes down to elevating that brand on the minds of the consumer. that is where we are headed. the way we shop is dramatically going to change. siri is going to know you have a wedding coming up. she is going to know what you have in your closet because she has all your photos. she is going to suggest you stuff to buy. sonali: we have to leave it there should happy holidays season to you. the ceo of findmine and founder. stick with us because we are going to switch gears. we are going to talk about a fun thing for this holiday season. we are going to be talking about wine consumption. i will be drinking wine tonight but maybe not as good as the ones we will hear next.

vonnie: you are watching bloomberg markets.

special edition this pre-christmas, pre-honeycutt day. up with 15 minutes to go. it has been that fine end to a fine year for many people. sonali: the s&p 500 back above 6000. the emotional level. if we end the year there, everything is all well in markets. vonnie: where it has not been well is grocery shopping. grocery shoppers hit hard by inflation but as we head into 2025, the threat of tariffs is clouding the horizon to stu leonard's president spoke to bloomberg about how tariffs might influence shopping habits and how he decides on pricing. >> our family business, i don't have to report to anybody at the end of the quarter except for my brothers and two sisters. now the next generation which is all in their 30's here. but you know what, it is almost

like a little bit of a gut feel on a dark word. i have been doing this for 50 years retailing. what you notice is if you go -- if i go 4.99 on these pasture raised eggs, if i go up to 5.29 or 5.49, sales go down. i have to make a decision to do i hold at the 4.99 and make less margin but sales will go up and you make more gross profit dollars after. it is always a touching point when you have to change over from 4.99 to 5.99 or if you have something at 9.99. if you go to 10.49, sales go down. >> people don't like to see the double digit before the decimal point. if we do get tariffs on european goods, that would affect french wine for instance and if you

have ever been to stu leonard's, you can get your holiday drinks, alcohol, wine, beer from the aisles. i'm curious what your thinking is in terms of price increases passing along those increases to the consumer on french wine. champagne or whether you see people substituting that drink for american-made products. >> tequila is another. cos amicus which is a great seller. tequila is a big thing. we buy it from mexico. you're not going to be able to buy tequila anywhere else in the world that is indigenous to mexico. same with french champagne. you look at some of these, look at this here out of napa valley. this is from the same family that makes french sam payne in france. -- french champagne in france. even though french champagne

might go up and trump is talking about a 25% tariff, people can switch over to a sparkling wine from california that tastes just as good. maybe to a champagne aficionado they can tell the difference for most of us, it is basically the same. tequila will be a problem. corona, this is for instance out of mexico. we are stalking up on this stuff. i don't want to say we are panic buying, but i want to make sure i have enough tequila in house. i want to make sure i have enough corona. sonali: that is to leonard jr., the president and ceo of stu leonard's grocery. anyone in the tri-state area knows where to find one of those. 2024 has been a little tipsy for the wine and spirits industry. has been navigating high

inflation, changes in consumer preferences and climate. an influx of droughts, fires and other natural disasters have impacted wineries across the world and that is where companies like grn and warehouses come into play to handle logistics is -- handle the just takes to -- handle logistics. a tough year for a lot of people particularly if you are in the wine business. a lot of things to grapple with. fires in different parts of the country and the broader globe. what were the biggest challenges and is the worst over for your clients? >> primarily for restaurant collectors, retailers so this is after they bought so we will see the wave in a year from now because everything we store, a wine that is 10, 15, 2030 years from this perspective but we

continue to see incoming wine. the only difference i would say we see recently in the last few years is we can see more coming on the west coast. the vast majority of our inventory is french wine. 85% is still french wine. 5% italian and the rest is u.s. very little from other regions. we are in different states to speak from an impact perspective. vonnie: it is fascinating because you hold licenses to transport lines overstate winds to don't think i knew you needed to to transport winds over state lines. tell us about your large protective storage facility in jersey. are you going to be putting geneva out of business anytime

soon? >> we have a huge protected warehouse. if you drive by, you will never know what is there. it is elevated. it is totally flood proof, temperature, humidity control and the reason for that is because we store very expensive wines. somebody to store wine with wine us, the has to be 500 a dawdle -- 500 a bottle minimum to we are full-service providers. you bring the wine to us. we register it. everything. onto the web and you can see every you have. the window of drinking etc. if you need a bottle of wine at

7:00 in the evening in manhattan, rest assured it will be there. it is highly regulated. you cannot transfer from jersey to you new york unless you have a license. sonali: are you seeing a change in the types of winds people are looking to store with you? is there a change in what is coming in and out of vogue? >> i think we see a trend that american wine is growing but not growing dramatically. there are a lot of tiki vineyards on the west coast we can see -- of boutique vineyards on the west coast. the most expensive wine is still french. you're talking on wines that are tens of thousands and even hundreds of thousands. a lot of our customer -- one of our customers was involved in an auction of remain county.

that was $500,000. these are very expensive wines. you don't want tofu around. -- you don't want to full around. we do see an increase, small coming from the west coast but a vast majority for collectors, future buyers in high end restaurant is still french. vonnie: i hope to be a client sometime. i would love to be a client because you know if you are a client and you know stuff stored in jersey, you have a lot of or at least a lot of nice wine. santa and his elves and reindeer are already on their way and they have passed many houses. they have delivered 2.7 8 billion gifts already according to the norad santa tracker.

i don't know if you were keeping track but they were last seen in ethiopia. they are heading to djibouti. as you can see, they are going strong. rudolph out in front with the red nose but i see donner and blitzen can only: i don't know how you know who donner and blitzen is. i will trust you. they get hundreds of thousands of calls every year. volunteers answer. this is the annual decades long santa tracker from the north american -- vonnie: yemen in 25 seconds. santa must have some defense with him. shelley: the bond market is closing in 30 seconds to the stock market and bond market have had interesting days where you have seen bids, in toward the end of it. we are leaving you there with a very happy holidays. vonnie: our producers saying

santa is bringing bonds for christmas. sonali: may be in the new year. this is bloomberg markets. happy holidays.

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

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