>> we want to welcome in our bluebird television and radio

audiences. you are watching "bloomberg markets.". we are looking at a volatile market. >> essentially the s&p has gone nowhere today but it is still above 6000. we got a little bit of economic data. claims arising to the highest in more than three years. initial jobless claims came in down 1000. i do not think there are many people trading. sonali: there are not many people around. we are looking at 1, 2, three more trading days in the year and not a lot to happen in between those days. if you stay above the 6000 level, you are looking at the biggest gains back to back. looking out of market that has not been this strong since the 1990's. ending on a strong note. vonnie: bitcoin down 2.5%,

trading around $95,000 a coin. oil is below $70 a barrel. let's start with economic data. continuous jobless claims at the highest point in three years. initial jobless claims fell below estimates last week. joining us to discuss this is matthew, reporter from bloomberg news. it seems like the market recalibrated and then over recalibrated. it looks like we are pricing in less than what the fed is anticipating for next year. how are you reading the market reaction? matthew: stocks are back up to where they were before the fed meeting. completely erasing that crash post-meeting. interest rates have not come back down. we are at an equilibrium of higher stock prices and higher interest rates. it seems like it is a very

benign scenario where things will keep chugging along in the fed will keep interest rates higher and it will not have a negative impact on the economy. that is the question for 2025, if that indeed is the case. sonali: we looked at the continuing claims, given that they have been the highest in more than three years. what does it mean for people to be out of work for that long? matthew: what we saw in the report is consistent with what we are seeing in the monthly jobs report. the job openings and labor turnover. the labor market continues to cool but it is in no way falling out of bed. . if you look at continuing claims as a share of the labor force, they are where they are at the end of 2018. if you think about 2019 for early 2020 about making progress and strengthening the labor

market, what we are seeing across a wide array of indicators is things are cooler than they were before the pandemic. that is consistent with what jerome powell is saying. this is not the booming labor market of late 2019 that we were so proud of. we do not see any source of inflationary pressure coming from the labor market. at the same time we are not seeing layoffs. initial claims remain incredibly low. that is a hopeful sign. vonnie: the bond market and implied fed funds future is not pricing in a full 25 basis point rate cut until july. january's is completely off the table. is there anything that can happen between now and even the march meeting that could make another cut a done deal? matthew: the thing on the labor market side is a continues to cool. it is not picking up steam.

things look ok. at some point you may be start to worry that continued cooling starts to accelerate and turns into something worse. these things tend to feed on themselves and that is what makes recession worse. on the inflation side the fed came out with their forecast last week and upgraded their projections. they see inflation being 2.5% at the end of 2025. they are keeping the bar low to further rate cuts. if inflation comes in below those projections as many as wall street suspect we will see more rate cuts. any sort of turnaround in the inflation numbers -- let's say the last few months of higher inflation do end up being a temporary bump and there are good reasons to think that is the case -- we could be back to talking about a different outlook for fed policy in the next three months. sonali: when you think about the

data you are looking out for, given the strength of the labor market, how are your reading every piece of marginal data for signs of inflation? especially given the last pce reading was not concerning, you did hear some concern from some fed officials. matthew" powell saying there were not a lot of signs coming from the labor market makes sense. you have to look at inflation data and think, what else is going on? one interesting thing we have seen rearing its head over the last year or so is this interplay between stock prices and inflation data. there is a direct way in which the stock market does go into the pce index when stock prices go up, it boosts the financial component of the index which gives inflation elevated. it sets up an interesting question of the market being near record highs before the fed

meeting. if it continues to go higher and higher, it will show up in higher inflation in the pce data and it could keep the conversation about the nervousness of inflation being too high being around that perspective. sonali: some would argue the animal spirits have been back, alive and well. matt following everything about the economy for us. we will dig deeper with mike dickson from horizon investments. going back to where we ended with matt, this idea that we are still looking -- a soft data in markets -- a strong market that has rallied more than 20% for the s&p 500 this year. how do you think about the strength going into 2025? mike: it has been a blockbuster year in markets and that follows

a blockbuster year in 2023. as we go into 2025, we have a lot of ingredients necessary to keep this going. we have a very strong consumer. you see that in consumer spending data and retail sales. economic growth has been over 3% in three of the four quarters this last year. another thing i will .2, strong corporate earnings. we had earnings surprises outpace estimates more than 7% on three or four occasions. that is a good sign. what you were talking about before i came on, interest rates. they are in a healthy place right now. we have seen a pretty large repricing following the september first cut. rates where they are in to see the market where it is is a healthy sign. i would add you have the ai theme, the big catalyst that can

help propel us further into 2025. sonali: you look at the s&p 500, up for the year more than 26%. the nasdaq 100 up almost 30%. just the index, a total return of the magnificent 7 is up 75%. you think of the gains in the mag 7 and how much they have driven indexes, do you think that will be the big driver into next year or do you believe in broadening out? mike: i firmly believe in broadening out. when it comes to the mag 7, they have driven the last several years of returns and a lot of that has been due to the ai. you have seen the broadening out the last few months in the ai theme. software and services apparatus strong run. actually, if you look at the

last six month return for nvidia or semi conductors, they are flat. software and services is still a way to play the top end of the market with the ai tailwind. also a way to come down in the cap range as well. the smaller mid-cap story, the set up is extremely strong. you had back to back years in 2023 and 2024 where the equal weight s&p has underperformed the market cap s&p, similar to what we saw with 1998 and 1999. that is a good set up. there has been a weakness in equal weight and smaller cap stocks in december which makes for a good entry point. trump policies will be very domestic focused. and quite friendly for small-caps. 1 we saw that in 2016 as well. vonnie: this market seems to

become a momentum driven market. if the momentum goes away from ai related stocks, do we see a flushing out of money out of some of these highly valued companies? mike: i do think it is fair to say these companies will be more sensitive to bad data than they were to start the year. you have had valuations remain quite elevated and have increased a good bit for a lot of these companies. there are a lot of big names were that is not nearly the case. one thing i will reference for that is the s&p value with growth indices that rebalanced last week. the biggest ads on the value side were apple, microsoft and amazon. there valuations are slightly above market but quite reasonable. there are pockets of the mag seven and ai over all are relatively fair. growth expectations are in the

prices. there are definitely others that are quite elevated and stretched. you need to be selective and careful. vonnie: next year donald will be in office. how much can he preside over this market? if it is donald trump versus the market, easy bigger than the market at any point? mike: if we know anything from the 2016 playbook, one of trump's biggest measures of success is how the stock market does. that is a pretty good starting place as we head into the new administration. a lot of the policies on the table from the 2016 playbook will be very america-focused, very de-regulatory focus, stuff that should benefit a lot of the broadening out theme. we saw a lot of that price in in the 2016 election. six to eight weeks out from the election you had small caps up almost 20%.

in 2024, small caps are roughly flat from the election. . it is a good entry point with a lot of policies we know will be very conducive to those companies. i do think with congress where it sits, it is a helpful scenario to get real legislation passed that should be conducive to the broadening out theme. vonnie: thank you so much for joining us. it is wonderful to have you on this holiday shortened training week. that is mike dickson at horizon investments. we saw this mass of trump trade after the election and the only thing that arrested it was the federal reserve. there are things that can take the market's attention away from whatever the president said. that said, the panama canal has been in the news and that affected oil. sonali: it has affected oil and we will keep an eye on if that will continuously have an impact on ripple effects and how we think about inflation and the

consumer. today, a fun fact on the s&p 500 -- it is many consumer stocks that are holding strong and shaking off data this morning. really betting on consumers like walgreens, target. we will keep an eye on those stocks and the rest of the market as we had a long. we will talk about the politics situation in the panama canal. vonnie: some stocks on the move. we have gamestop, which at one point today was up 10%. stay with us. this is "bloomberg markets." ♪

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vonnie: you are watching "bloomberg markets." i am vonnie quinn with sonali basak. let's continue to talk politics and president elect donald trump coming back to the oval office

for a second term. the trade war and tech competition between the u.s. and china set to take center stage. >> donald trump has been elected president of the united states. >> donald trump's first presidency gave washington a playbook of hardline tactics for preventing china for overtaking the u.s. as the world's dominant technological power. >> trump introduced punitive tariffs on china as well as trying to rebalance the trade deficit to try to contain china's economic rise and try to contain its military might. >> the most beautiful word in the dictionary to me is tariff. >> trump is focused on raising tariffs to prevent china from shipping goods into the u.s. that are perhaps subsidized by the government. >>'s campaign left no doubt that his ambition for american supremacy is is northstar. >> we will hire american, buy

american, and show the world the american dream is back. >> after four years out of the oval office trump is returning to face and embolden china. >> they have been very aggressive in applying for patents they think will help them develop domestic and receives critical to their future. >> ultimately there is this idea that trade always gets through. that is what we see would we think about the ev industry in china. >> tackling that is likely to be one of trump's primary plot lines in the sequel to his first four-year showdown with china. sonali: that was matt goldman of bloomberg originals. you can catch the full episode on bloomberg.com or in the bloomberg terminal. president-elect trump is also rattling diplomatic relations with panama. he posted on truth social that

the country is ripping us off on the panama canal far beyond their wildest dreams. panama's president pushed back saying the u.s. warships pay the same toll rates as other nations. we will talk about it with bloomberg's joe mathieu. a lot of this is because of china. you have a few things going on. he has picked an ambassador to panama and the leader of panama saying the meddling by china in the canal is not happening. how do you really pair what panama is saying and what the u.s. is worried about? joe: it is important what you just mentioned because donald trump has said out loud that china controls the panama canal. having heard today from the president of panama he decided to hold a news conference and said it is simply not true. the president said china has no stake in the panama canal.

he said these remarks alleging the influence of china in the canal by donald trump may be due to geopolitical fears that might be valid from their perspective but in terms of panama have absolutely no veracity. when you put together the idea that taking control of the panama canal, also purchasing green men, which donald trump talked about, it has been against the construct of a more powerful china. if you listen to the president of panama, there is nothing to this. donald trump naming cabrera to be our next ambassador to panama. this is a county commissioner in florida. vice chairman of the trade consortium. he helped get donald trump elected. work for the campaign in 2020 when he was running for vice chair of the florida republican

party. presumably he will be confirmed and will be the face of our policy when it comes to the panama canal. vonnie: if donald trump is serious about any of this it is serious about who he sends there as ambassador. what could he achieve with this? code fees -- could fees be lowered? will this just have to go away? joe: these are great questions and i'm not sure anyone has answers until january 20, when trump is in office. when you come out with a big salvo like this on truth social or twitter as an opening gambit that the president would like to see a result in lower fees. whether that happens remains in question. the same thing can be said with greenland for canada, he said he wanted to make canada the 51st state. it is about expanding the reach of geopolitically.

whether the president elect can do that remains in question. we have seen some of these movies before it comes to greenland and canada and those did not result in much at all. sonali: with greenland, he said it is a necessity for security. is it an absolute necessity and does this outline his plan moving forward in a way shaping up to be more expansionist? joe: all of these are great questions and it is difficult to tell how serious donald is, whether he wants to buy greenland -- you can talk to denmark about that. greenland is not for sale. it reflects an approach to geopolitics which is at odds with what we have seen with the biden administration and reminds us of what we experienced in the first term of donald trump. he is assembling a national security team that will be hard

against china. there are questions about what his approach will be to vladimir putin. he said he can orchestrate an end to the war in ukraine on day 1. it ever complicates the story with across-the-board tariffs. with the approach to beijing. that may involve some different questions. let's also remember donald trump invited president xi to the inauguration. that will not happen. he has a different approach with world leaders than joe biden. vonnie: we know there will very likely be a series of executive orders on day 1. what is everyone in washington telling you? you have your ear to the ground. joe: keep your sharpies ready. donald trump has promised to do a lot of things on day 1, including the start of mass

deportations. shutting down the border and conducting or begetting to conduct mass deportations. important news in the washington post. donald trump supporter cz -- border czar said family detentions will be back. donald trump is promising to return as he addresses the matter of the border. this is what we will be talking about in the outset. questions about ukraine. he said he can bring the war to an end. this is why donald trump is not waiting around. he and many of the officials who not require confirmation, like the border czar, are already off and running, having conversations with elon musk and world leaders. many are going to mar-a-lago to meet with donald trump. sonali: how are others preparing for the inauguration? whether you are thinking about

world leaders or world businesses. joe: write a check for $1 million and see what happens. that is a trend we have seen from tech leaders. donating to the inaugural committee. this will be quite a lavish affair. everyone from jeff bezos on down has given $1 million. they are doing this to be a part of the conversation, knowing the white house wants to be in good graces with corporate america. it is more complicated when it comes to high-tech, particularly those with social media platforms. we talk about the idea of censoring conservative views. it is difficult to tell what donald trump's relationship will be with big tech. that is partially why we are seeing the checks being written. i can tell you the scaffolding is just about done on both ends of pennsylvania avenue and this will be a traditional looking affair.

we have to swear in congress first. we will have the votes certified on january 6. and then the inaugural on january 20. donald trump will be on the scaffolding at the capital bank, alongside joe biden. vonnie: thank you so much. you will definitely be keeping us abreast of everything happening. that is joe mathieu, host of "balance of power." coming up, we will be speaking with walter todd. we will look at the final trading days of 2024. this is "bloomberg markets." ♪

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

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sonali: welcome back your audiences. i am sonali basak alongside vonnie quinn. we are going to get a check on what is happening under the hood in markets. light volumes today. alex semenova watching some critical stuff. alex: the broader market is slumping but apple is still up .2%. one of the big winners of the year, one of the so-called mag-7 stocks. it got a price target upgrade this morning from none other of wedbush. he raised his target to a street high of $325 from $300 and

writes the company is going into a multi-year ai driven upgrade cycle. he says it is still being underestimated by wall street. the firm sees growth catalysts from a multibillion-dollar annual services revenue stream with apps built around ai expected to prompt consumers to get new iphones. this will obviously do well for the company. they have an outperform rating on apple and even despite the small move today the stock is up more than 30% year to date outperforming the s&p 500 index. vonnie: a phenomenal outperformance. you've also been keeping an eye on progressive. explain to us why. we don't tend to talk about it often. alexandra: i am surprised, the stock up more than 50%. also getting a christmas gift from analysts updated to outperform at raymond james. they say the company's long-term record makes it a core holding

for any large-cap growth investors. it is a little down today but as i mentioned, more than double the s&p 500's performance. sonali: how do you see this in terms of winners and losers throughout the end of the year? alexandra: really incredible looking at the scoreboard for the s&p 500 index. all but one sector, 11 sectors are in the green. obviously some of the winners are information technology and consumer discretionary. that is because they house some of the mag-7 companies. meta up more than 90% year to date, nvidia, broadcom posting gains of more than 100%. then within consumer discretionary you have deckers outdoor, which is an interesting one. tesla, royal caribbean doing well. of course the financial sector. sonali: so interesting deckers is doing better than tesla this year. alexandra: i was surprised to see that. also right after tesla, who would've thought?

sonali: right now it is up even more. alexandra: of course you have sectors like financials, the regulation is expected to bode well for banks. we are expecting to see it pickup in m&a activity and ipo's. utilities also one of the winners of this ai revolution with data centers powering that group higher. some of the losers are not even really losing. but you have real estate, health care, energy, some cyclical sectors not doing as well. materials is really the only one slightly down, down about .3%. vonnie: i am curious to see if deckers suddenly got into bitcoin or something. i have to ask you about gamestop. i am sure you are not completely concentrating on it today but that stock is such an abused stock. alexandra: this has to do with the frothiness we have seen in

the markets. investors piling into speculative names. gamestop having a pretty incredible run. roaring kitty on twitter, active. it goes to show how investors are monitoring his tweets and piling into the shares for no apparent reason. sonali: the quote-unquote meme stock names that have been moving significantly. alexandra: always these moves in tandem. amc, these types of companies that were stars of the 2021 meme stock euphoria coming back in a big way this year. investors piling into these exciting high flyers on expectations the fed will ease policy, not too worried about fundamentals. vonnie: this santa claus rally is not right up to christmas day, it continues into the new year. we possibly could be looking at gains tomorrow even though i don't imagine very many people year-round, monday and tuesday

too? alexandra: apparently the santa claus rally in the s&p 500 on christmas eve was the best christmas eve for the index since 1980. we were up more than 1% tuesday. obviously some of that momentum petered out today but we could rally into the end of the year. people are excited about 2025, the election of donald trump is supposed to be very pro-market. the fed still on track to ease policy, albeit we don't know about the pace. earnings are expected to grow. even though we have had enormous gains in equities, two consecutive years of more than 20% returns, the momentum doesn't have any substantial thing that could stop it. that is of course if inflation keeps abating and we don't get any surprises. sonali: i am watching real estate closely because you see a steeper yields curve. you also see an elevated 10 year

generally. it is interesting to see even a little bit of relief. you have the 10 year just under 460 today, a little relief after the jobless claims data this morning. the real estate sector is the biggest gainer on the s&p 500 today. how are investors feeling about taking on the risk of real estate right now? alexandra: we are seeing a bit of a rotation. some investors exploring opportunities outside of the magnificent 7. so any kind of relief in yields could see traders piling into that sector. but you mentioned yields, a lot of people are worried about yields remaining higher for longer and what that could mean for equity risk. if you go back to the 1990's, the tech boom everyone has compared this moment to, yields were averaging around 6% to 7% and we still saw more than 200% over that five-year period. with this point we have seen even as investors recalibrate

their expectations around how the fed will ease, they are still piling into equities. there is not much stopping this rally. we have seen stockmarkets still do well in the face of elevated interest rates. vonnie: i am so curious. money can come out of that stock market really fast as well. alexandra: when you are piling into momentum, when it is going well it is going well and fast. but anything that can disappoint investors will see a big unwind. vonnie: thank you so much, we will be talking to you a little later. alex semenova, a friend of all of our programs. let's turn to another friend of the programs for more on the outlook for 2025. with us is walter todd, president and cio at greenwood capital in beautiful south carolina. i always associate you with financials. i know you have a broad array of holdings. but i am curious, did you stick with the financials you had in your portfolio through the downturn and is there more to run for this relief rally? walter: good afternoon. thanks for having me on.

we did stick with financials. banks specifically, in the many different portfolios in which they obviously had a very good run. certainly leading into the election and certainly post the trump election. now we are seeing some trepidation with rates backing up what was kind of the problem for banks in 2023 and the first part of 2024. we do think there is more room to go there, but we think a lot of good news is priced into financials and the markets in general as we head into 2025. that is one of the challenges for next year versus the past two years. vonnie: so how much would you be raising cash and getting out of some of the asset classes before the inauguration so maybe you can start again before january 20? walter: that question is very specific to individual clients but in general we would advocate for periodically rebalancing portfolios. stocks have had an incredible move relative to bonds the past two years. if you have just been standing

pat, probably well overweight equities, a good time to rebalance. rates are very attractive at these levels. if you have short-term distributions upcoming, certainly wouldn't want to time the volatility in the markets. there are things you could do around the edges to kind of prepare for increased volatility, which i think we are going to see. i don't know if it will happen between now and the inauguration, but certainly in the first half of 2025 we expect the volatility level to increase. you mentioned how quickly that can happen. we saw that in early august and of course the fed meeting in december. sonali: how do you feel about the risk and reward for equities into next year? even if you think they will not do poorly, and most analysts still believe that you are going to notch gains of 10% next year, looking at gains of about 26% as we stand this year. looking at two years in a row of returns on the s&p north of 20%. we have not seen that since the 1990's. so if you are going to get less

for your dollar in the s&p 500 next year, do you think diversification becomes more important? walter: it is a great question. of course we had five years in a rout in the 1990's of 20%-plus. that doesn't mean you're will be dad necessarily. but your question is the right one to ask. when you look at strategists putting out these targets to the upside for the s&p, not that that is wrong, but no one is talking about what is the downside. if the upside 10%, is the downside 20%? that is not a very good risk reward. it goes back to managing the risk within a portfolio. diversification has been a negative over the past two years. you want it to be concentrated. there are top names in the u.s. but ultimately we think it is an opportunity to take advantage of strong runs and diversify across different names within the equities and also across asset classes with interest rates at 4.5% and 5%, north of 5% if you

are looking at a corporate bond portfolio. sonali: if you look at expectations for the bond market next year you're looking at investors really starting to wipe out any hope of a cut, in january for certain, but even if you look at the first half of the year those hopes are fading quickly. less than two rate cuts are priced into the market, well under for next year. how much does that matter at the end of the day? if you are give -- -- plus pressure on the longer ends of the curve because of worries about the united states fiscal situation, what does that mean in terms of spillover effect for risk appetite? walter: yeah. apparently it doesn't matter. can matters to everywhere except for the top five to 10 names because we have seen the effects on small caps. they had a nice run the week after the elections, it has given all of that back. the next u.s. markets as we see strengthen the dollar, as we see that rise in interest rates.

eventually i think that flows route to fundamentals. between earnings season i think the momentum takes hold and runs us in one direction but in a couple weeks we are going to start to see fundamentals for individual companies and see outlooks for 2025, many of which we have not gotten yet. they are going to have to factor in the higher u.s. dollar for the globe operators and that will impact earnings. so we think it will eventually matter to everybody in the market, but at this point it is kind of isolated to everything but the top 10 stocks in the s&p. vonnie: you highlighted outside of those 10 stocks, this is an interesting one, health care. with donald trump as president and potentially a different kind of hhs secretary, we are not sure if that nomination is going to go through or not, but where would you invest in health care? walter: it has been a tough space, particularly

post-election. it has been only in one direction, down. whether you look at the fundamentals like a j&j -- take j&j and apple for example, some of the last two aaa companies in the country. apple is trading at 33 times. you find these opportunities. these are names we hold on behalf of our clients. 3% plus dividend yield trading at about 13 times. trading low to mid single digits. we think there are opportunities in biotech, equipment, and pharmaceuticals within health care. past performance is no guarantee of future results. that is what you are hoping for looking at health care because it has been a relative lag or for the past several years. sonali: happy holiday season to you. happy new year. we are looking at these markets. interestingly enough, still flat

on the s&p 500. looking at the more interest-rate sensitive russell 2000 and getting more they did. more they bid in the philadelphia semiconductor index. some trays that have been more granular and en vogue as we head into the end of the year. as we talk about interest rate sensitivity as well, we are going to hear from san francisco fed president mary daly for her take on the fed's hawkish cut next. as we have been talking about, markets really pricing out the hopes of rate cuts early next year with really just three basis points of cuts priced into the january meeting. that is next to nothing. this is bloomberg. ♪

vonnie: this is bloomberg markets. one of the last shows of the year. i might be getting a little teary-eyed. let's get to the federal reserve

because last week and voted to cut rates one final time in 2024, signaling a slower approach a new year as well. mary daly joined bloomberg last week to weigh in on that cut and the fed's plans for next year. >> it is about the data. it is always about the data for me. we don't know what the incoming administration is going to do. new administrations no matter when they come always put a slate of programs together. as a policymaker i want to see the net-net affects. once i see clarity about what those policies will be. i was focused on the incoming information and what it means for the outlook. today i feel like we have policy in a good place, the economy is in a good place, and we are prepared for whatever comes before us. >> what happened in the past three months that caused the fed and perhaps yourself to be much more concerned about the stickiness in inflation? mary: the data happened. you look at the data and what has happened is there are two things that occurred.

first of all the economy remains in a good place in the risks to the outlook are equally balanced between a risk to inflation and a risk to employment. that is where we wanted our goals to be and we adjusted policy, we had confidence and inflation was going down. we adjusted policy more to ensure we have a balanced labor market that continues. that is where we are. then the data on inflation had been coming in a little slower. i would not say sticky or stalled, i would say the progress has slowed relative to what we wanted but that is a typical pattern. it is bumpy. when you get from 2.5 or 2.8, it is just a bumpy path. >> at the same time some people were wondering if there was this stickiness, i am looking at the cleveland cpi now and it has ticked up for the month of december from november. there was this question why did the fed cut at all? mary: i am going to reassert that it is bumpy. earlier in the year we had two months of data and people said

oh my gosh it is re-accelerating and then it came down. inflation data, you cannot focus on one or two months. the most important thing for me is we need to recalibrate policy. i saw this as a close call. was 75 enough to be the recalibration we were looking for, right sized policy to meet the economy we expect, or do we need more? ultimately i determined the 100 basis points was really the bright level. now i feel like we have that recalibration phase behind us and we are in the next phase which is looking at the incoming information we can return to a more typical pattern of gradualism for the fed. we have practiced that. with a lot of uncertainty you adjust the policy rate and then you wait watchfully and see what transpires and then make further adjustments. that is the phase we are now entering. sonali: that was san francisco fed president mary daly speaking to bloomberg surveillance. we are now going to broaden back out into the equity market with

bloomberg's -- we're looking at moves heavily impacted by the meme stock traders. >> exactly. gamestop today rose as much as 10%, the most since early december. after keith gill, known as roaring kitty, he posted on twitter a gif without any text, and that was enough to push the stock higher. it is now up for a fifth straight session. if we look at the options market it also tells us that creators are expecting more gains to come. before the holiday season, traders bought more than 100,000 call options, bullish options on gamestop with $125 expiration price. and the expiration date is january 17. that means people expect the stock will basically quadruple during the next couple of weeks.

will that happen? we don't now. the stock is currently trading at $32. but we will definitely keep an eye on that. vonnie: the problem with keith gill is whenever he pulls something and this is a second time he has done this this year, you assume he knows something. but that gift box could be empty, or he could be making a comment abouta's holiday sales. it could have nothing to do with anything related to fundamentals of gamestop as a company. and yet it seems like the retail army is bidding gamestop higher again. it is still. . up three point 8%. natalia: exactly. we should also keep an eye on the performance of retail traders. this year although we saw some volatility and big upside moves, retail traders underperformed the s&p 500. there was a report from j.p. morgan a couple weeks ago, and strategists say retail traders

buy around 9% this year. s&p is up 20% this year because they made some wrong moves related to financial. they didn't play election positioning really well. and of course when it comes to meme stocks, they piled into those into the first half of the year which was challenging for those stocks. but now they are coming back. we will see how they perform a me get the final data for the year. sonali: i am reading one of your notes here and when we are talking about the s&p 500 writ large you have written since the early 1950's at the s&p 500's performance from christmas until the end of the year has been positive they median gain of about .4% and positive returns over two thirds of the time. it is interesting because you are not seeing that at least today, not yet. for what it is worth, we are

seeing the s&p 500 trying to flip into the green today. major sectors are still roughly flat. what tends to drive that year-end sentiment? natalia: typically it is a big shopping season. sometimes consumer stocks are also one of the indicators that u.s. consumers are still doing well. people are willing to spend so this excitement around holidays. we also see repositioning into the year-end. for example, when it comes to hedge funds, one of the stories i flagged is hedge are not forced to trade. people are more in a wait-and-see mode right now. they are not buying too much but they are not selling aggressively stocks going into the year-end. but overall it is repositioning, people are trying to get rid of weak stocks, and trying to catch

up the rally and by more stocks that can potentially perform better in early next year as well. sonali: to your point, when you look at the s&p 500 today the best performers on the day, walgreens up almost 4%. dollar tree up almost 4%. target up more than 3%. fedex up 2.7%. dollar tree in particular this year which a huge laggard,. down 46% this year. when you see resilience in stocks like that, do you see investors are starting to get more comfortable with the consumer? especially in some consumer stocks which have not seen a lot of love because they have dealt with lower income consumers that have felt more pain than the one to have been wealthier. natalia: exactly. the consumer sector saw a lot of different directions because we see that some lower income consumer and companies that are

exposed to those kind of consumers did not do well during this year. at the same time higher income consumer stocks, they performed relatively better. but overall we can see the u.s. consumer remains resilient. even if you look at some luxury stocks, ralph lauren, it is a big move. the stock is up almost 60%. this is also an indicator that u.s. consumers remain resilient. they are willing to spend on more expensive items. and again, this is an indicator that, at least for now, consumers are comfortable with prices. vonnie: mastercard spending polls showed an increase over last year on spending. tell us about bitcoin-related shares because we have seen a lot of volatility in bitcoin. it is still around the $96,000 mark. natalia: it is. it is down for the first time,

if i'm not mistaken, in three days. people are beginning to reposition. a couple days ago bitcoin traded at around $108,000. now it is about $95,000. what is also important to keep an eye on, tomorrow and friday we will have a big options exploration, about $14 billion in bitcoin options. about $4 billion in ether. they will expire and typically what happens, assets begin trading more freely. as a result we can see even more volatility tomorrow. vonnie: thank you so much for joining us in studio. natalia kniazhevich, who joins us always in market moving event. coming up we speak elon musk in the white house. what is it going to mean in the next administration? this is bloomberg. ♪ i earned my degree online at

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sonali: welcome back to our television and radio audiences.

i am sonali basak alongside vonnie quinn. we are looking at a day that is an interesting trade. low on volumes but the s&p 500 trying to kick back into grain. and a bond market that has gotten a bid back once again. vonnie: the 10 year yield at 457 now. lowering from the heights we saw this time around. of course the fed funds futures have repriced everything once again. now looks almost impossible we get a cut in january and maybe not even march. sonali: incredible. under the hood i have been looking at this story. repo rates have been spiking. pretty interesting to keep a lookout on. we will talk about the bond market later in the show. vonnie: new two-year yield, 433. four-year that 476. some commentators reflecting it is still going to be a steepening trade and money coming out of bonds.

at all-time highs, why wouldn't you? sonali: we are now going to talk a little more about the politics version of this. a lot of people in the bond market watching bond rates as it pertains to what is happening in the fiscal situation in the u.s. a lot of that comes down to not just the president elastic but also elon musk, blurring the lines between reality and the internet culture, even bringing doge to the white house. what started as an internet name is now musk's latest pet project. matt miller has more. >> elon musk is set to lead the department of government efficiency, or doge. get it? we know musk loves memes, the internet, and twitter.

the question now is will that affinity for lol's translate into effective government policies? according to trump, they plan to eliminate fraud and improper payments and will perform audits across the federal government. but already a clear winner is emerging from the creation of the doge, backers of dogecoin saw the cryptocurrency spike since donald trump's win, driven in part by optimism over trump's digital currency stands and aided by the doge announcement. musk says the department will in-state a leaderboard for as he says, insanely dumb spending. the next few years may see america operate as the land of the meme. vonnie: of course that was bloomberg's matt miller talking to us about elon musk being very close to the white house. i want to talk someone who has been following this closely,

specifically who elon musk has taken on with him to work with him with doge. steve davis, what does this mean for the next year and for federal jobs essentially? >> it is still such an open question what doge is going to look like. we know it is called the department of government efficiency but we do not think it is really going to be part of the government. right now it is more of an advisory council. elon musk has taken his very loyal deputy who has worked with him for more than 20 years and he is helping staff this effort. as of earlier this month there were about 10 people on board. it is coming together but it is still unclear what his priorities are going to be. it is a bit vague.

sonali: musk has gotten criticism already. this whole joke that you're running a department of government efficiency with two people for an initiative that has not yet been made clear. how efficient will this be? at the end of the day, to the point you're making some of these people are serving two ro les at once. they are keeping their day jobs. anne: yes. steve davis is working as president of elon musk's boring company. he is also working to staff the organization. it could slash government spending. that seems to be the goal. but it is still unclear what they will go after, what they will cut, and what sort of things they will end up targeting. so it is hard to say how many people they will end up with.

it may or not be efficient. but so far we know that they are recruiting. vonnie: give us a bit of his bio. we know that steve davis has worked with elon musk since 2003. he also worked at a yogurt store at one point. anne: yes. he has two masters degrees, one in particle physics and one in aerospace engineering. he started out working at spacex, also was brought on to work at twitter. in between he operated a yogurt store that was known for unusual gimmicks. you can answer trees via -- trivia questions and get a discount. he also had a bar that was also known for gimmicks. they had an angry our as opposed to a happy hour if you shouted your drink orders. this is a very unusual

character. sonali: thank you so very much for your time. this is one of the most read stories on the bloomberg terminal. you are not going to want to miss it. exactly how musk is going about hiring one of his top deputies to go about doge. we are now going to bring in jennifer greifeld -- jennifer greg l -- we are looking at what donald trump might do moving forward. how do you think social media is going to play a role in the upcoming world? how do you think they are going to use musk's platforms rather to the other more established ones? jennifer: maybe a little context. i know over the last four years,

i have been sitting back a little more and watching this all out. musk is the person of the moment and we are throwing around these terms like retail investors, but it is really about the public sometimes. the market is trying to make sense of what is going on. for me, the one piece i have seen lacking in media is any critique of the biden administration and how they have handled not just their leverage over social media but even this potential tiktok ban that is looming and is going to the supreme court. i know you are just talking about meme stocks and bitcoin. like it or not president trump is coming to power next year and he has an incredible amount of leverage. the ability to cut deals not just with tiktok, but any of those competitors. again, circling back to facebook.

it is no surprise that in the last election you saw people like mark zuckerberg cozying up a little bit more. i think it is because we are missing that context. for me it was difficult to cut through at times and provide that critique. but i am not sure the markets or the public have heard enough critique going into this. it has really been focused on musk. obviously he has the president's ear. there are jokes about him being the unelected president. of course he is incredibly rich and he has twitter. but again, he has made that work for him. for me, i think we need a little more history and looking into those who are in power, they had a lot of confidence going into this that aden would continue and then they passed laws like that. i think it will be unsettling to some of those larger social media companies.

i am not sure that their future is so sure and we should only be talking about tiktok. vonnie: what would donald trump like to do? on the one hand he needs leverage with a country like china especially if he is going to be imposing extra tariffs. this seems like easy pickings. jennifer: exactly. and he has easy pickings with bitcoin. do you make a reserve or don't you? he has so many levers going into this next term. looking at the last section, this is not a moment of clarity. we do not have confidence. we do not have certainty. i think the markets are reacting to that more than just this fed announcement. obviously we saw a major market moment. but i see uncertainty coming into the end of the year not

just because it is the end of the year but because we really don't know how president trump is going to play his cards. we just know he has a lot in his hands. vonnie: all these tech executives visiting mar-a-lago and digging deep with millions of dollars, these u.s. executives, what will that buy them? jennifer: that is what was interesting about the tiktok case. they went to extraordinary lengths to legislate, to carveout tiktok. otherwise it would have looked like every other platform. facebook would have been in the same situation. i think that gave tiktok comfort for a while. i think going into this legislative path was incredibly risky. it is a huge threat. freedom of information, freedom of expression. even the expiration date was right in front of the next term.

i believe it is just an incrediblly dangerous piece of legislation to target one platform like that. whatever the reasoning was, it was very, very targeted. the timing would have given the biden administration some leverage not only with tiktok, but maybe with the sitting platforms going into the last election may be struck a sweetheart deal with facebook. we have to look at the timing of all of that. that was passed in april of last year. we knew in march trump was taking the helm at the rnc. again, i don't like it. i don't like it. sonali: you look at how tiktok has been treated by lawmakers and you have seen both parties voice their concerns. at the end of the day if you think whether or not there is a full on ban that is pursued in

the early days of the trump administration, or a wholesale sale of the platform. does that pressure really go away? jennifer: great point. i am just trying to sneak in a pine -- a tiny piece of critique on biden here, because we really have not seen it. i have not seen it much in immediate. as you point out, it was bipartisan to get that through. but that is telling. on both sides of the aisle, president trump was a threat. but it was not just biden per se, but all the incumbents. we saw this -- this reminds me of in 2012 when we saw under the obama administration, they instituted the modernization of the smith mott act. trump was starting to make waves at that time, parting -- starting to put his hat in the presidential ring, and the

incumbents were bipartisan. a little bit of a gatekeeping action from those currently in congress in the white house saying we don't want this outsider coming in. so it spoke to maybe the political climate of those in power that maybe they were trying to get keep a little. i believe it gave an incredible amount of leverage to any incumbent at that time. vonnie: that is jennifer grygiel . they are associate professor at syracuse university. jennifer grygiel joining us. with bitcoin down 2.5%, we will be speaking about the coin next. ♪

vonnie: this is bloomberg markets. we have about 45 minutes left in a holiday shortened week. everybody knows this, volume very light.

but it has been a record-breaking year in the crypto market even though we have seen it come off the boil the last few days. up 130% this year from bitcoin. momentum from elon musk and donald trump helping drive the coin to new highs. it hit more than $108,000 earlier this month. the stock down now. for more we are joined by our crypto reporter, movie al shen. how do we even forecast what will happen with crypto next year? >> bitcoin had a very tremendous ear as you just mentioned. a couple things people are looking at going into the next year. first of all microstrategy which has been the main driver of the past year buying bitcoin, people are looking to continue to keep and i on whether microstrategy are buying more bitcoin. another thing is whether other public companies are going to

use similar strategies to buy bitcoin. another thing that is really huge, president elect donald trump has had a very powerful impact on the market and people are hoping to see whether he is going to keep his promise of creating a so-called bit: strategic reserve for the united states. i think that will have a huge impact on the markets and i'm pretty sure traders are positioning around whether this will happen in the coming months. sonali: when it comes to that idea for a strategic bitcoin reserve there are a lot of skeptics. what happens if he does not go ahead and do that even what a run-up we have seen in bitcoin because of a lot of the promises put forward? muyao: that is a very interesting question because i do feel like i have heard a lot of skepticism from within the crypto market. for example one has been very

outspoken. he said i would be happy if we create a bitcoin reserve but does not think it will happen. i feel like the markets have been having this good balance between the very pro-bitcoin reserve and those who are not really optimistic about it. i don't think it will have a major impact in terms of whether you have a huge upside to the market and prices. vonnie: can i ask you microstrategy? first of all it entered the nasdaq 100, looking to enter the s&p next year. this idea that it is going to issue more shares to buy more bitcoin seems like it should send the stock lower. why would that be a good plan? it is diluting the shares. muyao: you got me on that question. i have been asking everyone literally every day. what you think about microstrategy prices?

people are still relatively positive. the price is going to correct at some point what i don't think that is going to happen in the near term, not only next year. that does not shock me. they do have the psychological plate into the market and people are more bullish than bearish. vonnie: there are eight analysts, buys, and the lowest price target is $480, the highest is $650. i do not know if there is something we are missing or not. donald trump talking about the rest of the bitcoin we are going to see made in the usa, is that even possible? you cannot tell people in india and china and wherever else they still might be mining bitcoin that they can't, right? isn't that the whole point of bitcoin in the first place? muyao: he said that during his

campaign and gave a boost to all of the u.s. investors. first of all, it is very hard to make. a big part of the crypto industry does not want that because bitcoin is a decentralized crypto asset. it goes against the whole idea of bitcoin. vonnie: ethos is that the government should not have a say. sonali: made in america was certainly the campaign promise. muyao shen covering crypto for us. markets appear to be ending the year on a high note but there is a perspective on wall street that u.s. equities are due for a downturn. thomas peder fee holds that concern. he spoke with me about that and here are his thoughts about cryptocurrency as well. thomas: i'm afraid the markets are becoming overextended and that some time in the future we

have a downturn in the markets. but i do not think it is going to be very far. i'm extremely optimistic about the next four years and maybe even thereafter. sonali: the other thing where investors are spending much lighter regulation is in the world of cryptocurrencies. how do you feel about cryptocurrencies? when you feel that your clients are going to interactive brokers, is that something they are going to be asking about more and more? thomas: cryptocurrencies are a very interesting area. we have been into cryptocurrencies for about three years. we charge less commission on a cryptocurrency trade than any other firm other than robinhood. but robinhood has a wider spread because they get their commissions paid by the market maker who they send their orders

to. so i think on balance, our platform is probably the most efficient one for a crypto trader. otherwise, uhhh, to tell you frankly, i am sort of scared of crypto. it can go to any price because it is basically just a figment of imagination. so, it doesn't have any underlying value. the only value it has is same as the paper dollar, which is nothing. sonali: but you have seen people through etf's, the price of bitcoin get to $100,000. will the investor of tomorrow be more likely to buy bitcoin or a u.s. stock? thomas: well, it depends. well, for a bitcoin you can buy

u.s. stocks. for u.s. stock, it is more difficult to buy bitcoin. i think anybody who does not have bitcoin should have some bitcoin but not too much. i would recommend that people may be put 2% to 3% of their net worth into bitcoin. we, for example, we will not allow anyone to invest more than 10% of their assets into bitcoin because i think that would be very dangerous. vonnie: that was interactive brokers group thomas peterffy speaking to sonali basak, who we have here in studio. that was a whole day of goldman sachs guests. i would imagine many of them were very positive on this market. sonali: very positive. but thomas peterffy of course was the founder of one of the biggest retail trading platforms.

that reminds me, the retail trader, you would have thought they have done gangbusters in this market but they have trailed the s&p 500. you have thomas peterffy saying he is worried about nor -- more near-term drawdown. we are near record high, about 6000 on the s&p 500, investors largely shaking off those worries. but you have to wonder, what happens when you have all but one rate cut really priced out of the market at this point? vonnie: i do not get the feeling it is the retail investor being very wise and patient and slow and not greedy. there does seem to be a proliferation of these levered and double levered and triple levered etf's, and these are very, very volatile assets. sonali: something interesting to think about is with the s.e.c. chair stepping down and the president elect expecting to

have a light on regulation administration, are you going to see a whole host of new etf's with a lot of leverage into next year? there is another one with private credit in its mix as well. maybe some innovation in the financial markets next year, maybe for the better. vonnie: we also don't know how much impact any of these new chairs will have and how much we have to answer to donald trump and how much they have to be able to get something quickly and if there is no staff because of the department of government efficiency. we are going to talk more about the treasury market so stick with us right here. ♪

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>> this is bloomberg markets. i am vonnie quinn along with sonali basak on this third last trading day of the year. we did this last year, too, remember? rally, it looks like. sonali: not much left of the year but we are looking at the markets right back into the green but we are also looking at the bond market here also breaking back into within a bit of green on the day at least on the shorter end of the care of. that is following a roller and still a roller coaster, actually. people are not taking a breather

here, it feels like. 10 year off the 460 level but still above what max kettner talks to us as the danger zone of 4.5 percent. how do you think about this moving into next year when cftc positioning still shows that many traders are still in that short for the longer end of the curve? are they having the stomach to stay short and maybe even go shorter? >> i did see that interview can actually. i was thinking the same thing. max said 4.5 and allete if you fall said we would go about 4.5. 4.6 and change. i think a lot of people are feeling like, you know, a lot of them are short in the curve trades, meaning they are buying the shorter end, whether it is ones that they like and they are selling the long end. some of them have staying power.

even if you say, well, the fed is going to cut a little bit. much of the cutting has been priced out of the market and there's less than two full quarter-point cuts priced in. just one solid one but people think the shorter end will still do ok because at least the fed is still biased to cutting but there is a plethora of risk in the long end. hey, we might like the market but we are weary of 10 years and beyond because as you guys have been talking, there's a lot of uncertainty on the fiscal policy. we know president yoon ekstrom will come in after the 20th. he has said a lot of things but how much gets implemented and to what degree? how fast? is a lot of unknowns and fed officials, kind of surprising to many. a few fed officials factored into their projections, you know, in their recent quarterly projections some kind of estimates of what might happen with the new administration so there is a lot at play and you

see a lot of the 2025 notes keep saying uncertainty and that is the word of the note. >> exactly. how could you even trade longer-term at this point? like you said, there is so much uncertainty and we have no idea what the fed will end up doing next year. the market is thinking something totally different than it did a few weeks ago and we have no idea what tariffs will be placed on countries and how that will impact inflation. >> in fact, i was speaking to a fund measure from fidelity the other day and what he said to me is because of that, we are staying close to home, meaning they are close to their benchmarks, not leaning too long or short either way. the curve will steepen a little bit. i don't think people want to take big swings. there's so many things we need to know and you might have seen

that we could maybe end up surprising and treading water all year, meaning a lot of these policies not get done and all this volatility we expect doesn't happen so i think a lot of people are just not going too far over their skis right now but like you said, they did well this week. they did very well. so that shows, again, there's -- demand rates are nice and high for people. get the regular fixed coupon payment twice a year. i think that is what we are going to see and then we have to see the treasury secretary who president trump, you know, wants. does he get confirmed? there is a lot to be looking into in the first couple months of the new year. >> i want to look even shorter term for a moment here because even did indeed see the options go smoothly, there is another dynamic going on when you look at repo rates which is kind of interesting given that you saw

the fed make some changes. they adjusted the rrp facility rate further downward than initially the market had expected yet you do see repo rates still rising. what does that mean in terms of near-term funding stresses and why we are seeing them? >> my colleague has a nice story about that on the screen today. i mean, despite the fed -- you don't know that counterfactual so maybe if they did not do any of these, they added another standing repo facility, so now, there's two a day for a little bit until early january. maybe it would be worse if they did not have that but remember, we have been talking repo for a lot of years, you and i and this is also the typical month-end is a problem, usually, but now, we have year-end so it is the trifecta so people are expecting some repo pressures but we are in such a precarious time with the fed getting may be close to

the end and people have different estimates of when they may stop it and lori logan has laid out -- the fed official -- clearly what she is looking at. i'm not just pushing this off as year-end. i think it is something to watch. how bad does it get especially with these facilities? right now, we are not in a crisis but i would say things are fine until they are not, right? a lot of people see that coming and that was very bad including some of the fed let's just say were not predicting we were going to get close to the issues when 2019 hit in september of that year. >> if you were playing volatility of the yield curve, you might have been externally well if you got it right. if you compare the vix to the mov index, there were a couple of spikes this year, a couple of scary spikes, but the move index was yo-yoing all over the place. is there a trader out there who has done well from this uncertainty?

let's well, yes, because it is crazy the treasury yields -- the risk rates are supposed to be pretty stable and we have not seen that this year or even last year but i think people who have kind of hung in, and they were kind of brutally taking some pain in the yield curve trades, some are doing them in options structures so it has been a rough ride for them but we have finally -- you know how long the curve was inverted and now we have steepening so i think that volatility, if you could stomach it and stayed, the people who stayed in the curve steepen her trades are happy now. it does cost you some money to stay in there. but i think people were surprised at how volatile sovereign yields were. and not just here. look in europe. all of the things going on in france, closer to where italy -- we have seen a lot of trading in sovereign markets so yes, i think it has been tough to

stomach and that is why some like -- i forget. they needed -- they did a nice story and one was just sitting in cash, right? cash kind of beat everything with money market funds which have $7 trillion plus in it so i think some people said let me forget it. i will just sit in cash because i am making some money. did not beat the stock market but it did better than some fixed income securities. >> hindsight capital portfolio which is the end of the year. if we had only been just that smart. thanks for joining. that is this mccormick from bloomberg news, bond expert. winning us now is the global investment strategist at proshares. we were just talking about how the retail investor has lagged to the s&p 500 and i am curious because there's so many etf's, some of them levered and some of them not. how is the institutional investor potentially beating indices in the retail investor is lagging? what are they doing

wrong? >> the way we are characterizing rolling into 2025 is rational exuberance and what some folks are missing, and if they are missing, they might be missing on the market because they are nervous, is fundamental changes. behind the profitability of the stock market, it comes down to the following surprise. there is a lot less leverage in the stock market than there was just 20 years ago. so there's one third -- we are down to one and a quarter. there is a lot less leverage and that means less risk but what it also tells you is it uncovers very strong underlying profitability. people focus on return on earnings. return on earnings is not much higher than it was 20 years ago but when they are achieved with one third of the leverage, that means the underlying return on assets, the underlying profitability of the s&p 500 is four times what it was 20 years

ago. so i think if you are not fully cognizant of that piece, you are looking at the market and saying, i cannot go there, but we will call it rational exuberance and i think that is the missing piece that some people have not gotten their arms around. in some ways, even at 25 times, the market may not be as expensive as the casual observer may think. >> if you are saying the s&p 500 is about a third of the leverage it had 20 years ago, where has that gone? is that risk appetite that went away or has it moved somewhere? >> people like to talk about the private credit market and that is the kind of standard answer but it does have at least with respect to the s&p 500, it does have something to do with the technology sector and communication services that are just generating cash might crazy. there is a very strong cash generation aspect to the s&p 500. yes, there is private credit out

there but with regards to large-cap stocks, the leverage really has been mitigated by the incredibly strong cash flow but when i would note is even the public credit markets are priced to perfection. if you look at the high yield spreads today over treasuries, they are less than 300 basis points, less than 3%. historically, the average is six. when you got that average of six, on average, you lost 3% to defaults so you netted 3% and that means today in the high-yield bond market, if there are zero defaults in the public high-yield market, you will get less spread than on average over time net of defaults so that is why, another reason why we think risk is better taken in equities where you have upside, where the public debt market is priced to perfection. >> 20 about next year, a lot of conversations are brewing about

the value of diversification when the last couple of years, you just put money in the s&p 500, you might have been better off and a lot of people who could have captured some of the extra yield in fixed income markets sat in cash and were also just better off than may be on either duration or credit risk. how do you think about this dynamic heading into next year? do you play caution with cash ms heror do you find away to pick out yields that is outside of the obvious? >> it is a challenge because on the long end of the curve, which i would argue has been behaving rationally, chair powell said 2.5% inflation and we have gone from 4.1% to 4.6% on the 10 year so it is behaving normally but there is risk of inflation on the long end and that means yield up, price down, and there is still some cuts to fed funds. maybe just one more but that is a salary cut for folks in this money market funds and you also

have the tight spreads we talked about. that of -- that does leave the investor in a quandary to which we think it is a good idea to look towards equity to fill some of the income needs. the problem is that some of the classic ways to do that, high yielding, they can just come bonds in disguise and they might be interest-rate sensitive as well so we are appreciative of the explosion in the space to generate income that is not interest rate sensitive. and here, we know for folks, the s&p 500 index which brings daily options into play and that is a nice way for folks to get some income that is not interest rate sensitive and keep exposure to the equity market which, heh, yes, you have got to hold your nose a little bit but we think it has better opportunity than the credit on the fixed income side. >> thank you so very much for joining us. that is the global investment

strategist at proshares, setting us up for a 2025 -- it may not be as obvious now that we already have the changing expectations around interest rate cuts next year. >> is not even until july that there is a full cut priced in and if you look until the end of the year, there's only 25 basis points. >> it is not what is standing and what is expected out of policies coming out of the next presidential administration. certainly sets up for an interesting year ahead. stick with us because we are going to talk more about policy. we are going to talk about president biden looking at a decision on u.s. steel, one of the big outstanding m&a stories right now. stick with us. this is bloomberg. ♪

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>> they're going to talk more about the markets but before that, we are going to talk more about what to expect because the incoming trump administration is facing its worst trajectory for federal borrowing in modern-day history with the federal deficit projected to exceed 6% of gdp next year. earlier this month, janet yellen shared her concerns about the u.s. deficit with bloomberg david. take a listen. >> i am concerned about the fiscal outlook and i believe the deficit reduction is necessary to keep us on a sustainable fiscal course. now, president biden signed into law a -- $1 trillion of deficit reduction over the next 10 years . he did that in the agreement to raise the debt ceiling and our budget proposes an additional $3 trillion of deficit reduction for 10 years and i think that is

necessary to make sure that our fiscal path is sustainable. now, congress has not really done anything beyond what i have mentioned to improve the fiscal outlook and i think that is a shame. i am disappointed in that and 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 and many republicans have expressed a desire to keep all those provisions in place. that will cost $5 trillion over

10 years. so that really is -- and so that would be a blow in a situation where i believe an additional 3 trillion -- not doing the 5 trillion and 3 trillion more is necessary. and if the provisions are just extended, this will be a serious blow without finding ways to pay for them. we propose a lot of things that we think would fairly ask corporations, wealthy individuals to pay their fair share with negotiated and international tax agreements that would create a level playing field worldwide for multinationals. the united states has not yet joined although many other countries have and that would be

a revenue raising measures that i think would be very valuable and there is certainly more so i do hope that the new administration and congress will, if they extend features of j cta, find ways to pay for what they do and make sure the benefits go not to the wealthiest individuals but to middle-class families. >> janet yellen speaking with david and it is important to notice this next year is going to fly by and the treasury secretary is talking about the tax cuts. we have to get through so much first with continuing resolutions and the fact that republicans, there is a great handful republican sect did not agree with donald trump that it should be abolished. >> it is incredible because you have the posturing income but then you have the larger effort

that is still very unclear but one thing i read back she was the committee for a responsible federal budget that has taken a lot of what is going on and found some places where they can look. again, they are politically sensitive places to look to offset some of the issues with the deficit although i would say that with interest rates at the level that they are, we have to remember that just the payments on national debt alone are exceeding what you see in defense spending so you have an enormous cost to debt alone, let alone other areas of the government that you could reduce spending but for now, the debt load alone is a large cost. >> i want to bring to everybody's attention that dick parsons has passed away, the former ceo of time warner but also as you well know, knowing your citigroup history, the former chairman of citigroup --

for decades now. >> certainly a very sad moment. he died at 76 years old and the cause according to the new york times was bone cancer. according to the person on the estee lauder board of the family, one of the oldest friends who was known as dick parsons, very large figure in the current business world as we know it. >> exactly. dick parsons once again dead at 76. all right, let's move on now to another sticking point in washington. one of president biden's final act in office will be deciding the fate of the proposed acquisition of u.s. steel. they deadlocked on the deal earlier this week. this morning, they delayed the closing date of the deal into 2025. joining us now is john harney. will biden get this done and decided in the next 30 days? does it have to be done or might

it bleed into the next administration? >> well, he has 15 days from monday to say whether or not the deal should go forward. he has not said flatly that he's going to kill it but he has made plenty of indications that that would be his decision. the announcement today that the closing has been put off simply faces reality. nippon steel has put off the closing before this as a huge 12 plus billion dollar acquisition which has become further ensnared in american politics, in the election. it remains likely at this point that donald trump will have a say on killing the deal or not but both companies say that if

president biden says no, they will go to court and then who knows where it will end. >> to that end, what happens from here? because this of course is a politically sensitive dr and has a lot to do in terms of how steelworkers in america feel about foreign ownership and a lot to do with how the committee on foreign investment operates in relation to how they seek to block deals moving forward. what does it say about areas that are sensitive to the american economy as it comes to foreign investment? >> well, all those realms, if you will, are important. deadlocked over whether or not the acquisition should go forward. leaving it to the white house and that was a step that had to be taken but also, there is an international -- there's also international relations. japan is not an adversary like,

say, china. but a very close ally. the prime minister japan today urged president biden to approve the deal. now, whether or not he will do that or not, you know, we will see what happens but you are right in that this became a very political issue, as many other parts of america -- american business and the culture have, you know, many steelworkers have this, you know, and other americans have -- you know, there is a strong history behind u.s. steel. it is an iconic american company, but nippon steel and u.s. steel say there are many good reasons for this acquisition to go forward apart from politics, apart from nostalgia. >> we have to leave it there. thank you so much for joining us today. that is john harney of bloomberg news.

fascinating to see this as being a deadlocked decision by sofia us. the decision now in the hands of the president. trump has also been very critical although we do not exactly know how it would go. of course, we are not in that situation at the moment. >> exactly. nippon steel is so much larger than u.s. steel, looking at this behemoth, and you know, it would make conditions very difficult for u.s. steel if this merger goes away and on the other hand, the symbol on the new york stock exchange is x so someone else might want to weigh in for those reasons alone. we have been waiting for this decision for a long time. >> we are moments away from the closing bell. just the last trading days of 2024 and really of a gangbusters year. the s&p trying to stay in the green, moments away. we will speak to aaron gibbs, next. stick with us through the close. this is bloomberg.

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>> welcome to "bloomberg markets " special holiday edition. it is a holiday-shortened week and where seconds away from the closing bell is that you can hear ringing at the exchanges, and it is another up day, at least for the dow.

we just slipped negative with the other major indices, including the nasdaq 100. sonali: absolutely fascinating day, but you did still see the s&p 500 lower. the dow jones trust in the green, the nasdaq lower. you saw the russell 2000 and that lower yield story, almost 1%, about .9%, so there was green on the screen somewhere in the market, just not those major indexes. vonnie: maybe just taking a long weekend before the end of the year. talk to us a little bit about some of the gainers we sell because we did see some very happy companies today. >> even with the nasdaq 100 down today, there is the technology sector that has been a big winner in this session.

quantum computing stocks rightly up across the board, a sector that has become an area of intense interest on wall street and certainly one to watch in 2025. all these stocks have seen very pronounced moves year to date, up 1000%, 2000% on some of these names. it is not on fundamentals but the transformative potential of the technology. take one company with a $2.2 billion market cap and has $9 billion in revenue. another name, speaking of tech, that i'm looking at today, is apple, up about .3% after its price target was raised to a street high up $325 by wedbush securities by none other, of course, then dan ives, who says the company is heading into a multiyear a i have been driven up cycle. he says this up cycle is being driven by wall street.

even though today was pretty modest on this upgrade, it is up more than 30% this year. finally, i'm looking also at gamestop. shares rose as much as 10% today, up about 6% into the close, and this is after a boost on x from keith you -- gil. this post was an image of a gift on twitter without any text, so nope real reason the stock is moving higher, and trading volume was almost five times the 20-day moving average for this time of day according to data compiled by bloomberg. the stock also rose for a fifth straight session for its longest winning streak since november 1 and gamestop shares are up about 86% this year. sonali: appreciate it so much. let's look at the decliners for the day. >> i'm looking at the energy producers, specifically companies related to the natural gas industry.

the main reason stocks are lower is natural gas futures. we see that natural gas posted almost a 7% decline on thursday, and that was driven by forecasts. now forecasters expect a little bit warmer than expected weather in the last couple of days of 2024. as a result, it builds concerns about oversupply as futures of natural gas move lower. as a result, we see that natural gas companies are moving lower as well. another stock am keeping an eye on is, of course, microstrategy. we watch closely what has been happening with bitcoin. it is moving lower. microstrategy shares are down by 4% -- almost 5%. investors are also reacting to companies -- the company's news to additional shares to fund bitcoin purchases.

a reminder, microstrategy is seeking permission to increase the number of authorized shares of class a common stock and preferred stock according to the december 2023 filing. of course, bitcoin will be still volatile tomorrow as well because we see a huge option expiration tomorrow. as a result, we will keep an eye on crypto-related stocks. vonnie: the vix index itself down to under 15. we know that can move pretty quickly. in general, we have a mixed day with about 200 stocks lower and nearly 300 stocks higher, but not hugely higher. pretty good breadth, right? >> still pretty good breadth, and again, we are looking at final trading days of this year, if we will see more potential upside move driven by this so-called santa claus rally.

now, as you mentioned, volatility is also on traders' radar. what i heard from sources i spoke with, next year will be a little bit different. this year was volatile. we saw huge moves in the vix index, but they say that next year, volatility will be a little bit more predictable because it will be driven by donald trump's policies. as soon as traders know what exactly he will implement, it will cause, of course, volatility, but you can play volatility in a little bit different way and potentially gain more. this year, for example, when we look at those ball control funds, those funds typically follow market direction. they were lacking because it was so hard to protect volatility moves in 2024. lots of expectations that next year will deliver different. sonali: ladies, thank you for

joining us. we are all kind of wiping off our calendars and playbooks to prepare for 2025 and the end of the trade this year has certainly been strong. we are joined by the chief investment officer main street asset management to talk about that playbook. you think about the gains we have seen this year. how much the s&p has been driven by those mega cap tech names. a lot of people are scouring the market for other opportunities. how do you see those other opportunities playing out, especially when you see how sensitive some of the small-cap names have been to the interest rate movements? today, the russell 2000 was your relative gain or. >> exactly. i think now that we have a better sense of where the fed is heading, we are seeing more stable inflationary environment, slow and steady, and we are also looking at reduction of fiscal stimulus where we will billy see

productivity -- we will really see productivity, but we might see profitability will more likely be within some of your small caps as some larger caps are starting to face some headwinds. from an investor standpoint, i'm not only looking at where companies might grow, where profitability might come from, but also where the value is because as we have had such a big run ups from these high expectations of increased productivity within these mega caps, there really is a lot of money on the table from some of the smaller companies, some of the lesser-known companies even within the s&p 500 where even if they just meet, let say, 15% growth, they don't have to meet 20%, 25 percent growth, but they are undervalued by 25% compared to historical names. those are companies that would do really well if we finally see some expansion of market

breadth. sonali: you started to see markets start to shake off a lot of the risks out there. interest rate risks, geopolitical risks, yet we are sitting here with the s&p 500 at year end well above 600,000 still. what are the -- well above 6000 still. what are the risks that could throw investors off course? >> two big issues. one is a syllable -- slowing global economy. we are seeing some major economies facing headwinds -- china, south korea, europe. those larger companies, particularly multinational where they have to worry about revenue risks and dollar currencies, those are the companies that might face more headwinds than some of the more domestic-focused smaller companies. another issue is the reduction of fiscal stimulus. it looks like we are starting to

hit that peak of a cycle, and the economy might slow down, so you need companies that are able to operate efficiently and can really drive from other organic revenue forces. those are the two big headwinds -- the two big headwinds are slowing fiscal stimulus and slowing global external trade that might really potentially derail some of the larger cap economies next year. vonnie: you say earnings may start to disappoint. does that happen already? >> we did have a rather low beat rate for q3 already. we know analysts are lowering's -- lowering some expectations for q4. earnings expectations for next year are pretty darn optimistic

right now. we are looking at 14% growth for the s&p 500. 20% growth for the s&p small-cap , for earnings profit. whenever i'm looking at mid teens to even 20's, they have often been revised down. we have a lot to do with next year, even though the fed part of the story seems to be more stable, but certainly, i think people should be prepared for disappointment. when the stock market really is as for perfection, as we see in many markets right now, investors should be very wary if we do see some weakening or maturation within the economy and some of these industries.

a lot of it has been through fiscal stimulus, through dollar trade. if some of the terrace come through that trump has promised, that would be a huge negative impact, particularly on materials, industrials, consumers, just a host of industries, so that is something that i think investors should be very wary of and just remain up to date and be ready to switch if that changes because that type of policy could have a significant impact on companie'' profitability. sonali: for next year, what do you think your favorite traits are to set up for, any new dynamic under a new president? >> one, i would like to say, again, small caps are a little more insulated from tariffs. they might be, again, more domestically focused with less exposure to dollar currency trades. that is one of my favorites.

again, they are such a low value that have less downside risk. on the others, i do like some of the stable industrials. growth at a reasonable price. names like honeywell, caterpillar, nice, stable earnings quality that can weather the storm, weather if you quarters of potential volatility and still beat expectations. vonnie: thank you so much for joining us this holiday week. chief investment officer at main street asset management joining us. incredible how the market just turned around. we were going to be able to report a nice, green day, but we did not get it. sonali: it's interesting. as our colleagues have been reporting, typically between christmas and the new year, you do see a bit of a bump higher, epidemic rally. we are not seeing that materialize quite yet. of course, a lot of the sectors that were driving the market

earlier in the week -- for example, tesla was one of the bigger losers on the day today, dragged down that broader consumer discretionary index that would have seen much larger gains today with the likes of more stacks, on a day like dollar tree seeing a lot of love on a day when you are seeing people go to the stores buying things. vonnie: we will continue to talk about this. coming up, the editor-in-chief and cofounder of rizzi club joins us with his outlook on the u.s. market -- editor-in-chief and cofounder of resiclub joins us.

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close. many have speculated that falling rates this year would lead to the bottoming of the u.s. housing market, so what is in store for home heading into 2025? joining us to discuss is bloomberg news stock market and real estate reporter. what is the outlook broadly? the introductory -- higher and homebuilders and lower end homebuilders, the introductory homebuilders? >> we know housing homebuilders have been on a tear because they have been taking from existing inventory. because rates have been so high and mortgage rates have been unbearable for people to actually take out a loan and go get a house, we are seeing a lot of homebuilders profiting off of this, so as we think about the federal reserve and its rate outlook, it is a bit of a mixed picture for homebuilders.

i want to talk about the ultraluxury side of things. we have companies that geared toward luxury homes. buyers of that nature, when we think that a lot of these high network individuals are using collateralized lines of credit, it is money-like capital. some analysts are becoming bearish on the stock market heading into 2025. they do not think that will be a big bright spot for the homebuilding industry in the luxury space. sonali: is there any bright spot? you did see this as a place investors wanted to get back into. you do see areas of the real estate market getting harder hit than others. office, obviously, for example, being one of those areas, but you keep hearing that prices are bottoming. if that is true, why are you not seeing the love in stocks associated with these types of buildings? >> definitely. i think we need to call out things like single-family rentals. we are seeing people pretty

bullish on the space headed into 2025 because people are interested in getting a home maybe not buying a home. you will see people going toward stable family rental properties as a way to bridge the gap between renting an apartment and actually purchasing a new home. as you mentioned in the commercial real estate space, that has been topical and people have been thinking about if they have access to capital and are able to work with these regional banks to keep these projects going well. we are hearing analysts who are excited about office retailing into 2025. this has been a beaten-down sector, but if you look this past year alone, we have seen our best year since 2019. that's coming from the aspect that they have been down and discounted names, but we are seeing a divergence between high-and the properties and lower quality office buildings. vonnie: are there some that did not notice any kind of downturn?

>> new york city has been doing better. we are seeing a bit of an uptick when we think about vacancy rates of new york city buildings. particularly, we are seeing more of a search on park avenue, which we know is one of the ritzy or parts -- ritzier parts of new york city. we were seeing blackstone and other companies fleeing this area during the pandemic, but it seems they are going back. new york city is where we are seeing a bit of a pickup. sonali: we thank you for your time all year long, really. we are going to get more on the housing market in 2025. we are going to bring in now editor-in-chief and cofounder of resiclub, and he looks across the entire united states for granular data of what happened on the surface. because of course, not all markets are created equal. if you think about this larger housing affordability crisis

that many americans are feeling in real time, where is the worst of it? >> with housing affordability, it has really deteriorated in a historically fast pace over the past couple of years. that is due to an overhang of prices that occurred during the pandemic housing boom. that is due to the rate shop we saw going from an average 30-year fixed-year mortgage rate from three up to seven quite quickly, and that is also happening at a cost like property taxes and home insurance, which are lagging behind the overviewing of prices. what is occurring in the market is the housing market is still trying to stomach it, so if you look across the market, you will see pockets of the u.s. housing market on a regional level that are still fairly tight and still have fairly elevated home price growth. a lot of these are in the northeast. a lot of these are in the midwest, some in southern california. if you turn and look at some of

these boomtown markets in the gulf, in the market west that overheated during the housing boom, they have a lot of migration that has since decelerated, increasing shock to the market. the fundamentals and low incomes are having a hard time supporting these new prices. this also the fact of even more increase like home insurance shocks and the sun belt markets. a lot of these markets in florida and texas have a lot of single-family homebuilding. as builders try to maintain sales volume into affordability adjustments like bigger buydowns, bigger incentives, may be outright price cuts, that draws the attention of homebuyers who would have other look -- otherwise looked at the resale existing market and upward pressure on inventory growth in some of the resale inventory markets across these sunbelt markets, so we still see price growth in a lot of the midwest/northeast, and more

holding, even outright corrections of some of the areas. vonnie: you're talking about places like texas and florida that are experiencing more hardship in their markets even though they got more inventory. make that into pieces for us -- break that into pieces for us. >> the reason inventory growth is growing is that demand is no longer exhorting it at the same rate, so it is beginning to stack up. it is not necessarily getting two high historical levels, but it has cooled enough to get enough that it has created that softening in many retail housing markets in and around the gulf, places like florida and texas, and the builders that inspect inventory in some of those markets are having a harder time moving, so they are having to do bigger incentives and bigger price cuts to get it sold. sonali: if you are thinking about that dynamic where price cuts are starting to hit the market, you have to think about

this in terms of interest rates because when you see rates still so elevated, there is this expectation that most buyers would not be able to come to the market until you got well below 5%. yet we are nowhere near that. >> yeah, so, where rates are is certainly a strain on the housing market, both for the buyers and, really, the sellers because there's a lot of people that have 3%, 4% rates who would like to sell and buy something else, but they are not going to do it at a 7% rate, so it is not only keeping a good number of buyers out of the market, suppressing housing demand, but it is also suppressing turn, people who would like to sell housing and by something else, and the two come together to create a suppressed level of existing home sales, so 2024 is going to be around the lowest level for existing home sales since 1995, and if you population adjust it, it is a

low for 40 years, but on the others are of the coin, new home sales were not down as much. they have been far more resilient because builders when and where needed go through affordability adjustments to maintain sales volumes. vonnie: top three markets for 2025. >> if you ask me the top three housing markets for 2025, based on inventory and price growth, i'm going to say hartford, connecticut. i'm going to go chicago, illinois, metro. and then give me milwaukee, wisconsin. vonnie: all right. i'm not going to put money on any of those, but i'm happy for you to make those forecasts. we will chat with you again in the new year. very much looking forward to it. editor-in-chief and cofounder of an index tracking reporting and

analysis of regional housing markets, so he really has his finger on the pulse. this holiday season was definitely one to remember. i don't know much about our next topic, menswear. do you know much about it? sonali: i'm trying to learn about it for a lot of christmas presents. vonnie: someone who has been doing well, the ceo of the apparel brand true classic, will join us next. he will explain to us everything we don't know. this is bloomberg. ♪

vonnie: welcome back to "bloomberg markets" the fourth last of 2025. it is really difficult to believe, but we did close out the session sort of mixed, like, a little bit meh. sonali: we are kind of meh on the day, that is for sure. we certainly saw that santa claus rally in full steam, but it has fizzled. some of the biggest gainers on the hearsay tesla, were actually down on the day -- some of the biggest gainers on the year, say

tesla, were actually down on the day. vonnie: back in november, bloomberg spoke with bloomingdale's on the outlook for the department store. have a listen. >> honestly, i think flagships will have a bright future in the next 10, 20 years. i think the problem is managing such a large footprint, and that is a challenge sometimes. i bloomingdale's, we have a chance to be in prime locations at prime moments. i think we have more opportunities than threats or problems in the future. i think it has a bright future but has to reinvent itself from the perspective of the customer, and we have to rethink.

>> how about the broader retail landscape overall? are there too many stores in the u.s.? >> when you look at the market data, the overall market is slightly growing. for sure, the average productivity of square feet overall in the u.s. is slightly decreasing, so, yes, there will probably be some losers. it's have to -- it is why you have to check yourself and reinvent your models to remain relevant among customers. >> when you look at other retailers, and it does not necessarily have to be a direct competitor, who do you envy most? when you walk into their stores are shop on their website, who do you say, they have really got it right? >> i really think bloomingdale's is doing that right. it will not be my only answer, but honestly, i was very surprised the level of engagement with the customer, the relationship built with the customer is actually good, and i

think we can even do better in the future. if it is in terms of service, brand mix, events and activations, we have a lot of inspirations that are in and beyond retail. i do not want to mention any names, but have a lot of source of inspiration in the u.s. but also abroad. i think we should not be too domestic because we could miss some trends happening elsewhere in the world. remain --romaine: do you think what we see abroad overall will be palatable to a u.s. audience? >> i think we have to bring the best of both worlds. the customer is ready right now for something different, and this we can get from some other countries or some other models in the world. sonali: that was the ceo of bloomingdale's sitting down with

romaine bostick and scarlet fu. u.s. retail sales this holiday season rose 3.8% compared to last year according to data from mastercard showing that consumers were more willing to spend in-store and online if promotions were there, and it is exactly the type of momentum that brands like true classic are hoping to bank on. joining us now is the ceo of true classic. we were talking about this, menswear. where do people like to traditionally by? it is interesting you have partnered with target more recently, but are they going into the store or are they going online to do it? >> i would say income penetration has been rising over the past few years, but it is still very much the case that the majority of clothing is being pursed just -- purchased in a physical retail location.

>> how did you get to $500 million in revenue in just four and a half years? new brand and nothing in its back on the prove itself. >> pride ourselves on focusing on people -- >> but everybody says that. they all say it is about the people and our customers deserve the best, but how do you actually prove that? what are you giving to people that they are asking for and were not getting? >> quick product, great service, great rice point, great marketing. they love wearing it, they vote with their dollars. from a marketing standpoint, we do amazing ads that truly engage with customers, tell them why they should care about us, how it will make them feel, feel a sense of confidence, a sense of self-esteem, and they love that. from a price standpoint, we offer them a premium clothing

option for a fraction of the price of alternatives out there, and everybody loves a good value and we like delivering that surplus. we have done everything online, and now we are moving onto retail, so early days. it has been very much direct to consumer and i we are on this path towards an omni-channel global brand. vonnie: who is your customer? what age is he, how much does he make, and how tall is he? >> variety of customers, i would say. the core is 304054-year-old man -- 34 to 54-year-old man. across the united states, majority in california, texas, and new york. we have customers across different heights. we do have a decent number of customers in the united states, north of six feet two inches, and not just him but also her. she buys for him and for her

dad, her husband, her son, and she is a very important customer to us as well. sonali: when you look at your website right now, the few things at the top of the site, so expect t-shirt, you can buy it now for under $100. same for the classic three pack, marked down from 90 bucks for three pack to less than $60. are these really just holiday promotional drawdowns or are you finding a consumer that is quite concerning? do you need to keep discounting into the new year? >> those are our packed discounts. to buy individually, there's retail for $29.99 a shirt, but in a packed, we benefit from stronger unit economics and happily provide those benefits to the customer. those are meant to incentivize consumers who are willing to buy in bulk and therefore benefit

from a steeper promotion and steeper discount. sonali: how often do you find people taking advantage of those discounts right now? you mentioned pricing was one of your competitive advantages. is it because you are able to benefit from unit economics or are you finding there is an optimal price for a t-shirt right now? >> i don't know if there is an optimal price for a t-shirt, but i would say the american consumer and probably globally as well are tired of overpaying for premium goods, and they are looking for options that do not compromise quality but offer that to them at a reasonable price point, and that is exactly the area we play in. vonnie: talk to us about margins where you make your clothing specifically. how concerned are you for next year in tariffs? >> we have been prepared for that for quite some time with tension between the u.s. and china. we used to be primarily sourcing order products from china, but

we have diversified away, and at this point, we are pretty well diversified. we manufacture in cambodia, vietnam, egypt, and mexico. we have the ability to ship supply chains to different vendors, different manufacturers worldwide to ensure that we are not in any particular economy. particularly with the mexican government who overnight decided we are noted to import more. they have good options to mitigate against that. vonnie: what is the secret? you have been also at meta and helped the hyper growth of other companies. you know how to leverage facebook and instagram marketing strategy, and it seems those are the strategies that were best these days. consumers, if it's women or men, seem to be getting targeted more

on those platforms. is that this access to true classic so far? what advice would you give other brands? >> i would say those platforms are definitely the name ones -- the main ones to get a print off the ground. with relatively muted resources, we were able to boost this company. to your point, no ex-factor, no celebrities, and grow north of nine figures in two short years and do so profitably on the back of digital advertising, so, yes, highly recommended for anyone getting off the ground, but it is not magic. you have to have a great product. you have to have a great service, and you have to ultimately find that market space with that advertising model baked into your business model. we did that and we are not just advertising the product, we are telling great stories, connecting with humans on an

emotional level. we explained to them the benefit of our product, how they will feel in our product, and just what is the product, and that makes a huge difference. creative content, storytelling, excellent customer service, exceptional quality are all pillars of ultimately finding that product fit and fast growth. sonali: when you think of all those social media platforms -- and by the way, i'm a total sucker for buy-in on those platforms, so i know what you mean. >> we all are. sonali: how do you get through the noise? there are a lot of people selling on instagram and tiktok. how do you get your story through without, as you are talking about, those celebrity names, for example, attaching to the brand? >> i think it all goes back to storytelling. what gets you is someone who is able to hit the nail on the head , if it is a motivator or barrier to start a journey with a new company or by a particular product. for us, it has always been, for

example, like, really and is trading the fit and how the shirt will look on you when you try it on and do so in an authentic way with influencers and customers who tell their stories better than we can, and with that, people pay attention and want to give it a try. when they come to our site and see over 200,000 five-star reviews, when they see the growing community of almost 5 million people worldwide and how they rave about it, they want to try it, so you have to figure out a way to, as you say, stand out and differentiate yourself. on the media site, it is absolutely about storytelling. sonali: how much does philanthropy matter? you donate t-shirts to homeless veterans shelters, schools each month. >> incredibly important, but actually not advertising

particularly in the forefront about it. we do that because we want people to look good and feel good, not just with the clothing we sell but also in ways where we can deliver great clothing. around the holidays, we don't need it almost $10 million worth of inventory to many people around l.a. who needed those clothes for the holiday season. it is important for us as humans because we believe in showing up to humans and giving back, but i would not say it is a core pillar of the story of the brand and how we have been showing up. i would say still to this day probably many people amongst our customers do not even understand or know the extent to which our philanthropic efforts have gone, and that is something we should probably better do -- probably do a better job articulating to them. vonnie: thank you so much for joining and all the very best. your partnership with target expanding. that has been the ceo of true classic, and i have gone on the website as well, and i have to

say, everything looks very comfortable. those drugs look comfortable, and the colors are easy on the eye e. sonali: a lot of friends are tapping into this more casual market, if you will. you have to wonder how many of them are starting to tap into this market and what kind of demanded is, especially as people go back to work. -- what kind of demand it is, especially as people go back to work. vonnie: coming up, we talked netflix and break down the streamer's christmas-day doubleheader. this is bloomberg. ♪

sonali: welcome back to our bloomberg television and radio audience. we are watching netflix because

it broadcast its second big experience in live audiences yesterday with two nfl games and a high-profile performance from beyonce. netflix is just one streamer wanting to cash in. we talked about the shift from streaming to sports. >> the big thing is that all of the major streaming networks are streaming first now. you can see that, like in the meetings i had with my networks. during the year it went from what do they do about their linear business to they are just entirely focused on streaming, consider linear legacy business. disney, obviously, netflix, others, see it as a big growth opportunity. this industry has been so dependent on a strong -- a small number of large advertisers, and

now that customer base is broadening rapidly. vonnie: what will be the next catalyst for advertising? the election was a huge one, but need a new one now. >> i think espn going all-in on streaming. that is happening in 2025. sports. any sports content tends to do well. you see netflix bringing wwe. that is less than two weeks away. you will see a lot more sports content. i think disney and others are stepping up in terms of the amount of content, but it ultimately is all about sports right now. advertisers just love sports content. vonnie: very feasible -- very easily break down-able by age groups. >> one thing to keep in mind as

more people watch tv today then use social media. about 3.5 billion people worldwide use social media daily for an hour and 5.5 billion people a day watch tv and do it for three hours. feels like instagram, like social media is the new medium, but it is a small ad you can wipe by easily versus 65 inches on your wall and more people watching and doing it for longer. tv has not only started 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 as an advertiser. that is really appealing. vonnie: that was a conversation earlier this week with mountain 's ceo and founder. netflix's christmas day going

off without a glitch, highlighted by beyonce's star-studded halftime performance. i do want to highlight that mariah carey also took part, opening the doubleheader with a performance of "all i want is you." can we say it was a highlight? when will we know numbers? >> in about an hour, i think. some time later this afternoon netflix has said they will release it. i believe these ones will be authenticated by nielsen, at least u.s. numbers will be. netflix may put out a global number that will put out -- that will be big and impressive. i think just a fact that it went off without a hitch already makes it a success. even if the two games were not great, we know the viewership numbers on christmas are going to be pretty strong. sonali: it is interesting. i legacy what else was around the show, for example his own commercials for other programming ahead as well as any

other commercial money they bought. ultimately, when you look at what they have been doing in terms of life programming, how does it set the stage for 2025 in terms of netflix's ambitions for the space? >> it is important in terms of their advertising business. for most of it for pretty much all of his history, it has been a one-revenue-stream business, subscriptions. how many customers can we add and how much can we charge them? they introduced advertising a couple of years ago. it has been pretty slow growing, partially because it was only an option for new people to sign up. when i signed up for the nfl game, it gave me the notification that nfl is one of the things we are going to show you where even though you pay for an at-free tier, you can get advertising, and as they add in w w e, that is a lot of new

inventory that they can sell and a lot of potential revenue for this company. vonnie: exactly, and to a certain extent, they are auditioning for all these sporting events as well. presumably if it goes well, they would like to extend that, so they want to impress the nfl even as they sort of pointed at the moment. >> netflix has been very cautious in its messaging, because they don't want to get adventure sports leagues coming to them trying to get them to write a big check. they also do not want to spook investors into thinking netflix will suddenly start spending billions of dollars a year. but they also test things, so they do their boxing. they do tennis, football. they do little things to build up the negotiation that will happen next year for ufc rights. there is not a lot of other rights for them to do down the line or at least the next couple of years, but i expect netflix will bid on nfl, mlb, and what

they are doing now is just to prove concept because they can deliver an audience more effectively than any other network out there. sonali: what is interesting about this, too, is the expansion of audiences. just your microcosm of me -- i'm a new football fan apparently this year. more women watching football, more people betting on these sports as well. vonnie: it's a national institution, apparently. 200 countries, so many of them watched the first game. sonali: if you if you just watch the for the beyonce -- even if you just watched it for the beyonce cowboy casual. say it is a success. who should be afraid? who does this impact most at the end of the day? >> it is potentially bad news for the traditional

broadcasters, right? amazon has made the biggest/-- the biggest slash in exports. obviously netflix is a bigger streaming service, but amazon has bottomless resources and can out bid anyone for about anything. if you are cbs, nbc, fox, companies that currently have nfl rights and netflix suddenly delivers a bigger audience than you do for the sunday afternoon game or the sun and again, that is worrisome. they have these rights looked up into the 20 30's, -- locked up into the 2030's. nfl could try to sell netflix some international rights. there's lots of ways keeping these broadcast networks afloat could get in business with media companies' biggest rival. i have to ask, what prompted you to get into football this year? sonali: my boyfriend. i said the packers was the one team he could have because it

was the one sport i was unspoken for, but now he is trying to convert me away from the yankees as well and the next, and i think we are going to have a problem there. vonnie: oh, my gosh. does this guy got ago -- got to go? sonali: i'm not that week. you think about big name private equity folks getting into things like the nfl, driving up values even more, but if you go outside the nfl, nba, as the promised -- is the promise there as some of other these mainstream sports? >> we will see. netflix is placing a bet on women soccer. i think there is a lot of enthusiasm around women's sports in general. the wnba rights are spoken for as part of the new nba contract, although i think there might be some gains -- games available outside of it. i think the formula when deal is

coming up somewhat soon. netflix has been instrumental in the rise of that sport, at least it's growth in the u.s., so there are other sports on the side. when it comes to mass viewership, it is the nfl and everything else. college football is second, and you have competition for third between nba, mlb, and some other sports, depending how you think about it, but the nfl and college football are far and away the biggest. vonnie: as long as mike tyson does not appear in anything else, i'm good. sonali: we thank you so much. if you don't read lucas' newsletter, you should be. i read it every time it drops. we thank you so much. happy holidays to you. that does it for us for "bloomberg markets." what a crazy close. until tomorrow. maybe we will see that santa claus valley -- rally reappear. manifesting it for tomorrow. have a great night.

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