matt: good friday morning. from new york city and from london, this is a paul sweeney. we are simulcasting. good morning, caroline and happy

day after boxing day. caroline: whatever that is technically called. being full generally. the markets feeling sanguine. lane catch up in trading but it looks like it will be a dull and outdated if you are looking at u.s. futures anyway. paul: i love the concept of boxing day. we need to bring that to the states. as you mentioned, off about .40%, the nasdaq off about 109 points. yields higher, four point 59%, wti crude oil a little higher, around the $70 level area not a lot of movement. a little bit of a bump in bitcoin, up .60%. i call that out for tom keene here. let's go to alex semenova, with the equities for bloomberg news, joining us in our new york studio.

what are you looking at? alex: pretty uneventful on wall street but there is one name you can count on to make unexplained moves, gamestop. down within 1% in premarket trading but that is after it rose in all but one of the last eight trading sessions with an incredible rally yesterday, up more than 6% after a post, and at one point, trading volume yesterday hit almost five times the 20 day average after that post on x and gamestop is one of the most mentioned companies today. nearly four years after the main stock rally in 2021 and the reddit army is in full force. investors are piling into the speculative names for no apparent reason. perhaps a sign that policy is not as restrictive as it seems. caroline: talking of policy, asia policy japan japan seeing

the yen go weaker and that has put wind anything sales of asia trading but the news out of taiwan when it comes to deals that are not allowed to go ahead, it affects delivery and also a key. alex: absolutely. after a german online food company, food hero, it was supposed to sell its taiwan subsidiary but that deal was blocked by the government there. they had to complete the $950 deal by the first half of 2025. and it is one of the largest outside of the chip industry, and they said in a statement on wednesday that they can either appeal this sort opt to walk away and uber said it is disappointed by the decision but they would continue to invest in taiwan. paul: i'm not sure i would like to go down the route, but squid game, go.

alex: squid game stocks and south korea, they are sharply lower after netflix debuted "squid game" season two after the franchise did well in 2021. apparently, the reception was disappointing, hence the downward move. expectations were high with names like artist united and dexter studio saw significant declines in their shares in south korea today. caroline: the power of netflix, something paul sweeney knows a lot about, having covered media stocks for a long time. you will delve into the world of streaming later. thank you are talking about individual stocks on the move. let's go more broad because we would like to get into how this fits into macro policy and how we think about policymaking amid geopolitical risks that we are keeping an eye on. i would like to get to michael green who is joining us, looking over at simplify mass --

simplify asset management, good to have you. thank you for joining us on the post boxing day excitement. what are we setting up for for 2025? is it all eyes on regulation? michael: there is uncertainty, lily from a policy standpoint and that is carrying through in markets like the treasury market in the u.s., where we are uncertain whether resumed in coming secretaries are going to focus on extending out the term, increasing the quantity of 10 year bonds relative to the last administration under yellen. that intern's term premium to rise which is the compensation you are receiving for taking risk out of time, locking up your capital. that tends to be one of the critical components in terms of inputs on how we think about risk and how it is absorbed into

markets. the other thing i highlight is for all the talk around inflation, etc., the idea of key risk to treasuries is inflation. we really are not seeing that build into inflation as far as swaps are breakevens. we are seeing more evidence of this uncertainty about the issuance and the quantity that will occur at the longer end of the yield curve. that is going to be the deciding factor in terms of how risk behaves for 20 25. we continue to see that term premium rise and it will be hard for people to continue to justify allocating equities when they could receive that same return and treasuries. caroline: to that end, the 10 year is that a seven-year high when you look at borrowing costs, but what tempts you into an equity market if you get that return on basically risk-free investing? are you going to have to barb added with some focus on text,

or do you have to go more broad and equity market? it has remained narrow in terms of investing for 2024. michael: the key thing that happened in 2024 is the work i've emphasized is the impact on market structure of the growth of passive investing, 2024 is a year where it came to light and we saw the absolute increase in companies focusing on getting an index inclusion, going so far as to call it outing tweets and say orbit strategy, if you see enthusiasm for microstrategy, potentially joining the s&p, in addition to joining the nasdaq 100, there was a huge debate on the impact of passivity and it feels like only 24 is the year in which that crossed over to a clear acknowledgment that it is having an impact. that in turn means you are not estimating what they are doing but you are allocating equities because so much of it is by default. people have a 401(k), the

allocated to a fund and that fund has been reselected and then that buys equities, as long as they are employed. so as we look at 2025, it is a question of the economy and how it develops the labor market and whether those close continue. i see few reasons to see that they are not unless the economy turns -- turns south, and which the inflation protected bond looks really attractive relative to equities, that i don't think there is as much thought going into this as we would like to believe. paul: i know you focus on sentiment indicators. what are they telling you today? michael: we are seeing this across the board, ranging from surveys of vanguard investors in which they show higher expected returns to equities. i heard a discussion earlier about leading stocks with speculative stocks indicating that regional restrictive. the irony is when you look at

something like strategy, and you look at the funding of the to ask levered microstrategy. that is at near 10% a month at this point. the idea that risk-free rates have anything to do with this rather than sentiment and enthusiasm and a general belief that things can only go up strikes me as somewhat silly. we are seeing the restrictiveness of rates and real economy components, housing sales, the fact that auto sales remain depressed in many segments of u.s. society are struggling. see this in consumer sentiment and defaults, particularly for young people. this creates a bifurcated economy that i would say candidly contributed to the election of donald trump and the general sense of populism within the united states. paul: for equity investors in 2025, it seems i have a fed that will cut a couple of times, so i cannot really hang my hat on

that so much. it really has to be earnings growth, do you expect earnings to come through this year because i think it is discounting a low to mid teens earning environment. michael: that will be the question, earnings growth is relatively disappointing, particularly if we pull out the ai sponsored boom in capital spending and growth that has occurred for many companies and the s&p 500 at the top of the range. if you look at the rest of the economy, the earnings growth has not materialized, and looking at the rising term premium, rising risk premiums, it becomes questionable on whether that could be delivered in 2025 for the vast majority of stocks. what will happen, whether nvidia, apple or microsoft, it will be idiosyncratic. if you look across the rest of the range, the earnings growth will be hard to materialized.

caroline: looking across the range, u.s. exceptionalism, which has been driven by a smattering of three stocks and others in the tech world, gazette continuing to 2025 or do you start to get excited about other regions, areas and growth? michael: it is hard to get excited about equities broadly, and the reason i emphasize this is the component of passive. if i look at vehicles like target date funds that are typically allocated to a total market index, that means they are no longer rebalancing into the small caps or rebalancing into the rest of the world, and as long as the u.s. economy and flows are being driven in this manner, it means there are few checks on the continued runaway exceptionalism within the u.s., but if that reverses itself for whatever reason, and employment can be one of those, then we are looking at a situation where it

could flip quickly, but that is not a bullish outlook for the rest of the world, just less bullish for the u.s. on the fixed income space, i can get 4.3 percent, do i need to be a hero to take credit riskier? michael: i look around the world, i would go as far to say that what vanguard strategists are telling you is their expectations for the returned string associated with equities is below 4%. we have heard something similar from goldman sachs. if my theories are correct, that does not necessarily have to materialize in any one year, but it is hard to argue that people should be ignoring things like 30 year tips offering yields north of two point 5%, which is an inflation protected measure. that is why you typically look for equities and a combination of inflation protection and potential earnings growth. at least half of that has been taken away and given to you in the form of a tip that is now yielding the highest levels

relative to earnings in the u.s. that we have ever seen. the only exception is that.com period in which that profitability was so much lower. paul: great stuff, michael green of simplify asset management, chief investment strategist over there. it feels like after two years of 20% plus gains we've had in the s&p 500, what can you do with between 25 after that performance? caroline: i and will history continue? many feel after that exceptionalism, there can often be a return, but you have to be ready to stomach serious evaluations and start to go broader and get out of the winning trades, the momentum trade and start to decide that infrastructure and banks is where you will go. paul: very good. futures a little bit negative, off .50%, the s&p 500 down and

nasdaq off about .50%, the 2025 story for a lot of investors hinges on earnings growth and the markets discounting at low to mid-teens growth. a high bar if you think about it. coming, hedge funds cash in on the trump trade. we look at the biggest drivers of 2024 performance, coming up in a moment. s&p 500 off 31 points, half of 1%. this is bloomberg. good morning. ♪ think scaling your ai pilots is hard? think again.

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(♪♪) what took you so long? i'm sorry, there was a long line at the thai place. you get the sauce i like? of course! you're the man! i wish. the future isn't scary. not investing in it is. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com caroline: we are all in on a good cross-platform today, paul sweeney in new york, caroline hyde in london, we are in a simulcast, currently seen caution into this day of trade. than volumes -- then volumes,

european equities trying to catch up after the day off yesterday. the u.s. signaling another down day. we would like to get into the biggest names of 2024, and some would say it is that institutionalization of hedge funds and the breadth of with they have performed and how large the flows we are seeing into hedge funds. a wonky name is ken griffin, who sat down with sonali basak a little while ago, talking in new york about what the future of multi-strategy hedge funds, take a listen. >> multi-strategy hedge fund segment has exploded in growth the last several years, and like any area of the economy where you have a rapid number of new entrants and dynamics, you tend to have a thinning out at the end of the journey and you see your second tier firms, third tier firms face difficult times of disappearing. we are in the consolidation phase with hedge funds and it is part of the business cycle.

now, leah and her colleagues forgot that is part of the business cycle, but one of the great ways america has created so many great domestic global champions is only have two midsize businesses, we allow for synergies to be captured and businesses to continue to get stronger and more capable. that is a big part of the productivity story that was just lost on the biden administration , so i do believe the multi-strategy area is down in a time of consolidation, and it will consolidate for time and that we see growth down the road. >> speaking of consolidation, one of your large rivals, there have been reports that they may fall at stake to black rock, this is millennium i'm talking about. this would be the first time they would do it. would you do something like that for citadel and look for a

partner or oversell estate? ken: that is -- [laughter] this is an effort to create visits is headlines on bloomberg news. sonali: they would be good headlines. ken: yes. larry is an asset, the blackrock story is an incredible story. millennium is probably the largest multi-strategy fund in the world today, so it is an interesting type between those two firms and i have great respect. they are really leaders in the fields. we will see if the industrial logic comes to bear and a merger actually happens between the firms. at citadel, the vast majority of the firm, almost all of it is owned by those actively engaged day in and day out. we take great pride in being in

private partnership and it has served us well for 30 years, but if you look at service securities, we did sell a stake in one of the leading venture capitalist firms, and we would be open to the possibility of selling a minority stake in citadel at some point in the future. paul: that was the citadel ceo ken griffin speaking to sonali basak. let's continue the conversation on hedge funds, joining us is our next guest. thank you. how did hedge funds do in 2024 because the s&p 500 did quite well. >> yes, and sometimes people compare hedge funds with the s&p 500 which is not the right comparison, but if you look at hedge funds in their portfolio and this year, this is probably one of the first years in many, many years, as number stand

through november, they are on track to the best performance in four years, and with some luck, if they make another 1% on average, 2024 is going to be the best in 11 years, so that is a pretty strong performance and some of the drivers we have seen , like equities have done well. that is the largest strategy were a bulk of the money is and they have done very well, and macro has boomed. the trump trade in november the first week he lifted, so you had rising stocks, champion u.s. treasury yields and a stronger dollar all combined together to really lift hedge fund returns. caroline: so it felt like multi-strategy was a necessity.

has that changed the decision to go into the huge multi-offer eight multi-offer strategies? does that continue into 2025 and releasing more people wanting to take minority stakes? nishant: we just heard ken, and he's not that bullish, but i don't really by that argument. there is a lot of talk. if you look at really three key elements of the boom, which is performance, this year, they will have some of their best performance in many, many years, some that have three indications of performing and very low volatility. they are better than 12 to 20%, so there is performance. if you look at investor demand, they cannot have enough

multi-stress -- in fact, some of them are returning to investors, so capacity is becoming a real problem for investors, they would like to invest but they cannot find their funds to invest into, and then if you look at the tournament, which is the talent part, like hedge funds have been huge amounts of money to traders to redeem them, so on all of these three fronts, it remains a red-hot market. paul: when i left wall street at the end of 2004, i looked long and hard at the short-term equity business and i concluded that the ability to generate superior risk-adjusted returns was not there and the game was already played out. yet, money still flows into hedge funds. talk about whether shops are setting up these days. it used to be midtown manhattan and connecticut, but now dubai,

abu dhabi, other places that are attracting a lot of funds. nishant: the u.s. remains to be the biggest hotbed for hedge funds, but what has really changed is the landscaping in london. this is not the best place right now to start a business or to be based. and hong kong suffers from similar problems. singapore has had its own issues , so all of these centers, you know, have lost some of their chance, and abu dhabi and dubai have grabbed that opportunity, so every week and meet people who are in the process of moving to either abu dhabi or dubai, and you see people like millennium opening huge centers, moving a lot of traders. we are talking dozens and dozens of traders moving to abu dhabi and dubai, so they have kind of

benefited from this lower interest centers, and the low taxes, which has always had good weather, like sending middle east always helps, safety always helps, so they have been in a position to grab this opportunity that other bigger centers are offering them. caroline: miami is pretty nice and sunny, too. there is a reason. next year, are we going to see that institutionalization of looking beyond the initial founders nishant:? -- founders? nishant: definitely. that is one of the biggest challenges, will these large hedge funds, where a bull is generated, candy remain the same beyond their founders? most of the hedge funds had life of like 30 and 40 years, so this

planning is a massive, massive issue. it is a massive issue for investors, and we will see how they get back. so we will see. paul: thank you for joiningnishant kumar. a look at the markets coming up, how about it? this is bloomberg. ♪

paul: we are moments away from the start of the market this friday morning. i'm paul sweeney in new york city. caroline hyde is in london. a special edition of bloomberg markets on bloomberg tv and radio. a quick check of the futures, boom, negative futures here and a little bit of a wait and see on this market. a low-volume day in the week between christmas and new year's, so a softer opening as we see from the futures market, caroline. caroline: 9 million reasons and the largest volunteer food pantry in long island city, so were the cause during these volumes, yields creeping ever so high, a seven-month high on the 10 year yield and oil trading up

a little bit, but we would like to dig into individual movers and a wonder why we are going to the publishers illustrator next because it has a tiny market capitalization of $67 million and alex semenova has a reason why we are digging into the company. alex: i tiny market cap but a big move on a quiet trading day. the media company owns a variety of brands, and it was notified that it's regain compliance with listing standards had been approved, up about 17% right now, and shares were up 20% in premarket trading. there was news yesterday that the fitness website, men's fitness, relaunched under the company and the stock was up 12% yesterday, as well, so a pretty solid run. paul: a magazine business? go figure. alex: gamestop had shares lower

pretreating today, but it was up all but one of the last eight trading sessions and had a pretty solid move yesterday, up more than 5% after a post on x by keith gill, better known as rory kitty, interesting to see this name moving after the frenzy in 2021. at one point yesterday, trading volume hit almost five times the average, and it was the most urgent company on stock over the last day and moves like this suggest investors are still piling into speculative t -- speculative investors. paul: gamestop is a market cap of $14.7 billion, up to date. i know a lot of people traffic in this name in the meme stock world. i'm not one, but it does get a lot of volume. alex semenova covers equity markets for bloomberg news.

again, s&p 500, if you are just looking at that, 20% plus in 2023, tony percent plus gains in 2024. what do you do in 2025? katerina simonetti, private wealth management, private wealth investor over there. i would love to hear the conversations you are having with your clients as you close out a pretty successful 2024. how are you talking to clients these days? >> thank you for having me on the show. this is an important conversation because it is not lost on clients that we had double-digit returns for two years in a row, and it is only reasonable to expect that the returns in 2025 will be somewhat subdued. clients are concerned with questions we have on how to

capture portfolios, how to maximize risk management in the upcoming volatility, and to be fair, expectations for the year are not dm. think a lot of emphasis is on the fed, inflation, and how all the other factors will play out, but when it comes to practical things we do before the year end, we are balancing the portfolio, and stocks, bonds, real investments is the absolute key. paul: again, a lot of folks are saying, can i have a third year of performance and equity markets? you can look at the fixed income market. how do you think about the fixed income trade? do i sit there and a two year treasury i get 4.3% from the government or take some credit risk? katerina: if we are expecting the fed to not have as many rate cuts as expected, it is not

necessarily the worst thing in the world for fixed income investors. number one, we will get higher yields of cash at lower-than-expected, and we don't think about fixed income as a trade but as a hold and an acid that delivers consistent income and risk management, on the risk-adjusted basis into 2025, we preferred bonds or stocks, but quality very much so with bonds as well as stocks is going to be the name of the game for 25. caroline: volatility, because there is lack of clarity as it currently stands, take us through the thought process at morgan stanley and private wealth more broadly on whether or not the fed will cut more than two times, what realistic inflationary pressure will beget on talks of tariffs that have yet to be opposed? katerina: where do i start? uncertainty about the fed, inflation, the tariffs,

immigration, as all these headlines will start coming out in early 2025, all of this will play a role. our expectations for the early half of the year, with expectation of higher volatility in the last couple of weeks gave us a bit of a taste of what is to come. tell investors not to chase rallies, and this is the other side of the coin, where we have to prepare and stay calm and be sure that we have high-quality portfolios to focus on sectors that generate yield and focus on the areas like financials, industrials, materials and make sure that we take profits off the table and avoid higher concentrations in portfolios. we have had fantastic performance, this is the time. caroline: the problem is you had fantastic performance of 2023, and if you had had that mindset around the mag seven then, boy,

did you miss that. nvidia is up 1400%, so how do you talk clients out of that f omo feeling? katerina: it is only natural to feel this way. i think what we have to ask is are the valuations and profit expectations that are on the table, as well as the fact that the fed has a lot of pressure on them when it comes to inflation in terms of cuts, or going to get as many as expected? that is the big question. so if investors are looking at their holdings, it is natural not to be missing out, so we don't advise selling out of the entire position, but healthy profit taking and diversification into other areas where they are to that growth, and where future growth is significantly more substantial and technology in some areas that achieve remarkable growth

in 2024 and 2023. paul: how do you talk to clients about alternative investment, rabbit equity, credit and hedge funds? when i speak to ria's, i'm surprised at the high percentages they alter kate, how do you think about it? katerina: i did time when investors are concerned about risk, volatility and protecting the values of folio, having asset class portfolios that would hedge risk and equity side of the inflation is valuable. it comes with a cost, and it is liquidity, so investors that are comfortable with giving up some liquidity in their portfolios are perfectly fine using alternative investments because it has huge value making sure that we achieve consistent risk-adjusted return. with that, it is a piece of the puzzle were fixed income delivers income, equities deliver growth, and alternative investments are effective and

risk management. paul: it seems like we have changes to the tax policy. we will see how that turns out. i'm a big fan of municipal bonds , as i think it is a good and wonderful thing, how do you position you supposedly typical portfolio? katerina: taxes are a major concern and inflation is, as well. investors are looking at portfolios and analyzing that after-tax performance at the receiving tax deficiency is something a part of every single conversation, and this is where municipal bonds come into play. with municipal bonds, you have to make sure that the tax-equivalent rate of returns that we are getting is actually as good or better than a return that we can achieve incorporate fixed income, so there are

amazing buying opportunities on that side. but investors like having that tax free cash flow in their portfolio, especially retirement. caroline: taxation clarity is something the crypto world is potentially learning -- yearning for, how have you thought about crypto and that particular area of alternative investment for the 2024 to 2025? katerina: when you think about the development of crypto world, we turn to something we don't talk about to something that is the most exciting part of the portfolios and most volatile. now we are seeing more of a legitimization or the use of crypto in normal portfolios with people feeling more comfortable investing in this type of investment, but they can lose

track of the fact that volatility remains high, so the positioning in the portfolio has to be extreme be careful, and investors rely not crypto for liquidity have to keep that in mind because the volatility equity markets is high but our expectations for volatility in the crypto world is significantly higher than that. caroline: meanwhile, go back to equity markets, i'm interested in your overweight's, industrials, utilities and software, and that shifts from hardware to software from chips into software application in generative ai is a theme we are hearing but talk about industrials and utilities and what drives that for 2025. katerina: we are looking for defensive plays in companies that are not just delivering attractive earnings outlook, which is something we see across the board and we have been

looking across the board for 25, but also bringing to the table attractive valuations that did not have that explicit growth to some of the sectors we are seeing. that is where the industrials and the materials and consumer staples come in. we are looking for qualities and companies in position to make money to be profitable in 2025. paul: thank you for joining us. always appreciate getting your thoughts. morgan stanley private wealth manager, katerina simonetti. as i think about 2025, again, i have a fed that will cut a couple of times in 2025 and that is about it, that's what the market is telling me, so i need to have earnings come through here. that is why i read gina on bloomberg intelligence, but a mid-teen earnings growth is the forecast for next year.

caroline: how does that feed into the alley you already see? evaluations which have been jaw-dropping, the valuations we have a canned to more than 3 trillion, not just for nvidia, but throughout companies, with 8:40 futures earnings, it is not that expensive overall, and we will talk more about tech in the next conversation we have when we listen to the dan ives of this world, who has an outperform rating on nearly every single stock. i think he has zero buys at the moment or zero cells and 42 buys . paul: and we have known dan for a long time and he has been super bullish, and for the exception of 2022, since the great financial crisis, he has been right to be bullish. you know technology very well with your reporting, but he is

writing big, big themes, and i think the latest is just ai across the board. caroline: apple intelligence. paul: mostly apple intelligence. that is a thing. i think it is in my phone. we will see. we will have conversation with dan ives from earlier, talking about the textbased ai trade in general and how best to play it from investors in 2025. this is bloomberg. good morning. ♪

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paul: good friday morning. i'm paul sweeney in new york. caroline hyde joins me in london. this is bloomberg markets streaming live on radio and television. looking at the first 15 minutes of trading, the s&p is off about .70%, the nasdaq off 250 points,

and looking at the bond market, yields slightly higher, 10 year treasury 4.59 percent, and crude oil up about .20 5 -- 1.25%, $70.50 a barrel. there you go for the opening there. caroline: interestingly, the oil drift higher is helping the biggest point contributors, exxon mobil is up, chevron is up, the biggest drags, the entire magnificent seven, tesla and apple, and apple is what we would like to go to next because even though we have a points drag on the day, apple has had a nice year, and we have an outperform and a price target raised by none other than one of the biggest bulls in the street, dan ives raising that target to 3.25, and it is about the upgrade cycle that many think will happen, will apple

intelligence get us there? how listen to it dan ives told annmarie hordern a little while ago. anne-marie: why are you lifting the price target now? you said, i have a call to make. dan: because the bears are in hibernation mode because they can find ai in the spreadsheets, and what we see across the supply chain, we see strength not just into december. what i believe will be a record year for apple, 240 million iphone units. this is going to be in ai driven super cycle that is multiyear. they hated to trillion, despise it at 3 trillion and 4 trillion, they are yelling from the top of the mountains. anne-marie: you estimate 300 million iphones have not upgraded in over four years, so do you think this will be out of necessity because people are desperate for a new phone or is it that ai capability that ai

introduced? -- apple introduced? dan: 67% is that, and that has increased 200 million over the last few years. it continues to be the golden goose of cupertino, but the ai driven piece is just starting. that is why it is a get out the popcorn moment because in our opinion, the consumer ai revolution, that is why the bears talk about valuation they have for years with apple, it is about what ai adds to the story. we think it is $34 per share. anne-marie: how hard would it be for the next upgrade cycle, especially with so much driven by software updates? hardware hasn't really changed. dan: that is iphone 17, what we have seen into 2025, that will be a hardware driven and new

formfactor and that is why it is a one-two punch. it is 16 to 17, and that is what makes it unique, hundreds of apps are in development that are going to be on top of apple intelligence. that is why the enterprise ai revolutions, the godfather of ai , the consumer ai revolution goes through cupertino. that is why we could see 4 trillion potentially today or monday. anne-marie: one difficult spot is china. how are we thinking about china, especially with the fact that apple needs to partner with a local company to introduce all of this? dan: 10% politician, 9% ceo. anne-marie: you might actually have to be more of a diplomat to be 10%. dan: yeah, but the point is it is with he and elon musk have had to navigate with success with china, but what a little

about the cycle is early in 2025, it gets roll down to april, so the china great cycle in terms of ai coming to china, that is going to happen in april, and this is just the beginning of a multiyear ai cycle that plays out from apple. anne-marie: you also talk about salesforce. i spoke to marc benioff about asian force, and he said it is the most exciting thing he's worked on his entire career. is that why you are so excited? dan: your context, it speaks to our view, it is 10:00 p.m. that goes to 4:00 a.m., and marc benioff wanted to use names on the list and all of a sudden he is on the dance floor, software is let in, already on the dance floor from a use case perspective is palantir, and the

bears cannot see ai in the spreadsheets. they hated it as a teenager earlier this year, and despises it at 83, but it is just a beginning now of what i've u.s. the software age in ai, salesforce, palantir, and others. annmarie: what names will we be talking about next year that were very quiet during 2024? 2024 was about nvidia, tesla. what are the names of 2025? dan: in terms of my view for large-cap tech, i think they will be up 25%, 2025, what has not been on the radar, m&a, software, cybersecurity because with the ftc, that nightmare, nightmare on elm street, it is done protect. now you will see a lot of acceleration when it comes to software and cybersecurity.

that is what is going to lead the ai cycle, and cybersecurity is an area i believe could ultimately be one of the biggest outperformer's. annmarie: another tech analyst joined me and said the same, 2025 will be about cybersecurity. overnight, elon musk was clashing with a far right activist to has been close to president-elect trump. and the crooks of the argument was that h one b visas, but the individual also says that musk really is not maga yet he is, so close to president-elect trump, do you think there is a risk that he will loose the proximity to power what you said was one of the best bets of the ages? dan: i think that romance get stronger between musk and trump --bromance get stronger between musk and trump. whether it is china, the policy, you will have continued a steps.

this will be a soap opera for musk that continues to play out, but that will strengthen. it continues to be for musk, it is the best bet he ever made on trump. annmarie: so this is just a flareup in an episode but not the season finale. dan: this is one episode in a 10 to 12 parter on netflix. caroline: episodes on netflix. that is where the end, so many analogies through the interview. i love the vibes. talk about netflix, one of the key drags on the nasdaq today. interesting, after they had a phenomenal performance with the nfl, no technical glitches, and it seems beyonce was the drag with 27 million tuning in for her performance, but it looks like we are worrying more about "squid game's." the season two debut not living up to expectations, even though it had 80% critic approval.

we saw a fall out of bed for some of the korean links names. paul: i cannot say i fully understand that angle to the story, but if you think about netflix, it has become the de facto winner of this evolution of the media industry globally to streaming. the stock is up 85% year-to-date with the market cap of $385 billion. it has clearly won streaming wars, and questions for most investors is who else can compete against netflix? ken disney -- can disney, warner bros. discovery, paramount? that is where we are right now. if you are netflix, you have revenue drivers and investors are pretty comfortable about, and aside from subscription growth, advertising, and my kids cannot scam on my account anymore and they have to pay for their own kind of thing. caroline: is it weird for someone who has been so steeped

in media landscape for so long that we are back talking about advertising and live sports with names such as netflix and amazon? paul: you are right, the more things change, the more they stay the same. we are not talking about bundling streaming apps. we kind of did that before, and it was called the cable television model. they did it all for us, did you think you are paying for stuff you do not want? yet, but look at your credit card statements now. i guarantee you are paying for things you did not know you did not want at all. it comes back. caroline: i do not want to be anywhere near my credit card statement right now post festivities. paul: right. we will have more coming up, the senior portfolio manager at grady investments is coming up. this is bloomberg. ♪

paul: i'm paul sweeney in the new york city, caroline hyde in london. this is a special edition of "bloomberg markets," special because we are simulcasting on radio and television. the nasdaq off about 1.3% here.

we will keep an eye on the tech-heavy nasdaq. light buying on this day between christmas and new year. commodity space, little bit of a lift. wti crude oil just above $70 per barrel. a little bit of movement in a quiet day, caroline, in the markets. a little bit of rough sailing. caroline: yeah, and more bright in european trading. we remain in the green with an hour and a half or so of trading left. williams ever so t that volumes ever so thin at the moment. we are seeing people trying to dot their t's and cross their i's. paul: let's see what it is going on under that. natalia joins us in the new york studio.

what are you looking at in the markets? natalia: quiet day, hard-to-find stock movers. cooper is down 1.6% after taiwanese authorities flocked -- uber is down 1.6% after taiwanese and 30's like to deal bit a global delivery company expanded during the pandemic, trying to restructure its business, and it sold one of its units in the middle east. a big ipo above $2 billion. two big players in taiwan trying to make a deal. delivery hero was trying to sell its unit called food panda to uber, uber was offering to pay $950 million in all-cash but taiwanese and 30's blocked the deal. as taiwanese others blocked the

deal, they seem -- taiwanese authorities blocked the deal, seeing more disadvantages. uber says it will continue to invest in taiwan. caroline: uber off 1.8%. we are seeing the s&p falling to lows of the session at the moment, off by a percentage point. when you look at the mr. groups shining more brightly -- industry groups shining more brightly, there is the oil sector. you are looking at a gas company in particular. natalia: i'm keeping an eye on natural gas companies. natural gas in europe is up by 5%. this comes after russian president vladimir putin said that it would be impossible to arrange new transit value ukraine of natural gas to europe , and according to ukrainian authorities, things stand now, there will be no transit of natural gas by ukraine starting

from january 1. overall as of now from accounts for about 5% -- ukraine accounts for about 5% of natural gas demand in europe. not such a huge share, but nevertheless, it can create volatility. europe will be more reliant on gas supplies coming from norway, by blank as, as well as just pipeline gas -- as well as pipeline gas, lng experts in the united states. it has flipped to negative territory, but it was up in stocks will remain volatile in the next couple weeks. paul: anything else you are looking at? natalia: quick update, arena group stock is selling today. the company has received a notice from the new york stock exchange american tha its plan to regain compliance was accepted. the company got a note from the new york stock exchange october 2 saying it is not in compliance with minimal stockholders'

equity requirements. deadline until april 2, and it does make progress, new york stock exchange american may urge delisting. paul: natalia kniazhevich giving us the latest on some of these market movers here. as caroline was reporting, s&p off 1%, nasdaq off 1.7%. selling pressure here. heck of a 2024, folks. heck of a 2023 in the equity markets. let's check in with jeremy bryan , grady investments senior portfolio manager. i would love to read your letter for 2025 for investors. how are you setting up 2025? jeremy: yeah, i think the biggest theme is what i've been calling simply bring an umbrella. bring an umbrella doesn't mean it is going to rain outside, but

be prepared in case it does. two phenomenal years in the stock market, 20%-plus both years, and there is historical precedent we could have another historic year in 2025. what i'm saying is that you probably have over exceeded from your growth perspective the last few years if you have been participating at all. from that side, taking some of it off to protect assets you have made over the past couple years is a prudent strategy, and that is when we have been advocating for. bring an umbrella doesn't mean sell everything, it means be prepared and have assets that are protecting in case we do not have another 20% year in 2025. paul: how about that 60/40 portfolio? i grew up with a 60/40 allocation, stocks/bonds, and bonds were supposed to protect me from volatility. didn't work into 2022 whenever there was down.

how do you feel that fixed income going forward? jeremy: with the rise in rates recently is relatively opportunistic. when you have a 4.6% treasury yield, that gives you bonds giving you five, 6% from the yield alone. if interest rates were to fall for the remainder of the year, that would be additive on top. from our site, 60/40 being dead, 2022 felt that. i think that is overestimated from our side. i think that having a balance and a component of bonds and income protection is one particular strategy. it doesn't have to be the only protection strategy used. there are other asset classes out there, options-based strategies that can give you a level of protection against the market that doesn't take the interest-rate risk in bonds. having a component from multiple sectors in multiple ways of protecting your assets is the preferred method. caroline: ok, that protection,

that ultimate umbrella, what is causing the rain? what is the catalyst? are you watching the economic data, obsessing about cpi or inflation gauges the fed looks at? are you looking at the headlines on truth social or x? what is it you keep a keen eye on in 2025? jeremy: to us it's always jobs. i know we are a lagging indicator, i get a completely, but jobs are always going to drive consumer sentiment, which is going to try spending, which is going to drive our economy. that is what we are trying to accomplish and economic growth. jobs are kind of if americans have a job or feel like they can get a job, they will continue to spend money. i know we are hitting levels of credit-card debt at all-time highs in all these things. in my opinion, as long as they still have jobs, we will still be fined from a spending perspective. that is what we will watch the most. if that starts to turn over for

whatever reason, if we start to see cracks in the job market, i do believe that is going to be the catalyst of a potential reduction in economic growth and activity, and that would be the thing we are most concerned by coming into 2025. caroline: so you are talking high-frequency data, jobless claims, and the like. are you setting your store on the non-farm payrolls number that keeps getting revised one thing and without? jeremy: right, trying to rely on that is perfect data, it is the best we have in certain regards claims trends more than claims data. point-to-point doesn't matter a whole heck of a lot. if you see consistent upward trending in the claims data, that is actual data you can somewhat rely on, and if that number continues to rise upward, that is where i would get a little more cautious. paul: jeremy, how about you and your team -- you woke up the day after the election. did that alter how you think

about markets, investing, opportunities, risk? has that changed? jeremy: so after the election, i think the biggest thing that changed was we had a pretty decisive outcome. what we have always said is that a mixed congress and mixed presidential, having a balance, it lowers the volatility of what can actually be accomplished in washington, and sometimes that allows businesses to plan ahead a little bit more because they know there is not going to be dramatic amounts of interference in what is going on because they cannot get anything passed. that is the biggest change we have seen, that there are opportunities for an agenda to be more aggressively mandated going forward, simply because the numbers are somewhat more in their favor than was anticipated prior to the auction. so it didn't really change our fundamental focus and a business didn't change a whole heck of a lot.

what did change is saying we have to assume that some of these republican discussions and agendas with regard to tax situation, probably fairly favorable, and then tariff situations, the bigger unknown, has greater likelihood of implementation than it did before, and how does it adjust numbers and who's benefiting and who is hurt. that is where we take analysis. i can tell you clearly we did not make any actions with regard to political action in our portfolios. what we are trying to do is more understand who is benefiting, who is hurting, and making those adjustments within that based on business when a mental. caroline: what is really interesting is you go into single names, alphabet is one of them. for me, that still has a regulatory headwind, quite a big one, with the new administration. for you it is more about a valuation position and the quantum goodies helping them of late. jeremy: completely.

that is the consistent theme across the names i'm talking about, where have -- even if stocks have performed well, and alphabet is up 37% this year. it had a really good year. but even with that, the evaluation is well within long-term average ranges. it's not excessively valued to where there is an aggressive amount of expectations in the stock. that's where i'd be most careful right now. stocks that used to trade at 20, 25 times, are trading at 40, 50 times earnings. there is a higher bar, higher hurdle, higher level of expectations and those names. but i'm looking for is companies that can continue to grow, i still think that google, despite the regulatory concerns and the risks out there, is still going to grow. youtube is a phenomenal business. i don't think search is going away from ai. i think it is pivoting, but i don't think it is going away next year. we can take what we think is a reasonable valuation in google and still get that growth upside

to hopefully get a double whammy of price appreciation via growth and price appreciation via valuation extension as well. paul: good stuff for us to chew on. jeremy bryan, grady investments senior portfolio manager in minnesota, right outside minneapolis-st. paul, beautiful part of the country. in the wintertime it is pretty cool. s&p 500, off 1.2%. nasdaq off just about 2%. we are seeing and accelerating selloff in these markets, caroline. taking a bit off the table as we near year end. caroline: yeah, we are nervous. locking in profits after a spectacular year more broadly. we are taking away little bit as we head towards very thin volumes. on.got a lot still to be chewing we ended the conversation with jeremy on alphabet and he was talking about those tariffs and

how that is speaking to the lack of cloudy for many business operators and investors in those businesses. paul: businesses around the world are preparing for the potential trump tariffs. we'll discuss that coming up next because there is a lot of unknowns out there around the world for a lot of companies and a lot of different countries around the world of what the economic policies of the united states will in fact be going forward. we'll have more coming up in moments. this is bloomberg. good morning. ♪

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paul: i am paul sweeney in new york city. caroline hyde is in london. special edition of "bloomberg markets" simulcasting live on bloomberg radio and television. quick look at this market. s&p 500 of 1.25%. nasdaq is off over 400 points, 2%. i will call out the dow jonathan

ferro. 10-year treasury yield pretty steady, 4.58%. commodities front, a little bit of a lift to wti crude oil. chinese government is pledging more stimulus as it looks to stabilize economic growth in 2025. dave regress at down with treasury secretary janet and asked her about the u.s.'s relationship with china. sec. yellen: many countries when they are faced with unilateral actions of that sort look for ways to retaliate in my guess would be that they would do that. we have areas of concern where i have expressed repeatedly concerns with overcapacity that is developed in chinese advanced manufacturing industries and

clean energy, semiconductors, and the like. we think it reflects active large subsidies that are flooding the world with exports and threatened to drive our firms out of business in areas that we think are critical to our own future. we've put in place tariffs now. there strategic, -- they're strategic, effective $18 billion worth of trades. certainly not all about trade with china. we did it to make sure that china's actions don't undermine our own plans to support these sectors. broad-based tariffs, almost all economists agree that what they will do is hurt us by raising prices, possibly substantially, and making it more expensive for firms that need inputs from

china to be able to acquire them and harm our competitiveness of firms that rely on those imports. so we've taken a strategic approach focusing narrowly and a broad-based approach. i have serious concerns with, as most economists two. caroline: treasury secretary yellen digging into the relationship between the u.s. and china, strategic tariffs that biden had put in place largely affecting the chips sector entity technology. we know that the hint is those tariffs are likely to broaden in 2025 under the next administration. what does that mean for businesses? how are they preparing? that is the subject of today's "big take," and coming up early is one of the authors behind it, how trump tariffs threats are roiling global trade.

you go into this deep dive of individual companies and how they are having a surge of shipments from germany, whether it is riesling wine or the maker of wires and technology in the u.s. in california. how are they trying to front run the tariffs we are attracting? >> exactly, there has been a record number of containers running through the ports of l.a. and long beach, the biggest north american ports. people are trying to get ahead of this. at the same time they are balancing dish we don't want to over order in the case of there is a company that has earpods they supply, not apple ones. their concern as technology changes too fast and if we order to much ahead of time, we will be stuck with this inventory people won't want to buy. they are trying to balance all of these things, get it in while prices are cheap, beat the tariffs, and that the same time

don't over order. there are higher costs if you rush to get stuff in. paul: john, it's interesting, we don't even know what will be subject to tariffs, how much any of that, but it appears that companies aren't awaiting. they are trying to get ahead of this any way they can. it's extraordinary. john: they are trying to figure out what to do because the other concern is people thought, well, let's have stuff imported via mexico, assembled in mexico, and we can get around the chinese content rules on tariffs. now recently trump said we are going to impose tariffs on mexico and canada because we're concerned we are letting bad guys and fentanyl into the u.s. caroline: look, we are looking at a market that is currently under some significant selling pressure, off more than 2% in the nasdaq 100. is there a flavor of which industries are bracing themselves the most? i've reported all your on the

chips sector and how they have to navigate to china-u.s. relationship. you mentioned wine, technology. this is so broad in its remit -- autos. where are we seeing the most anxiety built? john: i would say across the board. clothing is another one you didn't mention. electronics, clothing, just about anything made overseas, which is most consumer goods we have in the u.s. lawn furniture, something that i go, oh my god, i won't be able to live without lawn furniture. at this in time, there are a lot of not -- at the same time, there are a lot of knock on effects, as sec. yellen was talking about. we are not sure whether it is good for the economy or bad. paul: you've got great graphics. "big take" stories, they are deeply sourced, deeply reported, and they have great graphics which makes it come alive. tariff talk abounds -- you talk

about how much companies talk about tariffs on their conference calls, and holy cow, it's bike in november and december -- it spiked in november and december. this is on the minds of corporate executives. john: that's right. we have ways of searching texts of calls all of the place and we use that as a tool. yes, ceos say that is a big issue for them going into 2025. and it's uncertain, too. that is part of the deal, we don't know what is going to happen, because trump has talked a lot, but he's not president yet. caroline: that must be the frustration, that ultimately all these business leaders know they have to drive up costs, perhaps unnecessarily. but they've got to make the call, they've got to decide whether they are going to front run something that is hypothetical in nature. do we know how much it is driving up costs? john: we don't know yet and we don't know how much they are going to pass on. there are higher costs for shipping and among people

using airfreight instead of anip to get it here earlier. there is stuff that if you order it really, you have to put it in a warehouse before you put it in storage. that could be an extra cost, too. we don't know what other kinds of tariffs will be. it is very hard to know how much each unit is going to cost, how much the people who are processing or passing on those units are going to pass on to consumers, too, because you don't want to raise your prices too fast. and then there are in the case of the german winemaker, export to scandinavia instead of the u.s., because i can make money in scandinavia, they are not a major exporter of wine. some of their competitors can't do without the u.s. paul: this is no joke, you have some research from oxford economics, where i think they polled executives. what are the biggest worries you have over the next two years?

eurozone crisis, china/taiwan. the middle east. bye for the biggest one is the global trade war. this is on top of mind of everybody out there. john: that's right, yeah, and as secretary yellen said in the previous segment, we don't know what kind of retaliation is going to happen. they are talking but using a very blunt instrument across the board tariffs. people will retaliate, and yeah, people will stop paying. we all know consumers are very unhappy about inflation. we don't know what effect higher tariffs are going to have on inflation, but generally it raises the cost of imported goods if you put tariffs on them. paul: great reporting. bloomberg kelly bureau chief -- bloomberg kelly bureau chief -- bloomberg l.a. bureau chief. find them online as well

markets selling off here. s&p 500 of 1.27%. nasdaq off over 400 points, two percentage points. light volume, which tends to happen when you get volatility on these days. that is what we are seeing here. coming up we are going to discuss the outlook for energy markets with ellen wald, a senior fellow at the atlantic council. this is bloomberg. ♪ (♪♪) what took you so long? i'm sorry, there was a long line at the thai place. you get the sauce i like? of course! you're the man! i wish. the future isn't scary. not investing in it is. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com to go further, you need to be ready for what's down the road.

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paul: good morning, i am paul sweeney in new york city, caroline hyde in london. this is a special edition of "bloomberg markets" simulcasting on bloomberg radio and television. we have a selloff the last half-hour. s&p 500 of 80 points. nasdaq is off 2%. nasdaq mine is higher than the average. we are seeing volume and the nasdaq. 10-year treasury yields off slightly, 4.57%. u.s. government bond and commodity space, wti crude oil a little bit higher, just about $70 per barrel. for years energy investors are preferred oil stock vs. natural gas, but looking to the year ahead, traders are betting on

gains and guessable fuel portfolios more than crude. joining us is natalia kniazhevich. thanks for joining us yet again. what drives this divergence between oil and gas? natalia: typically natural gas stocks follow oil shares. this year, we see some divergence, and this is driven by fundamental factors. just as an example, when you look at a company like eqt, it outperforms exxon mobil. when it comes to natural gas prices, we see that they are moving higher. first of all, it's global demand, more demand for american gas coming from europe and lng exports are rising, of course. as a second part of the story, more related to the so-called ai play. utilities were a big play for ai because of demand from data centers -- paul: i do not see that coming, i'll tell you that. smart money did.

natalia: and people i spoke with said that natural gas prices can be the next part of this play because there is more demand for gas-fired power coming from data centers, and as a result they can benefit, and oil is not doing as well. caroline: a a lot of these data center buyers and builders are ultimately big tech companies that have commitments from a clean energy perspective as well. they're trying to figure out where they can apply clean energy. that is why nuclear is a watchword. push us forward to 25. does that change where we are looking with gas prices are performing? where does the demand supply and up looking? natalia: first of all, seasonality on top of geopolitical factors. every year in november demand for natural gas is moving higher. this is also what we see this year. on the flipside, oil is down by

6% year-to-date. the biggest driverfor that decline -- the biggest driver for that the client is china. the latest data points from china's economy shows that industrial firms saw profits dropped in november for the fourth straight month, and this is a really sharp decline. we see some pessimism around ol forecast-- oil forecasts. opec cut demand growth for the fourth straight month, and now it slashed projections by 27% since july. people are becoming more pessimistic when it comes to demand for oil. even if we compare forecasts from opec to investment banks like morgan stanley, and goldman sachs, it's still very optimistic, much more optimistic compared international energy

agency, because iaea says oil market will see a surplus of more than one million barrels next year. this is all related to china and everyone expects china to recover, and may be the stimulus the country announced will help with the chinese economy to grow faster. caroline: maybe it will. oil is little higher on the day, like the rest of the markets. natalia, so great to check in with you on all things oil and gas. let's stick with geopolitical persuasion and what the outlook for these energy markets is going into 2025. perfect person to do that, ellen wald, senior fellow at the atlantic council and author of "saudi, inc." i'm so interested in your take on what the next administration means for the relationship with saudi, israel, and going forward lifting off where natalia was bringing us, the demand surrounding oil, how warm is

opec the moment? ellen: opec's fling a critical role right now because they're keeping a fairmont of oil off the market, and they are enabling -- fair amount of oil off the market and they are enabling the u.s. to have a role, a space for its oil market to grow. if, for example, opec were to decide all bets are off, we will open the taps, forget about these cuts, put all our production capacity back in the market, they have the ability to tank prices. they don't want to do that right now. but a lot in terms of the oil market hinges on whether opec is going to move forward with ts gradual plans to put more of the oil back in the market or whether they will continue to push it off. i think they are still very relevant, just not in quite the same way as they were in the 1970's. paul: ellen, i have to fully disclose i'm a big fan of the tv show "landman," so i consider

myself an expert on oil and gas and all that stuff. talk to us about the u.s. supply that is change the dynamic in global oil and gas over the last 10 years or so. are those guys going to be drilling, baby, drilling going forward? ellen: that is a great question, and you are definitely pushing me to start watching this show in my free time. paul: oh yeah, the time. ellen: this is not the same oil market as 2016 and 2018. this is a different shale patch. back then it was a real drill, baby, drill situation because it was kind of like the wild west and a bit of a sense and they had to keep on drilling and drilling even if they warrant breaking even -- even if they weren't breaking even just because they needed to make payroll get all the oil out of there and they were being funded with the intent to drill drill drill. that time is over.

we are in a different oil market now, different shale patch, we have a lot of consolidation, much bigger companies at the helm now, and they have -- they are a lot better capitalized, they are much more focused on not necessarily just growth, but returning value to shareholders. coincidentally, we happen to be producing at the highest levels have now. companies are also using a lot better techniques, a lot more sophisticated techniques to find oil, to get more oil out of each well. i think, yes, we have a lot of oil to get out there, we will be producing at very high levels, but the same mentality and the ability to addict where we are going is not there now. it is really different look. when it comes to the trumpet administration and drill, baby, drill, we will see that much more in the awful oil space because that is an area that has suffered -- offshore oil space because that as suffered under

the biden administration's regulatory restrictions. we will see more optimism dubbing because that is an area where things take a lot more capital to get going. you need a lot more time, you got invest a lot more. at the same time, those wells can last a lot longer than what we are seeing in, say, the permian and those areas. they are looking forward to a trump administration helping them get the permits and leases they need to start drilling, and that is an area where we are going to see a more drill, baby, drill outlook. caroline: ellen, the outlook under the next administration of relationships with saudi arabia, relationships with israel, normalization of that world more broadly, how are you looking at that and what it means for your markets? ellen: that's a really complicated area because i do think that the trump administration is much more unabashed and its support for israel, particularly in a military sense and diplomatic sense.

i think you are going to see a lot more very overt and very strong support for israel. doesn't necessarily mean it is going to put them at odds with the rest of the air world. i don't miss -- the arab world. i don't necessarily think so. they have a much more -- stronger stance on iran. it is entirely possible that we could see them start to enforce the oil sanctions on iran more forcefully. that takes iranian oil off the market, that would be good for saudi arabia that is what saudi arabia and the uae would like because they can put more of their oil on the market ,or it will help prices go up. i think while there is definitely a tension in terms of the relationship between trump and the saudis, the underlying aspects in terms of stability, in terms of trying to lessen iran's funding of diverse groups -- funding of terrorist groups,

that is with the saudis would like to see. while they may not necessarily show that they are best buddies in terms of u.s. support for israel, i do think there are a lot of aspects where they are going to see a lot of synergy. paul: ellen, if i'm a proponent of green energy, how concerned should i be about the incoming trump administration, about that process? ellen: i think it really depends what you're approach -- your approach to green energy is. i don't think the trump administration is looking to say rollback the ira. this is an administration that has a vested interest in wants to increase the domestic lithium and lithium battery supply chain in the united states. they may have a slightly different reason, they consider it more of a national security concern that an imperative to put more ev's on the road, but this is an area where they

definitely will have a lot of support there. i think there are a lot of areas where they can work together. if you are looking at offshore wind, i don't think you will see a whole lot of support from the trump administration. to be totally honest, the offshore wind industry has a lot of headwinds even without president trump putting the brakes on that. they have to issues in terms of the turbines they are using, collapses in the atlantic, problems with funding for projects off of new york and new jersey. the trump administration is a convenient way to excuse, perhaps, a lack of interest and difficulty getting it going. i wouldn't say it's necessarily the trump administration's fault that offer would is having a really difficult and slow start here. caroline: ellen, what about nuclear? ellen: that is an excellent question, and i think that is something that the trump administration could really make a mark on in energy if they

choose to address this, because the previous segment about data centers and these big tech companies, they want to use nuclear to power their data center. they realize that we have got to get something that is more reliable, we cannot use wind and solar for this. it is either natural gas or nuclear or accommodation. this is an area that the trump administration can push things forward. we have a lot of really interesting technology in terms of small modular reactors coming up. this is an area where they could push things forward and help bring safer, better, more affordable nuclear technology to the united states we haven't had a new nuclear plant -- it is incredibly difficult to build a new nuclear plant. nuclear is a stable baseload source of energy that is incredible safe. there is a lot of things they could do to help push that along, bring that to fruition in

safe ways that would help the environment and lower emissions. paul: ellen, thank you so much. ellen wald, atlantic council senior fellow and author of the book "saudi, inc.," one of our go to voices on energy. i was on holiday through ireland this past september and there are windows everywhere. i don't know -- windmills everywhere. i don't know how i think about that. beautiful irish countryside, now they have these windows. if they produce a ton of energy, perhaps it is worth it. caroline: same in the north of engen an offer in the u.k. europe has been far more promotable of clean energy and sources and have financed cleantech far more than the united states perhaps has. we will see how resilient they end up being and the overall electricity grid remains in the u.k. and europe. for some it is an eyesore, for some it is particularly beautiful.

i wonder how much we will see the shift to nuclear coming up. paul: some of the folks who are a little bit more cautious about green energy said the amount of fossil fuel's that were burned to construct these windmills will never be paid back in the 20-year life, so there two sides to that story, i guess. s&p 500 off 1.2%, and stack of .9% -- nasdaq off 1.9%. this is bloomberg. ♪

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caroline: we welcome you back to a simulcast radio and tv audience as we go worldwide. i'm in london, caroline hyde, and paul sweeney in new york. we are looking at a risk-off day. nasdaq 100 coming off of its lows, but volumes actually higher, 30% higher than the

average of the previous 20 trading days. people are trying to tie up their books as we end the year out and money coming off the table. nvidia a team name that is lower. paul: we are seeing them move around here. s&p, volume is a little bit lighter, higher in the nasdaq as we see big moves there. 2024 turned out to be a pretty good year for global wall street. of course, listening to some of the wall street folks talk, they are seeing 20 35 and the new trump administration might be even better. the jp morgan ceo jamie dimon says he sees more companies pursuing m&a and the trump administration. he spoke to lisa abramowicz. jamie: because they have the senate, house, the presidency, they have a far more ability to do things like that. last time around president trump started for every new regulation, one and two out,

litter one in five out. the banking industry, whether you voted for trump or joe biden, they are dancing in the street because they had years and years of regulations, a lot of which stymied credit. you could've come the banks equally safe but had them do more credit. just to give you an example, the average bank of america, $100 of deposits and $100 of loans. now it is $100 of deposits and $65 of loans. if for some reason the regular think their geniuses, so be it. a lot of things and didn't answer but they didn't know that would be the outcome. you could talk to any industry and they would give you examples of regulation that could be reduced or make it easier for them to do business while keeping the country safe and the air clean, while making sure the epa does its job, etc. i applaud them, they should be looking at those things. lisa: do you think in the

banking sector if there is less regulation there would be even steeper competition with banks getting back some of the business from private investment firms? jamie: probably, yeah. you ask about private credit, which i'm not against, it has grown very rapidly, it has pros and cons, i'm always in favor of competition. part of the reason they are dancing in the street, which they said publicly, these to get mad at me, now they say he is right, is half the capital, no social requirements, no fiduciary, no reporting to the government, no insurance, no liquidity. yeah, it's a huge disadvantage. it will make banks get back some of the business. it will be more important to regional banks than jp morgan. lis: there is a question whether it is banking mergers and acquisitions or more broadly whether there will be a more amenable administration -- are you seeing from conversations in

the past seven days with companies that they are hoping to expand their m&a pipeline to start putting that together? jamie: absolutely. a lot of m&a was stymied by the fact that you cannot get through the courts, but it takes two years, three years. if you are a bank -- we've seen this happen, one of these deals took three years, it took three years to get it done you are going to deal, it is binding, you have enclosed it, but you got to run the company. you want to work on common culture and common technology and you can't do it. a lot of committees will be looking aggressively at acquisitions and deployment of capital, and they should. caroline: ceo of jp morgan jamie dimon speaking with our own lisa abramowitz in peru. let's talk about the m&a outlook, whether we will see take off in 2025. mike, put the context, how to

2024 and up looking for m&a? which industries in particular? where are the biggest deals? >> it was pretty good, actually. a lot going on, a lot of cross sector deals being done. the actual totals were back $3 trillion plus globally, slight uptick from the previous year. that is still down from about $5.3 trillion in 2021, the peak for just about everything at this point. paul: as jamie dimon was just saying, expectations are pretty darn optimistic for 2025 with the new administration from a regulatory perspective, lower tax rates, lower cost of capital, all those things put together. what are your sources tell you about 2025? michael: it's looking good. he is absolutely right, and the dancing on the streets comment is hard for any journalist to avoid repeating five times.

the classic traditional republican administration coming in with a less regulatory bent and reversing regulations is a huge incentive that cannot be underestimated. there's another flipside of that, too, of course the uncertainty generated by donald trump quite frankly in particular is on the flipside of it a consideration as well. interest rates have come down. that is a huge incentive for getting deals done now. the uncertainty generated over something as simple -- not simple, but far-reaching as tariffs, if a threat of a 25% tariff on mexico and canada comes in, that is having a huge effect in the market attitude. one bloomberg story, a global supply chain freak out is underway right now. there's always going to be the question of what is going to happen. i think the biggest factor is the most obvious one, is th the

antitrustat--is that the antitrust regime has complete the changed. lina khan being replaced by fellow commissioner andrew ferguson, somebody who has opposed many of her rulemaking aspects, and a lot of the deals that, for example, albertsons and croakers got blocked this month-- krogers got blocked this month, that might sail through just fine in the next administration. caroline: but then gail slater and the doj side of things, what are we anticipating for big tech being able to make m&a deals, being able to remain as they fully are formed, whether they have to be broken up? everyone is wondering about alphabet. michael: oh yes, tech is the wildcard here. certainly if you are, for example, an energy company looking to export more oil, natural gas, whatever, you're

going to have a pretty clear path to do a lot of the things you want to do in terms of m&a. there is not going to be resistance. for all of the republican tendency to allow business to do what business will do, more so than democrats, for tech, donald trump in particular and others including jd vance, by the way, have come around and said that tech is a problem. i think it is going to be a little less predictable, and there might be some favorites, there might be some not so favorites that get things done. paul: how about the ipo market, another big moneymaker for global wall street? it's been a little bit thin, the activity has been below what i would've expected, given that the s&p is up more than 50% of last couple years. back in the day i would've gotten a bunch more deals, i feel like. what are they saying about the ipo market in 2025? michael: i've got a colleague who routinely taunts me about

saying is the ipo window open yet on a weekly basis. i think it actually is opening finally. like every thing else, ipo's and m&a, the peak was 2021. $669 billion raised that your globally. last year was up a bit, a bit modest from the year before. that's an improvement, but the real thing to watch for is there was consistency. 2023, there was a point when companies like birkenstock going public, it was like, hey, is this going to be the start of new things again. birkenstock and the headline worked quite well, the ipo did not go as expect it. a whole line of companies planning to go public put plans on hold. this year things are looking pretty good. there is beginnings coming up.

a lot of fintech, venture-backspace is. one company that is a real bellwether that is not a household name or anything, but the service tighten filed last week for an ipo. they are looking at a good-sized ipo, it appears. they are the kind of company that is venture-backed, that has its hand in home repair and construction -- caroline: yeah, mike, and we spoke to the founders of that company on the day they listed over on the nasdaq, it went incredibly well. maybe a bit too well in terms of how it managed to sail through its price. we thank you so much. we are going to be digging into these markets a low bit more. this is bloomberg. ♪

paul: all right, i'm paul sweeney in new york city. this is a special edition of "bloomberg markets," simulcasting on radio and television. looking at the market, we are selling off, off the lows.

the s&p 500 is off by 1.2%. nasdaq, down 1.8%. if you look at what has taken the nasdaq down, the top five contributors are nvidia, microsoft, apple, amazon, tesla. each of those names are down two .4%. the 10-year treasury yield's are steady, 4.58% from the 10 year. crude oil is up slightly, just above $70 per ounce. we will stay on top of that for you. let's go to self driving cars. why not? pony ai in china is looking beyond the u.s. to avoid tensions. the ceo spoke with bloomberg about the growth of his company and the impact of u.s. sanctions against chipmakers in china. take a listen. >> in terms of the sanctions on the chips, for us it's nothing new. we have dealt with this for quite some time already.

so, for our strategy, it was and remains to be that we will diversify our supply chain. i think as there are more manufacturing's of chips coming out from china where the rest of the world, what we will try to do is have more diversified supply chains to further de-risk our exposure to geopolitical tensions. >> james, this is steve, i think we met at the beijing auto show either last year this year. i took a ride in one of your lidar pony ai equipped toyota road oak -- robo cabs in beijing. i understand you are a company that had robo trials in the bay area, but also in multiple cities in china. so, you kind of have influence in both the united states and

china, obviously, but what were the main questions as you took your company public in new york, what were the main concerns, if you will, of potential investors when he went on that roadshow in the u.s. with increased geopolitical tensions? >> surprisingly, the geopolitical tension was not at the front and center of the investors, but rather the investors were actually more focused on the economical side of the robotaxi. people are really interested in figuring out when would be a good time for the robotaxi to be actually launched, scaled and deployed. and be profitable. so, i think -- the good news is that people really believe that zero to one has already finished and now is the time for those companies to really go to the

large-scale commercialization. caroline: -- >> what does that look like, exactly, james? right now you are operational in four of the tier one cities, but what does it look like over the coming years? i know you will continue to focus efforts primarily in china, but tell us about the competitive pressures that you face as well. >> yes, especially if you are talking about the next two years, our main focus will be on the tier one cities in china. actually, just, just this year we also signed a deal with beijing auto to mass-produce autonomous driving vehicles. meaning in the next two years we will have at least three models coming out of the assembly line to be launched into the u.s. cities and in china -- into the tier one cities in china.

with the full support of the regulations and the residents, they get more familiar with our services, i think we will have a much larger fleet, we will have bigger coverage, and hopefully we will be able to actually have a much larger scale commercialization. caroline: james peng, ceo of pony ai, recently listed in the united states. or at least from where i sit in london. interesting how they dovetail the u.s. china future relationship with technological innovation. let's talk exactly that. geopolitics -- geopolitics and innovation in 2020 five. joining us now is the senior director of their technology program, linzie gorman, who had served in the obama white house -- the biden white house working democracy issues. this is exactly the sort of conversation we need to be pushing forward.

going to china u.s., i'm all eyes on not january 20, but january 19. tiktok, will we indeed see a band on tiktok? it's in the hands of the supreme court at the moment. push us forward for a moment. >> absolutely. this tiktok test will be a real litmus test of how the next administration is going to handle these geopolitical issues around china and technology competition. this is an era where the u.s., china, and europe are all racing to develop and lead in the next generation of technologies. ai, quantum, bio. they've decided that these technologies are going to determine the future of who leads world affairs. we have an incoming administration facing really their first test on the question of tiktok. now, congress passed a law with overwhelming bipartisan support to require tiktok to divest from

its parent company, which is based in china, or face a de facto ban in the united states. that deadline, as you mentioned, is january 19. if tiktok doesn't find a new owner by the 19th, in effect the law that the president signed that received all of this support on capitol hill says that the app stores are no longer allowed to carry tiktok. now, there have been so many legal disputes and attempts to ban it in the past, this is the first piece of legislation that has stood up to a court challenge just in the last month. now tiktok is taking that challenge to the supreme court. as you mentioned, that will be in early january. even if the law survives that challenge, though, there's this question of what the incoming trump administration will do. on the campaign trail he said he would save tiktok. this is also the former president who was trying to ban

it himself in his first administration. i think we don't really know what's going to happen on january 19, but also january 20, if the incoming president decides he doesn't want to enforce the law. will tiktok be banned? paul: let's step back to think about what a trump presidency could mean. in terms of technology and policy writ large, i have to ask you about elon musk. i would think that if there is one area where he would like to have some influence, it would be and technology policy. how do you game it out? >> absolutely. we don't have to do too much scenario planning, we are already seeing it in action. everything is pointing to deregulation. trump said he wants to focus on ai, consistent with the biden administration approach, but crypto will be back in town. in d.c., trump said he wants to

make the u.s. the crypto capital of the planet. that will get more boost in addition to ai. and this question of elon musk, the borough in chief, whatever you want to call it, we have already seen his influence just by virtue of elon musk's posting on x earlier this month, we are led almost directly to a government shutdown over how the government would be funded. congress had a bill to fund the government. elon started posting on x and it almost lead to a shutdown. it's really important is they eventually got a deal but in that deal one of the provisions that was stripped out of the original spending bill that congress was going to pass related specifically to technology investments in china. there was a provision in the original bill that said -- let's place some restrictions on american investors in these really high tech industries of ai, quantum, semiconductor's

fueling future competitiveness. as we know, elon musk and a number of other business executives have ties to china. that's something that's difficult to disentangle and the u.s. is going through it now. this supranational tech billionaire having this outsized political influence raises questions and conflicts when it comes to u.s. national security interests and how competitiveness plays into that. caroline: speaking to the future of generative ai and regulations there, it's murky to perhaps understaffed -- understand what side must will come down on. we know he's busy taking legal action against openai -- openai, he doesn't want them to change the for-profit structure. we also know that he is someone who has been speaking out about the pace of generative ai and what it means for the future of humanity if it isn't regulated.

but he's also got x ai that he's trying to grow at full throttle. where does he come out thinking about his view on generative ai in the future of regulation there? >> day today it so hard to figure out, truly -- it truly is. we've seen openai developments in the last month. google put forward the gemini 2.0 model. the race is really on. as you mentioned, elon musk himself has a platform that's coming out now. there are ai image generators based on that. i think the name of the game, though, will be innovation at all costs. no one really wants to slow the pace of innovation such that the united states wouldn't lead in it. but really where the debate will be is are there going to be guardrails? or are the guardrails going to be there too little, too late. the u.s. ai safety institute

established by the ai executive order is now reviewing these models. they have had their first review , a technical review of openai and its 01 model and is it actually doing what it says it's going to do? if you use these models and systems in large-scale consequential decisions like loans in the financial market or medical devices, medical inputs in our health care system, you don't want to get this wrong. right now as we know, ai hallucinates. it gets a lot wrong. it's not always right all the time. that's where a lot of the regulatory conversation is. so the question really is guardrails are no guardrails. we have a lot of parties who want to run ahead. paul: 30 seconds, is there any way to avoid a technology cold war between china and the u.s.? >> i don't think it's a cold war, we are very connected with

china in a way we never were with russia. but i would say it's not only the u.s. making the decisions here and china itself has tried to push for its own supremacy as well. caroline: lindsay, so good having you. we appreciate your insights. pushing towards 2025 and looking at tech right now, it's under pressure in the markets. 1.4 percent lower. 1.9% if you look at the nasdaq 100. in large part this is one of the biggest sales we've seen in nvidia since the 25th of november up with some profit taking on those standout names. paul: higher volume on the nasdaq always catches your attention when we see that lower volume here. again, the s&p, it's led by the big tech names that let you on the way up when you think about the amazons and microsoft's of the world. this is a day when they are leading you down.

staying on top of that, the vix, calling it out for tom keene, up 3.17.7. coming up, we are talking holiday bach's office with the editorial director at the vox office company. pretty solid thanksgiving bach's office, rolling into what i think most theater operators will tell you is a pretty good holiday season bach's office as well. where are we relative to pre-pandemic levels? that's coming up. ♪

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it can be tuned to do just what you need. because the more ai knows about your world the more it can help you do. ibm. let's create. caroline: welcome back to "bloomberg markets." we are having a simulcast as we are between the joyous times of festive holidays ahead of the new year. paul sweeney in new york, caroline hyde in london, and a market that isn't looking to pretty. we are looking at the nasdaq 100 and the benchmark already off by 2% with volumes higher for that

tech focus benchmark. thinner volumes were off by one third compared to the last 20 trading days. big names on the diet -- on the downside, it's the magnificent seven. nvidia, tesla, apple, amazon, all moving lower with money moving out of bonds. there's no particularly safe area today. the worst day for nvidia since november 25. sentiment is clearly feeling nervous. heading towards the close of play in europe, it did manage to trade a bit higher, paul. paul: very interesting to see that, you guys are doing better over there after the boxing day. let's go to one of the big big businesses out there at this time of year, the movie business. when you think about the movie business, summer is a big part of that season. but the second big driver is the holiday season we are in right now. joining us now is daniel, the

editorial director of the vox office company, they do data and analytics on the global film industry. dan, thanks for joining us. how has the 2024 bach's office been in north america? >> it's been a recovery year. coming into the year we expected a downturn because of the actors and writers strikes of 2023, right? but in june we saw a rally. we had expected a 10% slide. by now we are expecting to finish the year within 5%, year-over-year, so a big recovery. caroline: there has been something for everyone of late. gladiator to, wicked, the kids with milana. where have been the sweet spots? >> disney is that one word. man, is a great to have them back. this is the first year since 2019 that disney returned $2 billion in the domestic bach's

office and it's their first year really we have seen them make the most out of that acquisition of 20th century fox a couple of years back. remember, we didn't know what was going to happen with that. the avatar movie's work a guarantee but this year we saw franchises revived like planet of the apes and alien, getting them back on the map. you had marble with deadpool green and walt disney studios animation as well as pixar, bringing huge recoveries that they hadn't seen since the pandemic. paul: you mentioned to the writers strike, the actors strike. i'm hearing that 2025 and 2026 will be full production years in really big for the movie business. what's your expectation? >> new benchmarks in the post-pandemic era. we are expecting the best post-pandemic bach's office in the coming year. right now we are forecasting between 9.3 billion dollars in

$9.7 billion domestically. 9.5 billion if you wanted to ask me for a sweet spot. that is coming from our forecast analyst experts in the industry who are giving us there insights as to where things are going in 25. caroline: let's talk a bit about the narratives within the companies themselves. as you said, the vox office was difficult and we are seeing a restructuring that continues to be difficult, like paramount, it's all about the hollywood bach's office. where will we see m&a and refocusing? >> the key word is spinoffs. we are seeing that with all of these legacy businesses. warner bros. discovery looking at how to spin off cable companies. comcast i know is looking at something similar. in terms of how it impacts theatrical or the vox office, i don't see an obvious answer, yet. it's a market on the rise.

granted, it took a big hit during pandemic, but looking at where cable television is right now, that's a market on the decline so the first point will be the upcoming cable apocalypse hitting the media next year. paul: talk to us about china as a market for u.s. films. for five years ago it was the growth driver, almost as big as the north american bach's office . you couldn't get a franchise film green lit unless you knew it would play in china. is that still the case with this cold war growing over the last several years between the u.s. and china? >> 10 years ago in my first appearance here, you asked me that very question and my answer then was that it was crucial in vital, right? that has changed significantly over the last 10 years. it's a lot harder making sure that china is a consistent player when it comes to release dates. forget bach's office returns,

just simple release dates. i think it's more of a high potential play rather than something you can depend on an right now where the market is, we need dependency. paul: what about the talent? and the dependency they are seeing evermore so on technology? many took to the strike action because of a concern about generative ai, one's likeness in the future. how is that shaping? >> that's a great question. right now it's a labor question but we are not to the point where it is a creative question yet. as soon as we can figure out how the labor unions can embrace it, live with it, or coexist with it, that is when we will be able to see how it looks creatively. i have said this before, right now ai is a potential but not a reality in hollywood. paul: north american bach's office, where are we versus the

pre-pandemic levels? that was the peak year. 20/20 was a very tough year, obviously, no rebuilding. when do you think we will get back to that peak? >> that 2019 bach's office in those later years were a benchmark of 11 billion, domestically. i don't think we will get there until 2027 at the earliest. next year i think we are looking at 9.5 billion. the 10 billion benchmark will come in 26. 20 seven, once we have a couple of years of full slates from these studios -- as you mentioned earlier, it's the first time since 2019 where hollywood has had an uninterrupted year of production. now that these movies are coming out and hitting theaters, we have to wait until 27, i think, to get to the pre-pandemic level. caroline: are they all hitting theaters? how will we see netflix or streamers decide to bring things out? amazon made a u-turn on one of their key festive movies and it

looked like it worked to bring it to the theaters. >> i think it's case-by-case when we talk about the streamers . i don't expect netflix to embrace theatrical anytime soon. apple is still hot and cold on their strategy. we will see how that tests with the release of f1 next summer. but then you have something like amazon mgm, which went forward with a release of "red one" in theaters, leading into a very profitable streaming run for that title. they have some really, really interesting smaller movies in theaters right now, like "the fire inside," a biopic on a boxer, and my favorite of the year, nickel boys. it really depends on the company strategy, but it is definitely still evolving. paul: 30 seconds left. the billion dollar bach's office is still out there, isn't it. you can still do boffo numbers,

as variety would say? >> three of the seven highest grossing movies of all time came out after pandemic. so, on an individual title sis, if the movie is there, the public will follow it to the theaters. caroline: daniel, so great catching up with you. what was your favorite movie again? >> "nickel boys," from amazon mgm, great drama, highly recommended. caroline: go watch it. daniel, at the vox office company, with all the data and analytics around the film industry. appreciate his editorial there. a quick check on the markets once again, as we are talking the movie business, amazon is doing well, but from a stock perspective, not so good. we are off by 1.8% with volumes surging compared to the last 20 trading days. the 10-year yield is flat.

as we head towards the close here in europe, we are calling on gains. not so much in the u.k. where we are basically flat, but we did see .6% of again on the euro stoxx 50 closing up that day of trade. from new york and london, we will have plenty more when it comes to these markets and what you should expect for 2025. this is bloomberg. ♪ to go further, you need to be ready for what's down the road. as energy demand continues to rise, we're harnessing breakthrough innovations to increase production in the u.s. gulf of mexico. our latest deepwater development, anchor, produces previously inaccessible oil and natural gas,

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paul: all right, good morning. we are here. i'm paul sweeney in new york city. caroline hyde, in london. we are simulcasting on radio and television, how about that? market selloffs this morning, the s&p is off of its low. the nasdaq is off 1.7% here today. the 10 year treasuries yielding 4.58% on the commodity front and oil is up slightly, $70.40 per barrel. bitcoin is off, if you are all covered here. so, electronic trading, these platforms are taking a bigger and bigger share of trading activity across a whole range of assets and classes.

our next guest is in that game. interactive brokers, we had some tape of thomas perley speaking with bloomberg earlier. let's take a listen. >> i'm afraid the markets are becoming overextended and that, you know, sometime in the future we will have a downturn in the markets. but i don't think it's going to be a very violent -- it won't go very far. so, i'm extremely optimistic about the next four years, maybe even after. >> the other thing where they are expecting lighter regulation is in the world of cryptocurrency. how do you feel about cryptocurrency from where you stand? when your clients go to interactive brokers, do you think they will be asking about it more and more? >> cryptocurrencies are an 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, on balance, i think our platform is probably the most efficient one for a crypto trader. otherwise, i am, to tell you frankly, i'm sort of scared of crypto. you know, they can go to any price because it's basically just a figment of imagination. [laughter] so, it doesn't have any, any, any underlying value. the only value it has is the same as the paper dollar, which

is nothing. >> you seen people coming through etf to get to the price of bitcoin at 100,000. will the investor of tomorrow be more likely to purchase bitcoin or u.s. stock? >> well, that depends. for bitcoin, you can buy u.s. stocks, right? for a u.s. stock, it's more difficult to purchase bitcoin. so, i think that anybody who does not have bitcoin should have some, but not too much. i would recommend that people put maybe 2% to 3% of their efforts into bitcoin. we, for example, will not allow anyone to invest more than 10% of their assets into bitcoin. because i think that would be very dangerous.

caroline: let's keep this conversation going and think about how, well, the maturation of the crypto ecosystem is being built into options trading. we have the perfect guests for that, stephen sykes, ceo at public. offering stocks, etf's, options and crypto. options on crypto. i'm going there, first. what's 2025 going to look like in terms of the ability for retail and institutional players to see this institutionalization continue? >> thank you for having me and it's tough to follow a legend like thomas there, even in a clip. as we think about crypto for 2000 25, it's going to be a continuation of what we saw postelection. retail investors coming to the market with a lot of heart to buy the assets and looking at

those opportunities over the next four years with greater deregulation. there are a lot of questions and thomas raised some reasonable ones. what are the valid use cases of crypto and how does it accrue to the platform? there is reasonable optimism that those cases will emerge. one that we point too often in this space is the continued growth of stablecoins as a payment mechanism. people are now like ok, stablecoins will grow overall as an investment theme. what does it mean for these investable tokens, right? usdc, but the thought is that it's pegged to the dollar. the answer comes in the first layer of the platforms they are issued on an that manage those transaction volumes. polygon, solana, each of those platforms and the core tokens have a derivative benefit from the increase in stablecoin

adoption. there is this question about the reasonable use cases and the intrinsic value, but on the retail market we are seeing a heart for those assets having a reasonable benefit from deregulation over the next four years. paul: we just heard from one of your competitors, thomas. how do you guys compete against the interactive brokers of the world and the other electronic platforms? what's your pitch? >> similar to interactive, we have a wide variety of asset classes. equities, crypto, options, a full sweet of fixed income offerings. basically making us a one-stop shop for sophisticated people who want to invest. the distinction between investing on public or interactive brokers group sound to we survey sophisticated clientele. professionals in their daily lives who want to be serious

about investing, but they may not be sophisticated traders. we really do focus on a sort of more narrow active trader, highly sophisticated type. while we do serve many of those clients with our wonderful value proposition on things like trading options, we are the only platform that offers a rebate on every trade it can't fight -- contract, but we do see that volume coming and we focus on a broader spectrum of the population. folks that are sophisticated and professional in their daily lives and what they platform that can meet them on their terms while recognizing it is there full-time job. >> i've had the good fortune of speaking to the ceo and offering more to those sophisticated clients, but the backlash of prior years was often about financial literacy, like

gamestop, a celebration rather than a realization. thinking about the rise of leveraged bets on micro examples , that has occurred in big ways this year. how do you get that narrative across without being patronizing but also without dumbing it down for this sophisticated group of investors that this is what you are buying and here's the potential for loss and winning? >> two mechanisms. one, recognizing that we are a self-directed platform. if this includes microstrategy and the various derivatives that leverage it on top, that's our job, to provide what our clients come and ask for. we want to make sure there is sufficient context in the user interface as they are going through their daily motions to try to trade these assets and that they can find all the information about them, right? every bit of fundamental information including the alternative data. for microstrategy, for instance, we have all the data available

around the current premium, how much it holds, making it available for investors as they go through and they can learn by doing in their daily mechanism. the second thing that is really growing in our use case is making sure customers have all the information available to them through the use of ai. we talk a lot about these critical use cases for large language models and one of the critical ones that we found was that, gathering all of that information available to a retail investor, which never had more great content available then we do today. but the volume is getting to a place where it's overwhelming for people who aren't professionals, like i said. summarizing that into a single bite sized nugget of why this asset is moving and what explains the changes over time is incredibly valuable to those folks. that first layer of alpha, the ai generated content that

explains why an asset is moving is super helpful and we do give them the opportunity to interact in a chat-based interface to dive a level deeper. the comparison that i make a lot is for the professional investor market, folks show up, they look at their portfolio, where they go to find out why their assets are moving in a particular way? the terminal, right? that's not accessible to the retail market. how do we help the retail market get that same kind of strength of having a terminal in front of them? we synthesize that information into a simple interface. paul: two great years in the equity market place. and in both years, what are your clients telling you about the 2025 outlook? are you seeing it in conversations and trading flows? >> postelection, activity has been ripping. retail has come back in a very

strong way. most of 24 was a significantly strong year. postelection it has hit a new fevered level and has been sustained, i think, right? having done this for 10 years now, the spikes and flows that we saw after the election, it's always we are going to revert and come back down to earth, but that is not what we have seen. we have seen continued, sustained high volumes of dollars in the market. and it has been a barbell. it hasn't just been on the highly speculative and. with long rates rising, the 10-year was almost at .46 over the last four weeks. there's been a lot of retail investors investing in longer duration fixed income assets. take advantage of that corporate bond yield available at the low end of the investment grade, high end of high yield. paul: seven-month highs for

those euros at the moment. certainly attractive. to that end, what are your clients asking you for? it's interesting, we started off the show by talking about the impact of passive investment in the market. how do you see people wanting to change execution methods in the options around how they lever? >> as we said a few years ago, there was a barbell demand from the investors. better fixed income on one end, delivering those fractionally. that is something we built out over the last year that we focused on in the higher for longer rate environment. now i think we have the best fixed income bond trading platform for retail investors on the web. on the other end, it was very options focused and we saw a full demand for a sweet of options trading.

looking forward into the next year, one of the places where we have to build out is the extended overnight hours. volumes are so muted, but as we see many of our competitors adopt that part of the plate -- platform, there is more demand across the market for that and that is something we are looking at next year. lastly, continued investment in ai futures to bring all of that content into a synthesized, summarized form for retail investors. paul: stephen sykes, thank you for joining us. the cup -- the company is the public online trading platform and that rounds out that segment about online trading platforms taking bigger shares with more investors. quick check on the market, s&p trading down 17 points. nasdaq is off 1.8%.

going over to the yield space, the 10 year treasury is pretty flat, 45 -- 4.58% in the 10 year. crude oil is up a little over 1%. bitcoin, call out for tom keene and his creation café. coming up, uniting the rules of chess and finance. yes, we are going to do that. we speak with a five-time world chess champion, coming up. ♪

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driven by the magnificent seven. apple, tesla, amazon, all in the red. in the green, not many. consumer names like pepsi, mondelez. keep a close eye on the stocks that manage to be in the green amid the general selloff. 10-year yield is flat, amid a seven month high new york crude is up 1.8%. paul? paul: thank you so much, we appreciate that. this will be fun, for the first time north america is hosting the procedures world chess championships in the heart of new york city in the wall street district, including a special wall street gambit uniting chess and finance. joining us now to discuss is there deputy president, a five-time world chess champion. wow, thank you for joining us here. talk to us about why you are in new york and about this tournament. how important is it in how

important is it to have it in america? >> historically, the classical world chess championship, the longtime six or seven hour format is the most important and remains so. but over the last few years we have started to work on the rapid and blitz format. 15 seconds 10 sec -- 15 seconds per game per player, much faster. and then the blitz. three seconds per game per player. highly sped up. you can imagine it produces a lot of excitement. it's very fast-paced. you can actually sit there and -- go ohh. second, we have the candidate tournament for the classical championship in toronto in april of this year. we were very excited to have a second important event in the americas. within one year.

you know, it's a part of something we are trying to do. you know, there's been a lot of excitement about the u.s. in chess. previously, queens gambit was the thing that kind of triggered it. paul: which was great. i've got to ask you, as a chess person, was it a good representation of the sport in the people in the game? >> yes, i have only one or two quibbles. the rest was very authentic. you could easily see yourself there. it was very well done. caroline: let's talk, though, about women versus men. there's a women's chess spotlight i understand. how are we seeing demographics playing out in the world of chess right now? >> it's becoming a global sport. one of the things that has happened is technology has managed to make it a truly global sport.

earlier, if you lived in a country without a lot of chess players, chances are you wouldn't know how to get into the game. now the problem is being solved. you can watch a game no matter where you are. livestream broadcasts, you can follow it in multiple platforms and it's becoming ever more global. i don't member the exact number but it's a large number of nationalities. many participants coming together. i should say, it's the open section and the women's section. the women can play in the open section, but not the other way around. the thing is, there is still a gap, but more and more women are starting to beat grandmasters. the gap is narrowing. there has always been a gap, but it's narrowing. we hope that this will trigger more and more women coming to participate in the game as well, because it is quite easy to. >> this event in new york city,

you got some serious players here. tell us about it. in addition to yourself. >> i'm not actually participating. i came here over the last year for duties. but we have almost everyone in the top 20 or top 30 except for two or three. it's the strongest ever addition. in all in history, this one has the highest average rating. highest average, you know, historical record, all of that, performance i should say. you know, it's fantastic that we are able to host on wall street, a very good location. which segues into our theme of having this conference. the wall street gambit. talking about chess and finance. again, there's a lot of similarities between the two and there have been a lot of crossovers. a lot of former chess players

were from finance or entered finance and went on to be very successful. at one point they were hiring chess players in companies for that reason. the other thing is, i would say that with all the technological development, ai and everything, when of the biggest connections i see is that chess has been ahead of the curve. we -- from the finance perspective, chess is slightly to the future of where china ants is going with ai, what happens when ai becomes very good at what you do? because chess is a game of, you know, is finite. 64 squares. it's finite. the computers were able to solve it. not solve it but get better than humans much faster. as a result, learning how to interpret that information has become a key skill for us.

big finance may be much more complex and may not be reduced like this, but again, as computers get better and better in different areas, our experience might be relevant there. caroline: i'm interested, many would say, and on the program before we have spoken to jenny just about how you educate people around poker playing, women, understanding risk and probability and ultimately reading people. with professional poker comes money. with wall street comes money. what are the prizes you are having to offer in the world of chess to bring about more and more people at this intersection between wall street, chess, and wanting to tempt to those who are more financially motivated? >> yes, prizes and chess have been growing. as the popularity of the sport grows and broadcast audiences are larger than ever before. the money is increasing. there is a record prize fund for

these championships. more than a million dollars. but you know, we have to keep expanding and getting along. that's clear. this is a part of our -- it's a very important event for us, we get an incredible number of spectators and it is the second most-watched after the will championships. that's why it's so important as we put more and more people in and attract more sponsors. >> the wall street gambit has some wall street players in it, right? who is playing? >> famous people from the world of finance. all former serious chess players . we are trying to play on that connection. paul: how do people watch this? is it streaming somewhere? >> there will be a stream. you can also attend the conference. paul: which is being held where?

>> downtown, i don't have the -- but it's basically in the middle. paul: and you can check out the stream as well. excellent, really interesting stuff there. five-time world champion and chess champion joining me in studio. there event will be down here in lower manhattan over the next several days. that's a good thing. caroline hyde, markets or maybe a little bit accelerated there? caroline: feels like we got some risk aversion, sin liquidity, people taking their bets off the table, trying to do a chess analogy. session lows at the moment, the magnificent seven are being sold the hardest. >> absolutely. but we haven't had this calendar

year is a selloff north of 20%. we haven't really had that. we had 8% several months ago but haven't had that 10% plus that a lot of strategists will say is healthy for longer-term bull markets. we haven't had many drawdowns, as the kids say. >> nvidia hit technical correction a week or so ago. but putting it into perspective, these are companies in stocks top 100, 180, over the course of the year. paul: all right, caroline. that was good fun here today. enjoy the weekend, everyone. we'll be back, i will certainly be back, next week. this is bloomberg. good morning. ♪

announcer: this is "balance of power." live from washington, d.c. joe: from bloomberg's washington studios to