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>> we are off our lows, the s&p 500 down 1.2%. a few elements higher. it is even extending to the russell 2000 which is down 1.7 5%. much of this is to blame on the sox index. right now we do have two elements higher but just barely. really all of the rest of the components to that index are lower. sonali: take a look across assets. you are seeing volatility higher, which is what you would expect. yes, every major index down 1% or more. volatility of just under a 17 handle. low, relative to the highs that we have seen this year. we are looking at crude oil here

up about 1.4%. also taking a look at bitcoin. we are seeing volatility this week as well. bitcoin still hovering well below that 100,000 level standing at around 94. looking at treasuries. fascinating moves there as well. while they seem muted, you are seeing the 10 year back above 460. you are seeing it almost three basis points higher. the two-year is one basis point lower. the longer end of the yield curve has seen yields rising. an interesting way to end the year. higher for longer rates impacting the equity market now. >>, there are some individual movers to the upside.

it is up about 4%. putting forward a director now for that board of directors. for the most part what you are seeing is red on the screen for all of the names we were dependent on all year. tesla lower, nvidia lower, all of the trump associated names. sonali: possibly some profit-taking at the year-end. that santa claus rally we saw is now over. we will now bring in alex of bloomberg news. it is interesting to see this text selloff today. if you take a look for example at what we have seen over a data track he says the levels we are standing at now, 38 times price range ratio, that historically leads to a poor 20 year return.

he thinks this time is different , partially because of tech. how convinced are investors that this time is different when you start to see some real volatility in those tech names driving down the broader indexes? alex: right now it is certainly different from any time in history. consistent, we had goldman sachs saying we will see annualized returns of 3% over the next 10 years because if you are looking at valuations alone there is not much more room to grow. this time is different because we have the potential of artificial intelligence driving stocks higher. had a question with julian emanuel, he thinks the s&p 500 could go to 6600. this time is not like any other time. when you look at these companies posting outsized profits that are spending on technology.

we will see them monetize on that next year as well. if you go back to years the s&p was trading at 17 times earnings. here you are two years later. we have 60% run in that index driven by these tech companies that people thought a while ago would stop seeing gains. vonnie: it seems to be difficult to be a bear on the street. the only one that i could find that was lower was steve -- alex: the only contrarian at this point. even the naysayers are expecting further upside in the index. jp morgan stuck with 4200 even as some of its peers were raising their targets. i had a conversation with their chief market strategist. he said there are three puts in

place, the china put, stimulus out of that nation, the fed put with jerome powell expecting to ease monetary policy. those things should drive this risk on sentiment and equities into 2025 after two straight years of return of more than 20%. sonali: another set of commentary i was looking at was you can't blame it on interest rates that were largely flat this morning though clearly elevated. he notes also that apple didn't make it to the $4 trillion level. apple today got new record highs. what does it mean? you have more and more investors pointing out the dominance of tech, that vulnerability that the index has two big tech. pointing out that it is almost a diversification at this point to

have that much of your index weighted to a sector. does that yield more volatility ahead? how could you expect your broader index to? alex: we are seeing some of the perils of that today. some of the names that have done so well. they will be sold once they are out of broader selling pressure. we have seen the index do well even as concentration risk has been discussed. valuations aren't necessarily -- they become a problem. it hasn't really impacted the indexes. vonnie: thank you so much. she will be back with us in the next hour. we are joined by tom martin, portfolio manager. thank you for joining. he says there is no reason to panic, earnings season kicks off on january 15. what do you think?

tom: thanks for having me on your program. you shouldn't read too much into what happens in december. as you pointed out earlier the volumes are so wide. you have to look forward to the next year. what is a little unusual so far this year because we had two years of gains, it is hard to find losses in investors portfolios. you want to make a change in your portfolio or change your perdition -- position, maybe not sell out of them completely but reduce your exposure and go elsewhere. by and large, that is not a great thing to do at the end of the year. we might be in for a little bit, not so much the positive january effect at the start of the year, who knows how january will end up. all of the positive fundamentals

that you factored in for tech and the broadening of that with other sectors of the market are hard to argue. it is hard to find a bear. sonali: i want to point out this note from big tech about bloomberg intelligence. you still have our analysts finding that 30% earnings growth for the sector is estimated for next year. it has been trading closer to 40% growth expectations. you could argue it is already overvalued. tom: you could make that argument as a whole. when you look at the value of the market relative to gross domestic income, it is two times gross domestic income. it is at a very high level. it is also very near those

levels. you are not finding a lot of ownership of stocks. you have some vulnerability on that basis alone. vonnie: what do you see in terms of inflows and outflows, do you think they will continue? tom: it is doubtful over the longer-term. we have seen a surge in the 50 day, the highs as they flow into etf's. investors experience fomo seeing the market up 28%, 38% on the russell 1000. we would like to be able to participate in that. people are hopefully positioning for a little bit longer term than just a short trade expecting they will get some turnout in the market. sonali: you also have to watch

how that bond market is the 10 year yield is above 461 again. at what point do you start to think the market is telling you something here? that you might see fewer rate cuts next year? tom: that's exactly right. the key is the 10 year and the yield on that. we have been closer to 5% in the not too distant past, we have been accustomed to rates at 4% and below that. with inflation expected to be tame and not worrying about the debt level of the u.s. government, we've had a change in the administration coming in, there is things we would expect to happen or we know are going to happen. inflation has not come down and the fed has really backed off on their rate path as has the

future expectation. getting up above that four point 5% level and moving towards 5% is a little scary. usually it will be a lot worse for longer duration assets. we've had a few of those days. this is a cell long-duration. they haven't lasted long. we come back to those same winters in the market. sonali: how do small caps perform in an environment where you have the 10 year at 4.6%? tom: a lot of the issue for small caps is refinancing risk and exposure to one product or one market. they are a lot more exposed to volatility, something specific going on. that is why the small caps rally has not sustained itself. we have seen several attempts earlier this year. they cute continuing to

underperform. you will have to have a substantial reduction in rates that looks a little bit more sustainable before you could get a sustainable rally in small caps. sonali: we thank you so much for your time. tom martin, senior portfolio manager at global investment. ai stock play of the year, probability remains elusive for companies that have made strides in technology. a closer look at challenges and shifting strategies of ai next. we will talk all about that trade and openai. vonnie: exactly, that is coming up next. back to what you were saying about the most recent note today, it is hard to be a bear out there. we saw levels like this where it should be at 38 for the s&p 500, that was 1999. first time around the s&p return

20.9 percent, the second time it was down 9%. sonali: the problem is the downside could be quite large if you have that risk reward. a lot of investors looking to that diversification trade. they have also paid off in the last couple years. bond markets are volatile. stick with us, we will talk more markets next. this is "bloomberg markets." this is bloomberg. ♪

sonali: welcome back to our bloomberg television radio audiences. i am sitting alongside vonnie quinn, we will talk now about ai . many ai related companies have seen stocks surge. the financial returns from ai are not yet understood. increasingly ai developers are finding models are not improving as fast as they used to.

therefore, profitability remains elusive. that is the topic of a new piece out from bloomberg originals. take a listen. >> it broke the internet overnight. >> new artificial intelligence tool is going viral. >> it is called chatgpt. >> it could answer questions and amend its own mistakes. >> they are really quickly gaining traction, you might ask it write a poem about unicorn. it might spit out something that sounds like something that was written by someone. that struck a chord with a lot of people and investors. >> tech companies and their investors have sunk billions of dollars into building ai systems with a bet that these tools will get more sophisticated and prove wildly profitable. >> there's this concept in ai that if you sort of keep feeding ai model more and more data,

more and more power, it will start to sort of teach itself and become smarter and smarter. >> progress seems to be getting a little bit for some of these companies. >> as expenses skyrocket, an industry known for moving fast and breaking stuff could be slowing down. >> it will get harder as i look at 2025. the low hanging fruit is gone. >> how do we make these models that are getting increasingly expensive worth that trade off? if you are not getting this incredible boost in performance, what do you do? >> chatgpt and ai systems like it work by using massive software programs using large language models. >> and ai system trained on data source from the internet. it could respond to written prompts with other amounts of text that sound like they were

written by a human. >> these models use an algorithm that process the parameters of any given prompt. this is how that unicorn poem comes to be. >> these models have been getting better, quickly. at least three of the top companies are having issues training their models to the level where they would like them to be. >> as we are spending more money the engineering and complexity of getting it right is increasing. that's why companies need to be larger, have more talent. >> it's hard to see if anyone is making money off ai right now. openai has quite a number of paying business customers, we don't know how that breaks down in terms of the exact number of companies that are paying for it or what kind of benefits companies are seeing. >> it's not all about the money, is it? openai for example was established as a nonprofit research company focused on

advancing ai for the benefit of humanity. of course, it plans on shifting to a for-profit model. the timeline is unclear. despite the wintry forecasts, the money keeps pouring in. >> they have plenty of money at the moment. it is not totally clear if companies are going to be using it long term. >> perhaps the most exciting thing for ai enthusiasts and the most horrifying for its detractors is the prospect of artificial general intelligence or agi. agi would be a system that could reason and think like a human. applying synthetic brain across disciplines. not just reacting to prompts with poems but accomplishing complex tasks independent of humans and maybe surpassing us. could we one day be working for them? >> no one agrees when we will

reach agi or what it will look like. a lot of people are predicting it could come quickly. you're seeing other people saying it could take decades, centuries, it could even never happen. some of the setbacks we are seeing give people a reason to reassess. vonnie: you could watch that peace online on the bloomberg originals youtube channel and on the terminal. let's continue this discussion. as we saw in that piece many ai companies saw stocks surge and it was founded as a research organization. now it is considering a restructure that would create a more conventional moneymaking corporation. for more, we are joined -- we heard a little bit about this in the piece causing friction earlier this year. what do we know about what the company is considering? >> we know that the company is

considering a shift to turn openai essentially into a for-profit public benefit entity and keep a nonprofit arm separately. the nonprofit would no longer control the for-profit as it does today. how is this widely being received? we know there are a camp of people that believe this is not why it was originally formed. why would it evolve now especially when it is such a potential future riches? shirin: what the company's board is saying is the reality is ai is capital. the company needs a lot more investment in order to grow. it's competitors have a less complicated structure and openai wants to continue to innovate, it essentially needs to simplify corporate structure and

therefore the argument for it, it does bring up questions about the original mission of openai and whether it will be able to do so with more conventional for-profit structure. vonnie: explain to me how you have for-profit and public benefit structures at the same time? i'm not saying there aren't for-profit companies that benefit the public but how do you intentionally have public benefit structure with for-profit, i don't understand? shirin: the idea is the public benefit company, one of openai's biggest competitors, anthropic has a corporate benefit structure. it is essentially a for-profit that still has do good or mission that is beneficial to society. now, that is different than a nonprofit. openai is saying it will keep a nonprofit and will pursue charitable interest in areas

like science or education. that nonprofit will own a significant amount of shares in the for-profit entity. that is how they are essentially trying to thread the needle between -- shirin: i definitely think that's a possibility in the future.

some investors would be hoping for when investing so much. sonali: thank you so much for your time. -- in san francisco, -- it sounds like a band name.

in chicago, northern virginia. you could find it on bloomberg terminal and on bloomberg.com. we are talking more about energy, we will talk about natural gas supplies on the chopping block. what will happen, we will break that down next, this is bloomberg.

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sonali: welcome back to our bluebird television and radio audiences. this is "bloomberg markets." i am sonali basak, alongside vonnie quinn. europe is about to lose a major chunk of its gas supplies. unless another arrangement can be made in the next four days -- further pressure on what has already been a tight market. for more we will go to our guest. what do you see playing out in the natural gas markets given the pressure you are seeing? >> we saw today european natural gas prices rose by almost 5%. keep in mind at the same time the story is different versus

how it looked a couple years ago. now, those flows via ukraine account for 5% of all demand for natural gas in europe. a couple years ago it was about 60%, if i'm not mistaken. never this is -- nevertheless, europe will have to rely on other. this creates a lot of opportunities for traders to play the game. when it comes to natural gas, the story is different around the world. here in the united states the story is completely different. here, demand is driven by weather. we see natural gas futures are moving lower. there is a big divergence in terms of how traders play gas

stocks versus oil stocks. vonnie: it is fascinating. when we got the data for natural gas this morning, a contract went negative in the u.s. because the trade is on a different dynamic than europe. is there any possibility in 2025 that anything that goes on in europe will impact the u.s. supplies? natalia: the story is so complicated when it comes to natural gas. on the one hand there is demand from europe. in the u.s., there are other factors. some traders i spoke with said natural gas can become the next ai plate. there is more demand from data centers for traditional utilities. at the same time demand is so high that traditional utilities, some of them probably will not be able to meet that demand. that is where natural gas suppliers and the power supply

can come into play. more demand domestically and internationally. what we see in the stock market, it has been an interesting year. for the first time in many years natural gas stocks outperformed oil giants. when you look at stocks like eqt, it outperformed exxon mobil. it is also driven by fundamental factors. demand for natural gas, at the same time oil is so volatile, crude is down almost 7%. this is mainly driven by concerns in china where demand is low. the market is facing oversupply. the market will potentially see more than one million barrels of oversupply next year. opec is very cautious.

reducing the forecast for global oil demand. that is why we see traders are moving from oil stocks to natural gas stocks. sonali: it is a really interesting plate. energy as a sector has not performed as you think it would. it is something where you thought "drill, baby, drill" would be the big trade going to the trump administration but it is not playing out that way. natalia: in 2024, we saw a big spike in oil prices. energy stocks were upgraded at one point to buy during the first half of this year. we saw hedge funds play the trade really well. then we saw a concerns about chinese demand. it all comes down to china because china imports so much oil. we saw oil prices move down sharply.

as a result, energy stocks followed. that is why we see that. the slow down closer to the year end, that is what energy stocks are not doing well. probably in 2025, we will see a different story. sonali: it is barely up on the year. out of the top 20 stocks tracked by the s&p energy index, only nine are up. you see a lot of divergence, particularly those involved in m&a. the sector has not done well. vonnie: when you think about the trump trade, we need to be inaugurated before we know how that plays out and see who he gets confirmed and what kind of policies they will put into play. our thanks to bloomberg's natalia kniazhevich for joining us. highlighting the need for sustainable energy resources. joining us to discuss more on this is an expert at pa

consulting. what are you expecting from the next trump administration, given the "drill, baby, drill" rhetoric and the man already in place? tony: there is a lot of speculation about what will happen on january 20. most speculation seems to point to a rolling back of environmental policies. a number of technologies have already passed the tipping point, like wind and solar, and in a growing number of cases, nuclear, and those will continue to thrive. we know the real implications of plastic waste. second, do not forget these challenges represent huge opportunities for the entrepreneurs of organizations. reduced regulatory pressure should mean more investment in the private sector.

this will be led by clean technologies. the financial cost of climate change has been staggering in 2024. it is estimated it is a cost of $310 billion alone in 202 those who4 help solve these problems will be. sonali: saw -- let's call a significant selloff when it comes to solar after trump had won the election. what kind of evidence do you have solar can continue to be profitable and significant investment area as you move forward? you said it was reaching a tipping point. can it live on its own without a bigger set of support systems from the government? tony: innovation will always be critical to any new and

advancing technology. what we will see is material science as a theme over that includes biomaterials and material science related to solar, wind and nuclear. again, those are market opportunities. entrepreneurs are at the ready, looking at how might the intersection of science, engineering and design might help bring that opportunity to life and push this market forward. more companies are realizing we have a nendig thirst for energy. fossil fuel alone will not be able to support that. we will be mandated and pushed into other areas. vonnie: what about recycling? over the last 20 years i have seen huge efforts in america to start to recycle. it feels very far behind. where are we on recycling? tony: i think all of us would

say we wished we were further along. 2024 has seen a lot of changes, none of which we would like to see repeated. the issue posed by plastics and recycling is complex and will require a number of solutions. we think three key areas will be critical to solving the issue. first, the world has to lean into enhanced recycling practices. ai and supported by robotics. we have companies like waste management leaning into ai. leveraging robotics. second, advanced recycling methods are coming onto the scene in a much bigger way. in the u.s. we have companies leading the charge. finally, what we are most excited about at pa is a move away from plastics into alternative materials. that includes things like plant-based fibers. we tend to be excited about a

move into fiber itself. we would call it paperizations of entire industries. sonali: when you think about the paperization, how does this get done at scale? it sounds like a great idea to use seaweed but cannot be done at a rate to replace traditional systems? tony: those of us who managed to avoid being on the naughty list noticed more paper packaging replaced with what would have been a plastic tray, especially in consumer electronics. it is getting much harder for companies to access recycled plastic material. that cost is going up and access is difficult. they are realizing consumers are looking to move away from those materials, especially when they are not necessarily essential. the industry as a whole is seeing a huge surge in a

transition away from what would be described as a petroleum-based material to paper alternatives. we are experimenting to identify where paper can replace those materials. again, huge, huge innovation happening in the world of fiber. plant-based fiber, tree-based fiber. one thing we are excited about is something -- fiber. there is a push by consumers and corporations to look into those alternatives. vonnie: in the run to 2025 and beyond, who is more important -- the united nations or the trump atration? tony: great question. i would suggest we still operate in a global marketplace. of course the trump administration in the u.s. will be a significant component but the global marketplace will continue to drive. in europe and in january as a whole, we will see the new

administration take old but we will see the world economic forum happening, as well. in addition to that europe could traduce to innovate on the regulation side ahead of the u.s. they will be launching a plastic waste directive in late january 2025, rolling out for the next 18 months. i wish i could tell you the u.s. is leaning on the regulatory charge. we are not on a national level but you are seeing states take on that responsibility. sonali: speaking of the state level i want to recognize also that governor hogle in new york signed into law a way to penalize companies for greenhouse gas emissions. at the state level, do you think you will see more progress and will there be a bifurcation forming because of the rollback because of some of these esg measures under the next

administration? tony: it will be up 10 to most of the innovation we see happening in multiple industries. a handful of states will be early leaders. when those proved successful, you will see mass adoption. as the states continue to gain power they will need to make their own decisions. what ic typically happening is carbon footprint, greenhouse gas emissions will likely emerge as the definitive measure of sustainability efforts. on top of that the issue of plastic waste is so face forward that it will need to be addressed. sonali: tony, we thank you for your time. tony perrotta, economy expert at pa consulting. a very tense time in the world of esg. we are looking at a selloff. the santa claus rally has faded.

the s&p 500 below the 6000 level. we will be speaking next to michael reynolds from glenn mead. he will bring us his outlook for 2025. stick with us for the conversation next. this is bloomberg. ♪

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earlier this week we spoke to the ceo of a company that is helping retail brands target consumers using ai. michelle: our ai trains on what the brand's editorial point of view is so we can understand how the brand was to elevate your sense of style and we can do that it scale. showing every product, how to where it in all the different trends and things happening on tiktok. vonnie: some of your brands include gap, old navy, pac sun. you have a lot of retailers. are you saying you take their vision and have it style it self, or are you adding things to it? putting together customers' personal information with the brand style? michelle: it is a mix of all of the above and that is the holy grail. personalization was a big topic.

what ends up happening is if you just follow the pattern of what the customer buys, they never get better and they do not get more stylish. what the brand has is a unique aspirational view for how stylish you could be. that help to become a better customer for them because you come back and buy more frequently. we are helping brands editorial vision. you end up buying more frequently. we increase 8% a repeat purchase rate. in retail most customers visit a website once and never come back and it might not be profitable. sonali: when you are talking to brands, how do they navigate these forces? you were talking about, how do you know me so well? i am a total sucker for instagram shopping.

i do not mind being told what i like. usually i do. [laughter] they are finding you one way or another. if you think about how they navigate this social media atmosphere and how people are buying differently -- i grew up in new jersey. the country of malls. i cannot remember the last time i went there. how do you navigate the different ways people are buying online? michelle: people clamor to online, what inexpensive way, relatively, to having all this real estate. people are finding online is very expensive to operate. not just from a cost of hosting and infrastructure and engineering resources but customer acquisition cost is crazy high. meta and google are getting insane amounts of money from these brands and retailers to

acquire those customers. one thing we are helping these brands do is avoid having to pay a paid advertisement by getting in on the organic conversations on social by being on trend end of the moment so we capture your attention, target you. it is meaningful and you do not mind getting targeted that way, you are getting something helpful. at the same time not losing all this money to facebook and google because you are just part of the organic conversation on these social channels. vonnie: that was the ceo of findmine. if you got a gift you did not want this week you might want to return it and you would not be alone. 40% of consumers typically return one or more gifts. consumers join the post holiday rush to get their money back. marcus shen joins to tell us what returns mean for bottom lines and the measures stores are taking to protect

themselves. we have had a busy retail season. are we going into your busy season because in the next few weeks people will start returning some gifts? marcus: that is exactly how it works in our world. we see all of the rush with all of the purchasing that happens before the holidays. now people are starting to think about returning some of those things and that is where it starts to get busy on the return side of things. vonnie: how does it exactly work. retailers call you up and say we have a bunch of inventory were not putting back on our shelves? marcus: a lot of the partners we work with from a retail perspective have the operational discipline to figure how to manage excess inventory. things that come back from you and me, whether it is this what are the did not work, the size that did not fit, inventory comes back to them and they

basically list it on what we create, a stock market for inventory. business buyers can buy in bulk and resell it themselves to their consumers. sonali: what is the resale price relative to the prices you would have the first time around? marcus: it obviously depends on a host of things. consumer electronics for example is a category that sells really well from a pricing perspective relative to the original retail price. whereas fast fashion or apparel, some things like that, tends to be in a lower price relative to the retail cost. sonali: when you think about the types of items that are being returned, what are the most returned items that you see right after the holiday season? marcus: probably the most commonly return thing is anything you get from your mother. sonali: [laughter] marcus: for the most part but we

see is apparel. obviously apparel, whether the wrong size, color, style, that tends to happen a fair amount. we definitely see apparel. toys at this time of year is a big thing. vonnie: i saw tools on that list. i thought that was fascinating. you would think if they got something and they would want to keep it. may be i am giving away too much about myself. how do retailers give -- they are out of money if they have to give a refund. do they work out a deal with you on financing? marcus: from their perspective, it is critical for them to maximize the amount of money they get for this inventory. the market is relatively efficient. we will help them get a fair market price and traded in the market. again, for them, they are trying

to get everything they can get on the dollar that they are selling stuff for. sonali: this idea that 40% of people return one or more of their gifts, what does this mean for inventory levels for a lot of your clients? do they find they start the year with too much on hand? marcus: i think that with more and more of these retailers and brands, they are increasingly trying to get more consumer friendly from a business perspective. loyalty from a consumer perspective is so critical with business. whether it is keeping the broadest selection of inventory in their stores, the consumer friendly return policies, e-commerce and online shopping, they are trying to make it as convenient as possible. there is some of that were inventory levels have to be slightly higher. it is a natural byproduct of them growing their businesses.

vonnie: do you sell internationally? who are the biggest buyers for your inventory? marcus: as you can imagine there is a tremendous amount of demand for inventory overseas, typically american brands, western brands, consumer electronics, all of that has a tremendous market outside the u.s. where it is not as easy to get access to the inventory. we see a great deal of our product go to asia, middle east, parts of central europe, even developing countries in south america and africa. sonali: we have less than a minute left. i have been shopping online more, i tended to buy the wrong size more because of it. [laughter] do you find online shopping has made the return game that much more strong? how much more are people returning now that people are shopping online more? marcus: the magic of being able to buy something on your phone

or computer without seeing the goods firsthand has made its the return rates have gone up, particularly as more of us -- we are so accustomed to buying things online. we are seeing return rates go up a little bit. we think about it in terms of, what is best for the end consumer? if it is so easy for consumers to do it, it is helping businesses grow. sonali: marcus shen is the ceo of b-stock. a lot of people looking to return items after this holiday season. we have been down on all the major indices. santa claus rally has faded. volatility a little higher. michael reynolds will join us next. stay with us. this is bloomberg. ♪

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vonnie: welcome back to our special edition of "bloomberg markets." i am vonnie quinn alongside sonali basak. it would have been nice to finish in the green this week. almost the final week of the year but i am afraid we will not do it.

one hour of trading left and those indices will stay in the red. the nasdaq 100 down 1.3%. the russell 2000 down 1.4%. perhaps the worst performer, the philadelphia semi conductor index, down .8%. only three components are higher. all of the other elements are lower. sonali: you are seeing, if we flip up the board, the vix elevated just a bit. it was higher. it was closer to 18 this morning. now at a 16 handle. crude up 1.1%. off the lows of september but nowhere near the highs of this year. $70. bitcoin down 1.2%. well off the $100,000 mark. down to $94,500.

you are seeing the two short end of the curve roughly flat. once you look to the 10 year, i am feeling a little stunned. we were at 4.58%. we are now at 4.62%. about four basis points higher on the 10 year yield. even more so on the 30 year yield. 4.81%. vonnie: incredible to see where we are. as for individual stock movers, lamb weston is up 3.3%. one of the few good stories today. it depends on if you are a buyer or seller. that stock has seen a more than 10% increase this week. some of the stocks that were not beleaguered this year are beleaguered today.

nvidia down more than 2%. tesla down 5%. smci, which is not a turbulent year, trading down 3.8%, $32.47 a share. sonali: for now we will bring in alex of bloomberg news over. >> really hard to find anything trading higher today in the sea of red but a name i am watching is arena group. shares are up 1.4%. they significantly pared a bigger -- this is after the company was notified by the new york stock exchange the plan to regain compliance with listing standards was accepted. if it did not comply it would result in a delisting. that is what led to the move higher in shares.

there was also news yesterday the fitness website men's fitness is making a comeback. they relaunched under the arena group. a lot of news in that little company. vonnie: i missed that one. sonali: i did, as well. >> this is also the owner. sonali: formerly worked at bloomberg. looking at progeny. a stock that was down 54%. >> a nice move. a little under 16%. it is a fertility benefits -- according to a filing. as we know whenever a ceo -- executive is purchasing a stock, it is a testament to confidence. about 150,000 shares. $2.2 million.

shares are still down 60% this year. vonnie: talk to us about the mag 7, some of the worst performers today. >> the high flyers, the winners that have been leading the market, when there is a momentum trade, they are the ones that get the worst of the selloff. the move in treasury yields also pressuring the sector. the 10 year up 100 basis points in september as investors recalibrate expectations around interest rates. these technology companies, there is more uncertainty. what is worrying investors is the profit outlook. this group has been driving the market higher because of the profit engine. that is expected to slow to 18% for the so-called magnificent seven, compared to 34% earnings growth this year.

it comes down to challenging year-over-year comparisons vonnie: it sounds good. alexandra: when you are comparing to past performance and you look at the expectations , it is lower than what health is expected to post and not much higher than other sectors. not good for a group that has spent so much on artificial intelligence. sonali: even if you expected it to earn more next year, it is trading at 40%. today you are looking at a market trading already above expectations for those names. vonnie: this market can be unforgiving so the earnings better come in stellar or we could be in for hard landing spirit alexandra semenova will join us later. for more analysis we are joined by michael reynolds of glenmede, which manages almost $50 billion

in assets. do we get earnings growth? what will this market need? michael: thank you for having me on. looking ahead to next year, we will be cooling off some of the larger growth numbers with soft, particularly from the mag 7. the start of 2025 is shaping up to be small caps which are predicting to outpace its larger counterparts. investors are proactively asking, we know we have this strong result from the mag 7 but how do we improve? comps are getting more difficult to beat. on the small caps side you have more fair valuations. it is this dual tale when setting up investors for better results. vonnie: you are expecting the bull market to continue but would you want to rebalance the equities part of your portfolio?

michael: we have been actively recommending rebalancing to our clients. part of the market action we have seen is the rebalancing effect. maybe it is not too late for a christmas analogy. you get presents and sometimes they are not exactly what you wanted and you return them. investors are looking at a generous gift in terms of mag 7 performance over the last two years and thinking about giving that back and looking critically at their portfolios about where the value may live. it is important to get rebalancing in the books ahead of the year end because you want to get ahead of what we have seen today. that is what we have been recommending to our clients. sonali: a small herd forming. if you think about the rotation and believe small caps are a part of it, how do you play that? is it through the russell 2000 or the s&p 600? four in more idiosyncratic ways,

name by name? michael: we think there is a lot of value to active management and small caps. you can avoid lottery tickets stocks. think of your biotechnology stocks, where you are perhaps betting on some sort of breakthrough and it is binary -- it happens or it does not. other strategies have more profitability screens. you get the profitability screen to get into the index or more active management on top of that. there is plenty of opportunity in small cap and we think it is the pond it to be fishing and going forward. sonali: even if you believe it is true, how do you justify that with a deal at 4.6% and edging higher? michael: we are looking to the new administration and taking off a lot of priorities beneficial for small caps. small caps have smaller corporate tax rates. if we see more deductions like

r&d, capex, that could be a tailwind for small caps. less small-cap supply chains are dependent on foreign country's imports. they need the less sensitive's to tariffs. you put through all of the tailwinds from the new administration's and fair valuations, it seems to be stars are aligning for small caps. vonnie: you talk about the biotech stocks being lottery plays, they work out or they don't. at this point, is a i also that way? michael: we have seen a lot of these ai adjacent parts of the market where they deliver the hardware or electricity, doing very well. the next step of the ai wave is we need to see that deliver results from the ai technology, not just the companies trying to build the technology. there are lofty expectations built into valuations and a lot of these ai companies, it is a

high hurdle to hit. we look at the tech bubble of the late 1990's, the last time we have these lofty expectations. we are getting of the neighborhood. investors have to critically look when they are picking individual stocks as to whether or not those expectations are within the realm of possibility or if they are getting overly exuberant. sonali: you look at some of the targets for the s&p 500 next year and they are significant. we have barely broken 6000. we broke it earlier this year but we are not at that level anymore. there are a series of analysts who see the s&p surpassing 7000 next year. what do you think? michael: we are not really in the business of hitting explicit targets or pointing out explicit targets for the s&p 500 but we are two years into this bull market and history tells us time itself is not the enemy of the

bull market. we are looking through this at a multidimensional lens. we know that equities are a premium valuation. we have asked ourselves, two years into a bull market and you have those conditions, how long has it bull market typically lasted? usually it lasts typically another two to three years on average. unless we get some big surprise on the economic side, we expect to see continued gains. late stage expense and typically means more volatility. investors should be cautiously optimistic. vonnie: one about fixed income? corporate spreads are very tight , particularly high yield spreads. any opportunities? michael: most of the opportunities live particularly on the long end. we have seen interest rates going higher. we are looking very cautiously at corporate credit right now.

we are seeing spreads in some cases rivaling their all-time lows. we are arguing to investors that instead of picking up the nichols it perhaps -- picking up the nickels. sonali: we thank you so much for your time. that is michael reynolds, vice president of investment strategy at glenmede. coming up we will talk about how businesses across the globe are bracing for those trump tariffs. he has promised them through the campaign trail. a lot of uncertainty to how that will play out. you have seen him already put threats out there when it comes to canada and mexico. china is the big question mark. inventory is another big question mark among companies and how this might change things more permanently. vonnie: and whether what he says is a jumping off point and yields something for president-elect. he will not stop until he does

get something. and what other ripple effects could be seen. sonali: fascinated with what is happening in canada. you are seeing an entire shuffling of the political system after seeing the finance minister step down. you are seeing justin trudeau try to navigate his own tenure. stick with us. we have more markets up next. this is bloomberg. ♪

sonali: welcome back to our bloomberg television and radio audiences. i am sonali basak, alongside vonnie quinn. this is "bloomberg markets." trump proposed tariffs on foreign goods, including a 60% tariff on chinese goods the could take effect as soon as his first day in office.

we spoke about the potential impact of those tariffs. >> there are obviously the risk of potential tariffs back and forth between the u.s. and china. the other concern is the domestic chinese economy and the slumber it appears to be in. from our analysis, the heavy weight of the housing sector that has been a driver of chinese growth for so many years appears to be weighing down the chinese economy. and the struggles the chinese economy is facing. something i am watching a lot is what the policymakers in china do and can they get the chinese economy on a stronger, sustainable growth path, the housing bubble does not seem like a long-term strategy. what is china's growth strategy? potential tariffs between the u.s. and china is something to pay close attention to but i

think china's own domestic challenges are also notable. >> do you think that if china's economy -- we could see other asian economies get impacted, as well? >> certainly possible. china is a huge economy and a huge part of the global economy grows slowly it will have an imprint on everyone else. commodity markets would be one of the first places we would see that. whether it is for steel, iron ore or other metals or minerals. it matters a lot for the global economy. i also think many other asian economies are linked to economies around the world. i was looking at analysis on where the u.s. imports most of its goods. china dominated that 10 years ago. china shared exporting directly to the u.s. has fallen quite a

bit. countries like mexico and other southeastern asian countries have picked up the slack. i'm optimistic that other agentn economies -- other asian economies could continue to perform well because they are connected to europe and south america. china is so large that what happens in china matters to other people. vonnie: trump's tariffs threat has the potential to upend the whole global supply chain, leaving countries and companies to prepare for a host of possible disruptions. we break down the measures businesses are taking in anticipation of the trump administration. where is the biggest disruption most likely? >> definitely china is in the target zone for trump. what is also not to be ignored

is the fact trump has also threatened to mexico and canada, our two other biggest trading partners, with increased tariffs if they do not do enough to stop the inflow of fentanyl four illegal immigrants or other threats to the u.s. sonali: you can find a story on bloomberg.com and the bloomberg terminal. it is great. there is a wide range of products you discussed. everything from outdoor furniture made in china to european wines being imported at a faster rate to the u.s. to avoid tariff pressures they could see. where are you seeing the biggest potential effects in terms of goods that might be impacted? john: goods is all over the place. consumer goods, pieces supplied to u.s. manufacturers. definitely european wines will be more expensive.

they are worried about it. the company we spoke to in germany, they say they will sell their wine to scandinavia if the americans charge too much. patio furniture coming out of china. they are shipping it in advance. the expanded their factories. there are importers who are saying we have to watch out how much we are importing. for example, there is an earbud manufacturer in california. they want to beat the tariffs because their stuff is made in asia but at the same time they do not want to get too much inventory because the technology is rapidly changing. they do not want to get stuck with old stuff they cannot sell even though they got it at a lower price. everyone is trying to figure out ahead of time what to do. vonnie: it is so confusing. who is going to decide what exactly the tariff is on a

particular item if it crosses borders a few times? john: that gets really complicated. a lot of companies moved manufacturing from china to southeast asia, or to mexico in an attempt to evade u.s. sanctions, u.s. tariffs. now that u.s. is talking about, we will look at the content and see how much is made in china. there are so many unknowns. basically, trump has expressed a lot of ideas and he is not president yet. whatever he does, there will likely be litigation. the wto might have a way in. mexico and canada are kind of concerned and might want to weigh in. after trump was elected, justin trudeau went down to florida because he wanted to get on good

terms with trump. sonali: it is interesting. what this would lead to, you were saying if you are front running any potential tariffs that could be escalated into next year and you are shipping goods faster, seeing elevated activity at the ports, it feels like just yesterday we saw dockworkers striking. you are seeing a lot of issues around the ports in recent years in terms of labor. what does this mean moving forward, with the threat of a potential strike into inauguration? john: the east coast and gulfport workers delayed their strike until january 15 or january 16, so they could be back on the picket lines in a few weeks. that could explain weather has been so much throughput into west coast ports. people want to get ahead of that potential work stoppage. we have seen a lot of airfreight

increase. people are in freak out mode. they do not know what to do. they do not want to spend a bunch of money and see it not be beneficial. they also do not want to get caught off guard. everyone is trying to game plan this ahead. one advantage people have is they saw something similar happened when trump was president before and started putting tariffs on. at least they got that playbook to go back to. vonnie: yes, but there could be downsides to that, too. we know the u.s. consumer is not in terrible shape. there could be problems but for the most part they are holding up. what is the danger in anticipation of potential tariffs and no one knows what they will be or if they take hold, that the consumer sees higher prices anyway because manufacturers and supply chain companies are trying to get ahead of any potential increase. john: that could be an issue we

do not know yet. how much costs vendors are going to pass on to consumers. already people are unhappy with inflation. they have to be mindful of that. when trump was president before, inflation was not an issue. after the pandemic, inflation was a friend of mine issue for consumers. i do not know how much lawn furniture they will be selling for it costs a lot more. personally, i am not going out to restaurants that much anymore because dining out is expensive. there are unforeseen effects that can happen if prices go up. that is a high likelihood if you raise tariffs on imports. sonali: thank you so much for your time. all of your reporting -- remember this story also cites, according to a survey

respondents set a global trade war is a significant risk to the global economy. a lot of investors keeping an eye on how things go from here. before that, more markets ahead. we will check in with jess to see which stocks she is watching. we are a half-hour away from the close of the market. this is bloomberg. ♪

vonnie: you are watching a special tv and radio edition of "bloomberg markets." i am vonnie quinn, alongside sonali basak. it is the final friday of the year. we are in the red. we will not continue the santa claus rally until at least next week. 30 minutes left in the trading day and bloomberg's just meant in joins us to get a look at some stocks moving underneath the hood. jess: looking at where we are, the s&p 500 still up .5% and the nasdaq 100 up .6%. that would put the s&p 500 on track to snap a two-week losing streak. i like to use the mov functions to see what is moving. liam weston lw is the ticker symbol on this.

up almost 3%. the best performer in the s&p 500. the index is down more than 1%. potential director candidate as the activist investor continues to see changes. thinking about some issues the french fry supplier has had so far this year, your today at stock is down 38%. it is on pace for its worst and you will gain this year. it is among the best performers although we did see earlier this month the company ended up cutting its profit forecast and replacing it ceo. that is a bright spot. sonali: one stock is palantir. it has been a huge again are heading into this year, taking a breather today. any real reason why? jess: it just got added this month to the nasdaq 100.

the third worst performer right now in the s&p 500, down 3.7% right now. when looking at this, it is falling in sympathy with other big tech names and software companies we have seen. some gains going into the weekend. if you are thinking about -- that stock has gained more than 300% at a certain point. it is 360% year to date. . you are starting to see some investors take some profits. if looking at the multiples, the price to projected earnings is about 150 times. potential excuses for people to sell. vonnie: it will not be unhappy to see the end of the year, smci. it had a storied year. it is possible problems are behind it. jess: different i counte --

different accounting. related issues still up 13%. it got added to the s&p 500 in march. one of the most named stocks, close to up 1% compared to yesterday. getting a lot of chatter amongst the chipmakers. sonali: what about red cap holdings? jess: that is one of those companies that has a market cap below $1 billion. rcat is the ticker symbol for this company. down 10% today, on pace for its worst day since the fed day. if you look at this, it is a drone related stock. it has gained 1300% year to date. it has been on a tear this month

among a broader rally in that industry because of what is happening with the drone sidings across the northeast. it has been a significant rally this year. vonnie: they are not drones. has nobody told you yet? jess: [laughter] vonnie: carnival is another place people go to have fun. stock is down but it has had quite the year. jess: down 2.5%. when you are looking at a more and he will gain, especially with travel stocks and when it comes to airliners, this stock is up around 35%. bloomberg intelligence, their analyst with the gaming industry, looking at a large cruise capacity market share, a lot are maintaining comparative rivals. we are seeing it lower here. some concerns about downgrades the stock is had recently. something that has been performing pretty well this

year. sonali: i was taking a look at some of the biggest gainers of the year. viscera was the biggest gain are the s&p 500. vonnie: that was ai. jess: it was added to the s&p 500 recently, too. the best performer would have been nvidia but now that you have the data center businesses, that is why the stock is up well over 100% year to date. vonnie: the other one i was looking at today -- warren buffett, berkshire hathaway upped its stake. it tends to have an impact on a stock. not benefiting too much today but that did not stop warren buffett. sonali: i want to point out another piece of news crossing the wire. big lots. back in september, the company

said it filed for chapter 11 bankruptcy in delaware and had sought to sell -- it tried to stelter nexis capital management but the sale had fallen apart. it is now sitting it agrees to a transaction with gordon brothers retail partners. . it will transfer assets to other companies including variety wholesalers. that would include more than 400 retail stores owned by variety retailers absorbing more big lot assets. a really interesting moment. one of my favorite screens on the terminal is bcy. those are bankruptcy filings. big lots was the third largest bankruptcy filing by assets in the united states. the fifth largest by liability. pretty large.

only to be followed by spirit. another much larger one. there were a lot of bankruptcies. a lot of pain in the consumer discretionary sector. when you look at the s&p 500, that is where you are seeing the largest bid come in. only the largest will survive. vonnie: you have some dinner teetering. container store, i feel like we need to get mr. b-stock back on the line. [laughter] sonali: that is just met in of bloomberg news. we will now bring in anthony, the chief market strategist to talk more about these markets. you are seeing a tough tape today. you did not see the santa claus rally maintain itself. what does it mean in terms of the risk appetite heading into 2025? anthony: we have had a strong year so i'm not surprised that

investors are getting ahead of some rebalancing we are likely to see through the beginning of next year. the declines we have seen over the last few days, we have to take it in the context of what we have seen all year. strong markets, strong economy, low unemployment, profit growth big -- continuing to tick higher. it has filtered through to the broader markets. not surprised as we get to the end of the year. vonnie: we have made our money on ai. we are very happy with all of our gains. what is the theme for next year? what do we jump on now? anthony: big tax and ai has been the story of 2024. expectations are really high for that group. the magnificent seven.

it will be more about delivering on earnings expectations which could create some volatility for those stocks. the long-term secular trends are built into some of these companies. hard to imagine if that is the case. take advantage of some opportunities. outside of those areas, you need to be more selective about the securities you own. you need to look at industries versus sectors. capital markets, software within technology and financials. shareholder yield is something we talked about. raising dividends meets returning capital to shareholders through buybacks, these are the areas that can help insulate some volatility and maybe expand your portfolio

into areas that might benefit next year if we see more volatility. sonali: there is a sector i wanted to ask you about. you see from the data and investors, the consumer is strong. you saw after the election when the market exuberance took off that the discretionary sector -- tesla is included largely in that sector. even without tesla you did see a bid with a lot of retailers that would count as discretionary. what do you think happens from here especially given investors are recalibrating the interest rate dynamic that could stay higher for longer? anthony: the key for 2025 is the consumer. a little fragmented on the higher end versus the lower end. as we saw with some shopping trends over the holiday, consumers are willing to spend.

with in discretionary, you have to be more selective. amazon and tesla are big drivers of the index. it plays into the theme we are talking about for 2025, start looking at individual securities and industries that can benefit. one area might be retail. our view is the economy should grow around 2% next year. unemployment should be around 4%. that means consumers have the wherewithal to spend, which means some consumer discretionary companies can benefit. you have to look at well-run companies, you have to be more selective. that plays into some themes and overall portfolio management. vonnie: how are you thinking about ways of capitalizing on whatever policy changes we might see next year? anthony: a couple things.

on the fiscal side valuations s&p 500 is trading 22 times for earnings. it is expensive based on history. optimism is built into stock prices. part of that is with the fiscal backdrop potentially lower taxes for next year. less regulation. progrowth, pro-business environment out of washington. all of that is already priced in. we have been talking with clients and advisors. if we just extend the 2017 tax cuts and jobs act, that is not stimulative. you need to see it move lower if we are going to talk about growing the economy. on the other hand, you have tariffs. the potential of that being inflationary or slowing growth and we have done some analysis. if you see tariffs on china go up to 60%, tariffs on all other

imports at 10%, that could raise inflation by .5%-.8% and could take away from gdp at the same amount. that is why you are seeing more guarded optimism and uncertainty around the fiscal backdrop because of the benefits of taxes and the headwinds of tariffs are what investors will enter 2025 with us. vonnie: thank you so much for helping us navigate. and you will continue to do so throughout 2025. that is anthony saglimbene. very low volume. we are at half of yesterday's volume and yesterday was already at thin volume. sonali: because of the thin volume. you are seeing that selling of the equity market. you are seeing it in the longer end of the yield curve.

the 10 year almost at 4.62%. you are now looking at a nearly 30 basis point differential between the 10 year and the two-year. some people made money if they stuck with it. vonnie: airbnb plans to offer travelers more for their vacations than just a place to sleep. this is bloomberg.s, next. ♪

sonali: we are going to talk travel now. we will talk about it with the jetblue ceo, who joined bloomberg surveillance earlier. it will change flight schedules as needed to make the company profitable. joanna: as we think about the

holidays, the summer time frame, that is where jetblue does its best. we have seen pricing pressure in the troughs. it is about balancing out the year and when demand is high you are focused on trying to capture your share of demand and reducing the losses. >> do you expect to increase fares this year? joanna: we are hopeful we can keep fares affordable. airport costs have gone up, labor costs have gone up so there is inflationary pressure for the airlines. are great food comes at a cost. we are trying to balance it and make sure relative to the other travel out there that jetblue is an affordable care for customers. >> there has been other constraints on the airline industry when it comes to parts, getting the planes they need to fly.

people are talking about possibly getting tariffs and how that could impact the supply chain. joanna: jetblue has a unique situation. we have a number of aircraft on the ground we are paying for the cannot fly yet. that is a headwind for jetblue. when we think about tariffs, it is too soon to tell. the good news is we take a lot of aircraft from alabama. we do have exposure from europe and canada. >> the jetblue-spirit airlines merger was blocked. are you potentially thinking about going at it again in the next four years? there might be a lighter regulatory touch in washington, d.c. joanna: we want to see jetblue thrive as a successful standalone company. we have a brand customers love. we have a great service. we are focused on flying where people know us. >> you might not dip your toes

back into the space but do you think this will be a more welcoming administration when it comes to things like mergers and acquisitions? joanna: it is hard to speculate but it is hard to see at administration that is worse than the administration we had around antitrust. >> you have announced a number of changes including closing down certain operations in a number of cities. you will cut some 50 routes. is it done? are there more to come? joanna: the majority of the changes are done but we will not rest on our laurels. if a market is not producing results, we will take a look and see if we can improve it. if not we will put the planes some are we can make money. vonnie: the jetblue ceo. airbnb bringing new features for

its big push beyond accommodations in 2025. think of refrigerator restocking and you do not have to do it. midweek cleaning. amenities people expect from a hotel stay but not a guesthouse. how much more is airbnb going to charge you for a stay like this if you want your refrigerator stocked or a midweek clean? >> airbnb has not been specific but they will have to offer a wide range of experiences. one analyst said the typical american consumer does not have that much money, not that much disposable income, especially after accounting for airbnb's administrative fees. i think analysts would said it would do well to offer a wide range of price points. not everything can amount to customers living like a king with in-home massages.

sonali: why are they doing this now? it was roughly eight years ago that they ventured beyond lodging programs, like experiences. it seems like a large shift to make at this point in time. dana: airbnb will restart its experience business. airbnb was doing things like removing thousands of what it would describe as low-quality listings and trying to improve the fundamentals of the platform. now that it feels it has done that it is focused on amenities that can help it better compete with traditional hotels. something the broader travel industry has seen is travel demand has been soft lately, but demand has remained pretty strong at the high end of the market. a seems like some amenities are chasing consumers that have more disposable income and are less afraid to book travel further in

advance. invest in these costly trips and perhaps add on fun extras. sonali: a lot of people are looking at -- find my next place to go, get around a new location, maybe it will figure out a place i want to go that i did not know i wanted to go. if airbnb does not do this, do they risk being obsolete many years down the road if they do not get ahead of competing with generative ai? dana: generative ai is on the mind of airbnb executives. they have been open about the challenges of infrastructure before they can get into generative ai. how well-equipped are you to set up that complex computing processes? how robust is the core platform itself?

it is on the mind of airbnb executives but in the meantime this is a way to curate experiences not through artificial intelligence but offer some form of special cure ration that to your point could go along side go toe to joe with a more automated solution. vonnie: this will put it to hotels. they will have to up their services if airbnb is doing this. dana: that is part of the idea. to better compete with hotels, where it might be more common to see these massages, refrigerator restocking. different degrees depending on the type of hotel that you are going after. to the point about the bifurcation of the u.s. travel market, there is the other end of it were consumers are trading down to lower priced hotels, may be staying less.

that could create a squeeze in the hotel industry but they have to work harder to win and retain customers at the high end. vonnie: do we have any idea what this will add to airbnb's revenue for a year or what its stated goals are? dana: i do not have the story in front of me. we might have thrown around a figure like -- sonali: $1 billion. vonnie: $1 billion is a big number, even by bloomberg's standards. sonali: is this $1 billion right away or over a number of years? it sounds like the payoff will not be immediate. dana: not all the details are hashed out. i detected some caution. all the reporting and interviews we have done with executives and analysts so far, i do not think anyone is expecting it to be an immediate solution or immediate

injection. vonnie: i could welcome a whole host of difficulties. a match of you paid for the extra bath salts to be there and then all of a sudden they are not there. then you are complaining to airbnb. sonali: now i am imagining vonnie complaining. [laughter] vonnie: just give me a tent. i do not need an airbnb. dana: my first thought was it is a challenge of scale. think about all the markets where airbnb operates in all the listings it has and would like to add in the future. i do not want to call it a problem. it is not for me to call it impossible but it is fair to call it a challenge of scale. how do you roll out these amenities widely enough so people feel they can count on

airbnb to book something like that. sonali: dana wollman, thank you for your time covering west coast tech for us at bloomberg news. less than five minutes away from the close. vonnie: i am getting emotional. . it is the last full trading week of the year. sonali: we are in the red. the s&p 500 in the red to the tune of more than 1%. we might end up up on the week thanks to the christmas eve rally. we will bring you exactly what has been moving the set up into the last week of the year. just a couple of trading days left. stick with us. this is bloomberg. ♪

i can't believe you corporate types are still at it. just stop calling each other rock stars. and using workday to put finance and h.r. on one platform. tim, you are a rock star. using responsible ai doesn't make you a rock star. it kinda does. you are not rock stars. (clears throat) okay. most of you are not rock stars. oooh. data driven insights, and large language models. oh, that's so rock roll. it is, right. he gets it. yeah.

vonnie: welcome to a special edition of "bloomberg markets." i'm vonnie quinn. sonali: i'm sonali basak. we are looking at a down day. red on the tape on a thinly traded day. vonnie: it was a valiant effort in the last few minutes of trading. at the same time, we fidown 1.1% on the s&p 500, similarly

for all of the other major indices it was a red day. the nasdaq down 1.4%. the russell 2000 down 1.6%. the philadelphia semiconductor index saw all but one of its components lower. advanced micro devices gave up most of its gains at the end. down 0.1%. those chip stocks and those favorites for most of the year are to blame for today's moves for the most part. joining to break down those market moves, alexander and natalia. alex, let's start with you looking at those gainers. boy, did you have to look hard. >> just a handful of names closing the session in the green today. progeny made a big purchase in the stock, snapping up 150,000 shares, worth $2.2 million according to a filing.

insider purchases are a test of confidence by management in a company's outlook. closing up about 15%. despite being a bright spot in today's selloff, progeny shares are down year to date. another name i have is the company who makes lithium rechargeable batteries for vehicles. those shares are up 60% and rising for the fifth straight trading session coming off a 100% gain yesterday. why this move, no apparent reason. kind of a meme stock here. finally, i did have irena group is one of the stocks that was gaining today. it looks like it took a hit as well today into the close, now down 2% into the final few minutes of trading. notified by the new york stock

exchange that it plans to regain compliance with listing standards and been accepted, hence the initial upward move. not making it into the green at the very end of the day. sonali: scouring the earth for some green. natalia, what down -- brought down stocks today? >> definitely magnificent seven stocks. tesla is down by 5% today. no fundamental reason, but potentially profit taking. all eyes are on fundamentals. tesla is expected to post delivery for the quarter next week. overall,, strategists, investors, analysts are pretty optimistic. the latest note from bloomberg intelligence saying tesla earnings could top expectations by 25% next year and that will be driven by less expensive electric vehicle cars, redesigned model y, as well as

cyber truck profit and the expansion of profits coming from its battery storage unit. i'm also looking at travel stocks because cruise line operators such as norwegian or carnival were also one of the biggest decliners today. overall, there is profit-taking, but analysts are pretty optimistic about travel stocks, including cruise line operators. we saw a story today from my colleague saying that this sector sees so much optimism. airlines are expanding projections going into next year. nevertheless, consumers, this is the wildcard. sonali: natalia, you watch positioning so closely. you talk to all the prime

brokerages. how much of this year-end downturn, the ending of the santa claus rally is profit-taking versus a change in risk sentiment? natalia: good question. up until recently we saw hedge funds posing -- posting one of the biggest returns, they are in pretty good shape as people are saying no one is forced to trade. what i heard from sources that hedge funds are in a wait and see mode. january is a month when everyone is coming back from vacation, people are getting more active when it comes to increasing long and short as asians. this time around, they think hedge funds are part of the profit-taking into the next year. hopefully we will get prime brokerage data because it will be interesting to look at positioning. sonali: the market is closed, we

don't work anymore, right? the street doesn't sleep. thank you both so much for your time. i want to read a little bit of a note here that today's selling was mechanical. the b team is in charge right now and everyone is getting rid of their inventory before the weekend, shouldn't worry about the selloff. do you see this as just a little bit of inventory management, window dressing, rather than a full off shift in risk appetite heading into next year? >> it's probably all of the above. you saw 10 year yields at 4.62. that doesn't go unnoticed. a big part of this month is the insider selling you were alluding to. coming into may be just before the fed decision and the gap down. the russell 1000 had 135 stocks

up better than 50%. a couple dozen up more than 100% when you see those kind of gains, insider selling is going to pick up. sonali: we are under 6000 on the s&p 500. if you put your pen down heading into this week and didn't lift your head up until you walked out, you would have looked at that 4.6 level and not loved it very much in terms of what it means for some of the hottest trades into the market next year. do investors start to recalibrate with a higher level of interest rate going into next year? is it going to start to matter more? david: it does matter, it matters today. most valuation models start with the risk-free rate. everybody has to recalibrate.

if you think back to september, right after we had the first 50 basis point cut, back then, the perception was we would get an additional 150 basis points or cuts between now and the end of the first quarter. now, we will be lucky to get just one. it doesn't mean stocks can't do well, but the hurdle rate is that much bigger and the units will have to be that much better. vonnie: how much should you be in cash going into a year that will be highly unpredictable? david: i tend to run cash very low. market timing is pretty tough. what will be the catalyst to get back in? down 10%, down 15%? down 10% will feel like it is down 20%. vonnie: do you rebalance it or where do you put the bulk of your risk sentiment? david: that's really interesting. i'm expecting a fair amount of rebalance at the start of the year. a lot of it has already happened this month.

i think a lot of hedge funds are tacking on. you look at a very popular stock up about 700% this year. $4 billion in sales from insiders, that sparks a lot of selling. there is something to own everywhere, i'm pretty full invested across sectors. vonnie: you continue to own ai. what about bitcoin related stocks? david: i can't tell you there is no chance of a selloff. ai is still in its early stages and i don't think you can paint the mall with the same brush. what i'm looking for in the first quarter, watch capex. watch companies like microsoft. microsoft, there is $67 billion. you can bet a lot of that is toward ai. if that starts to track lower, that will be code that demand is a little lower than expected. sonali: the sentiment under the surface is still pretty bullish.

you are looking at long-held strategists sang the s&p 500 will hit 7000 by the end of next year. do you think so? david: predictions are pretty funny. last year at this time, the predictions were 4833. we pass to that in four weeks. the high we made by the end of the first quarter. it is a moving target. markets are a living, breathing animal and when the data changes, so will we. sonali: what does the tainted -- data tell you now that you should do heading into 2025? david: i have to stay fully invested, there are too many stocks i want to own. we can't throw away sectors. whenever you massively underweight a sector that didn't do well the year before, you get your head handed to you. we saw that back in 2020. everybody was selling energy and then it had the best two years. right now, the lagging sector's

health care nobody wants to own it. there are a lot of good names, we own several. vonnie: we were speaking to somebody who said some health care areas like biotechnology firms are very binary where things work out or they don't. in health care, where are you looking? i know there was a lot of nervousness in the community when it looked like and it does still potentially mean that we are going to have a different hhs secretary. david: on biotechs, i will leave that to the expert because it is a binary move, either it is a homerun or a zero. i can't play that game, so i focus on companies earning money. he holdings or cardinal health and i believe we brought wert tech pharma at the close today. vonnie: interesting. energy for example, you saw those company taking care of ai

energy needs or liquid cooling needs or are you looking elsewhere? david: you are talking utilities. utilities is a slamdunk. i think it is one of the easiest trades right now. i suspect in a number of years, it will be twice -- twice that. there is a basket of names you could own right now. in r.g., constellation energy, all names we have been involved with on and off for the last year. sonali: we were talking earlier about how vista has been the biggest gainer in the s&p 500. it has been on a massive tear, of 262%. how do you beat that? if you have been holding it, do you start to trim a position like that or do you expect anything close to that kind of game next year? david: i sold that one too early, it was a homerun for us and we left a lot of on the table. it was a name i would like to get back in. .

if there's a rebalance, it could see added selling and i would love to pull the trigger on it. vonnie: next time, wait a little bit longer, david. that is david nelson. chief strategist at bell point. that is theing. even as he could have got back in again at nvidia, maybe he did, maybe he didn't, but that's the beauty of investing. sonali: if you are an investor like stan druckenmiller, you watch what happens after you sell and then you multiply the number of shares that you held by the differential and how much it rose. vonnie: to torture yourself? sonali: that is kind of the implied money left on the table. it is the opportunity cost, i suppose.

vonnie: it's a tough one. sonali: that's the bull market still. vonnie: indeed. let's see what money gets left on the table after today's session. we do have two more trading days in 2024. potentially lots of opportunity to make money. we will be speaking about the business of sports next, stephen only of mintz joins us. this is bloomberg. ♪

sonali: welcome back to bloomberg television and radio audiences. we want to bring you some breaking news, because it is a highly watched story, tiktok versus the united states. tiktok is urging the u.s. supreme court to overturn a looming ban. they filed the brief in advance of the january 10 supreme court argument. we will be taking a look at

exactly what they have filed, but we are keeping an eye on of the developing story because there has been a lot of political posturing around tiktok and its operating in the united states. vonnie: the biden administration determined to get this done while biden is still president. schedule to file that brief later today. netflix says it sees the payoff from mid star-studded christmas nfl games coming right through. it set a new record for the league and even topped that of traditional broadcast networks. joining us now is r-star hollywood reporter, lucas. 24 million viewers, not bad. how long did you have to be on netflix. i happened to realize that beyoncé was coming on soon and i tuned in for those 13 minutes or whatever it was. do i count? >> you are the reason viewership peaked during the beyoncé performance, i believe they said 27 million.

they measured the viewership for netflix much as they do for traditional television, where that 24 million is the average number of people that were watching at any given time. you can assume 24 million people watched the whole thing. more than that watched at one point or another, but the average was 24 million. that is good, not great, i guess would be the answer. they were able to tout it as the most-watched streaming sporting event ever, it beat a playoff game on peacock. at the same time, it was a smaller audience than watched christmas last year. it is a little bit bigger than the average nfl audience week to week that you would expect on christmas, but you have to imagine both sides are pretty happy. they were able to put a game on netflix, no issues with streaming, and one imagines given netflix's global reach that the international audience will be larger than it would be last -- otherwise. sonali: forever balanced, we appreciate that. 24 million, yes, a good number.

what does this mean for traditional streamers given that you have seen netflix kind of out of the gate here bring in more viewers than you have seen in traditional broadcast games? lucas: it is a good number, no way around it. i think you just take it in the middle. it's pretty impressive. you mentioned them doing it out of the game. -- gate. amazon was first with thursday night football, some people blamed it on the match ups. the number seven pretty good with better match ups year. peacock had a playoff game. netflix has proven that it will not take any time at all for people to deliver an audience for sports.

they are used to watching anything on netflix. it is a warning shot for any future bidding assuming netflix wants those rights. sonali: those numbers came out, pretty stunning. that is lucas shaw, don't miss him covering entertainment for us on bloomberg news. he has a newsletter that is must-read. private equity firms looking to invest in some league franchises, joining us more on some of the business of sports, stephen olenick, from mintz, which helps provides those in the sports industry with strategic counsel and litigation issues. as you know, i've been covering private equity for as long as i can remember. the nfl has been the most exciting thing. steven: crown jewel. crown jewel. sonali: but how much better does it get when you have that many

more options? if you have netflix starting to stream the sport more, so much of the value of the teams are also contingent on the streaming rights. steven: 100% and look at the eyeballs that the netflix got versus the nba. everyone wants to say which sport is king? right now, it is football. christmas day was the actual day where people saw, look at the viewership between the nfl and the nba, it wasn't even close. sonali: what does this mean at the end of the day in terms of valuations? what i think is you have private equity firm a getting into the nfl, you have tom brady being one of the first players buying in too, but if you are a player, wouldn't you want equity in your team at some point? it gets really complicated when you start to get on the food chain. steven: when you are as good as tom brady, he was able to structure fox with his deal, three hundred $75 million.

what he cannot do within that deal is he has equity within the las vegas raiders. what he can't do is he can't actually say anything bad about the nfl or do anything against the nfl because he himself is an nfl owner himself, so if you think about it, all the players and all the professional athletes would like to one day potentially own a piece of an nfl franchise because all of these nfl valuations of teams have skyrocketed, but the opportunity really isn't there because these nfl teams hardly ever allow and it is such a small group of owners that could actually buy into such an asset like that. vonnie: i don't think tom brady would have anything negative to say about the nfl even if he was allowed. maybe. you can tell us. transfer window for college football playoffs between december 9 and 28, so this is the last day, it is becoming like free agency.

how are you gaining clients and what do you do for these clients? steven: yeah, look, you look at the nfl and college football, it's becoming a must like the minor leagues for the nfl. now, you have a very small window of time where some of those student athletes opt into the transfer portal and are basically saying to the respective schools with the big money in their collectives, come get me. if you need a quarterback, come get me because at the end of the day, they have the right to move. in terms of what we do, you counsel them throughout. there are regulations you have to adhere to. it is a bit of the wild west in terms of what the ncaa and the state laws and working with public versus private schools, so you have to know the laws and the restrictions. it gives them an opportunity to capitalize and monetize off their name, image, and likeness. vonnie: is there anything concerning to you about name,

image, and likeness deals? some players are more popular on social media than others. if you have made your couple of million or whatever your number had been when you were growing up before you leave college, do you then even bother becoming a professional? steven: great question. if you are going to b late or mid-round draft pick, why wouldn't you stay in school where you are essentially the big person on campus? why wouldn't you structure a better name, image, and likeness deal with the collective to pay you more than what you would receive if you are a late round draft pick? same with the nfl. it gives the opportunity for a lot of the student athletes to capitalize on their name, image, and likeness and find brand deals that can set them up for the future. what we need to do is put in guidelines and standards so it is an equal playing field. if you can see based on the college football playoffs, the big schools are obviously

winning. vonnie: we have to get you back in the new year, we haven't got enough time to talk all this through. steven olenick from mintz. i want to bring you more details on that breaking news that sonali gave you earlier. the bidenistration urging the supreme court to uphold the u.s. tiktok band. that brief being filed at the supreme court. they are making dueling arguments as a showdown really over a law that would ban tiktok next month. sonali: a few more details from these briefs being filed. the main brief has been filed in the case and the justice department argues that chinese control of tiktok is arming u.s. national security. tiktok and bytedance countered

by saying that it would unconstitutionally stifle the speech of 170 million americans. vonnie: are they doing it through the dances or the comedians? sonali: how are they stifling the speech or threatening national security? [laughter] you know, that we will see being fought out in court. that is not up to us. stick with us. we will switch gears and talk about the wine industry. it's a friday night and a great conversation. this is bloomberg markets. ♪

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

sonali: welcome back to our tv and radio audiences, i'm sonali basak alongside vonnie quinn. many economists have raised projections for inflation next year. i spoke to the ceo of cisco who weighed in on the challenges facing his industry. >> we are seeing a bit of a normal environment at the current moment. the challenge that consumers are facing, if you look at it cumulatively over the past 2-3 years, menu prices when we go to a restaurant are up about 30%, 40% versus 2019. that is the pain we are all feeling when we go to a restaurant. we have cisco are taking actions with our supplier community and our business to bring those prices down so we can help

restaurants lower menu prices and still hit the profitability targets. sonali: it seems like consumers who were looking forward to a spate of deflation are looking at a december alone were cocoa and coffee are up 40%, more than 10% respectively. if there is something you could do to bring the price is lower, what is it at the end of the day? or do you simply see consumers shifting preferences to goods that are cheaper? >> that's a great question and i appreciate it. first and foremost is to work with our supplier community to bring down cost. leaning in hard with our suppliers to help them be more efficient, be that creating competitive environments,

suppliers of like product compete so we can get to lower net negative price and pass that savings on to our customers so they can lower the menu price. the other is the sysco brand. we offer product under the sysco banner and that allows our customers to save time and money. it may surprise you that 50% of what we sell to a mom-and-pop independent restaurant is a sysco private product. we call them swap and save opportunities. they can clear it through our website, through our salesforce to share that value with their customers and educate them, if they swap, they can save. thing number three is to take time out of the kitchen. help them with the opportunity to take labor costs out. we have prepared foods. we can lean in by cutting the meat, cutting the vegetables in

advance of it arriving in the kitchen. those prepared foods are good opportunities for our customers to take labor costs. because those of the two things that have increased for restaurants, the food and labor costs are up. we can help by providing both of those opportunities. last, but not least is lower cost alternatives. if one protein is spiking, we can help the customer understand, make the following changes to your menu, you can shift consumer purchasing to a lower cost of food and consumers save money and the restaurant lowers food costs. vonnie: that is the ceo of sysco speaking with sonali basak on open interest. another industry facing pressures of inflation are wineries. one has not changed their prices in the face of rising costs. tell us roughly how much wineries have had to put up their prices and how you have

managed to not put up your prices. >> thank you first or having me. delighted to be here. happy holidays to everyone. it is a very busy season in napa right now. gathering and celebrating is typically very good for our business. we enjoy all the visitors that come to participate and celebrate in napa this time of year, it's a lot of fun. you know, when it comes to the global perspective, supply, demand, and prices, there is a bit of a dichotomy going on at the moment when it comes to those three dynamics. you have to think about it in terms of dichotomy based on price points. there is the ultraluxury segment of the wine industry and then the more commodity segment of the wine industry. and if you look at the ultraluxury segment where boich family cellar resides, very resilient. we have volume and price still trending up in single digits.

it is a healthy industry. conversely, if you look at the commodity segment, it is a bit soft, i would call it stabilizing, but volume still declining. the pricing bit around the pandemic was quite a unique dynamic. we can get into that a little bit more if you would like to. vonnie: what is considered luxury in the market? have they been trading down for wine? john: if you sell wine that costs $200 or more, you are in the top 1% to 2% of wines in the world and those wines are typically very supply constrained because they come from world-renowned vineyards that are in finite supply. if you sell wines that are less

than $100 or perhaps less than $50, you are into a very big market. in america, that is 330 million cases of wine a year. what happened during pandemic, 2020 and 2021, is we had this enormous surge in volume. people raised prices, people stayed home, bought a lot of wind to be shipped to their house. some producers increased production. a lot of producers increased price. so, when you see prices down in 2022 and 2023 and a little bit of 2024, all of that is in the commodity segment is a little bit of a reversion to the mean, like any market. sonali: one thing i have been wondering about is when you thing about next year, we have this story out on bloomberg on the impact of tariffs on countries importing wind to the united states or exporting wine to the united states.

if you have european winemakers that are trying to get ahead of any potential moves by the u.s., what does that dynamic potentially look like heading into next year? john: you know, again, i think you have to look at the segments. so, for us, it is not an issue. we make 1500 cases of wine in america in napa valley and sell to 3000 customers. that is one dynamic. if you are dealing with first growth bordeaux wines, i think we all know who those people are. this is shout till margot, rothschild, right? collectively, those five first growth vintners make about 100,000 cases of wine, so not an issue. there is a chronic supply-demand balance that gives them pricing power. but if you are not in that category, if you are in the commodity category and you are

exporting wine from europe to america, you are going to have to be really on your toes about it. because there is a bit of a supply-demand imbalance in the commodity section of the wine. if you were to apply tariffs going into 2025 and 2026, you have to be ahead of that when it comes to your supply, managing your production. sonali: so what does this mean in terms of different price tiers as well? when we think about next year, a lot of people are preparing for some of the cost of the goods they are buying to be rising. but in wines, like in many parts of the economy, you may see a bifurcation. people who are buying bottles of wine that are in the $10's, $20's, $30's, may be more sensitive than those buying $100 bottles of wine or more. so, if you are at that upper end, do you think prices can

still go up quite meaningfully from here for more high-priced wines? john: you know, it's amazing. the answer is yes. the reason is because we have had a tremendous correction from, i would say, really outsized price increases during pandemic. one thing that happened during pandemic's demand for wine, especially wind that can be shipped to you, went up a lot. like four times normal growth rate in 2020 and 2021. producers took advantage to raise prices around that. in some cases, 30% to 40% in a two year period. in seen in history, this was the pandemic effect. what is happening since then is we have had a moderation of prices in 2022, 20 23, it little bit of 2024. that's why i refer to the stabilization. i do believe that even in the ultraluxury segment, where

people raise prices a lot, they will begin to have more pricing power. we didn't do that. at boich, we did not increase our prices a lot. we have inflation like everyone else, we worked that into the price of our wine, but our customers appreciate that because you don't see a 25% increase on a bottle of wine during the course of the year. maybe it is 5% or 6%. in this period of stabilization, for commodity and ultraluxury, you will see volume stabilize and go up, and a little bit more pricing power creeping into the occasion, which would be a welcome development for commodity producers. vonnie: it does strike me as we talk about the potential for tariffs this year and thinking about it constantly since the election, one area where tariffs might be welcome as wine producers. if there are extra tariffs

placed on european wines or french wines, does that benefit napa? john: a little bit, but the numbers are so minute. again, we have 75 million wine consumers in america. in napa valley, we make about 100,000 cases of ultra premium wine. so, you can kind of quickly do the math. with or without the french wines in america, our wine and wines in our category sell out every year and they have a waitlist. so, it is a bit of a different discussion when you are talking about that category. but you know, america, i would love to share this statistic because america consistent with this zest for consumption, pre-pandemic, consumed one million cases of wine a day. specifically 360 9 million cases of wine in 2019. we are down from that it little

bit in 2024, but it is still a huge number and we are by far the largest producer wine in the world. so, if we have to pay an extra 10% for a bottle of french wine or whatever we love, my sense is that americans will do that. sonali: john, we think is so much for joining us. happy holidays. happy new year. that is john boich, the fit and are -- founder of boich family cellars. i want to shift gears and bring you breaking news as well. there is a letter that has been sent to members of congressional leadership regarding the debt limit. you have janet yellen urging congress to take the steps needed before the treasury would have to start taking extraordinary measures. she respectfully urges congress to act to protect the full faith and credit of the united states. she said the treasury does not expect it will be necessary to

take extraordinary measures on january 2 to prevent the u.s. from defaulting on its obligations, however the treasury expects to reach the new debt limit between january 14 and january 23. in the middle of that is inauguration. vonnie: yes, it is a striking letter sent to the speaker of the house, who also could change at some point, right? it is a letter suggesting that janet yellen who has done the math expects that treasury will reach the new limit between january 14 and january 23. sonali: now, we want to bring you some more breaking news as well. you have the president-elect urging the supreme court to pause the law threatening the tiktok ban. this is becoming quite the dramatic afternoon, vonnie, because we know that we have currently the biden administration and tiktok sparring at the supreme court over the tiktok ban. you had just a little earlier

the justice department filing its main brief in this case. and tiktok and its parent bytedance countering that ban that they say would unconstitutionally stifle the speech of 170 million american users. the president-elect urging the supreme court to pause the law threatening the tiktok ban. we will bring you more updates. before we leave for the day, we are going to talk about the record-breaking holiday travel. stick with us for the travel destinations of 2025. this is bloomberg. ♪

vonnie: you are watching a special radio and tv edition of "bloomberg markets." i'm vonnie quinn along with sonali basak. it was a record year for travel pushing airline stocks higher for the year, 60% higher that is in 2024, that beats the s&p 500 for the most in a decade. jess, why did the airline stocks

get such a boost when i feel like all i heard all year? jess: especially because of the underperformance coming out of covid and the pandemic and obviously trying to deal with certain grappling higher oil prices in prior years, but we have seen since the summer and if you look at wti futures for u.s. oil prices, still near the lows of the year right now. you have actually seen american airlines earlier this month as well as jetblue and southwest, they boosted their profit forecasts. american in particular for the final three months of the year because of what they have seen even though we have seen some of the stickier numbers with cpi and other inflation measures. inflation still ebbing overall. then thanksgiving and the holiday travel season. sonali: the airliners have

certainly had, some have now had the same fate as manila spirit, but others have had a good year. you have seen solid performance of many of the cruise liners as well and many hotel chains. jess: it has really been broadening out, george ferguson at bloomberg intelligence lead the airspace and defense analysis. they were looking at the analysis for 2025 when you think about the north american airlines. american, jetblue, southwest, and others. they are focusing on moderating capacity growth firm low-cost carriers like spirit, but then jetblue as well as southwest. that could potentially slow airfare declines. something to keep a close eye on , wage costs and how those keep rising when you think about labor groups.

sonali: we thank you so very much for keeping an eye on the sector. we will talk more about holiday travel trends. airline points here, card associations have been a huge part of the story. how are people faring this holiday season? >> i think we have seen record travel this holiday season. we saw it with the end of the thanksgiving holiday. we have seen two point 7 million passengers every day so far on this christmas holiday break right now with two busy days of travel still to come friday and sunday. with airfares 6% lower than previous year, people are

absolutely taking advantage of the opportunity to travel and trying out new destinations, but also staying longer than maybe they would previously. vonnie: how is the return to work affecting things around the holidays? return to work is all very well and good until the holidays when companies have to be more lenient than they did we pandemic. -- pre-pandemic. becky: because of the opportunity for people to work remote or have a hybrid schedule, we have seen the airlines take notice of that also and they have changed some route schedules to accommodate that. what used to be the busiest day of travel may be during the week of thanksgiving or the week of christmas is not necessarily the case and the travel ends up being metered out a little bit more evenly over multiple days during that holiday timeframe instead of everybody trying to fly on the day before thanksgiving and coming home on that sunday after thanksgiving. sonali: you think about the price consciousness now and there is an element of

thanksgiving holidays, christmas break, you are watching people go more locally to their family often, but you have those people who are trying to capitalize on luxury vacations as well. do you see more people traveling internationally or is the sting of inflation still keeping people closer to home? becky: i thing it all depends on the destination and the strong dollar, that people can go to destinations that really get more bang for their buck. i was personally just in portugal. it was an amazingly inexpensive vacation. used points for my airfare. there are opportunities to travel overseas and tsa estimates over 50 million people will pass through checkpoints. we are really seeing that strong travel intention. there is a rise not only in domestic travel, but also the international outbound travel as well. vonnie: it seems like the dollar

is stronger versus a lot of currencies right now and of course inflation has been eating away at the united states, so it doesn't feel as bad spending your dollars because they are being eaten by inflation anyway. becky: the one thing we have seen is the rise in the luxury hotel prices, which is where points and miles come in as a great opportunity to be able to take advantage of a redemption that maybe there was a $900 a night hotel rate and you can get that may be at 18,000 hyatt points per night. so that really is the opportunity people should be looking for his work and they stretch their travel dollars and points and miles further. vonnie: when you think about the prices people are paying heading into next year, where is the next -- most concern? is it what you are paying for for a flight versus a hotel? we were talking earlier to one of our editors about the new offerings being put forward by the likes of airbnb. is competition going to drag

prices down a little more when it comes to where you stay? becky: i think that remains to be seen on the pricing, but there is definitely lots of competition coming online in the market, especially the luxury sector. we have seen also this growth in some of the glamping opportunities between hilton and hyatt taking over those brands and adding that to the pro folios. i think what we would consider to be a traditional hotel brand is really looking to diversify their offerings. you look at some of the new brands that have been rolled out from select service all the way up there luxury and some of these hotel companies have 30 different brands now. so, there really is a type of accommodation for every traveler. and they are really trying to stay competitive in the marketplace. it also depends on the location. personally, i live in arizona.

we have a high concentration of luxury resorts in our state. i think dallas, that market is seeing a high concentration of luxury and mid tier hotels coming online for conventions and things like that as well. so, it just depends on the market, but it also looks like the travel industry is going to continue to grow and the demand is not slowing down. vonnie: what is the top destination you are finding for 2025? we are curious as to what the new it place to go will be. becky: tokyo has been the most searched destination and japan is tops on our list for 2025 is one of the best places to use your points and miles. they have had a lot of luxury hotels come online in the last few years, so there really are some beautiful new properties to check out and amazing, great opportunities to travel and experience the culture. vonnie: thank you so much. that is the senior news editor at the points guide.

hopefully we will be able to take some of her advice in the coming 12 months. the news breaking this late friday to reiterate, president-elect donald trump asking the supreme court to pause a law that would be in tiktok on january 19 if it isn't sold by bytedance, its chinese parent company. trump sang in the last few minutes that he should have time after his inauguration to pursue a political resolution of the dispute. he didn't take any kind of position on the constitutionality of the disputed law, which congress enacted earlier this year. this comes right on the heels of the biden administration's filing to the supreme court asking it to uphold the law. sonali: it is incredible, this comes within hours of the main filings that the biden administration's justice department had filed for the supreme court, as well as the company's own answer. remember, tiktok and bytedance, its parent company, had countered a ban would

unconstitutionally stifle the speech of they say 170 million american users, while the biden administration is contending this is a national security concern, letting a foreign adversary spread propaganda and collect data on americans. this certainly has been a bipartisan issue, but we are seeing the president-elect weigh in. vonnie: we have had news to take us right through the inauguration because we have this tiktok tit-for-tat and we have janet yellen telik congressional leaders that the debt limit is likely to be hit between january 14 and january 23. the inauguration comes in between those two dates. president trump not a fan of the debt, let's put it that way. that does it for us. have a wonderful weekend, we will see you for two more trading days this year. ♪

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david: this is "wall street week ," i'm david westin bringing you stories of capitalism. this week, reconciliation. what is needed to make tough decisions around the national debt, and a look ateof wall street's passion assets.