♪ >> the market is seeing that the economy is not weak. >> i think markets are still really euphoric. >> you need that to totally anchor you because we are going to have a lot of volatility. >> i think we are going to get off to a bit of a sloppy january. announcer: this is "bloomberg serveillance" with jonathan ferro, lisa abramowicz and annmarie hordern. >> good morning to our audiences worldwide, this is "bloomberg serveillance." jon, annmarie and lisa have the day off.

my copilot for the day, kriti gupta in london, england. happy to see you here on this monday morning here in new york city. kriti: i stayed late just to anchor with you, just for you. romaine: let's get the lay of the land here. financial markets worldwide here on the back foot, seeing a slight dip in stocks in asia, in europe. s&p futures pointing to a lower opening u.s. you are seeing a bit of it did in the treasuries pushing field lower. the dollar of the unchanged on the day. energy commodity, a bit of trepidation here on the penultimate day of the year. coming up, max kettner is going to be talking to us on why he sees a host of positive catalysts heading into 2025. we are also going to hear from terry haynes on the life and legacy of president jimmy carter. and a discussion here about the

outlook for investing in emerging markets, specifically in africa. not a huge amount of stories crossing the wires this morning but obviously some focus today on what is going on in washington as well as what is going on in korea with that airplane crash. boeing shares right now in the u.s. move slower. but we begin with a broader look at futures here in the u.s. which are wanting to a lower open. investors trending in the risk before we get to the year-end but no matter which way you cut it, this has been a phenomenal year, you're liable -- a year largely driven by momentum. those gains have slowed significantly over the past few weeks and a lot of questions as to whether the momentum of 2024 believe the momentum of 2025. max, we start off here with that big question. the game right now as to how much momentum is there into

2025? >> i think there is still quite a bit of momentum left because at the end of the day, the economy is still doing pretty ok and we start 2025 with a pretty similar set of compared to the last two years. particularly in the last four quarters we always had a round about 1.5% gdp growth expectation. that isn't really changing the first half of next year. consensus is still convinced that those growth rates that we've been having for two years in a row, that's almost double the potential growth rates that we had, that they are only temporary and then we are actually going to go lower then we thinning the last couple of quarters and on the earnings side is a similar thing. earnings expectations in the upcoming season so far, a little more than in three weeks.

we again see earnings expectations pretty much flat, and actually if we exclude tech from that, earnings are going to drop quarter over quarter. so with such low expectations, such an easy barton v. i think there's quite a lot of momentum still to be had, particularly in the first half of next year. romaine: will that the broad-based momentum or a repeat of what we saw at the start of this year were pretty much just a small cohort of large-cap stocks the charge? >> i think it is going to be a bit broader but i don't think it is a question of are we going to buy the mag seven, are we going to buy tech for the other stuff. i think it is more a question of some of the other bits. some health care, for example, u.s. banks, really good value at this point in time. when we look at utilities, how well they actually held up in light of these increases in

yields with that ai story, there is a lot of sectors that really can support a bit of broadening out, but i don't think it is a story of ok, ditch the mag seven and tech completely and the rest is going to take over. i think it is a story of the mag seven and tech and some other stuff. kriti: how much of the dollar strength gets in the way of the strength not only of the mag seven, but of the broader indexes? is the currency the achilles' heel of the s&p 500? >> when we look at some other indicators right now, momentum signals, how long or how short they are, we are getting to a very strict territory of how long those momentum players are. so i'm not sure whether that is

going to be one straight line upwards. and we all know about this growth between the u.s. in the next couple of months, a little bit of relief. and on top of that, i don't think it is the currency, i think it is much more the right side of things. while we are constructive for the first half of next year and while in monaco is on the politics and what is going to come first in terms of the limitation or what comes first at all, is it going to be tariffs, tax cuts and so on, i think the biggest risk to our constructive view is it yields push higher. we've seen over the last month if that is driven by the term premiums, if we don't see real yields pushing higher, higher inflation, both would actually be positive or equities, positive for credit risk. but if this is just an add-on in

terms of cost, that really would be the biggest risk and the biggest achilles' heel for the first six months. kriti: so you talk about the rate story, but what is the line in the sand? is it 5%, is it about that? what is the line in the sand that spooks equities? >> we've been looking at her for the last two or three months and we've invented what we call the danger zone which might sound in cryptic what we look at is where is the level of yields, the level of long run rates expectations were equities and credit threads, when they really start to suffer. it is close to 4.5 percent so we are in fact at the moment pushing a little bit through that. the problem i think for the start of january is if we are all going to start in january and realized this is not good, perhaps issuance need to be put more on the longer end, the next

announcement is going to show a little bit more issuance. if we stay sustainably above 4.5%, so far it has not been the case. romaine: i think we have a pretty clear picture of maybe what u.s. economic policy and u.s. economic growth will look like. how much of a factor will china be, are you into the pitting a rebound not only in the economy but in the financial markets as well? >> i think there is a rebound in store on the consumption side of things. there's been certainly a little bit more of a consumption boost and particularly a boost in available savings for the consumer, and that should be allowing consumption.

i don't think the typical proxy trait that people are put on, one european luxury. i don't think these kind of trades will work. i think there is much more story about china and chinese equities in particular. romaine: always great, that conversation. kicking us off on bloomberg surveillance on this monday morning in the u.s., s&p futures pointing to a third straight day of declines. let's get you an update on some of the stories outside the world of finance. kriti: infighting in congress and republican pushback on gop. some party hardliners haven't committed to reelecting johnson as speaker after he backed a temporary spending deal that didn't include trump's initial demand for lifting the u.s. debt

ceiling. but others in the party are pushing back on calls to remove johnson. president-elect trump hasn't taken a public stand on speaker johnson's future. the house speaker ship vote is scheduled for january 3. bloomberg is reporting on how trump's foray into politics has changed the way some countries are looking at the starlink internet business. south africa's president and months cap and incontact to discuss ways for the government aims the rules to allow the high-speed internet to operate legally. those talks according to their sources, making it harder for some governments to resist starlink. added 20 new operating countries and now serves more than a million people in 100 plus countries. and it was a race for number one of the christmas box office with mufasa narrowly beating out sonic three. a lion king prequel claimed number one over the five day holiday stretch with $63.9

million while sonic 3 pulled in $59.8 million. rounding out the top three was no sderot to with -- nosferatu. romaine: we are going to take a look at the life and legacy of president jimmy carter. condolences still pouring in, xi jinping sending his condolences to karin president joe biden about the passing of our 39th president. the light and legacy of jimmy carter coming up after the break. this is bloomberg surveillance. ♪♪ ♪♪ ♪♪

♪ romaine: under surveillance this morning, the life and legacy of former u.s. president jimmy carter. >> president carter came to office in the wake of watergate and vietnam with a commitment to right the ship of state.

president carter brought back to government honesty, integrity and faith in government. he ran as a candidate on a government as good as his people and he truly did deliver that. i think president carter in many ways was ahead of his time in terms of his emphasis. on human rights, in thinking about alternative energy, in terms of his role. we all know that his ex presidency which has been such a long one has been graced by remarkable contributions to humanity by former president carter. i think right now he is seen very favorably. i'm really happy to see that because he's a very special man. >> one of his biggest challenges was energy in the face of the second arab oil embargo.

>> he was president during a very challenging time. there with the oil embargo would stroke oil prices -- drove oil prices which became the catalyst for the highest inflation that we had had. he did appoint very much tightening monetary policy causing a recession, which certainly was not an easy thing for president carter to run through. how are country could invest and incentivize in that area. i don't know if you remember but he had a solar panel on the white house which when he left, president reagan took down, but

he also had fuel mileage standards and really realized way before anybody else that we had to start thinking about climate and what it was doing to the planet. >> but as influential as jimmy carter was as president, people beaver member and every bit as much for what he did after he left office. >> the thing that i think is absolutely most notable about president carter is we can all debate the relative merits of any individual president's term but i think it is inarguable that president carter is the single most impressive, most successful land most to be admired ex-president in the history of our nation. this is a man who took the responsibilities of being a visible public figure incredibly seriously and was a role model to all of us.

romaine: current president joe biden designating january 9 as national day of mourning for former president jimmy carter. carter died at his home in georgia yesterday at the age of 100. terry haynes of pangea policy joins us now to help reflect on the life and legacy of jimmy carter. a lot of important dates. we talk about january 9 being a day of reflection and remembrance. of course his birthday, october 1, his death on december 29, but i want to start with july 15, 1979, the day he gave that famous speech and just a few weeks after that appointed chairman of the fed to fight what at the time was just an almost unprecedented level of inflation that this nation is facing. a level of inflation that for years, he didn't necessarily get credit for taming. >> i think that's absolutely

true. i said to markets this morning i think they should all thank and remember carter for the crucial role that he played in breaking the back of inflation over several years. as well as not only appointing paul volcker but defending him personally and fed independence is term, something which president reagan also did at no small political cost to reagan even though he eventually got the benefits out of it. that set the stage for not only the great market runs that we seen even for great geopolitical crises, health crises like covid, a bunch of other things, but also set the stage and helping the united states when the cold war by boosting the relative economic strength of the united states against the soviet union at a crucial time.

>> it is interesting to read some of the biographies that are really painted in a much better life and maybe let the country view him back in 1980 when he lost ronald reagan. as i am serious that if it went for the hostage crisis, the oil embargo and worse, the level of inflation, is it possible that he might have been reelected in 1980? >> absolutely. president reagan's run began fairly late, and carter was absolutely bedeviled by a lot of these policies. i've met president carter, but i was privileged to know a lot of the people that were his senior aide including jody powell, who i knew decently well. got a window into a lot of these things, and carter's strengths

turned out also to be some of his weaknesses. the commitment that he showed to voelker which made such a huge difference for the country even today was also in large part what helped bring him down. he had a split in his own party that led to a primary challenge from ted kennedy. he had a revitalized right under reagan that ultimately swept him out of office. and the author was filthy probably too much candor in talking to the american public about things. the malay that you bring up that led to the action that he was either out-of-control or unable to effectively kriti: that is a love of the domestic story. let's talk about his record internationally. the camp david accords, his role in the panama canal, these are all flashpoints that are just as relevant today as they were during his tenure as president.

what this done from take away from that, either lessons to be learned? >> absolutely. the first lesson to be learned i think if the presidency have limits. every victor any presidential campaign and the people around content to be a little fly him from. they all want to talk about the legacies, mandates and the like. clinton came in talking about a mandate when he basically won 43% of the vote. there's always a lot of salesmanship involved, but the lesson you can learn from carter's presidency and a lot of presidencies, frankly, is that the presidency has limits, and it is wise to remember those, even while you are trying to maximize your political benefit in the moment. what carter's presidency showed really was that he found it very difficult to bring his own

congressional party along with him. congress is a coequal branch of government and acts like it. also as much as he tried to lead public opinion, that also came back to bite him. it's a balancing act with a president and any president after carter was wise to remember that. kriti: we talk a lot about energy security, the oil embargo during carter's time as president but we are also talking about it now in terms of tariffs and what is going on in the middle east, that the united states is the largest energy exporter in the world at the moment. what does that mean for the here and now, talking about modern politics, is that a good thing or a bad thing for the united states? >> on balance i think it is a good thing.

we are in the most difficult geopolitical risk situation in more than two years, so it behooves the united states no matter who is president to make sure that it uses its advantages wisely, but that it maximizes those advantages as well. certainly energy is one of those and frankly, look to the next administration and president trump personally drive to do everything possible to maximize that. romaine: let's talk about president trump, his inauguration on january 20. what is his relationship going to be like with world leaders, particularly in contrast to what we saw with carter back in the 70's? i know they are two completely different people with completely different agendas, but are there any parallels? >> absolutely. carter had a very fractured relationship with many countries

in the world. this china policy was very successful but on the other hand, even coming up with the camp david accords require that hard headedness that i lauded him for earlier on monetary and economic policy. and he succeeded in that. he did not shrink from confronting world leaders in a way that he tried to push the benefits of peace. shrub has that same push-pull relationship and the thing i would just say to president trump is a spoonful of sugar will really help a little bit. he's been largely succeeding in pushing allies towards greater

defense spending and a variety of other things. he can continue that, but it's going to take some finesse. he has shown the ability to understand that, that is a good thing. romaine: obviously we had a totally different conversation plan for you but really great to get your insight on the life and legacy of jimmy carter. we talk a lot here about what jimmy carter did while he was in office. we would be remiss in not pointing out that some of his biggest accomplishments came after he left office. his work with habitat for humanity and some of his other charitable endeavors, absolutely remarkable. kriti: winning the nobel peace prize in 2002 for some of his efforts for disease eradication is certainly earning him quite a bit of not just condolences as a former president but truly as a game changer for a lot of the other ills plaguing the world. romaine: aunt joe biden saying

that they will be a national day of remembrance you worry 9, a st ate funeral as well as a private service that the family has planned down in georgia where jimmy carter was born 100 years ago. coming up here on the program we are going to take a closer look at what is going on in financial markets and a look back here at some of the key interviews that we've had over the year with some of the biggest players on wall street. we are going to hear from citadel ceo ken griffin who sat down with sonali bassett just a few weeks ago. we definitely want to hear what he had to say about the future of financial markets and for that matter, the future of politics. s&p futures from new york city and to our audience worldwide. this is bloomberg. rock star. it kinda does. you are not rock stars. (clears throat)

okay. most of you are not rock stars. it is, right. he gets it. yeah. (grunting) at morgan stanley, old school hard work meets bold new thinking. ( ♪♪ ) partnering to unlock new ideas, to create new legacies, to transform a company, industry, economy, generation. because grit and vision working in lockstep puts you on the path to your full potential. old school grit. new world ideas. morgan stanley.

>> i don't think the fed really appreciates the qualitative tightening tool as much as i do. i think as much as the markets do. ♪ romaine: welcome back to "bloomberg markets quick check of where we stand in u.s. futures. a third straight day of declines in what is still going to be a phenomenal year on this penultimate trading day of the year. nasdaq futures finally lower. seeing a slight decline in yields a racing a lot of the gains we had on a year to date basis for u.s. government bonds,

keep an eye on german bonds. we take a look at the dollar, really unchanged on the day. we take a look at that chart and it does not tell the whole story, the dollar up 7% against the euro, up about 5% on the day. keep an eye on a few key stocks. one of the biggest decliners in the premarket. we refocus here on what is going on in politics with president-elect donald trump facing a bit of a rift among his silicon valley backers over immigration. the gate -- debate wrapping up over h1v visas. the ceo sat down with sonali basak last month, here is what he had to say. >> immigration is an area of the

trump administration will be focused on. it is an area of real concern to me because much of our nation success is rooted in our ability to attract the best and brightest from around the world to work for american firms and start american firms. roughly half of all of the firms that have been launched the last 20 years are led by immigrants. i would say the majority of sales is immigrants. people that come from this country, they believe in the american dream. and yet i think everyone agrees that the chaos on the southern border represents a broken immigration policy where there is very little control over who comes into our country, whether they come to pursue the american

dream or in the various reasons. there is widespread across the country that we need to secure our southern border and we need a more orderly structure. this has been a really important voice that the american voters have delivered to washington. i'm pleased to hear that voice, i want to see washington execute on a policy that protects this nation's great stature of the world being the country you come to, to pursue your dreams. i was in europe last week with a chance to talk to some of the most senior policy leaders in europe, do you know what they talked about? they talked about how europe loses its best and brightest to america.

they talk about how the europeans had a number of absolute world leading minds in ai, how all of them have left to come to america. we need to keep that positioning . the second area that is very front and center on the minds of the american people is inflation which ties into the economy holistically. for most, it is not clear what the right government policy should be with a very fine pointed pen. they do appreciate when the economy is at full potential, when unemployment is right around 4%, that is about as good as the economy should be and yet inflation was running hot and

deficit was running roughly 6% to 7%. that is a number you would've seen during the pandemic. at a moment in time when it should've been looking pretty strong, our deficit in the clinton days was actually a surplus. the deficit should be closer to zero and was running closer to 6% or 7%. something is wrong in washington. the challenges, will team trump, will this administration be able to find a path to put america's fiscal house back in order. that is one of my real concerns. that is a big issue. sonali: over the course of the next hour we will go into different policy measures.

we will shift gears to talk about the market and how you navigate around it. let's start with the deficit. prior to the election you have the committee saying that you have an administration with the proposed policies ahead, seven point $5 trillion to the next decade. how do you start to trend that -- trim that fat and bring that number down? ken: how much did both candidates run on a strategy of promise the world and then deliver reality postelection? neither party had a compelling story. i think it's very difficult to have judged either vice president harris or president trump on the merits of their economic policy. neither set forth a plan that was tangible and would achieve the results for the american

people. that's part of the reason the secretary of the treasury is so important. the role of the senate, the role of the house. we will have to see the republicans govern and make some very difficult decisions about where to cut, what tax cuts if any happen or are maintained. we have to put the fiscal house in order. these are really unpopular decisions for politicians to make. sonali: a big part of that $7.5 trillion projection comes from tax cuts. do you think any of those could get done with where the deficit stands today? this administration is very different than when we saw trump back then given the size of the deficit ballooning. ken: in both scenarios, trump has inherited the following problem, american productivity is below where it needs to be

for us to make -- for us to deliver on the promises we have given to our retirees and forthcoming retirees. there's no way out in terms of promises we've made other than the american productivity. to be clear, i think trump made a bet, if we cut taxes, if we incentivize corporations and investors to take more risk, to put more money into capital and software, we will get the productivity gains that we need. romaine: the ceo of citadel, the world's largest market maker speaking a little bit earlier this year with sonali basak on a wide range of issues. the big focus by ken griffin on politics. let's get you an update on some of those stories outside of the world of politics. kriti: the transit deal with

russia sent to expire tomorrow bringing billions of cubic meters in gas flow to a halt. ukraine's president accusing slovakia's prime minister of making shadow agreements with russia's president. the deal will have major implications for the energy security and efforts to reduce its reliance on russian energy. south korean political turmoil continues. the country's investigators saw a warrant for south korea's president, the impeached leader replied -- repeatedly denied court summits to appear over his decision to declare martial law. he insists the move was within his constitutional powers. staying with south korea, 179 people were killed when a boeing 737 landed in a crash. investigators are probing the cause in the worst ever civil

aviation accident in the country. the pilot issued a mayday minutes after the control tower warned of a bird strike. a second aircraft from the same airline suffered a similar fault this morning above seoul before returning safely to the airport. romaine: coming up next, investing in africa. >> the african union is adopting policies africa wide. that is smart. the opportunity to be geopolitical for africa and harvest this technology. romaine: that is coming up next. you are watching "bloomberg surveillance." ♪

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romaine: under surveillance this

morning, investing in africa. >> here in africa, the african union has adopted policies that are africa wide. that is a smart approach. how you get at scale will make a difference. the big opportunity for africa is to have the 2 million people here under a similar set of rules so they could come up with something that could scale to 2 billion people. that is the opportunity geopolitically for africa right now is to harvest this technology. romaine: that scale is important. the world eyeing to invest in the fastest urbanizing place on earth, the continent of africa. development partners writing about this drives consumption and the consumer classed is forecast to make up 60% of the population by 2060. runa has been involved in private equity for three

decades. great to see you early, happy new year to you. i want to talk about that investing opportunity. we have talked a lot about the investment opportunities. it is interesting that most of those opportunities right now seem to be more in private markets than public markets. runa: that's exactly right, romaine, thank you for having me on and happy holidays to you. as i look to 2025 there are four major themes we are looking at. the clip from matt griffin pointed out africa has some of the lowest legacy assets in any area. digitalization is driving it forward at a much faster pace. the last 10 years, 66% of mobile transactions in the world are in africa.

that is the first theme. companies that benefit from digitalization. that could be in pharmaceuticals and specialty chemicals. the second thing we are looking at is somewhat new. the energy transition has been talked about globally. africa is realizing how much hydrothermal it has, wind and solar. we will be looking at companies developing in africa. another theme is -- romaine: i want to stop you there particularly on these urban populations. i'm curious if you could talk about some of the risk. there have been some support about how countries that have seen gains are just one big shock away from having those gains wiped out. i think about the youth protests in kenya.

how do you as an investor approach that type of risk that does seem a bit harder to wrap your arms around. runa: i think shocks are true everywhere in the world. i have been investing in africa for 25 years. there have been many such events that you referred to. the underlying themes of great population growth, 40% will be in africa by 2050. urbanization leads to further consumption. and then the growth and gdp coming in the year 2025, africa will be equal in growth to asia. by 20 will outpace. a couple years earlier than previously projected. those things create a situation

where despite the shocks, there is a supply demand gap. those are the sort of companies that we look at in private equity that we invest in. kriti: the case is quite clear from a demographic point of why africa is looking for returns. there has been a dynamic where so many french banks that have these historical ties and partnerships to africa has pulled out. they just can't make it profitable. they are getting basically outperformed or they are underperforming some of the more local banks, what flips that dynamic? runa: that is exactly right. with the growth of local banks, the big banks in other countries, they are growing. they have really high returns on assets and equity.

it really is adopting the banking model to the local needs. for african consumers and african companies themselves yes, some of them, not all of them are pulling out. the local banks are taking their place. as well as an opportunity for local businesses be they large corporate sort -- to actually have better banking services. the big trend there is both banks are thinking to the other banks in africa, there is a great need in opportunity there to get to smaller enterprises. i see opportunity in the trend you just mentioned. we invest primarily in local companies. kriti: the opportunity of investing in the private market

space that you alluded to, the idea of low banking penetration, in a world where private equity in the region is looking for a lot of support and a lot of government backing and security, how confident are you that africa can compete with the same returns you are seeing in europe, parts of asia. runa: it is really the growth, that is the story. the growth in economies, there are 23 countries in africa that are projected to grow 5% or higher. that growth feeds into return. absolutely there are shocks, there are issues sometimes with volatility in countries. that being said, our companies are growing very fast. our loss ratio is very low compared to other parts of the world in private equity. there are investable

opportunities. the macro you are referring to is part of africa, many parts of the world. the opportunities within themselves, if you pick the right companies, you put in what we call real hands-on value add. you are able to exit properly. that is a big opportunity. another trend that i will refer to now is the interaction between the middle east and africa. africa and the middle east our neighbors. we have seen middle eastern entities buy our companies, buy middle eastern companies, or do joint ventures. that integration is another big reason to be optimistic in africa. romaine: it's interesting to see just how much middle east investors have increased their presence. i'm curious about the sphere of influence. there has been a lot of talk about china and russia's

influence from a geopolitical standpoint. president joe biden made a trip over there earlier this month promising billions of dollars in humanitarian aid. there's a lot of talk of infrastructure investment as well. i'm curious how all of those pieces fit together? runa: it is interesting. this last year, africa has received attention globally. if you look at the following things, the african union has a permanent place in the g20. south africa is the current president of the g20. the g7 have created an initiative called the bill back better world where the eu and u.s. are set to invest in africa. there is china's initiative. a lot of attention. the eu and u.s. are also pledged to really support the corridor

from angola to the copper belt. all of these things are playing into the fact that africa is coming into its own as a geopolitical power in its own right. that is getting attention which we think a lot of investment follows, once that attention is there. romaine: one other interesting aspect i have seen in regards to investing in africa, this is probably more in public markets then private. the search for big beneficiaries of artificial intelligence. it has been very concentrated in the u.s. among a couple of big companies like nvidia and microsoft. there was an interesting note a little while ago talking about how the next big investable opportunity in ai would be in emerging markets and specifically in sub-saharan africa? runa: you are absolutely right. that is the same trend, the

continuation of the digitalization trend. we have been focused on the first level of digitalization which started around 2020 around the covid period, where all companies had to digitalize. this year and going forward we are focused on ai. that is the next logical trend. the more sophisticated companies get, very low legacy assets compared to the rest of the world. the more concentrated and better they get at reaching consumers in an intelligent way. the better they are at creating revenue and increasing. i expect ai to be a part of the whole ecosystem in africa over time, starting with the larger companies. in africa, we now have a venture capital area. that is also highlighting ai, use of ai in some of the business models. i do expect ai to have a bigger impact over time in africa than

most other regions of the world. kriti: one of the key pieces of the ai story even in the united states or in the u.k. and europe, you need a talent pool to keep that going. you need a talent pool that could create the technology but sustain it. does that exist in africa, in south africa, south saharan africa? runa: there are four major hubs where they landed several years ago first, egypt, nigeria, kenya, south africa. that is where the talent pool engineers, computer scientists exist. there has to be more training throughout the continent and in those hubs as well in ai. we are seeing quite a lot of young people going into these areas. we see diaspora coming back. we have fintech headed by a

nigerian working on the continent having created a unicorn. very good example of talent, africans looking at africa and local talent being developed. romaine: always a wonderful conversation. we will catch up with you in 2025. over at development partners about investing in emerging markets and investing in africa. quick check of what is going on in the commodity space. interesting year for oil. we talk about how crude oil started the year with a 15% rally. relatively unchanged during the day, down 4% on a day-to-day basis erasing all of those gains. coffee and gold down on the day but sitting on phenomenal gains on a year to day basis. kriti: very fastening -- fascinating. how are you prude -- pricing that uptick. romaine: romaine bostick, a lot

more coming up on bloomberg surveillance stay with us. ♪ ♪♪ ♪♪ ♪♪

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on our most popular smart bed. save $1,000. plus no interest until 2028. shop a sleep number store near you. >> the market is seeing the economy is not heating. >> you need something. you need that to really anchor you because we will have a lot of volatility. >> we will get out a bit of a sloppy january. >> this is "bloomberg surveillance" with jonathan ferro, lisa abramowicz, and annmarie hordern. romaine: good morning to our audiences worldwide. romaine bostick and bloomberg's

world headquarters -- in bloomberg's world headquarters in new york. i am joined by sonali basak. good to see you. happy holidays. sonali: good to see you. happy holidays. romaine: we are filling in for the trifecta. let's get the lay of the land of what is going on in the markets. this is a holiday shortened week. wednesday of course the stock market is closed for the new year's day holiday. sonali: a light week, but a down note. we are seeing december being the worst month we have seen since april. already we had the big selloff after the fed meeting, but we will see whether this is a change in attitude or some profit-taking at the end of the year. romaine: absolutely. futures in the u.s. pointing to a lower open on the russell futures and the nasdaq. stocks in asia and europe have

been on the back foot as i have been the last few days. euro relatively -- back foot as they have been the last few days, and the euro relatively unchanged. this down month, this down day we are having is not reflective of what has been a phenomenal year pretty much across all asset classes. stocks right now sitting on 20% to 30% gains in the u.s. you made a little money in the fixed-income space. if you invested in bitcoin, congratulations. golf cart to you. hopefully you take your profits and go into something else, or maybe not. cameron dawson with new edge wealth will talk to us about the lack of brexit in the market and whether that will increase. we will hear from kim wallace on the political situation and a refection on the life and legacy of president carter. parmy olson is a bloomberg opinion columnist that has a

great book on ai called "supremacy. we will talk to her about the future of the ai trade and whether it will eat all of our lunches, but we begin with the stock rally on pause. gains of the magnificent seven leading the way. 10 stocks county for the s&p 500's gains since the october 2022 low. you point the camera now to our first guest cameron dawson joining us to talk about the lopsided this we saw at the start of 2024 and whether it will be a lopsidedness at the start of 2025. cameron: the most important point about breadth, earnings growth has been arrows of it is not just valuation alone. we have seen that in the last four months. if you look at the magnificent seven, their earnings have been

revised higher by 15%. if you look at the equal weight index, they have been revised lower by 5%, so that spread and earnings strength is what has been driving the fact that this market is led by such a few short names. if you look at estimates and 2025, they have the everything else -- 2025, they have everything else starting to participate -- if you look at estimates in 2025, they have everything else starting to participate. romaine: how much of that is dependent on economic conditions and policy conditions coming out of washington? cameron: it is rather peculiar we have seen this economic growth environment where we have had consistent upside surprises to growth, we had growth beat above trend, and yet it has not materialized to the everything else earnings. meaning you have had this strong gdp environment but the average stock has continued to struggle. part of that as an overhang from the pandemic. you had some over earning that

happened. margins got overextended. that was coming back in. you have this expectation that you will have a huge react to location in the 493 names. we are not sure if you get that in the deceleration environment. sonali: you are seeing a big rebound in the bond market. we were at 4.61% on the 10 year last week. is it getting in the way already? cameron: the thing that is most surprising in 2024 is how much we have seen multiple expansion despite having rising bond yields. if you look at multiples for the s&p 500, they are up 17% over the course of the year. that is with a bond market that has seen the constant pressure in rising yields. at a certain point, is a 22.3 times forward multiple consistent with a bond yield at 4.6%, we always have to remember

that valuations are a very poor timing tool. equity risk premiums are incredibly narrow, incredibly tight. you are not necessarily getting well compensated for the added risk, as i tell investors. sonali: if you believe the reason yields are higher is because of strong economic data, does that mean any vulnerable economic data can set the market a little haywire? cameron: i think that is a really good point. if you are looking at things like credit spreads being ultra tight, valuations being so high, it is not contemplating any sort of growth slowdown. if you are in an environment where you see growth estimates getting cut versus raised, that would be a challenge to valuations. we think the most important charts over the last two years is gdp estimates for 2023 and 20 24. it has been a constant climb upwards. if that starts to go the other direction, meaning revised

lower, that is a very different market mood. romaine: i am curious when we talk about the expectations for economic growth. and we have seen what the markets and the economists and the fed expect. it is healthy. it may not be gangbusters, but it seems like a healthy enough foundation. so why is there still trepidation in the market and it comes to mid-caps, small caps -- when it comes to mid-caps, small caps, those that would benefit from the environment? cameron: risk has been priced out of the dust recession risk has been priced out of the market -- recession risk has been priced out of the market. romaine: i forgot about recession risk. cameron: if there is one thing -- romaine: do you believe? cameron: it makes us nervous if we are not considering downside risk as we are starting to see some signs of things like continuing claims last week continue to march higher. when it comes to small caps and

mid-caps, we have to acknowledge it is about the balance sheets, interest rates being so high, and there is this notion of survive until 2025 because powell will bail you out. we will get interest rate cuts. if those don't come, we have the balance sheet cost pressure that comes. romaine: if i say the word value to you, what does that even mean right now? is there value to be found in this market? cameron: value is not necessarily dirt cheap at this point, but we know the relative performance has been so abysmal that it is likely primed for some kind of setback. jeff pointed out this morning the value relative performance has been in about the six percentile -- sixth percentile, so very depressed. does that start to rotate in the other direction that is sustainable? meaning you can see it's not back in value simply because it is under loved and under owned, but is it lasting more than two

weeks? that comes back to the earnings line because those have to deliver more than a flash in the pan. sonali: a lot of investors have been trying to rotate out of the high flyers, the tech stocks, out of nvidia for example. romaine: not nvidia. sonali: not nvidia. you have seen pullback here and there. if you think about the way people are rotating, there is not a consensus. you have seen that small-cap trade, value, rotation to different sectors as well. how do you play it? what is the most sustainable rotation at this point? cameron: we think it is the steady hand of quality that remains very important. over the last four months or so, you have seen a surge in low-quality, high beta, high momentum kinds of names. we think the best way to be able to take advantage of these rotations is to continue to focus on things like high free cash flow, good investment return on capital, good balance sheets. they are getting left in the

dust recently but we think long-term, quality is the way to go. sonali: a lot of people under bloomberg terminal running those terminal charts. i want to go back to something you said earlier about gdp growth. because so many investors are looking at the way the trump administration will tackle the reorganization of the government. now we are talking about doge more and more on this program, aren't we? do you believe that could cut into the growth if we do not see the same type of fiscal stimulus we have seen the last couple years? cameron: fiscal has been a big contribution to overall gdp growth. if you start pursuing something that looks like austerity, it might be beneficial in the long run if we want to talk about budget deficits and balanced budgets, but in the short run, there is pain you have to have for that gain. it could be that if we are actually, and that is a big if, able to rein in some spending and do reorganization of

government, that could detract from overall gdp growth. we saw that the last time we went through a balanced budget kind of outlook. it was a drag on growth. it is an important watch point. romaine: that is a good point because i think people forget how much government spending contributes to the growth of the economy, and it gets into the idea of the bifurcation. how you have a higher end consumer if you will, higher income people that appeared to be doing well, but people in the middle and lower end anecdotally seem to be struggling. there is interesting data we got today about credit card delinquencies rising particularly among lower income folks. cameron: it is still very present that we have this case shaped economy. if you think about the lower income consumer, they are far more sensitive to inflation and they are more sensitive to the job market. the fact that you are seeing hiring start to slow down, that is likely what is creeping into those issues we are seeing with

the delinquencies for the low income consumer. if you go to the high income consumer, that is where the equity market is important because that has been one of the things. loose financial conditions, high interest rates, strong stock prices, strong housing prices have led to the high income consumer being resilient. the top 20% of consumers make up 40% of overall consumption, so they out punch their weight. if you start to see equity market weakness, that could cause the high income consumer to begin to pull back. romaine: i should point out i did my economic part this holiday season. i am sure it will make me weep when i get it. sonali: not excited to see it. the credit card delinquencies are a big point. we have earnings season starting once again. if you start to see credit card to the quincy's rise, do you worry about the banks again or -- credit card delinquencies

rise, do you worry about banks again? cameron: banks will get the benefit of the big ipo and m&a cycle. that is a big help. we are seeing good recent ipo stocks over the last month. maybe that is something that can defrost the ice that has been present for the last two years with in that part of the market. but it is an interesting point that markets have effectively priced out the credit risk saying the economy is strong so we don't need as much compensation for credit risk, but you are starting to see pockets of weakness. if rates remain high, we cannot forget that you have a big refinancing cycle that begins in 2025 into 2026. maybe that starts to pinch some of the borrowers. romaine: going to have to leave it there. no better way to close out the year than with a conversation with cameron dawson. let's get you an update on some of the big stories moving around the cycle this morning.

sonali: the u.s. economy defied expectations and remained solid this year despite uncertainty around the presidential election, elevated interest rates, and a cooling labor market. the american consumer was the main driver of the economy's resilience with household spending advancing 2.8% in 2024 supported by wage growth and household wealth. however, cracks have emerged in the manufacturing sectors, rising delinquency rates, and stalled events toward the 2% inflation target. nearing a 27% advanced fueled by u.s. monetary easing, sustained geopolitical risks, and a wave of purchases by central banks, gold has had a good year. lithium experiencing a second annual decline. elon musk making waves as he wages into international --

weighs into international politics. two down on his support for the far right german party two months ahead of the elections. he wrote an opinion piece in a german newspaper saying it was the last spark of hope. romaine: we are keeping an eye on former president jimmy carter. pres. biden: president carter stands for when it means for living a life of purpose, faith, and community. someone who embodied the most fundamental human values and never let it slip away. romaine: a reflection on the life and legacy of jimmy carter. that is coming up next. you are watching "bloomberg surveillance." ♪

romaine: welcome back to "bloomberg surveillance." a quick check on what is going on in the markets today. asia stocks down. european stocks lower. u.s. futures pointing to a lower open as well. the dollar relatively unchanged on the day. that is coming right now on what has been a phenomenal year. crude oil here in new york up about half of a percent. keeping an eye on the equity space, it will be a light week on the penultimate trading day of the week. wednesday is a holiday. under surveillance this morning, we want to take a moment to focus on the life and legacy of president jimmy carter. >> america and the world in my view lost a remarkable leader. he was a statesman, a

humanitarian. i lost a dear friend. jimmy carter stands as a model, what it means to live a life of meaning and purpose, a life of principle, faith, and humility. not for a time but for all time. romaine: president biden among the leaders member in the life of former president jimmy carter. he died on sunday at the age of 100 at his home in georgia. president-elect trump posting about carter's death untruth social saying "while i strongly disagreed with him philosophically and politically, i also realized that he truly loved and respected our country and all it stands for." he called carter a truly good man who will be greatly missed. that might be the understatement of the day as we reflect on a life that started 100 years ago back on a small farm in georgia, a man growing up with no

electricity, no running water, rising up to be the leader of the free world. and legacy tarnished by a hostage crisis and inflation but a legacy that was reshaped and reimagined over the years as i got a people look back at his time in office and realize he accomplished more than what people give him credit for in 1980. kim wallace not only covering politics but quite the historian himself about our leaders and about the legacy and how those legacies can change over time as we have more time to process not only what these presidents did in office but the long-term impact of that. i am wondering if you can start with some of those policies that were quite unpopular when carter put them in place in the 1970's but over time, we kind of saw the wisdom of what he was trying to do. kim: in that dynamic, good morning. i would think energy conservation comes to the top of the list.

we have now corporate average fuel energy standards that came out of jimmy carter's attempt to push back against opec using oil as a tool in the middle of the 1970's to various degrees of success. but nonetheless, the man, a nuclear physicist, pointed out that energy dependence of the u.s. 50 years ago was an important domestic policy and geopolitical objective. i don't think he gets enough credit for that. romaine: interesting you bring up energy independence, and we are to a certain extent energy independent right now at least when it comes to crude oil. i want to bridge the gap between the 39th president and what would be the 47th president with president donald trump's inauguration next month and whether we see a continuation maybe of some of those policies or at least a legacy of those policies that started under carter. kim: well, you know, president carter had a lot to deal with.

much of it he inherited for example with the inflation he gets tagged with that came from president nixon's decision to take the u.s. off the gold standard. that devalued the dollar and led to a rampant and steady rise in inflation that carter attempted to deal with and that got politically jabbed for doing so. in terms of energy conservation, is not just an aspiration and not an objective. it is actually an investment vehicle. i think of all the protections come into what is known as the ira program climate science that was passed in 2022 is the fact that you have a lot of mayors and governors around the country, particularly in the middle of the country, who support the program strongly because of the investment is bringing to their areas. that is going to protect the ira as we go through 2025. my guess is both the ira and

ships, something -- chips, something carter was aware of, particularly in the shipbuilding area going back to his naval career, those things will be debated during the tax policy conversation, not before. sonali: some of the aspects of what he put into government while he was there includes also speaking of energy the department of energy as well as the department of education, a department the president-elect has previously pledged to eliminate. when you think about the organization of government moving forward, what from the carter era remains moving forward? and are there pieces of it being chipped away? kim: good morning. my sense is it is underappreciated again that the bureau and the budget became the office of management and budget in part because of carter's push to professionalize fiscal policy

in the executive branch. in terms of what would be lasting, my guess is people will remember the attempted price controls, and that probably has historical lessons to end both in classrooms and in the economy overall. again, people focus a lot on the failed iran hostage crisis, but they don't focus as much on carter was the first president to extend formal diplomatic relations to china and the camp david accords of course helped at a time in the middle east in the headlines in a way that remained very personal negotiation by him and two of the heads of state. sonali: what would another camp david accord look like today? do you think another peace accord could be accomplished

today with the divisions we are seeing now? kim: i think so. i benefited from a weeklong trip to the middle east last spring. i was struck with speaking with a lot of asset allocators and other types of investors, both portfolio and direct, at the geopolitics of the region. this is the uae, saudi arabia, and qatar. my sense is the ebrahim accords that president trump got going and president biden followed through or attempted to still has life to it. what has happened in the middle east in the last six months has been shocking, frankly, and resets opportunities in the middle east. and the regional players there are much more interested in growing, accumulating, allocating capital than episodic war. my sense is in the first half of

next year, there will be another opportunity. clearly after a lot of death and destruction regrettably,, there will be an opportunity to reset the middle east among the three or four major players in the region away from these hostilities. romaine: all right, kim wallace, we will catch up with you in 2025. a look at the life and legacy of former president jimmy carter. when we come back, we will take a closer look at the world of artificial intelligence. a conversation up ahead with parmy olson, the author of "supremacy." you are watching "bloomberg surveillance♪

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romaine: a bit of trepidation heading into the year-end. this is "bloomberg surveillance ." romaine bostick alongside sonali basak filling in today here on "bloomberg surveillance." let's take a quick check of the markets. we are seeing s&p futures looking like they are setting up for what is going to be potentially a third straight day of declines. that is still sitting on monster gains on a year-to-date basis, more than 20% in the s&p, 30% for the nasdaq composite. we talk about some of the individual members on the day. a big gainer in the premarket trade. take a look at the treasury market.

the 10 year yield, if you told me we would be at 4.6% if you want to go, i would have said no chance. sonali: you have a bid back just a bit, but yes, 4.58%, just incredible the study moves we have seen. the 30 year almost at 4.8% if you can believe it. romaine: the dollar having a phenomenal year up against its peers. 7% up versus the euro on this monday morning in new york. we turn our attention down to the world of artificial intelligence. of course, it will he burst on the scene at least publicly in late 2022 with the release of chatgpt. i went next guest, parmy olson, is the author of a book called "supremacy." she notes the speed of ai adoption in the tech industry is phenomenal, writing "generative

ai promises to make people more productive and bring more useful information to our fingertips through tools like chatgpt, but every innovation has a price to pay." parmy olson joining us right now to talk a little bit about those prices. i want to start out with the evolution of this. i know ai has been in the government for years if not decades. for most of us, we only -- it only came to our attention a few years ago. i was talking to a silicon investor reminiscing about the computer age back in the 1970's and 1980's and how it was a bunch of ragtag researchers, people truly in their garages creating this stuff, and he compared it to today where it is not about the garage innovation but about microsoft of alphabet, and nvidia. the big heavyweights, multibillion-dollar dollar companies, trillion dollar companies driving this. why? parmy: i think it is interesting to make that comparison with

the.com boom -- the .com boom or the era of the 1980's. now a lot of the so-called innovation, and it is innovation, is coming from companies that are in quickly well resourced. we are talking the largest companies in the world with market caps in the trillions of dollars like microsoft and google or microsoft as a proxy for openai which has a 49% investment from microsoft. ultimately, what that means is when people talk about ai hy pe and whether we are in an ai bubble and we will see some type of a crash, my view is there has been a lot of hype and overhyped, yes, but i don't think we will see a big burst or crash because unlike with the .com boom and bust, this revolution in tech is being driven by companies with huge balance sheets, tens of billions of dollars, and they could afford to keep investing

in this very expensive technology for quite some time. i think we will continue to see this buildout continuing into 2025. romaine: what does the end product of ai look like? in your book, you talk about deep mind, openai, the competition between them. but what i found most fascinating about the storytelling among those two characters in the book was the divergence in their opinion of what ai should be. i feel like that seems to be the big challenge right now. you have two overarching competing visions of what ai should be. parmy: yeah. the divergence in my view is between how these missionaries, in my view the two most important builders of ai are the founder of google deep mind and the founder of openai, and these two guys in charge of these two companies have been trying to build artificial general

intelligence. that is the ultimate objective, which is ai that surpasses the cognitive abilities of humans. but they started out with explicitly humanitarian goals, building this ultimate godlike ai system that can help solve a lot of economic and societal problems, cure cancer, bring economic abundance to everyone. but what happened and what my book explores is this divergence away from those goals as these builders decided the ends justify the means. in order for us to build this technology, we need to align ourselves closer and closer to these incredibly large technology companies and build this ai as a product for these businesses and be driven by the financial incentives of those companies. sonali: aligning with capitalism more closely. openai mulling a plan for a for-profit business. what do you make of that?

does that create a way for more people, more investors, potentially retail investors, and may be a potential future one day ipo to be involved? or does it take away from its initial mission here to be a nonprofit, to be for the better good rather than the sake of money? parmy: it absolutely does both of those things because openai started as a nonprofit. it was not getting investment. it was getting donations. no one wants to donate hundreds of millions of dollars for this possible godlike ai that could bring economic abundance to everyone as sam altman has insisted it will do. that is why a few years after openai's founding, he realized building ai, generative ai as we call it now, is so expensive. he needed to get investment. that is why he took investment from microsoft and is now taking investment from other big players including softbank. it is interesting to hear you say ipo. it is almost like nothing is

really off the table now. i think one every they are looking at is particularly restructuring themselves as a public benefit corporation. that is maybe one way they can tow the line between capped profit and for-profit. but ultimately, the original objectives they were chasing have faded into the background as they become much more product focused and business focused. sonali: where does the responsibility lie at the end of the day? very curious what you make into meta's approach into ai. as opposed to the way chatgpt and openai deal with their own systems, more closed off. is there a dominant model here and making one company more successful than the other at the end of the day? parmy: that is a great question. that is what i wanted to explore with the book. both dennis and sam tried to start off or bill nonprofit

versions of their organizations, and both failed. they were trying to put in responsible oversight and governance of this very powerful technology. what i wanted to show to the mainstream audience through the book was ultimately we still have not think it out how to balance innovation and oversight and good regulation of this kind of transformational technology. open source, as mark zuckerberg and meta is trying to chase now, is a really interesting third party or third approach to providing ai democratically to people through free open-source software. the question is whether it is actually open-source. there is debate about whether the llama model that meta let out is technically open-source. and if you look at the most recent versions and has put out, they have become increasingly restrictive in their terms of use. and there are a lot of questions about the misuse of these kinds of models. everybody and anyone can use

them. they cannot be policed. romaine: that is what i'm curious about. you used the word oversight earlier and i chuckled inside because i don't know where the oversight is. parmy: i know. romaine: the industry is so far ahead of regulators right now. we don't regulators are always behind but the pace of which we are seeing development in the space relative to the lack of regulatory oversight, what does that mean for us? we will end up with a powerful technology controlled by a smog above billionaires and a technology that i am told that can do a lot things that humans do. i assume you are real and not ai this time around. parmy: so far. romaine: the fact is i might not know that and a lot of people may not know that. when do we get the guardrails that assure us that what we are interacting with is what we expect to be interacting with? parmy: yeah, i know. to your point, in the last few weeks as people have been talking about a potential slow down and come openai released a

new model which people in the ai community are really excited about and saying this is a whole new level of benchmarks. ai models can now do reasoning ai models can now do reasoning. -- ai models can now do reasoning. they can take action. i would not discount regulators. i think the european union's artificial intelligence act was put in place even before generative ai came on the scene with chatgpt, and it has a lot of quite good ideas about how to deal with the potential risks that technology can cause. it is not regulating the technology. it is the companies and getting them to do risk assessments on their technology and to be more transparent, which has been a problem. taking the 10,000 foot view as you said, this technology is being controlled by a handful of billionaires. that is absolutely true. it is just a few people making decisions about these models that are incredibly fluent, humanlike, being plugged into human education, legal firms,

health care. there just are not the checks and balances that you would expect for something like that or critically the transparency about how these models are being built. romaine: i am curious. i will ask you kind of a loaded question, and this has to do with how viable this technology is. i know what i'm being told, but there always seems to be out of silicon valley sleight-of-hand when it comes to these technologies. they kind of overpromise what these things can do. there were a lot of good stories about artificial intelligence, ai capabilities, and some of the exaggerations coming out of the ai labs. parmy: yes, absolutely. romaine: including google. correct me if i am wrong. i wonder if investors should be mindful we could be seeing some of that again without throwing allegations around. how much would you look at it from that perspective? parmy: i think absolutely. what investors are looking at where to put their money and how much of an impact ai is having, don't just listen to the tech companies. talk to the businesses, hedge

funds, law firms, education firms, and find out how they are using this. the pr firms and a lot of companies are using these models. to the extent that shows up on the earnings report as an increase in quarterly ebitda, it is hard to find that correlation to where i just paid a subscription to openai's new model and that has translated into kind of a return on investment. that is the big question for both tech companies and their investors. it is so difficult to measure roi on this stuff. but that is something we are figuring out. we will continue to figure it out over the next year. pay attention to the people who are using the technology. not just the tech companies. they are very good at spinning stories about how transformative the technology will be. i believe it will be transmitted but not across the board for every industry and company. some certainly way more than others.

sonali: how far are we out from the holy grail of artificial general intelligence? parmy: oh, gosh. there are some people who don't even subscribe to the idea of there being a threshold for artificial general intelligence. i am not entirely sure where i stand on that because i believe artificial intelligence as a term has become a marketing term. and i imagine agi will also be used as a marketing term. no one has a very clear definition of what that is going to look like. some companies and researchers have put out papers trying to define that. but there is no broad consensus on what that is going to look like. i can imagine companies will proclaim themselves as perhaps having invented something that looks like agi when maybe it isn't. there will be a lot of debate when we get to that point. some people are saying it is 10 years out. googled he might have said it is coming in the next five to 10 years -- google deep mind has

said it is coming in the next five to 10 years. i would be very wary of people proclaiming it as being here given how much the term ai has been so overhyped and used as a marketing term. romaine: this is a great book, and you are a great columnist now a quest with us and bloomberg. i will be interested to see a follow-up to this book in 10 years or whatever we get to the next threshold. parmy olson, author of the book "supremacy" on the future of ai or the race to build ai. now this is becoming more in the zeitgeist. i saw an interesting story put up by bloomberg government saying they expect the next proxy season for governments will have a lot of questions about artificial intelligence and whether companies should be protecting their workers or even their clients with more safeguards. sonali: really interesting because proxy season seems it is always a pompous. new york state's own retirement fund looking at ai babita

disclosures in particular. tom dinapoli, many companies are deploying ai without adequate safeguards. many transparency issues as well. governance frameworks, ethical guidelines, even with the esg pushback uic and, you could potentially see the governance part still see a lot of heat when you think about shareholder activism coming into the next year. romaine: absolutely. it will be interesting to see the proxy battles sometimes go nowhere but this is a big issue, front and center for investors and users alike. something to keep an eye on in 2025. meanwhile, here on the penultimate day of 2024, let's give you a bit on some other stories out there this morning. sonali: this morning, we are remembering of course jimmy carter, the 39th president of the united states, who died at the age of 100 sunday. is compliments during his one term included brokering a historic peace accord

between israel and egypt. after leaving office, he was awarded the nobel peace prize in 2002 for his efforts to promote peace, democracy, and human rights. president biden addressed the nation sunday night, calling card or statesman and humanitarian. biden says he will order a state funeral for the former president in washington and designate january 9 as a national day of mourning. the u.s. stock market has traditionally closed on the day of president's funerals -- presidents's funerals. president-elect trump paid tribute to carter on social media. he wrote untrue social yesterday that carter did everything in his power to improve the lives of all americans. for that, we all owe him a debt of gratitude. romaine: thanks to sonali, and we would continue over focus today on the life and the sea of jimmy carter.

when we come back, a closer look at the fed's path forward. >> the early part of the year, the fed will be to see what happens with policy, tariffs, immigration policy. they will look at the growth rate of the economy, and they will wait. romaine: that story is coming up next here on "bloomberg surveillance." ♪

romaine: a deterioration in s&p futures on this monday morning. the s&p 500 setting up for what could be a third straight day of declines. futures were only down about a 10th of a percent or so when we started the show but you see the deterioration. boeing one of the biggest

decliners. sonali: nearly a 1% decline in s&p futures. tough out there. you are seeing the bend in the bond market so you cannot blame the 10-year for today's selloff. we have a day off this week, but again, tough month to end on. romaine: jonathan ferro, lisa abramowicz, and annmarie hordern for some reason all got this week off together. i am not sure how that works but sonali and i will do our best to keep things moving. under surveillance this morning, inflation and the fed's path forward. >> in the early part of the year, the fed will wait to see what happens with policy, with tariffs, with immigration policy. they will look at the growth rate of the economy, and they will wait. they can afford to wait. there is no reason for them to rush ahead to lower rates anymore and good reason to regret having lowered rates as

much as they have. romaine: chuck lieberman there, a legend on wall street, talking about the positioning in the markets right now. you see the positioning on this day in the treasury market. yields down. we saw the moves on a price basis. treasuries have erased all of their price gains on a year-to-date basis despite imf projections that the u.s. economy is set to be the top performer among g-7 countries. inflation was the big story and 2020 -- in 2020, 2021, and that turned into deflation and 202-- in 2023, 2024. yields are pressed for trump 2.0 and a fed expecting interest return on their 5% for 2025. let's talk a little bit more about that. we talk about the fed tightening cycle. we talk about the fed easing

cycle, and now people are wondering if that is it, whether we got all that we got an the fed stands pat for a good chunk of the year. thomas: yeah. the fed has done a good job of repressing expectations moving forward i think in anticipation of what i describe as trump administration 2.0. this is an administration focused on taxes, tariffs, and immigration policy. all of which are aligned with this idea of this inflationary progrowth environment designed to get the economy moving faster. however, that puts inflationary pressure back on the table. i think with that backdrop, the fed needs to align expectation for a potential pause and the idea of cutting rates. let's sit back and see how the administration gets policy enacted and how they respond to that policy. sonali: what does this mean in terms of risk appetite investors are willing to take? traditionally, bonds have been a diversifier in the 60-40 portfolio. that has broken down as of late.

instead, yes and investors hiding out in cash to a large degree which have yielded better returns even in parts of the shorter end of the yield curve. where do you go from here? at what point do you start to take on direction risk in the bond market that has failed to deliver? thomas: that is a great question. i think as we look forward, a couple things to take note of. number one, let's look at where the market is present itself. they are giving us a good baseline. number one, the december 26 futures contract, that is consistent with one more fed cut over the next two years. the market has priced for the fed to be on hold. the 10 year note has been putting in some of the highest turn premium we have seen over the last decade with both volatility and inflation risks so that suggest yields are fairly priced for this idea of a new trump administration with attentional inflationary policies in place.

we have seen the yield curve has been steepening. to your point, that is added and yield advantage and it is sitting in cash. to that end, where do you go in 2025? you can look at a high income sectors in the bond market to generate income were policy goes sideways. in that scenario, look at loans through high yields, mortgages over investment grade. i think 2025 needs to be a scenario where you are looking to generate as much consistent income as you can. romaine: thomas, we will catch up with you again in 2025. a closer look at the inflation picture, the fixed income picture, and the fed. we know this will be a big theme for 2025. the fed is always a big theme here, but should investors be concerned about inflation? sonali: that is the big question. you don't know what the policies will turn out to be, whether it is posturing on a lot of the

terra policy or if it will be real. how risky will you be as an investor? are you willing to shorten the long end, shorten the leverage? there are definitely some players there. romaine: none of the fixed income space. that trade has backfired so much and 2024. what would you go back out on that limb unless you have some insight into some big shot coming? sonali: you have had a full percentage point added to the 10 year from the september lows. just an incredible move and sometimes violent. romaine: we did not get a chance to ask him about the fiscal situation, but there was a great column earlier today by dan mos talking about the ideas of how that will be a protector against some of the fiscal issues. interesting to see if that place out. we have been here before. sonali: we have certainly been here before but maybe it is a composition into tomorrow and 2025 because it is not going away, the dollar dominance. a lot more coming up for you.

romaine: a lot more conversations coming up including sam stovall and a conversation about crypto. ♪

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>> the market is saying that the economy is not awake. >> i think markets are still

there. >> you need that to anchor you because we will have a lot of volatility. >> i think we will actually get off to a sloppy january. >> this is "bloomberg surveillance." romaine: good morning to our audiences worldwide, this is "bloomberg surveillance." i'm romaine bostick. joint alongside emily graffeo for this hour. great to see you. not necessarily a great day for the markets. great year but on the back foot you are seeing a deterioration in s&p futures, third straight day of the kleins as we get ready to close out the year. emily: i thought stocks were supposed to go up in a santa claus rally but it doesn't look like that. romaine: look like it started out on a good foot but at least the last two days on the back foot. today more of the same. as far as some of the big

gainers, decliners on the day, boeing is down more than 3%, some concerns about the airline crash in south korea. verisign the upside because warren buffett keeps on increasing his stake. emily: what does warren buffett know? romaine: i am told he is a pretty smart guy, has made some money over the years. we check in on what is going on in treasuries, slight uptick in the vix. the dollar unchanged. people trying to pull together everything happening this year to try to figure out whether that will continue into next year. price target next year on the s&p 500? emily: i am not allowed to make targets, i'm a real journalist. romaine: our next guest talking about investors potentially trimming risk to potentially close out the year. we will also hear from perianne boring from the digital chamber to talk about her outlook,

bullish outlook for crypto. and patrick de haan at gasbuddy on the holiday travel season and what is next for the oil and gas markets under a second trump administration. we begin with our top story of the day, equity futures here in the u.s. moving lower with investors dialing back just a little bit on the risk side here in the final two days of 2024. sam stovall at cfra expecting volatility to lead to modest gains for the s&p 500. your and price target of 6585. the repeats after down years has only happened 20% of the time since world war ii. sand joins us now to talk about his expectations. we would be remiss in not pointing out expectations going into 2024 were a lot lower than

when we ended up. the end of december. i wonder if expectations going into 2025 are either too bullish, to bearish or just about right? sam: first off, happy new year in advance to you. i think they might be a little ahead of themselves. i think that while we are headed for a good year, i don't think we will end up with a great year. another aspect to consider is we are in the third year of this bull market. of the 11 bull markets that celebrated their second year, we only saw about a 2.5% price appreciation in the subsequent year with three of those bull markets become bear markets. there is a lot of volatility, a lot of potential for investors to take the money and run. we will see what happens. romaine: a bloomberg survey of strategists we did earlier this month showed most people expect the s&p on average to reach about 6600 and 2025 but you had

some estimates at 7000 and above and that is a pretty big rally. 15 to 20% rally to get to that level. it raises the question, in the global scenario, what exactly drives that, is it just about earnings, economic conditions, what gets us there, if at all? sam: i think what gets us to a double-digit advance is if we end up with 13 plus percent growth in earnings as is currently projected by wall street, that we do end up seeing gdp growth continue to remain above trend at about 3% or so, but we find the rate of inflation turns around and starts to head lower once again. and that the fed is close to its target by the end of 2025, and as a result of being in anticipation of that trend, resumes its rate cutting program, and we end up with more

cuts than the two factored into markets right now. emily: what happens if that doesn't play out, if we don't get the two rate cuts that the fed is now projecting? does that dent the stock market's progress in 2025? sam: i do think it ends up being a headwind, as romaine mentioned earlier, 95% of presidential terms ended up having declines of 5% or more within them, the average being a little bit more than 17%. there is a reminder, however, of the 80 plus declines of less than 20%, we got back to breakeven in an average of only four months. if we get the digestion of gains out of the way before the end of july, history vehicles who he says that basically says we end up with a positive year. there will be more volatility as

investors assess what the fed will be doing next but if you take away a lot of the potential tailwinds, that only leaves the headwinds and could lead to a challenging year. emily: what about on a sector level, is this another year that tech powers hire or do you see the market rotation, equal weighted s&p 500 coming out above? sam: from a valuation perspective, i can see why investors would want to go for the equal weighted 500. right now it is trading at only 1% premium to its average p/e over the last 10 years whereas the cap-weighted premium is trading at a 21% premium. if you look at the last 20 years, the s&p 500 is trading closer to a 35% to 40% premium. but history says, following an up year, you want to let your winners ride. .

going back to the early 1990's, if you earned the top three sectors from the prior year, carry them into the coming year, you beat the market by an average of 300 basis points a year, and you did so 75% of the time. obviously not a guarantee but if the sectors are leaders, it's for a reason. romaine: i want to fold in the idea of a first year of a presidential cycle. not always has an effect on markets. people draw parallels to 2016 where you had that huge trump rally right around the election and then it stalled once he came into office, at least for the first few months, and whether we see a repeat of that given how much the market has appreciated since late october into december? sam: certainly a possibility, again looking at historical precedent. if you look at what i prefer to being the january barometer, as

goes january, so goes the year. add that to the first year of a president's term in office, the first year plus an up january has led to a rise in the market 91% of the time with an average gain of 18%. i could see that we end up pausing just after the inauguration because we want to wait to see what the president will end up enacting in terms of tariffs, tax cuts, etc. but there could be a good end to the year if we start out on the right foot. romaine: we will catch up again with you in 2025. evidently, we talk about the equity market that has been concentrated amongst a few big winners, but it is not just crowded trades, also crowded forecasts. looking at the forecast by strategists we survey, an

interesting story talking about how clustered a lot of these predictions are among certain percentage levels. emily: i guess it doesn't pay to move outside that spectrum. i was reading another story on the terminal that said by late january 2024, most of the wall street strategists already had to revamp the s&p 500 price targets and bring them higher. it just feels like the last few years people have not been bullish enough. romaine: based on the bloomberg survey, we came in with expectation for a median gain to 4800 on the s&p 500. just below 6000 now, so a lot of people were wrong. the highest estimate was for the s&p to finish out the year at 5200, so no one even came close. emily: now the highest is 7100. romaine: so that means we should bank on 8500?

not much action on this day with s&p futures in the red. we want to update you on other stories floating around this morning with our bloomberg grief. we start with the infighting in congress and republican pushback on house speaker mike johnson. some party hardliners have not committed to reelecting johnson as speaker after he backed a spending deal. others in the party are pushing back on call to remove johnson. president-elect trump himself has not taken a stand on speaker johnson's future. the house speaker ship vote based on constitutional law is scheduled for january 3. gold heading for one of the biggest annual gains of the century, 27% advance right now, fueled by monetary policy easing in a wave of purchases by central banks. other metals have had a mixed year with base metals seeing modest gains.

lithium is experiencing a second annual decline. peru has closed ports and public beaches as rogue waves battered the coastline over the weekend. local news networks say fishing has been disrupted as strong waves overturn boats near lima. the national center for emergency operations say 91 of the 121 ports would remain closed until at least january 1. that is your bloomberg brief. meanwhile, when we come back, we will talk about a phenomenal year for crypto, and i guess next year could be even better. the digital chamber ceo perianne boring previews what could be a major year. that is coming up next on "bloomberg surveillance." ♪

romaine: welcome back to "bloomberg surveillance." romaine bostick alongside emily graffeo. stock futures setting up for what could be a third straight day of declines in the s&p 500, still sitting on your today and gains of more than 25%. euro-dollar right now relatively unchanged on the day. 10-year yield started to pick up speed, down about six basis points, below that 4.6 level. crude oil getting a modest bit on the day. the big story of the day has to be cryptocurrencies. bitcoin unchanged on the day, but earlier, it did make a run to around $100,000.

a lot of people looking at these record-breaking rally is and wondering if it could cool significantly as investors assess the impact of a new administration coming in, one that has promised to be supportive of crypto. perianne boring is at the digital chamber, one of the main groups lobbying on behalf of the sector. she says with a new administration coming in, the more on crypto is coming over. this presents opportunities for crypto. perianne boring joins us now to talk about that. i am sure you have the criticism, nothing fundamental driving cryptocurrencies. i don't know if that is true but it will certainly change next year as we have a lot of policies promised on the campaign trail by the trump administration that at least on the surface stand to be relatively bullish for the

crypto space overall. perianne: cryptocurrencies play a very important role in the geopolitical and macro economic environment, starting with bitcoin, the world's first cryptocurrency. this presents a stored value. at a time when we have every significant economic volatility all around the world, historically high levels of inflation, here in the united states but also many other places, having a safe store of value that is a digitally native asset is an idea that this time has come. that is why bitcoin is really seeing huge amounts of adoption. bitcoin is up over 150% this year, the best-performing asset class in the world for 12 out of the past 15 years. the fundamentals are extremely strong. as we mentioned earlier, public

policy and politics absolutely drive what's happening in the markets. we have had a huge attack, political attack to stifle the adoption of bitcoin and cryptocurrencies, and that is no over with the election of donald trump. romaine: let's talk about why it's over, we talk about a lobbying campaign by the industry. they put a lot of money not just into the presidential race but also congressional races. you have the white house administration that appears to be crypto-friendly, a congress that appears to be more crypto-friendly. there has to be follow-through on this. you cannot just say you want to do this without doing them. do you think we will see follow-through? perianne: absolutely right, and personnel is policy. in the trump administration, in the cabinet he assembled, there

are multiple pro-crypto and bitcoin people serving in the cabinet including our incoming treasury secretary who said multiple positive statements about bitcoin on the record. robert f. kennedy, jr., probably the most bullish candidate on cryptocurrencies in the history of the u.s. that we also have paul atkins, our incoming securities and exchange commission chair, who is also very supportive of this space. he serves as one of our advisory board members at the digital chamber. he really knows what policies need to be put in place to help foster the innovation and development of this technology here in the united states. congress will also play a very important role in developing that legal environment that will incentivize the private sector's development of this technology here. we have over 290 members of

congress that will be sworn in and a couple of days that ran on pro-crypto. crypto is the majority party. this is not a partisan issue. we have many members from both sides of the aisle that understand the importance of this technology to the united states leading in its development. emily: one of the positions that has not been filled yet is the person who will be leading the cftc, their role in crypto. there were some reports that a month ago you were a contender to lead the cftc. is that still on the table? perianne: it's absolutely critical the cftc has a pro-crypto person leading the agency. cryptocurrency, the majority are commodities. the biggest issue facing the crypto industry is this regulatory ambiguity which

cryptocurrencies are securities and commodities and both of those agencies have issued confusing and conflicting statements on which one has jurisdiction over the crypto space. president trump is abetting a number of pro-crypto candidates. that is the extent i am able to share with you today. it is critical that we have a pro-crypto leader, someone who is going to ensure the cftc is leading the conversation because the cftc should be the primary regulator for cryptocurrencies. emily: i want to get back to bitcoin specifically because you have a pretty large price target for bitcoin, ending 2025 at 80 0k. tell us what will drive that. perianne: it is impossible to predict the price of bitcoin. there are so many factors that go into why the price is what it is on any given day.

i really encourage investors and people to look at models. what do models, valuation models tell us about what is the value of bitcoin. stop to flow, over 80% accurate to the historical price of bitcoin, has a base case of 800k at the end of 2025. that model has been over two standard deviations above its price, so that could potentially be on the higher side, as high as 3.2 million dollars by the end of 2025. a couple other models to look at, historical price trend. that has that at 190k today. metcalfe's law has it at 119,000. these are not price predictions, these areing at the features, transaction volumes,

historical price of bitcoin to see what is the value today. what the models are showing us is that bitcoin is actually undervalued and we still have a lot of appreciation opportunity. romaine: broadening out from bitcoin, there is the hope with this administration coming in that is more pro-crypto than potentially the last administration, this idea of a broadening out of crypto. these are just digital assets. a lot of talk about digital ledger assets being put into tokenization, we may see the creation of new types of coins. are you expecting a broadening of the industry beyond just the big talk is that we talk about like bitcoin or etherium? perianne: absolutely, which is why the sec and cftc are so critical, and the people that lead those agencies are so critical. the reason we have seen so many innovations, investors, activity

leave the united states, it is because we don't have regulatory clarity between the cftc. bitcoin is the world's first cryptocurrency. it's store of value is very different from smart contracts or building essential applications, or other distributed ledger models. but bitcoin is leading the way. these rising tide lifts all boats. this is where that concept of web 3.0 really comes in. we are rebuilding the internet using blockchain technology, and this will impact almost every industry you can imagine. similar to the internet. this allows us to facilitate peer to peer transactions in a digital way and will not only change the financial services industry, but change the way that we share data and things of value over the internet. emily: you talk about rugged

lori -- regulatory clarity, one of those fighting with the sec will oversee versus the cftc, but what else are you think about in terms of more regulatory clarity for the crypto industry in the years ahead? is it about clarifying or adding more regulations that would be more pro-crypto? perianne: clarity is one of the issues. having these conflicting statements and stances from the sec and cftc has completely stifled innovation here in the united states. there is so much more that can be done to incentivize the development of this advanced technology here on u.s. soil. everything from being able to have a registration process to getting more regulated products to market, that all needs to be built that both agencies. then there are other agencies that come into play.

irs is a big one. tax policy has a huge impact on adoption. getting clearer tax policy from the irs is also a big priority of the incoming trump we have to leave it there. a closer look at the final year of crypto, potentially another one up ahead. headlines crossing the wire right now, accra strategy by more bitcoin -- microstrategy buying more bitcoin. let me come back, a focus on the oil and gas base with patrick de haan over at gasbuddy. stick with us. this is "bloomberg surveillance." ♪

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romaine: welcome back to "bloomberg surveillance." equity futures here in the u.s. on the back foot once again. we talked about the idea of what investors are preparing for. we don't expect a whole lot of price action this week, holiday shortened week. once we come back from next week, things will change. people will hit the ground with the new administration in washington and maybe new hopes for an extension of this rally? emily: certainly with a santa claus rally promises, extends into january. romaine: does santa claus know that we named the rally after him? emily: he knows everything.

[laughter] romaine: let's take a look at what has been going on in the energy space. while it has been a phenomenal year for equities, not a phenomenal year in energy markets. oil futures here and in london in the red on a year-to-date basis, holding onto modest gains on the day. that is raising a lot of questions about what could be an unpredictable year in 20 25 with a lot of unknowns surrounding incoming president trump's gas policies. patrick de haan sitting look for oil in the 60's and 70's this year. there is a chance it could fall into the upper 50's. changing dynamics for geopolitical tensions also potentially posing a risk. patrick joins us to talk about his outlook for energy prices. it is kind of a big contrast to what we saw at the start of 2024 when we had that 50% rally, everyone talking about oil at

$100 and beyond. we have come a long way since then. patrick: that's right. i think the bulls have been chased away for now. under president trump's mantra of drill, baby, drill, it could be another tough year. keeping about 5 million barrels of spare capacity offline. that is where some of the downside risk potentially comes. i don't think opec opens up the spigot again in april but it could be another challenging year for the upstream. or as you will still see your seasonal swings when it comes to your midstream, refiners. may be good news for pipeline operators who can expand more. in the retail sector. they will experience another good year. but only own, not a whole lot of upside risks. i think more downside than upside potential for 2025. romaine: i know there was a lot

of optimism about the trump administration coming in, particularly given the policies we saw the first time around, but there is the issue of capacity and whether there is anything to drill into that we have not already drilled into. patrick: exactly right. there is talk about potentially we opening the arctic wildlife refuge. i don't look for oil companies to go into rural alaska and be excited about drilling there. there are lots of challenges with that. getting that oil online could take years if not longer than that. the permian is slowing down so there is some upside there, but opec spare capacity, guyana seeing a huge increase in spare capacity. one of the wildcards, canada sends us over 400 million barrels of heavy oil every day through a couple of pipelines. president trump's promise on

tariffs, i don't know if that falls under that talk, but you never know. he is kind of against the status quo at least on some of these issues that potentially posing upside risk in the year ahead. emily: i want to go to your outlook in 2025 but first reflect back on the year. wti was basically flat on the year. what was driving that lack of movement? patrick: on the supply side, opec was taking barrels out of the market, not a whole lot to get excited about. china's economy has been incredibly weak and they have been pushing ev's much harder. their gasoline demand may have already peaked going forward, so the chinese is a huge headwind for the market. a lot of supply remains off-line. the u.s. is back to producing about 13.6 million barrels a

day. a lot of this story is focused on the china economy that has struggled this year but there are too many barrels sitting off-line for the market to see much of a run up. we could see a bit of a spring surge tied more to refined products but we will have to keep our eyes on the u.s. economy. a lot of possibilities that could slow down our economy which could slow down global oil consumption. emily: how do you think about inflation for 2025? fomc members upped their projections. how do you take inflation into your forecast? patrick: as you indicated, a year ago, we were waiting for the fed to cut interest rates aggressively and now there is more caution in their statement. that could pose a negative for oil as well. i don't think oil or energy will be inflationary in 2025 but it

is obviously a risk factor. if the fed slows down its interest rate cuts, there could be ramifications for the dollar. the dollar has been fairly strong. oil is globally traded in dollars, so that could impact the price of oil. something that we will be watching ahead. romaine: i wonder if you could circle this back to the consumer, a lot of talk about gas prices. as of today, gas prices are about 40% lower than a year ago. it gets to the question of whether we see prices at the retail level remained where they are or maybe even go lower, or are there forces out there but we should prepare ourselves for higher prices ahead? patrick: for consumers, i think it will be a third straight year of the kleins. ever since 2022, likely to trend lower. consumers should not confuse that because we could see prices

go up as we get closer to warmer weather. morning, one of those rare moments where the national average has slipped below the three dollar mark. i think that will be temporary and in the spring we will see that surge, prices up probably $.50 a gallon, and could get up to the mid to upper three dollar mark, but that will stop short of what we saw last year. consumers will not be shelling out as much in 2025, but keep in mind president trump's promise to cut prices and have. that is a big difference from three dollars versus cutting them in half which would represent a price below two dollars. romaine: something we have not seen on a sustained basis since i was in diapers. i am curious about this idea of an export economy for our energy. we have seen the u.s. over the last few years become energy independent and now has a thriving export business.

how much can that expand based on our own demands locally and how much will be left over to sell to folks overseas? patrick: a lot of that is lighter, sweeter crude oil. the bigger boom is lng, and that could expand under president trump. he is already threatening europe, if they don't buy additional u.s. energy, there will be ramifications. i think there is room to grow. natural gas prices have been promising. now above the three dollar mark. i think there is room to grow. the u.s. is the world's largest energy producer. we will probably see that grow in the years ahead especially as russia continues its war in ukraine and europe continues to turn to the u.s. there is a lot of promise in u.s. exports, especially lng and crude oil continuing to increase this year.

as president trump may push countries to make the switch over to u.s. energy. emily: what geopolitical risks are you looking at 42025 that could potentially pose a risk to your forecast? patrick: i think president trump is a bit of a wildcard. what he says and what he does, it's a little bit against the status quo to talk about putting tariffs on oil and other things, everything from canada and mexico. political relationships could shift in the years ahead. china is still a big one, how they are shifting away from fossil fuels is a big turning point. they may have potentially seen pete consumption. we see some growth in india as well. the middle east has been quieting down but there is still the potential of conflict there. russia's invasion of ukraine is certainly something to keep our eyes on. but with somebody like president in the white house, he may

strong-arm other countries into potentially doing what he likes doing more. that could certainly keep energy prices from clubbing much more substantially, if he uses that strong-arm. romaine: do you think there will be any sort of meaningful global coordination on this? we know opec-plus has its own cartel but in the past we have seen some cooperation among the other major oil producers not in opec. or is the relationship so disparate right now that investors shouldn't pay any attention to that? patrick: i think it is certainly fractured, dissension amongst the ranks in opec. we have already seen some countries want to raise production. saudi arabia and russia holding the line. the saudi's are spending a lot of money and they have a lot of at stake if prices were to decline substantially. some members want to increase

production while others do not. opec is certainly not as coordinated as it once was. romaine: great stuff, patrick de haan, closer look at the oil and gas market. putting this in context of this being the holiday travel season, i didn't quite realize this. the projection is for 120 million people traveling more than 50 miles from their home over this holiday period. more than 100 million of those were by car, not airplane, which i guess makes sense. we talk about this idea of whether that continues into next year, the summer season, etc. will there be enough appetite with gas prices being as low as they are? emily: also considering flying is not the most fun activity. there are delays, difficulties on the airplane, boarding, and it's getting more expensive. romaine: and louder.

have you noticed this trend of people who don't own headphones apparently and they just play whatever movie or video? what are you doing, dude? emily: as a new york city resident, that wouldn't bother me because everyone on the subway is already playing their stuff. to a non-city dweller, i can see how that could be alarming. romaine: i just keep my headphones in so i can ignore everyone on the subway and hopefully survive. let's get an update on other stories out there this morning. you're a bloomberg brief. a focus on ukraine's largest mobile operator and partnership with starlink to introduce satellite-powered internet service in the country. the deal allows customers to use space-based connectivity when terrestrial networks are unavailable, with text messaging

expected to wear the end of 2025. this partnership aims to provide infrastructure resistant to russian attacks which have regularly targeted infrastructure since the invasion in 2022. a big supplier for nvidia is weighing faster expansion for chip packages made in semiconductors. the company building a new factory in japan but may need to accelerate capacity increases to keep up with customer demand. the ceo of that company saying the use of ai is robust and demand is likely to last through next year. charles dolan, a paid television pioneer who founded hbo, built cablevision into the fifth largest cable company, passed away yesterday at the age of 98. he was regarded as a visionary in the world of television, who continually surprised investors

and rivals, while vexing many of those on wall street by running up his company's debt. but it paid off in a big way. he became the owner of madison square garden, and his two main tenants, the new york knicks and the new york rangers. that is your bloomberg brief. i know you are from the northeast area. i don't know if you are a fan, but we talk about charles dolan. hbo is phenomenal. hard to overstate just how impactful it was at the time. there was nothing like that, to get movies on demand in that way. they were to sports programming. to get that in a way that just didn't exist, even on network television back then, remarkable. emily: now consumers take it for granted, you can turn on your tv and get pretty much any program with hbo max. romaine: his legacy lives on with his son now in charge with

msg. not sure if you are a big sports fan. emily: going to my first game in january. romaine: decent team. good run last year. we will see if they can repeat. charles dolan passing away at the age of 98. a pioneer in the world of television with a shepherding end of cablevision and cofounding of hbo. we will take a look at the life and legacy of somebody else who passed away, jimmy carter, 100 years of age, passing away overnight. we will talk about exactly what he meant to the country and the legacy that he left behind. that is coming up next here on "bloomberg surveillance."

romaine: welcome back to "bloomberg surveillance." quick check on the markets. s&p futures are made on the back

book setting up what could potentially be a third straight day of the meter index. unchanged right now on the euro-dollar. 10-year yield continues to go lower, four point 56 and change. focus on the financial markets and focus on politics, focus on the life and legacy of jimmy carter, that is under surveillance this morning. >> president carter came into office in the wake of watergate and vietnam with a commitment to right the ship of states. >> president carter brought back to government honesty, integrity, and faith in government. he ran as a candidate on a government as good as its people, and he truly did deliver that. >> president carter come in many ways, was ahead of his time in terms of emphasis, for example, on human rights. in terms of his thinking about alternative energy. in terms of his role in the

middle east peace agreements that he put together. we all know that hisex- presidency which has been a long one, have been graced by such contributions to humanity by former president carter. right now, he is seen very favorably. i am really happy to see that because he is a very special man. >> one of president carter's biggest challenge was energy in the second era of the oil embargo. >> he was president during a very challenging time. as you recall, the oil embargo drove prices up dramatically. that became a catalyst for the highest inflation that we had had really since the war and probably even before that. so he had to take some very tough fiscal measures. he did appoint paul volcker, by

very much tightening monetary policy, caused a recession, which was not an easy thing for president carter to run through. >> he was the first person to talk about energy and how we had to start looking at renewable energy plans, and how the country could invest and incentivize in that area. i don't know if you remember, but he had a solar panel on the white house. when he left, president reagan took down. he also had fuel mileage standards, really realized way before anybody else that we had to start thinking about climate and what it was doing to our planet. >> as influential as jimmy carter was as president, he will be remembered every bit as much for what he did after he left office. >> the thing that is absolutely most notable about president carter is, we can all debate the relative merits of any individual president's term, but

i think it is inarguable that president carter is the single most impressive, most successful, and most to be admired ex-president in the history of our nation. this is a man who took the responsibilities of being a visible public figure incredibly seriously, was a role model to all of us. romaine: january night here in the u.s. will be a national day of mourning for president jimmy carter. that announcement being made by joe biden. typically on those national days of mourning, market will be closed. we will continue to monitor the situation as we count down to the official remembrances for the 39th president of the united states. when we talk about that legacy,

we have to talk about what got him into office in the first place. william doyle joins us now, author of "titan of the senate." i want to go back to 1976, if you will, maybe even before that. there was no way that anyone thought jimmy carter would win the presidency. he shocked a lot of people in those iowa caucuses, ends up defeating ford. i'm curious what laid the foundation for him from becoming a relatively unknown governor in a southern state to becoming president of the united states? william: i think you identified one of the keys which is south. jimmy carter was the last democratic candidate to sweep the so-called solid south. he had an unusual appeal to black voters, centrists, conservative white voters, and to people who were really ready for a change. of course, we had an

assassinated president in kennedy, a presidency in ruins after lyndon johnson, end of his presidency, richard nixon and jerry ford's short presidency. americans were ready for something new. carter, in a sense, was the perfect president for that time, although he was perhaps doome d from the start because he was not a good communicator and he hated politics, everyone will tell you that. he was much more concerned about the technical details of issues and fixing them more than being a republican or democrat. he was a technocrat. romaine: glad that you brought that up because it leads us to 1980, losing the election to ronald reagan. almost the opposite. not the best administrator but an excellent politician who knew how to communicate with the people. why didn't carter end up with a

second term, because of the lack of communication, connection? william: i think that was a huge problem especially in relation to ronald reagan who was absolutely a master on the level of froehlich and roosevelt or john f. kennedy, connecting to the american heartbeat and communicating. carter was in terrible political trouble with the after effects of multiple energy shocks. inflation went through the roof, unemployment went through the roof to staggering numbers. then came the iran hostage crisis, which sort of sealed his fate. we have to remember, jimmy carter lead the foundation for the reagan revolution. he initiated strong action against the soviets. he started the defense buildup that reagan accelerated soon after. in fact, jimmy carter was a

retroactive hero of the goal for 1990 and 1991, because back in the 1970's, he was championing long-range weapons like a tomahawk, cruise missiles, and the stealth bomber, all of which were used to very effective use by the first president bush in winning the goal for -- gulf war. romaine: one of the big compliments for him and to a certain extent, one of the big criticisms. we have to leave it there, william doyle. a closer look at the 39th president of the united states. jimmy carter passing away at the age of 100. we should point out, emily, the longest post presidency life of any president. almost 40 years. emily: incredible. romaine: coming up tomorrow, a

conversation with sebastian page. this is "bloomberg surveillance." ♪

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