>> good afternoon.

this is a special edition of "bloomberg markets." i'm carol massar along with vonnie quinn. we are getting ready to wrap up 2024. two more days. >> can you believe it? another year of gains. >> is pretty remarkable if you think about the last two years. it's an interesting day. it feels like the markets are tired but we are definitely off the worst levels of the session. vonnie: when the 2024 targets were put in place, we surpass those within the first three months of 2024, what is in store for 2025? could we have another year of gains? maybe not based on today's performance. some fatigue plus very low volume. a fraction of what we were on friday low. carol: most people are still on vacation. [laughter] let's get to our set up. we have treasury yields dropping. we will talk about fresh inflation data, more on the trade in just a moment. top of mind is the passing of former president jimmy carter. we will talk about his presidency and legacy.

someone who developed almost a whole second thinking about himself after he left the white house, safe to say. vonnie: 100 years old, he made it to the century. carol: pretty remarkable. what a strong moral compass. we will talk about him and markets and technology in the new year with a lifelong resident of the east bay area. i know of his background -- i love his background. vonnie: that's in just a few minutes. we have nvidia higher today. we have to end the year with the same thing we started the year. carol: we will talk about ai, 2025 in the new year lots to come over the next three hours. we want to get a check on the markets and the trade with jess menton. it's a quiet day to be expected. >> especially during the holidays, you can see what

volume looks like for the s&p 500. obviously done more than a third of what it would've been the last 30 days. to your point ed fell as much as 1.7% earlier this morning. it's down .6%. i like to look at the points, you get a clear indication of the weightings we are talking about. nvidia, turning higher, close to 2% here. when you have apple, the biggest point decliner right now, also followed by tesla, microsoft, broadcom, amazon and meta-, it is hard to offset with just nvidia turning higher there. vonnie: it's fascinating because we do have a severe amount of volatility at the same time there seems to be an effort for the market to improve. jess: if you are looking at how nvidia's performing today, i was looking at what other bullish signs are popping up. also today -- exactly,

semiconductor stocks, six-week highs relative to software shares. we saw that trade unwind. nvidia wasn't correction and fell off as much as 13% off its highs earlier this month. now it's only 6% off its all-time high. you are seeing it slowly geared toward the semiconductor stocks, relative to software. vonnie: we have bitcoin as well which was down substantially but is also improving a little bit. is let trading off any risk environment or any time like that? jess: it can be a frothy or corner of the market, that could be another side when you are seeing exuberant training. a lot of portfolio managers going into the holidays are managing money for longer term type lines and retirees -- clients and retirees. they took some profits and went away from the holidays. carol: i know you guys feel

the conversations you have been having since the election is people feel like, people managing money, that there are many questions in terms of policy and what we got from the new white house and a trump administration, a lot of questions about how everything ultimately lands. jess: epfr put out data that bank of america did modeling out friday, investors pulled $26 billion from equity funds last week. you are seeing the end of the year, the end of the month, after more than 20% gains, people taking some profits there . carol: jess, thank you so much. just menton joining us here in studio. vonnie: let's get some analysis with somebody was been following the market very closely all year long. the chief market strategist at callaway investments -- calbay investments.

with two years of fantastic gains, primarily in stocks, do you go into cash in our deployed cash in -- cash now? >> we are first running a rebalance. over the past two years, we've had incredible growth in the s&p 500 and the magnificent 7. this is a normal portfolio managementment -- portfolio management. a rebalance let's say at 60/40. we are looking at opportunities to put money to work, putting dry powder to work when we heard large down days is what -- have large down days is what we are looking at. we have a 3-6 month window to put that cash into work, because of the uncertainty coming january 20, when the trump 2.0 administration comes in, we will

have more answers as to what the tariff policy will really look like. we are awaiting that news coming in the next month or two, but that being said when we have the opportunity to buy, we will. carol: i'm curious first of all what it was before 60/40 in terms of the split. when you're talking about putting your money to work, is it more in a conservative bias or more in the fixed income blaze? -- income place? >> over the past two years, 60/40 can run up to a 7030 or 75/25 depending on what is in that account. so, that being said, you need to bolster your fixed-income. some other things we are looking at -- floating rate, for example, as we've seen today equities and bonds moving in the same direction, that can be scare. we saw that in 2022, when the equity market and bond market were down double digits first time in history. we are concerned about that

potentially moving into 2025, so we are looking for hedging opportunities within fixed-income. carol: is it a scare? is it like 2022? we are all trying to figure out, we have had strong gains on the equity side of things but we are trying to figure out what happens next year -- is it a bit of a scare for you? >> no. overall we have a positive outlook for 2025, we have end of your target between 67:07's and. it's the turbulence and volatility moving into next year with the policy uncertainty from the trump administration. like we saw the vix jump 75% two weeks ago, now is the first time that has happened in six years. we are thinking there is some instability and uncertainty about the policies coming out next year but overall we are expecting solid growth and earnings from companies moving into the next day or vonnie: what will the themes be -- the next year. vonnie: what will the themes be?

ai was the theme. even when the market lost confidence. at the -- at times, it came roaring back. that stock is rallying once again. >> we are still going to see aib a major factor in 2025. some of the big mag seven names, does not mean they are not going to perform well. it's just the run-up over the last few years, people are going to blow back as those valuations are stretched so much. you do have some names that have lower valuations within the mag seven, for example half of it. companies like that are still going to perform well -- for example alphabet. companies like that are still going to perform well. i think that's going to be a main factor moving into next year. really it takes part in a lot of the rebalance that's happening right now. we haven't seen any bad news over the past week, really, so

from our perspective this is just a rebalance. carol: have got to say reading -- carol: i've got to say, i was interested in your bio. you are a long life resident of the east bay. you are very familiar with the san francisco area, silicon valley area. you live on the island of alameda. i'm curious what you think about the outlook for tech innovation and venture. what's the mood you are hearing in preparation for a new administration in the white house? >> with the new administration coming in, there's a few things we can bet on, deregulation and corporate tax rate cuts, moving it from 21 to 15% will be a huge benefit to some of these younger companies in the tech arena. deregulation will help some of the finance companies,

particularly that's tech finance companies. everything we are hearing is companies are excited for the new administration moving into next year. i think is going to be a large boost for their profits and growth. carol: just a follow, we've seen the president-elect donald come out in support of h one b visas -- h1b visas for highly skilled workers coming out of the u.s.. a lot of them go into those tech companies in your area and elsewhere. does that say to you when it comes to policy and immigration policy that the president-elect may ultimately dial back on some of his strong stances once in the white house? >> i think so. i think this is one of the first times we have seen the richest man in the world and also a ceo of multiple tech companies in the back pocket of the president. i think there has been an impact there from elon musk and i think in this case is a positive

impact. i think moving forward it does say something about what trump's rhetoric was throughout the administration and the campaign. it may have a dial back tone moving into next year. that might be the same thing with tariffs. that's what we will have to wait for come next month. vonnie: many of your portfolios -- retirement portfolios, income preservation is really important. what is your view on crypto? whether it should play a role in a portfolio like that. >> crypto is not something that we specialize in nor is it something we really focus on with our investors, it's not something that they are interested in, and we typically stay away from crypto. carol: that's interesting, it's just too risky at this point, too volatile? >> especially for retirees looking to save their income over the next 20-30 years, it's

just not something that's in the best interests of our clients at this point. carol: as you look at 2025, do you feel like there is more knowns versus unknowns in terms of what might impact the investing landscape? >> we have more knowns than unknowns. tariff policy is going to be the key unknown moving into next year. i think we have a pretty solid expectation for what inflation is going to be next year. the fed came out and said they are anticipating tv next year -- two cuts next year and we would agree. they don't need to do two cuts. as long as inflation and unemployment stays intact, we will see positive growth. carol: we will leave it on that, some optimism heading into 2025.

it is interesting, in terms of the outlook, i feel like so many people are afraid to say, listen, we are investing for the long-term but we have to see how things play out. vonnie: the economic data has been great, but maybe we've got to take notice of this worsening data. carol: exactly, some cautious words from neil. we will take a look at the winner of the nobel peace prize, we are of course talking about jimmy carter who passed away at the age of 100. -- the life of the winner of the nobel peace prize, we are of course talking about jimmy carter who passed away at the age of 100. this is bloomberg. ♪

vonnie: welcome back to bloomberg markets, is special edition with -- a special edition with

carol massar and i. jimmy carter, leaving behind a legacy of promoting human rights and peace around the world. the one trump presidency face challenges including high inflation and the iran hostage crisis. after leaving office, carter was awarded the nobel peace prize. and continues to be involved in humanitarian work until his death. . david westin joins us now. talk to us about the peace process. it was something that was unprecedented at the time. could it have solved even more if there had been a little longer to work with? >> is always -- >> that's always the hope. he was coming off kissinger negotiating a cease-fire in a war in the area. jimmy carter took it a step further, negotiating peace, going to camp david for 13 days. he sat down with them and negotiated peace. it's held up through everything

that's happened including this year and last year in the middle east. that's one of the things -- carol: which is remarkable. >> it's extraordinary it's held through all of that. it's a great deal. as you pointed out, he had one term. it's amazing how much we can say about what he did and the challenges he faced. it was only four years. it was quite an eventful presidency looking back. carol: and a difficult presidency in terms of inflation. i think about the iranian hostage crisis. it was not a fun presidency, if you will. david: difficult from the get-go. this was coming off watergate and vietnam and president nixon having to resign. and president ford being quite unpopular because he pardons president nixon. he came in with a lot of doubt about the government overall and absh some normality as well as some integrity in the office. as you say he -- as you say, he had a tough situation on the economy.

not entirely his fault at all. coming off would had been done before -- what had done before. and we had runaway inflation. going back over the four years, the average gdp growth was over 3.2%. carol: not so bad. [laughter] david: so it wasn't so bad. it was a very difficult presidency. of course the iranian hostage crisis, russia invading afghanistan. you had a lot of challenges to face. i think it's fair to say he did his best. vonnie: we talk about the voelker fed all the time, it was part of that appointed voelker. david: such a powerful point. we have a tendency to think that ronald reagan came in and redid the economy and fixed everything and got tough on the russians -- in fact most of those things including paul volcker, the biggest move will really did stop inflation -- who really did stop inflation, voelker said he would sign --

tighten monetary policy. jimmy carter said, you worry about the economy, i'll worry about the politics. carol: it seems everything he did in the white house and after was this moral compass, trying to really help people at large. david: which was his strength and often our strength is right next to her weakness. he refused to consider politics repeatedly. in washington, that's a dangerous game. you want to believe your president has principles and believes in policy but you also have to garner the votes including on capitol hill. carol: to that point, longest living former u.s. president ever, perhaps someone you might not have expected to be president considering may be where he started or maybe he represent a change which is what the nation is looking for. david: to take your point if you have gone back 10 or 15 years before, jimmy carter would've been the last person you thought should be president. the country is ready for a

change -- was ready for a change. he was an outsider that came after several insiders in cairo. he was sort of ahead of his time. it reminds you a little bit of donald trump in 2016 coming from what many people thought nowhere to the presidency. he also ran against washington. he was not very popular. the carter's were not popular with the social elite of washington because he did not play the game. vonnie:vonnie: he did not play the game post presidency either. two other things that resonate today as donald trump takes office in a couple of weeks, carter was the one who established formal ties with china. he was also the person who signed the treaty granting kind of ownership of the panama canal. both of which are now perhaps in jeopardy. david: ironic. richard nixon reached out to china but it was president carter we decided we will normalize relations and have ambassadors and recognize it as

a country. interestingly, to the very end of his life, he was saying and writing that he-was worried about where u.s. china relations were headed. -- u.s.-china relations were headed. the risks he addressed when they normalize relations to avoid that problem, panama of course he returned to the canal to panama, and now the incoming president trump says he would like it back. [laughter] carol: history repeats itself or makes you think about what the origin of all of the stuff is. he was unpopular when he left the white house when he became very popular afterwards. david: it was the third least popular president leaving the white house, after truman and bush, he was quite unpopular. historians were down on him, and that has changed somewhat. there is some revision going on. part of that as you suggest is what he did afterward. him and his wife really traveled

the world on human rights and enforcing democracy, policing elections. habitat for humanity's, all the good they did. in addition to diseases in sub-saharan africa that they fought against. he got the nobel peace prize not for the camp david accords about when he did after the white house. carol: i didn't realize it was something different after the white house. vonnie: tell us more about the environmental policies he was so instrumental in. david: he was ahead of his time, he was concerned that u.s. did not have an energy policy -- he was dealing with an oil crisis. because of the embargo. i was around for those gas lines, you had to line up with your car which was awful. he said we needed an energy policy. he started the

deregulation. he said we needed to be more responsible with fossil fuels and got in trouble with some of his own democrats because of the coal estates. he actually put solar panels on the roof of the white house. which ronald reagan took down. he said when even -- we need to move into things like solar and wind. that part was geopolitical. he was dealing with problems in the middle east. he says we are too dependent on the oil over there. when it to be more independent. carol: he was right. you've been talking about him throughout the day. lucky for us you have been. when you think about his life and legacy,. a friend for you? -- what is top of mind for you? david: his character. the rest, you can find. but character you cannot find. it has to be there. that's why he came to office. to some extent, he was a little gracious -- a little righteous. but nobody at all that i can

think of ever questioned his central integrity. he really believed in what he was doing. he was trying to do the right thing. for me, that's the example he set for all of us. vonnie: apparently his final wish was to cast a vote for kamala harris and he did do that. david: along with being buried beside his beloved rosalynn carter. they were married for what,? 70 years? carol: 75. vonnie: -- david: just devoted to her. he said i just want to lie here and hold her hand. vonnie: such a gentleman. there will be a national day of mourning january 9. the markets are going to close early. joe biden will attend. . we are not sure donald trump will attend. david: i will say, i thought the incoming president donald trump was pretty gracious in his remarks. on the campaign trail he was

critical about carter as well as president biden but he has been quite gracious and what he said about jimmy carter, which is appropriate given jimmy carter -- also the dignity of the office. i will gladly say i've been pleasantly impressed by what the incoming president has said. carol: something that you would expect from a former an incoming president as well as commentary -- in terms of commentary. david westin, thank you so much, joining us here on bloomberg markets talking about the late jimmy carter, his life and legacy. this is bloomberg. ♪

vonnie: carol: we are back on a special edition of bloomberg markets. carol massar along with anyone. it was a benchmark year for the semi conductor injury -- semi conductor industry. broadcom and nvidia, reaching new highs. intel, as we know, falling sharply in 2024 as they contended with losses and a grim forecast, really trying to figure its way forward. we are joined by someone who knows us on myspace like no other -- the semi conductor space like no other, ian is joining us on this monday. good to have you here with bonnie and i. i want to start with intel.

i wonder if 2025 will be the year it figures itself out, how are you thinking about it as we get ready to kick off the new year? ian: it's a huge question right now. it doesn't even have a ceo. we still don't know who is going to lead this company forward. we heard from the co-ceo's, the interim appointees, will it be broken up? we don't know. that's even the existence of the company. even that's a question at this point. vonnie: what is its expertise in ? its expertise, what would it be bought for? ian: historically, it had one of the strongest design teams, it still owns a a huge percentage of the pc market in terms of market share and a big percentage of the server market

in terms of market share and it used to have the best factories in the world. all of those bright and shiny things are a little bit duller these days unfortunately but there is an intrinsic value in that capacity in those engineerings. carol: one thing i think about is what kind of leader does intel need going forward? with talked about the insider versus the outsider. i do wonder -- what is the kind of later this company needs to compete in this nvidia-dominated world at least at this moment? ian: that's the question. once the board decides who that is, the type of choice they made will be a really important indicator as to what they see as the future of this company. if they look to sort of replace pat gelsinger, the outgoing ceo, with somebody similar windows the company and is committed to

keeping it together -- who knows the company and is committed to keeping it together, the believers, or if they bring in outside and towards the end of their career who knows the industry in general and has all the contacts, maybe that's because they see it as a breakup situation at this point. vonnie: you have the other side of the coin, let's take broadcom for example, we waited all year long and suddenly broadcom had this resurgence, a 25% move in one day alone, was behind that we -- what is behind that revitalization of broadcom? ian: they've made this company sort of out of the leftover parts of other companies and identified what he sees as these stayed but strong franchises, the atmosphere surrounding this companies, and all of a sudden we are exploding with growth because broadcom does the design work for companies like google who want to make the semi

conductors. but this sector is amazing. carol: is broadcom potentially the company we talk more about in 2025 than nvidia? ian: if you look at the raw numbers, no, broadcom is projecting massive growth, $90 billion by 2027 for its ai- related chip designs. nvidia's already there. this year, nvidia's going to have a data center division somewhere in the 100-120 billion dollar mark. clearly nvidia's already there and there's a long way to go to be close to them. the closest one at this point would be broadcom. vonnie: nvidia is one of the stocks that is higher today where we are seeing right across the screen and partially i would imagine because of this acquisition of the israeli

software company, tell us about 1ai and what it will do for nvidia. ian: this helps owners of data centers get the best out of their infrastructure. coordinate it to make sure the utilization is up to make sure the software has been battles in the right way and this intermediate rule, which is very important when you are spending tens of thousands of dollars per chip, that is useful for nvidia. there were concerns that nvidia because of its market influence and size would not be able to get anything past regulators. that's obviously not the case. it's been able to close this deal. nvidia still perhaps room to do deals and be able to sort of make moves and influence the industry external. carol: one quick last question, we have talked so much about the semi conductor cycles, lots of demand, the buildup, then oversupply, will the semi ai

cycle be the same thing or different this time? ian: scarlett likes to point out how long i've been in this industry -- i've been listening to ceo's telling me this time is different for most of my 25 years and that's never been the case, why would that change now? carol: fair enough. whatever you say, i'm going to follow it. happy holidays. happy new year. we just chatted about semis with ian, 2024 was a year about artificial intelligence in a big way. if you look at the $2.6 billion global x funds global x artificial intelligence etf, it is up 26% year to date after a 55% gain in 2023. the question at this pointehougt with the senior research analyst atgood to have you here.

strong year in 2024 and much stronger in 2023, what's your investment outlook for ai related investment come 2025? any clarity on that? >> it's clear to most people and viewers of the show that ai is coming down the pipeline in every facet of society. autonomous vehicles, logistics, we are advancing to the next phase of humans are -- human tech interaction. it is going to be real time. we have maybe wireless earbuds, chatgpt, then consumer, government, industrial standpoint, we are seeing an ai- ification of everything. there's new safeguards and

challenges when you start to automate more human is not perfect. -- when you start to automate more. human society is not perfect. ai dan robles also depend on real-time and accumulated knowledge to make decisions from an individual basis and a societal basis. what we expect to see is continued implementation of ai and robotics. they will start to eat the world, to paraphrase reason. when you consider the dynamics happening right now. vonnie: what return on investment will it provide for investors and companies making those investments? is there a case for waiting to see what it can do in terms of the bottom line? >> looking at how wall street is looking at a classically,

projected top and bottom lines for ai and robotics companies are projected to continue to accelerate next year. the growth has been going on since october of 2022, november, when it bottomed out. these and markets are expected to grow rapidly. we are talking about a majority of gdp starting to be ai and robotics driven. you can reverse engineer task and processes and everything else. if you break down the stack of wood ai or robotics are, cerebral digital automation and all the connectivity and data storage that happens on that side, the physical inputs that are physics bound, there's a lot of subsectors that are parts of that. sensors for example, as we start to have robots that can connect and start to do more

than static and non-dynamic, we will have more robots with more skills. the payback periods will be better for manufacturers. there's a lot of push to move away from china. we've got vietnam, india, the u.s. we've got very low robotics penetration rates here. we are 10th in the world, in the u.s. there's a lot of room for growth. we have to do more there. carol: how does my life maybe change as a result of what you are saying? under people's lives change in 2025 as a result of what you're saying, this collaboration between ai and robotics? >> some of it will be less obvious, behind the scenes, like how health and food get to you. let's go a step further. navigating around your home,

automatic doors and dispensers, things like that. was the next level of that? meta is working on combining a real-time vision and a wrist one sensor that allows you to navigate your environment. this can be huge for the elderly and the disabled, as well as everyone else. personal ai assistants will start to take off a little more in a more impactful way in 2025. we have seen gemini do this. it's not exactly there yet. a more simple way is openai's latest ability to look at a scene and ask questions. there's a lag period. we will start to see that inference time disappear and the full ai capability on that specific device -- whether it is the glasses or the camera on your phone. that allows you to have a personal ai assistant, life coach, trainer, or omni

all-knowing thing that can help with whatever problem you have. vonnie: are there companies that have been overlooked so far in this bull run, with the things you just laid out? >> a lot of companies are putting their head in the ring, public and private companies. you've got humanoid robots that are coming. that's one form factor of many. you might not even have humanoid to the formfactor in your home but a telescopic arm and things to do chores for you. we probably will have an iphone like woman or chatgpt moment in the next year or two -- moment or chatgpt moment in the next year or two. it's coming up things are moving so fast. in cloud connectivity. they are not just operating as in alum device. they depend on inputs and

sensors. so a lot of these components like actuation and computer vision, i will look at it as, leaders of these subsectors that make a lot of stuff to get access to how we are seeing the majority of gdp transforming into a more automated world. carol: do we make the leap of ai having its own agency? ai not meeting human intervention to respond/react. do we hear more about that in 2025? it feels like that's the next big step. >> ai agents and experts, we will see many advances here. ai can start to solve problems on its own. we saw 03 from openai come out. open source. ai agents will start to be utilized more in 2025. no question about it. it will start -- open source or direct ai will start to eat the

world and ai agents is certainly a big part but is less of that pie. vonnie: we will no doubt be talking to you again in 2025. happy new year to you. carol: i'm not looking forward to the agent or ai assistant that says, do you really need those issues? -- those new shoes? [laughter] they kind of invent your life -- invade your life. vonnie: i don't notice any difference. do stay with us. the economy has been defying expectations. it looks like next year, it might not be any different. we will have the latest for you. this is bloomberg. ♪

vonnie: welcome back to a special edition of bloomberg markets with myself, vonnie quinn, and carol massar.

the imf expect the u.s. to be a topic, performer owns a g7 in 2025 despite uncertainty around presidential election. limited interest rates and a pulling labor market. matt bosler joins us now on the economic resilience of the u.s. is there in a case to be made that we might be getting less resilient last month or two? >> yeah. you are seeing these effects of high interest rates still waiting on sectors like manufacturing and housing. interestingly, we have some housing that out this morning that seems to suggest that homebuyers are starting to acclimate to the higher interest rates and are going ahead with purchases anyway -- that is a big question for looking ahead to 2025. housing is one of the sectors has been weak in 2024, but is it going to go ahead and be more of an upturned situation in 2025 even if we have these higher interest rates? carol: the fed is done so maybe door lock it in now? remind the world how important housing is to u.s. growth.

>> this has been one of the things that they say the economic timidity that really drives -- economic community that really drives investment and economic activity more broadly. if you think about the cycle of housing, when you build the houses you have to employ more people to build them, you've got all this money going in when people buy new homes to furnishing them and so on and so forth, so it's this major driver of economic activity that has a multiplier effect that rebels up to the economy in many ways from employment to consumer spending and everything in between. carol: it's huge. vonnie: we talk about the federal reserve, but there's also been a lot of talk in recent weeks about the incoming trump administration and how terrorists could affect -- the tariffs affect the u.s. economy. do you think it'll impact the economy positively or negatively? >> people are worried about potential trump administration policies from the housing side in the same way that they are

worried about the impact on those policies on things like manufacturing -- of those policies on things like manufacturing. the effect that i could have on -- that that could have on supply chains and building materials, that sort of thing. obviously on the labor side. this idea of mass deportations could have an impact on labor at a time when the sector has been struggling with -- with labor constraints for many years now. it would put us in a situation of ongoing challenges and housing affordability that would potentially get worse. carol: you talked about housing and the importance of that. i think about the consumer had how many times we remind everyone here that we are a consumer-led economy. consumers have held up well but i wonder if we are seeing an increasing number of cracks in terms of the strength of the u.s. consumer. >> obviously the biggest -- this

is the biggest question because consumer spending makes of the largest portion of economic activity but also one of the most interesting ones. we have been expecting this slow in consumer spending. there was a big boom with the reopening from the pandemic with the pent up demand and the pandemic savings. most estimates of those savings suggest that they are gone. now we are really relying on wage growth, the strength of the labor market. that has been slowing yet we are still seeing this room strong consumer spending. so where does that come from? what are we missing in the current picture with this current sort of story we have and this divergence between a pulling labor market and accelerating in some cases in consumer spending? does not continue into the new year? some evidence suggests it's being driven by high income households where low income households are starting to feel more of the weight of higher interest rates and increasing debt loads. but had an economy wide level, household debt to gdp is at a 24 year low and keeps going down. as a very different backdrop from the 2000's. vonnie: thank you so much, m att boser.

our thanks to you. let's turn to lorenz idell baker who is the economist at itr economics. we were anticipating a decline for december and pending home sales month over month up to .2%. year-over-year up 5.6%. less strong but nevertheless getting up there. what concerns do you have for the u.s. economy for 2025? >> we see actually good news ahead for the economy. my concerns are limited to the black swan type of events, something like tariff policies could constrain or cause upward pricing for the u.s. consumer which has already been squeezed by inflation. that could cause additional hiccups for businesses here. the foundational pieces are in place overall for a resilient economy so i don't see any underlying cracks. later into 2025, that is when we

see inflation starting to build again, some inflationary pressures already in place, so it's something that has been squeezing both consumers and businesses, and i could even cause the fed to stop decreasing rates potentially an even start raising them again by the end of next year. but those impacts will probably be felt most strongly by 2026 2027. all signs point to good news ahead in the year to come. carol: i want to go back to how you started, black swan events whether it is tariffs, because if we have learned anything over the last decade or two decades is black swan events actually do happen, i've had some happen in my lifetime, whether it's the financial crisis or global pandemic. what in particular is it? what kind of trade war do we see? what in particular are you most worried about? >> the big ones for me are all geopolitical. if we see wars, increasing tensions or conflicts globally, that is a big one that we just could not really predict. i am an economist, not geopolitical analyst. other than that, we see the trade war, especially if we get

reciprocal tariffs on some of the u.s. tariffs, that could hinder global trade activities. we are seeing a swing back to were from globalization. a lot of for interest investment flowing into the u.s.. but this is just tipping the scale. there will be winners and there will be losers of this tariff policy of changes to the trade policy. it's a matter of which side of the table you're sitting on. some opportunities for some but also because some disruption which could have unintended consequences economy wide. carol: and can make things more expensive, this is what i worry about, the inflationary pressures. >> yeah. i want to be clear, with the fundamental reasons for inflation coming back next year on top of the tariffs, it would just boost the level of press

rise. but at the end of the day terrorists tend to be inflationary. we have good cases historically from the 2018 round of tariffs, even domestic producers tend to increase their own prices when they get that room from their foreign competition being priced up, so i would expect this is building on what we already see as fundamentally resurgent inflation. vonnie: we have seen quite the rebound in yields, treasuries having the most phenomenally awkward and strange year. neil was sing the rise today was about the term premium because of deficit concerns. what do you think? >> there's a real case for the market putting their hands on the scale in this case, we have seen even things like government funding treasury levels, mortgage rates, were certainly would think would be driven by something like the federal funds rate, but we see it much more closely correlated with those treasury yields and just not reacting in quite the same way to the fed funds rate as they

have historically. there is certainly a lot of money aptly, a differential between global central bank policy coming into effect here, but overall the u.s. is still a very good place to do business, and until we get that additional risk premium, we are the gold standard. i see why you will have reacted in the way they will. deficit concerns, i'm watching those in the medium-term, i'm looking at 2030 to be where we really have to do something about this debt level or this deficit, that's when i see the problem coming to an abrupt end. but in the very near term, the u.s. is still the gold standard. this technically acts as what we consider the risk-free premium. carol: when you think about the deficit, we have been here before, but it feels like it is something different and the pressure is building, if it means cutting the deficit, that means cutting programs or spending somewhere and i do wonder about and worry about the economic impact, how do you see this potentially playing out and the impact on the u.s. economy that might result? >> no good answer to that

question, there are many things we could do for cutting programs, raising taxes, monetizing the debt or defaulting on the deck, threw her hands in the air and say we are done with it. none of those would be pain-free for the u.s. economy. some would be more painful than others. but at this point with our debt burden being so high, and our deficit really growing year after year, contributing to more debt, with higher interest rates today, just the near interest payments on our national debt are huge and growing problem contributing to that higher and higher deficit spending year after year. it seems like we are far enough down the road that there just isn't any easy answer anymore. carol: it never is easy. lauren, thank you so much. we are counting you down closing bells and breaking done all the action in the final hour of trading. stocks, off their worst levels of the session. the s&p down 38 points. the nasdaq down 163 points.

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carol: alright everybody. we are one hour away from the closing bell, this monday, december 30. we are bloomberg markets" live on television, radio, youtube and bloomberg originals. i am carol massar along with vonnie quinn. we are down across the board but off the worst levels. nasdaq 100 and s&p 500 showing declines. vonnie: the rally definitely fizzled. the s&p 500 is only down 1.6%. carol: perspective/not a terrible month when you think about it, the indexes of at 25% year-to-date? carol: same thing, nasdaq 100. two good years from both of them, we have seen similar performance. coming up, we will talk about the commodity complex. it is complex, if you will, some parts of their community universe are performing, some others not so much. vonnie: yes, look at natural gas today. who would've thought, the front month contract was up 20% at one

point. we will speak with michael mcglone to talk about what is going on. carol: and is it a commodity, is that a currency? what the heck is it? bitcoin has had a bullish year. we will get thoughts on what comes next. vonnie: the index still about 108 on the dollar index. we'll go an outlook for global currencies. what happens to the other currencies if the dollar is taking it all. carol: and we will also see what kind of trump policies in fact the u.s. dollar and global currency markets. and we will continue to mark the passing of former president carter later this hour. but first up, we want to get a check on trade. once again, we welcome in jess menton, who has been keeping an eye on it for us that the holidays. all of our worst levels of the session. is that a good thing? talk about momentum or lack thereof. jess: the growth of kim off their lows. we talked about how nvidia turned higher, but it

has given back some of its gains. the weighting when it comes to tesla as well as amazon and the discretionary sector. i wanted to point out materials, you were talking about commodity sectors. that is actually the worst sector performer this year. the only one that is down year to date, down 2% year to date, when you have the other 10 sectors higher. carol: which tells you what? for materials, it's not so great. jess: in some ways people could look at that. gina martin adams' team at bloomberg intelligence had a 12 month basis forecast and it is materials and energy being marked down the most. less so concerned about what is happening in the economy because -- but more so because commodities, oil prices, even though they are a bit higher, they are still trading near the lows of the year. obviously it is tied to the

global economy, but it is more of a commodity-centric-type story right now. vonnie: incredible. bitcoin is also something we keep an eye on although it's hard to know what it correlates to these days. still buying, but it's not helping the stock too much, microstrategy. jess: wright, microstrategy today is down 5%, on. so it's worth today since december 21. so not that long ago. it has continued to be under pressure. if you look at the equal weighted index in the third quarter, it had outpaced its broader benchmark. but this month if you look at the spw, it is down 6%, on pace for its worst month since september of 2020 two. where the s&p 500 is trading right now, it is basically erased its gains growth since election day. we have seen a big reversal where we saw a broadening out but now those gains have been given back. this is an area we have talked

about a year after year. the fourth consecutive year of the russell 2000 underperforming relative to the s&p 500 and the worst year since 1988 relative to the s&p. if you are talking to michael casper, he covers small caps for gina martin adams' team, when you look at the russell 2000 that there is a high amount of zombie companies in that. the s&p 500 index, they have better potential. it depends on the index. we saw that all-time high last month, but still down again. carol: do we want to talk bowling? should we even be talking bowling -- bowlin --boeing?

jess: the stock was actually done as much is 9% earlier. a lot of different aircraft operating especially with what happened with some of the different accidents that happened over the weekend. there are different analysts saying that it is unlikely the events were related to boeing's production. still, we've had a lot of issues tied to boeing over the last few years and that is what the stock down. carol: any time the 737 pops up, right, in all its iterations. jess: yes, it just adds to the embattled playmaker's issues. the stock is down year to date. another negative headline is another reason to sell in the short term. vonnie: yeah, and another in the staycation, i imagine. just bad pr. there was talk about the landing gear not deploying. would you want to get on a boeing playing right now? you have no choice? carol: my daddy used to say the

best time to get on the plane is after an accident. because everybody is so intense in terms of checking security in planes. jess: and then you think about how many rivals that has. just airbus. it will still be a competitor long term, something a lot of portfolio manager still have to hold. vonnie: safety is something we really need to think about. carol: we assume it will be there all the time. though i will still say with this incident, we are still waiting to see what will happen. vonnie: what are you keeping an eye on for the last 55 minutes of the trading session? jess: the technicals. at the s&p 500 fell below its 5943. sometimes when you see that, you start to seat buyers step in. we saw some of that today. so we are looking at the technicals and how things close out for today, as well as tomorrow since it is the last trading session of the year. carol: and we have that the ot session for the s&p 500, moving towards oversold a little bit? jess: people want to talk on -- a lot about valuation.

vonnie: jess menton, thank you so much. we will talk to you at the closing bells. companies like boeing and other multinationals are rather savvy when it comes to navigating swings in the global currency market. one wonders how a stronger global dollar might mark business in the new year for u.s. companies. to the fx market we go. with us in the studio is a jayati bharadwaj global ethics strategist at td securities. thank you for joining us. this dollar index continues to go higher, the dxy is above 108. where does it ends? guest: thank you so much for having me. i do think the dollar has had an incredible journey. but it's only the start of the journey. i think the dollar still has more strength to continue especially in the first half of next year. that will be based on 4 pillars of support. first from tariffs.

they are inflationary. that means that the fed will have to pause the interest rate cutting cycle. in fact we believe the fed was able to squeeze in one last cut but they might have to go out an extended pause and may not be able to cut for the first half of the year. carol: in support of the u.s. currency? jayati: correct. the second pillar comes from u.s. growth. it has been resilient. now you add to the fact that the u.s. will be injecting a new macro uncertainty to other countries and particularly in the euro area and china who are very trade-dependent and whose growth will be hurt by these tariffs. the u.s. will be sort of engineering its own exceptionalism and extending it. the third pillar of support will come from geopolitical uncertainty. the u.s. will be driving the geopolitical landscape. whenever there is uncertainty, the dollar rallies because it is still the safe haven of the world. the fourth pillar of support will actually comes from the fact that trump is sort of seen as someone who supports tax

cuts, who support de-regulation. in that environment, u.s. equities do better than equities from other countries, particularly china, the euro area, even the u.k. that in itself is also good for the dollar. carol: there are things though that once the president is in the white house, can do with an executive order, and others that he needs congress to help him with. how much do you think from what we have heard of the campaign trail, whether it is tax policy or tariffs, ultimately doesn't get done because he can't do it alone, because it sounds like you think a lot of it is coming? jayati: yes. there's a few reasons for that. first is the level of support trump has had for the election has been surprising. we have been pointing it out as the biggest risk in the last three months. that tail risk actually evangelized. he managed to capture the swing states with massive victories and that all has been surprising. what that means is that we

definitely will get tariffs because that is something he can do with a single executive order. we also have precedents from his last term of doing that. that will be his first order of business. in countries he will target, it will not just beat china this time, it will be the euro area. trump is unlikely to be an ally to them. what is interesting is that until now we have been expecting that mexico and canada will be exempt from it given the u.s.m.c.a., but his rhetoric on canada is tough, which means we can't rule out that as a risk either. secondly, you mentioned tax cuts. we have a president for tax cuts and for that you do need congress and we do have more republicans this time. even that will be easy to pass. i don't think that will be a big shock to markets because they were going to expire at the end of last year, so they will be

extended. so that also filters into the exceptions argument where a u.s. equities will do better than other countries where our policies will technically be taking away the growth. vonnie: what currencies will perform worse next year? jayati: there are a few. euro comes to mind. we expect the euro to move towards parity in the first half of next year. the euro has a lot of things going wrong. it has the worst of both worlds, not just the local sphere but also the geopolitical sphere. if you look at local fundamentals, there is a lot of fragmentation risk. we have seen friends, the headlines in germany. the euro area is also lacking drivers of productivity. there is nothing to be excited about on the growth front. the gap between the euro area and the u.s. in terms of growth and interest rates, will keep on widening. we think the ecb will keep cutting for the next four meetings and they will have to take rates below neutral into

stimulative territory. there is greater uncertainty about the fed and where fed rates land. second thing is trump will not be kind to the euro area that will push the euro lower. carol: the stronger dollar means selling u.s. goods overseas is expensive. i do wonder, you know, do u.s. global multinationals, will they be hurt as a result? jayati: i think that's a very good question. that's something investors should be asking for the next year. there is two ways to think about it. the first effect of tariffs is inflationary which means the fed will have to pause. . the second order effect will be on growth but that will only be the second half of next year, not in the -- and imminent impact and only after other countries start imposing retaliatory tariffs. i would be concerned about u.s. growth only in the second half.

i don't think it is something investors need to be worried about in the nextm six months thank you so much, a great take, in terms of u.s. currencies, but interesting to hear that the u.s. dollar looks like, at least according to you, that it could be a strong stand out. thank you so much. jayati bharadwaj is joining us, global ethics strategist at td securities. coming up, one of our big stories on this monday, the 39th president of the united states, jimmy carter, who passed away yesterday at the age of 100. we continue to look at his life and his legacy. this is bloomberg. ♪

vonnie: welcome back to the special edition of bloomberg markets, on bloomberg radio and television. i am vonnie quinn alongside carol massar.

president-elect donald trump offered his complete and total endorsement of mike johnson, intervening to ward off a potential site for speaker in the white house. the house will hold its vote for speaker on friday. joe mathieu is cohost of bloomberg's "balance of power" and joins us for more. joe, how sure are we that will not have another fistfight in congress? joe: we are not sure at all. this is a good development today but we can say mike johnson is out of the woods because of the math. it's pretty basic. you need 218 votes to be speaker. republicans have a house majority or they will, when they come to town on friday with 219. he can lose all of one. we know that tom massey, republican of kentucky, is a no, he has been a thorn in the side of the speaker. and based on what we have heard, there could be five republicans who vote no. do we go 15 rounds allete kevin mccarthy? that could happen.

to remind everybody. the first five days of congress are usually festive. it's a great experience as they elected their speaker. then the hard stuff starts. the first day is not supposed to be the hard stuff. carol: can barely we are back here again. [laughter] where is the first buddy, elon musk, in all this? joe: actually, really glad you asked me that. he came into support mike johnson. after the criticism we saw from musk on the continuing resolution, elon was giving a thumbs down to mike johnson. so he has elon musk and donald trump behind him. . it is just that you're dealing with such a tough math that one or two upset people makes a different story. this isn't necessarily kevin mccarthy all over again.

no one is gunning for him lately so with matt gaetz. no one else is raising their hand. this is not exactly a job a lot of people want. carol: you understand the cycles of washington better than most, so why are we here again? joe: boy, quite a question. if you could write a good book about that. [laughter] we got here again because of the division in this country. people talk about the trump mandate and he did win all seven swing states. he has a lot to brag about but when it comes to the legislature, this is an incredibly tight majority for republicans in the house and it could get tighter. trump has actually tapped three members to join his administration and if they all join, mike johnson has a majority of 1. good luck negotiating even the tax code in an environment like that. we have something like the debt ceiling which they were unable to manage at the end of this year. vonnie: how much would mike johnson -- the democrats? he has been speaker for a while now -- how much would it suit

the democrats if he were to continue to be speaker? joe: i don't think it will change their lives much. we know democrats will not help him. we heard from hakeem jeffries that not a single democrat will vote for mike johnson, which was something that had been considered for a time. the conference will vote all hakeem jeffries on one side, we will see how many vote for johnson on the other. but considering the agenda, the border first and foremost, we're in, followed by extending the term tax code from 2017 and lifting the debt limit to make that happen. it's unlikely mike johnson will have a lot of democrats on his side unless he is willing to work with them. carol: we appreciated, joe mathieu, with the latest out of the nation's capitol. thank you so much. also in washington, biden said he will order a state funeral, for jimmy carter calling the

former democratic president, an extraordinary leader, statesman and humanitarian. joining us to talk about this and jimmy carter's place in the presidential history and really his legacy out of the white house, is barbara ann perry university of virginia's miller center presidential oral history program cochair. so nice to have you here. my understanding is that jimmy carter was the first president that you voted for. take us back to that and tell us how you were thinking about the former president today? barbara: i do think about it very personally, because i saw jimmy carter when he was certainly jimmy who, in 1973. he was here for a democratic conference of governors from the democratic party. i was a highschooler and i was selected as a page to help with that meeting. people didn't pay too much of attention to him in terms of

presidential candidate. but by 1975 he came back to louisville for an issues convention for the democrats. by the time, eight other people had joined him to run for nomination of the democratic party in 1976. this is a new that would be the first election i voted in, i thought all the other people, these 8 other people who had been big names in the country and had been in washington for several years, i was really impressed with jimmy carter. he spoke about foreign affairs which would not have been an area of expertise for him, but he had traveled all over the world at he obviously had a very good mind. so i thought this is somebody who could be in the mix. sure enough, he 1a the iowa caucuses and went to win the nomination's and went on to win the presidency. i decided to go to his inaugural. it was freezing cold, so called potomac river froze over.

[laughter] but i had a warm feeling. because he did something different. he got out of the limousine and he and rosalyn walked hand-in-hand from the capitol to the lighthouse with their family behind them. the first time the president had done that and it really did make them seem like they were of the people. vonnie: what if he had had a second term? barbara: you know, it's a fascinating question. i love counterfactual's. i think the country wouldn't necessarily had been better off. by that i mean, the economy was not good when he left office, it was in of the main reasons he lost to ronald reagan. and jimmy carter, while we think of him now in terms of his positive contributions as a post-president, there was a side to him that may be came from his christian background and that was kind of a dark side. it tended to be a little bit lecturing and hectoring of the american people. and that was not ronald reagan.

what we needed in 1980 was a positive view. that is what ronald reagan brought. so i don't know if we would necessarily have been better off as a country. we certainly were better off as a country to have jimmy carter in a post-presidency. carol: this is something we talked about with our david westin. if you think about him bringing awareness to energy conservation, solar panels on the roof of the white house, creating the department of education. there is a lot he did that i think we credit may be to the reagan administration that he actually started to put initially into work. barbara: yes, it turned out that his lecture to the american people, the so-called, misnamed, malaise speech -- of course, he never used the term "malaise," -- was a crisis he was telling americans to face. but instead of doing it in a positive way, again, it was a

bit too negative, and specifically since right after that he got rid of most of his cabinet so it made people feel like things are more unstable. it did the things he mentioned. he also upgraded our defenses during the cold war that obviously ronald reagan could work on that in the end, thank goodness under george bush the first, and stuck the cold war. so there were many positives from the carter administration. there were just some unlucky events that he either mishandled or was not able to handle, that brought ronald reagan to power. vonnie: is there a lineage? any politicians out there who are carrying on a jimmy carter-type legacy? barbara: i do. joe biden. as he said yesterday, "decency, decency, decency." that is what he took from jimmy carter. that is joe biden. where it will go come january 20, it hard to say. vonnie: thank you so much, barbara, forgiving giving us

your time to say. first president you voted for, carol. carol: loved that story. the point about him and his moral compass is certainly something that in this division we are seeing and money and politics that seem to get in the way it, is just something to think about in this current environment. vonnie: that was barbara perry, university of virginia's miller center presidential oral history program, cochair thank you for helping us honor the life of president jimmy carter. this is bloomberg. ♪

vonnie: you're watching a edition of "bloomberg markets," the final day, almost final day. you've got me vonnie quinn , alongside carol massar. we will turn our attention to commodities. even with the light volume today, huge moves in commodities today. the front month contract is up 15%. other contracts are up 5%. really up across the curve, the most since the contract starting trading in 2012. this is the weather is colder.

mike mcglone is here. is this just about the weather? seems like the most massive move. we had been moving higher anyway. mike: the proper question, this time of year, it is mostly about weather and natural gas. it makes pete's right when you put in as cold winter. we just switched over to the february contract. it pumped near four dollars today. pretty good resistance. typically it drops down to near 2. typically when you look at the april and may contracts, they are trading closer to 3. you need a colder than normal winter for this to be sustainable. the trend has been that global warming happens in winter. carol: talk about the trend of 2024 for natural gas. we have had quite a run this year. mike: yeah, it has bounced off its lows. in july it dropped to 4.5 before

it expired. the winter has been colder. we do have storage higher than normal. but then there is also a decent amount of demand for electricity. the lesson he learned in natural gas, every time you catch something to near-normal for, supply comes back on and pushes prices lower. that is more likely to be the. vonnie: trend we have to look at europe as well as the jump in prices there as well as in about russian flows and what ukraine will allow to happen and so on. is there any correlation between what happens in europe and the rest of the world, will that shift flows if you can get natural gas from somewhere else? mike: the u.s. will only export 20% of its natural gas. couple years ago it was 15%. it might be more with liquefied

natural gas. it might accelerate with the trump administration. but supply will, too. it does not much of a concern. it is mostly domestic demand at this time of year. carol: looking at the top commodities menu on the bloomberg comex gold is 27% advanced. . and next year for metals markets. you talked about natural gas. cocoa jumping the ghost since may. oil traders see little prospect for gains as 2024 winds down. when you look back, what surprised you in the commodities space in 2020 for the most? mike: good question. i think the key thing that has been surprising is we didn't see lower prices in crude oil. crude oil, as you mentioned, is pretty bearish right now. oversupplied. i think it is being held up by things like that stock market and geopolitical tensions. so that tilt is lower crude oil prices. we have the glut growing. the key thing that has been working the right way is, gould

continued to appreciate. virtually most commodities. that will continue. the biggest surprises were in cocoa and coffee. they jumped up. this commodities near the equator are showing the effects of climate change. the biggest risk is it trickles down to the other commodities. most notably, cocoa and coffee. coffee his grown in brazil around the equator. and actually the biggest producer of soybeans right now is brazil. the weather for that crop is good. so the risk for next year is that cocoa and coffee will pull up things like soybean. it is more likely they will follow up corn and soybean towards that excess supply which means lower prices. vonnie: which commodity is most sensitive to the incoming trump administration? mike: wow, you are getting me with some good ones here. [laughs] i think it is most notably crude oil. the question is how much they have priced for it already.

the drill, baby, drill quotes from trump have started to be priced in the air. the market is worded there might be a cut from iran. it's definitely crude oil, it's the most significant. that risk is that the next $30 in crude oil from $70 is likely to be $40. i hundred dollars would be a shocker. overall, next year i think crude oil's risk is lower particularly as we drill more than we get lower cost energy in the u.s.. carol: not sure if you are a betting man, but if you were what is the commodity you think we should keep on our radar screens come 2025? mike: the doctor copper. [laughter] basically copper and industrial metals have to go up for any type of reflation. the risk is that it goes down. it made a new high this year, $4.20 a pound. the risk is that it goes back

towards three dollars which has been its price for most of the last three years. it has to be at sustainable numeral five dollars. the key indicator for that is that the chinese 10-year yield is 1.7 percent. the lowest on record. the risks are that commodities follow that 10-year note lower which is an indication of deflation in china. carol:. carol: we appreciate you as always, mike mcglone with our bloomberg intelligence team. thank you so much. less than 30 minutes to go until the market closes. equities retreating across the board. but we are off our worst levels of the session and kind of rolling over. if we look at the s&p 500, we are down 52 points. it's good for a gain of almost 1%. nasdaq 100, that averages down one percent, a decline of 220 nine points. s&p 500, as you would expect most names and broad-based selling. 470 names lower on this monday.

our next guest is looking at the market outlook. it looks like much of the selling is coming from the interest rate-sensitive areas. that is a quote, "the fed's last meeting put a chill into investors' ideas of where rates are going." joining us is kimberly forrest, chief investment officer at bokeh capital partners nice to have you join us. what is your bet on what the fed ultimately does in 2025? if you go back a year, we thought the fed would be more aggressive. they weren't. here we are at the end of 2024. we thought the fed would be more aggressive and it looks like they might not be. >> we keep forgetting what the fed says that every opportunity which is that they are data-driven. we could roll our eyes like a 16-year-old girl every time he says that. but it is true -- [laughs] -- it

is data-driven. the data has been lumpy. it has been slowly coming down. maybe not that slowly, but inflation has been coming down and the fed will always be behind the ball if we believe them and they are data-dependent, they will have to see the data fall before they either stop lowering or start raising. so we have to be as patient as the fed is over maybe a little bit more as investors, and not really get spun up about it. and that's hard. that's really hard to be an investor and not get concerned about where the fed is going next. vonnie: of course. you must have your forecast so you can build a portfolio. right? i am curious, have you changed the amount of cats will happen next year? the market is barely pricing in one at this point. kimberly: any kind of market in the short term will get the short term wrong and the

long-term correct. i think last year at this time were to be forecasting like 6 -- warrant day forecasting like six cuts next year? very aggressive. crazy aggressive. i think there will be more. they probably have a full 4 more cuts of 25 basis point before they are that what we consider stasis. that it is not too easy money or too tight. right now i think the fed, everyone in the fed understands that the current level is tightening against the economy. that's what it is supposed to be doing. vonnie: one thing i do wonder, something we have talked about suddenly it today, is you look at the s&p 500, a 20 4% gain at last year. a similar gain this year. so what does it take for equities to continue gaining on that level in the new year?

kimberly: i will go for it right here. that 24% this year is not like the year before where it was more even across the s&p 500. this really is a handful of stocks, right, the magnificent 7 have driven things higher. and i think we will see a break in that for many reasons. all signs point to it may be the takeover of the large language models, how many of them we need and where they are developed. all that kind of stuff, it is like the 6-8 cuts that investors expected. no, large language models will not pop up everywhere and take over every last molecule of electricity. i think the magnificent maybe don't have the opportunity to grow like they did this year. and maye next year, other stocks get a chance.

that is where if you come from. it could also come from smaller names. i am really fond of that mid-cap stocks that have been left behind. vonnie: you say that, but it is hard to rotate into the russell 2000 when you look and see that it has been of 15%. which is not too shabby, compared to the s&p 500 in the last two years, it is only up half as much. it's hard to say well, i will take a chance this year, that might be the year. kimberly: well, i don't think it is taking a chance. if you look at high-quality companies that have great product management, you know they were either organically grown, or they will be acquired. something we haven't talked about is we have a change of a president in 2025, and this administration stands on mergers and acquisitions is different than biden's administration.

combined with the fact that we had raising rates during most of his term and disincentives about mergers and acquisitions, that was a limiting factor on those medium-sized companies. a lot of those companies either get a better -- get together or get bought by other companies. that is not going on. that is an area i think we can anticipate change in over the next year. carol: do you see m&a activity across the border is there a certain sectors you think investors should watch especially in the smaller cap or mid-cap targets? kimberly: sure, i love technology. i was a sell side analyst as my first position in this industry, and a software engineer. i think technology is always looking to get bigger and better . they ask the question, should i build it or should i buy it? there is a lot of other areas.

retail will have issues coming up here at where there will be some rotating changes at the top. and maybe even some more consumer discretionary and restaurants, things like that. it will be a weird year. i think mid-caps are going to get some love. we will see what happens. vonnie: something tells me it will be a volatile year at the very least. kimberly, thank you so much for joining us, founder and chief investment officer at bokeh capital partners. carol, if you were to sell the winners, if you decided ok, i have made gains at nvidia, tesla, then the market continues with this for the rest of the year, you would feel a little stupid, wouldn't you? carol: i know, will we say the market is broadening out, and then once again we get a year where the large cap tech names lead the way forward. i guess we will see. but the m&a story i think it's

kind of interesting. vonnie: i do think it is always a market that is designed to humble you at times. we will talk about another market that could be humbling in the moment, crypto. it's been a blockbuster year, though it is not quite finishing the year in blockbuster style. can that continue into 2025? it is likely the volatility will. bitcoin in the last while, up 2%. though it is $15,000 lower than its peak earlier this month. carol: how much was it at this year? it's done pretty well. vonnie: we will discuss below that, up next this is bloomberg. ♪ ol hard work meets bold new thinking. to help you see untapped possibilities and relentlessly work with you to make them real.

carol: you are back on "bloomberg markets," carol massar along with vonnie quinn on this december 30.

we have headlines crossing the terminal. the u.s. treasury was notified on december 8 of a hack to certain stations. the hack accent and that the hacker access to a classified document. treasury writing a letter to senators. it is attributed to a chinese state-sponsored actor. treasury saying it was compromised beyond just service. it was taken off-line. also looking at coverage from the new york times. the department notified lawmakers of that breach which was linked to a state-sponsored actor in china. again, a developing story. we will continue to monitor it. vonnie: it's a little scary when somebody can compromise our third-party cyber provider because they are the people you pay to keep you secure, right? carol: exactly.

vonnie: bitcoin is up 1.3%. it has trimmed its gains but it is still up 125%, blockbuster ear for crypto. can that continue into 2025, volatility, obviously, leaving some investors cautious. sonali basak spoke with our next guest at a conference in new york city and asked him. >> i am afraid the markets are becoming overextended. and that sometime in the future, we will have a downturn in the markets. that, i don't think it's going to be a very violent and very far -- it will not go very far. i am extremely optimistic about the next four years and maybe even thereafter. sonali: of the other things where investors are expecting later regulation is in the world of crypto-currencies. how do you feel about them from where you stand, do you think your clients at interactive brokers will be something you're asking about more and more? >> crypto-currencies are very interesting area.

we have been into crypto-currencies for about he years. we charge less commission on the cryptocurrency trade than any other firm other than robinhood, but robinhood has a lot of spread because they get their commissions paid by the market maker who they send the orders to. so i think on balance, our platform is probably the most efficient one for crypto trader. otherwise, to tell you frankly, i am sort of scared of crypto, because it can go to any price, because it is basically just a figment of imagination. [laughs] it doesn't have any underlying volume.

the only value it has is the same as the paper dollar, which is nothing. sonali: but you have seen people pouring in nonetheless through etfs, we saw bitcoin get to $100,000. will the investor tomorrow be more likely to buy bitcoin, or a u.s. stock? kimberly: well -- thomas: well, it depends. for bitcoin, you can buy u.s. stocks. for a u.s. stock, it's more difficult to buy bitcoin. i think anybody who doesn't have bitcoin should have some bitcoin, but not too much. i would recommend that people put 2% to 3% of their net worth of their net worth into bitcoin, and we, for example, will not allow anyone to invest more than 10% of their assets into bitcoin

, because i think that would be very dangerous. carol: that is interactive brokers chairman thomas pacify with sonali basak. certainly, bitcoin has been front and center in 2024. microstrategy is one of the reasons why, saying it bought $200 million more a bitcoin marking the eighth consecutive week of purchases for the company. it aims to raise 42 billion dollars in capital in the next three years to buy cryptocurrency. it comes of the ishares bitcoin trust's industry records, growing to more than $50 billion in assets since it came on the scene just 11 months ago. here to talk all things crypto is our own mike regan. it feels like 2024 it has certainly been another year of crypto. mike: another year. who would have thought after the 2022 and early 2023 that we saw, feels like the wheels were falling off the bus.

carol: is that all trump-related, or other stuff as well? mike: it started with the sec decision to finally allow eds in january, that really got that party started. but the election took it above 100,000. people attribute that to trump promising everything to the industry, from crypto friendly regulators, he has got this new crypto council led by david sachs. he has even promised to create this strategic bitcoin reserve along the lines of a strategic petroleum reserve. it really just a 180 from the position that biden administration talked to was the crypto industry, very critical, high-scrutiny, many criminal cases from the sec. really the opposite here. that is enough to get it above the 100,000 dollar mark. what is interesting now is you have seen some weakness in the past couple of weeks. it really delineates the two

driving factors for crypto. one is, all the hype around it. who is buying it? trump is promising a friendly regulator. udf got approved. michael seiler, all those crypto-a natives. but with all the news working its way to the system, and all the buying and selling that's down, there are these macroeconomists returning to the scene. higher interest rates. crypto likes tech stocks. it does elect higher interest rates. we have seen the nasdaq, off its big rally this year. carol: it has really followed the overall market trade. mike: it has a sort of come back. it is an unreliable correlation, but it returns again and again when there isn't a better narrative for the market to latch onto. it kind of falls back into the co-relation with the nasdaq.

you look at bitcoin and the nasdaq 100, but they both peaked the day before the last fed meeting. carol: so much for bitcoin to being a safe hav didn't talk about that in 2020, the narratives change around it. mike: if i were to put myself in the shoes of the bitcoin bulls, they would still consider that over the long-term. i mean, we are talking a correction from 108,000 to 95,000, this was worth five cents in 2010. [laughter] vonnie: you can understand why companies like coinbase, marathon, they go with bitcoin. but microstrategy is an interesting one for me, because you have these buys with targets of 650 for 800 by the targets don't change with bitcoin changing. are they assuming bitcoin at 100, -- 200,000 at one point? mike: it is kind of big theme for anyone in crypto to think bitcoin might have a bear market

in some years, but eventually will keep going up. vonnie: but they shouldn't be in a rabbit hole, right, they should be looking at fundamentals? mike: if youbtcoin -- [laughs] -- who knows. there aren't any really. but if you look at its price action over history, it has been outstanding how much it has gone up -- astounding. similar batting average as the stock market, i think 8 of 10 years. a lot more than down. microstrategy, there isn't much of a software business left there at all, it is strictly just a levered play on bitcoin. if you have seen bitcoin come down, you will see microstrategy come down a lot more. carol: you think about 2025, we'll see where bitcoin goes and where the crypto market goes over all, but are there any specific catalysts that might be a positive or negative?

mike: through this very moment, i am thinking about the macro connection. interest rates and tech stocks. further on, it depends on whether or not properly does create a strategic bitcoin reserve and get congress to buy some bitcoin fight, then it is off to the races. vonnie: oil, it iscarol: mike re following you throughout 2025. bloomberg cryptocurrency team. we have bitcoin up one point four percent. ethereum 1.8% as we got you down to the close. crypto markets q-pon trading. coming up, we are just moments away from the closing bell. christopher brigati will be joining us next the county down to the close. i am carol massar along with vonnie quinn. this is bloomberg. ♪

carol: all right, everybody. you have the closing bell on monday, december 30. we are finishing off our lows of the session, but you still are

looking about a 1% decline in the s&p 500. moving over to the nasdaq 100 and you have a steeper decline out of percentage basis. down 275 points on the nasdaq 100. broad-based selling with most names and the nasdaq and the s&p 500 low on the day. vonnie: what is incredible is just a few seconds ago we had one tiny sector still positive in the s&p 500 and that was energy. [laughter] even that gave up any of its gains and we are literally a red pie. it is a christmas pie. i don't know what is in there, cranberries. energy did perform the best and within energy, we do have a couple of oil and gas equipment companies, that was basically on the natural gas pump. carol: a lot of red on that screen. let's get to the market trade,

the premarket trade, the trade, and here we are at the closing bell. just, considering how the day started, we saw some selling right off the bat. we rallied a little bit, but stayed in the red all day. jess: coming off those lows after dropping, trimming losses, but nonetheless still declines after a stellar year. up more than 20% year to date, but two consecutive years of more than 20% gains. carol: doesn't matter how we trade in the last couple days of a year in terms of what it means for the new year? jess: some people will follow the state of clause rally period. but that still takes us to friday, we still have a couple more trading sessions left. you and i and vonnie were talking about volume earlier and what it is telling us. when you have more than a third lower relative to the last month, obviously any sort of moves you see in the tech giants

will exacerbate the swings. vonnie: it does exacerbate them, but won't necessarily reverse those moves. when will we get better volume? can we counted out the rest of this week? jess: probably on january 15 because that is when j.p. morgan will kickoff earnings season. it will be on a wednesday this time, not a friday typically. you will have citigroup and some others coming through. that is when we will see more volatility and bigger swings. vonnie: you know what comes the following monday after that? that is martin luther king day. jess: inauguration. vonnie: inauguration. jess: some would say the j.p. morgan collar trade adds volatility. it's a hedge fund type strategy. typically after the rebalancing earlier this month, that typically can add more volatility. carol: let's have you walk us through some of the gainers on this monday. eq two corporation, not something we talk about a lot. jess: that is the biggest gainer

on the day, up more than 5%. this is an energy stock. it moved higher in sympathy with what we are seeing from natural gas prices, something vonnie was pointing out earlier. biggest percentage gainer. natural gas futures headed for their best year since 2016, up more than 50%. each cutie up more than 20% -- eqt up more than 20% year to date. another one we were talking about, nvidia. we talk about this every day, up about 0.4%. best day since christmas eve. this is the biggest point gainer in the s&p 500 when you are looking at that. it obviously has big swings. it is only down about 6% from its all-time high. we were talking about this earlier when it dropped as much is 13% from the november high. it has begun to perform better. carol: it is up about 78% this

year. jess: it is the second best performer in the s&p 500 this year. power producer for strap is a top-performing stock. it got added back to the s&p 500. that stock is up more than 260%. nvidia will have to settle for second place. vonnie: what's up with the vivid seats? jess: it's an online ticketing marketplace. it's up close to 20% to date. it's best gain on record. the market cap is less than $1 billion. it is in the russell 2000 small-cap index. carol: why is that? jess: they are exploring a takeover. carol: a short position on this one. we talk about those m&a deals may be coming in the new year. jess: maybe some of those things

in the red. vonnie: you have your choice. jess: boeing, the worst day since november 13. bloomberg intelligence analyst george ferguson was saying they ordered an inspection of all of its 737 800 planes operated by carriers following that crash over the weekend. the likelihood of those issues being related to initial manufacturing at the boeing plant might not be quite as likely as people had been anticipating. 17 buys, 14 holds, and two cells. carol: lamb weston and walgreens. jess: lamb weston up 3% -- down 3%, rather.

french fry supplier unfortunately doing -- i'm doing some gains, but it has reported earlier earnings that disappointed investors. and then one of the worst performers year to date behind supermicro, supermicro was added to the s&p 500 in march, down 4% today in sympathy with the bear decline. that stock down more than 60% year to date on pace for its worst decline. carol: they are trying to figure out the takeover. jess: they are. carol: speaking of not a great market, treasury market closed, vanquishing the small gains it made earlier this year. investors wary of the trump agenda, maybe not so many rate cuts. we've got to finish with rates, not so great. jess: if you look at the 10-year treasury yield, coming down from the highs we had seen. carol: much higher.

jess: but also still above 4.5%. that is really the key because the direction really can tell you and dictate what happens with the direction of growth in technology stocks. vonnie: thank you so much. we have another day to do this before we can call it a day for 2024. always explaining this equity market to us, our appreciation. let's get some more advice from chris, the chief investment officer at s wbc, who joins us now. any essence we should take away from today's blood in the water? >> it is a difficult thing that might happen. a little position correcting around the holiday period and pullbacks always help after such a robust year. nothing really to take away from this other than buyers. carol: how are you thinking about the new year? just getting through the first 90 days of a trump white house

before you think definitively about a narrative for 2025 in terms of investing? chris: i think i'm got some thoughts ahead of time. i always want to see what happens 90 days in, but as you prepare and think about the year ahead, you can kinda forecast what might happen and the policies to be aware of. some things to benefit from the trump administration. policies from steeper yield curve. there are opportunities out there and you have to be on your front foot to grab them and possibly optimize your portfolio returns. vonnie: you have teased us, you've got to tell us, what are they? at least some of them. chris: of course, i'm really favorable on financials. i think anything in the financial space will benefit from the steeper yield curve. the yield curve had been inverted for the longest inversion in quite a period of time. now that it is steeper again, it presents opportunities. anything with financial backing will have an opportunity to progress.

companies that can benefit from personal portfolio investing. carol: i'm looking at the kbw bank index, up 33%. it has seen quite a run since the election. the financial backing is pretty massive. is this the big banks or the middle ground? is that the charge card companies? what do you find most appealing at this point? chris: looking at some of the big banks, definitely. jamie dimon has a great platform and they are expanding and are kind of like the bellwether in the banking space. you want to be aware of things that might affect growth and opportunity. are they heavily invested in commercial real estate. that can be a bit of a drag for them and know what you are getting into. i do expect some consolidation in the coming year and you can

see smaller banks being gobbled up or even some consolidation within the small to midsized banks. vonnie: would it be an opportunity to play them at all? in hopes that they might be a target for acquisition? chris: i think so, i think there might be opportunity for acquisition gains in that space. buying into that space would be a good overall play. there are definitely opportunities in the small to midsized banks that investors should continue. vonnie: curious as to your thoughts on international stocks. it does seem like u.s. stocks have had a great run, but you have to look outside the u.s. sometimes as well. we saw india habits run, china having a bit of a question over its growth next year and the potential for stimulus. any companies outside the u.s. you are interested in? chris: i think the dollar will perform well and that could be a

boost to domestic equities versus other foreign currencies. i think the eurozone will start to perform a little bit better and there are definitely opportunities in that space. when you get outside of the euro zone, looking at foreign countries like india, there is opportunity, but i'm a little more skeptical on their overall performance versus the dollar. carol: how much of a risky bet is that? i'm looking at the msci index ended is up 22%, so way below what the u.s. market performed. how risky is a bet even if it is undervalued fundamentally? how much risk is it in investing outside the u.s. right now? chris: you are taking on a little bit of risk, that's a very fair point, a little bit of a reversion to the mean theory in terms of thinking u.s. performance might come down, european might cap. -- might pick up. both of them are reverting to a

normal relationship and therein lies the rub. carol: the big tech cap names really propel the markets higher this year. are you in or out? where are you. chris: i'm still in, you can discount them. nvidia will keep grinding away, keep performing. it's a matter of what can benefit as an ancillary basis around that. i like some energy plays that can benefit from the huge ai opportunity out there that will require a lot of energy and therefore that is where the opportunity lies. carol: it's hard to step away and the energy play is fascinating in terms of what will be necessary really to fuel all those data centers required by ai. chris, happy holidays, happy new year. the chief investment officer at swbc. i do think that's an interesting play because the euphoria over ai, it is out there, but in terms of data centers and the buildout and the necessary energy for all those computations, it will require a lot of spending and

infrastructure build. so you just got to keep an eye on that. vonnie: that is what was behind the big gains as well for vstra. everyone says don't market time, but at the same time, you have to decide, when is the time to get out when you have made those gains? carol: i feel like i've heard that over the decades and every once in a while i think, that is a good gain, it kind of makes sense to maybe put some -- takes the money off the table after a really strong year. all right, this has been a year full of a lot, including the passing of former president jimmy carter. when we come back, we continue to look at his life, his legacy. this is bloomberg. ♪

>> i might say that the nations

of the world had built a lasting peace based not on weapons of war, but on international policies which reflect our own most precious values. these are not just my goals, but the affirmation of our nation's continuing strengths and our belief in an undiminished, ever-expanding american dream. carol: president carter speaking at his inauguration in january 1977. a special edition of "bloomberg markets," carol massar and vonnie quinn. for more on his life, his legacy, we are joined by david westin.

we talked with you last hour and a kind of wanted to go back to his beginnings because they were super, super humble. >> they were indeed. he is the son of a peanut farmer in planes -- plains, georgia. he went to the same high school that is to be wife went to. but then in world war ii, he went into the navy and ended up at the naval academy and ultimately ended up a nuclear engineer. admiral rickover was really something, who created the nuclear submarine fleet. he was going on to be a more senior officer when his father died and he went back to the peanut farm to take over the family business. by the way, built it into a very successful business. he ended up being a millionaire before he ever ran for office. vonnie: and went into the georgia senate at one point. what are the odds that he might never have become president? david: i think most people at

the time would have taken those odds for all sorts of reasons. he was from the deep south. he was a modest man in many respects. he was a centrist at a time that a lot of his party was moving to the left. of course, he came along at a particular time after nixon had had to resign and gerald ford had taken over and pardoned richard nixon. there was a lot of chaos in the country. vietnam in addition to the scandals of watergate. he was sort of a simple man who had been successful as a governor in georgia and a man of unquestioned integrity, which appealed to a lot of americans in 1976i think. carol: it is hard to speculate, if watergate hadn't happened, would he have ended up in the white house? how do you think about that? david: it's impossible to speculate, but i would not be the first to suggest that perhaps not, that he was the product of his times, which was

both a blessing that led him to the presidency, but also the curse, because all those things put the united states in some pretty tough shape when he took it over. he faced almost runaway inflation. he had an oil crisis with the oil embargo. as he stepped in, he had a lot of problems and it got worse. vonnie: as we have seen in the united states and other countries, runaway inflation can do serious damage. david: it was largely out of control. not largely through his responsibility, if you recall. richard nixon, when he took the dollar off the gold standard, they clamped down on wage and price freezing. people told him, when you release those things, you will get inflation and they got it. i don't think he deserves a lot of the blame for that. he was a fiscal conservative. he did not run up big deficits

or spend a lot, unlike what we are seeing now. carol: which is fascinating. sometimes you have to take hard steps to get a nation on the right track. i don't know. david: it's a hard job, to state the obvious. not one i would ever think about having myself because it is so very hard. at the same time, there are very special people we have had in our history who can make really tough decisions and somehow figure out how to make them go down. i think of abraham lincoln, talk about hard decisions. fdr made some tough decisions. jimmy carter was very principled, he had a lot of intelligence, perhaps one of the smartest presidents we have had. a lot of people would suggest he was not a natural born politician. vonnie: he certainly changed the way things were done in congress. the other thing we associate

with him is the appointment of paul volcker and he moved his fed chair to treasury. david: he moved out his fed chair and he put paul volcker in. he didn't know him terribly well. as i said last hour, he said, president carter said, i will worry about the politics, you worry about the economy. he led the way on deregulation, bringing in alfred con from cornell to deregulate the airline's and gas industry. he was very progressive in that way. created the department of energy and education. considering he was only there for four years. carol: we talk about current politics and maybe people are looking for something different. i do wonder, would jimmy carter be elected today? david: i've thought about that.

in some ways, i would love to say yes, but i'm not sure i believe myself. carol: why? david: i think the media is entirely different, the country is much different. it is much more divided. there was left and right, but not the extremes we have seen and we in the media didn't cover it the same way. we didn't have cable television news. it was three channels for television. a different, simpler time in many respects. i would like to believe we could have somebody that principled and that committed to sound policy who could be elected today. i'm not sure that's right. vonnie: we were speaking with barbara perry a little while ago and she maintains that president biden was perhaps the closest to have carried on the legacy of jimmy carter. david: i saw that interview, that could be right, but i think if you read the life of joe biden, he's a politician in a way that jimmy carter wasn't

basically. he was an astute businessman and a nuclear engineer. deep in his soul, i'm not sure you would call a politician. joe biden has been a politician since he was in high school. there may be some similarities, i think there might also be some differences. carol: is there something to being a governor and then coming to the white house versus being a member of congress? david: a lot of people say that because you have actually run something and made tough decisions. you have had to make a budget. in the states, you can't run a deficit. a lot of people think there are a lot of advantages, but we have had successful presidents who have not been governors. ronald reagan was a governor. fdr was a governor. lincoln was not a governor. you have a mix of that, but there are a lot of people who think you have an advantage if you have run something. vonnie: he stayed out of politics except for the humanitarian side of things

after that, but you can't help but wonder what his thoughts were on the continuing problems in the middle east having brokered at least a peace deal between israel and egypt. david: he wrote about that and felt very strongly about it. he was very concerned about israel. he had a real deep affection for israel, but at times thought it was going badly off the rails. i'm projecting, but i think this is right, you can't separate his attitude toward israel from his deeply religious roots. he was a true evangelical christian, top sunday school after he was diagnosed with brain cancer, was teaching a sunday school class at mirror nafta baptist church -- maren off the baptist church in plai ns. i think he was very concerned. but he was the one who normalized relations with china. carol: that to me blows my mind. we often think of nixon opening it up. david: it's easy to think it was

inevitable, that was not inevitable. if you read the history of the time, it was controversial and jimmy carter had doubts whether he should do that. there were splits in his own administration. he not only went over there and had deng xiaoping visit him in washington, but after he left the presidency, he kept going back to china and wrote late in his life he was concerned about how u.s.-china relations were going back to a battle time. carol: and here we are today. david westin, thank you. vonnie: absolutely, what a fantastic way to commemorate the life of the 100-year-old jimmy carter who passed away sunday. national day of mourning, january 9. markets will be closed, bond markets closing early. ♪

let's go boys. the way that i approach work, post fatherhood, has really been trying to understand the generation

that we're building devices for. here in the comcast family, we're building an integrated in-home wifi solution for millions of families, like my own. connectivity is a big part of my boys' lives. it brings people together in meaningful ways. ♪ ♪

carol: all right, everybody. back on "bloomberg markets." while 2024 was the tale of two cities in commercial real estate, there were some deals to sell properties they no longer wanted, often at steep price cuts. meanwhile, they were scoring new equity investments on high-quality towers. we still have a lot of questions when it comes to office properties. john gittelsohn joins us now from l.a. with more on his story with bloomberg's natalie one. we continue to talk about

commercial real estate offices in particular. tell us about 2024, let's look back. john: looking back, it was a story of basically bifurcation. they were the haves and the have losses. midtown new york, there were some really winners like one vanderbilt, which got a new stake sold to a japanese company and valued the building at 4.7 billion dollars. other office buildings around the country were falling in value by 50%. vonnie: i love the way you say haves and have losses. why do people flock to a successful building like successful people? or are they genuinely better buildings? john: it's both, location, location, location is the key thing if you take one vanderbilt. it is right next to grand central. and then it is brand-new too.

the ones that are losers if you look at the picture behind me, downtown l.a., it is not a very desirable place in the buildings are 20, 30, 40 years old and those are ones falling by value and half. vonnie: this at continue in 2025 that we continue to see prices marked down on the second and third tier office properties in particular in those prized properties still command top dollar? john: definitely, i think you will see the top do well. the bottom parts, basically, there is a lot of debt coming due that needs refinancing. $300 billion in office properties through the end of next year. as people are forced to refinance, they will look at the books and say, can i make money doing this? or do i have to pour good money after bad? the ones forced to refinance and figure it is a bad deal, those are going to come to market faster. other people are going to

decide, let's hang on and maybe we can join the rising tide that is catching the top tier of buildings. carol: wait, so the people refinancing and may be looking at their much lower valuations, do we see more people may be walking away? we had high-profile walk aways in 2024. john: sure, i think additional people will walk away. i don't know if the number will go up. defaults are rising. mortgage backed securities, they reached 10% this year. moody's projected they will go up to 14% next year. starwood is the owner of a big office complex in l.a., not even downtown. the people who bought that essentially paid $200 million

and the building had more than six hundred million dollars of debt on it. carol: that is underwater several times owner -- over. vonnie: speaking of underwater, miami was a place where a lot of people moved to during the pandemic and a lot of offices opened and then we heard that maybe it wasn't as popular anymore. how are office buildings in miami doing? john: the brickle area, the financial district, is doing very well. there was a building that treated for $700 million, which i think was the second-highest costliest building in florida. if you are in the right place in miami, there is still high demand. a lot of wall street people moved down to miami and there is also among -- a lot of money coming from latin america and other parts of the world, so the office properties in south florida are doing pretty well. carol: we keep thinking coming

off the pandemic, how many years are we now, four years? vonnie: oh my gosh. john: coming up on five. carol: we still see a lot of vacant properties. are we still going to see some office properties that will never be filled again? john: yes. there are estimates that vary widely, 10% to 20% less demand for offices. in other words, each company, the next time they lease, they will be down 10% to 20% in space on average. typically, office leases are about 10 years, so we are like halfway working through all those leases that were signed before the pandemic. and then there is also a lot of tech companies that over-leased even through the early pandemic, they were thinking, we are growing like mad and now a lot

of that property is up for sublease. that is providing another added level of extra quality property in many cases to the market, so there is excess space that still needs to be absorbed out there. vonnie: the unemployment rate is not bad by any stretch of the imagination. people are employed for the most part, so you would think the offices would be pretty full again. are there other centers of gravity that have done well? i know nashville was growing when it comes to financial services and so on. are there huge buildings being built there and in houston maybe or other places? john: i mean, nashville and austin are two areas where there was a lot of new construction that is actually adding to the inventory and not necessarily getting filled up or it is creating vacancies elsewhere.

austin has one of the highest sublease rates of any city. vonnie: john, thank you so much. you are amazing. follow the details on the commercial and other housing markets as well. that is john gittelsohn from our l.a. bureau. across the world, businesses are not waiting until u.s. inauguration day to see which countries, products, or tariffs are announced in incoming president trump's widely telegraphed trade wars. the mere threat of his universal tariffs sparking a scramble leading to disputes or disruptions that could impact the global economy. noah dixon from state street joins us now from boston. thank you for joining us. how have you all at state street been gaming out the potential for disruption in the ripple effects from currencies to stocks to bonds of any type of change in president trump's tariff theory? >> sure, i think the uncertainty is certainly palpable in the

markets. i think investors are in wait and see mode. tariffs i think, the one thing markets eight is uncertainty. we don't know what the retaliatory effects are going to have and then how the fed ultimately is going to react to those tariffs. we think it can certainly lower global growth. we are just in wait and see mode and investors are certainly a little skittish going into next year. carol: i do wonder how the u.s. does it alone and can keep up the momentum if the rest of the world is not doing so well. in the great financial crisis, without the emerging-market world would be immune from what was going on in the developed world and yet it wasn't. because what happens in the u.s., it will often be felt

around the globe. if the rest of the world is having a difficult time in terms of their economy, be it europe or parts of asia, can the u.s. do it alone? noel: i think it's possible. we kind of have a playbook. we had trump 1.0. he did implement tariffs on several countries at that point in time. and the u.s. actually was able to withstand a lot of the retaliatory impacts. at this point in time, u.s. growth is pretty solid, growing well above trend. other countries will make adjustments. china currently has some stimulus measures. i would imagine if they were hit with high levels of tariffs, they would subsidize some of their industry. i think it would weaken their currency and that obviously will keep them soda buoyed. i think other countries will

make adjustments. europe for example, they may potentially turn to china to get some assistance. i think so long as we don't go into a real, deep global recession, i think the u.s. can still chug along. vonnie: where are the fragility's in the market? you mentioned the chinese currency and we know china is issuing more special bonds, but where in the markets that u.s. investors have access to do you see the biggest fragility's? noel: the biggest fragility is the bottom 40% of income earners in the u.s., they are still under a lot of pressure. we have this case shaped recovery that is only getting exacerbated. there is a potential as you get a tightening of financial conditions that that lower two quintile of income earners could actually drag down the entire

u.s. economy. i think your previous guests talked about the commercial real estate market as well. i think that's another risk investors are focusing on. vonnie: in the 20 days leading up to inauguration day, what would you be doing? would you be pulling out of anywhere you have liquidity in order to wait and see? noel: i would definitely avoid durations and the long end of the u.s. curve. i think you have to be selective as it relates to equities. if you are only fully invested, i don't think you should try -- unless it is rebalancing, i wouldn't completely escape or leave the market at this point. there are opportunities.

carol: you sound pretty cautious as we get ready to kick off the new year. noel: i think we will have a lot of volatility. i think that is what we should expect. i think the u.s. will still be able to chug along and have solid growth. when you have a fed that is cautious, when you have the commercial real estate concern, the bottom 40% of income earners , i think you do have to be cautious and it is not just going to be a broad-based rally. i think it will be a lot more selective this time around. carol: vonnie brought up a good point earlier. when you look at the two years, last year of the s&p 500, up 24%. , how many of your clients, institutional or otherwise are coming to you and saying, we have had two good years and i'm

ready to put something in conservative and ready to ride it out in 2025? noel: not a lot, actually. they are being a lot more cautious of being more selective. they still see opportunities in the market. also, they are skittish about the fixed income market. they actually see more opportunity with high quality equity companies that have nice, free cash flows, good, solid earnings and forward guidance. they actually feel a little more solid or confident with those type of companies as opposed to other places in the fixed income. vonnie: thank you so much for joining us. one trading day left in the year and we appreciate your input. noel dixon at state street.

that is fascinating. 50% over the last two years, wouldn't you be tempted to think that would be the time to maybe pull out? carol: they talk about you can't time the market, but at some point there is a logical side of your brain that says, this isn't too shabby at over the last two years. third consecutive decline for the s&p 500 and nasdaq. that is the tone over the last week or so. vonnie: likely no more records this year unless we get something crazy tomorrow, which is not completely out of the austin. stay with us. we will speak with wendy liebman n on the u.s. consumer. thiss aecial edition u.s. markets -- bloomberg markets. ♪

vonnie: you are watching a special edition of bloomberg markets on bloomberg television and bloomberg radio, on bloomberg originals and bloomberg.com as well.

consumers willing to keep on spending, even as the labor market softens. for more on the season and the strength of the consumer, we are joined by the ceo and chief shopper at ws l strategic retail. carol: i want to be a chief shopper. i'm just going to put it out there. [laughter] vonnie: i'm pretty much the chief shopper of my own home, wendy. i'm curious as to the holiday season, bloomberg economic seeing a little bit of data, how healthy is the u.s. consumer right now? wendy: well, healthy in the sense of willing to spend this holiday season and with all the uncertainty coming next year, they certainly did with their money with the credit cards were. i would say this, that they are increasingly cautious and i think if you looked at the way they shopped and where they shopped, it was very much waiting for the sales, waiting

for the deep discounts, and then shopping. good news that they did shop, not so good news that credit card debt is up and people are very concerned about the coming year. so, nervousness out there. carol: i felt that way shopping this holiday season. i felt like from the get go thanksgiving week, black friday, 40% off right out of the gate. all these deals. were there a lot more deals this year? give us for from what we saw your ago. wendy: yes, absolutely. even before black friday. black friday means little or nothing these days. you probably saw deals from amazon, walmart, and target and others pre-black friday. those set the tone and as we moved into the holiday season, retailers were really aggressive. the one time i felt confident as they had listened to the concerns of the american chopper and they realized if they wanted to get them to spend this year,

they would have to be very aggressive on discounts. that is what you saw across the board, whether it was luxury, department stores, mass retailers or brands, there were a lot of really good deals if you were willing to play the game and stay it out. vonnie: what about experiences? have experiences held in to the appeal? they were out doing all sorts of other types of shopping on the shopping list. wendy: absolutely and i think the tendency, travel up, people willing to spend on those types of things. essentials maybe they haven't stopped up for in a while. buying things like home fridges or stuff like that and there is concern about what the new year

will look like in tariffs. a mixture of experiences of what i need to replenish, what i might need, and then the little treats and cautions around beauty or new parish shoes, it was quite -- quite broad, but very clear people were only spending on what they got a really good deal. carol: i like a good deal, which is why i love t.j. maxx. i need an intervention, no doubt about it. what are you expecting one of retail front? wendy: very cautious. before we went into the selling season, shoppers were telling us in our how america shops research they were quite pessimistic. really concerned. so i think that is going to continue. credit card debt is up even

more. that first half of the year, there will be a lot of caution. like the markets, shoppers don't like uncertainty. while that is going on, they will sit on their wallets and try to realign. carol: thank you so much and happy new year. ceo and chief shopper at wsl, from shopping for stuff to someone who spends his time shopping for a great travel experience and he does that a lot as well. five continents, 15 countries, 52 flights. here to share the best tips and tricks he learned from a full year of globetrotting is brandon presser, bloomberg pursuits contributor. good to have you here. tell us about what you set out to do and kind of laying out your year. >> sure. i write a series that bloomberg called two night minimum.

we call it internally the obsessively vetted city guides. what i do is i go to a city, spend as much time as i can, go to as many hotels, restaurants, bars, experiences, activities, things to do outside the city, i will eat three dinners and night, four lunches a day to figure out what the best things are for you. vonnie: we are so grateful, brandon. thank you so much. [laughter] one of the things you figured out on your travel, your very onerous travels, was the best new restaurants aren't even restaurants. explain what that means. >> it's been really interesting year. i think the cost of opening a restaurant is prohibitive and there are a lot of people passionate about hospitality and serving and passionate about food. i have seen a lot of people break the mold. one really good example is in toronto, there is a chef who has

opened a supper club inside of a ceramics studio. that is one example of thinking outside the restaurant. in singapore, you have an estimated 3000 people using the public housing system and using their apartments to have one or two table mini restaurants inside their own. carol: that's incredible. it sounds like fun, was it? brandon: all of these are absolutely incredible because you go beyond what we have created as the definition of a restaurant and it feel so intimate and you get to really interact with the person who owns the establishment. how many time do you go to a fancy restaurant and you don't even get to talk to the chef? this is a whole different thing. vonnie: on your travels doing other things, you found it is easy to make friends as well. you said taking 10,000 steps can lead to 10,000 new friends. brandon: it's true. i found in all the cities of

covered this year for two night minimum that there is some kind of way to meet new people. for me, that was more important than covering a museum or some sort of static experience. i wanted to create nodes of intersection, interconnection and give people who might be somewhere for a business trip the opportunity to meet people who might live in the destination. the easiest way i found was run clubs. in manchester in the u.k., you can go to track brewing company and at this beer garden and brewery, every wednesday night, there is a very low-key run club and you don't have to pay coming you just have to show up at around 6:00 p.m. and you do a circle with the group as slow or as fast as you want and at the end, you have a pint. carol: sounds like a lot of fun. for someone who grew up in the suburbs, i like this. typically, you go to the major cities when you travel, but you

experienced that the suburbs are pretty cool. brandon: we offer this thing at two night minimum where we give you two neighborhood zoom in. the first is an obvious neighborhood, the second one is digging into the destination. if you go to the suburbs even farther, you will find back in toronto, just incredible food in the suburbs. scarborough as well. i found that if you just go a little bit further, it is the suburbs of cities all over the world. vonnie: until you just said that, i was going to call you a liar. you reminded me there are some fantastic cuisines and places we would never expect. you say the best pizza is no

longer in new york city or italy. brandon: i will be in a destination and i have started about having guilt about ordering a club sandwich at a hotel. i can't just stay in for the night. after eating all the food that i need to eat at the destination and i'm covering all the local bites, i tend to go to pizza if i need a taste from home. my favorite pizzas in the year were in ronin, ballet l.a. carol: you are fired. everybody will have to go online to read more. vonnie: we got a call from the mayor and have to get off the yard quickly. carol: brandon, thank you so much. that will do it for this edition of "bloomberg markets."

i'm carol massar along with vonnie quinn. have a good and safe evening. this is bloomberg. ♪

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emily: there is no shortage of drama when it comes to chip making. even when you are winning, the game changes. do you ever feel like you were running a race that never stops? >> of course, of course, absolute