>> welcome to bloomberg markets. we have stocks and bonds falling so let's show you how things stand. the real action is the bond market. the 10 year yield is moving up. that is an eight-month high. this comes in for a 39 billion dollars sale of 10-years later today. the catalyst for today is dated from ism services that shows the

services economy is growing faster than expected, reducing the odds of a cut before july. stocks under pressure. s&p 500 declining, losing .3% -- .75%. big tech is leading the way with nvidia and focus, losing 5.4% on the day, retreating from a record high. jensen whan -- these are long-term investments. investors looking past that and what the look for catalysts to boost the stock. specific individual movers on the equities side. stryker agreeing to purchase an aari medical -- inari medical. the deal aimed at using blood clot devices.

paychex is higher after agreeing to buy paycorp. four $1 billion in cash. the transaction will enable paychex to enhanced capabilities for ai technology with the cloud-based software. all the buzzwords in one company. vaccine makers seeing their gains as seasonal flu cases rise across the country. yesterday there was a patient in louisiana who tested positive for bird flu and passed away, the first u.s. fatality linked to the virus according to the cdc. the u.s. has 66 confirmed cases. moderna is working on some kind of bird flu treatment. earlier today, torsten slok spoke about how any fiscal plan from washington could affect treasury yields. torsten: this raises the risk we will get headline of a significant number in terms of

what the deficit impact is. if you have a bigger risk of higher numbers, that raises the probability we will get some potential liz truss moment we could see a significant number coming out where instead of doing it drip wise having a number were market say there's already qt coming on, t-bills it need to be rolled over any budget deficit and treasury issuance is a hot topic. scarlet: when it comes to today, we have a 10-year auction just under half an hour. yields are higher after a string of economic data. we are looking at ism services which pointed to a stronger-than-expected economy and the biggest part of the u.s. economy. for more for the bond market, let's bring in ira jersey. always a pleasure. i want to go back to what

torsten slok was referencing, this truth -- this liz truss moment. causing general mayhem for investors and other asset classes. we saw this in the u.k. do you see this as a possibility of the u.s. or is this an out of consensus call? ira: if you're going to have any kind of liz truss moment, something has to break in terms of the funding markets. what happened in the uk's unique because of the leverage involved. in the u.s., we would look much different. that said, people will start thinking about repricing bonds if we wind up with a budget deficit that is significantly higher than what we currently have. how much higher and how much will they go? it depends on what the sustainability of that growth of budget deficits is. people steal father treasuries -- still fought the treasuries. there is always a need for them.

yeah. it will not look like what happened in the u.k. but people might start avoiding u.s. debt a little bit if budget deficits are not approved. scarlet: let's talk about the 10-year bond option, the reopening. is creating an existing 10-year note with a fixed interest rate of a belief or .25%. this is an added wrinkle to what we usually get in an auction. it is notable given where yields are. how significant is this? how much should we read into this bond auction result? ira: today will be a little dicier than tomorrow. tomorrow we have a 30-year bond auction. that's a lot of market risk added. the liability-driven investors like 5% yield. when you look at where 30-year treasuries are, they are at or close to 5%. tomorrow might be a little better than today. today with the 10-year

preopening, we know with the bond is trading at. we are trading where we are, 4.7%ish on the 10-year. today a lot of times what we have seen is the market not doing very well or the bond auction not doing well. at the same direction of the market. when the market is selling off like today, it is possible we wind up seeing a reasonably weak auction given today's momentum and lack of risk appetite for treasuries. scarlet: really important point. something to keep in mind as we await the auction result. as we have been talking about a lot of supply coming to market this week. the better-than-expected economic data with audiences and services and the ongoing concern donald trump's progrowth agenda may stoke inflation. what is the important driver for pushing yields to the longer end of the yield curve now?

ira: for the talk about budget deficits and people fearing fiscal sustainability of the u.s., the move since september has been only one thing as far as we're concerned. it is 100% in our view to do with the economy doing better and pricing out 125, and now almost 150 basis points by the fed. if the fed will only cut another 25 basis point, the market had to react. what happens if overnight rates are at 4%? that means you add onto that a term premium, say 75 or 100 basis points, and it makes sense for the 10-year to be at 4.75 percent to 5% of the fed is only when to stop cutting interest rate after the march meeting. given the data we have had, definitely a possibility. scarlet: good stuff. ira jersey, thank you as always. when it comes to the fiscal

story it will center on the new congress and president-elect donald trump, who has been speaking for the past hour at mar-a-lago in a wide-ranging news conference. i want to go to kailey leinz to give us the latest. what did we miss? kailey: he's adjusting -- addressing fiscal issues and once that she doesn't want to see a default on the debt ceiling. he wanted the debt either abolished or lifted until he's out of office before he takes the oath on january 20. he was talking about that in conjunction to questions around plans for a budget reconciliation package early on in the administration. he says he likes the idea of one big bill. that's what the house is advocating for. he's open to the suggestion of what senate republicans have been pushing for. he will meet with republican leaders in washington at the capitol ahead of jimmy carter's state funeral on

thursday. the other interesting point, one of the most interesting. he's covered territory around greenland and panama. he's walking away from the party him. -- podium. he was asked if he could rule out using economic or military conversion for greenland and panama. he suggested he might impose tariffs on denmark if they don't get greenland up. his reasoning is both countries are important for the u.s.'s economic security. scarlet: do we have a sense of where the idea came from? he mentioned greenland and his first administration but nothing transpired. more recently, he talked about canada as the 51st state. what specifically has prompted this term to look at greenland -- turn to look at greenland and canada and panama as critical parts of u.s. national security? kailey: it seems he does view riemann and panama as an economic security question.

by nature, he tends to view whether or not a relationship seems fair in his eyes. that is related trade as well. that is the issue with canada. he suggested economic measures to bring canada as part of the u.s. he called the border an artificial line. he said the u.s. spends too much to defend canada and the trade deficit is too large. he suggested we don't actually need the products we get from canada, cars for example. he threatened for both canada and mexico higher tariffs that can going to place. it's about the way he views the united states trade deficit with partners. also some territorial disputes about the way much economic relationships work, whether it is the flow of goods through the panama canal or greenland, which has strategic importance location-wise even though it is a small country of less than 60,000 people. when it comes to greenland, his son don jr. is actually there in the country today. you on most posted a picture, suggesting the people agreement want to be part of america and

that should be welcome. scarlet: i'm glad you mentioned the trade deficit. the trade deficit we got data showing it widened on the largest jump on imports since 2022. a lot of that perhaps driven by the idea that companies are trying to frontload their orders to get ahead of potential tariffs. kailey: donald trump has not been shy about his desire to use tariffs as a mechanism, whether for leverage or otherwise to get fair trade relationships on the behalf of the united states. he pushed back against reporting from the washington post on the idea that while his administration might be looking at universal tariffs, they were going to narrowly target those strategic imports only. he said that was false and he's not planning to pare back his tariff plans. he once again threatened putting tariffs on canada and mexico, potentially denmark in the press conference today. it does not seem he shifting his tone on that. scarlet: thank you. kailey leinz, bloomberg "balance of power" cohost. we will hear from you in the next hour when she begins her

show. coming up, companies are making news at ces, led by nvidia. jensen wong spoke to bloomberg. what he had to say and what it means for the highest valued company. from new york, this is bloomberg. ♪

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scarlet: this is "bloomberg markets." the stock of the hour is nvidia. shares under pressure as the market declines. in the last hour the ceo and cofounder jensen huang spoke with ed ludlow on the heels of major product updates and announcements at ces in las vegas. take a listen. jensen: ai will reinvigorate the

videogame industry. for developers, it will reduce the cost of creating the content. on the other hand, all the characters that are in the games you will be -- will be smart characters in the future. they will be interacting with you on a much more intelligent way. the games are going to be more interesting, the characters more interesting, the content development cost will decline. that will be great for the industry. i think the future is bright for videogames and these virtual worlds. artificial intelligence will reinvigorate. ed: may i pick it up? $3000. a supercomputer sitting on the desk. jensen: imagine you were sitting there just like that, working on your pc. ed: why would i need one of these? probably not me but how big is the addressable market for this? jensen: there are 30 billion

software -- million software developers. 10 million designers around the world. probably another 20 million creative artists. hard to say how many students. i want to guess probably a couple hundred million students around the world. everybody is going to have to -- they can't afford computers. they would like to have a companion that helps them do ai. this is the way to do it. ed: can i clarify something? you said mac, os, lennix and windows. -- mac os. jensen: whatever computer you use, you are enjoying how it will be used. it is sitting right there and you connect to it wirelessly like your personal cloud. ed: i promised the audience i would clarify. we are running short on time. president-elect trump has been

speaking during our conversation. how imperative is it that you go to mar-a-lago and be with him if nvidia is america's leading ai company? jensen: i would be delighted to see him. ed: have you been invited? jensen: not yet. i would be delighted to see him and congratulate him and do everything we can to help the administration succeed. scarlet: for more on that conversation let's bring in cohost caroline hyde. allotted one pack -- a lot to unpack. interesting on the idea about videogames. is this what investors wanting to hear? caroline: if you look at the market reaction, the record high dwindled. we are seeing in the biggest selloff for the stock. i had investors say perhaps this is a consumer electronics show.

you are likely to hear big picture blue sky thinking about the future applications. everyone here and now in the investor world wants to know about blackwell, the run rate, how it will get into the user's hands. that eight into the run-up -- ate into the run-up in the stock we have seen. the company was built on gpu's. he's going back to those roots. if the company like a company like micron searching today. its own memory chips are going to be within these gaming gpu's. to force --geoforce. it will predict what image is about to be generated and facilitate far better experiences. this is jensen huang trying to articulate yes, there are ai data centers but they are about more. there about gaming, robotocs -- robotics and autonomous vehicles.

scarlet: the fact that these companies are in nvidia's orbit are seeing the orbits of being associated. what about the linkage to the white house and washington? i like how ed brought that in. have you paid homage to the incoming president? caroline: have you kissed the ring? he's willing to go. what was interesting was trump was on at mar-a-lago discussing a new $20 billion investment from the middle east to do what? invest in data centers in the u.s. those are going to have nvidia chips. he's going to be a winner. the cfo has been speaking about the jp morgan event, particularly that blackwell and ai accelerators are here to stay for the next decade. this is longtail vision when you think about autonomous driving, about robotics. that is why the analyst are calling out this is long-term gains. where is the near-term wins? it has 70 buys and zero cells.

scarlet: it has done well for shareholders. if you want specifics, go to what the cfo was saying. caroline hyde, "bloomberg technology" cohost on the latest with nvidia. coming up, dockworkers and east coast port employers are back in the negotiating table today. if the deal cannot be reached, the strike -- the east coast could see another strike taking place. we will look at the potential fallout next. this is bloomberg. ♪

scarlet: talks resuming between the dockworkers union and their employers at major east coast and gulf coast ports. there is one major sticking point that remains. automation. if a deal cannot be reached, other industries would be affected, including retail. let's bring in jonathan gold,

vice president of supply chain and customs policy at the national retail federation. good to speak with you. we saw the u.s. trade deficit number widen on a jump in imports, the biggest since 2022. you were anticipating a big increase in imports. how much of that is tied to the strike versus tariffs? jonathan: thanks. it is unclear how much is tied to each. both are ongoing concerns for the nation's retailers and stakeholders who rely on those ports and could potentially be impacted by the tariffs. we are seeing frontloading to avoid both situations. we will see that further elected --reflected in the numbers this week. scarlet: we have seen companies reroute to west coast ports last year. i am wondering if they stuck with those ports after the strike ended or did they return to their east coast and gulf coast ports? jonathan: many company stuck with her mitigation strategies pending the final outcome of

negotiations. with the 90-day contract extension there is a lot of concern a contract will not be agreed upon and you can see a strike again on january 16. we are happy to see the parties are back at the table today. there are negotiations over the weekend, some discussions at least on the big sticking point of automation and modernization. we hope that proves a pathway to get a final deal before next week. scarlet: talk about the additional costs of relying on west coast ports. whether that is in dollars over time. -- or in time. jonathan: shifting product to the west coast, you have to bring that back to the east coast or gold coast, wherever it was expected to be. there are additional transportation costs with mitigation strategies that they are putting in place. scarlet: in the past you have encourage president biden to weigh in on the strike discussions, for the labor discussions, to prevent a strike.

what is your understanding of whether he has done that and whether the incoming president is involved? jonathan: divided administration continues to monitor the situation and talk with the parties. president-elect trump has been engaged to a degree. there was the social media he put out about a month ago after meeting with the ila. the transition team paying close attention to this. if a strike does occur, it could go on while he's being inaugurated. a big issue for him to be paying attention to. scarlet: what is the number one thing you are watching for to give you a sense of whether things are going in the right direction? jonathan: make sure the parties stay at the table and continue to negotiate. the only way they will get a deal is if they stay at the party and talk through the issues of importance. if they cannot get a deal done by next week, we encourage the parties to do another contract extension. stay at the table and continue to negotiate.

we can't afford to have the parties walk away or engage in disruptive activity. scarlet: jonathan gold, appreciate you joining us. vice president of supply chain and customs policy at the national retail federation. this is bloomberg. ♪ lock in let's go. rated e for everyone. [rock and roll music playing] xfinity. made for gaming. rewards members, get early access to an ea sports fc25 kit. visit xfinity.com/rewards.

>> from the world of politics to the world of business, this is "balance of power" live from

washington, d.c. joe: donald trump meets the press as don jr. heads to greenland. welcome to the fastest show and politics. the president-elect talks economy, energy, geopolitics, windmills and home appliances. i'm joe mathieu alongside kailey leinz in washington. thank you for being with us for "balance of power." it was a tour de force. p news about taking over canada and refused to rule out the idea of military force somehow to cajole panama or greenland. kailey: he described both of those as being important to the economic security of the united states. he said he could not rule out using either economic or military coercion. once again, threatening tariffs on canada and mexico, as we heard from him.