>> the u.s. is going to continue to attract capital. >> the u.s. economy is in a good place. >> there is reason for optimism. green shoots that people are able to point to. >> the ability to be successful, the rules, has driven strong growth in the u.s. >> as america goes, so does the world. >> this is bloomberg surveillance live from davos with jonathan ferro and lisa abramowicz. lisa: good morning, new york. good afternoon, switzerland. good evening tokyo. the final day of the world economic forum meetings. today is the huge gap between washington, d.c. and davos will close. president trump has been looming over every conversation.today , he will speak directly to the group and take questions from santander, bank of america,

blackstone, and tou thao energy. i am alone now and it's not because jon drank too much last night, decided to go skiing, or is looking at the snow. he is hosting a panel. we will speak to two guests on his panel. in the meantime, you're stuck with me. the u.s. and european stock markets hovering near all-time highs with the s&p posting the best start to a year so far since before the pandemic. you're seeing markets pullback attached, but this is off of the record close that we saw yesterday on the s&p 500. the focus on big tech. can they lead in the yield space? a little take higher -- tick higher. emory, what did we learn from the interview last night with fox news and president trump? what do we expect to learn today in his discussion with davos attendees?

annmarie: we have a change of heart from this president when it comes to the likes of tiktok. remember, and his first administration he signed an executive order demanding that bite dance -- byte dance divest from tiktok. what we have seen is this president is signaling that anything that comes out of china that is an electronic device could potentially be a spying device. president trump we have our telephones made in china for the most part.we have so many things made in china. why don't they mention that? tiktok, you're dealing with a lot of young people. is it that important for china to be spying on young people, young kids watching crazy videos? annmarie: in a world where everything is basically transmitting some sort of digital information, trump is reviving the debate about what is considered national security.

this may potentially cause a bigger debate within his own administration given the fact that you have the likes of national security advisor mike walls, the new secretary of state marco rubio, who have been very critical about tiktok and are considered china hawks. potentially, we will get questions regarding national security, china, and especially trade with china, today when donald trump will be zooming in as the 47th president of the united states into davos and taking a lot of questions.i've learned that the zoom is supposed to last 45 minutes. based on the first three days of his presidency, it will likely last more than 45 minutes. you can see who he will be speaking to. steve schwarzman of blackstone and someone who supported the president. maybe we will get some energy questions from patrick. lisa: thank you. that is surely the discussion,

how to understand what national security is and how to correctly regulate technology at a time when people are talking about the potential influence of artificial intelligence. we turn to someone brave enough to make the commute directly from the inauguration festivities and washington, d.c. to the alpine vistas of davos, switzerland, i'm wondering, governor sanders, given that a lot did not make that journey, are you acting as ambassador fielding questions? >> certainly don't need the ambassador. president trump will address the group today, although he cannot be here in person. certainly dominating every conversation, but not just here, across the globe. there is so much excitement and optimism about him coming back into the white house. people across the world are excited to see what he is going to do. he has hit the ground running and gotten a lot done in a short amount of time.

this is someone coming in as a seasoned veteran. he has been there before. there is no learning curve. he is getting a lot of things done in short order and people are excited to see what's happening. lisa: annmarie was talking about discussions about tiktok on fox news, and the question around, what is national security? how do you adequately regulate big tech when you also have this focus on celebrating the national champions of u.s. tech companies? how do you reconcile that? >> one of the things that we're looking at and one of the places we are leaning in arkansas and as governor, is you can protect national security, you can look at continuing to grow some of the technology and innovation, but one of the places we have to do a better job is on our young people. we've seen a mental health crisis take place. nobody is immune. one thing we can do is a better job protecting the young people

from constant access and infiltration of nonstop device in their hand. they need to get outside. they still need to pay attention in class. that is one of the things we've done in arkansas and talked about here. one of the things that i hope to see the united states lead on. lisa: as a mother and someone who sees a lot of children, there are a lot of people who would agree with you, but there is a lot of tension. president trump was talking about they are just a bunch of kids looking at silly videos, do we need to care about that so much? do you agree, or is this something that goes to national security but also the heart of something else? what it means to have appropriate technology? >> there can certainly be a great resource in technology. it is a tool that a lot of us use. one reason donald trump became president was he was able to use technology to get his own message out, go around the mainstream media and talk directly to the people.

i think it can be a great tool. it can't be something that our kids are spending 10 hours a day doing. that is one thing that we have to look at. one thing we are talking about a lot. the pressure, the anxiety, the depression, the suicide rates that have skyrocketed in large part because of a total access and connection to social media. protecting kids has to be one of the big topics of conversation. lisa: do you think president trump agrees? >> that is a conversation that i haven't had with him, but i look forward to talking with him as he takes the reins at the white house. lisa: is there clarity about what national security is and isn't? >> there are questions between kids versus national security and whether or not they can focus in the classroom and whether or not other countries are taking all of our data. those are different conversations. this is a president who i know cares a lot about protecting american interests and is always

going to do what is necessary to protect our country. you have seen him taking action on day one, so i have no concern over that. one thing i think has to be a greater part of the discussion is the mental health impact that it is having on young people. lisa: you are on a panel with kentucky governor andy beshear, who is a democrat, i imagine the sharks and jets walking past each other. it is governors in states implementing policy. it comes at a time when president trump has said get on board or face the consequences. do you think that that is the right way to get states on board? >> i have a great partnership. i want arkansas to be one of the leaders of a lot of the initiatives the president is pushing. we are going to be one of the biggest champions, and i want us to be a place of innovation. use arkansas as a pilot for some of the programs we are rolling

out. on health care, there is a lot of opportunity to do things in a better way than we've done. this is a president that will be able to do that. a good relationship with the states is a good thing. we shouldn't be in constant battle between the state government and federal government. that is one thing people see us both talk about, how can have good cooperation and get things done to benefit the people that we govern. lisa: states that don't comply from the president? >> i am in agreement with the things the president is trying to do, and i think we will be able to not only improve things happening in arkansas, but hopefully in all 50 states.this is a president coming in with a huge band-aid. people want to see his policies enacted. they know exactly what they signed up for because they've seen his leadership style. he won in an overwhelming margin. people are hoping he will deliver on all of the things he's been talking about over the last couple of years. lisa: have you talked with governor beshear? >> i haven't, but i'm looking

forward to spending time with him this afternoon. lisa: you are both children of governors, coming to the stage, but from opposite sides, democrat and republican. you expect it to be a working together type of feeling or is the divide getting more entrenched? >> governors have a unique perspective. i certainly want to promote and bring business and economic development to my state and i know that he wants to do the same, but there are common challenges we are dealing with. i think that we will have a great conversation and of looking forward to it. lisa: one reason you're here is to be with business leaders about investing in arkansas. are there specific projects that you would like to see financed, streams of business that would be helpful to get international investment? >> one of the biggest areas of growth in our state's aerospace and defense. it is the number one export from arkansas. arkansas has the best economic growth of any state in the country over the last year, the

number one state for people to move into anywhere in the country. there are a lot of great things happening in our state. we like to tout that we are home to fortune 1, a little retailer you may have heard about. walmart. we are not afraid of big business and success stories in arkansas and we have the opportunity to meet with companies and let them know that we are open and ready for them to invest and make arkansas their home. lisa: how many meetings? an influx of people wanted to meet with you. did anyone or any places surprise you? >> it is certainly a busy couple of days and i look forward to making them a productive few days with a lot of good things to take back home to arkansas. >> are you concerned there's a feeling that the u.s. is putting itself first at the loss of other countries? >> not at all. it is important. people will be competing for the people that they govern or lead, and that is what you will get in donald trump. he has not been shy about the fact that he wants america to

win. there's nothing negative about wanting the best for your country and the people you lead. people want to see him do that, and that is why he won reelection in such a big way. lisa: governor sanders, appreciate you making the trek from washington, d.c. to davos. not many people did that. governor sanders did. let's get an update on other stories. here's your bloomberg brief. dani: the saudi crown prince told president trump that he is willing to expand investments and trade with the u.s. by at least $600 billion in the coming four years. the saudi arabia state media reported that the prince told trump by phone that the kingdom was eager to seize partnership and investment opportunities created by the new administration. president trump's acting defense secretary deploying 1500 more troops to the southern border to comply with trump's declaration

of a national emergency. he also said that he approved the use of military aircraft to assist with deportation flights of more than 5000 illegal aliens detained by customs and border protection. fire crews are making progress containing a new fire that broke out north of l.a. yesterday. the hughes fire quickly spread to more than 10,000 acres but is more than 14% contained. about 50,000 people are under evacuation orders and warnings in the region. there is a chance of light rain across southern california starting tomorrow. that is your brief. lisa: let's hope for that rain, because that could make it a lot easier. tarrifs and global trade. >> if you looking to take advantage of the united states through tariffs, you're in for a rude awakening. we have certainty. if you don't disagree with the president, the one thing that you do know come you don't have to guess where he is coming from. ♪

lisa: max kettner calls it goldilocks on steroids. you can see in markets yesterday that the s&p reached a record high and europe is not far apart . with yields, staying pretty constant, you saw drop off in yields initially. today, just marginally higher. meanwhile, not seeing the same dollar strength that could potentially be disruptive with the euro gaining a bit. the interesting focus is on the bank of japan, widely expected overnight in the u.s. hours of tomorrow morning for japan to hike rates going against the ground, putting some sort of threshold underneath the yen. tariffs and global trade. >> we think the next four years will be very clear.

you are looking as a country to do reciprocity with the united states, the bottom line is, you will have a good environment. if you looking to take advantage of the united states through tariffs, you are in for a rude awakening. the united states, i hear people day in and day out talking about how wonderful things look going forward. we finally have certainty. if you don't disagree with the president, the one thing that you will know is that you don't have to guess where he is coming from. lisa: there is uncertainty about how tariffs will be implemented, but possibly more important for a lot of people here is what that will do to inflation. will it be inflationary, keep rates where they are, or increase the prospect of some rate hike from the federal reserve? joining us is someone who focuses a lot on that macroenvironment as he invests in real estate around the world. he has the heinz global cio. david, thank you for being with us. we talked a lot about how rates can remain where they are simply because nothing is breaking. the u.s. economy is doing fine.

maybe this is the neutral rate. do you think that we can see a real estate recovery at a time where rates may not go down at all? david: i do. i think it's important to remember we are almost 40 months into rates going up in the u.s. and a lot of markets around the world. that is a long time. the spread has been wide for some time. even in this moment, if rates stay neutral or even tick up, the market has digested where we are. when we are underwriting projects, we are focused on how we can drive rent growth in our buildings to increase cash flow and reducing the amount of leverage on assets. lisa: you think that this market is stabilized and adjusted? a lot of people think that the real estate market is completely broken. people are not able to borrow money to buy homes. you think that we have seen the washout in commercial real estate that some people have talked about?

david: i think we have seen the bottom in the u.s. we will see capital that is on the sidelines come in. here, everything i'm hearing is that every marginal dollar around the world is looking at the u.s. as a significant opportunity. we have 35 months of the market being able to have that price discovery. we have been waiting for a long time. this year is the year that we will see a lot of activity. lisa: we have seen activity and slices of the market, data centers, warehouse spaces. not in office spaces, particularly in second and third tier cities. do you think that it has gotten lopsided? the area that has been popular stands to become less so and money flow into the office space? david: there is opportunity in data centers and industrial. they have carried the day for a long time. there are a lot of tailwinds that are important to realize. for us, living is a top sector. the u.s. is 2 million houses short. you believe there needs to be a

lot of new building. retail is a sector we are focused on. it has been challenged were so many years that the winners and losers have been sorted. office is something we are starting to look at. we are starting with credit in office today, but as the year progresses i could see us moving into equity. lisa: mostly in the u.s.? david: correct. lisa: you talked about multifamily and single-family homes in the idea of renting. how much of this is a structural change?given the rise in rates and increase in prices a lot of people are locked out of home ownership and we have seen an increase in renting structurally and decrease in homeownership. will this a -- will this accelerate? david: key demographic changes are happening. broadly in the west, europe, australia, and also the u.s.

demographic changes are also impacting what you're talking about. openness to rental, there are certain positives for a lot of people. i think that the market needs to provide more rental housing that is obtainable. i think it will happen. lisa: you think that there is more room to run in terms of raising rents? that is a main component of cpi of the main inflation gauge that looks at consumer prices. i wonder if that stands to increase? david: more broadly, i am concerned about the longer-term inflation across many different sectors. it is not only rental rates, it is other parts of the economy. i think that there will be new corridors of demand that open within cities. while renter rates will not be able to infinitely go up in certain markets, we are seeing because of demographic shifts that people are moving around and spreading out. i think that is good for the market and will help provide more obtainable housing. lisa: a theme at davos has been the u.s. versus europe versus the rest of the world. the more people are excited about the u.s., the more

despised to perfection, maybe we should look elsewhere because they could stand to do better even if they don't miss as much as people thought. are using more opportunity in places like europe? david: we invest money around the world. we are an active real estate investor in 30 countries and we look at all of the countries as where the opportunity is. asia is our growth stock, so we will stay active. we will put a lot of capital to work in the u.s. i believe this is a great time. europe, in davos, the negativity around europe, it can't be that bad. i don't think so. we raised a substantial amount of capital we are ready to deploy in europe and we will do so this year. we will be selective. when i hear capital pullback from a geography, it feels that way in davos, i don't think you'll end up being as bad as the sentiment is. lisa: are there regions you are looking at more closely? i say this at a time when the economic engines of europe are sort of the sick dogs.

the sick dogs are kind of the economic engines. david: it is interesting the cycle following the financial crisis. it was northern europe that had more strength compared to southern europe. this time it feels a little inverted. southern europe for us, there is a lot of interesting activity in spain and italy and places in those geographies. i do think with the capitol pullback, various opportunities will open in germany. we are active in the u.k.. all those geographies will provide. lisa: you mentioned that the u.k. and a theme that has come up is the debt and deficits in a lot of places. as a homeowner, one of the first ways as they go is taxes on your home and how much you're looking at these policies as headwinds in certain places. david: the headwinds are fairly ubiquitous in a lot of markets. you could add insurance. you could add a lot of pressures on cost everywhere.

i think that is something that investors will broadly have to get their head around because it's impacting a lot of sectors. it isn't just real estate, it is the broad economy. debt levels in many western countries will put more pressure on interest rates long-term. as we invest today real estate, it is a longer-term investment and you have to think about that horizon. lisa: what is your stress test in terms of the range of rates where you will still be above water? david: we are using very conservative leverage. that is different than previous cycles where there was more leverage in the system given the cost of capital. we are being conservative with leverage and focusing very much on how much cash flow we can create when we can make an investment. predicting where interest rates will be in five to 10 years is close to a fool's errand compared to what will happen. relying on income, relying on the real estate you are buying,

that is the most important. lisa: you mentioned asia and i won't let that go. are you headlong into china given that real estate seems to be on sale? david: we have been in those markets for a long time, including china. we had a lot of successful projects. we are now mostly focusing on india as the major growth component for asia. china needs a bit more time. india is where all of the tenets that we have spoken to have shifted into significant growth expansion mode. that is where we are seeing the most activity. lisa: are you staying in china? do you think there are opportunities? david: we are a long-term investor and have been in china. i think that you have to see the long-term. for us, we will be mostly focused on india. lisa: what is your main take away from davos? david: i have been here several years. i think that the optimism is palpable. my only concern is, when it is that positive, can it really be that good?

i am feeling a little more curious to ask harder questions. without question, i think the 2025 will be a good year. lisa: thank you for being with us. more than $90 billion. coming up, we will talk about bank mergers. you can see markets really embracing the optimism of pulling back in touch today. ron will have an interesting view on bank m&a in 2025. ♪

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lisa: another hot tip to max kettner of hsbc with the headline of the morning, goldilocks on steroids. that was what we saw yesterday. the s&p hitting an all-time high. a lot of that dominated by big tech. not a lot of action in interest rates. that is a wonderful thing for people worried about the potential for inflation. three hours away from the cash open. let's get to some morning movers. manus: it may be bullish on steroids. larry culp says it was a monumental first year for ge aerospace. way above the estimates of $1.04. a dividend -- raising the dividend by 30%.

this is about a company working through its supply chain issues. a monumental first year. we want to understand the personification, what are the risks of tariffs in canada mean? think about aluminum, this is what they are saying. tariff pain in aluminum would have a quieting effect. 25% tariffs on canadian aluminum would cost consumers 1.5 to $2 billion. that is if it comes through. they did beat on the numbers. a revenue of 3.80 4 billion. there is the overhang of what comes from tariffs. the games space. you think about the sims. $77.15 billion for the year. what you're seeing is peak engagement in some of the games. dragon age engaged 1.5 million

players, that is down 50%. global football is down single digits. this is about trying to understand where you are in some of these games and the software that is out there. lisa? lisa: we are looking at markets that are trying to digest everything political. we were talking about max kettner of hsbc saying it is not political, it is just the things look good. if you're looking at politics as a catalyst, it keeps positioning in check. one areas where the president's policies are getting optimism is the bank mergers and acquisitions space. joining us is someone who got the interest rate call right last year. it is the chief executive officer ron kruszewski. how bullish is it? ron: it is pretty bullish. i'm surprised i've not seen more people doing dances. it is pretty bullish.

i will tell you the one thing that could be the canary in the coal mine. we need to watch the 10 year. a lot of people are talking the bill will get through congress and this will happen. one thing that will be the governor is the bond vigilantes. if policy gets out of whack you will see it in the 10 year and that could give difficulty in equity market valuations. other than that things are positive. lisa: this is the fly in the ointment and we have heard this from a couple of people. i wonder what you make of the rally we've seen in the 10 year where people are saying you have scott bessent who will make things rational and they will get something through. you think that is too optimistic? ron: i hate arguing with the bond market. the rally probably does have a little bit of optimism in it. the deregulatory bent can be disinflationary in terms of taking costs out of the system.

there is a lot of optimism about last. i think the 10 year right now is giving all of the right signals. lisa: meanwhile you are seeing that deregulatory impulsive. the transactions you yourself have done have done all been focused in the united statesd just closed on european middle-market investment bank. why europe? do you think there is more opportunity here at a time everyone is decrying its demise? ron: we are here in europe. my board looked at me and said why europe? i will tell you. it has been pretty depressing over here and i think it is a good time to invest. i am listening to the banks and i'm listening to people in davos and they are echoing the fact that they want deregulation and a better business environment. i think there'll be some overflow of u.s. policy into

europe which will bode well for european business activity, specifically m&a. we are always investing and why not? lisa: you have had a lot of conversations with people and regulatory bodies as well as government in europe. do you think they will do this? ron: i think they will be pressured to do it. whether or not they will do it is the risk of the deal. even if they do not they will lose market share to u.s. companies. let's call it what it is. if you say we will not do it i will say that is even more bullish for the united states their national companies. lisa: would you be interested in doing more deals in europe? ron: i am always interested in doing deals but in europe my board will fall over. there is so much to do in the united states but we have not talked about where they will be a big boom. that is in m&a, poised to have a phenomenal year. last year i told you 2024 would be a transition year.

deal volumes were down. lisa: you can take a victory lap. ron: i will take a victory lap. look at the banks. kbw. we have a viewpoint into what is going on. there are eight changes in the regulatory bodies right now. in one industry where personnel is policy it is banks. the environment coming up for bank m&a which has been strangled by the prior administration who did not like bank mergers, that is changing. lisa: can you give us some sense of the scope of m&a we could see. we have 4000 small and midsize businesses in the united states. how many do you think will be left? ron: that is a great question. i can say there will be less. i will not give you a number. what the financial services

industry needs to do is it needs below the big cities -- the biggest banks have grown. i think that is bad policy. we need our champion banks. don't get me wrong. we need the regional, the 50 to $120 billion banks to be able to combine, they need innovation and scale to compete and it is good for the u.s. economy. i am optimistic that banks will combine for those reasons and it will be powerful. lisa: are you concerned about the commercial real estate portfolios and the balance sheets of the banks in the meantime. we have some people saying you've seen the wash and others saying you have not because they're not been transactions and a lot of these pockets of commercial real estate. do think that will be an issue? ron: a year ago i would have said yes. today there are a lot of things going back against that trend, number one being people going

back to work. the idea was you did on the real estate because no one will come back to work. most companies are coming back to work. president trump says federal government people are coming back to work too. is it still a pocket of concern? ask. less today than a year ago. lisa: are you back to work? ron: we have been. we cannot compete remotely. i am all for work life balance and we have situations where we will do that but we are collaborative firm and we need to be together. lisa: steeple has been a huge acquirer of other companies. what about the u.s.? are there pockets of opportunity you looking at more closely? ron: the wealth space has been our strongest growth. i joined in 1997. i've been around a while. we had 100 million in revenue mostly driven by wealth and

helping people plan and that is what we are good at. i see continued opportunity to grow in that space. lisa: this is highly competitive and i keep hearing about it, whether it is citi, morgan stanley, ubs trying to lean into the wealth space. why is it so important now as a ballast to a lot of banks that have been lenders? ron: because it is a stable business that does not have a lot of risk. it is the same customer base and so the banks have realized that. that is not a new phenomenon. i think culturally we have an advantage even against the biggest banks. lisa: president trump be addressing the davos crowd today, 5:00 local time, 11:00 eastern time. what are you curious to hear from him? ron: i am curious to hear some

optimism. i felt some of the things that happened -- i do not agree with all of the pardons but since they are out-of-the-way maybe will not be worried about the judicial side. let's focus on economic policy and i hope he has a positive message for the people in davos. lisa: is there anything interesting that stuck out about what you have heard? ron: i'm just reporting. every meeting last year was dei and climate and it is not top of mind this year. is that good or bad? we can have our own viewpoints. it is noticeable the discussion that is economic based. lisa: encouraging? ron: it is for me. lisa: ron kruszewski, thank you for being here with us. let's get you an update on stories elsewhere.

dani: secretary of state marco rubio is planning his first trip since his confirmation. he will reportedly travel to panama as early as next week underscoring president trump's seriousness about taking back the panama canal. sources say rubio plans to visit guatemala, el salvador, and costa rica. elon musk is expressing skepticism about the stargate project announced by president trump. elon musk questioned whether the companies actually have the funds for the ai investment effort. openai ceo sam altman said elon musk was wrong and suggested he was upset because the pact could rival his own ai efforts. parts of the southern united states have seen their worst snowstorm in 130 years. as much as 10 inches of snow fell in new orleans, smashing a record set in 1963. similar accumulations were recorded in florida. houston texas was hit by four

inches. that is your bloomberg brief. lisa: thank you so much. up next, taking risk. >> i think it is a good but not amazing time to be taking risk in the market. when you take into account what has already happened, how much is baked in, you have to say it cannot be great. ♪ i can't believe you corporate types are still at it.

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jonathan: that was a great party last night. that is all i can say. lisa: hear you,. jonathan: where have i been? lisa: you have been partying, you have been ice-skating, you've been measuring the snow. jonathan: is that what i do in my spare time?

have we done any market checks? down .1% on the s&p. under surveillance this morning, apparently, taking risk. >> i think it is a good but not amazing time to be taking risk. when you take into account what is already happened to risk premiums, you have to say it cannot be great. you could have a great year for the u.s. economy, you can have companies returning money to shareholders and it not being an amazing time to be an investor. jonathan: just had a great conversation about this downstairs in the world economic forum. i know you followed a little bit . it was interesting when we got into u.s. exceptionalism and katie making the case that things are pretty good and might get better, but how much of that is already fully priced? a low bit of caution i've not heard too much of in davos, heard a lot in the last 60 minutes. lisa: you are seeing this and

people looking to other places that are lower-priced, not necessarily where there is more optimism. that is why you saw the dax, european stocks in regions not doing that well near record highs because of this exact dynamic. jonathan: second-best on that panel joins us today. >> i am happen to be second to katie. [laughter] jonathan: a lot of the audience followed some of those comments on bloomberg television. that note of caution that things are great but markets are fully valued. >> i think it is true. markets are in their top 80 or 90th percentile. a lot of excitement about the u.s. is priced in. there are three big drivers which gives you a lot of optimism. energy security, tech innovation, capital market leadership. those are true and they create a

real sense of opportunity. i think we had a good conversation about some of the risks related to the trade deficit and budget deficit that need to be addressed. jonathan: let's talk about some of the opportunities as well. a lot of people want to get into her world. what does that mean for the strategic risk you take as a firm? bill: we are focused on innovation and entrepreneurship around the world. there is no shortage of terrific entrepreneurs, no shortage of good ideas. our pipeline is rich. we are at an incredible moment of inflection in the technology space and it turns out this is the fifth major tech cycle in my career. i think of the pc cycle of the 1980's, the internet cycle of the 90's, mobile in the 2000s, and now we have ai. what that does is it rewrites the winners and losers.

we are at the early stages of that. this will play out like all of the cycles over 10 or 20 years. lisa: there was a huge pipeline of private tech deals that were supposed ipo and then the pandemic it. do you think that has been washed out of the system would you think there is still some reckoning? bill: i think we will have an ipo renaissance. i think we've had three of the toughest years on record for ipo activity and it was a combination of things. it was in the u.s. the second was a post-covid lapse. there was a lot of capital and the private markets available for companies they are taking advantage of. we are in a moment of time when it's time for the ipo market to open back up. there are three ways to win. companies can raise capital. it gives the public a chance to

invest in the most exciting growth stories they have been shut out of for a while in for a private market investors it gives them a chance for liquidity. lisa: it seems like there is a tension in washington, d.c. because donald trump has been talking about national champions in the big tech space at the same time questions around what national security is. you have a clear sense of the difference? bill: i think he is right to point out that if you look at the top five or 10 tech companies in the world most of them are out of the u.s. and they are homegrown and of been successful and have emerged as global leaders. he is right to champion those companies. he is worried about power and scale and all of the usual things. generally speaking he is looking to stimulate investment in the united states and foster more innovation and more growth. jonathan: he is playing a big role in the company you are on the board of. we would love your opinion on bloomberg surveillance.

what has last few months been like being on the board of bytedance? bill: since we had legislation passed in the united states that would effectively ban tiktok if we did not come up with a solution we have been highly focused on trying to develop that solution. we are very grateful to president trump for intervening and keeping tiktok available. the company wants to engage with him and develop a solution and ethic we are optimistic we will find a solution. lisa: do you think that solution will involve selling the u.s. assets to a u.s. based company or individual? bill: i think there are number of alternatives we can talk to president trump and his team about that are short of selling the company that allow the company to continue to operate with a change of control. lisa: do think the chinese government would allow that? bill: i am optimistic about the

dialogue emerging between president trump and president xi and that might help create a much more constructive environment, a much higher level of engagement that could lead to a positive solution. jonathan: how unique is this moment with regards to being on the board of the company and needing the input of the chinese leader at the american president? how unique is that and you see that being replicated at all with the likes of meta who cannot get into china? bill: what bytedance is and tiktok is is a global internet company with chinese heritage and we will see more examples of global companies coming out of china and they will have to confront these geopolitical issues and navigating the u.s. government and the chinese government and i think that'll will be something we will see more of. my hope is with better engagement between the trump administration and the chinese leadership we will find more common ground going forward. jonathan: one thing we have witnessed over the last few days and we've been talking about this is the disconnect between

the headlines we are having out of washington, d.c. and seeing equity markets at all-time highs. you struck a note of optimism regarding trade. i would say optimism around the incoming administration across the board. you've mentioned that this week. where does that come from? bill: i am very excited about treasury secretary bessent and his agenda. he has his 3% economic growth, getting the deficit down to 3% as quickly as possible, and increased energy production. those are very positive for the u.s. economy. that is a good thing. the trump policy agenda will be one that is pro-business and progrowth. lisa: what is fascinating is not necessarily the reaction to president trump from the united states, but from europe. people are so down on europe. when you talk to different executives they are getting more optimistic there will be change in europe, that now is the time to be invested.

are you one of those people? bill: i am, and in my conversations with ceos in europe they want change, they want regulatory rollback, they want a more constructive business environment, they want to be global champions. there are terrific companies in europe. many have been held back by excessive regulation. they want that to change. there welcoming our catalyst coming out of the u.s. and they push for change. lisa: are there areas in europe you think are right for investment? i say this because we are talking about a time where people say where does the tech dominance, and the continent? bill: europe has always been about 20% to 25% of our portfolio. there are a lot of terrific entrepreneurial companies in europe. i do not want to lose sight of that. europe is full of human capital. there is a lot of talent and plenty of good entrepreneurs.

i think they are held back by the review tory environment, held back -- by the regulatory environment, held back by not having a single consolidated capital market were companies to go public, but at the ground level they are entrepreneurs and their high-quality companies. jonathan: are you confident we will see the cultural shift. are you going to see the cultural shift where europe starts to -- does not punish success? bill: i am seeing more young people being willing to start companies and there is capital available for companies. i wish they had a bit more of a risk-taking culture. i wish we had a better ipo and exit environment. we do not have a consolidated capital environment in europe the way we do in the u.s. when many companies choose to go public in the u.s. or from europe, but maybe that will change. jonathan: we have to do this more often.

bill ford, appreciate your time. coming up shortly in the next hour, we will be catching up with the saudi finance minister. after that the tcw ceo katie koch ready to go. the boston celtics co-owner -- also co-owner of a football club happening a wonderful season. we'll be talking italian football. look out for this conversation with jo taylor at the relationship between united states and canada. the ontario teachers pension plan ceo. this is bloomberg surveillance. ♪

investment opportunities are everywhere you turn. but at t. rowe price, we're letting curiosity light the way. asking smart questions about opportunities like advances in healthcare. and how these innovations will create a healthier world tomorrow. better questions. better outcomes.

>> you clearly have an administration that wants to use fiscal policy. >> when you have messaging from the top of the united states on pro-business that causes investment. >> we think the next four years will be clear. >> there is questions around the geopolitical landscape. tariffs in particular. >> this is "bloomberg surveillance" live from davos with jonathan ferro and lisa abramowicz. jonathan: live from switzerland at the world economic forum on the final day for us. that word on repeat is optimism.

people optimistic about the future and it has been a real shift and it has taken three or four days. all of a sudden people are talking about a different donald trump presidency, one where we solve some of these issues. the trade story, yes europe will get it. at the same time equities are at all-time highs. we have heard that on repeat. jonathan: there is a tension. how much does it have to do with donald trump and how much does it have to do with the underlying momentum in the economy that will be turbocharged because of the reduction in regulations. max kettner was looking at how it is not because of politics, it is because basically you're looking in a strong economy and the put upon certainty will keep sentiment in check. jonathan: the number one risk, a fiscal deficit on steroids and how close are we to the moment of reckoning? it was katie koch from tcw who

was looking for the potential, not a base case, but a worry you do get that fed option in the story changes quickly. lisa: the bond vigilantes are the black cloud hanging over some of the enthusiasm. if yields surge that could stymie some of the activity, whether it is m&a, whether it is deals, whether it is investment on the table. jonathan: doom and gloom with a smile is what you can expect for the next couple of hours. lisa: and days and weeks. ♪ and years -- jonathan: and years. for now a very important conversation. sitting down with a special guest. >> good morning to you. sitting with me is his excellency the saudi finance minister. good to be talking with you. my colleagues in the u.s. were talking about the excitement many industry leaders feel about

the prospect for the u.s. economy this year. my question to you is how does the rest of the world feel about it? what you think the return of trump means in his talk of tariffs for global growth? >> thank you for having me. i think a very strong u.s. economy is a good thing for the world and the world economy. the same applies to other economies. if they go south the whole world would feel it. we are excited about the new u.s. administration and we are excited about the u.s. economy. we think the next few years will show strength in the u.s. economy and that will be good for the whole world. obviously we need to be watchful and make sure we also support cooperation and multilateral institutions. i am confident the u.s. economy will be positive and i think the

imf in their latest report showed there is the upside. >> it seems like the crown prince had a constructive call with president trump yesterday. reports say saudi plans to invest in the u.s.. that is about 55% of saudi gdp. you are the finance minister. where will you get that money from? >> the saudi press agency issued a statement on this. we enjoy a very strong relationship with the u.s. over the years. we have a relationship that spans over eight decades. very strategic, based on economy and trade and will continue. we have over $770 billion of investments in the u.s. this is not really new. this is a combination of investments and procurements. we have very ambitious plans in

saudi arabia. vision 2030 is moving as planned and a relationship with the u.s., with your, with china will continue to flourish. >> i think about it from a funding perspective. there are projects saudi arabia has committed to and we talked about three prioritization of goals and the redirection of funds. then there are new projects that saudi is taking on. the world cup. qatar spent $200 billion on that. the question from the investment community is if you're are planning on borrowing more how much balance sheet deterioration are you willing to tolerate? >> we have a strong fiscal buffers, very strong. we are very careful about what we spend, how we spend it and the return on that spend.

we have a very clear plan, we moved from three year fiscal plan into a long-term fiscal plan. we have concluded this last year so we know exactly what we are going to spend. where are we going to get that money from, how we will make sure it helps the economy, and the private sector. that is a long-term plan. all of these projects will fall in place within that context. we recalibrated what we need to do and we wanted to make sure we prioritize what matters. we want to make sure we do not overheat the economy. we extended some of these projects over an extended period and we want to make sure the private sector benefits. if we do too much at a short time the private sector will not catch up. we would have a lot of leakage from our economy. we wanted to balance it and that

is what we did in the long-term plan. if you want to see how this actually is reflecting in saudi you would need to see what is happening with the people in saudi arabia. they were embracing this change. they are part of that change. you can see it in the purchasing managers. >> i would get to the growth question. on the funding can we expect further sales of the government stake in aramco? >> there is no extra funding than what we have planned. aramco or other assets is part of the plan. there is nothing immediate to talk about but this is part of a long-term plan we started in 2016. >> on the growth imf marginally downgraded the saudi estimate for this year, looking to 3.3%

for 2025 and partially on the back of saudi's lower oil production and this was the decision taken by opec-plus. i wonder how long you think saudi arabia can continue with producing less and continuing to achieve those nonoil gdp figures you target? >> this is a very good question. the whole idea behind saudi vision 2030 is exactly this, to deal with these things. we were an economy that is totally dependent on commodities and the volatility of that -- we are decoupling the saudi economy from the oil economy. you can see that in actual numbers. the nonoil gdp part of the economy is 52%. the private sector investments as a percentage of gdp has seen

a structural change. you do not see private sector investment as a percentage of gdp changing very quickly in any economy. we are seeing that in saudi arabia jumped from 17% to 24%. that is a serious shift in the economy. the consumption is very strong. you look at the confidence at the business side but also the consumer side is strong. >> just to wrap things up, saudi arabia for so long has been a place where investors from around the world have come to receive funding, to receive capital. how successful has the kingdom been in terms of mobilizing these funds domestically and encouraging the international community to invest in saudi arabia? >> very important point. i will cover fbi -- i will cover the prerequisite for the fdi. for fdi you need to make sure

you attract your own local investors to invest in your economy. these are colleagues and friends and partners. if you're not able to convince local investors to invest you'll not be able to convince foreign investors. we are achieving both. we are seeing significant growth in local investments in saudi arabia and we are seeing the ministry of investment published a few weeks back what is the target and the saudi national investment strategy over last 40 years and what have we achieved in terms of fdi? i think saudi offer significant opportunities for investors local and international in multiple years of space. >> i will leave it there. thank you for sharing your perspectives about the outlook

for the saudi economy and funding as the kingdom continues to implement a saudi 2030. i headed back to you guys. jonathan: fantastic conversation. sitting alongside the saudi finance minister. this whole forum will pause later on this afternoon. that address coming up from the president of the united states from washington into davos, switzerland. lisa: 5:00 p.m., 11:00 p.m. eastern time. the questioning from key executives is fascinating because you have your brian moynihan of bank of america, but you also have santander, you have the tou thao energy ceo, you have a number of -- you have the total energy ceo. they say it will be 45 minutes. jonathan: you say ask real questions. you know access journalism where you get those soft questions.

you certainly do not know about it. other people might know about it outside of the walls, other networks. are you telling me the ceos are going to ask hard questions of donald trump at a time they want access to the administration? lisa: there has been a lot of soft pedaling and nice talk towards the president hoping they do not invoke the higher of the president. maybe that is one of the executives flying in right now to get some access. there is a real question about what tariffs look like, about what policies will be around trade, about what taxes will look like. there are host of policy focused aspects looking for clarity. jonathan: let's see if we get a bit of that in a few hours. let's get in update on stories elsewhere. here is dani burger. dani: sticking with president trump, he is planning his first visit to asheville, north

carolina which is still recovering from hurricane helene. then he will head to california to survey the damage from the los angeles wildfires. looming over his trip are questions about federal funding for disaster recovery. ge aerospace shares railing in the premarket 5.8%. it beat estimates for profit and sales. ge aerospace also announced a $7 billion buyback underscoring a company that has been able to navigate supply chain limitations and able to take advantage of a strong maintenance backlog. american airlines earnings falling nearly 7%. it forecast a surprise loss for the coming first quarter, as much as $.40 a share. the expectation had been a one cent profit on average. it is a break from its rival carriers who had been cashing in on unusually strong winter demands. that is your bloomberg green. jonathan: appreciated. some movers.

american airlines coming out with some numbers. those numbers are not pretty. lisa: down almost 8% in premarket trading. $.40 on the share in the current period. the interesting part about this is how different it is from some the other airlines, whether it is delta or united, has to do with deliveries delayed but it shows it is not all smooth flying for some of these airlines. jonathan: the stock is down close to 7% in the premarket. this week in switzerland a big discussion about not just the markets or the economy, but the future of ai. >> we are beginning to see the enterprise customers spending on infrastructure to support ai and modernizing their infrastructure in preparation for ai. enterprise customers are looking for partners to help them understand how to navigate this and deploy this stuff and we will play a big role. ♪

jonathan: equity futures so far this morning. good morning to all of you stateside. equity futures doing ok. down .2%. a decent run over the past few days. in europe we have seen a big run. record high after record high. in the bond market yields starting to creep higher come up by three basis points. lisa: this after rallying. there was a question and ron kruszewski was talking about how there's a lot of optimism bait in there will not be some extension of debt and deficits. a big uncertainty hanging around that space. jonathan: the data point of today comes a little bit later

on when we get the address from the president of the united states at the world economic forum in davos. we have all been whipsawed by trade headline after trade headline but there is a sense you do not take those headlines seriously. that is the way the equity market and foreign-exchange has behaved. lisa: this is the reason why people are looking at not just the words president trump says but he is addressing davos and how he characterizes his relationship with rest of the world when the rest of the world is listening. jonathan: we have to start with something much more important. tcw ceo katie koch joins us. katie: thanks for having me here. super -- jonathan: super strong ties to los angeles. give us an update. katie: thanks for asking about that. we are headquartered in los angeles and have 480 families based in l.a. county. it has been difficult.

we have five families who been primly displaced. many other ceos have been impacted as well. my family has been permanently displaced and it is tough. i want to focus on is the fact that the community has come together and i am so proud of the way the tcw people have come together. other ceos feel the same way. it is personal. while we did lose all of our things, the things -- we are grateful we had insurance. we are very fortunate. what we are grieving is the pacific palisades community where we lived. you know my family pretty well. i the great privilege of working at goldman for 20 years, had the opportunity to move to let work with tcw. i took that opportunity but i had to bring the four kids and

husband across the country. i feel guilty about that because i am pursuing my ambition and the family has to come along and we get to pacific palisades, people felt at home. people have been extraordinary. as a working parent you guys would appreciate is i cannot be there for every moment of my kids life, i cannot do this job and be there and there are so many times and i was traveling and i would see a picture of my kids at the chapel or drop off or pick up because those parents at that school did that for me. that is my special connection to the community. there are thousands of people across los angeles that have their own special connections and so we have to rebuild. we have to rebuild because it is economically important. the gdp of los angeles county is bigger than switzerland. and we have to reestablish these communities. i will end by saying i am a believer that when things are difficult and people come together you are able to tap

into resilience and courage in an extraordinary way and that is what everyone will see from los angeles in the coming years. jonathan: i will say this on your behalf. you are one heck of a resilient person. the scale of the devastation when you compare it to the nation of switzerland in the swiss economy, i do not think many people outside the united states understand what is taking place in los angeles. lisa: devastation at a time where there are still active fires and there is a question of getting it under control but also opening up larger conversations about how to rebuild smarter at a time when this is an issue that will continue being a problem going forward. this is not something that can be forgotten. jonathan: i am highly -- katie: that's right. i am highly optimistic we will come together and use ingenuity and shared love for each other to rebuild. i'm proud to be here representing tcw and also looking forward to getting home to the kids.

i learned something new about john today. his mom watches this show for half an hour every day. jonathan: sit -- show she feels like -- soap she feels like i'm still there. you have been generous with your time. let's talk about the u.s. economy. the word you mentioned is optimism. there is a lot of optimism but a note of caution from you about how fully priced that might be in financial markets. give us color on that. katie: that is the mood. i've been watching some of the people you've interviewed. the dominant mood is extreme optimism, executives especially. what we are hearing as this will be a pro-business moment for america, animal spirits will keep going, the m&a cycle is part of that. what i was saying to john earlier is i think that is possible but we are in the money management business and we have to create returns for our clients.

the market is already priced like this. a lot of the optimism is priced into the markets. the idea of u.s. exceptionalism -- factually the u.s. has demonstrated exceptionalism. we are 4% of the worlds population, 20% of gdp, 60% of global market capitalization. that is factual. the question is is it sustainable and how much further can it go? lisa: do you think bonds are overoptimistic or stocks? jonathan: it is scary -- katie: it is scary when bonds are overoptimistic. let's focus on the u.s.. we managed to hundred billion dollars globally. we are a lot in the credit markets. when we think about fixed income markets in the u.s. we do think the credit markets are expensive and we are underweight credit in some of our portfolios. it is a negatively convex trade. we are taking the underweight

position which means we are carrying under some of our indexes in our portfolio. that gives us liquidity and optionality to take advantage when there is a dislocation and step in when other people can or want? lisa: do expect there will ba disinflationary shop to because people realize maybe things are too optimistic? katie: i do not get to see too many panels. yesterday i watched a panel and someone made the comment that we did not need to worry about the business cycle because the business cycle is over because it is superseded by these megatrends and it made the hairs on the back of my neck stick up like oh my gosh. the answer is of course something will happen. that is how the world works. our job is to navigate that for clients and maintain liquidity and to take advantage of the volatility. for active management a volatile environment can be ok and i feel

confident about our ability navigate that for clients. jonathan: you are on a panel earlier this morning with me and you mentioned the deficit and talked about that possibly being a big risk and the potential of a failed auction. what does that moment look like where we understand we have push this too far? katie: when you ask the question what could go wrong, we are running a large current account deficit defined as peacetime periods of 6% or 7% as a percentage of gdp. that is called an economic miracle in the united states. it is a fiscal crisis in france. we can do that because we have the privilege of being the world's reserve currency. my comment is this could go on for a long time. we do not know what the catalyst is that will make people focus on that. we need to get it under control. there has been a commitment from

our future treasury secretary we would try and bring that down to 3%. i don't know what the solution is for that. the only where you can get there is -- it will not be doge. it will have to be something around entitlements and i'm not sure we have the political will to tackle that. that could be the thing. jonathan: i said earlier. you're the best. appreciate your time. katie: thank you so much for having me. stay strong ally. -- set -- stay strong l.a. ♪ i'm a rock star. great job putting finance and hr on one platform with workday. thank you! guys, can you keep it down. i'm working. you people are (guitar noises). hand over the air guitar. i've got another one.

the way i approach work post fatherhood, has really 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. in the average household, there are dozens of connected devices. connectivity is a big part of my boys' lives. it brings people together in meaningful ways.

jonathan: equities down about .1% on the s&p with two hours until the opening bell. just had a wonderful conversation with katie koch of tcw on the risk. things are good and could get better but in a lot of places that is fully valued in the number one issue for her is what happens with the fiscal deficit. i know that is your favorite topic. lisa: absolutely because we have to focus on the auctions. there is this concern and we are not seeing it expressed in bond markets which have actually gotten calm as we have seen president trump in his third day in office. will that change? jonathan: we will hear from the president later on this afternoon. let's get you some morning movers with manus cranny. manus: good morning. this is a company led by larry

culp, it is their first year of standalone and it was a monumental close to the year for them at ge. they will raise the dividend and the buyback. the free cash flow scf is critically important. way ahead of the estimates. they divested the health assets, this is a pure play on aerospace. what a different story for american airlines. 24 hours ago we were talking about united. premium cabin, transatlantic route. you have an unexpected route in the first quarter. this is about breaking away from rivals. your capex is down but you have capacity constraints which holds you back in terms of what you can deliver. unexpected quarterly loss of

between $.20 to $.30 on the first quarter. electronic arts entertainment software, i'm not a big player of these games but apex, the sims, ufc. guidance is lower than the market had expected. think of some of the names. global football down mid single digits. this is about peak game interaction, peak numbers in that. dragon age 1.5 million players is down 50%. the question is what does the peak look like in some of the proposition they have in the market? good morning. jonathan: good morning. you mentioned a sports. steve pagliuca sat down with us and lisa says aside from sports. lisa: you have been talking about atalanta for three years and i know the whole thing will be about atlanta.

-- about atalanta. he has a lot of tentacles and a lot of places. jonathan: steve, good to see you. let's start with sports. steve: i thought i was on espn. jonathan: atalanta 5-0. what a story for that team. steve: i'm very happy for the team and the coach. jonathan: can you the league this year? steve: the old adage is take it one game at a time. we have to get healthy. they are playing fantastic. jonathan: barcelona is up next and maybe qualification to the next round. steve: that would be baked. hope to go to barcelona. jonathan: that was the football. let's do basketball. reports you are after majority ownership of the boston celtics. steve: i cannot comment on any

deals including that deal. can we talk -- jonathan: can we talk more broadly about nba franchises? i noticed tv audiences have fallen off? steve: i think it is fragmentation of viewing. viewership is good when they can counted correctly and find out who is watching where. i do not think there is a concern. the leak is strong and has more stars than ever. i think that is a bump in the road. lisa: we have covered football and basketball. any other sports you will by a team in? steve: i am not into cricket so i am good. [laughter] lisa: there is a lot of talk about if you will buy another team. will you buy another team? steve: who knows. lisa: davos has been dominated by incredible optimism. america will boom and what will donald trump to? and there is the overlay of artificial intelligence.

what has been your biggest overlay with what people are concerned about with the trump administration? steve: this davos is all trump and all ai. the trump issue is what will happen with tariffs. europe is worried about tariffs. what will happen with the ukraine. what will happen with the american economy and protectionism. that is their worry. on ai, ai is for real. it feels a little bit like 1999 internet boom. there is a lot of hype but there is a lot of reality and i i will change everything. i view ai as building the railroad's interstate highway system in the u.s.. we will need to have that over the next 20 years. it is a legitimate discussion on ai they came out with the stargate program. other countries are getting ahead, china is investing billions, uae is investing

billions, i think the u.s. has get ahead of that trend. i am excited about it. jonathan: how do you think about the opportunities? you mentioned the late 1990's. it took a while to find out who the winners would be. are you expecting something similar? steve: i look at it a little differently. you had ai, you winners like google. there are many verities of large language models. the real use will be vertical ones. tailoring models with the specific data for health care, specific models for transportation with transportation data. vertical ai models will start to impact the economy and the other ones will grow and we need that infrastructure. what will happen is from that you need power, fusion is being talked about and is around the corner. all of the fusion companies are getting close to generating energy.

the model showing they will generate energy. that will have the power to get us the gpu's. power usage of ai could be entire power in the united states. i think the stargate program is needed and we have to match the other countries. that will a virtuous loop of spending. it will revolutionize health care. lisa: i know you have been very active in that space, particular in the speed it will take to put new prescription drugs on the market using machine learning techniques. is that your main focus of investment when it comes to ai or are there other regions you think are promising in the application near-term, not just the long-term goals? steve: i am focused on health care but it will be helpful in energy and finding energy and processing energy. it will be embedded in every business. liquid ai which we are invested

in, they studied a worm sprayed at m.i.t.. there are 300 neurons in a worm how many neurons do you think is in your brain? lisa: 300 and one. steve: 86 billion. they have come up with an ai system that provides 86% less power diluted. you will have your assistant on your phone. it will revolutionize the way our lives are. lisa: one aspect that is so interesting is there a real tensions that need to be resolved, especially as everyone is talking about artificial intelligence. donald trump talking about national security, he is talking about the chips that could transmit data back to china or one of our other adversaries or competitors. i am wondering how an investor you understand what is national security and what is not? steve: you have to follow the

government and it changes all the time. we do need national security but it has to have a purpose and hopefully they will have rational people who decide what that is. jonathan: you worry some voices will get a bigger say in the private sector in the future? steve: i don't worry because we have a system that will work in the long term and there will be a lot of it. there always have been different companies for different things. we have congress and the court system. i think we need cybersecurity in general. hopefully we can have a to taunt with china so we do not have that going on. i think trump wants to cut deals to move the economy forward that will be a good thing. jonathan: i'm sure europeans have asked your opinions on the next four years. what have you told them? steve: i have been many meetings

with health minister's and all sorts of ministers. what they say is the e.u. is not a full union. they use the same money but there is not an integrated capital market, there is not an integrated anything. to start a business you need to fill out 100 pages of forms and germany and different ones in portugal. many say they need to create a 28th state, a virtual state with one set of rules to start a business and one set of bankruptcy. bankruptcy is different in every country. you cannot have a capital market if you're dealing with 27 ways of doing things. i think it is a great idea to start a 28 virtual european state and businesses can opt to be that or be in one of the 27. it is hard to be in both of those. the advantage the u.s. has is it is one market. lisa: i want to return to where

we began which is sports in my sport which is auctions. jonathan: that is quite a turn. lisa: i am serious because i wonder how much you are watching what so many people are worrying about witches all of this optimism and happy top about getting together and focusing on growth could get stymied if you start to see bond yields climb and the fiscal pressure come into play. how concerned are you about that? steve: all of the data would show when you have increase in money supply as big as it has been and a large deficit that will cause high interest rates and inflation going hand-in-hand. my biggest worry is inflation out of control. we definitely have to increase the supply and they are looking at programs to do that. with 7% mortgages that is not great growth. lisa: you mentioned 1999.

there is a feeling there needs to be a washout as they get with technology that continues to evolve. it is that the concern that this increase in rates could catalyze that washout. is that what you're keeping your eye on? steve: increase in rates catalyzes washout. the good news is for most of my life interest rates -- t-bills have been 5%, 5.5%. it is not anomalous. that is the fear. we have already seen a lot of company valuations go down. we are through that. there is a lot of hype on ai and probably funding at very high levels. i do not see it like it was in 1999 where everything across-the-board was crazy. i used to walk into a room in san francisco and they gave me a term seat and said we would have

a company that would reduce the value of the company at 100 million. you have two hours to decide whether you want to invest 10 million. i almost fell out of my chair. i said thank you very much. 999 of us went bankrupt we had a few -- we had google and a few others that did well. jonathan: it is good to see you. good luck to all of your sports teams. steve value good of bain capital -- steve value good of bain capital -- but have bought that club. we are doing viewing parties at 1:00 eastern time every time we get in auction. steve: we have a brand-new renovated stadium so they are coming there. jonathan: so you will host -- lisa: so you will host the viewing parties for bond options -- for bond auctions? dani: away from sports president

donald trump downplay the national security risk played by tiktok. he sat down with sean hannity for his first tv interview since taking office for a second time. >> our telephones are made in china. we have so many things made in china. why don't they mention that? you're dealing with a lot of young people. isn't that important for china to be spying on young people? young kids watching crazy videos? dani: on his first day in office trump signed an order delaying the app's ban and floated the idea of u.s. buyers like elon musk or larry ellison with a state from the u.s. government. ukraine's president volodymyr zelenskyy says any peacekeeping force in ukraine would need to include u.s. troops. as linsky said his european allies do not have enough soldiers -- president zelenskyy

said his european allies do not have enough soldiers to pose a risk to prudent. the -- a risk to putin. the historic southern storm impacting the southern states led the nba to postpone a game in new orleans. a makeup date has not been determined given the ongoing conditions with tonight's game also in jeopardy. more sports there. that is your brief. jonathan: we appreciate it. snow in louisiana. who saw that coming? it gives people practice with snowmen. they did a pretty good job. colder there than here which is remarkable. up next, competing with trump's united states. >> everybody will be competing for the people they govern or lead and that is what you will get in donald trump. he has not been shy about the fact he wants america to win. ♪

jonathan: counting you down to an important event, the president of the united states addressing the world economic forum in dad owes, switzerland. a president who feels vindicated, feels like he is been proven right, all of the warnings he had for the europeans turned out to be the correct warnings to make. lisa: he feels vindicated and he also feels loved which is different than 2017 when he was first accepting his role as president. a lot of people are saying to him how can we work with you, we want to be more like you. at least in public. jonathan: things in united states are decent. in europe things are challenged.

competing with trump's united states. >> i think it is important, everyone will be competing for the people they govern or lead and that is exactly what you will get in donald trump. he has not been shy about the fact that he wants america to win. there is nothing negative about wanting the best for your country and the people you lead and i think people want to see him do that. that is why he won reelection in such a big way. jonathan: joining us is joe taylor, the ontario teacher pension plan ceo. good to see you again. last year we talked about the difficulty in doing business between texas and california. maybe we should start much bigger. canada versus the united states. what is behind that tension? jo: i think the 51st state is a bit of an opening salvo to that discussion. from our point of view, we are

international investors, we approach this from the perspective of saying it feels a bit like the discussions we had with our companies and our partners. you try to kick off with constructive collaboration. if that does not work move towards negotiation. if that does not work then you have to be creative. jonathan: does it lead you to rethink exposure you take in canada and the united states, the kind of companies you want to be owning, the kind of companies you want to stay away from? >> we have a significant investment in the u.s.. it has been a profitable market for 25 years. the rethinking is how do you avoid continuing to put more money into the u.s.? there are been lots of initiatives that have drawn capital into the u.s.. we have tried to run a diversified international portfolio. in some ways it is where in the rest of the world you see growth and you see a return on the risk

you will take? lisa: a lot of people are saying the same thing and we are seeing that in the performance of markets which is the region we are talking about european equities performing so well. is that your take away that places like europe or even south east asia offer a better return proposition in the year ahead given the united states already has so much capital and some people are saying it is price to perfection. jo: we invest in private and public markets. on the public side you can take the debate about the relative value that exists between the european and other markets. one that is really interesting is the private market. that will be things like infrastructure, private equity, credit. i am a gate believer in hunt where the others do not want to trend. a lot of are saying i only want to be in the u.s. and we are saying that openly in davos. lisa: jo: europe is the place to

go instead. not exclusively in europe but within europe there are still great companies. you have to pick your company and pick your spot. the thing that europe has had for a long time is a predictable regime in terms of regulation and you also have currency which is relatively stable to the canadian dollar which we like. beyond that you have businesses of a size where we can invest in them. our ticket size to investors is relatively significant. if you're doing that you want a professional management team and there are plenty in europe. jonathan: could you describe some of the themes within europe you would like exposure to, the things you are focused on? jo: we still believe in climate change. it is one of those things where the discussion has moved about ai and data centers. climate change will continue to be in focus. if you live in l.a. you would certainly say that is an issue for you. we are still investing around the climate transition.

we have done a lot in electricity transmission. new types of power or different types of alternative power. beyond that what we are trying to do is be thoughtful about disruptive technologies where we can move into a new area which is not just ai. hydrogen and other fuels that are interesting. we are also very active in terms of looking at new disruptive companies. some of them are not in ai but a lot of them morph into that area. we like technology that enables other sectors, we like technology that enables the financial services market that covers quite a broad church. we can get into those businesses because we provide long-term patient capital and at some cases -- we can be there for 10 years and help the business to scale. lisa: ontario teacher pension

plan has been one of the pioneers in sourcing private deals and having a big presence. do you think the pendulum has shifted from private equity to credit and that he think it is shifting back from private credit more to more of the equity style private investments? jo: you will always see a bit of this tactical moving around. we have been investing in all of those sectors for 25 years and we have an outlook which is 50 years out. there has always been a place in my heart and portfolio like private equity infrastructure and credit. credit is cyclical. spreads tighten up when everybody wants to choose the same deals. private credit you will be careful you are not putting the same product into the same business. private credit with an equity strip in the same company. for us the trick is to get a balanced portfolio that is diversified. it is quite a mature pension

plan. this is our 35th anniversary. i have those teachers in ontario need to make sure i'm anxious about the retirement. jonathan: joe taylor, ontario teacher pension ceo. i'm still thinking about what katie koch said earlier. 4% of the population, one for the biblical economy, and two thirds of the market cap. it is stunning stuff. lisa: that is the reason there is so much focus. this will be the question. how do you get some sort of sense of prevention going forward. jonathan: up next we will catch up with the morgan stanley ceo. the eq ceo, nila richardson of adp, and we will catch up with the ceo of emphasis. ♪

>> the u.s. will continue to attract capital. >> the u.s. economy is in a good place. >> there are green shoots that people are able to point to. >> the ability to beat successful, the rules, all of that has driven strong growth in the united states. >> this is bloomberg

"surveillance." live from davos. with jonathan ferro and lisa abramowicz. jonathan: at the world economic forum in davos, switzerland, good morning. the big event later this afternoon, president donald trump calling in, and a lot of questions from american and european ceos already lined up. lisa: i love that he is calling in. we were talking, does he feel a need to be a part of this event, already dominating it, will he, won't he discussions? how much of this will be a forum for executives talking about how much they appreciate him, please don't hurt us, make our lives better, versus trying to clarify the vagueness? jonathan: i was listening to guy johnson the markets are like this, a clenched fist, and

donald trump comes in, and they are relaxing. a threat of 35% tariffs on mexico, canada, 10 percent on china. the message for the europeans, you might get it, too. whether your assumption is that is just negotiations and we will end up somewhere else, that looms large. lisa: the discussion has changed from will tariffs hurt europe to let's deregulate so we can compete better with united states. it's a different tone and that is where people are getting optimistic about the european continent when it comes to investing. jonathan: we've been asking, how little needs to go right in europe to generate some big gains. because the bar right now is really low. 4% of the global population, 1/5 of the global economy, two thirds of the market cap. that is u.s. exceptionalism in

three numbers, that is dominance. lisa: the capitol is there. the question is how do you put more capital on top of that and have a really good return? it is also getting harder and the conversation that we also keep having. jonathan: let's catch up with anne-marie in washington. we are all waiting for the address from the president of the united states. annmarie: not exactly sure what he would say to this group of global elites, but yesterday, you called it a level of indication that the president will have. in the past, he lectured the group about being enslaved to russian energy, outsourcing their defense to the united states, only spending 2% of their gdp. people will likely call for more defense spending and will likely talk to them about tariffs.

this stuck out to me from 2020. they have trade barriers where you cannot trade. they have tariffs all over the place. they make it impossible. they frankly make it more difficult to do business with and china. expect some of that tone with the group of europeans. what will be interesting is the q&a portion of this. these are not journalists, likely people that want to curry favor with the president, or those that already have, thinking up steve schwarzman, but we could hear about things like deregulation, what the tears and trades may look like, or what the energy landscape may look like in the united states from somebody like toal. jonathan: thank you. look out for that, 11:00. no softball questions here. morgan stanley chairman and ceo, ted pick. ted: i got a little rattled

because you said we are coming up to a big event, and i thought it was our interview. oh. i am like filler. jonathan: ok, so this is the real thing. live from davos, switzerland, the big event. ted pick from morgan stanley. ted: one year and three weeks. it feels amazing. you come into this job and what to do good. what you discover is the quality of the underlying franchise and the people. i have the keys to a great car. the partnership is alive and well. jonathan: now you have to hit the ground running. american bankers very happy here in davos, switzerland. are you one of them, optimistic about the year ahead, and what about the incoming administration gives you the confidence? ted: i am because it is definitely a change in tone.

it feels like there will be more interaction between the public and private sectors. it cannot be state actors alone and it cannot be private companies alone. the fact that there is a real dialogue building, that's a huge plus. on european question, there may be some catalyst to some reflection now. capital markets union, banking union, european self strength. maybe this is a catalyst to some conversations. lisa: are you hearing about some actual business activity stemming from that change in tone in europe or is it just a conversation at this point? ted: 25 basis points into the new administration, we are just getting going but a hell of a lot more than you would have expected two or three weeks ago. lisa: one thing in your earnings that stood out is the top trading revenues, which is booming. a discussion about how risk on

things have been feeling. certainly at davos but the last couple of months. do you see that waiting at all or does it continue to ampup in terms of risk-taking? ted: when you become a ceo, one thing is certain, all of your children are beautifully -- the equally beautiful. equities is one of the children that i adore and, yes, they put up some good numbers. that's a reflection on the underlying franchise but also that people want to allocate to more risk. they want to get beyond the index level, you talk about this. equity risk are immune relative to sectors payment we are talking about the regulation in the energy space. financial space. how about the rest of the 493? some of that dispersion, getting allocated across names and sectors around the world, that is a multiyear trend. jonathan: concentration is

certainly a risk factor that a lot of people are considering. another is the deficit and the u.s. government. is that a risk more generally that you and the team are focused on? ted: you have been talking about that a lot, and i think it's important, because if you don't talk about it, it says there is no canary in the coal mine. but the fact that there has been so much attention given to this, you have folks like scott bessent coming in who know the bond market, that is a reaffirmation that we had to look out on that. that said, term premium is still pretty narrow. we have not seen the long bond really move, so there's an underlying confidence. the question is what kind of growth can we generate. the conversation one would have is what comes first, the potential inflationary effects of tariffs or the positive the regulatory effect?

we know there will be an ongoing dialectic. which policy can be transmitted more quickly than the other? jonathan: do you think it holds back activity, that degree of uncertainty? given how confident everyone is, we get nervous when everyone in davos gets really confident. does it hold back activity without having the clarity on what these changes will look like? ted: i think part of the dilemma is the vernacular of whether we are really moving with animal spirits is whether we see a bunch of m&a announcements. over the last number of years, we've had two major uncertainties. financial pressure, zero on zero, do we know where rates will be? we can focus on what the details will be a, one or two moves, but

we know generally, the u.s. rate is somewhere in the mid 4's. that is kind of past us. that is an uncertainty taken off the table. the second set of uncertainties is around the resumption of nationstates and the like. one could argue there's a lot of uncertainty in the world. i would say having some sense that things are going to happen in the u.s., europe, around the world, i think it galvanizes the corporate community. how fast will that be? i think an important catalyst to this will be, there are the better part of 1900 companies, five years of life on average, those companies need to move. i couldn't tell you exactly the pacing of that activity but we have been below trend in the m&a market. i think we will be trendline or higher.

i think it will be everything. you have talked about the paucity of investable names, especially when you get past the big seven companies. i think, yes, it can be painful for a young company to be public, but you get in during come a long term value from shareholders that can also add some value. you can use that currency to make other acquisitions. the ipo product is alive and well. what has happened, financials agents of the markets, the intersection of private and public has come of age. maybe don't go public in the classic new york, maybe go hybrid first with a full capital structure. lisa: one of your babies, your wealth capital department. one of your drivers of revenue

for a long time. what has been the challenge in accumulating assets in wealth management, growing assets to the agreed that you want to? ted: you have a massive denominator. what has happened is, we are now the better part of 8 trillion aum between investment and management. what have assets done? in one year, they have gone up by 1.3 trillion. you raised 250. that's a huge number. for me what's important, how is our final working? think of our wealth business having three parts. we are seeing transaction activity ticking up. that is positive. we have this workplace business. then i can do factory floor to ceo. then the fee-based advisor. 50 basis points per and him.

especially if clients need to allocate across sectors. lisa: you made a lot of acquisitions in the past. planning any further tieups yourself? ted: we see stuff but i really love the durable growth organically that we have in our two major businesses, investment bank, wealth and investment manager. jonathan: one minute left. have you spoken to the president? ted: i have not. jonathan: if you had the opportunity to, and davos will today, question to the incoming president, what would you ask him? ted: i like the quality of the questions you have. jonathan: if your name was in the mix and you had one. lisa: he tried to punt. ted: the question i would ask, one that would give him the opportunity to speak to the possibility of him thinking

about a lot of different possibilities on a lot of different issues. something like, are you open to taking idea flow around a bunch of different spaces? i think the answer he would give is, yes, and i will give you examples. the reason that's important, we are so early in this administration. people are trying to weigh how much is tactical. people understand there is a real conversation taking place on a whole bunch of important issues and we are only five days in. people hearing that will give confidence that we are in the early stages of the dialectic. there is more to come. jonathan: safe travels back to new york. lisa: you have to come on again soon. jonathan: chairman and ceo of morgan stanley. with your bloomberg reef, here is dani burger. dani: fire crews are battling a new fire north of l.a..

the hughes fire broke out yesterday and spread quickly to 10,000 acres. about 1500 people are under evacuation warnings in the region. more details are emerging involving president trump's plan to make the u.s. and ai powerhouse. softbank and openai each plan to commit $19 billion to the 100 billion dollar project known as stargate. the two companies when both own 40% of the endeavor. industry players like elon musk have been questioning the lack of details around the venture and its financing. the new york jets have found their next head coach. former detroit lions defensive coordinator aaron glenn has agreed to become their next coach after interview with five other teams. glenn joined the lions in 2020 one and becomes the first coordinator to be hired as head coach by another team this year. he played eight seasons with the

team. that is your bloomberg brief. jonathan: more from danny in about 30 minutes time. priced to perfection. >> the dominant mode is extreme optimism. the question we need to push ourselves on is is it sustainable, how much further could it go?

jonathan: the opening bell, one hour, 12 minutes away. equity futures done by point 1% on the s&p 500. big conversation it at the world economic forum. yes, things are good, this economy could get better, but are we priced for perfection? >> the dominant mood is extreme optimism. a lot of that optimism is priced into the markets.

this idea of u.s. exceptionalism, to put that into context for people, actually, we are 4% of the world population, 20% of gdp, 68% of global market capitalization. the question we need to push ourselves on is, is it sustainable, how much further couldn't go? jonathan: that dominant is incredible. 4% of the global population, 1/5 of the global economy, two thirds of the market cap. lisa: why everyone is focusing on the united states. the key is getting past that and understanding what they are doing with the money. jonathan: let's get some morning calls with manus cranny. manus: goldman sachs is lower the price target on apple. they say dominant may be shifting, citing lower iphone sales and competition from china. what carveout might they get on the tariff story? bank of america raising the price target on meta,

highlighting optimism on ai capabilities. research upgrade for netflix pointing to strong fourth-quarter results. just remember those numbers we brought you yesterday, 19 million subscribers in q4. jonathan: there is going to be a huge investment in ai and associated data centers in the united states and worldwide. we've already seen that. it's about to get even bigger. that means there will be some serious energy demands. let's talk about that with the eqt ceo toby rice. gases in demand big time. let's start with murders and the incoming administration. it has been difficult to make deals under the biden administration. is your life about to get a little easier? toby: i think our lives will get easier not just from m&a, you look at the energy market we have right now, people are scratching their heads. we are producing record amounts

of energy in this country. we are producing over 30 million barrels a day equivalent. you would think that would translate to lower energy prices , but energy prices for americans are up over 35%. the reason for these bizarre facts is because political forces overwhelmed market forces when it comes to energy in america. the past administration has made it incredibly difficult to get energy projects built. whether that is causing lng, requiring an act of congress to get a pipeline built. having donald trump in office is a welcome change. we hope we will let market forces take a backseat and let market forces drive the cheapest . lisa: the highest was going back to -- i know so much about it.

is it difficult to get investment at a time when you are not seen the requisite increase in prices? toby: natural gas prices have been incredibly volatile. right now, we are looking at the average price at four dollars per million btu. in 2024, that was $2.25. for perspective, people need to be reminded, four dollars natural gas is the energy equivalent of $24 oil. this is still the most cost-effective energy solution out there. what will be driving natural gas prices, a lot of volatility, we have seen demand increase 50% over the last 15 years. the pipelines that service that demand have only grown 25%. the storage infrastructure to buffer the supply has only grown 12%, so that means price will be the buffer. we will see times when prices

are two dollars, times like in 2022, where prices were north of six dollars. you have to be a low cost operator like eqt to weather the storm and give investors exposure to compelling upside. lisa: the key to being resilient is being low cost, being big enough, and having the access to build what you need in an expedient manner. do you plan on being part of any acquisitions on either side? or trying to build in some kind of way, given permitting will be getting easier. toby: our strategy starts with becoming a low cost operator. with the transaction we just completed, we have completed our transformation of eqt. we have increased our scale by 50%, almost doubled our inventory. we have lowered our cost structure by 30%.

and we have doubled our free cash flow per share capability. this is a healthy business. it's incredibly important for us to be able to be strong so we can meet the needs because the demand for natural gas is incredible, whether you are talking about energy, security to our allies, lowering energy bills, building out this ai revolution, or simply making the , lowering global admissions by replacing coal. a 20 to 40% increase in natural gas demand is coming over the next few years. as america's natural gas champion, eqt is ready to meet that demand. jonathan: the president will be calling in from washington, d.c. i mentioned this earlier on, i said, what would you ask the president, what do you want to know from the president of the united states? toby: it is very clear that what needs to happen with energy is we need to get back to market

forces driving the energy that makes its way to the marketplace. permit reform, making sure that happens. i think that's inevitable because we are in such a fragile state with our energy system. we will either be reactively fixing, like germany did in 22, when they got energy projects approved in five days, or we can be proactive and get ahead of this. perm reform is going to happen. it is one thing to let market forces work. what can we do to incentivize these market forces to drive not just the clean aspects of energy, what can we do to incentivize the reliability of our energy system which has been significantly attacked over the past few years. we are in a hole when it comes to that and we need to get back to providing reliable energy systems. jonathan: toby rice, the eqt ceo. a lot to get through but

ultimately a shift, new era potentially for the energy industry. lisa: per btu. jonathan: coming up next, nela richardson of adp. we will bring you some economic data in a moment. we will be catching up with mike mckee. you are watching bloomberg tv. ♪ i can't believe you corporate types are still at it. just stop calling each other rock stars. and using workday to put finance and h.r. on one platform. tim, you are a rock star. using responsible ai doesn't make you a rock star. it kinda does. you are not rock stars. (clears throat) okay. most of you are not rock stars. oooh. data driven insights, and large language models. oh, that's so rock roll. it is, right. he gets it. yeah.

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jonathan: we've been fairly light on economic data. jobless claims just around the corner. light on fed speak, which is good sometimes. we will hear from the federal reserve next week. equity futures on the s&p down 0.1 percent. negative on the nasdaq by 0.5%. to y y, 10-year, 30-year. let's go to mike mckee for that data. mike: seeing a small rise in jobless claims, 220 3000 which is up from the originally reported 217,000 the prior week. we will see if that is revised. 1,899,000 continuing claims,

that is from the revised 1.853. let me see if there is a seasonal impact here. unadjusted claims, 240,000 is down 68,000. seasonal factors had expected a decline of 75,000. this is just a seasonal jump from the seasonal factors, not a change in the outlook for unemployment claims at this point. just coming out of the season in which we see problems in the markets, in the claims because of holidays. one last note, california jobless claims last week only up by 6000 700, 13 thousand the week before, so we are not seeing a major jump yet in california because of the buyers. jonathan: i think that will be a big question as we anticipate incoming information, how much disruption will he get in the

economic data? katie koch affected directly by the los angeles region, that is a bigger economy than the whole of switzerland. that will be a big issue for the incoming data. small upside surprise on jobless claims. if you look at the bond market, as mike mckee was speaking, lisa was on the terminal looking for the intraday move of the 10-year and 30-year bond yield. not a big deal but slipping back just a touch. lisa: not only did you see a small upside surprise and ongoing initial jobless claims continuing claims you saw up to almost 1.9 million. this also signaling the sense that around the margins may things are not as robust. i will say the most interesting market move was dollar-yen. the dollar weakened more significantly against that bank of japan decision.

tokyo, a very large focus on these potential moves. jonathan: joining us now is nela richardson, chief economist and esg officer of adp. nela: great to see you, even if we are in coats. jonathan: as we have said, it is called her back home. everyone is very happy with the u.s. economy. how do you read things? jobless claims up just a bit, but what is your read on things? nela: things are stable right now but i don't think that will stay. there is a lot of stasis in the labor market. you can see it with these very low jobless claims numbers that came out. we are lower than we were going into the pandemic. but i do think you see the threads starting to fray when ou look at initial jobless claims. it is taking longer to get a job.

we are seeing wage growth come down a little more. there is a little less heat in the labor market. i hope it's not a cooldown but too early to tell. jonathan: it feels like these things have been going on for quite a while, if you had fix along the way. since then, things have changed. what do you see that makes you think that things will break one way or the other pretty soon? nela: i look at other economy in the labor market, the difference from cyclical to noncyclical industries, like health care, which has been the driver of growth in the labor market versus manufacturing which has been on its heels for a very long time. i look at the dichotomy between large firms which are really motivated all the gains in the labor market versus small firms are struggling. that is where you are seeing the pockets of weakness. those pockets of weakness could be, as menuing for -- manufacturing surveys have been

in the past, a leading indicator to the economy. when manufacturing typically slows, the u.s. economy is quick to follow. i keep saying global because the u.s. is driving global growth right now. if the u.s. slows, so does global growth. lisa: which is why people are looking at these numbers and saying how much can we actually read into it? jonathan was talking about los angeles and the distortions there. is this the new reality, that every day print doesn't give us much? are you seeing how much momentum there could be or could it be behind it, where you can look through those distortions easily? nela: i don't think it is time to look through those distortions. that is why i'm so glad i work for adp, where you can see the disruption, its effect on hiring. it will be super important. i'll be looking at los angeles county, a big job center in

terms of displacement. which industries benefit from the said displacement we have seen? leisure and hospitality. we have seen a slowdown in hiring. i see that picking up in l.a. county because so many fled to hotels and restaurants. on looking at forestry. eventually construction. we need that data because we need to understand the disruptions and how they affect the overall market. lisa: there is a bigger term disruption, longer term that we've been talking about here in davos, artificial intelligence. i know that your firm and you have been doing a lot of work on what the implications are for the labor force. are humans going to be needed in about 10 years? nela: i hope so. [laughter] you didn't ask me about economist, but humans, for sure. it is really about but the task underlying the job, getting the worker ready for continuous

change in how their tasks involved. i think this point is missed when we talk about generative ai. we are still talking about jobs. jobs are quickly becoming old-fashioned. it's about how those skills move the worker through the transition of technology. unfortunately, workers feel unprepared. we did a global survey at adp, 38,000 workers, 34 countries, and we found 24 percent of those workers don't feel like they have the skills they need to advance their careers in the next three years let alone the next 10. lisa: what does that mean, that some older generations will fall out of the workplace as younger generation learn to adapt faster? or is there some other broader implication? nela: such an interesting question because you match what we're hearing about generative ai and technology and advancement with what we know is going on with demographics and aging. we are not talking about a

number of skills walking out the doors of the u.s. labor market as boomers retire. how do we retain that institutional knowledge, match that with technology? we are losing skills every day. my thought is how do we retain those skills, lead to more flexible work environments, key people attached to the labor market longer maybe in nontraditional ways, so we can help workers transition through these trends we are seeing. jonathan: i worry about the younger generation quite a lot when it comes to ai. i think they are totally unprepared for number of reasons including academia right now which i think is pushing them away from using these tools which could benefit them. that is point one. also, they don't have the soft skills and have not been working on them either. an additional point, i keep going back to the conversation i had with brian moynihan last

year. this is my worry. banks are going around saying they will be able to do more with less. so it every dollar of revenue they can generate will become less and less labor-intensive. that may not mean layoffs on the whole, but it will mean a lower recruitment, potentially out of college and university. i want to know what your advice would be to a graduate, may be a software graduate that was told, learn to code five years ago, they have done that, and all the firms are saying we may not need that anymore. nela: this is the irony. first of all, i will recognize the pain point they will face in the labor market because skills have never been so easy to acquire and so hard to retain. technology is moving fast. as soon as you learn that coding language, it's already changed. my first piece of advice is to really involved with the technology -- involved with the

technology -- evolve with the technology. our survey shows that nondegree holders feel just as unprepared as degree holders. engage with people, interact with them, collaborate, learning from different demographics. you have the benefit of five demographics under one worksite. use it to your advantage. lisa: another aspect of this transformation which is interesting, the skills are harder to replace with ai are the things are traditionally more blue-collar, people who are making things, building things, teaching people, caring for people, etc. are you going to see some of the office related jobs shrink and these others really build out? nela: at adp research, we actually quantified that change. we saw coming out of the

pandemic, gen z increases in manufacturing, producing stuff, because so many of those jobs were lost in the pandemic and they had to be rehired quickly. but if you match where the market is to where demographics are going, that care economy fuels the economy. if we don't have nurses and health care providers, which is a physical, in the room kind of job to help us with this aging transition in the united states and in higher income countries, we don't have an economy to fall back on in terms of other things that we want to do. the care economy is the backbone of the entire economy. there are jobs to be had there. jonathan: thanks for being with us. see you back in new york. the chief economist and esg officer at adp. remind me of one of the best conversation we've had this week at this forum.

there is a favorite question of mine that i repeat, and i'm sure that you will hear it in the years to come. the disruption that we have seen with ai, will it do to services what global manufacturing did? it will be more profound but a difference, it will be in the reverse. it will not be about blue-collar workers, it will be about the highly paid software engineers. that is where you'll see the greatest disruption. lisa: it is already starting to happen on the margins. if you think about the banks, all junior associates, are they going to be needed if you can get an ai system to do it? these are the questions that people are increasingly going to be analyzing. jonathan: i understand ceos want to keep the workforce motivated, they don't want to be saying there will be huge job losses but there is a part of me that ultimately that headline will begin to cross on the bloomberg because they have replicated that work using ai. lisa: from my conversations,

that day is not now, not two years from now, not five years from now. the problem is people don't have visibility of what it looks like after that. my take away is that people don't fully understand the capabilities. ai has the potential to surpass human intelligence, etc. jonathan: skin in the game, just a little bit. the two biggest themes, trump and ai. basically nothing else. let's get an update on stories elsewhere. dani: initial jobless claims rose last week by 6000 to 223,000, a relatively low level. the median forecast called for just 3000 less. however, it is taking longer for out of work people to find a job.

continuing claims jumped to 1.9 million, the highest figure since november 2021. president trump acting defense secretary is deploying 1500 troops to the southern border. he also approved the use of military aircraft to assist with deportations detained by customs and border protection. president trump is also planning his first trip. tomorrow, he will go to the asheville, north carolina site which is still recovering from hurricane helene. then he will go to california to survey the damage from the wildfires. looming over his trip, questions about federal disaster recovery. jonathan: thank you for this week. programming note, president trump speaking to the world economic forum at 11:00 eastern time. ahead of that, join bloomberg at

9:00 as we look ahead to the address and wrap up davos. you can listen to our reporters discussing trump's impact days after his inauguration. terminal users can put questions directly to our team. next on the program, a change in tone. >> it is definitely a change in tone. it feels like the overall framework is one where they will be more interaction between the public and private sectors. the fact that there is more dialogue building, i think that's a huge plus.

jonathan: live from davos, switzerland of the world economic forum, understandably there's been one thing in focus,

the trump administration. under surveillance this morning, a change in tone. >> i am positive because it's definitely a change in tone. if you like the overall framework is one where there will be more interaction between public and private sectors. the fact that there is more dialogue building, that is a huge plus. on the european question, there may be some catalyst to some now flexion. jonathan: that was ted pick from morgan stanley, on repeat from american bankers, some confidence out there. lisa: at a time when there is still uncertainty, the idea of stripping away regulations and having a pro-business tone at the top is really feeding some of the ambition we here from busy executives here. jonathan: a lot of optimism, i wonder what this will look like 12 months from now. lisa: right now people are looking forward and saying where

is the money potentially not going to the u.s. and couldn't go to europe in particular? jonathan: 41 minutes away from the opening bell. with your morning movers, here is manus cranny. manus: talking about american, making 20 to $.40 per quarter. they force customers to book direct. that cost them $1.5 billion and they have learned their lesson. ge upping the dividend by 30%. free cash flow just under $7 billion and a buyback. that is what is driving this. i believe you with a thought on ea entertainment. the guidance was like. lightening up on some of their viewership. jonathan: manus cranny, thank you. standing by with a special guest. >> you said it, it's about trump and what impact he would have on

not just businesses but economies. with me now is salil parekh the ceo of infosys, one of india's largest companies. its biggest market is the u.s.. questions about how the trump administration will impact the outsourcing business. what is your take? salil: thank you for having me. what we see is many of the policies being put in place, discussions this week with u.s. executives is all about business becoming more robust in the u.s.. if that happens, when that happens, business becomes more robust with a new approach, we will start to see more economic growth. typically what we see in those cycles is much more focus on using technology for large programs. we think it's a positive side to have that sort of an approach going in. already we announced the results

last week, last order, 6% growth, we increased our guidance. operating margin was about where the guidance was, about the midpoint of the guidance. we feel quite good about what this year looks like. if all of this happens in the u.s., that looks positive. haslinda: how good do you feel? it was a lackluster year for i.t. services last year. what are you here and in particular from your clients in the u.s.? salil: clients have been quite optimistic, and their view is with more focus on the economy, with all of those policies coming in place, they are looking forward to more gdp growth in the next coming quarters. with that, there are new technologies. of course, there is focus on ai, but new technologies in cloud, data analytics, digital services. and spending more in those areas. haslinda: can you quantify the

spending that you expect to see in the coming 24 months? salil: i don't have a number about what it felt like this week and all the discussions especially with u.s. clients, much more optimism about the u.s. economy. we are hoping that translates into our business. haslinda: h-1b one visa, issues about whether they should be expanded or not. what is your take on the debate right now? salil: we have made our business more resilient from three years ago. first, a lot more work is being done in india for infosys from what it was some years ago. we have also built some nearshore capability in canada, mexico. then employee base in the u.s. is much more local hires, so not dependent on visas, over 60%. with those activities, i think our business is more resilient.

we feel in good shape whatever direction we take. haslinda: so you are fine with whatever they decide to do? we know from our story that outsourcing companies have been gaming h-1b, applying for far more than what is needed. what do you make of that tactic? salil: for infosys particularly, we make sure we participate to the extent we need for our client work. in addition, we have large digital centers in the u.s. and a lot of the work is done by u.s. employees. we have no specific view on what are the people in the industry are doing. haslinda: we have to leave it there. salil parekh, ceo of infosys. jonathan, lisa, back to you. jonathan: thank you so much. that just about wraps up our coverage here at the world economic forum. coming here for the better part of a decade plus, and this time,

the optimism around a single nation has been absolutely palpable. when we heard from the president, talking about a golden age for the united states of america, that resonates with executives in a big way. europeans, not so much. i have to say, the chinese, asian representatives more broadly, absent at this event, when in years by, they haven't been. lisa: i do think it will be interesting to see how much there was a vibe shift that had to do with taking away regulations and being more pro-business than a lot of these nations and companies have been in a long time. much less messaging about dei, esg, and really down to how do you grow your business? what i found interesting was the optimism around europe getting its act together because so much pessimism was baked in. that was a theme throughout a lot of our conversations.

and the fly in the ointment, may be challenging on the margins, inflation worries, the idea that debt and deficits could rear their heads. the looming cloud of the bond vigilantes. jonathan: that is at the core of everything. core competency and growth. tremendous growth in america, lack thereof in europe, and the divergence of the two. there is tons of confidence among american executives. we will see where we are in 12 months time looking back. for our audience worldwide, thank you for being with us through this week. thank you for choosing bloomberg tv. in, from davos, switzerland, was bloomberg "surveillance." ♪

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katie: stalling out at all-time highs. 30 minutes until the start of trading. sonali: matt miller is off today and bloomberg open interest starts right now. katie: that rally hits a wall near record highs as traders take stop -- stock. also digesting a fresh round of earnings from the surprise loss in american airlines to disappointing guidance over electronic arts. plus elon musk and sam altman clash again this time over that $100 billion ai effort hyped by president trump. all that and more coming up. let's look at where markets are trading. 30 minutes into the bells ring. you can see there's red on the screen behind me. a little bit when you take a

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