sonali: welcome to bloomberg markets. i am scarlet fu. equities hovering near all-time highs today. let's check where the s&p 500 stands after four days of gains holding around the record high. a bit of a stalling out of the moment. we have seen this return into gains in the session earlier this week. the pressure semiconductor stocks are under. the philadelphia semiconductor index down by more than one

present after texas instruments gave a disappointing forecast saying industrial demand remains slow. lower yields. treasuries hire. the two year yield coming down about three basis points to 4.25%. up the dollar weaker versus all 16 major currencies. we dig into that later. the yen's farmer. in the bank of japan hiked rates for the second time this cycle. the policy rate in japan is at the highest since 2008. before the currency conversation let's highlight a couple individual equity movers. we go to natalia. natalia: we are watching shares of meta up slightly below 2%. mark zuckerberg announced plans to spend $65 billion on ai in 2025. analysts expect the company will spend slightly above $51 billion. the company reports earnings on

january 29 so all eyes on that as well. the verizon stock is rising as the company posted better than expected results. we see growth across mobile phone subscribers as well as broadband customers. analysts are optimistic about free cash flow growth and finally novo nordisk, at that company is soaring today. up by 8%. it was up as much as 14 earlier. novo nordisk posted a really strong early trial results for one of its experimental drugs that showed patients can lose more weight versus previous drugs. keep in mind, stocks -- the stock is down by 14% over the past 12 months. it's a long way to recover. scarlet: good stuff. natalia kinazhevich thank you for the numbers. we are still waiting for the first trade from a venture global.

that stock, when it does begin trading is under the ticker vg. another currency market all strength has been a theme since the election of donald trump with the bloomberg dollar index of more than 7% fourth quarter alone. earlier today jay polaski of tbw spoke about the currency's importance. jay: the dollar is key for us. if the dollar rolls over it is bullish on the exposure for 20 25. american exceptionalism at risk. there is no room for mistakes and in the u.s.. that is the main take away. there is room in the rest of the world. so, that audibled anova suggests to us -- the dollar rolling over suggests to us, where are there opportunities elsewhere? scarlet: morgan stanley has a note out focusing on some of those opportunities saying traders looking to sell the dollar are actually far more common than thought.

matt hornbeck is morgan stanley's global head of macro strategy. great to see you. before the opportunistic trades you might be looking at, i want to get to the knob -- nub of morgan stanley's short dollar thesis. is it that there is less market strength. the market realizes or that the dollar has peaked and is ready for a regime change? matt: our thesis is a combination of factors. what is usually required to get the dollar to move in a big way. certainly, the interest rate component of the marketplace is important here. we think yields in the u.s. will be going down. we think they will be going down more than in other parts of the world. it is all, of course, relative to what is priced in at the moment. look at the u.s. interest-rate

complex. there is hardly any reduction in fed policy rate priced in. we think the fed is ultimately, going to deliver more. when we are thinking about where is the dollar going from here? it is both an interest rate story and also a global growth story. and the risk around the global growth story. most of 2024 we were lamenting the performance of activity outside the u.s.. we were celebrating it within the u.s.. we think that could change. that general view of investors. by the time we get to december of this year, which, of course, is some time away, we think that if you will have shifted. that, ultimately will end up weighing on the dollar over the course of the year. scarlet: your strategists say that for those willing to add to dollar shorts it is more a question of timing rather than

direction. timing means, what? specific technical levels that people are looking at for paris or the dollar index? matt: usually it comes down to confidence. the currency complex is similar to the bond market. it is effectively a strike. and activities strike, if you well. i did the bond market it was a buyer strike. people did not want to put money to work at the start of most investors fiscal year ahead of the inauguration of president trump, just as most currency investors did not want to sell dollars going into the inauguration, in part because expectations were increasing for day one tariffs. and of course, as we saw, those y one tariffs did not come to pass. that led to a pretty sharp correction lower in the daughter that you can see is continuing today. -- in the dollar that you can

see continuing today. the further we get into president trump's second term i think the more comfortable investors will become expressing the views that i think they hold which is that the dollar is rich , interest rates are high and they are both ripe for correction. scarlet: there are those skeptical of the dollar's continued strength and a cohort super determined that the dollar will stay strong. what will be the tipping point for the super dollar bulls to abandon their optimistic stance? matt: i think it is the reality of washington dc as it plays out over these first 100 days. congress has a lot to get done that does not necessarily involve tariffs or tax cuts. we have to, of course, keep the government open. we have to deal with the debt ceiling. then, congress will need to turn its full attention to extending

the tax cuts and jobs act provisions set to expire at the end of the year. those are not easy lists for -- lifts for a house of representatives which, by the current count, is extremely narrowly divided. scarlet: we talk a lot about how no one can be absent from any votes. if we do see an exodus of dollar bowls, --bulls which currencies will benefit the most? matt: we are focused on dollar/yen moving lower and euro /dollar moving higher and finally we are focused on cable moving higher. the british pound, the euro, and the japanese yen are the three currency pairs we are most focused on to outperform against the u.s. dollar over the next couple months. scarlet: that does it. the major pairs.

matt, have a fantastic weekend. matt hornbach is morgan stanley's global head of macro strategy. american express released fourth-quarter earnings this morning with guidance in line but share is dropping on higher expenses. and a newly report on so-called cash poor americans giving us insight into the cost of borrowing. rodney williams of sold-out funds joins us to break down what he has been looking at. this is bloomberg. this is bloomberg. ving with diabetes, i'll tell you the same thing i tell my patients. getting on dexcom g7 is one of the easiest ways to take better control of your diabetes and help protect yourself from the long-term health problems it can cause. this small wearable...

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scarlet: this is bloomberg markets. i am scarlet fu our stock of the

hour american express reported stronger than expected fourth-quarter earnings. saying "consumer confidence is getting higher and translating into potentially more spending." for more on his comments let's bring in caroline hyde. the fate of the consumer. caroline: a high-end segment of the consumer. scarlet: a young group too. caroline: this set of numbers ultimately met expectations. maybe people expected more of a revenue boost in terms of guidance for 2025. he said i am sticking to my 8%-10% growth range and shares were at a record high yesterday. ultimately this is a higher end consumer going for a more high-end luxury card having to give away a few more perks. expenses -- expenses ran a little higher. they are looking to win over a

millennial and gen z. it is about the future of the buyer. the person who wants to travel, go to hotels. what is interesting is for them the stock market doing well is good for his consumer. he is talking about why he will sustain this revenue run rate and profitability. it is before they think inflation will get under control and the drop support is good. it speaks to a strong stock market and helps the consumer. scarlet: a goldilocks scenario for american express. i am curious about the idea that they have to pay more. the perks. these are credit cards where they charge consumers fees, right? caroline: maybe the regulatory environment going forward will be better on those fees. what will happen next? they have done bultmann's -- bolt ons but ultimately the fee environment, the capital environment is what he is liking. geopolitical risk will still we had went from his perspective. dollar strength means you and i go traveling but what about the

consumer coming here to the u.s.? the next step he put forward was geopolitical risk remains but the regulatory environment will perhaps sway his way when it comes to fees. scarlet: thank you so much bloomberg technology cohost caroline hyde. we mentioned american express. we learned this morning consumer sentiment declined overall in january, the first decline in about six months on concerns about unemployment and the impact of potential tariffs on inflation, specifically, lifting prices. added to that uncertainty the new 2025 cash poor report says 58% of americans are living paycheck-to-paycheck, a 20% increase from the prior year. joining us with more details and insights is rodney williams cofounder of soto funds which helped compile the reports. great to see you. what you are looking at is kind of the polar opposite of what american express is talking about, that demographic. rodney: it is the challenge we

are all facing. there is a group of the consumer segment that is having a more positive outlook on what is currently happening. the segment we are referring to in the cash poor report is a segment that does not share that view. there sentiment has not declined. it has been a troubling sentiment for some time. i think there is some level of hope as we get to the next four years, honestly, the next 12 months. scarlet: give us a sense of who the group comprises, the demographics. perhaps, the size and how it has shifted over time? rodney: historically, when you think about cash poor, a segment of american consumers that are cash poor or limited savings you automatically think about middle-class to low class. we are seeing an increase coming from consumers that make over $100,000 per year, consumers with a salary jobs that own a home and number one, consumers

with credit cards with high balances. that correlates with a recent report from the federal reserve bank that talks about credit card debt approaching an all-time high of over $1 trillion. not only is this group growing, they are historically credit card users. now they have high balances. honestly, they are looking for other options. what is most shocking about this group is the fact that they make over $100,000 per year. that portion of the cash poor group is growing. scarlet: $100,000 per year sounds great when compared to the national average. but not in certain cities, like new york, for instance, or california. when we talk about the spending and budgeting, the unexpected expenses that pop up sometimes if there is an emergency, if your house burn down because you live in los angeles, if there was a medical situation you weren't prepared for, that tips

you into an emergency situation where you have no funds and a breathing room, essentially. rodney: that is the challenge. it is the unplanned expense. the dog, the pet care with the emergency procedure. the fires in california when all of a sudden you need to immediately get to a hotel and you are already on a very tight budget. it is things like weather. the east coast has had a ton of winter challenges this year. that requires additional expenses. and less hours. think about people working hourly that can no longer go to work because of weather. when we see the top reasons it is auto repairs, medical bills, utility, rent. that is shocking. but a lot of that is unplanned when it comes. they need solutions. scarlet: solo is the largest community finance platform in the u.s.. you try to offer advice and steer people in different directions. you mention alternatives.

what are lower-cost alternatives people can turn do as opposed to just putting it on their credit card? rodney: this report was brought to existence with great partners like the aspen institute, pace university and the global black economic form. the findings are pretty widespread and radical. mainly, the traditional products like credit cards are significantly more expensive than fintech products and credit cards as a whole charged about $19 billion of fees in excess of the apr. i know that apr is kind of the billboard in terms of cost assessment, but it is not the only cost. and it is not the cost that causes the most damage. the report says, that is the cost that causes the biggest problem. a lot of fintechs do not share that structure. we are one of the fintechs. what is different about solo

funds is this is community driven, people lending and borrowing from each other. it's like a person was a little extra savings giving back to a person that needs it. they are sharing in their own economic outcome. i think that the power of that, also, if you have never seen the natural distress these types of consumers have with financial services versus the trust they have in each other i think this is an example of that. scarlet: peer to peer lending has been brought up often and is perhaps more necessary than ever. thank you so much. rodney williams is cofounder of soto funds. we have more coming on bloomberg markets. coming up, back to the investment world. there was one fund manager able to pick stocks better than the rest including passive indexes. who is he? how was he able to outperform indexes and his peers? all of the date and the details next. this is bloomberg. -- data and the details next.

this is bloomberg.

scarlet: breaking news on venture global and natural gas company that began trading today after the company cut its ipo price by about what he percent. it ipoed at about $25 per share and is now trading at 23.95. this is a company that had to cut pricing by about 40%, giving you a sense of the direction here. the down arrow perhaps not a surprise with the market cap and out of about $50 billion. the results are in. one investor beat the rest in 2024, adam benjamin, the 53-year-old that took control of fidelity's selective semiconductor portfolio in 2020. after two decades focusing on the industry. that fund has outperformed more popular passively managed indexed funds for the past -- first time in four years.

the data speak for itself. neatly compiled in a new bloomberg opinion piece published this morning. we are joined by the writer of the piece matt winkler. great to see you. matt: great to be with you. scarlet: the returns on this are impressive for the fund. i am curious what the benchmark was for adam benjamin. the s&p 500? the philadelphia semiconductor index? who does he compare himself to? matt: every index that includes the stock market is a benchmark but you start with semiconductors themselves. there are indexes that actually track the industry. that would probably be the closest, if you will, the s&p technology index would probably be the one that he would be using as a benchmark. having said all that, he actually crushed everyone -- one of these indexes. you mentioned the philadelphia index. it is a semiconductor index. the handle -- he handily beat

it. there really is not, among the passive group of funds last year, that came close to matching his performance. scarlet: when i think of the chip sector i think of the mutual fund to be that as well. what specific trades did he make? what strategy allowed him to beat this fund and others? matt: there are a handful. but this is exactly what he does. he has of course been bullish on nvidia. before a lot of people were. and he still is. that is a big part of his performance. consistency there. there are some other things. broad calm. -- broadcomm he decided to purchase in september and the stock increased 48% in december. that was not an accident. he has known a company that was

private for a long time called xterra labs and he bought the ipo in the spring last year. then he pretty much doubled his holding of it in -- and of course it took off for the rest of the year and this comes from his own understanding. what is really relevant to your question is when everybody else was loading up on intel, he did not own any of it. that contributed to his performance as well. scarlet: intel had a really rough year, making big transitions, having an identity crisis in many ways. we have about 30 seconds. what was adam benjamin before he became a fund manager? what is its background? matt: somebody who has been most knowledgeable at semiconductors going all the way back to the beginning of the century. it is really what he does all the time. scarlet: so he is intimately familiar with the industry? matt winkler so much bloomberg

news editor in chief emeritus, check out his column on the bloomberg terminal. i'm scarlet fu. that does it for bloomberg markets. balance of power is next.

♪ announcer: from the world of politics of the world of business, this is "balance of power." ♪

live from washington d.c. ♪ joe: donald trump or lance in the disasters. welcome to the faster as you get the president makes his first trip out of washington since the inauguration, visiting north carolina to see the damage left by hurricanes, and california, of course, damage left by wildfires, some of which are still burning. i am joe mathieu with kailey leinz in washington. welcome to the early edition of "balance of power." based on what we are hearing, the response and funding to clean from these disasters could be more complicated. kailey: he did say more funding is coming, that they would be supplying it, though he didn't get into specifics on numbers he would be requested from congress or what role is and he states would have. he also suggested states should be taking over emergency response. that fema goes into the disaster zones -- and that needs to be