sonali: welcome to bloomberg markets. i'm scarlet fu. stocks falling and bonds surging. the s&p 500 losing ground for a fourth straight day after u.s. consumer confidence fell by the most since summer 2021. you can really see the pain in semiconductor companies. the sox index down by 1.5 percent as of the white sketches out a tougher versions on curves

of u.s. chips to china including the number and kind of ai chips that can be exported without a license. there was a clear bid for bombs. you can see the 10 year yield coming down 10 basis points to 4.3%, the lowest of 2025. traders are now pricing in two full rate cuts this year. bitcoin sinking below 90,000. currently at 87,500. now a couple individual equity movers. let's check in with bloomberg's emily graffeo. emily: a risk off day in markets. leading the losses are tech stocks. tesla one of the biggest losers in the nasdaq 100 down 8% in its biggest drop since december. there is some company specific news. today, the european automobile manufacturers association said sales of tesla vehicles in europe sank 45% last month across the region even as ev sales soared 37% for the overall

industry and sticking with tech stocks seeing chipmakers down. nvidia heading into today down about 1.4%. but it had been down as much as 5% on the news you mentioned earlier. bloomberg news reporting trump's administration is pressuring u.s. allies to escalate chip restrictions on china and intel is also fallen on the news down about 4%. for nvidia now down over 10% on the month. its earnings reports is tomorrow. those earnings are all the more important now that that stock is really feeling the pressure. finally, shares of unitedhealth group. that stock is down about one point 6%. the stock really fill after a report from the wall street journal that the u.s. senate is now launching an inquiry into the company's medicare billing practices. the journal said on monday senator chuck grassley sent to the united health ceo a letter demanding detailed information regarding the company's medicare billing practices coming after

the stock was crushed last week after the doj is investigating those practices. scarlet: thank you for the highlights of the different movers. emily highlighted declines we are seeing in nvidia. billing for mag seven as a group they are in correction mode down more than 10% since there are high in december. the s&p 500 at a six week low. i should say, the nasdaq 100 at a six week low and that s&p down about 3.5% in four days. how would you characterize the weakness we see in parts of the stock market? >> scarlet, we have to talk about the elephant in the room, the magnificent seven. you look at the selloff today

and it is very instructive. large gross that is, 54% is the magnificent seven, roughly 54% of the russell 1000 growth index. that is down about 200 basis points. largely, value is up 10 basis points. small caps. they are causing a lot of what i think our distortions and in the market starting with their concentration, roughly one third of the s&p, as i mentioned, a big chunk of the growth index. with that, i think what becomes

important is when you look at the valuations relative to the rest of the that, i think what s important is when you look at the valuations relative to the rest of the market. look at the russell 1000 growths important is when you look at the valuations relative to the rest of the market. look at the russell 1000 growth versus russell 1000 value. it is going to correct. when it corrects, given the concentration, the market will look like it is selling off a lot, like today. scarlet: a reassessment, rethinking here. emily mentioned nvidia will be reporting results. a blowout earnings report from nvidia, could that turn the tide here? has it seen enough selling that the bar for what investors expect has been lowered sufficiently? nir: you know, i'm not sure. one thing to look at his over the last decade to magnificent seven has grown earnings collectively by about 37% per year. the rest of the s&p 500 has grown earnings by about 5% per year. that's a monster spread. dentistry. the market is forward-looking.

what are we expecting? wall street analysts, the consistent estimate over the next three years is earnings growth of 15 percent. the rest of the field? also 15%. if you look at those estimates and say they are probably bent into the market what accounts for the valuations spread, the continuing valuation spread, the magnificent seven and the rest of the field? the best answer i can give as i think investors are expecting higher earnings growth than analysts are estimating. will that come in? i do not think that one earnings result from nvidia will make a big difference. i think it will come down to, can they sustain the growth of the past 10 years? wall street analysts say no. i am with the wall street analysts. i'm very suspicious if at their current size they can sustain the gap we have seen recently. scarlet: a move away from growth names and towards value names. what you think about ripples pop --tariffs and the overall

market? nir: i looked at this in a recent column and tried to line up the tariffs with the market and discovered that he hasn't by 500 by weight is mostly technology and health care, not places that these tariffs are expected to hit. given the concentration of the market i can very easily see pain because of the tariffs, but going to sectors that aren't well represented in the market now like consumer discretionary's, material, that will affect those companies but not in a market dominated by tech. if you see in the magnificent seven lots concentration in the market all of a sudden the tariffs good start to show up in the broader market. but it is too soon to say.

scarlet: always a pleasure speaking with you, nir kaissar bloomberg opinion columnists. safe havens seeing higher prices meaning lower yields, pretty much what the trump administration, from treasury secretary scott bessent to elon musk are looking for. for more on the 10 year yield's new role as a scorecard let's bring in bloomberg news chief correspondent from global macro markets let's mccormick. to what extent is elon musk trying to impress at bond market with the doge teams across the board cuts? they still and the reason yields are down today is not really what the administration wants. elon musk feels like the bond market should be rewarding and real reward in the future. and scott bessent has said the same thing. for what they are doing to try to cut excess spending through

doge and overall and that bond investors will expect less premium to invest in treasuries, 10 year treasuries, because they see the administration doing what it needs to to get to the deficit. the bond market, despite lower yields today, is a little bit light, let's see how it pans out, right? elon musk does your like he should be rewarded for what he has done so far. scarlet: the reason yields are lower today is not so much people being impressed with cost cuts as a growth scare across the board. we know the new treasury secretary clarified when trump says he wants lower rates, he does not necessarily mean he wants the fed to cut rates. but, he is looking for the 10 year yield to stay down because it is the benchmark for so many borrowing costs in the united states. at the same time if the fed is not in rate cutting mode it is a little bit hard for the 10 year yield to stay lower. liz: if the fed had to turn

course and hike rates it woulds be hard for us to see long end rates fall. even now pricing in a little more fed cuts down a few days ago because of the economy. but you are right. scott bessent dent the administration made here we aren't talking about getting our hands in fed policy. we think our policies will bring rates down. but, we know by the math that the overnight funds rate is at the base rate for everything. if that rate is not going down at all, it at least lowers the trajectory of how much longer rates can go down. so, they are somewhat tied to it. but, they do feel like they can do policies that, over the long run, the administration overall, the bond market will reward it. i don't think we know yet. just being impartial. most investors are saying, most of it is good. i like the signs that maybe they will cut defense spending. something they have not before. at least, they are talking about

it. but we don't know. as you know, we have to see what comes out of congress, what for tax cuts are juxtaposed against dan net-net what it means for the u.s. deficit trajectory. those are the real things that matter. scarlet: as much as dougie bob said it cut $55 billion in costs, when you dig deeper and numbers may not matter. bite not move the needle when it comes to the debt burden. liz: our whole last fiscal year we spent over $1 trillion just in interest costs to service our debt. what doge is doing so far, again, nice direction but it does not really move the needle on if we want really sustained, significant deficit cutting. we will give them time. but so far, the numbers aren't that big for the big picture. scarlet: liz mccormick wrote today's a big take on the topic. read the story across our bloomberg platforms. coming up on markets, a stock

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scarlet: this is bloomberg markets. home depot is higher today to find broader market selloff after comparable sales for the quarter past two turned positive after a string of losses for let's bring in kate mcshane from goldman sachs. she has a buy rating on home depot. i am looking at home depot as the biggest gain or in the dow industrials.

aside from that comparable sales number fourth-quarter what are you seeing in the details of the results and the commentary supporting the stock? kate: first and foremost, same-store sales were much better than the street expected and as you pointed out, it was the first positive comparison since we have seen it since the third quarter 22. within that sales growth number, transactions and tickets are the two components of sales growth. transaction represents a growth or traffic that was a positive too since the second quarter 2021. so there was real dumb flexion we saw today that i think the market is responding to. there was a very positive commentary around re-engagement in the home-improvement space. they are starting to see mark green shoots with regards to consumer demand for home improvement. it remains an issue for a bigger

home improvement like bath and kitchen renovations still requiring some kind of financing where rates are very high. scarlet: that makes sense, yet the full year outlook home depot gave was weaker than expected weather looking at the revenue growth number or same sources sales number. how do we square that? kate: i think there's a degree of conservatism here. we are still operating in a pretty muted housing environment. really, home depot comps have always been the most highly correlated to fixed residential investment at home price appreciation. but what has been dragging the comp down for them and others in the space have been low housing turnover. that has been, as a result of these higher mortgage rates and people being locked in and very, very low mortgage rates, much lower than they are now.

the outlook for housing turnover, while slightly better, is expected to remain muted in 2020 five. i think that is the basis from which home depot is facing that 1% comp. scarlet: we saw her early on in the fourth quarter earnings season that that lack of detail really hurt some companies, thinking of gm in particular. what about goods imported from mexico, canada, or china? kate: we have only had a few retailers report so far and give guidance. they have been given guidance without any impact from tariffs. i think part of that is due to the fact there is still some uncertainty with how that shakes out but more importantly for

home depot they are not necessarily importing a large amount of their products internationally from china, from other areas being impacted by tariffs. they do have some pricing power. about two thirds of what they sell is defensive. things break in the home and needed to be replaced. when they do there is less of a degree of elasticity responsive prices have to go up. there were two things to consider. one is exposure to tariffs. yet other is pricing power. i do think that between the fact that they are not quite as exposed to tariffs along with the fact that they have some pricing power i think helps navigate this for them. scarlet: what kind of expectations does this shift from lowe's later this week? kate: good question. i think if home depot had a

slightly better quarter than expected lows probably did as well. probably what drove a slightly better quarter was some hurricane demand that has been as a result of the hurricanes in the fall. lowe's will get some benefit from that as well. loads gave preliminary guidance for fiscal year 2025. there should not be too much of a difference from what we hear tomorrow versus what they talked about in 2025. scarlet: lowe's shares up two point 7%. kate mcshane is managing director of global investment research at goldman sachs with a buy rating on home depot. coming up the bank of america ceo brian moynihan sat down with bloomberg today to talk about regulation, stress tests and the new trump administration. we have part of that conversation next on bloomberg.

scarlet: this is bloomberg markets. a growth scare pushing equities lower. look at the s&p 500, not so much of the dow industrials. the s&p 500, heavy with technology names down .4%. look at the technology names. semiconductor companies in particular with the white house sketching out cover versions of existing curbs on u.s. chips to china pushing that group lower in addition to nvidia getting ready to report results tomorrow with plenty of bind in treasuries. the 10 year yield coming down to 4.29%. risk off the sentiment extended to crypto with the decline of now below -- with bitcoin now below 87,000 dollars. financials lower in the s&p 500. bank of america down for a six straight date currently off by 1.5%.

earlier today brian moynihan spoke to david rubenstein at the economic club of washington discussing bank regulations with various u.s. administrations at how stress tests show the health of the industry. lesson. brian: the stress tests are publicly available. every year you can see their report card of the bank industry itself and every year the bank industry has great health. but the issue we got with the bank industry suing the fed was behind-the-scenes the rules cap changing. think of the last four or five years with volatility in capital requirements. went from 50, 75 basis points up and down the year. 10% downturn in the equity markets, 30 percent drop in housing, 30%-40% drop in commercial real estate.

high yield spreads by 1000, 2 thousand basis points. the same test proves a different result that did not make sense. behind-the-scenes, transparency was not there. stress tests are a very good thing. it gives the state of the health of 31 banks that cover most of the industry. we do stress tests every quarter in multiple scenarios. our trading book is stressed every day. if you think about it it's a good thing. behind the scene, dials are being turned. numbers are becoming irrational to the market. we have investors and we have to have capital available for the industry. david: there was a vice chair of the federal reserve in charge of regulating the banks. that person gave up the position recently. it is -- is it something the banking community was happy about, that he stepped aside? brian: he had a year left on his term and the new president would appoint some new to that

position. people always ask me, do you have different approaches for different administrations. as a long-term, we have been around since washington was president. if we geared ourselves up for this present, and that -- not that present. think of how many different prime ministers. even in my tenure as ceo. at the end of the day you run the company the right way. we are saying, get a structure and have it stick to the ribs. if you keep swinging like this, our clients can't depend on us when they need us. scarlet: brian moynihan the ceo of bank of america speaking with david rubenstein. in terms of where we are standing with financial markets, bank of america with 20 out of 24 members of the kbw bank index lower in the s&p 500 down .4%. the magnificent seven that i did not include on the board is in correction mode done more than

10% since its record high september 17. all of this before nvidia reports earnings tomorrow after the close. i'm scarlet fu. that is it for this edition of bloomberg markets. balance of power is next with joe mathieu and kailey leinz. 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.

>> from the world of politics, to the world of business, this

is balance of power. live from washington, d.c.. joe: prove it time for the house. the faster show in politics. speaker mike johnson casts fresh doubts on whether his republican conference can actually pass a budget resolution today. i'm joe mathieu alongside kailey leinz in washington. welcome to the tuesday edition of balance of power on bloomberg tv and radio. it's not like mike johnson is trying to convince democrats to vote for this, just trying to wrangle members of his own republican party. kailey: yet there are multiple members of the republican conference in the house that suggested they will vote no to the bill, tom massey, victoria spartz, warren davidson told reporters today he's not for this budget resolution because he wants government funding that