>> the market is paying for quality, so it is back to selection. >> we're so dependent on large index stock flows, it will hit those big mag 7. >> it is hard to say we will have a big upside. >> high expectations for big economy impacts, so we are seeing a slower online. >> under the hood, there is rotation and that is dampening volatility. >> this is bloomberg surveillance with jonathan ferro, and annmarie hordern. jon: good morning, good morning.

bloomberg surveillance starts right now. coming into thursday just about snapping a four-day losing streak on the s&p 500, equity futures with a bounce. the s&p 500 up zero point 6%. the nasdaq 100 up a .63%. the big event is nvidia in the premarket with the tiniest of bounces up 0.98%. jensen huang says that demand for blackwell is amazing and the street calls it underwhelming. lisa: can we say that it is that exciting? it comes down to the nuance of how expensive it is to make these chips at a time when there is a lot of competition growing elsewhere. this was all around a great report. there are a lot of signs that it is a beat and arrays once again. sales guidance were about what people expected but the smallest beat in two years. operating margins coming down i think is the focus. jon: the economic data later this morning at 8:30 eastern time, jobless claims.

why are jobless claims more important? they are more important following the cuts we are about to see in washington, d.c. yahaira: lisa: two things people will be using claims for. one is how steep the doge cuts have been, how concentrated they are in specific states, a lot of state-by-state dissection of what the details show, and the new layer on top of it the idea that we saw a huge growth scare repricing fed cuts into the market. do you get confirmation of that with jobless claims going up or not? do you get a rebuttal with the idea that we are still in this pretty calm place? jon: annmarie is in washington, d.c. this morning. we go to the calendar once again. march 4 next week, 25% tariffs on canada and mexico. in the middle of march, 25% tariffs on steel and aluminum. in early april, reciprocal tariffs, the eu might be in

trouble. it is canada and mexico next week or the following month? lisa: president trump suggested it might be april 2 that the canada-mexico tariffs go on versus march 4. the white house said, no, march 4 is still the time. i don't know where the confusion is coming, but we still have the deadline. the market immediately priced in we may never get the canada and mexico tariffs, but it highlights the uncertainty and lack of conviction. how much of this market is not pricing and the likelihood of canada and mexico tariffs. jon: equity futures right now on the s&p are posited by 0.6%. your lineup looks like this. we begin this hour with stocks

higher as markets digest nvidia earnings and a little bit of confusion on the tariff front. writing, for all of the concerns about tariff policy the market seems more worried about growth than inflation. chris, good morning. i kept going over your quote from the last time that we spoke. do yield speak to some economic weakness or support cyclicality in the equity market. is the equity market answering that question? chris: that is what has been so important about the move in yields. it hasn't re-catalyze the leadership from the market's more cyclical corners. it's a change in the character of what we've seen over the last 18 months, where you would get relief in yields and re-entertain the broadening of the market, cyclical or small cap leadership. you haven't seen that to any great extent. what we ask is, are lower yields

more reflective of something sinister with the economy moving forward? i think that the jury is still out. financials are good, but it would be silly to not entertain that. jon: what you see in credit in high-yield and more speculative parts of fixed income? chris: it is still remarkably benign which is why i don't want to get too carried away with the growth scare call. at the end of the day of something sinister is out there, you will see it through the lens of weaker financials, weaker banks, weaker credit.we cannot check those boxes yet . we put out a note last week of some caution, but i don't want to get to over my skis until you see changes in credit and financials, which you haven't gotten. lisa: jon was laughing at me the other day when i said that if you get a good option that could be a bad thing too. how much more bearish can you get? is it telling of where valuations are in risk assets?

that a rally into bonds could be e viewed more to the negative. if you get a selloff to bonds it could also be a hit to valuations at these levels? chris: i think what you described is simply a game of expectations. we entered 2025 with the expectations game very full domestically and light elsewhere. what have we seen to start the year? europe and china easily exceed low expectations while we have struggled domestically to meet the bar of high valuation. maybe deteriorating technicals and the like. the expectation stocks the position -- expectation junk -- juxtaposition. if you look at where i would expect to see higher bond yields, you aren't seeing it. it goes back to the market may be has more growth concern on its mind than it does inflation. one last big point, while we

have seen cyclicality weekend avesta clay, i think that it's important that we haven't seen that elsewhere. cyclicality hasn't been local. it is alive and well in europe and really alive and well in china. it seems like cyclicality just migrated to other parts of the world. lisa: you nailed it when you said that it has been a game of expectations and a lot of it is the money moving to places where it seems that valuations are less extreme. any further decline in yields or deterioration in equities has to come on true evidence of true weakness in the u.s. versus simply a read occurring of capital flows? chris: at maybe 4:30 this morning, the two-year average is about here. the last two years you've made

no progress. as much as you want to take credit for yields lower, the reality is that no one has made money on either side. it has been a range. at the end of the day, where's the bottom of that range? somewhere around 390. at the end of that you say, what is the market messaging about the economy? i think we are ok. the market is digesting expectations. we don't want to see the internals get worse. 65% of stocks on the two day moving average, that turns a split market into a bad market. jon: europe versus the united states, china versus the united states is also taking place at the fixed income level. 10 year government bonds in america are climbing. china is rolling over aggressively. it is likely flipped. chris: a really important change. we have been very much in the camp that what was beginning to play out in china over the last

year was reflective of 2008-2000 nine domestically where you were in a financial crisis and you couldn't get stabilization until the short end of the bond market stabilized. the two years in china are up over the last six weeks. i think that that's essential to really changing the tide and the narrative. you've had these fits and starts of rallies in china over the last year, but this is the first one where bond yields have gone up. i think that's an important change. look at the leadership in china. financials have broken out. tech and semis are your leadership. it is a clean leadership set up in china. the market saying that we are past the worst of the economic recession. jon: a massive shift backed up by bond yields. stateside we have a dislocation the equity market. the mag 7 down 10% from all-time highs in december. what does the team do with that now?

what is the approach to tech? chris: i will say this as someone who is not a level sensitive investor. i like to think about the character of a market or what the leadership looks like, but this is a year where you have to be level sensitive because the mag 7 is not monolithic anymore. nvidia is up modestly after what seemed like good numbers. that raises an eyebrow to me when you cannot respond to good numbers. it really hasn't made a new high since june. a fractional high last year, but not really since june. when you look at mag 7 or large-cap tech broadly, the other big story is that it keeps relative to the s&p the same day that dollar-you -- dollar-yen peaked. to think they are not related would be silly.

to the degree that that has changed i think it is important. lisa: how much is this in tandem with the fact that the dollar is weekend versus strengthened? how much do you see a stickiness to the reversal in flows, the idea that countries that used to be huge investors in the u.s. are suddenly seeing more in favor at home? chris: capital goes where capital is treated best. for a long time when the interest rate is fixed or oppressed, that rule was out of the window. that rule is back. look at japanese two-year yields or 10 year yields and i think they tell you the whole story. more from the boj. i think dollar-yen is telling us they will surprise to the hawkish pair. look at every yen pair. you have put a major bottom in yen. what does a stronger yen mean moving forward, less money east to west. who has been the biggest

receiver of these flows? over the last decade i don't think that these things are entirely coincidental, there is some causality. jon: dollar denominated assets, part of that story has been big tech and the mag 7. chris: that's the reason why we are talking about the dollar-yen and how that coheres with the peak that we saw in the magnificent 7 is important. i think about the credit pockets that the japanese investors are some of the biggest investors in. when is this due to potential dislocations down the pike? jon: smart as always, one of the best. appreciate it. dollar-yen. dani: president trump gave conflicting messages on the future of tariffs. the president said that tariffs on canada and mexico would go into effect in april instead of the march deadline. white house officials clarified

that the deadline does remain next week. trump proposed 25% tariffs on the eu without further details. a check on shares of nvidia are higher by 1% in the premarket after initially trading flat. earnings beat analysts estimates but gross profit will be tighter than expected as it rolls out its new black will chip. those results amid concerns about whether ai capex would slow and potential impacts of u.s. tariffs. amazon's cloud unit built its first quantum computing chip. the hope is that quantum chips will lead to advancements in fields like chemistry and health care. amazon web services named the chip ocelot. coming up an interview with amazon ceo andy jassy. that is your brief. jon: more from dani in about 30 minutes. tariff uncertainty. >> mr. president, can you

clarify the canada-mexico tariffs? the 30-day pause -- pres. trump: 25%, april 2. for everything. jon: is it march or april? we will try to get clarity in a moment. live from new york city this morning, good morning. ♪

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jon: equity futures on the s&p 500 are up by 0.6%. the bond market yields bouncing back by five basis points. quite a run of lower yields. the 10 year now, 4.30 77. under surveillance, tariff

uncertainty. >> mr. president, can you clarify the canada-mexico tariffs? when does it go into effect? pres. trump: april 2. for everything. it will be 25%, generally speaking, and that will be on cars and all of the things. the european union is a different case than canada, a different kind of case. they have taken advantage of us in a different way. jon: president trump causing a little confusion over when tariffs on canada and mexico will be enacted. a white house official saying later on wednesday that the deadline for levy's remains march 4. annmarie joins us from washington. annmarie: it is confusing. we heard from the commerce secretary yesterday at the cabinet meeting who seemed to insinuate that there is potentially a path forward for another pause with canada-mexico if they were to really come in

with solutions to stem the flow of migrants and fentanyl. we are five days away. like the markets, i am also confused. here to help out is our friend from pangea policy. it is great to see you in person. should the markets be believing commerce secretary howard lutnick or donald trump? terry: the answer i think is yes. the decision has been made. they deploy strategic ambiguity, a phrase familiar to the taiwanese. they think that that is part of the omega and they will continue to do that for a while -- that is part of the dealmaking and they will continue to do that for a while. they have said all along they will look at reciprocal tariffs in an april timeframe. this is very much flying by the seat-of-the-pants until then. annmarie: even if we get some

tariff level next tuesday, five days away, around the corner, does that mean that the level could rise to 25% for those two trading partners by april 2? terry: it could rise or fall. one of the things that secretary of treasury scott bessent has been specific about is talking about it is a path-dependent decision on a lot of these things. in this case, the path is dependent on what the other countries actually do in response to what the united states wants. annmarie: so, choose your own adventure. if you're the leader of mexico or canada, what concessions are you offering the oval office? terry: you want to continue to push on border. show them you are serious about the border and you want to continue to show them that you are serious about the flow of illegal drugs, particularly fentanyl, into the country, because that is what the administration says that they care about. and you want to frankly talk to them about autos.

they will perceive that as a trump weak spot, but that will benefit all countries to figure out how to massage that. annmarie: we have heard from the ford ceo talk about how this could "blow a hole" in the industry. what should the european union be doing right now? terry: as aggressively as possible talking about ways to mitigate whatever they think that the problem is. one thing that the united states doesn't know, that the european union doesn't know, is frankly what the united states' interest is. purely economic or some other issue? my suspicion is that trump is using the european union tariffs to keep the european union in line on ukraine. annmarie: there is also the united kingdom. keir starmer will be in washington, d.c. today in a joint press conference with the president at 2:00 p.m. and hopefully we will learn a lot.

in congress democrats and republicans are reintroducing a bill to try to get a trade deal done between washington and london. do you think the fight trump will have with brussels will get keir starmer to the finish line? terry: the u.k. very much wants to differentiate itself from europe in this regard. this is tough for the labour party to do because they are more europhilic in that regard. but you have keir starmer being pressured by the party out of power to do a deal with the united states at a time when growth in the u.k. is almost impossible to come by, so it could be a win-win for keir starmer for sure. annmarie: already do you think that keir starmer is being treated potentially differently than the european union? terry: very much so. trump has always treated the u.k. distinctly from the european union. when trump came to office in

2017 it was just after brexit, and he has always wanted to p -- wanted to pump up the special relationship in a variety of ways and we will see economics take center stage. annmarie: if you look at the entire trump 2.0 agenda in its scope, part of the tariff plan is to offset tax cuts. there is a fight going on between house republicans and senate republicans on how they will enact that agenda. there is a wonky debate over if they cut taxes from current policy versus current law. potentially, depending on which way they go, it could mean trillions of dollar on paper or potentially costing no money. can you explain this flashpoint in the debate? i think it's important. also, which way they will end up going? terry: i have been banging on about this for a while and it is starting to go public. current policy versus current

law. what happens is, these things get scored in congress as current law. current law assumes the tax cuts will expire in current policy assumes the opposite, that tax cuts will continue. what happens in tax cuts, wonky but important, is that the tax cuts become much larger and the pay forwards become much smaller because of the assumption. annmarie: if they cut from current policy does that mean that trump has fiscal room to add in more of the tax aims that he talked about on the campaign trail? no tax on tips or social security? right now, that's missing from the house plan. terry: my favorite example -- in the new york area, it blows a huge hole in things but not if you're going from a current policy baseline. you get that room, yes. annmarie: can johnson through

current policy get the fiscal hawks on side to vote for that? terry: eventually because trump will pressure them into doing it. annmarie: where else can they get offsets? terry: i don't think they will be able to get the amount of savings in medicare/medicaid they would like. they look at it as efficiencies. that will be draped around their next. annmarie: they say they are cutting from medicaid. terry: you can cut from the infrastructure of medicaid. you can assume that maybe there is too much underneath it all. annmarie: that would technically be a medicaid cut. terry: which allows the democrats and others to hang it around trump's and republicans' necks. that is one thing driving them towards this current policy baseline. annmarie: another cloud on the horizon, 15 days to a government shutdown. you think that they shut down? terry: i am at 40% today, which is high and rising.

you have three parties, democrats, republicans, and trump. two of those -- i look at him as free roaming rather than anything else -- but two of those are advantaged from shutdowns. democrats want to show people that they are against cutting things, the spending cuts. it allows them to run against elon musk. trump can be advantaged by saying, look at what these people want to do. they want to stop government efficiencies, stop what we are trying to do. which, on its face, is pretty popular. you might stumble into something. annmarie: you have the opportunity from either side to spin it? terry: yes. do i think it will be disastrous? no. annmarie: thank you so much for joining us this morning. jon, a lot of confusion in washington, d.c. when it comes to tariffs, and we have all of

these dates to pay attention to we almost forgot 15 days away we could be in the middle of a government shutdown. jon: we can only think about one thing at a time. at the moment, tariffs. people pausing. how many times have you seen the phrase "wait and see" from an executive over the past few days? lisa: you have to wonder how much people are making excuses for overall changes to consumer appetite? they want burgers and not salads. we are seeing this more and more. jon: we will catch up with joseph moore of morgan stanley on nvidia's good but not great earnings report. ♪

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jonathan: equity futures on the s&p 500 up 5.6%, just about -- by .4%. check out the bond market. a mix of uncertainty around trade with weaker than expected economic data taking 10-year yields lower for six consecutive sessions. this morning higher by five basis points. lisa: it has been to give the scott bessent who looks at the 10-year yield everyday. guess what? the treasury department had options that have been incredibly successful with a huge amount of demand.

how high is the bar for this to continue given the fact the economy is uncoupling and people are feeling bad, but they are still spending? a difficult equation where there seems to be a rewriting of what the fed will do. jonathan: jobless claims just around the corner. look out for that economic data at 8:30 eastern time. over seven consecutive weeks of falling 10-year bond yields. that has taken heat out of the u.s. dollar. euro-dollar. 104.79. dxy, weaker for four straight weeks. the longest run since september. lisa: how much is this just a reversal of what we saw the end of last year with flows changing, capital going where it is treated best? places like japan. in china. how much has the story played out how much is this going to be

fueled by something that happens in europe in the investment and defense or if there is evidence of a weakening u.s. economy? jonathan: i think there's a difference between capital being pushed away and capital being pulled away. at the moment you can argue capital is being pushed away by the uncertainty around policy in the u.s. they could come back when you get clarity. prayer to be pulled away, you want to see better earth and -- growth in europe and trends. lisa: that's why everybody gives you a long dream list of reasons -- laundry list of why you should feel bad about what's going on with u.s. policy and uncertainty. they still prefer the u.s. over everything else and we will not pull our money out. what are people doing verses saying that first essay? -- doing versus saying? jonathan: on our radar, president raising questions on tariffs.

levies on mexico and canada will go into effect on april 2 after previously saying march 4. trump proposing 25% tariffs on the eu without further details. lisa: erases more uncertainty around the timeframe for tariffs that the market is largely discounting. it highlights how people have been saying this is a negotiation with these trading partners and would be catastrophic to certain industries. the fact that president trump single-handedly shifted it back a month is double down on that. you can see the mexican peso doing well because people are retracing expectations. jonathan: i will do something dangerous and try to read the tea leaves. this is that the take place next week. 25% tariffs on canada and mexico. if he was serious about 25% tariffs, wouldn't you know the difference between the dates of early march and early april?

and how one thing is early april and another thing is early march? maybe you could say there was a sense of confusion and we can clarify things. i would have thought this administration was serious about putting 25% tariffs on mexico and canada, they would all be on the same page about when that will happen. lisa: i think everyone agrees with you, markets and beyond. they goes back to what are they trying to accomplish? what are the deliverables going to be that you can announce from said meetings that are ramping up to the march 4 deadline versus is this a renegotiation of the trading partner between mexico and canada? why canada? why are we going after them? jonathan: it is consensus. maybe it is. they consensus think is dangerous on this issue. i find them incredibly unpredictable. that could be the case if they go forward next week. lisa: that's why it's important to understand what they want. do they want some sort of kiss the ring or something

superficial? does the political will in canada not there to really deliver that because there's so much anger toward the neighbor treating you that way? it raises these questions, like the rare earth deal with ukraine and what we saw there. seems like it was a comportment thing in the way the relationship was between volodymyr zelenskyy and donald trump. jonathan: the prime minister keir starmer arriving in washington ahead of his first meeting with president donald trump today. expected to push for a deal with the united states reinforcing a truce between russia and ukraine with some security guarantees. starmer is doing with the president wants to see, offer to push of defense spending and pulled back on aid spending. lisa: that's giving him a win. how can he deliver that? yesterday he mentioned about jobs rod back from apple. we talked about that. he wants the wins.

prime minister keir starmer is going from her and being smart about how he's framing this by saying the u.s. needs europe to succeed for its plans to be successful. that is the reason why they need to be invested in the success of ukraine. this is for you, not for us. this is really our strength is really a benefit for your greatness. jonathan: annmarie is in the nation's capital and will bring coverage of that story later. the earning story of the last 24 hours, nvidia reporting mixed results. the fourth quarter sales topping estimates by the smallest margin and some two years. the company warning gross margins would be tighter than expected as it rolls out its new black will chip. the stock is up by 6%. joe moore raising his price target to $162, citing momentum and the large-cap ai semi space. welcome to the program. appreciate you coming on this

morning. i'm sure it has been a busy 12 hours. what gives you confidence we can achieve that price target? joe: you have to look at this quarter through the lens of a product transition. two thirds of the data center revenue roughly came from hopper, which is clearly behind what blackwell is. you had customers transitioning from hopper to blackwell. there have been some well discussed supply issues with blackwell with the various complexities of the systems and the solutions they have. they grew the data center business 18% with that backdrop. everything they said about blackwell demand is what you wanted to hear. the gross margins were not as good as we hoped. that will take them -- we are past the worst of all of it and i'm looking forward. we have a strong second-half ramp for blackwell. we are in a robust ai spending cycle, not a bubble.

this was a very good result in the context of transitioning to a new product, struggling with the productization of the new product. they have done a good job with that. from here everything gets better. jonathan: what do you do when the stock does not recall to a -- respond to a good result? any information you can take away from that story? joe: sure. to your point, it's a good result looking forward. there were some issues around it. the gross margin pressure was a little unexpected. that's a bit of an overhang. we highlighted coming into the quarter for the third straight quarter we have a situation where inmate quarter people worried about -- in mid-quarter people worried about certain issues. i thought some of the previews were a little high. there are some expectations issues in the near term.

gross margin issues. they will be an overhang of what the government export controls look like. we are now heading into a strong product cycle. you have the backdrop of every hyperscalers saying how much they are investing in ai. i think you could foresee some of this. if they stay strong to the end of the year and visibility remains strong, the stock can get to new highs. lisa: sit on the idea of the margin question a little bit to understand the why behind it. it seems like there are two futures. the cost of the new data center equipment was significantly higher than in the past. as they develop more advanced technology it will cost more. they also have to pay their people more because they are trying to attract top talent. how many of these issues potentially are longer-lasting and more permanently cramp their margins when some of the big tech companies are under

pressure to pull back a little bit? joe: most of it is temporary. when you talk about the margins getting back into the mid-70's in the latter part of the year, that's a healthy number. we have been in the high 70's before. it's always been a little frothy. the mid-is the place to land. we can see here the complexity of blackwell has been significant. what they are attempting to do moving people to rack scale solutions where there is multiple issues you incur above and beyond the chip, that's the primary issue. it is the cost of expediting. it is not yields. the demand is for more blackwell than anticipated. no issues with the manufacturing of blackwell at this point. it is costing them money. it feels a little temporary. going forward, you may see the company be a little less

ambitious on the roadmap issues. we are so far ahead of the competition here that they don't need to push the envelope on manufacturability. when you see blackwell ultra, there's more focus on let's make sure we are staying ahead of our competition. let's make sure we are ambitious in what we are doing at the systems level. let's make sure we don't have staff moves in terms of deliverability and i think we will see all of that. the equipment is very expensive, no question. we just heard a resounding commentary across the ecosystem that people are willing to make these investments. the gross margins will take a little longer to get back to the mid-seventies but we will get there. lisa: how much was this earning season designed for an audience of one? so much of the report was talking about the u.s. companies and how wonderful they are and

the idea of u.s. dominance. it was entirely discussing american technological prowess and not really addressing anywhere else, in particular china. how much of that was an attempt to pivot towards something that puts more -- that is more palatable for president trump? joe: that's a major factor. the ai diffusion rules put in place in early january by biden are not taken off the ledger yet. a 120 day implementation. that goes into effect on may 15. we heard a number of things from the trump administration about new rules. i don't think we know exactly what's going to happen. i think what you are hearing is some attempt to make sure we can ship in these other regions. they did say some things. they talked about china being roughly half the level that we were at before the export controls kicked in. that's a lower number than

anticipated. it is not just china. there's a concept of mid tier countries that will need to apply for a license to build over a certain scale. the presumption is they will get those licenses outside of china, but is that something that will slow things down? nvidia's focus on that and would like to make sure they will be careful about doing with the u.s. wants them to do and making sure we don't get to licensing practices that slow things down where the presumption is everyone will get what they need and cannot get it as quickly. they are moving incredibly fast around the supply chain. they want to make sure they can get their product in the hands of customers who need it under the restrictions the government is trying to impose. jonathan: i enjoyed reading the note this morning. joseph moore of morgan stanley. big scare for this how ecosystem was deepseek. would it lead to less pending for the biggest clients for the likes of nvidia?

we had confirmation that may be a won't. lisa: maybe it won't. some people say they will double down but there are questions about what happens later. overnight there was a story about google laying off more than 100 people in their cloud computing unit at a time when there is more of a focus on interesting -- inferencing rather than training which is less intensive on these chips. jonathan: i am wondering if it leaves scarring for the valuations. maybe there's a multiple people are willing to pay after being spooked. lisa: we saw that with microsoft and alphabet. the shares have not recovered. you have to wonder if that is the why behind the shares did not rally more on numbers that by any measure were terrific. jonathan: nvidia up in the free -- the premarket 5.8%. -- by .8%.

dani: a survey showed positive on the u.s. equity market. 60% investors say they were bearish, up from 40% last week. it is the highest rating since spring of 2022 when markets were marred by the start of the cycle and the russian invasion of ukraine. salesforce is down by nearly 4% in the premarket trade. the results didn't optimism that salesforce's new ai product would spur faster sales growth. salesforce launched its ai customer service product in october. the family's investment vehicle still retains 30% of the luxury carmaker's voting rights. the sale of proceeds will be used for a quote sizable acquisition. ferrari says it plans to buy as 10% of the shares disposed. that is your brief.

jonathan: why are you shaking your head? lisa: how much do you have to pay to get a ferrari? let me tell you how beautiful their uniforms are. nascar. nothing. jonathan: top of the timesheet and testing, just in case you are interested. of next, the doge purge continues. >> those people who have not responded, they are on the bubble. i won't say we are thrilled about it. we are trying to find out who those people are that have not responded. jonathan: that conversation up next with torsten slok as we look ahead to jobless claims just around the corner. ♪ ♪

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jonathan: equity futures positive here by .7%.

10-year, 430.20. the doge purge continues. >> i think it's misinterpreted as a performance review. >> those million people that have not responded, they are on the bubble. i would not say we are thrilled about it. maybe they don't exist. maybe we are paying people that don't exist. we are trying to find out who those people who have not responded. jonathan: investors eyeing the impacts of doge's federal layoffs. torsten slok of apollo writing, "the consensus expects doge related job because to be 300,000. for every federal employee there are two contractors. layoffs could potentially be closer to one million." good morning. have not seen austerity for a while in this country. are we about to see it?

torsten: there are two important dimensions of this. if the various numbers are there, if we see around 300,000, is that a big number or small number? total employment is around 160 million. 300,000 is not a lot. unemployed, it's about 7 million. the total number of people who changed jobs every month is about 5 million. in that context, not really a lot. if contracts are now being canceled and for every federal employee there are two contractors, maybe we could have another 600000 and that will be impactful. it becomes important for the applications in the 500,000 to one million in terms of layoffs. we have to think about if they are in total 3 million federal workers and two contractors, that is 6 million contractors. that is 9 billion people in

potentially 9 million families being impacted by having the risk of layoffs. that is why the numbers we got for consumer confidence could be a reflection that a lot of people are now being impacted by the risk of potentially seeing layoffs. that is why consumer confidence took a significant hit. jonathan: the hope is that as the government steps out the private sector will step in and increase the dynamism of the u.s. economy over time. that is the destination. how painful will the journey be? torsten: that is why any adjustment in any economy when you take people out of one sector, government, trance rotation, health care -- transportation, reallocate them, it does involve periods of unemployment and people who do not have the skills to go into the other sectors you want to bring them into. any adjustment in any economy would be involving pain. in this case, the high unemployment rate. lisa: sentiment bad, hard data

good. how long can i continue? torsten: the incoming data, as you talk about all the time, it is really strong. the number of people flying on airplanes is strong. the number of people going to broadway shows is strong. credit cards are strong. how long can we have this uncertainty about both consumer confidence being weak and policy uncertainty being so elevated and for a more extended period? at some point you are it will impact hiring decisions, impact spending decisions by companies. at 8:30 and also already as soon as next week when we get the employment report, is the uncertainty just talk and uncertainty or something that will begin to impact spending decisions by businesses and households? lisa: this is the key question into the remainder of the year. you were strong about inflation and not coming down as quickly as people expected last year. you said essentially they did

not see the need for the cuts we saw last year that led to the 10-year yields rising. is that the same thing here amid all this uncertainty? do you think the rally we are seeing in bonds reflect the great weakness that could be longer-lasting? torsten: it is still the case. we are turning towards a world with more segmentation. we have the german election on sunday. segmentation means countries are saying we are no longer interested in importing as many goods. they have to be more expensive. that is inflationary. there's also a drive towards saying we're not interested in immigration. let's also inflationary for wages. industrial policies in different countries are now different. they have different interests. it means less competition, which also means more inflation. on a number of fronts you could have at the same time high inflation and weaker growth, the definition of stagflation. it is a shock when you see

inflation going up in growth slowing down. that happens to be the backdrop for the conversation we are having in markets at the moment. jonathan: is the fed cutting or hiking into that? torsten: they have a choice to figure out how much weight they want to put on the slow growth and put on if inflation is ticking higher. they have been more worried about inflation but if growth slows meaningfully and unemployment goes up, they will put more weight on the growth risk for the argument that it will drag inflation down. it's a difficult spot for having stagflation. jonathan: sounds like your are making a bit of a change. torsten: we are worried about the challenges from initiatives globally in terms of what is coming from politicians in terms of the restrictions on immigration, what is happening with tariffs, and industrial policies that are things that are inflationary. jonathan: do you think tax cuts

could change that conversation? torsten: we will have that conversation at another time. the initial policies are inflationary, tariffs moving higher and something done across the board towards different countries. the more we have the risk we will both have, higher prices and less sales, the more markets should be preparing for the risk a stagflationary expectation is playing out. jonathan: a bit of a turn from torsten. lisa: laster it was how much dynamism there was in the u.s. economy. this year the global discussion about how tariffs and deglobalization can increase costs is an interesting one. jonathan: this conversation in the next hour of "bloomberg surveillance." to catch up with jared woodard, kate kalutkiewicz, waldemar szlezak, and james fishback. from new york city, you are watching bloomberg tv.

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>> there is a slow down on the business side happening now. the consumer is running out of gas. >> the economy is weaker. >> inflation is a big concern but it's being replaced by all this political agenda. >> consumers are looking at the tariffs and thinking about potential inflationary impacts. >> it's unclear of the policies work out great for the u.s. economy or detrimental. >> this is "bloomberg surveillance" with jonathan

ferro, lisa abramowicz, and annmarie hordern. jonathan: let's start with the scores on the s&p 500 bouncing back, up by three quarters of 1% on the nasdaq. half decent numbers. if you speak to the analyst community, they say they were underwhelming but these are very good figures. the question is, if that is the case, why are we seeing a bigger move? lisa: there's an overhang of uncertainty about what the future looks like at a time of rapid technological change. one potentially companies are going to get more efficient and buy fewer chips because a lot of customers are saying where's the proof this is going to increase revenues, and b, the chips are becoming obsolete by the time they come out. jonathan: let's talk about the data. if you're just joining us, 8:30 eastern time, jobless claims.

the cuts the federal workers down in washington. are we going to see that filter out the contractors? seeing that creep into headline figures? torsten slok making the case for exactly that. lisa: saying it's about 300,000 but there are two contractors for every federal employee cut. families get affected. i'm wondering how the market treats that. if you can dissect it is a doge related increase in the jobless claims, does the market infer weakness from that? how is that read through? the market response will be as interesting if not more than the actual numbers themselves. jonathan: we said this is the most fascinating moment and financial markets we have had since the pandemic. there are so many different things going on across 70 different dimensions. we talked about trade, about cuts data in washington, what it might mean for the data. the potential of wars ending.

crude and energy prices lower as a consequence of that. when need to talk about they are planning to cut taxes at some point later this year. how far are they willing to go with that? i don't know. markets are focused on the sequencing of things. on the things we are talking about upfront. that is doge and tariffs. where we are 12 months from now, where is the policy pump going to be 12 months out? should we skate towards that? lisa: there's a really good outcome economically and from a market's perspective and is a bad outcome. which you choose to focus on become something of a personal preference. you could see policies to emphasize either point of view. as you say, it might be a sequencing think and we know with tariffs. we might not. they might negotiate to lead to a better end or it could stymie the deals that have been inspected to go into place and reduce some of the capital

expenditure that was already planned at bacon to a lot of valuations. jonathan: we are seeing evidence of that and is still only february 27. week five. lisa: almost week six. jonathan: coming up, we catch up with jared woodard as markets react to the next outlook for nvidia. the former trump white house trade official kate kalutkiewicz on the latest tariff that. look at for this later. james fishback on a possible doge dividend. good but not great results from nvidia. jared woodard writing, "artificial intelligence might be the latest in a long line of technologies that rate broad productivity but did not recoup investment quickly and not by the benefactors." jared, welcome to the program. a provocative statement to start the conversation. walk me through what you really mean by that. jared: i'm glad to be with you.

it is a sequencing argument, like you were discussing about policy. there is a sequencing questioning among investors that is becoming seen in the market. when you look at the history of big innovations and technologies that transformed economies, railroads in the 1800s, fiber-optic cable and the telecom in the late 1990's, all those huge productivity gains came with a big round of initial investment and a bubble in the stock market. a big correction to put it mildly. once the dust had settled, the productivity gains were distributed across the economy and they were economic and financial gains for investors. it was not the first stage investors that reaped the most reward without your medicine volatility. investors who are bullish today, bullish expectations for years and years to come, we have to ask the question, do you think this time it is different that

there will be a smooth and painless transition from initial stage capex investment to the rollout of technology? do powerful profits justify the big investments? it is not entirely clear yet the gains are being realized by companies across the economy. that may still happen but it is the number one evidence we're looking for to remain bullish on equities in the next year or two. jonathan: where you think we are in the so-called sequence? jared: the initial rollout takes time. it takes a long time. all signs from bank of america and our research department suggests there's incredibly strong demand across the economy. capex expectations are high. signals from companies are still quite positive. it's about the rate of change in the margins for companies at the heart of the ecosystem and from

companies that are ultimately the customers of these technologies. that is the most important piece to see the next step of progress. that is why the broadening out of earnings later this year among the s&p 493 is really the most important question to watch. if you cannot see earnings broaden out, if you cannot see evidence there are capex investments and new purchases in artificial intelligence or generating real revenues, that's a huge problem given the dominance of passive investing. lisa: that is why i thought salesforce was one of the more interesting earnings. an underwhelming profit outlook for the new agentforce, your secretary that can book things for you that is fueled by artificial intelligence. this was the application a lot of people were hoping for. who do you think will be the biggest losers and how much more of a downside do you expect on the heels of the classic boom-bust around technological advance?

jared: the concentration question is urgent in our view. passive investment funds account for more than 50% -- 54% of equity market share. that has never happened in history. one we have had investment bubbles, the railroads, dotcom, all those cycles where you had been crowding into growth stocks, a turn in the economy or market, and a massive correction or bear market, that occurred with a much more healthy and diverse investment ecosystem. our concern is the dominant passive invested makes them more fragile. there's an upside where market cap waited funds in every investment account really drives prices higher. our concern is that means more volatility to the downside. if you see continued disappoint around the ai theme at the level of companies trying to earn

higher revenue or real efficiency gains, the concentration could accelerate risks to the downside based on the simple mathematical truth about the weighting in the s&p 500. lisa: how isolated people can actually get from a downside to big tech of this is an index-driven market where people wholesale liquidate their positions. that could overwhelm any kind of selective buying on the margins. how much do you see the broadening out as a smokescreen argument that you can't really hide if there is some sort of massive correction? jared: there are a few things you can do. our colleagues across our department to see some industries and sectors at the company level in the aggregate where earnings growth is becoming more broad-based. it is a trend we want to see continued but not without justifications. more importantly, if you're

concerned about the risks, look at the relative returns of equal weighted versus capex index. that's the whole story in one number. if equal weighted stocks keep outperforming the way they have, that would be the number one signal that there's a bigger shift happening in markets. two, investing in high-quality stocks, companies with high free cash flow yields and casual margins has been a massive outperformer across investment cycles. all of them capture firms with high free cash flow that are not dependent on sediment or flavor of the month at the industry level and can weather the storms when a traditional cap weighted index might go through a rough patch. folks have filters for profitable companies. even those indexes adjust to the

profit cycle and cavities that are struggling or not struggling. it is not a case for us of bearishness. we think it's important to watch some metrics for signs of a turn as companies contend with the revenue upside from the area investments -- ai investments they have made in the past two years. jonathan: what do you think about geographic regional diversification? we have seen a sentiment shift over the past few months. jared: yeah. in our report we reiterated are bullish you and japan -- bullish view on japan. china and europe, not yet real. the economic struggles in china, the lack of technology companies and struggles with energy and other policies, those are serious structural constraints on europe. until you see massive

politicians, this is like a trade, not an investment. jonathan: appreciate it. the brilliant jared woodard of bank of america on diversification. lisa: i'm thinking about if you ran a gelato shop and europe, a flavor of the month. i'm curious what the flavors will look like. jonathan: i might feel sick by the end of the year. lisa: that was good. maybe one scoop of europe and two scoops of america. jonathan: an update on stories elsewhere. here is your bloomberg brief. dani: the trump administration canceled a meeting with the food and drug administration vaccine advisory committee set for march 13. the committee was going to discuss how to make the next season's flu shot. it's a routine step to ensure manufacturers have enough time to reduce the proper doses. elliott investment management ramped up pressure again on bp after the new strategy fell short of expectations. sources tell bloomberg the

activist investor thinks the turnaround plan lacks urgency and ambition. bp's strategy reset was selling $20 billion of assets and cutting low carbon energy investments. elliott is one'of the oil companys largest shareholders. more ice cream news. ben and jerry are looking to buy back their namesake ice cream brand. the founders have health initial discussions about a potential deal and we look to partner with socially minded investors. unilever stated ben & jerry's is not for sale and is instead plaintiffs sp -- and is instead planning to spin off the ice can business in a merger. jonathan: more from dani in about 30 minutes. up next, tariff confusion. >> can you clarify the canada-mexico tariffs? you just referred to 8 -- >> 25%. >> one is echo into effect? >> april 2. for everything. jonathan: we look catch up with

annmarie in just a moment. she will speak to the former white house trade official kate kalutkiewicz. from new york city, good morning. ♪

jonathan: we just had six days of gains in the bond market. six days of lower bond yields. right now yields higher vifor pharma basis points. -- by four basis points. the equity market higher by .6%. many interested where nvidia is. posited by about two percentage point. under surveillance, tariff confusion. >> mr. president, can you flare

clarify the canada-mexico tariffs? >> 25%. >> wind is a go into effect? >> april 2. for everything. 25%, generally speaking. then on cars and oil and things. the european union is a different case. they have taken advantage of us in a different way. jonathan: these are the proposals. next week, 25% on canada and mexico. march 12, 20% on steel and aluminum. april, reciprocal tariffs as much as 25% on autos, pharma. let's catch up with annmarie for more. annmarie: president trump was asked directly about the date that is next tuesday when it comes to the pause in canada and

mexico of 25%. seems to be the date for everything on april 2. howard lutnick had to explain there is a pause in place when it comes to canada and mexico. lots of dates are flying around. they talk about reciprocity on all these trading partners. given more clarity, someone in the room driving these negotiations. we are joined by kate kalutkiewicz. thank you so much for joining us. lots of headlines yesterday surrounding trade. what did you make of all of it? kate: it's hard for businesses to keep it straight. it is indicative it's also hard for the white house to keep a straight. there are so many memos. annmarie: they are the ones leading the policy. kate: you would think so. it is hard. by my count since the president took over on january 20, we must have had 6, 7, 8 executive

orders. some are somewhat repetitive. they are asking the agencies to figure out who is not treating is fairly and go after them -- treating us fairly and go after them. the tariffs on mexico and canada which are deferred until march 4, the president was not talking about those yesterday. he was talking about the broader actions he's looking to achieve by april. annmarie: is there a chance he was in the middle of negotiating those and is just pushing it out to april 2? which we might not see. if you look at the peso, they don't believe that. kate: i don't know we will see this tariffs on tuesday. if i'm trying to sort this out as mexico or canada or a business impacted by potential tariffs, the tariffs are in place until they are not. we don't have an exit order deferring this tariffs. they go in place to stay any action by the white house. annmarie: they would have to

cannot have another directive. what is telling his domestic and economy minister is in washington today meeting with jamieson greer. on friday, meeting with howard lutnick. what concessions are happening behind the scenes? kate: these discussions are not related to trade or reciprocity. they are about the border, the president's number-one campaign promise. the mexicans brought a lot to the table in terms of border security, and drug cartel cooperation and the rest. the mexicans and the mexican peso are feeling pretty confident they brought enough to forestall this tariffs. annmarie: what is going on with canada? it seems is a punching bag for this administration, even though it is one of the biggest trading partners and a staunch ally for decades. kate: it is true. for many of us we are scratching our heads a bit every time canada is mentioned. there are some issues with

respect to reciprocal treatment that the president from time to time gets upset about. i think the tariffs announced on canada with respect to the fentanyl border issues were interesting. every thing was hit with the 25% tariff except canadian energy. that's indicative that the president understands that tariffs on energy would dramatically impact our economy. i do think it's important. it's an important signal he understands that prices can go up because of these tariffs and he wants to avoid those. i think that canadians are also very actively engaging the white house. i suspect they also with the creation of a fentanyl czar, more support at the border, will seek a deferral and get it. annmarie: march 4 is on the books unless we get a deferral. march 12, 25% on aluminum and steel. this echo through? -- you think that goes through? kate: i do. it is really directed at china.

at the present moment we don't import steel or aluminum from china so therefore we have to hit a global tariff to keep it from coming onto our shores. the president is serious about this. this is something he did in his first term. provide administration strengthened it. i think this one is coming. annmarie: when it comes to alumina and steel, the memorandum on copper, does the u.s. have enough of the supply to reset demand or prices going to be going up? kate: section 232 governing these actions enables the white house to do a series of actions. it can be tariffs, things like the defense protection act to get production going where we need. these are all intended to address a concern we don't have enough domestic production. it does take time to get those copper mills going again. depending on the action, you could see prices going up. annmarie: one place with fireworks will be the european union.

what is going on with this potential deal on the table when it comes to the eu dropping their 10% level on tariffs for imports of american cars potentially to 2.5%, matching the american level? do you think that is real? president trump that he hears potentially this deal is in play. kate: i think it is but i don't think it is enough. let's be honest. i draw from 10% to 2.5% on carsey europe is not going to significantly impact the european market for consumers are not interested in american cars and regulations continue to create barriers. the europeans beyond the car tariff, which we hear the commerce secretary talk about a barriers and digital servicesory that the president has gone on the attack. a number of other regulatory ideas around the green deal and sustainability isaac the president will go after. -- i think the president will go after.

annmarie: justice go through on april 2? -- does this go through an april 2? kate: i'm not certain that means new tariffs. the president on his first day asked all agencies to come up with lots of ideas for how to target reciprocity and trade barriers. we could see a series of investigations. more 232 investigations. more 301 investigations on things like digital, shipbuilding as we saw over the weekend. we have a new series of investigations as opposed to tariffs. the president would like to announce tariffs as quickly as possible but it takes time to calculate the harm. annmarie: you mentioned shipbuilding. i think of china when it comes to steel. you were there in trump 1.0 with the phase one trade deal. how much different is a nobody comes to trying to level the playing field with beijing? kate: the president has

unfinished business and is anxious to get to it. all roads lead to china when it comes to a number of these trade actions. the reality, because the united states spends so long trying to confront china through wto's instruments which was not sufficient in blunting the growth. now we have some very dramatic ideas that impact allies that the president has committed to taking. i do think -- we hear about president trump the dealmaker and he is. he weston negotiation. he has a good relationship with president xi. he will get bumpier before gets better. there's a real potential here for a phase two once we get going. annmarie: probably the 10% on china has stayed. what is your number one piece of advice for clients? kate: trying to focus on the when. are they next week or the week after? the tariffs will be a threat until they are not. try to prepare by understanding

where your supply chains are, where you can source, how to move. this is my best advice for preparing. one can help engagement with those up in the midterms will be an important piece of efficacy advice. annmarie: thank you for joining us. that is kate kalutkiewicz, formerly part of trump 1.0 doing these negotiations. tariffs. it is part of the feature, not a bug of how they want to conduct policy. jonathan: more from annmarie later in the hour. up next, waldemar szlezak on the energy and capital demand for ai. ♪

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jonathan: the opening bell two hours away, some economic data from one hour now. jobless claims at 8:30 eastern time. 7:30 on the east coast, equity futures positive by 0.7%. nasdaq 100 positive by 0.8%. two hours until the cash open. here is yahaira jacquez. yahaira: nvidia shares are up 2.3%. reading through endless notes, the move seemed to reflect the idea that yes, nvidia put up a solid performance but not the magnitude we are used to.

the analyst community largely positive. td callan saying nvidia continues to make the extraordinary seem ordinary payment next we have shares of snowflake, soaring nearly 12%, rising after the software maker posted a solid beat plus the outlook also looking good. they see cloud service growth rising, signaling a lot of demand from companies using their ai powered services to organize all of their data. last, we have moderna shares, falling 5%. u.s. health officials are reevaluating a 590 million dollar contract they gave it to develop bird flu shots, of course when we are dealing with an outbreak, but also we know the company has been under pressure to find new sources of revenue outside of its covid vaccines. jonathan: that stock lower by

about 5% in the premarket. president donald trump's latest comments selling some confusion around tariffs. a white house official saying his bid for tariffs on the eu is new but no decisions have been made. the deadline for canada and mexico remain next week. lisa: if you want to market to take these threats seriously, this is not the way to do it. i keep going back to it, what does he want in terms of negotiation from mexico and canada? ultimately those deliverables will be the tea leaves. jonathan: we have said it a few times, it feels like europe is different when it comes to these negotiations and the president has set himself the eu is different. lisa: 25 perce on everything, just on autos? it goes to the lack of clarity, how you plan your purchases, business around an unclear goalpost. jonathan: a few weeks ago we

spoke to mike werth from chevron about his business, the operation they had and venezuela. president trump says he is revoking their oil license to operate in the country because of their failure to take back migrants from the united states as they promised. lisa: what is the ultimate goal? questioned about whether this is a question to the majuro government, or is this because of the migration issues which is what we are seeing with mexico as well. if it is that, are there deliverables or is there just a blanket type of order? i don't totally understand it. do you? jonathan: i don't have any thoughts on the matter at all, just waiting to see how policy changes from day to day. it was on the agenda at the time, let's put it that way. at the time it was secretary

rubio who gave people a decent steer, this was the direction this administration is going in. lisa: hard to know if somebody can do something to offset this direction or if it is ideological, has to do with the election that many said it was manipulated and reported incorrectly. jonathan: the white house telling plans to prepare large-scale staff cuts, moving offices out of washington. the doge team is said to be executing the plan. lisa: one that will probably come out a little bit in the numbers, maybe with the jobless claims we get in an hour's time. the federal government is a very small fraction of the overall workforce. state and local governments are not. one of the key questions people are turning to is at what point does the doge effort shift to and beyond the federal

government? i also think it's important what we were saying about contractors. for every federal employee laid off, there are two contractors affected and that takes time. jonathan: jobless claims at 8:30 eastern time. mike mckee says it may be too soon to see the show up in the economic data but we are in wait and see mode. lisa: saying federal employees have a different unemployment insurance paradigm than other workers so it may not show up in these numbers yet. that said, if there are contractors, those that work in local shops that are not getting as frequented, do you see that turn already? jonathan: looking for that data in about an hour's time. nvidia up about 2.5% in the premarket after delivering mixed quarterly results. concerns on data center operations will slow spending. waldemar szlezak says the

demand for data centers are skyrocketing. are we seeing any changes at all? we had the deepseek revelation the last time we spoke. what changes will your world? waldemar: not very much. fundamentally we believe that artificial intelligence today is not a fad, it is a tectonic shift in terms of general-purpose technology evolution, similar to electrification. that is sort of a trend, likely to persist decades and not years. there may be fluctuations in any given quarter or year but the underlying trends are very robust. you saw it yesterday from nvidia earnings, on the ground, from the picks and shovels element, from the kkr lands, data and

power side, we are not seeing any change. jonathan: if you see a multi-decade trend, are you reconsidering where you want to be in the whole ecosystem? do you want your footprint everywhere are certain places, energy transmission, data centers, certain that you prefer over others? waldemar: great question. we have five data center companies. we have a presence in the u.s., europe, asia-pacific, recent acquisition into the middle east. i would say each of the markets exhibits different trends in terms of growth, s curve adoption. markets are maybe richer and more, some are on the hyper growth trajectory. when you go back to the computing piece and the power, those that merge into a single mega theme. we recently announced an expansion, investment into a

large transmission in the midwest. we saw the convergence of those two themes into a single theme. there is a little bit of a shift in our strategy in terms of where we want to position our data center capacity. maybe deemphasizing the large training centers, focusing more on the inference piece, which has always been our strategy to begin with, the primary basis of our data center investments. than a lot of opportunity in terms of power infrastructure investments. we announced a partnership with energy capital partners, bringing the strength of digital infrastructure, capital formation, corporate partnerships, their strength and power generation. today we have 50 gigawatts of conventional power on our partnership control, 75 gigawatts of global development. between everything we are doing, we are uniquely positioned to be the ultimate winner in this race

to the ploy ai. frankly, restoring, manufacturing in the united states and globally as well. lisa: there is a lot to unpack their. deemphasizing within kkr may be of the data centers, more to the power generation, other parts of the ecosystem. did you do this before deepseek, did you see this coming, that there would be a shift away from training toward inferencing? that you could do more with a smaller footprint? waldemar: i would say our strategy with respect to data centers has not really changed. we are big believers in the fundamental growth. look at the numbers today, 50 gigawatts of data center capacity, likely moving to 200 or 300 gigawatts. i think we were cautious initially on the large training centers. we thought ultimately data

centers that are constructed and deployed close to major urban areas, ultimately where the workloads are being consumed by consumers have a more intrinsic value, higher barrier to entry. versus more speculative deployments that are less location sensitive. i would say there is a caveat to that. in terms of training, what has happened, evolution of scaling loss, yesterday, jensen huang alluded to that. we now have xai in memphis deploying. we have increased exponentially the size of the data centers. there is talk about anthropic having a 400 data center cluster. there is speculation that meta is making a large supplement of $200 million. i am not sure that there is a tremendous shift, but in terms

of reallocation, we think most of the computing infrastructure going forward will be deployed in the production inferencing rather than on the training side. today is about 65%. likely the ratio will flip in the next four or five years. lisa: you talk about power, which will be necessary regardless of how this gets deployed. it all takes a lot of energy, talking about the size of new york city to power that. given that these two trends have merged, the power required for ai with the need to increase the energy infrastructure, how do you insulate yourself from investing in something that has elevated valuations because of the fad, everyone wants to get into the same bed? waldemar: we struggle with some of that. we already have five established data center platforms. we led the largest data center private taking 22.

we were happy to deploy capital to support the growth of those platforms. we are more cautious in terms of investing into platforms at elevated valuations. on the power side, we are looking at interesting ways to unlock opportunity. in the u.s. power sector, that industry effectively that line for 20 years. the expectation is that likely triples over the next 30 years. we will move from 4000 terawatts hours to 8000. we have to build a lot of new generation in the united states. that's a terrific opportunity for investors. the capital that is needed is likely trillions of dollars. the market capital in the u.s. is about a trillion dollars. private capital like ours can help some of that growth, structure the redevelopment of

this mission critical infrastructure. our deal with the ap is a perfect example of that. $3 billion investment. that helps in the transmission infrastructure, helps to upgrade the infrastructure, as well as expansion of the infrastructure. we think more of those deals are likely to come. jonathan: leadership at alphabet says they think the bigger risk is under investing, not over investing. i don't hear any of that from you. you don't think that is a risk at all, that we don't end up with a situation where we have too many investments? waldemar: at some point, animal spirits may get ahead of themselves. i would sit in the scale and cost of capital for data center deployments is so high that we are truly speculating on that and it would be reckless. most of the data centers we see being built are built with

contracts in hand. today, they can see they are very low. one of the biggest bottlenecks is being able to secure power and most of the markets. if i mourn about the trajectory of growth in the united states, the ability for us to generate enough power and transmit to the right places, that is the other piece i alluded to earlier. i'm a little worried that some elements of speculation may occur early on. winter may come at some point. i just don't know when. jonathan: that is a public market problem? waldemar: public markets to some degree, there are so few ways to play that a i in the public markets. 16 trillion of value, 9 trillion in a handful of stocks. if you go down the ecosystem, data centers are only $150 billion of that. people have tried to play this

through investments in utilities. we have seen a tremendous expansion of utility expansion of the balls. i'm a long-term investor. the fundamental trends are undeniable but could there be some overheating in public markets? for sure. jonathan: i was just trying to reel you in. lisa: winter could be coming. he is throwing you a bone. there are a lot of opportunities and this is what people have been analyzing. in the moons that you have seen and that our real, whether it is the ramble system or other things, there are lots of winners, but they don't always look like the ones at the very beginning. jonathan: i sit in my office and listen to all the interviews. i'll be doing that with this one. appreciate your time. waldemar szlezak of kkr. let's get you an update on stories with your bloomberg brief. dani: bloomberg has learned nissan is making plans to

replace its ceo after disappointing earnings and the collapse of talks with honda. directors are gauging interest in potential candidates. iran's stockpile of uranium enriched is near the level of nuclear weapons. that surged more than 50% in the last three months. the iaea says iran is not producing the equivalent of one bomb's worth of material a month which could be upgraded to a level used in nuclear weapons. oscar winning actor jean hackman was found dead in his home yesterday. the 95-year-old was found along his spouse and dog in their home outside santa fe. the cause of death is uncertain but police do not suspect foul play. that is your bloomberg brief. jonathan: thank you. that is a sad story. up next on the program, doge dividends. >> there is even a new concept

where we give 25% of the doge savings to american citizens, 25% goes to paying down debt. jonathan: who came up with that new concept? this guy right here, james fishback, joins annmarie hordern in washington, d.c. ♪♪ only servicenow connects every corner of your business, putting ai to work for people. pfft ... every corner? every corner, nick. ow! so kate in hr ... hey kate. can focus on people, not process. oh actually, i have a question ... keep up, nick. do you have to be sick to take a sick day? patty in it is using ai agents to deal with the small stuff, so she can work on the big stuff. agents like secret agents? secret agents i control. with your mind? you know ... i played a secret agent once. - we know. - oh gosh ... i liked it. over here, ai gives tina the info she needs to get the job done. nick, what did we say about touching? no touching. good.

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jonathan: equities near session highs, up by zero point 7% on the s&p 500. nvidia higher by three percentage points and change right now. in the bond market, yields lower for six consecutive sessions. up by four basis points. 10-year, 4.2943. under surveillance this morning, doge dividends. pres. trump: there is even under

consideration a new concept we give 25% of the does savings to american citizens, 25% goes to paying down debt because the numbers are so incredible, hundreds of billions. we are thinking about giving 25% back to the american citizens. jonathan: president trump considering an idea to take 20% of savings of the department of government efficiency cost cutting efforts and return that money back to americans. anne-marie joins us in washington, d.c. along with the man who came up with the idea. annmarie: that idea starting to pick up steam. james fishback joins me, the ceo of azoria partners but he is the architect beyond this doge dividend, and now you are having these meetings on capitol hill. you tweeted this white paper, easy to suggest between then elon musk tweeted back at you and said i would check with the president. now this idea has legs. what exactly is a doge dividend?

james: doge will save about $20 million payment let send that money back to the taxpayers. they didn't send it to do suit to be ways to, product, or abused vmate we are sending back as a refund. there are two key benefits, the first is restitution. second as the president noted, let's incentivize americans to be a part of this government efficiency process. they can be our eyes and ears on the ground to report waste fraud and abuse because the more that doge saves, the bigger the check will be in the end. annmarie: speaking with members of congress, having meetings today with senators, when they talk about extending tcg a or adding no tax on tips, social security, they say they will offset this with some of the savings at doge. where is the dividend on the priority list?

that will take away from offsetting the deficit savings. james: 80% of the doge dividend goes to narrowing the deficit and paying down the debt. we view it as a priority. the bigger thing is the one dimensional thinking in d.c. is that things like no tax on tips or overtime are somehow an automatic hit to revenue. when we incentivize labor force participation by increasing the all in pay for hard-working folks in hospitality or leisure, that brings folks off the sidelines. 7 million working age men in america are not working. when they hear president trump's plan for no tax on tips or overtime or even a doge dividend, they want to rejoin the labor force so they can earn those benefits. the biggest tax office -- offsets will be growth. if these changes can supercharge the golden age, we will see nominal gdp pickup, we will see tax receipts pickup, and this

will pay for itself. annmarie: one issue that trump campaigned on, many would credit winning on besides immigration is inflation. if you send out 5000 dollar checks, wouldn't that be inflationary, which republicans have accused the stimulus checks under the biden administration being? james: that was an entirely different deal. $6 trillion spent on covid in stimulus. only 13% of that was stimulus checks. supply and demand matter payment you had a massive demand shock at this time tanya had a supply pullback with a labor shortage, lockdowns, supply chain dislocations. this time is different. we don't have those considerations. secondarily, remember this was taxpayer money that was sent to washington that is being sent back. the macroeconomy is different. remember under covid, massive supply chain dislocations payment look at what is happening under president trump and secretary bisson's leadership. drill baby drill means lower oil

prices. we are seeing inflation come off. the macro backdrop was disastrous for stimulus during president biden. it is very favorable today. when we ask folks how would they spend these doge dividend checks? folks tell us they will use it to pay down debt. the only dent in the mainstream media that folks seem to care about is the national debt. consumer debt went up by more than 25% under president biden. they needed to borrow to keep up with inflation, keep up with that policy. americans deserve a doge dividend to pay off their debt that president biden force them into. annmarie: is this another taxpayer dividend? isn't this just on the way of saying this is an extra tax refund? james: you sent your money to be sent to washington to be spent in america, not in iraq or a transgender in colombia. money is owed back.

if i go to walmart, you go to costco, we don't like the hot dog, we are entitled to a refund. send the money back to americans and incentivize them. this is not directly captured in numbers, but we will restore the trust between taxpayer and government. seven out of 10 americans don't believe the federal government is using taxpayer money wisely. taxpayer trust will go up under this plan and i'm honored that president trump supports it. annmarie: thanks for your time this morning. that is james fishback. he is being known as the doge dividend czar. we will see if his plan makes it through congress. jonathan: next on the program, bankim chadha, ronald jewsikow of guggenheim, lauren saidel-baker, and george bory. the third hour of bloomberg surveillance up next.

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>> the market is paying for quality. it is back to factor selection. >> we are so dependent on these

large indexed outflows. >> if we don't have her earnings moving up in a meaningful way, hard to say we will have a big upside in the overall market. >> we are seeing a slower on-ramp for that >> you look under the hood, there is rotation happening, and that is dampening volatility. jonathan: the third hour of bloomberg surveillance starts right now. 90 minutes away from the opening bell. close to session highs on the s&p 500, up by 0.6 percent. close your session highs as well on the nasdaq 100, up by zero point eight. supported by a rally in nvidia. higher by three percentage points at the moment. 30 minutes from now, jobless claims in america, renewed focus over the past few weeks. lisa: on the one hand, you are interested about whether there is this worry about growth in the u.s., which we have gotten

from a number of data points, bond yields, and then the question, will we see the ramifications of the cuts made to the federal government from the doge effort? that is what will be sending people parsing through the details. jonathan: we are seeing it in the confidence data. will that lower confidence translate into weaker hard data down the road? that is what some are looking for. lisa: that is what companies are looking for as well, whether it is the guidance from walmart, sweetgreen. at some point, maybe people are sick of eating so many greens, but i'm curious about whether the guidance and the fears will be setting a little bar or whether this will come to fruition as people struggle with policy. jonathan: on the one hand, some don't know, and we have seen that from home depot and walmart. others are confident, gm, but the investors are not convinced.

lisa: with an auto company, it could be the story of infinity if you end up with these tariff s, parts that are more expensive and a time when there is diminished demand. it becomes a binary outcome for some of these companies. we've been talking about the markets not buying this idea that 25% tariffs will not go on to canada and mexico. at the same time, what is the upside but to some of these companies? jonathan: ken griffin said that the damage has already been done. you can make the argument looking at the economic data. lisa: certainly the confidence data. when does that come into a lack of jobs, lack of hiring, potential layoffs? jonathan: we will get you some bullishness in just a moment. equity futures on the s&p up by 0.6%. that bullishness coming from

bankim chadha of deutsche bank. we will also catch up with guggenheim. we will also speak to lauren saidel-baker of itr economics reacting to jobless claims and gdp. equities pushing higher after nvidia's mixed earnings report. bankim chadha is still optimistic, looking for the s&p 500 to end the year at 7000. good morning. give us a reason to be optimistic. bankim: let's talk about the confidence issue we were talking about, the pullback in both measures we have of consumer confidence. the points that i would note, confidence is actually not a good indicator or driver of spending. you only need to look at the last two years when confidence was low but spending was great. you could argue, and is a open question whether the decline in consumer confidence, it does

impact at the end of the day some of the spending on big-ticket items. but that is still out there. there is not a robust relationship with overall spending so it just may be rotation. on consumer confidence, i would argue it does tend to have an impact on presidential job approval ratings. we saw that over the last two years. it does matter. i would argue bigger picture for equities what matters is the business cycle. in our view, that is much more important, ceo confidence. the clock has been ticking rather fast basically, so we don't actually have good readings on ceo confidence from the typical providers. jonathan: you track earnings calls. what are they saying on the calls? bankim: that is what i was going to get into. every quarter, we write a report

on what companies are saying. a quote from a company, living in a climate basically of uncertain optimism. optimism still outweighs the uncertainty, but that of course can change. bigger picture if you look at the s&p 500 since the election, almost four months now, we have been in a very, very tight range. plus or minus less than 2% on either side. very sharp, few moves but really going nowhere. the best explanation over the past four months, while we are up one day, we were down the other day. [laughter] that is what the price action basically says. you look at where we close to yesterday, in the middle of the range.

we can talk a lot about what is driving everything but that is not what we do. we were just doing that because it is such a tight range. lisa: you say beer in an environment of uncertainty, what you are hearing on a lot of these calls. how long does it have to be that this level of uncertainty exists about forward-looking policy before you start to question your 7000 price target on the s&p? bankim: we have been in a very tight rein for almost four months, but taking one step further back, you look at the s&p coming out of the october 2022 lows. we are in the middle of that. the big picture has not changed yet. it is a very steep challenge, the way i would put it, 24% at an annual rate. if we continue to go sideways, at some point we would break the lower end of the channel.

that is april some time, so there is still some time. about the uncertainty issue, it is about the cumulative impact of that uncertainty over time. so far, i would say limited and backs, but if you continue along like this, you are very vulnerable to negative shocks. that is where we are. one of the things that is basically keeping us in the range, the issues, concerns the market has that we have been talking about, i would argue it is capping the upside. if you think about the market from a demand-supply point of view, in the absence of any new news, the market will go up. you wanted an optimistic take. there are three elements of the man, changes in positioning, which is coming down because of the uncertainty. still overweight. you have lows that have continued.

if i look at the last five days in the u.s., lots of market jitters. $25 billion in inflows. we just had earnings, 15% year on year. that is where the buybacks are coming from. in the absence of news, this market flows or rolls up. lisa: what you said was interesting, the uncertainty may be dampening the upside that we otherwise might be seeing, that this market would be substantially higher if there was more certainty around the policy going forward. you reject the idea that the index level cannot go up significantly or to that 7000 level because of the big tech dominance, the fact that that traders over? the reason there is pessimism there is also tied to this uncertainty and lack of conviction? bankim: it is not even a pullback. 5% pullbacks since august of last year. we are just flat. jonathan: is there something

going on in the internal that gets your attention, a growth scare warming up in any way? bankim: this morning, we are up, the last couple of days we were down. bond yields are down, equities are down, which is what we saw. that is telling you basically the market is concerned about growth. that is classic reaction to, market response to growth concerns. if you look at cyclicals versus defensives, it is the same reading. there is clearly some concern about growth, how big it is, how far it goes, open question. i think the cycle has been very, very strong, likely to remain strong. i think big changes in policy are a risk rather than our

baseline view. lisa: market weight or equal weight, what is your preference? bankim: equal weight. that is just because positioning in mega cap growth and high tech is on growth side, growth slumming a little bit. not as much as we expected but positioning is still too high for the growth that we are getting. somewhat vulnerable i would say. jonathan: big tech is a place where we have had a pullback, mag seven as much as 10% from record highs. is that not interesting to you? bankim: definitely interesting and important but it is in line with our thesis, so i don't worry about it. i think it is still a bit early because positioning is high and growth is slowing. positioning is in line with many cap growth and tech continuing where it has. arguably even accelerating,

which we think is very unlikely. jonathan: looking for 7000 on the s&p 500. bankim chadha of deutsche bank. tesla has had a really tough ride of it. an analyst from guggenheim has a cell on the stock in just a moment. with an update on stories, let's go to dani burger. dani: the white house ordered federal agencies to ready plant by march 13 for large-scale staff reductions, laying the groundwork for president trump's most significant cuts so far. the plan also requires agencies to submit proposals to move offices out of washington to cheaper locations. doge will help to execute the plans. u.s. health officials are reevaluating a $590 million contract for bird flu shots at the biden administration awarded to moderna. the review is part of the government push to examine spending on messenger rna vaccines. merger and his plans for a final stage like trial of its vaccine may be impacted if funding is

withdrawn. youtube star mr. beast book to several financial firms and wealthy individuals to raise money and expand his business. the funding round could value his company at $5 billion. he is raising money to fund a holding company for several of his businesses. jonathan: thank you. more in 30 minutes time. next on the program, morning calls, what analysts are saying about nvidia, and we will catch up with ronald jewsikow on his call to sell tesla. that conversation up next.

jonathan: the opening balance is one hour 15 minutes away. equity futures positive by 0.6%.

a real struggle to snap a four-day losing streak. yesterday, equities were higher by 0.01%. in the bond market, yields have been falling every day for the past week. the yield by 25 basis points plus on the 10-year. bouncing back by just three right now. 4.2848. lisa: i am thinking about what torsten slok said, a lot of people are expecting the core pce data we get tomorrow to show ongoing disinflation, but i'm trying to think how does this bond market respond to the potential it higher inflation is met with lower growth i'm not sure people are fully grappling with or fully buying. jobless claims and gdp, a lot of other economic data points coming out in 14 minutes time. let's get to the morning calls. morgan stanley raising its price

target on nvidia after the company's better-than-expected earnings. the analyst keeping it as a topic. the stock is up 2.4%. jp morgan reiterating its overweight rating on the name, citing strong demand for blackwell. truest raising its product that price target to 205, noting data center revenue. let's talk about tesla. shares plunging 20 8% since the start of 2025 but a majority of analysts are still bullish on the stock. ronald jewsikow is not one of them. he has a sell rating and a 175 price target. let's start with accelerating. why the change, why the sale? ronald: we maintained a soul for quite a while, to be clear. we have been adjusting our price target around the various changes in the automotive business. we have maintained this sell for

quite a while. it's been challenging postelection with the stock moves but we are of the view that the election largely doesn't change the fundamental value of this business and most of the autonomous regulation that people seem to be excited about for the election. really decided still at the state and local level. the federal government has very little control. i lost the screen here. jonathan: carry on. we will fly blind. carry on, i'm listening. ronald: the vast majority of autonomous regulations are done at the state and local level. the idea that the federal government will have a meaningful impact on tesla's progress on autonomy was always flawed. jonathan: the change i was referring to was the change in the stock. we saw the run up into year-end, and at the start of this year,

we see the stock rolling over aggressively. you referenced may be some of these hopes are driving. do you think that somehow figured out that maybe elon musk's presence in the government is hurting the name more than helping the name? ronald: certainly has come up in our investor conversations. we are not of that view. i think the stock often is a price drives narrative story, it was momentum up, to some degree it has been down as of late. if you were going to frame politics, hurting tesla sales, you could do that by looking at where sales have been the weakest, u.s. and europe, where there is more partisanship, the idea that elon's politics will lead you to that conclusion. but the man has been slowing down for months here and they have been cutting prices to drive volume.

lisa: looking at what happened in europe, you saw electric vehicle sales go up more broadly while tesla sales in europe fell by 45% in january. how can that be construed as something other than sentiment in the region toward elon musk? ronald: it's a good question. tesla sales have been comping negative in europe for the last several quarters but they did accelerate to the downside this quarter. there are two factors. the model 3 is weak, which is hard to explain. the model 3 is not supply constrained. sales are down about 50% compared to the fourth quarter. model y sales are supply constrained. you have more coming this quarter and some of the sales weakness is much more about supply than demand. but we will have a better picture in the next several months.

i do think that europe demand is clearly week. the political conclusion is tough to draw at this time. lisa: also a question of you is running tesla? is it possible for someone to be running parts of the government, government efforts, also running a couple of other companies and initiatives and a car company? has that entered the conversations? ronald: i would say less so of late. we kind of went through this with the twitter acquisition several years ago where this became a part of the narrative. i think elon has shown his band to manage several companies is quite high. to the extent the stock keeps falling, it is certainly going to enter the narrative more and more. i am personally less concerned about his involvement in the government. we are more concerned about valuation. the robotaxi launch has the potential to be a negative catalyst here. it should investors to realize

this is actually further away than some think, just because of the scale and scope of the lunch, quite limited on the front end. jonathan: how far away do you think it actually is? ronald: to be a meaningful part of the business, 2030 and beyond. tesla will continue to scale it starting with the austin launch. the initial launch, we think will be employee only, they will have to use some sort of remote operations. at least to our understanding, it will use model 3's and y's to start which may be a disappointed to the market, because some expect the cyber cab to be a part of this. to the extent this is 2030 and beyond, we think it is captured in our evaluations. we have fsd being a trillion dollar business a decade from now which is quite favorable for something today that doesn't contribute meaningfully at all to the company. jonathan: the question that we

have all been trying to answer for a long time. what kind of multiple does the stock deserve, how should you value this company? certainly does not trade on what is happening with auto sales. how should you value this company? ronald: it's a great question. to be clear, we have stripped our multiple base valuation several quarters ago because it is challenging because the auto industry is struggling as it is and so much of the value is tied up in the terminal value with the autonomous push, now robotics. we do take a dcf approach where we value fsd, autonomous efforts separately. that is the only way you can get close to the current price. if you were to only price this as an auto and energy business, we think it is worth less than $100, but we give quite a bit of value to some of these

future endeavors. lisa: what kind of blowback have you gotten from having a sell rating, both at a time when the stock was surging, and now where it is actually looking prescient? ronald: in terms of blowback, have not gotten a tremendous amount. most institutional clients appreciate if you have a view and stick to it. our view is the facts have not largely changed, the automotive business continues to deteriorate. have a tremendous amount of value of fsd, so in terms of blowback, i haven't gotten a lot, i get pushback from clients all the time, but that is a debate. i am sure the bulls also get plenty of pushback because the valuation looks challenging to justify. with sales deteriorating, but we see as a first quarter delivery miss, the near term is challenging unless you are

depending on the robotaxi launch or the new models which will be somewhat cannibalistic of the model 3, maybe not the model y. it is tricky because the stock ran up so much postelection. jonathan: powerful run over the last few years. appreciate your time. hopefully we can continue the conversation through the year ahead. over the last two years, up by 62% in 2024, 2023, more than 100%. lisa: at a time when people thought it would be able to be at the forefront of the shift to us all being able to take a car with nobody in it, driving us around. jonathan: still could be. lisa: this was around's point. the technology is not as far as people think it is, and the fact that we have not seen it yet, people can dream high without seeing with the path ahead is. how quickly can you roll it out?

how much will people want to adopt it? in san francisco, there is already a program with a robotaxi and people are taking it. jonathan: that will be a debate for the next several years. s&p positive by 0.6%. we will be talking about the economic data. a double dose of big economic data. jobless claims and gdp. we will be catching up with lauren saidel-baker, george bory. both of them here to react. this is bloomberg. ♪

jonathan: 60 minutes away from the opening bell, seconds away from some economic data stateside. on the s&p, positive by 0.6%, up by .75% on the nasdaq 100. your yields looking like this across the curve. 2-year, higher by a single basis point, 4%. 10-year up to 4.28. with that economic data, here is mike mckee. mike: we get a big jump in the number of jobless claims, up to 242,000, last week, 219.

on a continuing basis, 1,862,000 from 1,867,000, so not a major change there. the number everyone wants to see in terms of jobless claims is whether we are having a doge effect yet. right now, initial claims for former federal civilian employees was only 614, so this is two weeks delayed, as of february 15, so we are not seeing the doge impact in terms of federal workers, could be some contractors. but we don't have the exact numbers. biggest increases in claims the week before, kentucky and tennessee, don't suggest that we are getting a lot of doge impact. we also get durable goods orders. these are january numbers. these are more relevant than stuff we have been getting recently.

up 3.1% after a drop of 1.8% in december. capital goods orders ex-air nondefense, up .8% after .2% in december. good news on the business spending side. finally, gdp, no change. the first revision to first quarter gdp, 2.3%. a little bit of a change in personal consumption, rising to 4.2% -- actually comes in at 4.2. the expectation was it would be revised down a little bit. the big number of the morning appears to be initial jobless claims but we don't have an exact reason why that has jumped. it does not appear to be federal workers claiming benefits. remember, they have their own separate program from the overall all unemployment compensation plans. jonathan: we will give you a few moments to go over the numbers and then come back to you. that due to computing would

better do it elsewhere. in the bond market, yields are still higher. 10-year, 4.28. 4.1% at the front end of the curve. equity still near session highs, up by 6.6% on the s&p. i am sure it caught your eyes, 242 on jobless claims. lisa: he is telling us there is not a huge federal input. you probably have to back out some contractors. that just means that there were more people who lost their jobs this past week aside from what we are seeing with doge. one week does not make a trend, this is not catastrophic, and that is why it is not overwhelmingly better-than-expected due to in other places. jonathan: payrolls is coming up quickly. 155 so far is the meeting in our survey. we will build out out and bring

you some fresh numbers. 155 is the number at the moment. the previous read, 143. lisa: it will be what we see with participation, how much wages are going up. there has been a shift of stagnation in the labor market but it seems like the leverage has shifted back to the employer's where they are saying get back to the office, we need this from you, people are saying, yes, we will be there. jonathan: jamie dimon made that clear. lisa: very clear. he is saying, i have been back in the office through the pandemic, where is everybody? you are seeing that reflected across the united states. jonathan: joining us now to join the conversation is lauren saidel-baker. i am sure you heard the commentary from mike mckee. what do you think? lauren: overall no change to the outlook, business as usual. growth is still slowing but staying positive.

i see the jobless numbers as a little bit of a hindrance, again, as you said, even one month does not make a trend but we are getting that continue to story of directional deterioration in the labor market but coming from such an incredibly tight starting point. we had the room to lose. jonathan: the soft data has gotten softer, the survey data on the consumer. we saw that from the conference board earlier this week. how much attention do you pay to those numbers, and when you start to see them we can like that, do they bleed into the heart due to eventually? lauren: consumer sentiment data i pay almost no attention to. what we are seeing it especially from the michigan data, it diverges so much republican and democrat how i feel about my own personal inflation rate. consumer sentiment is a notoriously terrible leading indicator. what i'm more focused on is

something like ceo sentiment and all of those surveys are showing higher growth expectations this year, more demand for hiring especially in the second half of the year. the more reliable leading indicators, that is where we still see green shoots. it is just muddling through the political noise on the consumer front. lisa: the 242,000 reported was in tandem with december 6, previously much higher in october, so these numbers have been jumping around, to your point. when it comes to policy changes, we were speaking with torsten slok, and he was noted that for every federal employee, there are two contractors that also lose their jobs. are you expecting a significant footprint in these reports that stem from some of the doge efforts in d.c.? lauren: significant is the key word there. i don't see that happening yet. there is so much uncertainty

even with the self-reported numbers from doge which have come under question. the grand economic story is that there are still skills gaps, especially on the manufacturing and construction front. we do see some laxness in the tech labor market but there is still generally some opportunity in that core or median u.s. consumer. we will watch closely but we need some people at least two work in the federal government for it to keep on churning. lisa: one other thing he was saying, all of what we are getting right now, the muddle, is setting up a stagflationary environment, and you could get growth at the same time you get a pop in inflation. i understand the numbers are backward looking, but if you look at core pce prices in the fourth quarter gdp, revised

upward, 2.7 percent from the initial 2.5%. i wonder at what point do you start to see inflation concerns bleed into the data and then into markets? lauren: i do see inflation concerns. we look at the pce data tomorrow. that will be closely watched. as i say, one month does not make a trend, but two months, three months? we have seen this relatively sustained inflation a little bit to the upside of what the market expected. i expect inflation to come back by the second half of the year but i think that timing might be a little bit earlier in some of these key categories. they are really pressuring the consumer. jonathan: appreciate your time. lauren saidel-baker of itr economics. gdp, jobless claims, capital goods. like, you got in a few minutes to go over it all. mike: you are going to hate me for this but i'm going to dismiss the number for the jobless claims.

we had a holiday and the seasonal factors expected a drop of 22,000. we only got a drop of 2000. artificially increased there. when you look at a state-by-state breakdown, a number of claims went up in massachusetts, rhode island, big drops in california. it doesn't look like this is related to what is going on in washington. as we mentioned, only 614 federal workers filed for unemployment last week. the other thing i would note, in durable goods numbers, this is a bowling story. 93% increase in terms of what boeing orders came in during the month and that pushed up the overall number. still good news on the capital goods numbers that excludes those aircraft, up .8, suggest that businesses have not pulled back yet. although interestingly we saw a pullback in orders for finished metal products.

maybe some people were not putting in orders because they were worried about prices going up. jonathan: i would never hate you, and most investors are saying the same thing based on what the bond market is doing. bonds are where they were going into the data. lisa: what mike was saying, there are seasonal effects that are artificially increasing some of these numbers. when you look at the data, it is not exactly a straight line. jonathan: i love the sound effects. where have they been? george bory of all spring investments is alongside us. good to see you. the whole country is in wait and see mode seemingly. from ceos, consumers. what does that mean for the federal reserve? george: they are clearly and wait and see mode payment they led the charge in terms of guiding the market to wait and see. their data dependency has

basically obliterated forward guidance for the most part. they are clearly waiting to see what happens. as we talk about the data, talk about where we are currently economically, the economy is still in a pretty good spot. we are talking about granular changes on the margin which is what we are supposed do, but they are pretty minor at this point. there is the sort of whiff of stagflation may be creeping its way into the narrative as confidence in some areas we aken. the more important data is certainly on the inflation side where this persistence, stickiness in inflation is here, it is real, and it's not going anywhere. from the fed's perspective, they look at a labor market fully employed, inflation that is barely contained with maybe some upward pressure. they are very happy to sit and

wait. makes it tough for bond investors, but that is where they will be for quite some time. jonathan: go further out on the curb for us. seven weeks of fallen yields. what explains that? george: i think there are some technicals, seasonality within the bond market is favorable. the wait and see mindset is alive and well in the bond market. look at our own positioning as we gravitated toward a more neutral duration position. many of our competitors have done the same. we are waiting to see is inflation going to break out or is it going to subside or remain contained in some way, shape, or form? positioning doesn't look overly stretched. you have seen the range in 10-years really compressed. we are at the bottom of the range now, 4.20 5, 4 .75.

we had been hovering around 4.5. we have been there the last few months. i don't think we will break out anytime soon. i think we will be stuck in this range for a while, but as you mentioned, lisa, tomorrow's inflation data is pretty important. labor market data will also be important because that is what drives the fed. lisa: we have seen the data go up and down, swinging pretty violently, but the narrative in the market is swinging pretty violently. people talking about growth concerns in the last couple of weeks, not inflation concerns. you said you have move more neutral in duration, the fed is stuck in neutral. are you thinking that inflation is the bigger risk than some sort of real decline in growth? george: for bond investors, yes. inflation is certainly the biggest concern we are focused on. the growth data is still looking reasonably healthy.

i think on the margin you can start to suggest there is some softening, but not enough for, we think to get super alarmed, heading into a recession or dramatic slowdown in the near term. i think the market is still waiting to see what comes out of the administration in terms of taxes, deregulation, ongoing discussions as it goes with tariffs. there are enough actors to pull in the reins a little bit, but we have an economy that is fully employed, people are spending. the distribution of that spending is pretty skewed. the high and is doing very well, spending a tremendous amount of money, and at the lower end of the economy, people are spending everything they have and drawing down on debt where they can. there are not obvious signs that the economy is ready to roll over but inflation is real and persistent.

as we see it gnaw its way back into the narrative and the data, that is something that bond investors have to stay very focused on. lisa: which sound like a really good environment for credit, for companies to borrow and actually pay it down while also managing these risks and giving investors a bit of a buffer from inflation. but valuations are really hot. how do you play that? george: we know spreads are tight. we like to say there are elements of a super cycle in the world of corporate credit in particular. that has a lot to do with the great financial crisis, low interest rates, lots of low cost that on balance sheets. that creates tremendous financial flux ability for companies, the ones that have it, and we are in that period of time. credit spreads are tight for a reason and there are many companies on the right side of inflation. inflation can be destabilizing when it becomes too volatile or

rises too high, but modest inflation is actually a fairly good operating environment for companies and any indebted entity, as the value of that debt is inflated away over time. that is good for credit. it is not a good value trade. 300 basis points for high yield. it is just enough to keep you engaged, not a lot to get you one of the excited, but it is very appropriate we think for this type of environment. our central message, the all spring message to investors, yield, yield. take what the market offers. the market offers a lot of attractive real yields, whether it is corporate backs, mortgages, compound that through time and let your portfolio grow. it is working in real terms. it is not wildly exciting, but it is working, and we want that in our portfolios.

jonathan: certainly call me listening to you. george bory of allspring global investments. we are hearing from the richmond fed president, president barkan talking about a couple of topics. the job situation, saying we are seeing a lot of uncertainty on the firing side, that the firing of employees on the government side is real. for hiring to rise, businesses need confidence. lisa: especially at a time when you have to translate this into what it means for policy. some speculating that the uncertainty will let the fed holder rates where they are for longer. that said, you can make an argument with this level of uncertainty, it would encourage them to cut more quickly. it raises the question, i understand they are trying to figure out how to feed this into their models, but doesn't make them more prone to keep rates where they are or cut? jonathan: getting comment from

the president of the united states on trade. this will take a while, so forgive me. drugs are still pouring into this country from its ago and canada at a very high and unacceptable level. a large percentage of these drugs, made in and supplied by china. more than 100,000 people died last year due to the distribution of this highly dangerous poison. the families of the victims are devastated and in many instances virtually destroyed. we cannot allow this to continue to harm the united states. the proposed tariffs scheduled to go into effect on march 4 will indeed go into effect as scheduled. china will likewise be charged an additional 10% tariff on that date. the april 2 reciprocal tariff date remains in full force and effect. of course, some confusion about where we were to the scheduling of events. lisa: this actually clarifies a lot.

he is looking for a deliverable that he can deliver early next week with respect to fentanyl and immigration with mexico. if he can deliver that, we will get the april 2 back in a rather than the march 4. it also points to that this is being used to put tariffs on china that will stick, raises the tensions there. to me, this clarifies what the deliverables are, what he is looking to get done. jonathan: equity futures falling away from session highs. still positive by 0.4%, just not as high as we were. in the bond market, higher by two or three basis points. yields basically where they were. we are heading down to washington in a few minutes to catch up with anne-marie on these comments from the president. before that, let's get your bloomberg brief with dani burger. dani: just to recap the data, initial jobless claims rose more than expected to 242,000, but as mike mckee pointed out, the

increase was led by massachusetts and rhode island, both hit by winter weather. gdp growth was left unchanged. core pce inflation was adjusted higher to 2.7% from 2.5%. secretary rubio laid out a strategy for managing russia's relationship with china. he says he wants to dilute ties between the nuclear powers. he also warned those are tight between the two would be a problem for the u.s. if moscow became the "permanent junior partner" to beijing. president says he plans to revoke chevron's oil license to operate in venezuela. he said electoral conditions and failure to take back migrants from the u.s. as crudely promised. chevron would have a six-month wind down period to exit operations in the country. that is your brief. jonathan: next on the program, we are going to washington to get the latest on the trade front from the president of the united states. ♪

jonathan: the opening bell, 37 minutes away. equity futures are positive 5.1 percent on the s&p 100. nasdaq 100 still positive by .5%. your week ahead in the next couple of days shaping up as follows. president donald trump holding a bilateral meeting with the british prime minister keir starmer. at 2:00, a joint press conference. after the closing bell, earnings from dell and hp. tomorrow, core pce, and we will hear from low to mayor zielinski who will be reportedly visiting the white house. our attention right now is on trade. the president addressing mexico and canada and the tariffs set to go next week, saying they are set to go on march 4 will go into effect's scheduled on china.

china would be charged an additional 10% tariff on that date. the april 2 reciprocal tariff date will remain in full force and effect. let's try to make sense of this with anne-marie in washington. annmarie: i'm trying to make sense of it as well. of course the pause on canada and mexico were just that, put on pause, but china went through in early february. that 10% went through and there was just the pause on canada and mexico. the president making it clear in this truth social post they will go into effect on march 4. then there is this additional line which will cause some confusion. china will likewise be charged an additional 10% tariff on that date. and if people are looking at this and saying, is trump talking about the 10% already in effect in february, or is this in addition to 10%? i am reading this as trump potentially opening the door for another negotiation of this 10% with china that is going to come

into effect. just five days, march 4. that will be the first one up when it comes to these tariffs. jonathan: i have to get to the price action. equity futures rolling over just a touch. not much movement in the bond market, but where you see some movement is in foreign exchange. dollar-mex, a move of 0.5%. euro-dollar moving to a similar amount. lisa: any optimism yesterday that went donald trump was saying was a signal that they were pushing back tariffs is getting taken back today. i want to note foreign-exchange has been the place to highlight all of the trade bets, and that is where you see the action today. jonathan: confusion over the trade yesterday. no longer confusion this morning. tomorrow, we are speaking to the former world bank president david malpass leaving from new york city, thank you for

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matt: man, that 10 year come down. 30 minutes until the start of trading. i matt miller. sonali: i'm sonali basak. katie: and i'm katie greifeld. bloomberg "open interest" starts now. sonali: after two years of blowout earnings nvidia delivers good but not great results, drawing a muted response from esther's. matt: investors also waiting through a fresh batch of economic data. next up, the january pce report due t