e products at wt.com surf's up! can i have another pancake? from full house... ♪ ...to empty nest... ♪ ...to free birds. ♪ vanguard. we got this. fifty years of helping you invest for every chapter. good friday morning thank you for joining us this morning. i am maria bartiromo. and friday, january 10, it is 8:00 a.m. on the button on the east coast.

we have breaking news right now, the death toll rising in los angeles at least 10 people dead more than 10,000 buildings damaged or destroyed, the los angeles wildfires burning up the region new fire in -- in san fernando valley has prompted even more evacuation orders, the palisades fire scorched nearly 20,000 acres is now 6% contained. they've got 6% containment. at least 20 looters arrested for stealing from devastated recess departments as d.a. projects punishment forks business max gorden live from pacific palisades neighborhood with the very latest max. >> maria what is hard to convey especially right now still dark on west coast the extent of destruction home after home block after block looking just like this. lives absolutely up-ended he a

homes burnt down to foundations all really left just chimneys maybe few burnt out vehicles left in driveways so many lives completely turned over by these fires you see communities that have been decimated, you said there in the beginning, around 10,000 structures destroyed by fires across southern california. around 35,000 acres scorched the death toll rising, now at least 10 people are confirmed dead that death toll would rise higher, the human element has also played a factor in this the past days yesterday super scooper one of the firefighting aircraft had to land make emergency landing because it was hit by a drone that was flying in the area illegally a civilian drone did damage to the wing nobody was injured but super schooler out of the firefight, 20 people also been arrested because of looting obviously, that is not majority of people but there

are some bad elements out here we have some private patrols law enforcement, looking for anybody up to no good. now there is some good news here on palisades fire we have 6% containment firefighters are starting to get a handle on things, mother nature is starting to cooperate a little bit. it is still very, very dry it is still windy, and there is going to be continued fire weather through the weekend into next week. luckily nothing like we've seen we saw 1200-mile-per-hour gusts on some mountaintops, the winds calmed down hopefully giving firefighters a clangs to catch up on these fires hopefully folks will be able to return, but, unfortunately,, some people are going to be returning to absolutely nothing. maria: my god mow devastating max gorden this morning in l.a. joining me recruiter chief economist julia evacuated from her home in pacific palisades because of wildfires, julia, tell us what happened, how are you doing

today? where did you find housing? >> good morning, maria. so about -- 11:00 a.m. my nanny called panic saying smoke coming our direction i grabbed a suitcase said let's get out not take a chance before packing i side let me get my son from school i ran next door to elementary school the fire getting closer closer flames already jumping across to the brush around homes just behind the school. and you know took a while before to call education, 20 minutes for children to be released, by the time i got home got in the car quickly as we could left with very little. we knew at first to offer to take us in in palisades village are their homes since destroyed another friend in malibu said come stay with us, their houses have been destroyed we are in santa monica one block south of the

current evacuation area. and all constant alerts i was to raebt house in calabasas before we signed off, the owner say it wait we are in emergency evacuation a fire in the valley probably still dynamic, very much ongoing. >> any word in terms of your home? what happened to your home? and the school? >> so my husband was os able to go in and check on our home first day he check on our home since was burning hedge between our home and neighbor's home burning most you houses around our house already burnt down the school was actively burning, our home somehow was still standing, home in middle of a wasteland.

he took buckets, the hoses, weren't work being hosepipe wasn't working but able to take my son's baseball bucket take runoff from gutters put out fire on our property. that i think saved our home. maria: unbelievable, you've got to be thinking about the policies that got us here, heartbroken california mother confronted gavin newsom with a appears complete lack of preparation on part of the california leadership, watch this. >> i live here governor, that was my daughter's school governor, please tell me what you you i am not going to hurt him i promises. >> litter talking to the president right now to specifically answer question what we can do for you and your daughter. >> can i hear can i hear call because i don't believe it. >> i'm sorry, can i -- literally -- >> okay he said he was on

phone with president then said i -- i don't have service, julia you posted on x, this i am receiving lots of emails, from l.a. city institutions offering mental health services i wish city would build veros bury power lines clear brush burn firebreak coordinate disaster response i don't need a shrink i need good governorance tell us more. >> one policy failure after another in this case, the first is that the state has regulated insurance out of business, and so, by forcing insureers in game of probing consumer not to price risk accurately but main affordable coverage insurers the left one neighbor got you notified by

insurance company policy being terminated fire conforming dropped by major insurers in our area people would be paid fair insurance to protect themselves this is absolute neighborhood very affluent neighborhood, as wealthy friends of ours have lost insurance pushed on to state cal fire program or unable to make arrangements in time so many people are uninsured. >> some decisions, that were made like karen bass cuting the funding of the fire department by 17 1/2 million dollars, or governor newsom, deciding that the water was needed in the pacific ocean to save fish. >> a huge problem with water storage, distribution fire hydrants empty in i cases early on in the fire water pressure disappeared, and so many places where the fire was

being started by small embers tiny fires on properties that could have been put out, but they were just allowed to burn because no one was able to fight them. you know, the policy failures enormous on saturday our mayor went to ghana, should be focused on local issues, and two days already been warnings not just high winds but extreme winds, of extreme fiber risks she decideded to go on international trip anyway, so, you know absent at the very top inadequate coordination between the various agencies the fire department police departments, friends of ours managers a aeronautically buildings phoned 8911 said we have no police officers here complete gridlock, on sunset boulevard on palisades driver people abandoning cars road

impassable we need replace to direct traffic the firefighters can't get to the fire, because the roads are impassable those kinds of oversight despite adequate warning we had this is a driest winter on record in this area. there is a lot of fuel, that is just sitting there waiting to burn, and we knew incredibly high winds coming assets weren't moved into situation wasn't a command center watching this, and -- vigilant. >> we pray for your safety, and, of course, all residents of the area i know you are joining us for jobs data we will see you in 20 minutes michael thank you so much for joining us about to take on jobs numbers we will see you soon. >> very good. >> thanks michael michael balbona, dan niles here

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when you want to invest with more confidence... the answer is j.p. morgan wealth management . maria: welcome back. now look at stocksity major double-digit gains with you 2024 next guest forecasting s&p 500 would finish higher by 20% we got a givens across the board joining me now he man himself files investment management founder positively manager dan niles thank you so much for being here, congrats you are spot-on with your trends last year your take twa 2025 will look like main predictions for the year. >> i think 2025 is going to be a lot more challenging, one of the widest, outcomes that i am thinking about that i can remember, where you could see market up 10%, this year if inflation stays under control because i think the economy is going to remain strong.

and earnings go growing 10% the other side of this is that since june and q3 all the different measures of inflation have turned higher and you see fed acknowledge that on december 18th when jerome powell said our nation forecast have kind of fallen apart s&p went down 3% bond yields surged, so i think if you do have an issue with inflation reigniting the fed pausing having to -- think a good 50% chance potentially happening you can see market multiples contract 30 to 40% along with stocks. >> i we're in what that means for the fed hawkish pivot fed cut rates for the last time in a couple of months i think, really markets have been uncertain tell us how you want to latino capital in this environment i know one of your top picks is kash.

are guaranteed 4% yield money market fund dry powder what you are writing about to clients about number one pick, cash? really? >> yeah. well, you have to remember last time i picked cash in 2022 s&p went down 19% so i think right now, you are getting a very good yield 4%, it does give you dry powder because you have to remember for the overall stock market, if you go back through history look at when inflation was between 2 1/2 to 3%, the trailing multiple on s&p 500 was 19 times. today at 25 times. 10 year treasury yield yield 5.8% today up 4.6, so much like in 2022 if you say "well valuations going to goback to where he they've been literally" you could see losses in bonds and stocks exactly what you saw in 2022 in that situation cash looks

pretty good. with guaranteed yield money market funds over 4%. >> hmm, good point look at yield 4.70% right now on 10-year is this about the inflation worries dan? what are your thoughts on the impact of this yield because i am wondering if this is going to show up as bond losses, for the banks when they report next week, and guidance for next year. or this year '25. >> remember we've been through a banking crisis back in 2023 with failures of silicone valley bank volunteers with credit suisse, forced in that marriage with ubs bone through banks have gone ahead cleaned thing up dramatically that is why looking at banking etf the other side of this is that you've got yield curves steep so banks can i know give you and me, a pretty -- when we

put money in savings but give you higher rate based on shape of the yield curve where 10 years are from that angle banks are going to see much better being about the profitability on that interest margins president trump coming in focusing on deregulation, cutting taxes, so that is really good for bank stocks why they are one of our top five picks, because you've seen bank, wbiden we are recommending that is down 4% last three years because of banking crisis, s&p 500 up 23% over that time so you've got a big discrepancy bank, next week a good idea how things are going to perform. >> i love the fact that some of your picks do go back to policies. and that is -- that is the difference here you see a different policy coming in, so you are looking at the impact, on sectors, deregulation is a very, very powerful policy. that certainly is going to

help banks, so kbwb wick what other policies are you looking at as far as critical to stocks or sectors? >> yeah. i think those also will help mid cap stocks but especially if you have a slow down in spendingive talked about microsoft capex guidance january 3 is an example of that. so if you look at the midcap, value index in particularly helped by deregulation tax cuts, the s&p over last five years have been driven by magnificent seven, you had covid investment in internet infrastructure, the last two years has been all about a.i. so mid cap stocks forgotten s&p up 82% over the last five years mid-cap nails underperformed by 35%, trading at 17 times p/e, while s&p is

trading at 25 times, new policies coming in, that should really help those names play a lot of catchup also defensive if inflation does in fact pick up. we've written about this see how they did in 2022 or tech bubble broke in 01-02 o other thing getting access to all this internet data criticized cisco will do well a top five, and in europe and u.s. should benefit so that rounds out five. >> i i mean five ferry official kaushdz central bank rate cut path this year uncertainty over lingering inflation fears fed expected to pause the rate cuting first policy meeting beginning january 28th, and you told clients that you would would mot surprise to you see 10-year he yields liar incoming administration tried

to issue longer dated treasury debt how much higher can yields 10-year go. >> if you've got you go back look at history when the one cpi between 2 1/2 to 3% , or back through time, 10-year treasury yield has been 5.8. so right now i think 10-year about 4.7 so it could go up another00 basis points get back to what the average has been, so that is still a lot of upside risk than we've seen before, obviously, into around the globe including u.s. a lot more debt on balance sheet trying to trim out debt prior administration should have done when yields were 10-year one point down to 0.5%. but the incoming policies even though great for growth gdp is going at 3t 4% other side of even more iss why 10-year you can see it go

quite a bit higher compress market milk why i am concerned about s&p falling >>, of course, 5.8% yield i would say all bets off on any rally in stocks going to kill things what about the dollar? you talked about the u.s. dollar ending third quarter at 101 ending the year at 108 tell me about the dollar implications here dan. >> yeah. that is a big deal for stocks, in the sense that s&p 500 gets about 30% of revenues internationally so when you take international revenues i translate back into u.s. dollars much higher, you are take about a 7% hit right there 30% of revenues, so that is going to be an issue for a lot of these bigger companies cause remember what magnificient 7 you got some names with closer to 60% revenues from international markets so when they guide out a lot only guide out a quarter in advance potentially could see hit to revenues. maria: dan, really, amazing analysis as usual, one of the

best, in the business. in terms of analyzing this market dan we so appreciate your time this morning great to see you, sir. thank you. >> thank you. dan niles futures indicating decline start of trading before that we get december jobs report out in seven minutes' time, we go all-hands-on-deck for the december jobs numbers, just as they cross the other side of this break you are watching "mornings with maria" live on e) "mornings with maria" live on e) "fox business" i think i've glue frame over the microphone.

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about two and a half minutes economists expecting 160 though i noun pharm payrolls added to the economy which in december, the unemployment rate z 4.2%, joining me to break it down is a macromavens president stephanie pomboy heritage foundation economist trump economic adviser stephen moore, former toys "r" us chairman ceo former target vice chairman joel, julia pollak john lonski cheryl casone great to see everybody. thank you so much for being here i want to kick off with backup in yields stephanie pomboy, your thoughts what this yield was telling us at 4.7% you just heard from dan niles this is going to be a problem for the stock market if this yield keeps moving up; correct? >> yeah. i couldn't agree more, i think if you take the -- backup in

rates you couple it with strength in the dollar strongest drag for corporate profits since 20e profits, and obviouslport into hiring is pro growth. so, this could be a real problem for the economy more broadly in terms of lower earnings growth, leading to less employment obviously, that continues into restrain consumer spending then into that whole kirkel fed cut 100 basis points 10-year yield has gone up 1 hundreds basis points fed easing -- facial typically. >> on top of the backdrop that you have been questioning, for a long time, talking about the fact that the headlines don't

really tell the story of the consumer today. >> yeah consumer is in trouble especially, the lower income half with very high debt loads incredible coordinator debt inflation killed people so stressed to the breaking point. >> steve moore numbers out in 30 minutes, i am wondering if the 160,000 jobs numbers is what you are expecting it is way down, by the way, from last month. >> yeah, i am expecting somewhere in that neighborhood, but there is no question the economy is not in good shape, you know. this message this narrative from biden people that they are handing off to trump, healthy economy is absolutely wrong! i agree with stephanie that you see fed continue to lower rates, and yet the long-term rates going up what that is an indication of, maria, is that inflationary expectations continue to climb, so i think trump is going to need a big

super school tore fix this mess inheriting. >> people i spoke with believe trump agenda is antiinflationary numbers are out to cheryl with jobs numbers for december >> we have 2356,000 jobs -- 256,000 jobs in december estimate 160,000 higher than expected rate nor unemployment went down a tick to 4.1%, the 12i789 for a rate of -- 4.2%, we had no revisions for month of november, but for november payrolls revised to 212,000 a jump, 43,000, november was raised hire labor force participation rate 62.5% average workweek, hours 34.3, and that is in line with what we have last month. cake taking a look at government jobs, 33,000 government jobs there is never

an estimate that that is in line with what we had last month, factory jobs, we have, loss of 13,000 factory jobs, we were looking for gain there. and then the u67.5%, labor force participation i mentioned 62.5, let's get into the actual report and talk about what the government says is where the job growth actually was strongest. they are saying here that employment trended higher in healthcare, government, social assistance retail trade jobs also were added in december a loss in that particular metric for the month of november. so, i will go ahead send it back to you panel for analyze i will keep looking at nupz >> we want to understand what this reaction is markets worsening as you were talking

cheryl dow industrials down 300 points right now, the nasdaq down 215, john lonski your reaction to this reaction to the better-than-expected jobs numbers. >> according to latest report on payroll drop in unemployment rate my goodness this is telling us if treasury bond market had it right with that percentage point jump by the 10-year treasury yield and federal reserve had it wrong with that percentage point drop, the federal funds rate tells us the economy is doing quite well. and as a result, inflationary pressures are on the rise. >> um-hmm wondering how incoming agenda is going to offset what people are expecting look at yield on 10 your up 8 basis points right now 4.76% two-year up 10 basis points 4.36% break this down steve. >> good report with i am very

he relieved i expected a lower number it shows there is still resilience in this economy but the thing would keep me up at night creeping inflation, that john and stephanie were talking about one thing could dismantle trump agenda if prices start rising again there is no question about it, the number one issue, that put trump in the white house was the inabilities of -- of joe biden, to bring prices down people were angry every time went to grocery store if you see those continue to pick up if we go from 2, to 3, maybe 4% by the way, look what is happening with commodity prices continue up 6% pace so if i am trump i am very nervous about these price rises the supply-side agenda of donald trump increasing production of goods and services lowering taxes, deregulating will take some pressure off inflation because it means more goods, as laffer

would say when economy produces more apz annels. >> exactly what happened short term bets on the next rate cut, is now leaning towards one rate kruk for 2025 that would be no earlier than month of june 2025, the yields reacting in tandem to that. maria: on policy, julia polk jump in talking about the devastating l.a. wildfires, of course, forced you to evacuate. julia i am wondering if next step in washington is going to be in enact meant of disaster relief legislation to pay for rebuilding infrastructure for emergency housing replenish the people avenue how does that weigh into backdrop right

now julia. >> disaster already is seventh costliest in u.s. history so far from being contained could be the costliest disaster will have, the impact, and fiscal effect as well, you know this comes at a time seeing glimmers of hope in the labor market the hundred basis points in cuts translateing into imprisonments already banks more open to lending to consumers, home equity line credit balances rising as consumers are able to test that huge amount of home equity base built up, we're seeing total vehicle sales go up people are buying big ticket items labor market was lagging that wasn't quite catching up yet, about but this report perhaps rebound after two years slowdown in

labor market, is beginning. >> yeah stephanie pomboy what are you telling clients now? >> the well, i am very focused on we talked at a top higher rates stronger dollar, and i think important to note, because we are coming into a year corporate sector has a trillion dollars in debt comes due there is another trillion in commercial real estate related debt there is federal government that has a massive amount of debt going to have to roll, the competition for capital is going to be fierce take place at much higher levels of interest especially in light of this reportedly, which suggests the fed really has no runaway to continue to cut rates if they go they are going to ignite further already, increasing inflation pressures i think it is going to be a bumpy ride for

investors this year just because they spent all last year discounting the pivot now looks like that is not going to happen less kind of tapping fingers on table waiting for trump tax cuts to come through. and it looks like they are going to be tapping fingers on the table a while given this apparent preference for two bills it sounds like other than one might get pushed later into the year, that is what i am concerned about. maria: smooshths are. >> dow down 334 near lows of the morning in paf you said you own gold how do you hedge what do you want to do as investors if you do buy into this idea, that markets will have a rocky start to '25 are there areas to hide? >> well, i continue to be bullish on gold i think the dollar is selling -- reversal

pushing to levels of strength will create some kind of economic -- uh you know weakness that will decline there, i do think that gold is a great hedge against that. . and i wouldn't remark -- we have a wager last year as to what would perform better stock market or gold, i said gold, it turned out that was in fact the case for 2024 i think will continue to be the case no 2025. i think in terms of places to hide is a good place to hide, i think that you know you want to be given the strength in dollar and nonmultinational companies multinationals, hammered here more commodity focused i would say resource focused where i would be i anticipate at some point just like with dollar higher rates

will sow seeds of decline in the treasury complex i think that will not be related to -- echoed neither corporate bond market where i think spreads might finally begin to widen out, in 2025. so, we will see. but i think you know the long story short that is there is going to be much more volatility in the market this year, because waiting on rate cuts looks like probably not going to happen now they've got to wait for drults to come through that is putting eggs in policymakers' basket not a comfortable place to be. >> look at the end of the day, goes back to the strength of the backdrop and you've been questioning consumer in backdrop sometime higher rates only add on to pressure, how do you see 2025 playing out the in terms of the macrostory? >> well what i see going on is friction between optimism? consumers and businesspeople based on incoming trump administration policies they hope are going to happen, that

is the car trying to take off drive off but on slippery sand what is pulling behind it working the other way against it pulling it back numbers today look good i hope they are good keep in mind survey 4 % response rate -- 43% rate numbers almost certainly wrong let's say as good as they look that is based on pop optimism about future that may or may not occur that is why it is trump bret get off to fast start or we are going to have series problems. >> steve you want this administration to deal with taxes as prior to the, by the way, voters voted for that they voted to get us out of this inflation spiral and voters voted to secure the border. but we don't know if it is going to be one big bill or two, what do you want to stay to lawmakers tie as they are approaching president trump this weekend in mar-a-lago with this strategy talks? >> well, look i am with larry kudlow we got to do this in my

preference would be to do it in one bill. but what matters most is not so much whether one bill or two bills but its got to get done as trump said, by memorial day that means in first 150 days or so they can do this they can do border security energy stuff walk and chew gum at the same time my point that longer you wait to get this done, the more you delay that kind of big recovery we want to see, and more uncertainty about whether at all one quick point talking stock market returns got experts on stock market i am not expert i will tell you in my new book with laffer called the trump economic miracle the stock market performs of the dow the nasdaq, and s&p 500 are adjusted for inflation twice as high under trump as under biden.

maria: good point but yields are spiraling i don't know where this ends look at 10-year we are talking about 10-year kissing up to 5% john lonski has massive implications across the economy and debt, your reaction to this move in rates on heels of jobs numbers at 4.78%,up 10 behaves right now. >> quite a shock bad news for housing already on the ropes, not only bad news for home sales but also bad news for those businesses who say sales again upon purchases of a home. building material stores furniture stores, and the like. it is also bad news for capital markets, you know a lot of people expected a big increase by merger and acquisition activity in 2025, well if interest rates go higher that is not going to happen. and that could weigh on equity markets performs.

performance what dan nooildz was saying is a fwu minutes ago july wra take us to jobs story where jobs are even though headlines look like economy doing fine jobs picture is not. it has been deteriorating. even though this is a better-than-expected number your thoughts on where specifically the jobs are right now. >> story in 2024 was slowing narrowing market job growth in healthcare government other sectors either sluggish or flat or moving in reverse. this report shows manufacturing still is incredibly weak manufacturing, hours down jobs down that sector, despite enormous he investments that have been made last few years manufacturing construction new facilities, employment is not improving there, the retail number i think is hopeful here

outlook surveys improving on the strength of the consumer improving strength of the consumer now two years of positive real wage gains after, of course, two years therapy will terrible for consumer where they lost purchasing power amid out-of-control inflation but clawing their way back translating into confidence among retailers stepping up. >> the consumer has been trading down you are seeing, you know the highest earners go to places like walmart, cheryl casone this market reaction has been fierce any revisions. >> looking at bond bond selling off yields as well when you look back at what is happening with regards to you know the contents of the report, i am wondering if that retail trade boost we saw maybe this is better for jerry than highlighted is kind of a

one-off a seasonal number one thought we also have truncated retail selling season we lost a week between thanksgiving and christmas, we started to get data last week about consumer credit card debt consumer continued to pile on it wasn't that we saw consumers going out spending on fun things they were spending on a necessities i think a really disconcerting worry some statistic that may continue to play out in this year to your point about fed rate cuts if we get one cut we don't get it for six months the average credit card interest rate is 20%, the average. i worry aboutness. >> people have been putting more on credit cards, do you read the job a creation retail in december as totally seasonal?

>> absolutely. and as i have been saying a long time, it looks like consumer spending that is great, but, again, they are borrowing money to do it it is all on the come betting able to pay back when trump gets into ofgs policies improve good times here if it doesn't happen fast enough can't pay it back then tough situation for future expenditures, you are not going to see it continue to grow you are going to see it shrink you said about this growth in summer spending last quarter was high low cons i traded in small subset very large retailers indicater to value walmart, costco, tjx amazon doesn't mean store on the street did very well. >> it is a good point. look. we now all on the agenda, and all on what can be done on a federal level, steve moore. i don't know you've got lots

of different people with different priorities you've got new york and california lawmakers want the salt deduction back in place, i have been saying for awhile they are holding congress hostage to getting anything done, do you lose their vote if not in big bill beginning of the year or or like defense spending energy permitting. >> great.by the way, i think there is nothing more absurd in a tax entire tax code saying a lot than salt deduction preposterous we should be giving millionaires he billionaires wall street hollywood silicon valley biggest tax break because they live in high tax states, cities it makes no sense, so i don't see in fact if i had i would get rid deduction entirely we've been pushing go

ahead rid of corporates why should corporates be able to deduct 8 to 10 revenues in northeast in house of representatives say they won't vote for this bill unless they get some salt because this is affecting people in those districts, but look. i want to be optimistic though here because trump is coming in, and what a week, and this is going to be a brand-new america, i mean going to be we are getting going on energy production he is having a staff, thick of executive orders not waiting within an hour of being sworn in assigning executive orders very pro-growth i remain optimistic about where this economy is headed in 2025. >> yesterday reports that he told the senators gop senators that he has a stack of 100 executive orders for day one, some analysts say one of the

key executive orders going to sign january 20th is one that freezes, freeze all pending rulemaking we know what happened come on we know john lonski that biden put in lots of rules and regulations, to corporate america, in a sense, shutting down oil and gas drilling. >> so sad horrible for u.s. inflation, the fact this morning we have oil futures up by 3% my goodness! if oil prices move higher i do not think will be the case, i think somehow trump will get around these restrictions, placed by joe biden. if we can get oil prices down that improves the inflation outcome i might want to add all the more imperative if a strong economy that we have elon musk and and then succeed reducing government spending via doge. >> i agree you know what elon

musk said on x last night we're lucky if we get two trillion all the time two trillion dollars in cuts could be had, made on government spending, now, you know, when you peel back the onion figure out the fact a lot of are mandatory spending cannot be cut he said we are luck if we get one trillion, two trillion would be best case scenario. >> two trillion is not going to happen neither will one trillion i will if we can make progress range in government spending, you know may take a downturn in the economy that is driven by unexpected jump by 10-year treasury yield by borrowing costs to have congress come to some sort of agreement to rein in growth of government spending going forward. maria: i think implications of this spike in rates are far and deep specific to me does this show up in the earnings of banks next week? and the guidance that we're

glowing to get from major banks for twroif that is really way want to know. i want to get ahead of earnings the majorings banks start reporting next week . >> hard to believer it won't,, maria, fers off they are sitting on massive book of unrealized losses in both treasury and agencies securities not going away because rates continue to move higher to say nothing of delinquencies toing gone on consumer side we obviously, are familiar with the largest number of consumer delinquencies on coordinator debt since the great financial crisis, but you also have huge hits being he borne on commercial real estate exposure that is not in any way to going to improve as john suggested earlier the housing ought remarket is not in any way amealaited by continued rise in interest rate from loan quality standpoint going to have real

issues whether that is manifest here in latest quarter or takes a little while to come to the surface, you know i am not sure but i think clearly the path for banks much bumpier than people anticipate, and you know going back to the whole conversation about that i think that, you know, we come back to the conclusion that the key here is to get inflation down getting inflation down is going to bring down interest rates and then help with improve the state of balance sheet, et cetera, to bring facing down i am old enough to remember when economists used to chart the pages of the federal register versus inflation rate bigger government got bigger regulations more rule higher inflation went we have seen that firsthand over the last four years, so i share steve's hope that you know we can reduce that, and bring the inflation down. but it is going to take a lot of work, obviously, you know the executive orders will go a long way.

but i think trump is inheriting a real mos bringing inflation down going to be much harder, than we would like to imagine, we're seeing it already the fed raised rates in record fashion, and inflation has moved higher in the last several months. so you know, they really they are declaring vaishth too prematurely, you know, if this massive increase the fed interest rates did not ring out inflation excess we are counting on smaller fiscal, that is a tall order. >> 30-year bond 4.99% right now julia talking about inflation, we also talk about wages, what do you want to say about wages as people are searching for jobs, what is ziprecruiter saying in terms of best wages in terms of those jobs.

>> -- across the board, survey majority of employers expected to raiser wages substantially by 5% or more still feeling distant wage growth pressure we see that this winter, with the strikes that led to epic lines in nation's top ski resorts labor movement has significant leverage, and employers battling shortages, cheryl your thoughts. >> well you know i am my mind moving to next week now because we are going to start to get the big banks, you talked about this a few times this week already. but wells fargo has international moment of mortgage exposure in ka, i don't know if in the report i doubt it. but going to have to come up on conference call, bank of america is also another has

got -- reasonable amount exposure for california if looking at defaults i think pretty severe in day state, reasonably soon, that might really kind of change the conversation about bank earnings next week. maria: yeah, one analyst this morning, is estimating that bank of america's paper losses are significant, "barrons" estimated that obtaining america paper loss on portfolio 568 billion in bonds most u.s. agency mortgages securities could widen to 111 billion or more compared to 86 billion end of september, all interested in what they say about dealing with this for 2025 what is the guidance in terms of earnings growth, the impact of this wild swing in the bond market. and what could be significant losses, on bonds. as yields soar those yields are soaring today this is the story of the market.

this is going to be talk about all day with yield on 10-year, let's take a look at it close to 5%. you are 4.7 plus percent we'll see what the fed has to say about this. you've already said there's no shot we're going to get a rate cut according to market expectations until june, so, you know, we'll see what that means, jerry, in terms of the dynamics for earnings for not just bank, but even retail. >> absolutely. and, again, you know, don't -- everyone said, oh, it was a great holiday. don't expect that to be across the board. all boats didn't float. you're going to have some positive surprises and a lot of negative surprises on the retail earnings front when retailers start to come honest about what happened over the holiday season. and it's just going to be tougher going forward unless this moves quickly. maria: well, they're all trying to figure out how to address

this in washington, steve, and, you know, john thune reportedly told president trump that they'll start with one big, beautiful bill as the president wants, but if it doesn't work out, if they can see they're not getting the votes for that that, then they'll switch it to the bills. but what i'm hearing now from analysts is that the march 14th continuing resolution is likely going to be a vehicle for the california wildfires. this is important because on top of everything else, you're going to have to have disaster grants. you're going to have to have a principal response. and it could be the small -- a federal response. and it could be the small business association, the disaster loans, but it could also mean we get a different continuing resolution with wildfire emergency aid and the debt limit in that bill march 14th. what do you think? >> yeah. i mean, the one issue that we haven't haven't even mentioned in this great discussion is what's happening with our federal budge. we're three months into the fiscal year which ended at the end of october, so we have got

the numbers now for october, november, december, and we're on pace right now for another $2 trillion annual deficit. maria: right. >> i mean, it's outrageous. [laughter] the spending. and, by the way, biden, as we speak, they're spending every nickel, quarter and dime they can get their hands on, i mean, it's so outrageous what they're doing to our budget. my hope, by the way, maria, because we've been doing this together first friday of every month for, i don't know, eight years. my hope for 2025, because this is the last report for 2024, is we start to see big reductions in government hiring. what was the number? another, i think cheryl said it was 30,000 -- maria: yeah are. let's show where the hiring was, guys. show that list again in terms of where the jobs was. government -- the jobs were. government was 33,000, steve. >> it's ridiculous. the government should be laying off people and stop hiring people. it makes no sense when you're running a $2 trillion deficit,

to be hiring more and more people. i want trump to the put a complete freeze on hiring and get rid of people through attrition. we want private sector growth, not government growth. maria: well, that was the whole point that elon musk made as well, that if the government employees don't work five days a week, just put that rule in place and then they'll say, well, i don't want to work five days a week, i want to work if home and maybe i'll quit. great discussion. such a smart discussion, everybody, thank you very much. julia pollack, is stephanie pomboy, steve moore, jerry storch, john loan i sky and, of course, cheryl casone. we've got a market that is down, roping today after -- reopening today after being closed for the funeral of jimmy carter. the nasdaq down 235. the market opens in 30 minutes' time, and i will see you tonight at 7 p.m. eastern. "varney & company" picks it up. institute stuart good morning, everyone. just a half hour ago the jobs report, and