Bloomberg Surveillance 03/01/2024

>> DATA IS STICKIER WITHINFLATION. >> THERE IS AN EVERYTHING ISAWESOME MENTALITY IN THE MARKET RIGHT NOW. >> INVESTORS HAVE BEENUNDERINVESTED AND NOW THEY ARE HOLDING THEIR NOSE AND HAVINGTO PLAY CATCH-UP. >> THIS IS “BLOOMBERGSURVEILLANCE” WITH JONATHAN FERRO, LISAABRAMOWICZ, AND IN REORDERING. JONATHAN:YOUR EQUITY MARKET IS LOWER. KICKING OFF THE MONTH WITH –THAT STOCK IS DOWN.

WE ARE PLUNGING 29%.THESE ARE THE ISSUES, DISCOVERY MATERIAL WEAKNESS, WRITING DOWNTHE VALUE OF COMPANIES REQUIRED AND REPLACING LEADERSHIP OVERIT AND WHY BC. LISA: THE KITCHEN SINK WAS ABOUT LOANMARK RESERVES AND EVERYONE SAYS THIS IS BECAUSE THEY CROSSEDTHE THRESHOLD. THIS RAISES QUESTIONS OF IF ITGOES DEEPER THAN THAT WHICH TO BE IS MORE CONCERNING AN SPEAKSOMETHING ABOUT THE RISKS OF RATES REMAINING HIGHER FORLONGER. JONATHAN: ALL THINGS YOU DON'T WANT TOHEAR FROM, RELATED TO INTERNAL.

REVIEW AND RESULTING FROMINEFFECTIVE OVERSIGHT AND MONITORING ACTIVITIES. ANNMARIE:EVERYONE HAS COME OUT TALKING ABOUT THIS WAS IT TO THIS BANKAND NOT TO OTHER BANKS IN THE ABC.YOU HAVE TO THINK JAY POWELL IS GOING TO BE ON THE HILL TALKINGTO SENATORS. HE IS GOING TO GET ASKED ABOUTWHAT IS GOING ON UNDER THE BANKING INDUSTRY AND IF THEREARE LARGER CONCERNS — WIDER CONCERNS. JONATHAN: THE LARGEST ROASTED EXPOSURECOMES FROM $37 BILLION IN.

APARTMENT LOANS. ALMOST HALF BACKED BY RENTREGULATED COMPLEXES. THAT IS THE ISSUE FOR THIS NAME.LISA: THERE IS ANY ISSUE IN NEW YORKCITY ABOUT HOW MUCH PEOPLE CAN CHARGE FOR RENT AND WHAT THATDOES FOR CERTAIN VALUATIONS AT A TIME WHEN APARTMENTS ARE HELDBY THAT. RIGHT NOW, THE MARKETS DON'TCARE. THEY CARE WHITE — ABOUT NYCBAND NOTHING ELSE. THIS IS BEING SHRUG UP TO THEEXTENT THAT A YEAR AGO PEOPLE.

WOULD HAVE SAID THIS GUY ISFALLING, WE BETTER HUNKER DOWN. YOU ARE NOT SEEING THAT IN THESAME WAY AND THAT TELLS YOU A BIG MESSAGE. JONATHAN:JP MORGAN CLOSING YESTERDAY AT ANOTHER ALL-TIME HIGH.YOU TAKE THE MONTH OF FEBRUARY, THIS HAS BEEN AN ISSUE SINCEFEBRUARY. REGIONAL BANKS DOWN 3% LASTMONTH. WE HAVE SEEN BIGGER MOVES THANTHAT. S&P 500 BANKS OF 4% — UP 4%.LISA: PEOPLE ARE NOT LOOKING FOR ANOTHER SHOE TO FALL AND THISIS THE QUESTION I HAVE.

HAVE WE WORRIED OURSELVES OUTAND NOW WE DON'T HAVE ANY WORRIES LEFT SO PEOPLE ARETHROWING IN THE TOWEL AND SAYING I WILL GO WITH IT?WE WILL HAVE THAT RECORD HIGH ON THE NASDAQ FOR THE FIRSTTIME SINCE 2021, OKAY. JONATHAN: I HAVE NO DOUBT YOU WILL FINDSOMETHING TO WORRY ABOUT IN THE NEXT 60 SECONDS.EQUITIES ON THE S&P 500 LOOK LIKE THIS, WE ARE SLIGHTLYNEGATIVE, DOWN BY 0.14%. N.Y.C. BE GETTING HAMMERED 29%.EUROS LOWER. THERE ROSE ON CPI COME UPSIDESURPRISE.

108 — 1.08 ON EURO-DOLLAR.MARCHEX OFF WITH STOCKS AT ALL-TIME HIGHS — MARCH KICKSOFF WITH STOCKS AT ALL-TIME HIGHS. STEVEN WIETING, CHRISTOPHERMARINAC, AND GREG VALLIERE AS TRUMP AND BIDEN OFFER VERYDIFFERENT PERSPECTIVES. STEVE WIETING OF CITIGROUPEXPECTING THE MARKETS TO CLOSE THE GAP SAYING THIS “THEEXTREME DIVERGENCE OF LARGE CAP TECH PROFITS FROM OTHERINDUSTRIES SHOULD DIMINISH THIS YEAR AND NEXT.WE WOULD NOT BE SURPRISED IF.

MAX GAINS IN 2024 WERE CUT INHALF ON STRONG INVESTMENT SPENDING AND GREATERCOMPETITION.” STEVE JOINS US NOW.CAN WE BUILD ON WHAT YOU ARE EXPECTING? STEVEN:THAT IS STILL SUBSTANTIAL GROWTH. INDUSTRIES THAT ARE LITERALLYBOOMING AND THERE IS PROBABLY A LIMITED NUMBER DOING THAT,BOOMS YOU WORRY ABOUT ON THE OTHER SIDE, THEY'RE NOT GOINGFROM LARGE GAINS TO DECLINES. THEY'RE GOING TO BIT OF ASLOWDOWN.

MAGNIFICENT SEVEN, THERE AREFOUR COMPANIES BUYING UP EVERY MICROCHIP THEY CAN TO OFFER AISERVICES. AN OPEN QUESTION AS TO WHETHERTHESE SERVICES ARE DEFINED DEMAND IN THE ECONOMY FROMEVERYWHERE, NOT GOING TO BE AS WITH EACH OTHER AND THEY'REGOING TO BE ABLE TO BOOM TOGETHER OR WILL THEY COMPETEAND NARROW DOWN PROFITS? WE ARE NOT WILLING TO GIVE UPDIVERSIFICATION IN PORTFOLIOS TO THAT ON THAT SINGLE TREND.A LOT OF OTHER GOOD THINGS ARE HAPPENING.WE ARE RAISING OUR ECONOMIC.

FORECAST AND SEEING INDUSTRIESTHAT HAVE BEEN WEAK FOR THE LAST YEAR AND A HALF BOTTOM OUTAND BEGIN A RECOVERY. THEY WANT TO DO AS WELL AS MAGSEVEN. JONATHAN: SMALL, MID-CAPS, TALK TO USABOUT THE INDUSTRIES YOU LIKE. STEVE:YOU CAN GET MID-CAP GROWTH COMPANIES IN THE U.S.FOR THE SAME VALUATION AS EUROPEAN SHARES. THE U.S. MID-CAPS HAVE GROWN 11% ANDEUROPE HAS GROWN AT 2%. WE WANT TO SWERVE TOWARDSHEALTH CARE, SOMETHING THAT HAS.

BEEN OUT OF FAVOR WITH COPDDRUGS. STORES HAVE HAD A HISTORIC — ALOT OF PEOPLE THINKING WE WILL NEVER DO ANYTHING IN HEALTHCARE BUT TO LOSE WEIGHT WHICH I WISH I COULD. LISA:I WAS GOING TO SAY A LOT OF PEOPLE ARE WORKING ON THAT.I AM CURIOUS ABOUT THE IDEA THAT EVERYONE IS SHIFTING TOTHIS IDEA THAT EARNINGS ARE BETTER THAN EXPECTED, THEECONOMY IS BETTER THAN EXPECTED. FISCAL KEEPS SUPPORTINGEVERYBODY. WHY IS IT CASH FUNDS ARE ON FORANOTHER RECORD YEAR?.

PEOPLE OF THEIR CASH FUNDS ANDTHEY ARE PALLING — PROBABLY MORE MONEY INTO THE. STEVE:THE REASON WE ARE NOT MORE OVERWEIGHT WIKIS — OVERWEIGHTEQUITIES IS THERE IS GREAT COMPETITION FROM DEALS.OUR BOND PORTFOLIOS ARE BELOW AVERAGE DURATION.WE EXPECT TO EARN THAT LONGER THAN THE FED WILL STAY AT 4.5%.THIS IS GOOD COMPETITION. WE HAVE BEEN BULLISH FOR AWHILE. WE HAVE SEEN INCREASING BULLISHNESS.NEW SHORTS IN THE EQUITY MARKETS.EVERYBODY IS BEARISH IN THE.

BOND MARKET.I THINK THERE ARE SOME AREAS THAT HAVE BEEN SO STRONG THATWE WANT TO EASE BACK FROM THEM. WHEN YOU HAVE 80% RETURNS ON THE SOFTWARE, IT IS TIME AGAINTO START TO SHIFT TO OTHER AREAS.THERE IS ROOM FOR STOCKS AND BONDS IN PORTFOLIOS. LISA:THIS DOESN'T SOUND LIKE A MARKET DRAINED OF LIQUIDITY.IT SOUNDS LIKE A MARKET FLUSH WITH LIQUIDITY.WHITE HAS THE FED BEEN INEFFECTIVE AT DRAINING THISMARKET OF LIQUIDITY? STEVE:.

DO YOU HAVE TO?MUST WE HAVE A NEW RECESSION TO STOP RAPID INFLATION?WE HAVE ANOTHER TROUBLING INFLATION REPORT THAT IS GOINGTO COME FOR THE MONTH OF FEBRUARY.IT IS ANOTHER REASON FOR EVERYONE TO SAY MAYBE WE ARENOT ON THIS DISINFLATION TREND, MAYBE WE ARE GOING TO BE STUCKHERE. THAT IS POSSIBLE OVER THE SHORTTERM. THE GOOD NEWS HAS BEEN WE HAVEBEEN ABLE TO LINEUP A LOT MORE IN A STABLE WAY WITHOUT AMASSIVE SURGE ON EMPLOYMENT.

IF WE GET TOO EXCITED, THEREARE GOING TO BE PROBLEMS. JONATHAN:GROWTH, WHAT DO YOU SEE? STEVE: IT IS WEAKER PIECES OF THEECONOMY. WE HAD A HIDDEN RECESSION UNDERTHE SURFACE. IF YOU ARE LOOKING AT GERMANY,JAPAN, CHINA, MANUFACTURING IN THE U.S., THE REALITY IS ITCONTRACTED FOR THE YEAR BEHIND US.TRADE CONTRACTED IN PERCENT THE YEAR THROUGH THE THIRD QUARTERLAST YEAR. THESE WEAKER COMPONENTS AREMOVING INTO A MORE STABLE.

GROWING PLACE.PROBABLY NOT ANYTHING V SHAPED, BUT IT IS THESE THINGS IN THEBOOM. JONATHAN: THERE HAS BEEN A SPREAD BETWEENMANUFACTURING AND SERVICES FOR A WHILE.MANUFACTURING STARTED TO COME UP TO SERVICES.DOES THAT HAD YOU EXPECT THAT STORY TO COMPLETE? STEVE:IT WILL COME WITH A DIFFERENT LABOR MARKET OUTCOMES.AUTOMATED. THE HEADCOUNT DIFFERENCES AREGOING TO BE SUBSTANTIAL.

THE SERVICES INDUSTRIES CANNOTKEEP ADDING JOBS PER MONTH IN THOSE INDUSTRIES.YOU HAVE SEEN EMPLOYMENT GROWTH FROM TWO YEARS AGO WHENSERVICES TURNED BACK ON LIKE A LIGHT SWITCH.HOSPITALITY, AIRLINES, TRAVEL, ALL OF THESE THINGS INCREDIBLYLABOR-INTENSIVE AND WE HAD MASSIVE JOB LOSSES TO RECOVER.NOW WE ARE AT THE POINT WHERE IT WILL SLOW DOWN AND IT DIDN'TIN JANUARY. IT WAS 53,000 JOBS IN JANUARYBUT WE SAW SEASONAL DISTORTIONS. ALL THESE THINGS ADDED FORDIRECTIONS.

IT IS GOING TO TAKE A WHILE FORTHE MARKET TO SORT IT OUT. I THINK WE WILL BE WORRIEDBEFORE WE COME TO GRIPS. ANNMARIE:MOHAMED EL-ERIAN WAS TALKING ABOUT WHAT HAPPENS IN THEUNITED STATES MATTERS IN THE WORLD. DO YOU FORESEE U.S.GROWTH PICKING UP HELPING THE REST OF THE WORLD? STEVE:IT IS BUT IT IS CHALLENGING BECAUSE THE AMOUNT OF TIME WESPENT WITH RESTRICTIVE MONETARY POLICY IS STILL GOING TO BELONGER. WE HAVE NOT CHANGED OUR MIDYEARESTIMATE.

CONFIDENCE THAT WE ARE GOING TOHAVE EASING, THE COMMUNICATION OF EASING THROUGH MARKETS.THE DOLLAR HAS BEEN STRONGER. THAT HELPS AND THAT HURTS.YIELDS HAVE RISEN AT THE LONG END OF THE CURVE.THOSE ARE MODEST CHALLENGES WHILE SOME OF THE THINGS AREHELPING. CONSUMER DEMAND HAS NOT COLLAPSED AND PRODUCERS HAVEBEEN UNDERWHELMING. THEY HAVE BEEN SHORT IN TERMSOF MEETING DEMAND. JONATHAN: IT IS ALWAYS GOOD TO CATCH UP.STEVEN WIETING THERE OF CITIGROUP.LOOKING FOR ONE MORE UGLY.

EFFICIENT REPORT — UGLYINFLATION REPORT. LISA: THAT EVERYONE CAN LOOKPAST–BECAUSE IT WILL BE ONGOING DISINFLATION.IT WILL NOT BE AN EVEN RIDE WITH A HIGH ADOPTION. THIS FRENCH CALL CENTER, THEIRSHARES PLUNGED BECAUSE CLARNA SAID THEY COULD RESPOND TOTHEIR CALLS WITH AI AND THAT WAS WIPING OUT THE INDUSTRY.THESE ARE THE POCKETS OF DISTRESS I FIND INTERESTING.JONATHAN: IS THIS ON THE LIST OF THINGSTO WORRY ABOUT, FRENCH CALL.

CENTERS? LISA: IF YOU THINK ABOUT IS, HOW MANYBUSINESSES WILL BE RENDERED OBSOLETE THAT HAVE NOT BEENPRICED YET? JONATHAN: THE BEAR ON WALL STREET ISHOLDING UP TO FRENCH CALL CENTERS. LISA:IT IS GOING TO BE MY CLARION CALL. JONATHAN:YOUR BLOOMBERG BRIEF WITH DANI BURGER. DANI: DOJ IS KEEPING — QUESTIONINGTHE TIMING. REPORTERS AT THE BANKERSMEETING IN BRAZIL THAT THE.

PRICE TARGET IS NOT YET INSIGHT. IS COMMENT DID APPEAR TO POURCOLD WATER ON THE EARLIER MOVE THIS MONTH.ECONOMISTS ARE STILL EXPECTING A NEAR-TERM HIKE IN MARCH ORAPRIL. THE LAST TIME THE BOJ RAISEDRATES WAS 2007. THOMAS HORTON IS DIPPING DOWNWITH A SURPRISE ANNOUNCEMENT. IT IS GOING TO HAPPEN AT THEEND OF SEPTEMBER. HE HAS BEEN THE CENTRAL BANK –HE REMOVED THE CAP ON THE FRANK IN 2015 AND A DOCTOR THEWORLD'S MOST INTEREST RATE AND.

DEALT WITH AT BANKING CRISIS.DON'T MISS OUR INTERVIEW WITH THOMAS HORTON.META IS WINDING DOWN ITS NEWS FEATURE IN U.S. AND AUSTRALIA.IT WILL DRAW SUPPORT FROM ITS NEWS TAB.PUBLISHERS WITH EXISTING AGREEMENTS WILL STILL BE ABLETO POST CONTENT UNTIL THEIR DEALS EXPIRE.LAWMAKERS HAVE BEEN PUSHING FOR META TO COMPENSATE PUBLISHERSFOR CONTENT BUT THE MAN FOR THE SERVICE HAS DECLINED. JONATHAN: I CAN'T BELIEVE IT HAS BEEN ADECADE ON THE JOB FOR THOMAS.

HORTON.AMAZING HOW QUICKLY TIME FLIES. LISA:I SAW THAT AND THOUGHT DIDN'T HE JUST GET THERE? JONATHAN: I WANT TO TALK ABOUT APPLE,REMOVED FROM THE CONVICTION LIST AT GOLDMAN SACHS.THE STOCK IS DOWN. NEW YORK COMMUNITY BANK SHARESPLUNGING. >> 500 BASIS POINTS OF RATEINCREASE HAS A STRESS TO BE SECTOR.IF WE LOOK AT THE LOANS COMING THROUGH, WE SEE LESS LOANDEMAND AND LESS THAT CAN HURT.

THE ENVIRONMENT. JONATHAN:THAT CONVERSATION IS COMING UP NEXT.LIVE FROM NEW YORK CITY THIS MORNING, GOOD MORNING. ♪ JONATHAN:FOUR MONTHS OF GAINS ON THIS AND BE 500.LIVE FROM NEW YORK CITY. WE ARE DOWN ON THE S&P.NYCB SHARES PLUNGING ONCE AGAIN. >> FOR INVESTORS, GROWTH INBANKS HAS BEEN TAINTED WITH THE SILICON VALLEY BANK FAILURE. TALKING TO INVESTORS, DOINGCONFERENCES, THEIR NERVOUS.

ABOUT GROWTH.500 BASIS POINTS OF RATE INCREASE HAS STRESSED THESECTOR. IF WITH THE GET THE LOANSCOMING THROUGH, WE SEE LESS DEMAND. JONATHAN:NEW YORK COMMUNITY BANK SHARES PLUMMETING, THE COMPANY ANDTHAT SICK MATERIAL WEAKNESSES AND THAT SICK MATERIALWEAKNESSES IN ITS LOAN REVIEW PROCESS.THERE BANK COULD BE SWAPPING CEOS AND EXPECTS TO VISIT ADEADLINE FOR FILING AN ANNUAL REPORT.

CHRIS MARINAC SAYING THIS,”DIRECTOR CHANGE ARE PART OF THE EARLY REPAIRS AT N.Y.C. BE.INVESTORS SHOULD BE PLEASED. TWO DIRECTORS HAVE RESIGNED, WESEE THIS AS A HEALTHY CHANGE THAT SHOULD BUILD CONFIDENCE.”CHRIS JOINS US RIGHT NOW. I ASSUME YOU BELIEVE THE STOCKSHOULD BE UP AND NOT DOWN 30%? CHRIS: THAT IS RIGHT OR AT LEASTCREATING FLAT. BOOK VALUE WILL ONLY CHANGE BYTHREE PENNIES GIVEN THE FOURTH-QUARTER CHANGES.JONATHAN: WHY ARE YOU SO CONFIDENT THATARE NOT ANYMORE MONSTERS UNDER.

THE BED AT NYCB? CHRIS:THE COMPANY'S ISSUES HAVE TO DO WITH STRESS TESTING.THEY HAVE TO STRESS TEST FOR HIGHER INTEREST RATES.THERE IS MORE OF THAT TO GO BUT THE COMPANY HAS THE EARNINGS TOWORK THROUGH THIS. THIS IS NOT AN EARNINGS ISSUE.THE CREDIT ISSUE IS STRESS TESTING AND NOT HAVING DONE ITSOONER. THE PRIOR MANAGEMENT TEAM HADTO GO. WE HAD TO HAVE THE CHANGE INORDER TO HAVE A CONFIDENCE CHANGE.THE LARGEST SHAREHOLDER IS.

TAKING CHARGE AND MAKING SWIFTCHANGES. YOU HAVE UNHAPPY BOARD MEMBERSTHAT HAVE LEFT AND THAT IS FINE. THIS IS HEALTHY TO GET THECOMPANY WHERE IT NEEDS TO GO. THEY ARE NOW $115 BILLION.THEY HAVE TO BE PART OF THE NEW WORLD ORDER.THE REGULATORY WORLD IS CHANGING BUT YOU HAVE TO ADAPTAND YOU CANNOT SIT STILL. LISA: YOU SAY THERE ARE A COUPLE OFUNHAPPY BOARD MEMBERS. THAT RAISED A RED FLAG IN MYVIEW. THE DIRECTOR OF THE BOARD RESIGNED.IN THE RESIGNATION LETTER HE.

SAID HE DID NOT SUPPORT ANOTHER– DEMELLO'S APPOINTMENT TO THE BOARD. WHY? CHRIS: HE DID NOT WANT TO SEE THE CEOCHANGE. THAT IS HIS PREROGATIVE. I THINK YOU ARE GOING TO SEETHE COMPANY MOVE FORWARD WITH ANOTHER DIRECTOR AND CONTINUETO MAKE CHANGES VERY QUICKLY. YOU HAVE ONE QUARTERBACK AT THECOMPANY, YOU CANNOT HAVE TWO. YOU HAVE TO TAKE QUARTERBACKNUMBER ONE AND RUN WITH HIM AND MOVE FORWARD.THE STORY IS GOING TO TRANSITION TO RECOGNIZINGCREDIT RISK AND FAST TRACKING A.

LOT OF THE CHANGES TO DIVERSIFYTHE PORTFOLIO. THEY HAVE HAD TOO MANYMULTIFAMILY LOANS AND REAL ESTATE.THERE WILL BE MORE BALANCED COMPANY AND THEY WILL MAKE MOREMONEY WITH WILL CREATE BOOK VALUE AND GET THE STOCK PRICEMOVING AGAIN. THAT IS A SHORT-TERM REACTIONTHAT WILL CHANGE. LISA: THE MAJORITY OF PEOPLE WAKINGUP IN MARKETS DON'T CARE ABOUT NEW YORK COMMUNITY BANK OR THATCOMPANY BUT THEY CARE IF THIS IS A HARBINGER OF MORE WEAKNESSTO COME, IF THIS MEANS YIELDS.

REMAINING HARD FOR LONGER ORCREATING CRACKS ON THE BALANCE SHEETS OF BANKS THAT HAVE BEENPUNISHED BUT CAN'T CLIMB OUT OF IT.HOW WOULD YOU ARGUE THAT THIS TRULY IS IDIOSYNCRATIC AND NOTA REGULATORY CAPITAL ISSUE? CHRIS:EVERY BANK HAS CREDIT RISK AND IF YOU LOOK AT THE FILINGS WESAW THIS WEEK AND LAST WEEK WE ARE SEEING INCREASES IN THECRITICIZED ASSETS. REALLY CRITICIZE.BACK TO THE STRESS TEST ISSUE, BANKS RECOGNIZING THE RISK.WHAT INVESTORS DON'T SEE IS.

THAT LEVERAGE IS 60% TODAYINSTEAD OF 95% IN 2008. YOU ARE NOT GOING TO LOSE MONEYAT NEW YORK COMMUNITY LIKE YOU WOULD HAVE BECAUSE LEVERAGE WASHIGHER. YOU WILL HAVE SOME LOSSES, SOMENEED TO BUILD RESERVES. THEY HAVE DONE A BIG PIECE OFTHAT. THE WHOLE INDUSTRY IS GOING TOCONTINUE TO MARCH FORWARD AND BE MORE PROFITABLE THAN FOLKSUNDERSTAND. MOST BANKS ARE ASSET SENSITIVEWHICH MEANS HIGHER ASSET RATES FOR LONGER BENEFITS MOST MARGIN.MOST COMPANIES SEE AN INCREASE.

TO EARNINGS IF INTEREST RATESARE HIGH. IN A LOT OF RESPECTS, THE FEDCUTTING RATES TOO QUICKLY IS NOT A GREAT THING FOR THEINDUSTRY. IT IS A PERCEPTION ISSUE. LISA:I WONDER WHEN THIS THESIS COMES TRUE.WE ARE LOOKING AT AN INVERTED YIELD CURVE WHICH MAKES ITCHALLENGING. WE ARE ALSO SEEING REALCONCERNS ABOUT LOANS NOT GETTING LIQUIDATED BECAUSE ITISN'T A MARKET FOR THEM. WHEN DOES THE PAGE CHANGEDESPITE PROFITABILITY RIGHT NOW?.

CHRIS:I THINK THE BANKS ARE IN BETTER SHAPE THAN PEOPLE REALIZE.THERE IS ENORMOUS LIQUIDITY WHETHER IT IS PRIVATE CREDIT.IT IS BETTER THAN PERCEIVED. THE CHALLENGE BANKS HAVE ONSELLING LOANS OR LIQUIDATING ASSETS IS THEY DON'T WANT TOTAKE BIG HAIRCUTS. THEY WOULD LIKE TO TAKE TIME.SOMETIMES THEY CAN DO THAT, OTHER TIMES THEY HAVE TO TAKEACTION. IN NYCB'S CASE, YOU WILL SEETHEM TAKE ACTION QUICKLY. THE 10K WILL BE RESOLVED WITHIN14 DAYS.

A LOT OF THAT ARE CHANGES THATHAVE TO HAPPEN. WE HAVE SEEN OTHER BANKS OFINTERNAL CONTROLS AND LARGE COMPANIES LIKE JP MORGAN ANDWELLS FARGO. THEY HAVE MADE THEIR CHANGESAND MOVE FORWARD. ANNMARIE: THE UNDERLYING ISSUE ISINTEREST RATES. NYCB, POUR STRESS TESTING ANDHIGHER INTEREST RATES, WHO ELSE IS HAVING POOR STRESS TESTING?SHOULD WE EXPECT THIS TO HAPPEN EVERY FEW MONTHS? CHRIS: NYCB IS UNIQUE IN TERMS OFHAVING CROSSED OVER $100.

BILLION WITH AN FDICTRANSACTION , NOT PREPARED TO DO STRESS TESTING THIS YEAR.THAT IS IDIOSYNCRATIC. THE REST OF THE INDUSTRY IS ALLOVER THIS. THE ISSUE — SILICON VALLEYBANK ISSUE WAS ABOUT SECURITY IS UNDERWATER AND DEPOSITS OUTOF WHACK BECAUSE THEY HAD LARGE PICTURE CAPITAL DEPOSITS.THOSE DEPOSITS ARE GONE. THE INDUSTRY IS IN MUCH BETTERPOSITION FROM ANY UNINSURED DEPOSIT STANDPOINT.NYCB HAS EXCELLENT DEPOSIT FLOWS THE PAST MONTH.DEPOSITS HAVE BEEN STABLE, THE.

COMPANY IS GOING TO MAKE MONEYTHIS QUARTER. IT IS UNFORTUNATELY HAVE TOMAKE THESE BOARD CHANGES NOW. IT IS GOING TO BE FOR THE LONGRUN MUCH BETTER TO DO THIS HOUSECLEANING TODAY. JONATHAN:OUTSIDE OF NYCB, ISN'T THE MARKET COMING YOUR WAY?JP MORGAN CLOSING AT AN ALL-TIME HIGH.MONTHLY GAINS ON THE S&P 500 LAST MONTH.THE REGIONAL BANKS, LOWER THROUGH FEBRUARY BUT NOTHINGDRASTIC A GIVEN THE SINGLE LAMP. IS THE MARKET COMING OUR WAY?.

CHRIS:I THINK SO AND HE WILL SEE THE TANGIBLE KEEPS GROWING FORCOMPANIES. WE WILL PROBABLY SEE MARKETS GOUP AGAIN ON HIGHER RATES AT THE END OF MARCH BUT WE CAN HANDLETHAT. MOST BANKS ARE MANAGING EXPENSES WELL AND AT THE END OFTHE DAY, THE NET CHARGE-OFF COMPANIES ARE REPORTING OURMODEST. WE ARE WORRIED ABOUT STRESS TESTING BUT IGNORE THEFACT THAT CHARGE-OFFS REMAIN LOW. JONATHAN:NOTHING TO SEE HERE. ULTIMATELY MAKING THE POINTHERE THAT WE SHOULD NOT BE DOWN.

30% IF THIS IS TRULY THATKITCHEN SINK MOMENT. LISA: THE SECOND ONE.THEY HAD THIS BEFORE, IT WAS A KITCHEN SINK MOMENT BEFORE.WHEN YOU KITCHEN SINK SOMETHING, THERE IS NOTANYTHING LEFT TO KITCHEN SINK AGAIN.THERE IS NERVOUSNESS ABOUT WHAT WE DON'T KNOW IN BANKS, THERISKS WE HAVEN'T FULLY PRICED. THAT IS EVIDENT IN ONE NAME.JONATHAN: I DON'T WANT TO SINK VOLUMETHREE ANYTIME SOON. PRESIDENT BIDEN AND DONALDTRUMP OFFERING DIFFERENT.

VISIONS ON THE SOUTHERN BORDER.WE WILL BE CATCHING UP WITH CHRIS VALLIERE.THAT CONVERSATION JUST AROUND THE CORNER. EQUITY FUTURES ON THE S&P 500DOWN .1%. JONATHAN:FOUR MONTHS OF GAINS ON THE S&P 500 HEADING TOWARD A SECONDCONSECUTIVE WEEK OF GAINS ON THIS AT THE END NASDAQ.THE NASDAQ GOING NOWHERE. THE S&P 500 DOWN AROUND .1%.YESTERDAY, PCE COMES OUT IN LINE.

YIELDS CAME BACK LOWER, DOWNFROM THE HIGHS OF THE YEAR ON A TWO YEAR, DOWN TO 459 — 4.59.LISA: IT IS A TAIL RISK, THINGS TOWORRY ABOUT, THE LIST GOT SHORTER FOR THE MOMENT.PEOPLE THOUGHT MAYBE WE WOULD SEE AN UPSIDE SURPRISE TOINFLATION AND THAT WE COULD WAIT ABOUT STICKY INFLATION, ARUNAWAY SENSE OF THE ECONOMY WHERE YOU DON'T GET THEIMMACULATE DISINFLATION. IT CAME IN LINE, THE TALE RISKTAKING OFF THE TABLE, BACK TO THE BASIS. JONATHAN:LET'S TALK ABOUT A TURNAROUND.

FOR DOLLAR-YEN. FIRST CLOSE SUB POINT — SUB150. BACK UP .3%. A WEAKER JAPANESE HERE.WORK WITH ME, WE ARE NOT YET IN A POSITION TO FORESEE THEACHIEVEMENT OF A SUSTAINABLE INFLATION TARGET.THE GOVERNOR POURING FREEZING COLD WATER ON ANY IMMINENT RATEHIKE. LISA: SOMEONE WHO'S IS NOT FAMILIARWITH THE STORY SAYS I DON'T HEAR ANYTHING BUT BLAH BLAH.ON ONE HAND WE MIGHT BE GETTING CLOSER TO WHAT LEVEL THE BANKOF JAPAN WAS LOOKING FOR.

YESTERDAY AND THEN YOU COME INSAYING NOT YET AND THIS IS ENOUGH TO POUR COLD WATER.THIS IS THE REASON WE ARE NOTICING MASSIVE MOVES.JONATHAN: THIS IS A POLICY EFFORT DECADESIN THE MAKING ROUTE. THEY'RE NOT GOING TO MOVE LIKECHAIRMAN POWELL LIKE IT'S GOING TO DO A NEWS CONFERENCE ANDSAID LET'S GO. YOU ARE GOING TO GET A SURPRISEFOR THE BOJ BUT AT THE MOMENT THEY'RE NOT WILLING. LISA:I AM OLD ENOUGH TO REMEMBER.

THIS WAS ON THE TALE RISK.THIS WAS ONE OF THE WORRIES. I DON'T THINK WE CAN REMOVEJAPAN FROM THE LIST OF WORRIES. JONATHAN:YOU CAN CLICK THAT AND PLAY IT OUT LATER THIS YEAR.WE WILL SEE IF THAT SHOULD HAVE BEEN ON THE LIST. DOLLAR-WONEND, 150. CHINA'S FACTORY ACTIVITYSHRINKING FOR THE FIFTH STRAIGHT MONTH, ANOTHER SIGN OFWEAKNESS. THE COUNTRY ALSO SEEING ACONTINUED SLUMP IN THE HOUSING MARKET.THE VALUE OF NEW-HOME SALES.

FROM THE BIGGEST REAL ESTATECOMPANIES SLIGHTING 60% FROM A YEAR AGO.FEBRUARY SALES WERE DOWN NEARLY 21% FROM JANUARY.THOSE NUMBERS ARE UGLY. LISA: A LOT OF PEOPLE SEEM TO BECOMING ON THE SHOW AND GETTING BULLISH ON CHINESE EQUITIES.MICHAEL FROM BANK OF AMERICA SAYING CHINESE STOCK FUNDS SAWTHEIR LARGEST WEEKLY OUTFLOW IN THE LAST WEEK.TO BE PEOPLE VIEWING IT AS A TRADE SEE IT AS REACHING THEEND AT A TIME WHEN THE DATA IS NOT TURNING AROUND THAT MUCH.JONATHAN:.

THE MARKET WAS UP 9% INFEBRUARY. THAT IS QUITE A SQUEEZE. LISA:THIS ISN'T PEOPLE RUNNING INTO THAT NATION'S STOCK MARKETSAYING LET'S GO, THIS IS PEOPLE SAYING HOW BAD COULD ITPOSSIBLY GET? IT SEEMS TO BE WHERE IT ISFLUCTUATING. JONATHAN: THAT HASN'T HAD THAT WARM ANDCOZY FEELING FOR INTERNATIONAL INVESTORS.FED PRESIDENT WILLIAMS SAYING — THE SAN FRANCISCO FEDPRESIDENT TELLING BLOOMBERG.

“THERE IS NO IMMINENT RISK TOTHE ECONOMY.” MARCH IS A BUSY MONTH FORCENTRAL BANKS. BANK OF JAPAN'S STABLE TARGETMIGHT NOT BE IN SIGHT. THE ECB IS GOING TO DECIDE NEXTWEEK ON THE SEVENTH AND THE FED DECIDES ON MARCH 20.LET'S SPIN THE WHEEL. WHICH ONE DO YOU LIKE?WHICH ONE ARE YOU FOCUSED ON COMING ECB, BOJ, FEDERALRESERVE. LISA: I WOULD SAY MORE ECB.THE FEDERAL RESERVE WE HEAR A LOT FROM.THE ECB HAS A MORE DIFFICULT.

NUT TO CRACK GIVEN THATINFLATION CAME IN HOTTER THAN EXPECTED AND COMPARE THEMODELED COUNTRY TO COUNTRY. THEY HAVE A DIFFERENT MANDATEWHERE THERE IS ONE NATION FRACTURED.YOU HAVE A LOT OF NATIONS WITH DIFFERENT DIVISION OUTLOOKS.THAT IS MUCH MORE CHALLENGING AT A TIME THEY ARE FACINGWEAKNESS. JONATHAN: THE GROWTH PROFILE ISDRASTICALLY DIFFERENT AND HAS BEEN.KALLUM PICKERING IS GOING TO JOIN US.PRESIDENT BIDEN AND DONALD.

TRUMP CLASHING ON THE SOUTHERNBORDER. >> THIS IS A JOE BIDEN INVASION.THREE YEARS AGO WE HAD THE MOST SECURE BORDER IN HISTORY.PEOPLE WERE NOT COMING BECAUSE THEY KNEW THEY WERE NOT GOINGTO GET IN. PRES. BIDEN: HERE'S WHAT I WOULD SAY TO MR.TRUMP, INSTEAD OF TELLING MEMBERS OF CONGRESS TO BLOCKTHIS LEGISLATION, JOIN ME OR I WILL JOIN YOU IN TELLINGCONGRESS TO PASS THIS BIPARTISAN BORDER SECURITYBUILT. JONATHAN: PRESIDENT BIDEN CHALLENGINGTRUMP TO MAKE PROGRESS ON.

IMMIGRATION AFTER STALLING APLAN AND A CONGRESS. THE BIDEN ADMINISTRATION ISSTILL INSTALLING AN EXECUTIVE ORDER. GREG VALLIERE JOINS US.THAT IS THE TALK. WHAT POLICY CHANGE ARE YOUEXPECTING SOON? GREG: PROBABLY NONE.IT IS UNLIKELY WE CAN GET BIDEN AND TRUMP TOGETHER ON THISISSUE. THERE IS A DESPERATELY NEEDEDTO AID UKRAINE. MATT IS A DRIVER FOR MANYPEOPLE ON CAPITOL HILL — THAT IS A DRIVER FOR MEDICARE BLOODCAPITOL HILL.

I WOULD SAY THERE IS A ONE INFOUR CHANCE WE GET IMMIGRATION LEGISLATION REVIVAL. ANNMARIE:WHAT ABOUT AN EXECUTIVE ORDER? WILL BIDEN BE PUSHED INTO DOINGSOMETHING BEFORE THE ELECTION? GREG: HE NEEDS TO DO SOMETHING.THIS PERCEPTION BY THE PUBLIC THAT BIDEN DOES NOT HAVE A PLANHAS HURT HIM. IF HE LOSES THE ELECTION, HEMAY LOSE BECAUSE OF IMMIGRATION MORE THAN ANY OTHER ISSUE.HE HAS TO DO SOMETHING. I WOULD NOT RULE OUT ANEXECUTIVE ORDER FAIRLY SOON. ANNMARIE::SHOWED — BLAMED BIDEN BUT WE.

ARE SEEING ANY UPTAKE OFINDIVIDUALS BLAMING REPUBLICANS AS WELL, THOSE IN CONGRESS ANDTHE TRUMP ADMINISTRATION. DO YOU THINK BIDEN IS ABLE TOTURN THIS AROUND THE WAY TOM'S WAS IT DID AND PUSH IT TOREPUBLICANS FOR NOT MEETING HIM ON A DEAL? GREG: HE WILL TRY. I READ A LOT ABOUT HARRY TRUMANWHO WON A SURPRISE REELECTION BASED ON FIGHTING AGAINST ADO-NOTHING CONGRESS. IF YOU SAY — IF YOU SEE JOEBIDEN SAY IT IS A DO-NOTHING CONGRESS DAY AFTER DAY, ITMIGHT SINK IN. LISA:.

WHAT CAN BIDEN DOSINGLE-HANDEDLY VERSUS DOES HE NEED CONGRESSIONAL SIGNOFF INTERMS OF SOME PREFERENTIAL — PRESIDENTIAL ORDER TO TAKE CAREOF SOMETHING ON THE BORDER? GREG:THERE IS NOT MUCH AND NOT MUCH SHE CAN DO FOR UKRAINE ORISRAEL OR TAIWAN. THOSE ARE GRIDLOCKED.I THINK THERE IS WOULD YOU BE A BUDGET BILL FINALLY, THIS LONGTORTUROUS FIGHT MAY COME TO A CLOSE BECAUSE APRIL 30 ISCRUCIAL. THAT WOULD REQUIRE A NEWEXTENSION.

ON APRIL 30, WE HAVE AUTOMATICACROSS-THE-BOARD SPENDING CUTS. NOBODY WANTS THAT.NO DEMOCRATS WANT THAT. LISA: THIS IS PEOPLE EXPECTED THISKICKING THE CAN DOWN THE ROAD. DOES IT GIVE YOU ANY HOPE WEARE GOING TO KEEP KICKING THE CAN DOWN THE ROAD WHICH IS THEBEST CASE OUTCOME WE CAN HAVE IN WASHINGTON, D.C.? GREG:IT IS THE BEST CASE. WE WILL KICK THE CAN AGAIN.WE HAVE NO DEADLINES OF MARCH 8 AND MARCH 22.I THINK THEY WILL BE KICKED DOWN THE ROAD.IF WE GET TO SUMMER AND THEY.

SAY WE WILL DO A BILL FOR THEREST OF THE FISCAL YEAR, THAT COULD HAPPEN AND THEY WILLSTART ALL OVER AGAIN. JONATHAN: LET'S TALK ABOUT MONEY.BIDEN HAS A LOT OF PROBLEMS AND MONEY IS NOT ONE.I AM TALKING ABOUT CAMPAIGN FUNDRAISING.GROUPS ALLIED WITH BIDEN HAVE COMMITTED TO SPENDING MORE THAN$700 MILLION TO HELP THEM DEFEAT DONALD TRUMP.HOW IMPORTANT IS THAT GOING TO BE? GREG: IT IS HUGE.IT IS A SLEEPER ISSUE. BIDEN WAS IN CALIFORNIA RAISINGMORE MONEY.

THERE WILL BE NO SHORTAGE OFFUNDS. AT SOME POINT MONEY LOSES ITSCLOUT. RIGHT NOW, THE FINANCIAL ADVANTAGE FOR WRITING IS ASIGNIFICANT. IT IS ONE OF MANY REASONS WHYIT IS TOO EARLY TO COUNT HIM OUT. ANNMARIE: WHEN YOU LOOK AT THE OTHERSIDE, THE TRUMP MONEY, A LOT OF ISSUES BECAUSE HE IS USINGCAMPAIGN DONATIONS TO PAY FOR LEGAL BILLS.WHAT KIND OF CASH STRAPPED IS HE GOING TO BE IN THIS SUMMER?GREG:.

YOU WOULD THINK IT WOULD BECONSIDERABLE. NIKKI HALEY HAS FIRED AWAY ONTHIS ISSUE WITHOUT MANY RESULTS. I WOULD SAY BY SUMMER THEYLEGAL NIGHTMARE FOR TRUMP IS GOING TO BE DRAINING FINANCESQUITE A BIT. IT IS A BIG ISSUE. LISA:ONE OF MY OTHER WORRIES RIGHT NOW WHICH IS WHAT PEMCO ISTALKING ABOUT, THE DEFICIT. THE FACT THAT WE ARE FACING OFFWITH BOTH CANDIDATES NOT WILLING TO CUT THE DEFICIT.EVERYONE IS LIKE WE KNOW THIS. THERE IS THIS FEELING THERE HASTO BE A HIGHER TERM PREMIUM IN.

THE SPACE TO OFFSET THE RISKTHAT SEEMS TO BE EVIDENT. THEY SAY IS STARTING TO TAKEHOLD. HOW MUCH DOES THE BOND MARKETHAD TO SELLOFF BEFORE WASHINGTON TAKES NOTICE? GREG: YOU TALK TO PEOPLE ON CAPITOLHILL AND THEY DON'T WANT TO ADDRESS IT.THEY CANNOT FIGURE OUT WHAT THE PRESCRIPTIONS MIGHT BE IN TERMSOF SPENDING CUTS OR TAX INCREASES.THE YEAR THAT ENDED SEPTEMBER 30 WE HAD A DEFICIT OF $1.8TRILLION WITH A GOOD ECONOMY.

I FORBID HE ECONOMY COULD BESOFTER, IT COULD GO HIGHER THAN THAT.I DON'T SENSE ANY URGENCY ON CAPITOL HILL. JONATHAN:I AM NOT SURE WHEN YOU WILL GET SOME.THAT WILL COME DOWN TO WHETHER THIS BOND MARKET ACTUALLY SELLSOFF IN THE FASHION THAT WOULD REQUIRE SOME ACTION.THAT IS WHERE THE PRESSURE NEEDS TO COME FROM.HAVE NOT SEEN IT YET. LISA: WE SAW A PIMCO PAPER ON THISAND THERE ARE A LOT OF PAPERS ON THIS.THEY ARE SAYING THIS COULD LEAD.

TO A HIGHER STRUCTURAL TERMPREMIUM. YIELDS REMAIN HIGHER REGARDLESSOF INFLATION. THIS COULD AFFECT EVERYBODY INTHE SPACE THEY ARE BUYING INTO. THIS HAS BEEN THE PERSON WHOCRIES WOLF TIME AND TIME AGAIN. HAS SOMETHING SHIFTED?EVERYONE I TALK TO SAYS MAY BE AND OTHER PEOPLE SAY IT IS THEYIELD. JONATHAN: YOU HAVE MADE ME SMILE SO MUCH,HOW LONG IS THIS LIST AND IS EUROPEAN CHOCOLATE ON IT? LISA:IT ACTUALLY IS. ALSO THE POLICIES BEHIND IT.IT RAISES A NEW SPECTER OF RISK.

IN FISCAL POLICY AND TARIFFSARE IMPORTANT, ALSO. JONATHAN: I WAS TRYING TO WORK OUT OF THECHOCOLATE-FISCAL POLICY CONNECTION. LISA:CHOCOLATE IS IMPORTANT AND IF YOU START HAVING BEST CHOCOLATE– JONATHAN: SHRINK SOLUTION. HUGE DEAL.IS THE PRESIDENT GOING TO TALK ABOUT THIS IN THE STATE OF THEUNION? ANNMARIE: THEY WILL BE DEBATING HOW MUCHTIME THEY SHOULD SPEND ON TRUMPFLATION — SHR INKFLATION.IF THE PRESIDENT TALKS ABOUT IT, HE IS HIM ON THE ISSUE FORCONSUMERS WHICH REMINDS THEM.

THAT THERE IS INFLATION AND ITWASN'T HERE PRIOR. JONATHAN: THIS ISSUE HAS BEEN AROUND FORDECADES. WHY ALL OF A SUDDEN ARE WEJUMPING ON THIS BANDWAGON? LISA: CERTAIN THINGS WERE NOTSTICKING SO LET'S TRY THIS ONE. JONATHAN: THROW IT AT THE WALL.LISA: WHEN YOU GET A BOX OF CEREAL.JONATHAN: CATTLE FEED FOR HUMANS. LISA:IT LIKE A QUARTER FIELD AND THEY SAY THEY WANT MORE SPACETO CUSHION IT. IT IS FILLED THE LESS. ANNMARIE:COMPANIES HAVE BEEN DOING THIS.

FOR DECADES.IF THEIR INPUT COSTS ARE HIGHER, THEY HAVE TO FIGURE OUTA WAY TO RAISE COSTS OR PUT LESS IN SO THEY CAN MAKE MONEY.JONATHAN: EQUITY FUTURES -.1%. LET'S GIVE ANY UPDATE ELSEWHERE.HERE IS THE BLOOMBERG BRIEF. DANI:LEXIE NAVALNY WILL BE BURNED TODAY IN MOSCOW.POLICE HAVE BEEN DEPLOYED NEAR THE CHURCH. ALEXEI NAVALNY DIED AFTERFALLING ILL IN A REMOTE MAXIMUM-SECURITY PRISON.

DELL HEADED FOR BIGGEST GAIN INMONTHS FOLLOWING A REPORT THAT BEAT EXPECTATIONS.TAGAMET FOR AI SERVERS IS DRIVING THE MOMENTUM.THE STOCK HAS MORE THAN DOUBLED. ELON MUSK IS SUING OPENAI ANDTHE CEO, HE ALLEGEDLY BREACHED THE AGREEMENT BY PUTTING PROFITAHEAD OF BENEFITING HUMILITY — HUMANITY.THE RELATIONSHIP WITH MICROSOFT UNDERMINES THE ORIGINAL MISSIONOF CREATING OPEN-SOURCE TECHNOLOGY THAT WOULD NOT BESUBJECT TO CORPORATE PRIORITIES. MUSK WAS ONE OF THE EARLYFUNDERS.

THAT IS YOUR BLOOMBERG BRIEF.JONATHAN: THE FED — >> YOU EXPECTINTEREST RATES LATER THIS YEAR? >> WE ARE READY TO MAKE MOVESAND ADJUST AS THE DATA DEMANDS IS TO GIVE. >> IT WILL PROBABLY BEAPPROPRIATE TO START TO REDUCE RATES IN DECEMBER TIME.JONATHAN: THAT CONVERSATION COMING UPNEXT. LIVE FROM NEW YORK CITY, THISIS BLOOMBERG. ♪.

JONATHAN:EQUITY FUTURES ON HIS 500 NEGATIVE BUT RECOVERING.WE ARE DOWN BY 0.07%. THE FED IN NO RUSH TO CUT RATES.>> I EXPECT US TO CUT INTEREST RATES LATER THIS YEAR.RIGHT NOW, THERE IS NOT A SENSE OF URGENCY. >> WE WANT TO AVOID HOLDING ONALL THE WAY TO 2%. WE ARE READY TO MAKE MOVES ANDADJUST AS THE DATA DEMANDS US TO DO. >> IT WILL PROBABLY BEAPPROPRIATE IF THINGS GO AS WE.

EXPECT TO SEE US TO START TOREDUCE RATES IN THE SUMMERTIME. JONATHAN:FED SPEAKERS WAITING ON THE DATA, PUSHING BACK CUTS UNTILLATER THIS YEAR. INFLATION DATA RAISING AND A,THE FASTEST PACE IN A YEAR. THE PAYROLLS REPORT DUE LATERTODAY. KALLUM PICKERING SEES THE FEDCUTTING FOUR TIMES THIS YEAR STARTING IN JUNE WITH THEECONOMY HEADING FOR A SLOWING DOWN. BERENBERG'S KALLUM PICKERING.THE GOOD NEWS IS WE DID NOT SEE.

BAD NEWS. KALLUM:YES, MORE EVIDENCE THAT THE U.S. ECONOMY IS HUMMING ALONGNICELY, MAY SLOW IN THE FIRST HALF OF THE YEAR.IT LOOKS LIKE IT WON'T WIND BUDDHIST SLOWDOWN. JONATHAN:WE HAVE SEEN A STORY FROM THE FEDERAL RESERVE.HOW SYNCHRONIZE DO YOU THINK BECAUSE THERE GOING TO BE?KALLUM: THE RISK IS THAT THE FED GOESLESS RATHER THAN MORE. WE WERE DISCUSSING WHAT THISQUESTION AROUND THE YIELD CURVE BUT NO EFFICIENT MEANS.WE HAVE TO ASK WHICH PRESS IS.

WRONG, THE 10 YEAR THE SHORTEND? SHORT AND IS 150 BASIS POINTSTOO HARD BUT YOU NEED MORE OF THE LONG END.IT IS POSSIBLE WE ARE ADJUSTING HERE TO THE HIGHER GROWTH,HIGHER INFLATION ENVIRONMENT. WE ARE HAVING A LITTLE BIT OF APROBLEM HERE AND CENTRAL BANKS ARE HAVING IT, UNDERSTANDINGWHAT IS THE NORMAL RATE OF REAL GDP, WHERE WILL IT SETTLE, ANDWHAT INTEREST RATE YOU NEED TO BALANCE THE ECONOMY.ALL OF THE UPSIDE RISKS IN THE U.S.WHO WOULD HAVE BEEN OPEN FOR.

SEEM TO BE PLAYING OUT ONUNLIMITED GROWTH, PRODUCTIVITY GROWTH, DEMAND, THE GOVERNMENTGETTING AWAY WITH FISCAL STIMULUS. IS A NICE STORY. LISA:GOOD FISCAL STIMULUS, I KEEP THINKING ABOUT MONEY GOING INTOTHIS MARKET. WHAT IS THE U.S. DOING THAT EUROPE IS NOT THATIS MAKING IT FLUSH WITH CASH AND SUPPORTING GROWTH? KALLUM:WHAT CAN THE U.S. DO THAT NO ONE ELSE CAN DO?WE ARE IN A 7% DEFICIT. YOU SAY WHAT YOU SPEND THATDEFICIT ON? 10% RISE YEAR-OVER-YEAR ININVESTMENT GROWTH.

FISCAL POLICY IS TO TOWARDBOOSTING THE ASSETS OF THE COUNTRY, BOOSTING SUPPLY ANDADDING TO LONG-RUN POTENTIAL. MITCHELL PHYSICAL ACTS ARE NOTSIMPLY JUST KNOCKING DOWN OLD COAL-FIRED POWER STATIONS ANDBUILDING NEW GREENER, BUT IT JUST ADDS TO THE DEBT. YOU ARE RIGHT AT THE TIME WHENYOU HAVE A NORMALIZATION IN DEMAND GROWTH. LISA: ARE YOU MAKING THE ARGUMENT FORCOULD SEE THIS GROWTH AND FLUSH OF LIQUIDITY WITHOUT ANYINFLATIONARY SURGE? KALLUM: U.S.

SEEMS TO BE MATCHING DEMAND ANDSUPPLY BETTER THAN A COUNTRY AT THE MOMENT.BETTER THAN EUROPE BECAUSE WE ARE MORE EXPOSED TO THE GLOBALSUPPLY SHOCKS. WHILST WE HAVE THE HOPE THATTHIS CAN CONTINUE, STRONG GROWTH ACCEPTABLE INFLATIONWITHOUT THE NEED TO CUT MUCH. IF THE FED ONLY GOES TWO ORTHREE TIMES THIS YEAR, BOND MARKET VOLATILITY BUT AS ANECONOMIST I AM HAPPY ABOUT THAT. THE RISK THAT HAPPENS — THEREIS FOR ME IS ABOUT WHAT HAPPENS NEXT YEAR.WE ARE A CLOSED AUNTS BETWEEN.

SUPPLY AND DEMAND BUT WE AREMATCHING. IF YOU END UP WITH A PRESIDENT,NOT NAMING ANY NAMES, THAT RAISES IMPORTANT TRIPS, REDUCESIMMIGRATION AND THAT BESIDES I WANT STRONGER GROWTH SO I AMGOING TO CUT INCOME TAXES, YOU HAVE AN EFFICIENT ALBUM — YOUHAVE ANY EFFICIENT PROBLEM. IT IS REPORTED TO LIVE THEECONOMY DO WHAT IT IS GOING TO DO.IF THE VATICAN TICKETS FOR OFF OF THE BREAK, GREAT.WE HAVE MORE GROWTH, I WILL BE HAPPY. ANNMARIE:HOW DO YOU START PREPARING FOR.

TRUMP 2.0. KALLUM:THE MARKET IS GOING TO WAIT UNTIL THE FOURTH OF NOVEMBERAND THAT ASIDE. WE ARE ALWAYS OVERTAKEN BYEVENTS IN LIFE SO SHOULD NOT BE ASSUMING THE NEXT FOUR YEARSLOOK A CERTAIN WAY. A LOT DEPENDS ON HOW EUROPEREACTS TO GEOPOLITICAL RISK. FROM A MACRO PERSPECTIVE, ASLONG AS FISCAL POLICY IS ORIENTED TO THE SUPPLY-SIDE ANDTHE U.S. CONTINUES TO ENJOY GOOD EMPLOYMENT GROWTH, IT IS AQUESTION OF WHETHER INFLATION SETTLES IN HIGH TWOS OR LOWTWOS. ANNMARIE:.

AT WHAT POINT ARE BONDHOLDERSGOING TO WANT MORE TO HOLD U.S. DEBT? KALLUM:AS LONG AS YOU DON'T HAVE A MAJOR EFFICIENT PROBLEM, IDON'T SEE WHY WE SHOULD BE PUSHING UP U.S.RATES SIGNIFICANTLY. MAYBE THEY NEED TO BE 50 BASISPOINTS HIGHER BUT THAT REFLECTS REAL GROWTH AS UPSIDE RISK FORINFLATION. IF FISCAL POLICY WOULD YOUCHANGE TO BE DEMAND FOCUSED, THEN YOU WOULD WORRY ABOUTINFLATION PROBLEMS. REMEMBER THE LESSON OF LIZ TRUSS IN THEU.K.. THE REASON THOSE DEFICIT.

SPENDING PLANS OF PANIC TOMARKETS IS BECAUSE THEY WERE INFLATIONARY IN AN ECONOMY THATWAS STRAINED. ARE YOU RAISING DEMAND WHENDEMAND IS ALREADY STRONG ENOUGH OR ARE YOU TRYING TO RESUPPLYIN ORDER TO MATCH THE INCREASED DEMAND? THE U.S.GETS AWAY WITH IT. OTHER COUNTRIES PROBABLYCOULDN'T. JONATHAN: INTERESTING. LIZ TRUSS, QUITE A LESSON.KALLUM: IT WAS REAGANISM WITHOUT THEDOLLAR. JONATHAN: — SUPPORTS EVERY NOVELIZATIONOF RATES AT HER LEVEL.

WHAT HAS CHANGED BETWEEN 2019NOW? WHAT HAS CHANGED THAT WOULD LEAD TO THAT OUTCOME? KALLUM:LET'S IMAGINE A WORLD WHERE WE DID NOT HAVE COVID AND DID NOTHAVE THE INVASION OF UKRAINE. WE REMOVE SUPPLY SHOCKS. U.S.RATES WOULD HAVE BEEN DRIFTING HIGHER, THIS NEUTRAL RATE.WE ESCAPED THE WEIRD FUNK AFTER THE POST FINANCIAL CRISIS.THE FED STARTED TO REACT TO THIS CHANGE FROM 2017 ONWARDBUT HAD TO ADJUST RITZ DOWNWARD. NEUTRAL RATES HAVE DRIFTEDHIGHER SO YOU CAN ASK THE QUESTION, YOU LIKE TO REFER TOR-STAR, IT IS 4% OR HIGHER.

CLEARLY HAVE 150 BASIS POINTSOF TIRING, — OF TIGHTENING, NOT 500 BASIS POINTS WHICH ISWHY INFLATION EXPEDITIONS HAVE COME DOWN, WIDELY HOUSINGMARKET HAS CORRECTED BUT CONSUMERS HAVEN'T PANICKED ANDTHE JOB MARKET HAS SLOWED. JONATHAN:ARE WE SUFFICIENTLY RESTRICTIVE BASED ON THAT?THE FEDERAL RESERVE SEEMS TO HAVE A DIFFERENT VIEW ON WHATNEUTRAL IS. KALLUM: WE ARE GOING TO FIND OUT WHERENEUTRAL IS. IT IS HARD TO BE PRECISE ATTHIS MOMENT.

I FEEL KILLING INFLATION RATHERTHAN ALLOWING THE ECONOMY TO RUN HOT.OUR MARKETS ARE NOT SYSTEMS, THEIR ADAPTATIONS AND THEIRDEPTH REPRESSES. A WORLD WHERE PRICES GROW AT 1%IS NOT SIN HE KNEW STRONG SIGNAL ABOUT INVESTING HERE ORTHERE. THE MORE YOU HAVE 3% GROWTH,THE MORE SIGNALS YOU HAVE TO DO SOMETHING.I WOULD PREFER TO SAY LET'S RUN THE ECONOMY HOT FOR A WHILE ANDLET THIS WEEK NORMALIZATION TAKE PLACE THAN RISK KILLINGTHE UPSWING. JONATHAN:.

A LOT OF SHOULD VERSUS WILL.WHAT DO YOU THINK THEY WILL DO? KALLUM:JUNE IS GOING TO BE A MASSIVE MONTH. TO BANK OF ENGLAND, THE FED THEECB ARE GOING TO CUT RATES AND IT IS A QUESTION HOW FAR THEYGO. FOUR FOR THE U.S.. AND THEN A QUESTION IF THEY CANGO 50 MORE NEXT YEAR. IT IS A CLOSE CALL. LISA: IT SEEMS LIKE IF THINGS ARESURPRISING TO THE UPSIDE IN TERMS OF ECONOMIC GROWTH, WHYWOULD THEY CUT MORE THAN THEY.

ARE SAYING THAT? KALLUM:LAST YEAR THE U.S. AND PERCENT ANNUALIZED PROBABLYTWICE THE RATE OF THE CONTROL GROWTH.THIS FIRST HALF WE ARE GOING TOO SLOW TO 2% ANNUALIZED.INFLATION IS PROBABLY GOING TO COME DOWN SO THE FED WILL GETANY OPPORTUNITY IN Q2 TO START CUTTING INTEREST RATES.THEN YOU HAVE MOMENTUM A FEW TIMES AND THEN THE SECOND HALFOF THE YEAR, LET'S SEE IF INFLATION EXPECTATION STARTS TOCREEP UP AS THE ECONOMY STARTS TO ACCELERATE.THEN YOU WILL ASK WHERE THE FED.

CAN STOP. JONATHAN: UNITY SEE BRAMO'S — WE NEED TOBRAMO CAMP. WE JUST NEED TO CHECK BRAMO'SREACTION. KALLUM PICKERING THERE. COMING UP, AVERY SHEFFIELD ANDMARIO PARKER. A CHOCOLATE CONVERSATION WITHJAVIER BLAS. THAT IS COMING UP NEXT. >> MARKETS MOVING CLOSER TOWHERE WE THINK THINGS SHOULD BE. >> THERE IS A LOT OF RISK THATTHE FED RATES LONGER.

THEY ARE LIKELY TO HER ON THESET OF CAUTION. >> ONCE WE START CUTTING, WEARE GOING TO CUT AGGRESSIVELY TOWARDS A NORMALIZED WORLD. >> THE FED IS MORE LIKELY TOREMAIN ON THE SIDELINES RATHER THAN RE-ENGAGING IN RATE HIKES. >> IT IS BECOMING INCREASINGLYLIKELY MAYBE WE HAVE NO RATE BECAUSE THIS YEAR — NO RATEBECAUSE THIS YEAR. >> THIS IS “BLOOMBERGSURVEILLANCE” WITH JONATHAN FERRO, LISAABRAMOWICZ, AND ANNMARIE.

HORDERN. JONATHAN:LIVE FROM NEW YORK CITY, GOOD MORNING.THE SECOND HOUR OF “BLOOMBERG SURVEILLANCE.” BEGINS RIGHT NOW.YOUR EQUITY MARKET ON S&P 500 ALMOST ENTIRELY UNCHANGED.STARTS WITH A BLOW AT JOBS REPORT, CPI, UPSIDE SURPRISE,PPI, UPSIDE SURPRISE, PCE COMES IN LINE.THIS IS WHAT CHRISTIAN HAS GOT TO SAY. NO NEW BAD NEWS.THIS IS WHAT THE MARKET TRADED ON. LISA:EVERYONE IS LOOKING FOR THE TAIL RISK WHICH IS WHY I HAVE ALIST OF WORRIES.

CAN WE GET CONTINUED GROWTH INUPSIDE SURPRISE WITHOUT COMMENSURATE INFLATION?THERE WAS A HALF SECOND PEOPLE WERE WORRIED.PCE WASN'T SURPRISING AND EVERYONE WENT BACK TOGOLDILOCKS NIRVANA. JONATHAN: STOCKS HAD THE BEST MONTH SINCENOVEMBER DESPITE EVERYTHING BRAMO SAID. S&P 500 UP BY 5%. STOCKS IN EUROPE IS UP BY ASIMILAR AMOUNT. THE NIKKEI IS UP.I WILL KEEP GOING JUST TO TORTURE YOU.EVEN THE CSI 300 IN CHINA IS UP.

BY 9%. THAT IS A DECENT MONTH OFGAINS. ANNMARIE: THAT IS A MASSIVE MONTH OFGAINS AND YET JAPAN IS IN RECESSION, THE UNITED KINGDOMIS IN RECESSION. IT IS HARD SOMETIMES TOUNDERSTAND THE ECONOMY VERSUS THE STOCK MARKET. LISA:I KEEP GOING BACK TO PEOPLE HAVING AND OUT WEST YOU, BEINGREADY TO GO AND THEY CAN RESPOND TO ANY WEAKNESS WITHCUTTING RATES. TO ME, IT IS UNCLEAR WHETHER WECAN GET GROWTH WITHOUT INFLATION, WHETHER THE EI BOOMIS GOING TO BRING PRODUCTIVITY.

IN THIS PREFECT BASED –JONATHAN: WOULD YOU LIKE SOME NEGATIVITY?SINGLE MAN, NYCB — SINGLE NAME, NYCB DOWN 26%.JP MORGAN YESTERDAY, RECORD HIGH.THE BAKING INDEX IS PERFORMING IN LINE WITH THE INDEX ON THES&P, UP 4% OVER 5%. EVEN THE REGIONAL BAKING INDEXDOWN 3% AND WE HAVE KNOWN ABOUT THIS ISSUE ALL MONTH. LISA:PEOPLE HAVE BEEN TRYING TO SNIFF OUT TO THE LOSERS ARE INTHE SMALL BANK SPACE ABOUT A YEAR. IF THEY HAVE SPENT A YEARTRYING TO SIT IT OUT AND.

REPRICE WHERE THEIR HOLDINGSARE, IS THIS GOING TO SURPRISE THEM?THE BIGGEST SURPRISE IS GIVEN THAT, WHY ARE PEOPLE NOT MOREALARMED WITH A KITCHEN SINK AND THEN ANOTHER KITCHEN SINK?JONATHAN: NYCB IS DOWN BY 26%. BRAMO'S LIST OF WORRIES GETSSHORTER. COMING UP, AVERY SHEFFIELD –WITH OPEC+ LIKELY TO EXTEND CUTS.MEGAN ROBSON FROM BNP PARIBAS. WE BEGIN WITH STOCKS AT RECORDHIGHS OF FOLLOWING A FOURTH MONTH OF GAINS.AVERY SHEFFIELD SAYING THIS, “.

THE MARKET IS PARTYINGEXTREMELY HARD. VALUATIONS ARE STRETCHED ANDFUNDAMENTALS ARE BEING OVERRULED.WE THINK THAT THIS CREATES UNDERAPPRECIATED DOWNSIDE RISK.”YOU SOUND LIKE A GUEST LISA BOOKED.LET'S TALK ABOUT DOWNSIDE RISK. WELCOME TO THE SHOW.HOW LONG IS THAT LIST? AVERY:THE RISK IN TERMS OF WHAT HAS BEEN PRICED IN.AS YOU HAVE BEEN SPEAKING ABOUT, WE ARE RUNNING A SIX TO7% DEFICIT IN THAT ENVIRONMENT.

IT IS HARD TO SEE MUCH ECONOMICDOWNSIDE ABSENCE OR SOMETHING HAPPENING IN THE BANKING SECTOR.THE ECONOMY LOOKS LIKE IT IS HUMMING ALONG. IT IS OKAY. FROM A STOCK PERSPECTIVE, WHATIS PRICED IN WITH THE NASDAQ, 29 TIMES, S&P COMMUNITY 21TIMES. WITH REAL RATES, THE HIGHESTTHEY HAVE BEEN SINCE THE GSC. THERE IS A LOT PRICED IN.WHEN EXPECTATIONS AREN'T MET, THE DOWNSIDE CAN BE VERYMEANINGFUL. WE WOULD SAY IT IS PROBABLYMORE LIKE IT TO HAPPEN IN STOCK.

SPECIFIC BASIS RATHER THAN THEMARKET AS A WHOLE GIVEN THE GENEROUS SPENDING FROM OURFEDERAL GOVERNMENT. JONATHAN: YOU SAID SOMETHING ABOUTCHAIRMAN POWELL THAT HIS ULTIMATE GOAL WAS TO MAKEPEOPLE HAPPY. IS THAT STILL YOUR DESCRIPTION?AVERY: I THINK HE WAS LISTENING BECAUSE SINCE THEN IN THEJANUARY FED MEETING, HE DID COME OUT AND SAY EXPLICITLY,WHICH WAS A LITTLE REFRESHING, THAT INFLATION LOOKS LIKE IT ISPICKING UP A BIT AND WE ARE NOT LIKELY TO RAISE IN MARCH.

EVEN MARY DALY THIS WEEK ONBLOOMBERG SAYING CONSUMERS ARE CONCERNED ABOUT INFLATION, ONEOF THEIR TOP RISKS. WE CANNOT REALLY LOWER RATES TOCONTINUE TO STIMULATE THE PARTY IN THE WAY HE'S ADJUSTED HEMIGHT FROM HIS COMMENTS IN DECEMBER. ANNMARIE:THIS IS SOMETHING I THOUGHT — LISA:THIS IS SOMETHING I THOUGHT WAS INTERESTING, HE SAID THINGS TOMAKE PEOPLE HAPPY BUT DID NOT ADDRESS THE ISSUE OF FINANCIALCONDITIONS EASING AND WHAT THAT WOULD DO TO PUSH THEM FURTHERAWAY FROM THEIR GOAL.

DO YOU THINK THAT IS BECAUSE ITIS NO LONGER RELEVANT OR BECAUSE THEY ARE NOT AWARE OFHOW MUCH THE INCREDIBLE EASING IN FINANCIAL CONDITIONS HASMADE IT WERE DIFFICULT FOR THEM TO CONGRESS INFLATION? AVERY:AT THAT MOMENT IN TIME, HE JUST DIDN'T WANT TO STOP THE PARTY.IT IS CLEAR FINANCIAL CONDITIONS EASED SO MUCH BUT HEWAS HOPING INFLATION DID NOT ACCELERATE FOR A WHILE AND HE WOULD HAVE LEEWAY TO KEEPEVERYTHING ON A STEADY COURSE. BECAUSE INFLATION HASACCELERATED AND IS PROMINENT IN.

CONSUMER'S MINDS, FINANCIALCONDITIONS ARE FLOWING SO QUICKLY THEY HAVE HAD TO WALKBACK THIS FINANCIAL CONDITIONS DON'T MATTER, WE ARE GOING TODO WHAT WE ARE GOING TO DO. THEY ARE FLOWING THROUGH AND SOTHEY ARE GOING TO HAVE TO RESPOND TO IT. CAN YOU REALLY EASE WITHOUTCELEBRATION? SO MANY STOCKS ARE PRICED AS IFTHE FED IS GOING TO EASE AND STIMULATE DEMAND FROM THECURRENT LEVEL RATHER THAN THAT THEY WOULD EASE IN RESPONSE TOTHINGS GETTING WORSE. LISA:.

THIS MORNING I WALKED IN ANDSAID EVERYBODY TALKING ABOUT THIS PARTYING AS IF IT IS ANEGATIVE. WHAT IF THERE IS NOTHING WRONGWITH THIS PARTY? WE ARE JUST AS MUCH MONEY GOINGINTO CASH FUNDS, MORE GOING INTO EQUITIES. IS THIS HEALTHY?AVERY: THE ISSUE IS IT IS LEADING TOCONTINUED INFLATION WITH KEN — WHICH CONSUMERS ARE NOT HAPPYWITH. IF THEY WERE HAPPY WITH THEIRTROPIC PRICES, HAPPY WITH HAPPY MILK PRICES AND THE COST OFHOUSING, IT WOULDN'T MATTER.

CONSUMERS AREN'T HAPPY.THAT IS WHERE WE HAVE THIS ISSUE THAT YOU CANNOT JUST KEEPSTIMULATING THE PARTY AND HAVE PEOPLE ACTUALLY BE HAPPY.ANNMARIE: WE SEE A DIVERGENCE INCONSUMERS AND YOU TALK ABOUT THIS IN YOUR NOTES.NOT ALL CONSUMERS ARE NOT SPENDING. AVERY: RIGHT.THE HIGH END IS CONTINUING TO SPEND.LOW END IS CONTINUING TO SPEND WITH THEIR NOT HAPPY WITH WHERETHEY ARE SPENDING. TODAY MUCH ON CHOCOLATE ANDCOFFEE, NOT ENOUGH MONEY LEFT.

FOR DISCRETIONARY.THE HIGHER END CONSUMERS ARE CONTINUING TO SPEND.THIS IS ONE OF THE ISSUES WE ARE FACING.IF EVERYONE WASN'T SPENDING, IT WOULD LEAD TO DEFLATION BUTENOUGH PEOPLE ARE SPENDING THAT IT CREATES INFLATIONARYPRESSURE. THE FED'S TOOLS ARE VERY BLUNT.IF STIMULUS DEMAND FOR EVERYONE. THE LOW END CONSUMER GETS HITMORE. THAT IS A REAL ISSUE. WE THINK THAT IS GOING TO KEEPTHE FED MORE IN CHECK FOR LONGER.IT MEANS THE CONSUMER SECTOR.

AND OTHER SECTORS BEING PRICEFOR A STIMULATE DEMAND FOR THESE LEVELS ARE UNLIKELY TOLIVE UP. JONATHAN: THAT IS THE THIRD TIME YOU HAVEALLUDED TO THIS. THE RISK AT THE SINGLE-GAMELEVEL, WHAT ARE THESE NAMES — SINGLE NAME LEVEL, WHAT ARETHESE NAMES? AVERY: I WILL SPEAK MORE GENERALLYWHAT WE'RE SEEING. IN THE CONSUMER SECTOR, YOUHAVE STOCKS PRICED AT 30 TIMES OR 40 TIMES EARNINGS THAT HAVEBEEN REAL LEADERS, BRANDS PEOPLE HAVE LOVED FOR A LONGPERIOD OF TIME.

CARE FACING INCREASINGCOMPETITION — THEY ARE FACING INCREASING COMPETITION THATBENEFITED FROM LOWER INCOME CONSUMERS TRADING UP.THEY ARE NOT REFLECTING THOSE WRISTS — THOSE RISKS. ALSO COMPANIES THAT SELLFURNITURE, HOME IMPROVEMENT, EVERYONE IS PASSING IN THESECUTS RE-STIMULATING DEMAND. DEMAND MIGHT FALL FURTHERBEFORE IT COMES UP. YOU ADVENT SOFTWARE SECTOR.– YOU LOOK AT THE SOFTWARE SECTOR, VERY DIFFERENT RESULTSFROM SOFTWARE COMPANIES,.

COMPANIES PRICED FOR EVICTIONAND MANY BENEFIT FROM A HIGH BUT MAYBE NOT AS PEOPLE THINK.WE ARE ALREADY SEEING THOSE STOCKS CORRECT AND WE WILL SEETHESE WELDING BUBBLES DEFLATE. COMPANIES OUT THERE THAT DON'THAVE THAT BUBBLE-LIKE DYNAMIC BENEFIT FROM ANY ECONOMYBUILDING ALONG HAVE SOME OPPORTUNITY TO THE UPSIDE.JONATHAN: GIVEN THE NAMES YOU HAVE CITED, I CAN SAY COMPANIESTHAT RHYME WITH ROSE. AVERY: FOR THE S&P AS A WHOLE, YOUHAVE YOUR MAGNIFICENT SEVEN.

THE PERFORMANCE OF THEMAGNIFICENT SEVEN HAS DIVERGED UNDERNEATH THE SURFACE.IS, MEDIC OF WHAT WE WILL SEE IN THE MARKET AS A WHOLE.WILL FOUR OF THOSE THINGS THAT HAVE DONE ENOUGH THIS YEAR BEENOUGH TO THAT WEAKNESS? TWO OTHERS, A LITTLE SOFTNESS?THAT IS PROBABLY WHAT IS GOOD YOU DRIVE THINGS AT AN INDEXLEVEL. WE HAVE ALREADY SEEN BIFURCATION AND THE LEVEL OFVALUATIONS WITHIN THOSE COMPANIES, IT IS HARD TO MAKE ACALL ON THE INDEX AS A WHOLE. LISA:I LOVE YOUR IDEA ABOUT SPECIFIC.

COMPANIES AND THIS BRINGS ME TOFRENCH CALL CENTERS. THIS REALLY IS AN IMPORTANTSTORY. THIS IS A COMPANY THAT FELL OUTOF BED BECAUSE CLARNA SAID IT IS DOING THE WORK EQUIVALENT OF700 EMPLOYEES. I AM CURIOUS HOW MANY TELLERPERFORMANCES ARE OUT THERE. AVERY:THERE IS MORE AND THAT IS AN AREA WHERE WE WILL CAI HAVINGEARTHQUAKE TYPE TRUCKS RATHER THAN AI BEING A RISING TIDE OFLIFTS ALL BOATS. — THAT LIFTS ALL BOATS.THERE ARE THESE COMPANIES THAT.

WANT TO MEET EXPECTATIONS.THERE ARE ALSO COMPANIES THAT ARE MIFID TO BE DISRUPTED ANDDON'T HAVE IT PRICED IN. JONATHAN:AVERY SHEFFIELD, THANK YOU. MORGAN STANLEY TALKED ABOUTTHIS, THE DIFFERENCE BETWEEN AI AND ENABLERS AND AI ADOPTERS.THE SECOND PIECE IS THE PIECE YOU ARE ALLUDING TO, COMPANIESTAKE IT ON AND SUCCEED AND OTHERS WHICH MIGHT STRUGGLE ANDFAIL. LISA: I LOVE THIS STORY AND IT ISHARD TO TALK ABOUT IN GENERALITIES BUT THERE ARECOMPANIES THAT ARE GOING TO DO.

BETTER WITH RESPECT TOPRODUCTIVITY AND THAN THOSE IN TWO WEEKS CALLED OUT OFBUSINESS BECAUSE THEIR ENTIRE MODEL IS GETTING DISRUPTED.THAT UNDER THE HOOD WORK THAT IS NOT THAT ITSELF TO — ISINTERESTING. JONATHAN: I THINK IT DOES LEND ITSELF TOMORNING TV, HOW ARE LABOR WILL THOSE COMPANIES BE?WHERE WILL THOSE JOB LOSSES BE? YOU WILL FIND THEM IN ASIA ANDINDIA WHERE A LOT OF THOSE CALL CENTERS MOVED TO. LISA:IT IS A GREAT POINT IN TERMS OF CHEAP LABOR AND WERE IT GETSBLOWN OUT.

I WOULD ALSO ARGUE IN THE U.S.THERE IS SOMETHING LIKE MORE THAN ONE MILLION GROCERY STORECASHIERS. THINK ABOUT JOBS LIKE THIS, THERANK AND FILE. WHAT HAPPENS TO ALL OF THOSEJOBS? JONATHAN: CHEAP LABOR, CHATBOTS.EQUITY FUTURES ON THE S&P, -1%. BE CEMEX ME FEEL SMALL WHEN SHETALKS ABOUT FRENCH CALL CENTERS BEING ON THIS LIST BUT I AMWITH YOU. YOU NEED YOUR WEEKEND. BEST GET ANY UPDATE ON STORESELSEWHERE. HERE IS YOUR BLOOMBERG BRIEF.DANI:.

EUROZONE INFLATION IS LESS THANFORECASTED IN FEBRUARY WHICH BACKS THE MORE CAUTIOUS ECBOFFICIALS. CONSUMER PRICES ROSE 2.6YEAR-OVER-YEAR — 2.6% YEAR-OVER-YEAR.BIDEN WILL PUSH PLANS TO INCREASE TAXES ON THE WEALTHYAND LOWER PRESCRIPTION DRUG PRICES IN HIS STATE OF THEUNION ADDRESS. HE PLAYS JULIET'S ECONOMICAGENDA FOR A SECOND TERM IN OFFICE — HE PLANS JULIET'SECONOMIC AGENDA FOR A SECOND TERM IN OFFICE.

JANET YELLEN SAID ANY –UKRAINE IT HAS BEEN HELD UP IN CONGRESS AS THE COUNTRY'S WARWITH RUSSIA ENTERS A THIRD-YEAR. SHE SAID THE EU HAS OFFEREDUKRAINE “VERY MEANINGFUL FINANCIALS”BUT THE TOTAL DOES NOT SEEM LIKE ENOUGH. JONATHAN:UP NEXT, A BATTLE AT THE BORDER. >> THIS IS A JOE BIDEN INVASION.IT IS A MILITARY OPERATION. THIS IS LIKE A WAR. PRES. BIDEN:THIS IS WHAT I WOULD SAY TO MR. TRUMP, JOIN ME OR I WILL JOINYOU IN TELLING CONGRESS TO PASS THIS BIPARTISAN BORDER SECURITYBILL. JONATHAN:.

WE WILL HEAD DOWN TOWASHINGTON, D.C. FOR THIS DISCUSSION NEXT.GOOD MORNING. ♪ JONATHAN:TWO HOURS 10 MINUTES AWAY FROM THE OPENING BELL.YIELDS A LITTLE BIT LOWER BICYCLE BASIS POINT. 4.23 65. A BATTLE AT THE BORDER. >> THIS IS A JOE BIDEN INVASION.THREE YEARS AGO WE HAVE THE MOST SECURE BORDER IN HISTORY,THERE WAS A SECURE BORDER AND.

PEOPLE WEREN'T COMING BECAUSETHEY KNEW THEY WEREN'T GOING TO GET IN.IT IS A MILITARY OPERATION. THIS IS LIKE A WAR. PRES. BIDEN:THIS IS WHAT I WOULD SAY TO MR. TRUMP, SAID POLICIES IN ISSUEINSTEAD OF TELLING THEM WAS OF CONGRESS TO BLOCK THISLEGISLATION, JOIN ME OR I WILL JOIN YOU IN TELLING CONGRESS TOPASS THIS BIPARTISAN BORDER SECURITY BILL. JONATHAN:DONALD TRUMP AT PRESIDENT BIDEN MAKING DUELING TRIPS TO THE U.S.MEXICO BORDER. A KEY ISSUE IN THE RUN-UP TOTHE PRESIDENTIAL ELECTION.

MARIO PARKER JOINS US FOR MORE.THE RHETORIC IS FAR APART, HOW FAR APART ARE THEY ON POLICY?MARIO: IT IS NIGHT AND DAY IN TERMS OFTHE GULF BETWEEN BIDEN AND TRUMP ON POLICY. THE REPUBLICANS EXACTED WHATTHEY WANTED OUT OF PRESIDENT BIDEN IN TERMS OF IMMIGRATIONAND BORDER DEAL AND THEN RENEGE ON THAT DEAL — AND THAT MEANTBACK ON THAT DEAL FOR TRUMP WHO WANTED TO KEEP THE BORDER IS AVULNERABILITY FOR HIS OPPONENT LOOKING TO NOVEMBER. ANNMARIE:WHEN IT LOOKS TO EXECUTIVE.

ACTION, BIDEN WOULD HAVE TO USETHE LAW THAT FORMER PRESIDENT TRUMP WANTED TO USE.THIS WOULD BE SUSPENDING THE ENTRY OF FOREIGNERS WHENDETERMINED THEIR ARRIVAL IS NOT IN THE BEST INTEREST OF THECOUNTRY. IF HE WAS TO GO THAT ROUTE, HOWMUCH PUSHBACK WITH YOU GET FOR THE PROGRESSIVE LEFT? MARIO:HE WOULD GET A LOT OF PRESSURE FROM THE PROGRESSIVE LEFT.HE HAS BEEN MULLING THIS FOR THE LAST THREE WEEKS AFTER THATTHE DEAL WAS SCUTTLED, WHETHER OR NOT HE HAS THE EXECUTIVEAUTHORITY TO DO SOMETHING.

VIS-A-VIS DONALD TRUMP.YOU ALL ARE IN NEW YORK, WE SEE SOME OF THE PRESSURES ONBIDEN'S SIDE FROM DEMOCRATS. ILLINOIS, NEW YORK, SOME OFTHESE BIG CITIES BEING INUNDATED WITH MIGRANTS BASEDON THIS AGAIN MEANT GOVERNOR GREG ABBOTT PULLED.BIDEN IS CAUGHT BETWEEN A LOT OF DIFFERENT PIECES BETWEEN HISPARTY AND THE REPUBLICAN PARTY. THE FACT THAT WE SAW HIM GO TOTHE BORDER WAS A FOLLOW-THROUGH FOR A PROMISE THAT HE WAS GOINGTO GO OUT ON THE ROAD AND TAKE THIS FIGHT HEAD-ON, TRY TOEXPLAIN TO THE AMERICAN PEOPLE.

THE POLITICS OF WHAT HAPPENED. LISA:TOM'S — ANNMARIE: TOM SWAYZE TALKED ABOUT THE BORDER.WHAT IS PRESIDENT BIDEN GOING TO SAY NEXT WEEK IN THE STATEOF THE UNION ABOUT THE BORDER? MARIO:IT IS QUITE UNCLEAR RIGHT NOW WHAT PEOPLE SAY OTHER THAN THEFACT THAT HE IS GOING TO PUT THE ONUS ON REPUBLICANS.HE WILL POINT TO THE FACT THAT HE DID CONCEDE TO REPUBLICANDEMANDS IN THE DEAL THEY SCUTTLED.

ESSENTIALLY HE IS GOING TO CASTDONALD TRUMP AS A PUPPETMASTER OVER THE REPUBLICAN PARTY.THE GAMBIT ON THE OUTSIDE IS THAT REPUBLICANS FEEL IT IS SOENTRENCHED OF AN ISSUE FOR BIDEN THAT HE WOULD BE ABLE TODIG HIMSELF OUT OF THE WHOLE. IN TERMS OF THE STATE OF THE UNION, BIDED'S — BIDEN'SCAMPAIGN IS CASTING THAT AS HIS VISION FOR AMERICA, ANOTHERSEMINAL MOMENT IN HIS CAMPAIGN. THEY WANT HIM TO START HAVING AVISION LOOKING FORWARD AND COMMUNICATING THAT TO VOTERSWHILE TRYING TO EXPLAIN TO.

VOTERS SOME OF HIS KEYLEGISLATIVE COMPLIMENTS, HOW THEY HAVE IMPROVED THEIR LIVES.ANNMARIE: IS THERE EVIDENCE OF WHAT BIDENIS TRYING TO DO IN TERMS OF TAKING THE BORDER ISSUE HEAD ONSAYING YOU ARE THE ONE WHO BLOCKED THIS DEAL I COULD HAVEGOTTEN DONE? ANY EVIDENCE THAT IS WORKING INTERMS OF VOTERS PLANNING REPUBLICANS? MARIO:IN TERMS OF EVIDENCE, THE EVIDENCE IS SCANT.WE HAD A MORNING CONCERT POLL THAT CAME OUT AND SHOWED MOREVOTERS BLAME REPUBLICANS FOR.

WHAT IS HAPPENING AT THE BORDERBY A FIVE PERCENTAGE POINT INCREASE.THAT IS NOT A LOT GIVEN WHERE BIDEN IS ON THE ISSUE. IF YOU LOOK AT FORMER PRESIDENTTRUMP'S RECENT STOP SPEECHES, YOU CAN SEE SOME LENSES OF WHATHIS KEY AIDES ARE TELLING HIM. HE SAYS NOTHING ABOUTIMMIGRATION BEING BAIT FOR DEMOCRATS — SAID SOMETHINGABOUT IMMIGRATION BEING BAIT FOR DEMOCRATS.PROBABLY HIS ANALYSTS TOLD HIM IT IS SO BAKED IN THAT IT ISWITH THIS POLITICAL GAMBIT TO.

CONVINCE HIS PARTY TO GO BACKON THAT DEAL THEY HAD. JONATHAN: MARIO PARKER IN WASHINGTON, D.C.ON THE DIFFERENCE BETWEEN DONALD TRUMP AND IS SITTINGPRESIDENT JOE BIDEN ON THE SOUTHERN BORDER. THE FED WILL NOT CUT RATES IN2024, QUITE A CALL. THE REALITY IS THE U.S.ECONOMY IS NOT SLOWING DOWN AND THE FED PROVIDED A STRONGTAILWIND TO GROWTH SINCE DECEMBER.AS A RESULT, THE FED WILL NOT CUT RATES AND RATES ARE GOINGTO STAY HIGHER FOR LONGER.

HE OFFERS 10 REASONS, A VERYLONG LIST. I WILL GO TO THE 10. I WILL SHORTEN THE. SHORTEN THE.– SHORTEN THEM. IT IS EXHILARATING.UNDERLYING MEASURES OF TRADE INFLATION MOVING HIGHER.SUPER COURT INFLATION, PREFERRED BY CHAIRMAN POWELLTRENDING HIGHER. THE LABOR MARKET REMAINS TIGHT.SMALL BUSINESSES ARE PLANNING TO RAISE SELLING PRICES.MANUFACTURING SURVEYS SHOW A HIGHER TREND IN PRICES PAID.SERVICES PRICES PAID, ALSO TRENDING HIGHER.WE ARE GOING TO RAISE WORKER.

COMPENSATION AS WELL ACROSSBUSINESSES. ASKING RENTS ARE RISING ANDMORE CITIES ARE SEEING RAISING MEDS — RISING RENTS.FINANCIAL CONDITIONS, THE OBVIOUS ONE, EASING.EQUITY MARKETS RATHER TO ALL-TIME HIGHS AND SPREADS ARETIGHT. LISA: THE INDICATION WE GOT FROMCHAIR POWELL AT THE END OF LAST YEAR HAS WORKED AGAINST THEIRGOAL TO GET INFLATION DOWN. THIS IS WHAT AVERY WAS TALKINGABOUT A COUPLE OF MINUTES AGO. IT DOES MATTER.THIS IS FACTORING INTO SOME OF.

THE STRENGTH.HOW MANY PEOPLE ARE GOING TO COME TO HIS VIEW?THE JIM BEYONCA CAMP WAS A LONELY CAMP AND STILL NOT BEINGPRESENT IN. JONATHAN: I WANT TO REMIND YOU HOWQUICKLY THINGS CHANGE LAST YEAR AT HOW THE TIMES WE HAD ADIFFERENT NARRATIVE IN THE FIRST THREE MONTHS OF 2023.FEBRUARY WAS NO LANDING, ALMOST X EVERYWHERE WE ARE.MARCH, BANKS STARTED TO FAIL AND THEN IT WAS ALL OF A SUDDENHARD LANDING. THIS IS THE WAY I WOULD THINKABOUT IT.

THE PROBABILITY AROUND A RANGEOF OUTCOMES HAS SHIFTED MARKEDLY.I HAVE NO IDEA WHERE WE ARE GOING TO BE AT THE END OF THISYEAR BUT THE WORLD HAS MOVED TOWARD THAT PERSPECTIVE.THE CHANCES OF THAT HAPPENING NOW ARE SOME ATTIRE AT THESTART OF MARCH THAN A MONTH AGO. JONATHAN: THERE ARE NOT — LISA:THERE ARE NOT SIGNS OF >> PEOPLE WERE TALKING ABOUT –SIGNS OF WORRY PEOPLE WERE TALKING ABOUT. CONCERNS ABOUT INFLATION, IT ISKIND OF STAY GIVEN TO THE EDGES.

BUT IT IS COMING IN SOME PLACES.ALL OF THESE WORRIES SEEM TO BE KEPT IN CHECK ENOUGH FORINFLATION DO NOT COME DOWN AS MUCH AS PEOPLE EXPECTED.JONATHAN: EQUITY FUTURES ON THE S&P 500ARE SOFTER, NEGATIVE BY .1%. TREASURY YIELDS LOWER BY ABUSINESS POINT OR TWO AT THE CURVE. LET'S CALL IT 4.60. BOYLE CAPPING HIS SECONDSTRAIGHT MONTH OF GAINS AS COCOA SEE ITS BIGGEST RISE INYEARS. WE WILL DIG INTO THE MARKETWITH JAVIER BLAS NEXT ON THE.

PROGRAM. JONATHAN:NOT SHARING MY THOUGHTS ON THAT, NO CHANCE.EQUITIES ON THE S&P NOT A CHANCE. NEGATIVE BY 1/10 OF 1%. WE GOT NOWHERE ON THE NASDAQ100. THE FED WILL NOT CUT RATES IN2024. THE REALITY IS THE U.S. ECONOMY IS SIMPLY NOT SLOWINGDOWN. THE FED PIVOT PROVIDED THISSINCE DECEMBER. GETTING TO THE TWO-YEAR, IT'SBEEN AS LOW WAS 1.4%.

AT THE MOMENT 4.6.YIELDS DOWN BY ONE BASIS POINT. IN LINE WITH EXPECTATIONSYESTERDAY. YOU'VE GOT TO PRICE OUT ANOTHERTHREE CUTS. WHAT'S THE UPSIDE POTENTIAL ONTHAT? LISA: WE WERE HEARING THAT COULD BEABOVE 5%. FOR THE NEXT TWO YEARS TALKINGABOUT THE FED FUNDS RATE THAT WILL REMAIN AT 5% OR 5.5% ILOVE THE WAY HE BEGAN BECAUSE IT WAS BASICALLY YOU ALL HAVEBEEN SO BEARISH AND SO WRONG. THE MARKET WENT INTO 2024EXPECTING SIX FED RATE CUTS.

YOU LOOK AT THE DATA AND THAT'STHE REALITY. >> CAN WE GET THE .10 ON THELONG LIST OF REASONS. FINANCIAL CONDITIONS CONTINUETO EASE? DOES THAT BECOME MORE IF WE DOINDEED GO IN THAT DIRECTION. >> THIS IS THE GAME THEORY ATTHE MOMENT, CAN THEY GET THE INFLATION RATE THEY WANT IF THEMARKET THINKS THEY WILL BE ACCOMMODATING AND TRY TO KEEPTHIS PARTY GOING. RIGHT NOW YOU CAN SEE THIS PLAYOUT IN THE MORTGAGE MARKET WHEN RATES GO DOWN EVEN ONE HALF OF1% YOU CAN SEE PEOPLE APPLY FOR.

MORTGAGES.RATES RISE BACK UP, EVERYONE GOES AWAY.THAT'S FINANCIAL CONDITIONS EASING. JONATHAN:THREE CUTS THIS YEAR IS CONSENSUS.IN THE BOND MARKET AT THE MOMENT WE ARE DOWN TO BASISPOINTS. IF YOU TURN TO FOREIGN EXCHANGEWE GET TO THE EURO SLIGHTLY POSITIVE.SPEAKING OF AN ECB THAT MIGHT NOT BE ABLE TO CUT RATESANYTIME SOON. UPSIDE SURPRISE ON INFLATIONOUT OF THE EURO ZONE, IT'S.

COMING DOWN AND STILL AROUNDTHREE WHICH IS BETTER THAN 4, 5, 6 OR SEVEN. LISA: IT IS NOT COMING FROM SERVICES,THIS IS FROM OTHER AREAS, OF THE GOODS DISINFLATIONCONTINUES. AT WHAT POINT DO YOU NEED TOSEE SERVICES INFLATION COMING IN MORE AGGRESSIVELY? >> JUST LISTEN TO THE AUSTRIANCENTRAL BANK GOVERNORS EARLIER THIS MORNING.THAT MAN IS NOT IN A RUSH ANYTIME SOON.NEW YORK COMMUNITY BANK SHARES.

PLUMMETING.THE COMPANY SAYING MATERIAL WEAKNESSES IN HOW ITCONTRIBUTES LOAN RISK. THE RESULTS FROM INEFFECTIVEOVERSIGHT AND MONETARY ACTIVITIES.AND WHY THEY ALSO ANNOUNCED A CHANGE IN MANAGEMENT WARNINGINVESTORS IT EXPECTS TO MISS A DEADLINE FOR ANNUAL REPORT,THAT STOCK ON MY SCREEN RIGHT NOW IS OFF THE LOWS AROUND 20%. >> TALKING ABOUT A COMPANYTHAT'S BEEN BEATEN UP OVER THE PAST COUPLE OF MONTHS, TO ME IWOULD THINK THE MORE.

INTERESTING ASPECT IS HOW IT'SBEING TREATED AS AN ISOLATED EVENT.PEOPLE ARE FALLING INTO THE IDIOSYNCRATIC STORY HOOK LINEAND SINKER. >> IF YOU ARE JUST JOINING US AT HOME AND YOU MISSED THATTODAY, I THINK THOSE NUMBERS MATTER. THE LARGEST REAL ESTATEEXPOSURE COMES FROM $37 BILLION WITH APARTMENT LOANS WITHREGULATED COMPLEXES. IT IS TRULY A VIDEO SYNCRETIC.LISA: THE ISSUE I HAVE IS WHY DO THEYNOT HAVE A HANDLE ON WHAT RISK.

MANAGEMENT ISSUES THERE WEREONE MONTH AGO. IS THIS AN NYC ISSUE? THE REASON THE ISSUES ARE LOWERIS BECAUSE OF THAT. JONATHAN: CLEARLY THEY HAD A BIGEXECUTION PROBLEM. PRESIDENT BIDEN WALKING BACKCOMMENTS TELLING REPORTERS HE'S HOPING THEY HAVE SOMETHING ONMONDAY. BIDEN SPOKE THE LEADERS OFQATAR AND EGYPT, HOPING TO BROKER PEACE DEAL BETWEENISRAEL AND HAMAS. THE CYNICAL MIGHT SAY THOSECOMMENTS WERE MADE JUST AHEAD.

OF THAT MICHIGAN PRIMARY TO GETSOME SUPPORT HE OTHERWISE DID NOT HAVE. ABIGAIL: ALREADY PEEPED — ANNMA RIE:ALREADY PEOPLE ARE SAYING THAT. MUSLIM AMERICANS WERE GOING TOPROTEST ABOUT, THEY DON'T WANT TO SEE BIDEN IS THE CANDIDATE.HE SAYS HOPE SPRINGS ETERNAL. IF A DEAL WAS TO GET DONE THEYWOULD HAVE TO BE BEFORE RAMADAN ON SATURDAY.YESTERDAY THERE WAS A DEADLY CONFRONTATION IN GAZA AND YOUOF THE WHITE HOUSE SAYING THEY WANT TO INVESTIGATE THIS.

YOU HAVE DOZENS OF PALESTINIANSDEAD. IT'S GOOD TO MAKE THE HOSTAGETALKS MUCH HARDER WHEN YOU HAVE CONTINUED FLAREUPS LIKE THIS.JONATHAN: MORE ON THAT LATER. TESLA ROLLING OUT ANOTHER JUSTA NUMBER OF INCENTIVES. THE INCENTIVES INCLUDEINSURANCE SUBSIDIES AND DISCOUNTS ON SOME PAINT COLORS.TRIGGERING FURTHER CUTS FROM LOCAL COMPETITION.WE CAN CALL THIS A PRICE WAR WITH BYD SLASHING ITS MODELS BY20%. LISA: HOW MUCH DOES THIS CAUSE A REALISSUE FOR TESLA IT'S ALREADY.

SEEN ITS MARGIN HOPEFULS COMEIN QUITE A BIT. DO THEY THEN AFTER CUT PRICESIN THE U.S. OR ARE THESE MARKETS DIVORCEDFROM ONE ANOTHER AS THE U.S. THROWS UP WALLS TO ANY CHINESECARS. >> YOU'RE PAYING A LITTLE BITMORE THAN 20% TARIFF IF YOU WANTS TO IMPORTED A CHINESE CARRIGHT NOW. THE ISSUE IS WORLDWIDE. HE SAID IF THERE AREN'T TRADEBARRIERS BYD WOULD DEMOLISH THE MARKET.

>> WHETHER THEY CAN AND WHETHERTHEY WILL BE ALLOWED TO COMPETE THERE. IF YOU END UP WITH THISSITUATION AND WE DON'T KNOW WHAT'S CAN HAPPEN BUT LET'S GOTHROUGH THE WHITE HOUSE STATEMENT FROM THE PRESIDENTYESTERDAY ON THE NATIONAL SECURITY ISSUES AROUND CHINESEVEHICLES, LET'S SAY THEY GO AS FAR AS BANNING THESE VEHICLESTHAT YOU CAN BUY THEM IN AMERICA ARE THE CHINESE JUST INA SIT THERE? THE AUTHORITIES TO ALLOWFOREIGN MANUFACTURERS TO SELL IN THEIR MARKET WHEN THEY CANSELL ABROAD. WHAT HAPPENS NEXT?.

>> A LOT ARE EXPECTING THEREWILL BE SOME RETALIATION. WE CAN REALLY GAME THIS OUT INANY LINEAR FASHION. THE OTHER QUESTION IS WHAT ISTHE PRICE AT WHICH AN ELECTRIC VEHICLE CAN BE SOLD TOBREAKEVEN AND HOW DOES THIS STYMIE IF YOU HAVE LESSCOMPETITION, HOW MUCH IS IT KEEP PRICES HIGHER ON ELECTRICVEHICLES IN THE UNITED STATES THAT LEADS TO LACK OF DEMANDWHICH WE'VE SEEN CONSISTENTLY. >> YESTERDAY THIS WAS SLIGHTLYDIFFERENT, IT WASN'T ABOUT UNFAIR TRADE PRACTICES, BIGSUBSIDIES, STATE-SPONSORED.

INDUSTRIES.WE HAVE THAT HERE IN AMERICA AS WELL AS EUROPE.THIS WAS ABOUT NATIONAL SECURITY. IT'S A VERY DIFFERENTINGREDIENT. >> HOW MUCH ARE PEOPLE WILLINGTO GO WITH THIS AND THIS IS THE REASON I SAY IT'S ABOUTNATIONAL SECURITY SO IT WILL GO THROUGH BUT WHAT DOES IT MEANFOR ELECTRIC VEHICLE ADOPTION. I THINK THAT SOMETHING A LOT OFAUTO MANUFACTURERS ARE GRAPPLING WITH. >> TESLA A LITTLE LOWER IN THEPREMARKET.

OIL POSTING A SECOND STRAIGHTMONTHLY GAIN EXPECTING VOLUNTARY SUPPLY CUTS INTO THESECOND QUARTER. THE MARKET ANTICIPATES A FULLROLLOVER INSTEAD I BELIEVE THE CARTEL HAS A CHANCE TO ADD ABIT OF EXTRA SUPPLY TAKING SOME SHORT-TERM PAY FOR A LONG-TERMGAIN. CAN YOU WALK US THROUGH THAT?WHAT WOULD THE LONG-TERM GAIN BE FOR DOING THAT NOW. >> BRENT CRUDE IS IT $85 ABARREL AND I THINK WHAT OPEC IS DOING CONTINUING TO RESTRINGPRODUCTION IN THE FIRST QUARTER.

INTO THE SECOND QUARTER IS CANIT CONTINUE ADDING A FEW MORE DOLLARS AT THAT PRICE AND IT'SNOT TO BE SUBSIDIZING THE U.S. SHALE INDUSTRY.WE KNOW THAT EACH DOLLAR METALS ASH MATTERS THAT EACH ONETRIGGERS A SIGNIFICANT INCREASE AND I THINK THAT THE TIME ISFOR OPEC TO SAY 80, 85 WE DO NOT NEED TO SUBSIDIZE THEM THEU.S. SHALE INDUSTRY BECAUSE IF OPECCONTINUES TO RESTRAIN NOW WHAT THEY WILL FIND IS HARDER LATERIN THE YEAR. THAT IS THE GAME. >> THERE'S A REAL QUESTION OFWHERE THE LINE IN THE SAND IS.

FOR OPEC-PLUS.HOW LOW CAN PRICES GO BEFORE IT IS UNSUSTAINABLE FOR A GROUP OFCOUNTRIES THAT HAVE RELIED ON CRUDE INCOME FOR A MOST ALL OFTHEIR INVESTMENTS. >> YOU CANNOT ASK THAT QUESTIONTWO OPEC-PLUS IT VERY MUCH DEPENDS ON WHICH COUNTRY YOUASKED. THERE ARE SMALLER RETAIL COUNTRIES IN THE MIDDLE EASTWHICH CAN LEAVE PERFECTLY HAPPY WITH CURRENT PRICES MUCH LOWERGRADE I THINK SOME COUNTRIES IN THE MIDDLE EAST 65, $70, YOUASKED THE SAME QUESTION IN SAUDI ARABIA.

THE CURRENT PRICE IS THE BAREMINIMUM FOR PEOPLE TO ACCEPT A VERY SIMILAR QUESTION RUSSIA.THE KEY DIFFERENCE FROM THE OPEC WE USED TO KNOW 10 OR 20YEARS AGO IT IS THE SAUDI'S WHO REALLY WANT THE HIGH PRICES. >> WHAT'S THE SAUDI CEILING? >> THE SAUDI FLOOR FOR THEPRICE IS SOMEWHERE AROUND $80 A BARREL.THEY WANT TO GUARANTEE 80 SO THEY'RE AIMING SOMEWHEREBETWEEN 80 AND 85. I THINK THEY HAPPY KEEP OILPRICES ALL THE WAY UP TO $100.

THEY DON'T SEE A PARTICULARPROBLEM FOR THE GLOBAL ECONOMY. THEY BELIEVE THE ECONOMY CANTAKE IT. THEY ARE SITTING COMFORTABLYSOMEWHERE BETWEEN 80 AND 100. LISA:I'M GOING TO REVEAL SOMETHING THAT YOU ADMITTED YOU ARESTOCKPILING CHOCOLATE. WHY ARE YOU STOCKPILINGCHOCOLATE? DO YOU THINK IT'S CAN GET THATMUCH WORSE OUT THERE? >> I STOCKPILED ON ALL OF OILLAST YEAR AND I WAS HAPPY WHEN THE PRICE WENT THROUGH THE ROOF.THE PRICE OF COCOA IS AT 150%.

THE PRICE OF CHOCOLATE ON THESUPERMARKET IS GOING TO GO UP AND GO UP QUITE SIGNIFICANTLYOVER THE NEXT SIX MONTHS, THE MARKET FOR COCO IS FACING ASTRUCTURAL DEFICIT. THEY ARE WELL BEHIND THE DEMANDBETWEEN DEMAND AND PRODUCTION. IT'S GOING TO BE IN 2024 THELARGEST AND 65 YEARS. THE ONLY CURE FOR THE MARKETRIGHT NOW IS HIGHER PRICES SO WE ARGAN A C HIGHER PRICES INTHE SUPERMARKET SO I'M JUST ANTICIPATING FOR THAT. ANNMARIE:THAT'S ALREADY WHAT THESE CHOCOLATE COMPANIES ARE TELLINGUS.

WHEN YOU LOOK AT THE MARKET ISIT WHAT'S GOING ON IN WEST AFRICA IN TERMS OF WEATHERDROUGHT AND DISEASE AND SOME OF THESE CROPS OR IS IT TARIFFSCOMING INTO PLAY FROM EUROPE. >> THERE IS A MIX OF FACTORSAND CERTAINLY THE WEATHER HAS BEEN VERY UNFAVORABLE.IT'S BEEN DRY RECENTLY. IT WAS TOO WET A FEW MONTHS AGO.WE HAVE DEFORESTATION AND THEY HAVE BEEN PRODUCING NEW PLANTEDAREA, THAT'S NOT CAN I HELP. I THINK THE BIGGEST PROBLEM ISTHEY ARE RELIANT ON A GROUP OF WEST AFRICAN COUNTRIES FOR 60%OF THE COCO.

THAT'S IVORY COAST, NIGERIA ANDCAMEROON. THERE IS BEEN PLANTING IN THOSECOUNTRIES FOR THE LAST FEW YEARS.THE TREES ARE PRODUCING LESS AND LESS AND THOSE TREES AREMORE SENSITIVE TO BAD WEATHER AND DISEASE.WE HAVE HAD A LOT OF THAT IN RECENT MONTHS.DISEASES ARE QUITE WIDESPREAD. IT WAS IN GHANA AND IVORY COASTAND THAT'S THE BIG PROBLEM AT THE MOMENT.IT'S A COMBINATION ON ALL OF THE ABOVE REALLY RESTRAININGSUPPLY THIS YEAR PERHAPS ALSO.

INTO NEXT YEAR. JONATHAN:WOULD YOU LIKE TO EXPLAIN TO THE AUDIENCE WHY THEY SHOULDN'TWORRY BECAUSE THE CHOCOLATE HERE ISN'T REALLY CHOCOLATE. >> YOU REALLY WANT TO PUT ME INTROUBLE. I REALLY AS WITH ALL OF OIL ITRY TO GET HIGH QUALITY CHOCOLATE HERE IN EUROPE.JONATHAN: IT COMES FROM ONE PLACE, >> ITIS NOT ITALY. JONATHAN: GOOD TO CATCH UP. LISA:A LOT OF THE ITALIAN OIL IS MADE WITH SPANISH — JONATHAN:THAT'S NOT THE REAL STUFF. LISA:.

I'VE HAD THIS DEBATE ALREADY.YOU'VE TOUCHED ON A REALLY IMPORTANT POINT.IF IT WAS SPANISH WHY WOULDN'T THEY LABEL IT SPANISH?WHY WOULDN'T THEY? LISA: PEOPLE THINK.IT'S WORTH MORE FROM ITALY. JONATHAN:BECAUSE ITALY IS BETTER. >> THE AVERAGE HERSHEY'S BARS11% CHOCOLATE. >> I GET THE DARK. >> THAT'S IF YOU WANT LIKE THEHEALTH BENEFITS. PEOPLE LIKE DIFFERENT THINGS.I DON'T UNDERSTAND WHITE.

CHOCOLATE. >> MORE SUGAR APPARENTLY. LISA: I THINK HE IS ONTO SOMETHINGWITH STOCKPILING. IT'S ON MY LIST. LET'S GET YOURSTORIES ELSEWHERE PRAYED HERE'S YOUR BLOOMBERG BRIEF WITH DANIBURGER. DANI:THOMAS JORDAN STEPPING DOWN THE END OF SEPTEMBER.HE'S BEEN THE SWISS CENTRAL BANK CHIEF FOR MORE THAN ADECADE AND STEERED THEM THROUGH THE DEBT CRISIS AND ADOPTED THEWORLD'S LOWEST INTEREST RATE.

DON'T MISS OUR INTERVIEW WITHTHOMAS JORDAN TODAY. DELL IS HEADED FOR THE BIGGESTGAIN IN SIX MONTHS OF 24% AFTER REPORTING FOURTH-QUARTERRESULTS THAT BEAT EXPECTATIONS. ANALYSTS A DEMAND FOR AISERVERS IS DRIVING MOMENTUM. THE STOCK IS MORE THAN DOUBLEDOVER THE PAST 12 MONTHS. META WINDING DOWN HIS NEWSFEATURE IN THE U.S. AND AUSTRALIA.THEY WILL WITHDRAW SUPPORT IN APRIL. PUBLISHERS WITH EXISTINGAGREEMENTS WILL STILL BE ABLE TO PUSH CONTENT AT LEAST UNTILTHEIR DEALS EXPIRE.

LAWMAKERS HAVE BEEN PUSHING FORTHEM TO COMPENSATE PUBLISHERS FOR THEIR CONTENT BUT THEY SAYDEMAND FOR THE SERVICE HAS DECLINED. JONATHAN:THANK YOU VERY MUCH. STRIKING A DELEGATE BALANCE INCORPORATE CREDIT. >> WE FEEL LIKE THIS START OFTHE YEAR IS ALMOST A REPEAT OF LAST YEAR FOR SURPRISES TO THEUPSIDE AND INFLATION. YIELDS MOVING HIGHER, CREDITSPREADS TIGHTENING AND THEN SOMETHING HAPPENS. JONATHAN:YOU KNOW WHAT CONFUSES ME, REESE'S PIECES. LISA:IT'S PEANUT BUTTER. ANNMARIE:.

THAT'S WHAT THEY ARE PUSHINGOUT. >> I JUST DON'T GET IT.YOU REALLY LIKE THAT DON'T YOU. >> THAT'S MY DESSERT. JONATHAN:FROM NEW YORK, THIS IS BLOOMBERG. JONATHAN:EQUITY FUTURES ON THE S&P NEGATIVE BY 0.05% BOND MARKETYIELDS LOWER BY A SINGLE BASIS POINT. IN FOREIGN EXCHANGE, THE EUROPOSITIVE BY 1/10 OF 1%. UNDER SURVEILLANCE THIS MORNINGSTRIKING A DELEGATE BALANCE IN.

CORPORATE CREDIT. >> WE FEEL LIKE THIS START OFTHE YEAR IS ALL MOST A REPEAT OF LAST YEAR. WE HAD A SLEW OF GOLDILOCKSDATA , A SURPRISES TO THE UPSIDE IN INFLATION, YIELDSMOVING HIGHER, CREDIT SPREADS TIGHTENING AND THEN SOMETHINGHAPPENS. >> HERE'S THE LATEST,ENTHUSIASM REMAINS IN THE CREDIT MARKET AS SPREADS GRINDDOWN IN THE FACE OF A RECORD FEBRUARY FOR CORPORATE DEBTISSUANCE.

EXPECTATIONS FOR 2024 ARE HIGH.AND POSITIONING, OF THE FUNDAMENTAL RISK PROFILE FORCREDIT HAS IMPROVED WITH PROGRESS IN FINANCING SPREADINGAT THESE LEVELS. TALK TO US WHY YOU THINK THESETHEMES CAN CONTINUE. >> THANK YOU FOR HAVING ME.I THINK WHAT CREDIT IS REALLY REFLECTING HIS DOWNSIDE RISKSARE MUCH LOWER SO IF YOU ARE AN INVESTOR YOU ARE BUYING CREDITNOW BECAUSE A LOT OF THE RISKS THAT CAME INTO THE YEAR LOOKBETTER AND CREDIT PROVIDES GOOD CARRIE. THE MATURITY WALL AND.

HIGH-YIELD YOU'VE CHIPPED AWAY40% OF THE EXPECTATIONS OF MATURITIES WE THOUGHT WOULDHAVE TO BE REIFIED THIS YEAR AND YIELDS ARE LEVELS RELATIVETO OCTOBER WERE REFINANCINGS ARE MORE OF A SPEED BUMP RATHERTHAN A ROADBLOCK — ROADBLOCK IF YOU WILL. >> HOW MUCH SUPPLY THAT WE HAVESEEN HAS BEEN PULLED FORWARD FROM WHAT WE EXPECTED AND HOWMUCH OF IT WAS CATCH UP FROM LAST YEAR. >> LET'S LOOK AT IG.FEBRUARY WE SAW 200 BILLION OF.

ISSUANCE AND THE HEADLINENUMBER HAS TO BE TAKEN WITH SOME CAVEATS.ABOUT 25% OF THAT IS JUST FOR JUMBO, DEALS.THE HEADLINE NUMBER IS MUCH MORE IN LINE WITH HISTORICALAVERAGES WHEN YOU TAKE THOSE OUT AND WE'VE ALSO SEEN A LOTOF THE ISSUANCE IS REFINANCE. IT'S NOT NECESSARILY A LOT OFNEW NET SUPPLY THE MARKET HAS TO ABSORB WHICH SOMEONEEXPLAINS WHY CREDIT SPREADS HAVE BEEN ABLE TO MAINTAINUPTIGHT LEVELS. LISA: WHAT'S THE BIGGER RISK FOR YOU?THE INVESTMENT-GRADE SIDE OR.

THE HIGH-YIELD SIDE.THE INTEREST RATE SENSITIVITY OR THE SENSITIVITY TO RETURN. >> WE HAVE A FEW BROADLY OFDECOMPRESSION. WE MAINTAIN VERY SUPPORTIVETECHNICAL BACKDROP AND STILL HAVE YIELD BUYERS COMING IN ATTHESE LEVELS. HIGH-YIELD I THINK COULD HOLDIN WELL ASSUMING RATE STAY AT THESE LEVELS AND GROWTH HOLDSUP OK. BUT IF WE SEE ANY RISK OUTSIDEOF THE BASELINE SCENARIO I WOULD EXPECT HIGH-YIELD TO BEMORE VULNERABLE.

>> WE GOT SOME OF THE FLOWSDATA OVERNIGHT AND WHAT WE COULD SEE HIS PEOPLE ARE STILLPILING INTO BONDS BUT INVESTMENT-GRADE U.S.TREASURIES YOU CAN SEE THOSE INFLOWS. YOU CAN SEE $3 MILLION INTOTREASURIES AND INTO INVESTMENT-GRADE.IT WAS THE FIRST OUTFLOWING U.S. HIGH-YIELD BONDS GOING BACKEIGHT WEEKS. IT WAS NOT THAT MUCH. DOES THAT MEAN SOMETHING TO YOUABOUT A TIDE SHIFTING?.

>> IT SPEAKS TO HOW MUCH WERALLIED IN HIGH YIELDS. WE ARE GETTING CLOSE TO 300BASIS POINTS IN SPREADS. AT THESE LEVELS IT WOULD MAKESENSE TO BACK UP A BIT. OUR SPREAD TARGET FOR YEAR ENDIS 350 BASIS POINTS SO I THINK INVESTORS WHO ARE BUYING CREDITFOR THE SPREADER THE RISK PREMIUM ARE STARTING TO THINK ALITTLE BIT MORE NOT JUST PILING IN BUT YOU SEE MORE BUYING ANDSELLING RATHER THAN JUST ALL IN. JONATHAN:WE JUST HAD A NOTE I'M SURE YOU HEARD US TALKING ABOUT IT THEFED WILL NOT CUT RATES IN 2024.

THE REALITY IS THE U.S.ECONOMY IS NOT SLOWING DOWN AND THE FED HAS PROVIDED A STRONGTAILWIND TO GROWTH SINCE SEPTEMBER. >> WE STILL HAVE AN EXPECTATIONOF FOUR RATE CUTS THIS YEAR. THE FED WILL START IN JUNE ANDCONTINUE FOR THE REST OF THE YEAR. FOR CREDIT THAT'S GOING TOPROVIDE RELIEF AND A LOT OF OUR LEVERAGE FINANCE ISSUERS AREEXPECTING THAT IN PARTICULAR FLOATING RATE LOAN ISSUERS WILLNEED TO SEE TO GET REFINANCINGS DONE.I THINK THE SCENARIO TORSTEN.

HAS LAID OUT WOULD BE BEARISHFOR THE LOAN MARKET WHERE YOU HAVE PRIVATE EQUITY SPONSORSAND A LOT OF THESE ISSUERS ARE THINKING I JUST NEED TO MAKE ITSIX OR 12 MONTHS AND THEY'LL HAVE THAT ON THE BORROWING SIDE.>> DOES THAT BECOME — IS THAT SORT OF THIS IDEA THAT IF WEDON'T GET THESE RATE CUTS. >> YOU WILL SEE THE MATURITYWALL AND THE IDEA OF INTEREST COVERAGE, BACK INTO RISKS THIRDOR FOURTH QUARTER IF WE DON'T SEE THOSE RATE CUTS.MATURITIES THAT HAVE TO BE REIFIED THIS YEAR WE ARE ALMOSTHALFWAY THROUGH THOSE BUT.

LOOKING WE WILL HAVE THEMATURITY WALL STEP BACK UP AGAIN.THIS COULD BE COMING BACK INTO THE DISCUSSION. >> WHICH COMPANIES ARE TRULYSURVIVING TILL 2025. DOES THIS CUTTING CYCLE ON THEPRECIPICE OF FAILING SURVIVE? >> I THINK IT'S NOT JUST THE100 BASIS POINTS BUT THERE'S A CONFIDENCE THE CUTTING CYCLE ISUNDERWAY AND IF YOUR PRIVATE EQUITY SPONSOR YOU HAVE CASH ONHAND. YOU WILL HAVE TO PICK AND CHOOSE AND YOU WON'T INFUSECASH INTO EVERY COMPANY YOU OWN.

IN ORDER TO HELP THEM SURVIVE.THERE IS THIS ELEMENT OF IF THE FED CUTTING CYCLE IS UNDERWAYWE COULD SEE THREE CUTS THIS YEAR, FOR CUTS NEXT YEAR ITHINK THERE IS CONFIDENCE THAT I WILL PUT THIS CASH INTO ACOMPANY BECAUSE I CAN SEE IT DOWN THE LINE BEING ABLE TOSURVIVE. >> CAN YOU DESCRIBE HOW THEMOOD HAS CHANGED WITH CLIENTS? IN THE EQUITY MARKET WE TRY TOWORK OUT POCKETS OF EXUBERANCE OVERTAKEN THINGS A LITTLE BITTOO FAR. HOW WELL RECEIVED HER THESEMESSAGES IN YOUR CIRCLE?.

>> ONE WAY TO SEE THAT WEREQUANTITATIVELY IS POSITIONING. A POSITIONING INDICATOR IN THE90TH PERCENTILE. I THINK THE ONE PLACE WEHAVEN'T SEEN INVESTORS ADD IS THE LOWER DEBATE PART OF THEMARKETS. YOU ARE NOT SEEING A WHOLESALEBUYING OF THAT BUT WHAT SINGLE IS IN HIGH YIELD.THE RISKIEST RATING BUCKET OVER THE LAST MONTH. I THINK IT REFLECTS POSITIVECONVICTION FOR THE REST OF THE YEAR AMONG INVESTORS.

>> SPREADS SUPER TIGHT.TONS OF SUPPLY. >> I REALLY THINK IT'S A GOODPOINT BECAUSE IT MATTERS WHY THE FED IS CUTTING RATES.IF THEY ARE CUTTING BECAUSE THEY'RE TRYING TO KEEP THISPARTY GOING THEN GREAT, GET IT. BUT IF IT'S BECAUSE THERE'SREAL DAMAGE IT'S GOOD TO CREATE A VERY DIFFERENT TYPE OFSCENARIO THAT DOESN'T LOOK AT THRIVING IN 25 BUT MAY BE HELDLONG IT IS STILL. >> THANK YOU SO MUCH. COMING UP ON THIS PROGRAM,LAURA OF DISH LIVE FROM NEW.

YORK CITY, COUNTING YOU DOWN TOTHE OPENING. EQUITY FUTURES ARE TOTALLYUNCHANGED ON THE S&P 500. YIELDS UP A LITTLE BIT LOWERDOWN ABOUT ONE BASIS POINT. CRUDE IS HIGHER. 7963. >> RATES MARKETS ARE MOVINGCLOSER TO WHERE WE THINK THINGS SHOULD BE. >> A LOT OF RISK IN THE FEDWAITS A LITTLE BIT LONGER. >> THIS POINT STILL IS ONCE WESTART CUTTING WE WILL CUT AGGRESSIVELY TOWARDS ANORMALIZED WORLD.

>> THE FED IS MORE LIKELY TOSIMPLY REMAIN ON THE SIDELINES RATHER THAN REENGAGE IN RATEHIKES. >> IT'S BECOMING LIKELY MAYBEWE HAVE NO RATE CUTS THIS YEAR. >> THIS IS BLOOMBERGSURVEILLANCE WITH JONATHAN FERRO, LISA ABRAMOWICZ ANDANNMARIE HORDERN. JONATHAN: LIVE FROM NEW YORK CITY THISMORNING, GOOD MORNING. FOR AUDIENCE WORLDWIDE. >> LET'S GET YOU TO THE WEEKEND.JONATHAN: WHAT ARE YOU BREAKING UP THESHOW FOR?.

CAN YOU SEND THE CAMERA BACK.I CAN DO IT AGAIN. GET THE CAMERA TO GO BACK.I CAN SEND THE CAMERA BACK. LISA:LET'S GET YOU TO THE WEEKEND. JONATHAN:I NEED THE ACCOUNT IN MY EAR. THANK YOU. SILENCE.LET'S GET YOU TO THE WEEKEND LIVE FROM NEW YORK CITY THISMORNING, GOOD MORNING FOR OUR WORLDWIDE THIS IS BLOOMBERGSURVEILLANCE. MAYBE I WOULD'VE GOT THERE. >> THERE'S NO WAY YOU WOULD'VEGOTTEN THERE.

MAYBE WE WON'T GET ANY CUTS.I WILL GO THROUGH THEM NOW. LISA ABRAMOWICZ EVERYONE.ANNMARIE HORDERN, JONATHAN FERRO.THE FED WILL NOT CUT RATES IN 2024.THE ECONOMY NOT SIMPLY SLOWING DOWN. THE FED PIVOT PROVIDING ASTRONG GROWTH SINCE SEPTEMBER. >> MORE PEOPLE ARE COMINGAROUND TO THIS IDEA OF BEING IN THE MARGINS.HOW MUCH IS THAT CREATE A REALITY CHECK TO THE MARKETHITTING NEW HIGHS WHERE EVERYONE SEEMS TO BE SHRUGGINGOFF CONCERNS.

I THINK IT'S BEEN AN EXHAUSTINGWHIPSAW FEELING OF INCREMENTAL MOVES TO SORT OF GRINDINGHIGHER NOT FEELING TOO ENTHUSIASTIC BUT THERE ISNOWHERE ELSE TO GO. JONATHAN: LET'S PUSH AHEAD TO NEXT WEEK.PAYROLLS FRIDAY. A SNEAK PEEK OF THE SURVEY.190 K IS THE MEDIAN ESTIMATE. THIS MOVING TARGET WE'VE PUTTOGETHER MORE OF THESE ESTIMATES FOR YOU. 190,000 IS THE NUMBER.IF YOU LOOK AT UNEMPLOYMENT WITHOUT UNEMPLOYMENT SIT AT 2%FOR TWO CONSECUTIVE YEARS.

LOOKING FOR THIS TO STICK AT3.7. >> THERE'S A REASON THIS ISCOMING OUT SAYING THEY WON'T GET RATE CUTS THIS YEAR.IF YOU COME UP WITH A THEORY IT MIGHT CALL FOR WEAKNESS.IF YOU LOOK AT THE REALITY IT IS NOT SHOWING THAT.SO WHEN YOU SAY THE REALITY IS PORTRAYING STRENGTH. >> THAT'S THE REALITY IN THEECONOMY. LET'S TALK ABOUT POLITICS ASWELL. AVOIDING A NEAR-TERM GOVERNMENTSHUTDOWN.

I'M NOT SURE IF WE CAN AVOIDONE ENTIRELY THIS YEAR THEN WE HAVE SUPER TUESDAY WITH NIKKIHALEY'S CAMPAIGN HOLDING ON. THE PRESIDENT DELIVERED THESTATE OF THE UNION. >> HUGE WEEK FOR POLITICS NEXTWEEK. WHAT IS HE GOING TO SAY IN THESTATE OF THE UNION THAT PUSHES HIS CAMPAIGN FORWARD. >> WE HAVE REPORTING HE WILLTALK ABOUT TAX CUTS, THEY HAD A CHANCE TO ROLL BACK A LOT OFTRUMP ERA TAX CUTS EARLY ON IN HIS ADMINISTRATION AND THEY DIDNOT DO IT.

THEY WERE NOT ABLE TO CLOSECARRIED INTEREST LOOPHOLE. SO WHAT IS HE GOING TO TALKABOUT ON THE CAMPAIGN TRAIL. WE HAVE SEEN HIM TALK ABOUTRAISING THE CORPORATE TAX RATE GETTING CLOSER TO THE 28%.POLITICO REPORTING ONE OF YOUR FAVORITES, HE MIGHT ADDRESSSHRINK FELICIA AND. TALKING ABOUT THE ECONOMY, THEJOB MARKET IS DOING WELL. UNDER 4% FOR TWO YEARS BUTINFLATION IS STILL HURTING THEM WHEN IT COMES TO CONSUMERS ANDTHEY WILL BRING IT UP BY SAYING ACTUALLY IT'S THE COMPANY'SFAULT.

>> I CAN'T WAIT FOR FRIDAYMORNING COVERAGE OF THAT SPEECH. A DELAYED START TO THIS HOUR.WE CAN CUT OUT THE BEGINNING FOR THE ONLINE VERSION.I SAID LET'S GET YOU TO THE WEEKEND. LISA:IT'S GETTING INTO 8:00. IT'S OK. JONATHAN: CAN I PROCEED?EQUITIES UNCHANGED ON THE S&P 500. ARE YOU TURNING INTO TOM? IN THE BOND MARKET, 4.25 ON THE10 YEAR. MICHAEL ON WHY MARKET TO LOVEMOVE TO RUN. WHY EV'S WILL BE CENTRAL TO U.S.ECONOMIC LEADERSHIP AND.

LOWERING OF FS INVESTMENTS ONWHY SHE SEES INTEREST RATES NORMALIZING AT HIGHER LEVELS.WE BEGIN OUR TOP STORY KICKING OFF STOCKS AT ALL-TIME HIGHSAND STRATEGISTS ON WALL STREET RACING TO GREAT TARGETS.SAYING I'M QUITE CONSTRUCTIVE ON THE ECONOMY AND MARKETS.I THINK SEEING 5500 ON THE S&P OR EVEN HIGHER IS A DISTINCTPOSSIBILITY. MICHAEL IS WITH US AROUND THETABLE. GOLDMAN SACHS, 5200. IT'S NOT GREAT.– THAT IS AN UPGRADE. YOU WOULD SEND — 5500 ANDBEYOND, WHAT GETS US THERE?.

>> WE HAVE THIS CONDITION AFTERTHE DECEMBER OMC WHICH IS WE'VE GOT THE FED STOCK TALKING ABOUTHIKES. I'M ON THE PAGE ABOUT VERY FEWCUTS MEANING ZERO THIS YEAR BUT I WOULD ALSO ARGUE THE FED, OFTHE LACK OF HIKING IS WHAT'S KEY HERE.THEY'VE ANNOUNCED THE SORT OF BIG MESSAGE OF PIVOTING AWAYFROM HIKING IF ANYTHING THE ACTION IS ON THE CUTTING SIDERATES. NOW THE DUAL GOLDILOCKSCONDITION MEANS CONCURRENTLY THIS IS REALLY UNUSUAL BY THESTANDARDS OF THE LAST 12 TO 14.

YEARS IS YOU HAVE A WORKINGCONSUMER IN THIS CONDITION AS WELL. BUT YOU HAVE THE WORKER CONSUMER WERE REAL WAGES ARECLIMBING, INFLATION BROADLY IS FALLING IN YOUR SEEING WAGEGAINS GO HIGHER AND HIGHER. THE CONCURRENCE OF THAT WHEREYOU HAVE A FED PIVOTING DOING A DOVISH PIVOT INTO 3.7%UNEMPLOYMENT WITH GDP CONTINUING TO BE STRONG ISREALLY PRETTY REMARKABLE. >> YOU CAN IMAGINE A WORLDWHERE WE GET TO 5500 THIS YEAR WITH NO RATE CUTS IN 2024.

>> I CAN ACTUALLY.WHAT IT REALLY UNDERSCORES A LOT OF THIS IS A SHIFT, A SLOWSUBTLE BUT INCREASING PROBABLE SHIFT OF GOING FROM WHAT WEKNEW BEFORE COVID SORT OF THE LOW NOMINAL WORLD INTOSOMETHING WITH A HIGHER INFLATION FORM BUT ALSO GROWTH.AND A HIGHER NOMINAL GDP OUTCOME THERE WHERE INTERESTRATES ARE GOING TO ADJUST TOWARDS THAT. SO I THINK — I AM OFFICIALLYAT ONE TO TWO CUTS THIS YEAR. I THINK THERE'S A VERYREASONABLE CASE FOR ZERO CUTS.

BUT IF THE EARNINGS ARE THERE.LET'S NOT FORGET YOU PUT UP MY QUOTE ABOUT THE — WHAT WILLDRIVE THE RALLY HERE. YOU'RE LOOKING AT 20% EARNINGSGROWTH YEAR-OVER-YEAR FOR THE MAG SEVEN.EVEN AS INFLATED AS THOSE MULTIPLES ARE, OF THEPRICE-EARNINGS TO GROWTH RATIO IS AROUND 1.1 FOR THE MAG SEVEN.JONATHAN: YOU KEEP SAYING SEVEN BUT YOUACTUALLY SAID SIX. WHO'S DROPPED OFF THIS LIST?MICHAEL: DROPPING THEM OUT IS LESSCONSEQUENTIAL.

OF ALL THOSE STOCKS TO REPORTTHE ONE THING THAT WAS THE MOST PROBLEMATIC ON EARNINGS THERE,THEY ARE ALSO THE SMALLEST AND HAVE A WHOLE BUNCH OF SECULARHEADWINDS TO FACE WITH EEEV NARRATIVE EVOLVING AS WELL.BUT THOSE CORE SIX OF THE BIG ONES AND THOSE ARE THE ONESDRIVING THE BIG TECH STORY BUT THEY ARE REALLY DRIVING ANDUNDERSCORING THE BROADER S&P. JONATHAN: DO YOU NEED — LISA:DO YOU NEED DIFFERENT LEADERSHIP OR IS IT THE SAMETHING BASICALLY DRIVING THIS EVEN IF RATES GO HIGHER ANDCONTINUE UNDERPERFORMANCE FOR.

THE RUSSELL 2000 AND OTHERISSUES. >> THE TEXTBOOK TELLS YOU THELACK OF A REAL VULNERABILITY, I DON'T KNOW IF IT HAS TO BE THECASE. IF THESE COMPANIES ARE ABLE TOGENERATE THE EARNINGS THE STREET EXPECTS THEM TO, ANDTHEY END UP LIFTING UP THE OTHER ONES.AS LONG AS THE OTHER 490 STOCKS DON'T FALL APART ON EARNINGS ORFUNDAMENTAL BASIS THERE, THEY BASICALLY HOLDS TOGETHER.I DON'T SEE WHY IT HAS TO BE PROBLEMATIC.

>> WHAT IS THE HEDGE.BASICALLY ARE TALKING ABOUT THE POTENTIAL FOR NO RATE CUTS ANDA SELLOFF IN BONDS AT A TIME WHERE THAT USED TO BE THE HAVEN.WHERE'D DO YOU GO NOW? >> IF YOU WANT A MARKET HEDGE IWOULD ADVOCATE LOOKING AT CALLS ON THE S&P PUT.FOR A WHOLE HOST OF REASONS. IF YOU'RE ASKING ME ABOUTDURATION IS NOT AS SAFE. BECAUSE OF THIS LOWER MOTIONVERSION OF THE BACKUP IN YIELDS, I THINK IT'S — I DON'TWANT TO SAY BIG TECH, BUT THEY ARE — THE BUSINESS MODELS AREPRETTY STRONG AND SO FORTH.

IF YOU ARE A LONG ONLYMANAGEMENT YOU HAVE TO THINK ABOUT THAT, THOSE EARNINGS EVENAS INFLATED AS EVALUATIONS ARE. YOU LOOK AT THINGS LIKE GOLDAND SO FORTH. >> I'M LISTENING TO YOU TALKAND THINKING IF YOU SEE BIG TECH AS THE GROWTH DRIVER, AS APOTENTIAL SAFE HAVEN WHY NOT JUST LEVER UP, GO ALL IN ONTHEM COMPLETELY. >> I THINK IT WOULD PROBABLYREFRAIN FROM DOING THAT. I THINK THE MARKET IS CAPABLEOF JUST PUSHING THIS FOR A WHILE.

WHAT I'M SAYING EFFECTIVELY ISTHE VALUATIONS FOR THE MARKETS GOING THROUGH MASSIVECONTORTIONS OVER THE LAST FIVE YEARS.THE INCREASING RATES AND ALL THAT. I THINK THE EXPANSION ORCONTRACTION STORIES IS KIND OF BEHIND US.RIGHT NOW IF THERE IS EARNINGS GROWTH THOSE WILL GO HIGHER.I THINK YOU CAN EXPECT EARNINGS GROWTH FROM THE MAGNIFICENT SIXTO BE REASONABLY STRONG THIS YEAR.I HAVE BIGGER QUESTIONS ABOUT THE S&P.

>> YOU DROP TESLA OUT OF THEMAG SEVEN. HOW INVESTABLE IS THE AUTOSECTOR IN AMERICA RIGHT NOW? >> I'M NOT AN EXPERT ON THEAUTO SECTOR BUT I WOULD CERTAINLY SAY THIS THAT I THINKTHERE ARE MASSIVE QUESTIONS ABOUT WHETHER THE EV IS GOING TO STICK AND I WOULD SAYWHETHER THE PRICING CAN ADJUST IN THE BUSINESS MODELS CANADJUST, I THINK IT IS PRETTY TRICKY. >> MICHAEL, THANK YOU.WE WILL BE TALKING WITH AN.

EXPERT IN JUST A MOMENT.YOU'VE ALWAYS GOT AN OPINION. LET'S GIVE AN UPDATE ON STORIESELSEWHERE. HERE'S YOUR BLOOMBERG BRIEFWITH DANI BURGER BRAIDED — DANI BURGER. DANI:JORDAN HAS BEEN THE SWISS CENTRAL BANK'S CHIEF FOR MORETHAN A DECADE BRAIDED HE STEERED THE ECONOMY THROUGH THEEURO AREA DEBT CRISIS AND ADOPTED THE WORLD'S LOWESTINTEREST RATE AND ALSO HANDLED THE COLLAPSE OF CREDITS WESPRAYED DON'T MISS OUR INTERVIEW LATER TODAY.PRESIDENT BIDEN PLANS TO.

INCREASE TAXES ON CORPORATIONSAND THE WEALTHY AND LOWER PRESCRIPTION DRUGS ADDRESSINGTHAT IN THE STATE OF THE UNION NEXT WEEK.BIDEN PLANS TO LAY OUT HIS ECONOMIC AGENDA FOR POTENTIALSECOND TERM IN OFFICE TRYING TO CONVINCE VOTERS HISADMINISTRATION'S EFFORTS WARRANT ANOTHER TERM.THE STATE OF THE UNION ADDRESS TAKES PLACE ON THURSDAY EVENING.JANET YELLEN SAYS ANY PLANS TO SEIZE RUSSIAN ASSETS CANNOT BESEEN AS A REPLACEMENT FOR AID TO UKRAINE.UKRAINIAN AID HAS BEEN A KEY.

ISSUE HELD UP IN CONGRESS.IN AN INTERVIEW WITH BLOOMBERG SHE SAID THE EU HAS OFFEREDUKRAINE VERY MEANINGFUL FINANCE BUT THE TOTAL DOES NOT SEEMLIKE ENOUGH. >> THANK YOU.WE ARE GOING TO TAKE A BREAK NOW. TAKE THREE MINUTES OUT. UP NEXT, ARE YOU READY? THE U.S.CRACKING DOWN ON CHINESE EV'S. >> AND IT'S GOING TO BE VERYHARD TO MAKE IT OUTSIDE OF THESE TWO IN THE INDUSTRY. >> LET'S GET YOU TO THE WEEKEND.[LAUGHTER].

JONATHAN:I'VE NEVER SEEN YOU LIKE THIS. FROM NEW YORK THIS IS BLOOMBERG. JONATHAN:IT'S A QUIET START GOING INTO THE WEEKEND.GOING ALMOST ABSOLUTELY NOWHERE. YIELDS ARE HIGHER BY A SINGLEBASIS POINT ON THE 10 YEAR. UNDER SURVEILLANCE THIS MORNINGTHE U.S. CRACKING DOWN ON CHINESE EV'S. >> THE STOCK HAS BEEN DOING ANEXTREMELY GOOD JOB. AND NOW THE CHINESE ARE COMING.

IN FILLING THE VOID AND THEGAIN LEAVING MUCH ROOM FOR THOSE TWO TO BE SUCCESSFUL.YOU HAVE TESLA MEETING WITH THE BEST CHINESE PLAYERS AND IT'SGOOD TO BE HARD TO MAKE A LIVING OUTSIDE OF THESE IN THEINDUSTRY. >> THE WHITE HOUSE ORDERING APROBE INTO POTENTIAL DATA AND CYBERSECURITY RISKS POSED BYCHINESE EV SPRAYED PRESIDENT BIDEN SAYING CHINESE POLICIESCOULD FLOOD OUR MARKET WITH ITS VEHICLES, OPPOSING RISKS.I'M ANNOUNCING UNPRECEDENTED ACTIONS TO ENSURE CARS FROM U.S.ROADS FROM COUNTRIES OF CONCERN.

DO NOT UNDERMINE OUR NATIONALSECURITY. JOINING US IS ELLEN OF THIRDWAY. THE FORMER CHIEF ECONOMIST AFFORD AND THE U.S.DEPARTMENT OF COMMERCE. I HAVE A FIRST QUESTION.IF CHINESE VEHICLES ARE GOING TO POSE A NATIONAL SECURITYRISK WHAT ARE THE CHANCES MAY BE THEY ARE JUST BANNED? >> WE DID HEAR FROM THE SEC.THIS WEEK FOLLOWING THE STATEMENT FROM PRESIDENT BIDENAND SHE BASICALLY SAID WE WILL LOOK AT EVERYTHING.WE HAVE TO STUDY THIS AND MAKE.

SURE WE PROTECT AND OURNATIONAL SECURITY IS NOT AT RISK.THEY ARE LOOKING AT EVERYTHING. SHE SAID ALL THE WAY FROMBANNING TO INSURING THAT THE TECH IN THE EEEV ISAMERICAN-MADE OR MADE BY ONE OF OUR TRADING PARTNERS.SO THEY ARE GOING TO LOOK AT EVERYTHING THEY DO RATE STUDIESAND THE DEPARTMENT OF COMMERCE AND I THINK IT'S WORTHWHILE. WE HAVE TO MAKE SURE THAT WEPROTECT AND HAVE NATIONAL SECURITY, FREEDOM ANDCAPITALISM AT THE TOP OF OUR.

LIST. LISA:DO YOU THINK THIS IS MORE OF A MATTER OF NATIONAL SECURITY ORPRESERVING JOBS IN DETROIT? >> I THINK IT'S FIRST ANDFOREMOST NATIONAL SECURITY. WE HAVE SEEN INSTANCES WHEREOUR NATIONAL SECURITY HAS BEEN COMPROMISED AND WE KNOW WE HAVETO MAKE SURE IN THE FUTURE THAT WE PROTECT AND DEFEND ANDTHAT'S ABSOLUTELY CRITICAL. THE U.S.MANUFACTURERS, A LOT OF OUR OTHER MANUFACTURERS THEY ARENOT SHYING AWAY FROM COMPETITIVENESS.NOBODY WANTS TO HAVE A.

PROTECTED MARKET THAT MEANSBASICALLY WE END UP WEAKENING OUR PRODUCT CREATION OVER TIME.WE NEED COMPETITION TO ENSURE WE HAVE ONGOING INNOVATION.INNOVATION IS KEY IN THE ELECTRIC VEHICLE MARKET.THERE'S MORE COMING. >> THE SOURCE OF THATINNOVATION HAS BEEN IN CHINA. THAT SOURCE HAS BEEN REALLY INPYD COMING OUT OF THE WORLD SECOND LAS VEGAS — SECONDBIGGEST ECONOMY. WOULDN'T IT HAMPER THETRAJECTORY TO MORE ELECTRIC VEHICLE FRIENDLY FUTURE TO BANCHINESE VEHICLES FROM BEING.

SOLD IN THE U.S.AND BRINGING DOWN THE PRICE POINT PROGRESSIVELY? >> LOOK AT VW.LOOK AT FORD, THEIR INITIAL FIRST GENERATION ELECTRICVEHICLES, GM, THEY MADE COMMITMENTS.TESLA WE'VE ALSO SEEN INCREDIBLE PRODUCT NOW COMINGOUT OF HYUNDAI KIA. SO LET'S STAND BACK AND SAYIT'S NOT JUST CHINA. CHINA HAS BEEN SUBSIDIZINGTHEIR ELECTRIC VEHICLE INDUSTRY FOR TWO DECADES NOW.

I REMEMBER AT FORD WHEN THEYSTART THE SUBSIDY PROGRAMS AND THEY INVITED U.S.LEADERS, MANUFACTURERS LIKE FORD OR GM TO CHINA TO HELPTHEM WITH PRODUCT DEVELOPMENT, MODELING, FORECASTING,INNOVATIVE PRODUCT CREATION. IT'S NOT LIKE IT HAPPENED INCHINA WITHOUT A LOT OF SUPPORT. SO NOW WHAT DO WE DO?WE HAVE TO GET COMPETITIVE. THIS INDUSTRY IS GOING TOELECTRIC VEHICLES. IF — WE DID A STUDY ONCOMPETITIVENESS IF YOU GO TO THIRD WAY WHEN THE AMERICALEADS.

YOU'VE GOT $27 TRILLION OFADDRESSABLE MARKET BETWEEN NOW AND 2050 AS WE TRANSITION TO EVSPRAYED IT'S NOT A QUESTION OF IF, IT IS JUST WHEN.INFRASTRUCTURE AND PRODUCT DEVELOPMENT AND ROLLING OUT ANEMERGING TECHNOLOGY ALL OF THAT TAKES SOME TIME.IT'S NOT LIKE IT'S GOING TO HAPPEN IN A QUARTERLY EARNINGSREPORT. >> WE HAVE THE ITALIAN LEADERVISITING THE WHITE HOUSE TODAY. ITALY IS SET TO BE ASKING BYDTO POTENTIALLY, SET UP SHOP AND BE A MANUFACTURER IN ITALYWHILE AT THE SAME TIME THE U.S.

IS THINKING OF COMPLETELYBANNING EV SPRAYED I THOUGHT THIS INTERIM — WOULD TAKE AMULTILATERAL APPROACH WHEN IT COMES TO CHINA.DOESN'T THIS ADMINISTRATION NEED TO SHORE UP WHERE THEEUROPEANS ARE AS WELL WHEN IT COMES TO CHINESE EV'S? ELLEN:SUPER GOOD QUESTION. ITALY USED TO HAVE ANAUTOMOTIVE INDUSTRY AND SO I CAN UNDERSTAND WHY THEY WANTCHEAP VEHICLES COMING INTO THEIR MARKET TO SATISFY WHERETHEY ARE IN TERMS OF THEIR ECONOMIC GROWTH AND PROSPECTS.BUT HERE IN THE U.S.

WE HAVE ALREADY DEVELOPED THEBEGINNINGS OF AN ELECTRIC VEHICLE MARKET. HAVE ASKED IT. IF WE FIND THAT BYD ENDS UPWITH NO NATIONAL SECURITY RISK, COME INTO THE MARKET.I DON'T THINK ANYONE IS SHYING AWAY FROM COMPETING BUT WE NEEDTO MAKE SURE WE UNDERSTAND THAT THAT MARKET IN CHINA HAS BEENSUBSIDIZED FOR MANY YEARS, BUT WE ARE NOT GOING TO LOSE THETERMS OF OUR AUTOMOTIVE MARKET. WE HAVE 4 MILLION JOBS IN THEAUTOMOTIVE INDUSTRY AND THE JOB MULTIPLIER OF ABOUT 10 WHERETHOSE PAYCHECKS OF WORKERS HAVE.

BEEN SPENT IN LOCAL COMMUNITIESAT BUSINESSES, RETAIL BUSINESSES AND ALL DIFFERENTTYPES OF CONSUMPTION. IT'S NOT LIKE OUR AUTO INDUSTRYIS GOING TO GO AWAY. IT IS ABSOLUTE CORE TO OUR U.S.ECONOMY. AND THAT'S WHY POLICY IS REALLYWORKING. IN FACT THERE IS A STUDY DONEOF CLEAN ENERGY INVESTMENT MONITOR.ORG. IN THE FOURTH QUARTER THISYEAR, THERE'S $12 BILLION THAT'S INFLATION-ADJUSTED AQUARTERLY RATE.

IN TERMS OF INVESTMENT IN THEEV SUPPLY CHAIN, CRITICAL MINERALS, VEHICLE ASSEMBLY ANDCHARGING EQUIPMENT. SO THERE HAS BEEN A LOT OFINVESTMENT GROWTH IN THE EV SUPPLY CHAIN JUST IN THE LASTYEAR. AND WE ARE ONLY STARTING BECAUSE THESE PROGRAMS LAST FORABOUT 10 YEARS. JONATHAN: ONE PIECE OF PUSHBACK.YOU CAN SAY ITALY USED TO HAVE AN AUTO MANUFACTURING INDUSTRY.5000 EMPLOYEES WILL BE DEEPLY UNHAPPY.THANK YOU, IT'S GOOD TO SEE YOU. >> GOOD CATCH, THANKS. LISA:YOU ARE LIKE AN ITALIAN.

YOU ARE THE AMBASSADOR. >> I HAVE TO PRESS THECONVERSATION A LITTLE BIT. COMING UP VERY SHORTLY, WHYINVESTORS SHOULD REFRAME THEIR INTEREST RATE OUTLOOK.WE WILL TALK ABOUT THAT AFTER THAT BIG NOTE EARLIER THISMORNING BASICALLY MAKING THE POINT THAT HE DOES NOT THINKTHIS FEDERAL RESERVE WILL CUT AT ALL THIS YEAR.WE WILL CATCH UP WITH HIM MONDAY AT 7:30 EASTERN TIME. >> GOOD NEWS IS GOOD NEWS.TREAT IT'S ON ITS FACE THAT IT.

WILL BE BAD NEWS FOR THE FEDRATE CUTS AND THAT'S WHAT A LOT OF PEOPLE ARE THINKING ABOUT.WE CAN STILL GET TO 55. ANNMARIE:JEROME POWELL IS ON THE HILL NEXT WEEK.WHAT IS THE TIMELINE FOR THESE RATE CUTS.HE WENT OUT TO 60 MINUTE SAYING I THINK SHORING UP THE AMERICANPUBLIC IN AN ELECTION YEAR WHY HE HAD TO GO DOWN THIS PATH.JONATHAN: YOU TURN UP AND ULTIMATELY SAYTHE SAME THING YOU SAID IN THE LAST NEWS CONFERENCE MAY BE YOUINJECT SOMETHING NEW OR FRESH.

BUT IT'S ALWAYS THE LAWMAKERMAKING A CLIP TO MAKE A COMMERCIAL TO SPEAK TO HISCONSTITUENTS OR HER CONSTITUENTS. I HATED.IT DRIVES ME NUTS. JONATHAN: THE PEOPLE AT FERRARI WOULD BEINSULTED AS MILQUETOAST, IT'S ART. THE S&P IS POSITIVE AT POINT02%. ON THE BOND MARKET, THE 10 YEARUP BY TWO BASIS POINTS. BUT THEY ARE MOVING IN ONEDIRECTION AFTER AN IN LINE.

REPORT. LISA: HOW MANY PEOPLE ARE GOING TOCOME AROUND TO KNOW RIGHT BECAUSE THIS YEAR? JONATHAN: MAYBE WERE NORMALIZING A MUCHHIGHER RATE PROFILE IN THIS MARKET. LET'S FINISH ON THE EUROAGAINST THE DOLLAR, POSITIVE BY 0.6%. THE WRONG KIND OF UPSIDESURPRISE ON THE CPI PUSHING BACK THE DEADLINE ON THE NEEDFOR URGENT BREAKOUTS. LISA:.

CONSUMER PRICES ROSE 2.6% INEUROPE AS COMPARED TO A 2.5%. THIS COMES FROM THE SERVICESSIDE. IS IT COMING FROM FLUCTUATINGCOMMODITIES? JONATHAN: ALL THIS TALK ABOUT ON MARCHRATE CUT FROM THE ECB OR FEDERAL RESERVE.THIS IS ONLY TWO MONTHS OLD. IT DOESN'T SEEM LIKE THEY WILLHIKE ANYTIME SOON. IT WOULD NOT BE THE FIRST TIMETHEY CHANGE THEIR MIND BEFORE THE MEETING. LISA:IS IT ON YOUR LIST? JONATHAN:I DON'T HAVE A LIST. MAYBE.

THAT'S THE DIFFERENCE BETWEENYOU AND I. LISA: THIS IS WHY YOU HAVEN'T SEENMUCH ACTION BECAUSE NO ONE'S WILLING TO GET ON THAT LIST.JONATHAN: 1.08 ON THE EURO. PRESIDENT BIDEN AND DONALDTRUMP IN DUELING VISITS TO THE BORDER. LISA:THIS IS A BIDEN INNOVATION. — >> TELL CONGRESS TO PASSTHIS TYPE PARTISAN BILL. JONATHAN:MILES APART BUT ADDRESSING THE MIGRANT SURGE BEFORE THEELECTION. 300 MILES APART BUT WITH THERHETORIC, HOW MANY MILES APART?.

ANNMARIE:IF HE DOES AN EXECUTIVE ORDER HE WOULD BE USING THE SAME LAWTRUMP RELIED ON. IT'S A VERY DIFFERENT JOE BIDENTHEN LEADING UP TO THE 2020 ELECTION. HE WAS WRITING ABOUT RESTORINGASYLUM PROTECTIONS AND BRINGING MORE HUMANITY TO THE BORDER. THIS IS A HUGE PROBLEM FORDEMOCRATS THAT IS THE NUMBER ONE CONCERN. JONATHAN:WHAT DID OBAMA DO DIFFERENTLY? THAT BIDEN IS NOT DOING?ANNMARIE:.

HE CAME INTO OFFICE ANDBASICALLY SAID, WE WILL NOT TAKE THE SAME APPROACH TRUMPDID. PEOPLE SAY THAT WAS THE SHOTHEARD AROUND THE WORLD FOR INDIVIDUALS TO SAY IS EASIER TOGET INTO THE UNITED STATES. LISA:IF YOU LOOK AT THE NEW TRIAL TWO POINT KNOW HE WANTS TOARREST ALL IMMIGRANTS HERE AND HAVE ACTIVE DEPORTATION. IT'S A SLIGHTLY DIFFERENT TRUMP. JONATHAN: WAITING TO SEE WHAT THE POLICYWILL BE FROM THIS.

ADMINISTRATION. WE HAD A MOVE OF 30% ON NYC BE. THE BANCSHARES PLUNGING AFTERMATERIAL WE MISS AND HOW IT ATTRACTS LOAN RISKS.IT STEMS FROM AN EFFECTIVE OVERSIGHT, RISK ASSESSMENT ANDMONITORING ACTIVITIES. LISA: WE'VE BEEN TALKING ABOUT THEIDIOSYNCRASY OF RENT CONTROL ISSUES IN NEW YORK WHICH ISSPECIFIC REAL ESTATE. HOW WILL THAT REPRICE REALESTATE? JONATHAN: IN THE LAST 24 HOURS WE HAVEHEARD TWO GUESTS A SURVIVE.

UNTIL 2025.WHAT IF YOU GET NO RATE BECAUSE IN 2024? LISA: ESPECIALLY IF YOU'RE TALKINGABOUT HIGHER RATES BECAUSE OF THE STRENGTH OF THE MAGNIFICENTSIX OR FIVE. THERE ARE COMPANIES THAT WILLDO BETTER WITH HIGHER CREDIT RISK. JONATHAN: LET'S TALK ABOUT INTERESTRATES, JOHN WILLIAMS REITERATING HE DOES NOT SEERATE BECAUSE COMING ANYTIME SOON.

>> THEY EXPECT US TO CUTINTEREST RATES THIS YEAR AND THAT MAKES US WITH INFLATIONCOMING DOWN IN THE ECONOMY AND BETTER BALANCE. BUT RIGHT NOW, THERE IS NOT ASENSE OF URGENCY TO DO THAT. JONATHAN: WE HAVE HAD SO MUCH — THE SEER.LISA: TO HAVE ALL THE FATHEADS COMEON AND HAVE THEM TO GET OUT? JONATHAN:THEY HAVEN'T HAD TO CHANGE THEIR VIEWS THE SAME WAY THEMARKET HAS HAD TO. LISA:.

THEY HAD THREE RATE BECAUSETHIS YEAR, IS THE BALANCE OF RISK SHIFTING IN A DIFFERENTWAY? WE TALKED ABOUT THE POTENTIALFOR RATE HIKES. THE IDEA OF NO RATE CUTS, IWANT TO HEAR ABOUT THAT. JONATHAN: THE CHIEF ECONOMIST ON RANKININVEST MENTS. LET'S GO STRAIGHT TO APOLLO,THEY ARE SAYING NO BECAUSE FOR 2024.I KNOW YOU ARE NOT THERE IN THE.

SAME WAY BUT THE FORCES THATLEAD YOU TO BELIEVE THAT WHERE READING NORMALIZING WHAT ARETHEY AND COULD YOU SHARE THOSE VIEWS THAT TORSTEN HAS? LARA:WHILE THE FED HAS SIGNALED THEY WANTED CHANGE POLICY ITMAY NOT CLEAR THE PATH TO THE RATE CUT THAT THEY ARE HOPINGFOR. AT THE END OF THE DAY WE SEE NOURGENCY ON THE ECONOMIC SIDE TO CUT RATES AND I THINK WE NEEDTO START TO GET A LITTLE MORE NUANCE WITH THE REAL RATE STORY.I THINK THE FIGHT COULD SURGICALLY CUT TO KEEP POLICYAT THE STATUS THAT IT IS.

WE NEED TO BE REALLY CAREFUL TO PUSH BACK AGAINST THIS IDEAABOUT NEEDING RATE CUTS. JONATHAN:WHAT HAS CHANGED IN THE ECONOMY TO CHANGE YOUR THESIS? HE DESCRIBED IF YOU TAKE OUT THE SUPPLIEDSIDE, WAS A LEADING TO THAT? LARA: I'M A BIG BELIEVERIN THE MODERATION WE EXPERIENCED SINCE THE FINANCIALCRISIS.

THIS WILL BE BLUNTED BY MASSIVEFED CUT RATES. I THINK WE SAW THAT WITH THETRADE WARS IN THE TRUMP ADMINISTRATION AND CAPITALIZEDON A MORE VOLATILE CYCLE WHERE THE FED WAS ABLE TO RAISE RATESBEFORE THE PANDEMIC. THIS IS ALL BEEN TOWARDS THEUNWINDING OF THAT. THE PROCESS HAS SPED UP AND FROM HERE, WERE OUT OF THEWORLD WHERE INFLATION STAYS AT THAT 2% LANE. THE REALITY IS FROM A POLICYPERSPECTIVE, IF YOU CAN'T RELY.

ON INFLATION BE LOW YOU NEED TOBE MUCH MORE PROACTIVE AND THAT'S A DIFFERENT WORLD THANWE'VE HAD. THE INVESTMENT THAT WE ARESEEING THESE ARE REALLY POSITIVE INNOVATION AND THAT'SWHEN I WANT TO LEAD PEOPLE WITH. THIS IS A GREAT OPPORTUNITY FORINVESTORS THAT WE HAVEN'T SEEN IN DECADES. LISA: YOU TALK ABOUT WHERE YOU SEETHAT OPPORTUNITY WHY ARE WE SEEING PEOPLE RETHINK THE IDEAOF RATE CUTS IN SCOPE AND SIZE DO YOU THINK THE FACT THAT WESAW GREATER ACCOMMODATION OF.

MARKETS WITH IT AND EASING OFFINANCIAL CONDITIONS THAT IS HELPED INFLATION STAY HIGHERFOR LONGER? LARA: THERE IS A BEHAVIORALCOMPONENT TO THIS. MARKETS HAVE BEEN USED TO RATESBEING LOW IN THE IDEA THAT THAT HAS BEEN NORMAL AND MANY LOOKAHEAD WHERE IN THE WORLD WHERE THE YIELD CURVE IS STILLINVERTED AND WE NEED THAT TO NORMALIZE. I THINK MARKETS WERE RELYING ONIF THE SLIGHTEST OPPORTUNITY THAT THE FED SLAMS RATES BACKDOWN.

WERE NOT IN THAT WORLD ANYMORE. I THINK THE BANKING SYSTEMWOULD BE THRILLED WITH A SLOWING YIELD CURVE AGAIN. LISA:THIS IDEA THAT THE MOST EXPENSIVE, OVERPRICED AREA THATSOME HAVE SUGGESTED IS 10 YEAR TREASURIES ARE PRICING IN THISHIGHER FOR LONGER SCENARIO HOW MUCH HIGHER COULD IT GO BEFOREIT BECOMES PUNITIVE? LARA: I THINK WE WILL VISIT 5% THISYEAR AND WE NEED TO THINK ABOUT THE FACT THAT IT WAS THE SPEEDWITH WHICH RATES MOVE THAT MADE 5% FEEL PUNITIVE.

WITHOUT ZERO INTEREST RATES YOUWILL SEE COMPANIES THAT WERE ARTIFICIALLY HELD THEAFLOAT COME UNDER DISTRESS. THIS FINANCING WILL GET DONEAND THERE WILL BE A PRICE ADJUSTMENT BUT THIS OPENS UP ATON OF OPPORTUNITY FOR INVESTORS. WE ARE IN A PLACE WHERE THEREARE A LOT OF OPTIONS FOR INVESTORS THEY GIVE YOUDOUBLE-DIGIT RETURNS. JONATHAN:HERE WE ARE, BACK TO WHERE WE USED TO BE IN THE GOOD OLD DAYS.10 YEAR IS AT 4.27.

THEY THINK WE CAN RETEST 5%.ON THE LONG END. LISA: WE HAVE HEARD MARCUS SAY THEBIGGEST MISPRICING IS ON THE LONG END BECAUSE IT'S BEENFLUCTUATING IN RESPONSE TO THESE CUTS. JONATHAN:WE WILL HAVE A NEW PAYROLLS REPORT IN HAND AND LET'S TALKABOUT IT. IF THAT DATA DOUBLES DOWN YOUWILL HAVE TO MOVE BECAUSE IT IS DIFFICULT TO DISMISS IT YOUDOUBLE UP IN FEBRUARY AND THEN WE HAVE A TREND. LISA:.

THEN YOU GET QUESTIONS ABOUTFISCAL SPENDING. JONATHAN: RUN, DUBAI.EQUITIES ON THE S&P 500. HERE'S YOUR BLOOMBERG REEF WITHDANNY BERGER. D ANI:IS REVIEWING ITS DEALINGS WITH THE HEAD OF THE FRANCHISE GROUP.IT DOESN'T EXPECT ANY SIGNIFICANT CHANGES TOFINANCIAL RESULTS. META IS WINDING DOWN ITS NEWESTFEATURE IN U.S. AND AUSTRALIA. NEW STABS, WILL BE ABLE TO POSTCONTEST UNTIL THEIR DEALS EXPIRE.

META SAYS DEMAND FOR THESERVICE HAS DECLINED. ELON MUSK IS SUING OPENAI ANDSAM ALTMAN BY PUTTING PROFIT AHEAD OF BENEFITING HUMANITY.THEY SAY THEIR CLOSE RELATIONSHIP WITH MICROSOFTUNDERMINES ITS MISSION FOR OPEN SOURCE TECHNOLOGY THAT WOULDNOT BE SUBJECT TO CORPORATE PRIORITIES.THAT IS YOUR BLOOMBERG BRIEF. JONATHAN:HE HAS A POINT WITH THE MICROSOFT THING. CONCEPTUALLY, ONCE MICROSOFTMAKES AN INVESTMENT IS NOT A.

CHARITY? LISA: INTELLECTUAL FREEDOM INKUMBAYA WITH CODING. JONATHAN:LET'S CHECK OUT APPLE IN THE FREE MARKET.IT HAS BEEN SOFTER THIS MORNING NEGATIVE BY 0.6%. THE PRICE TARGET IS 232 AND ITWAS 223. APPLE OFFICES THE HEADWINDS TOPRODUCT REVENUE. LISA: THERE IS A STABILITY POINT,NOT NECESSARILY THE GROWTH POINT. JONATHAN:.

THE STOCK LOWER, DOWN BY 0.6%. >> OUR GUEST AT ALL THREEBRANDS HAS BEEN REMARKABLY RESILIENT.ONCE THEY FIND US THEY ARE VALUE FOCUS. THE PERCENTAGE OF THOSE TAKINGADVANTAGE OF LTO'S ARE UP. JONATHAN:TARGET, KROGER AND GALLUP REPORTING NEXT WEEK. THE COMBINATION OF REAL WAGEGROWTH AND IMPROVING INFLATION SHOULD BECOME A SOURCE FORCONSUMER TO SHIFT BACK TO GOODS.

CAN YOU IDENTIFY THE COMPANIESTHAT YOU LIKE IN THINK ARE UNDERAPPRECIATED? THERE NO AUDIO. CHUCK: SORRY ABOUT THAT.IT'S IMPORTANT TO LOOK BACK. WHAT WE HEARD FROM A COUPLE OFRETAILERS IS THAT WERE BEGINNING TO SEE SIGN OF UNITSBEING PICKED UP. WHEN WE LOOK FORWARD WE THINKWE WILL CONTINUE TO SEE THAT ACROSS RETAIL AND I THINKCOMPANIES THAT WE THINK ARE POISED TO BENEFIT WOULD BETARGET.

THEIR MIX OF GENERALMERCHANDISE HAS BEEN UNDER A LOT OF STRESS.TARGET WILL BENEFIT FROM THE TREND. JONATHAN: GOING TO GOODS AWAY FROMSERVICES, WHY IS SERVICES PLATEAUING? >> WHEN YOU LOOK AT PC DATA UCSERVICES AS A TOTAL OF PC IS BALANCING OUT AND GOODS COULDRECOVER BUT IS PREDICATED ON INFLATION.AS PRICES COMPRESS WE THINK REAL WAGES ARE ACCELERATING.LISA:.

THERE HAS BEEN A SHIFT UNDERTHE HOOD IN THE NARRATIVE WITH RESPECT TO THE DIVIDE BETWEENHIGHER AND LOWER INCOME FAMILIES IN SPENDING. THERE SEEMS TO BE A RENEWEDAPPETITE TO SPEND AS WELL, DO YOU EXPECT THAT TO COME THROUGHIN EARNINGS? CHUCK:IF YOU LOOK AT THE PRESSURE OF THE LOW INDICES BECAUSE OFHIGHER ENERGY PRICES, GAS PRICES OF FOOD IT IS CONSIST OFTHE LOW INCOME CUSTOMER. AS WE LOOK FORWARD TO THE LOWINCOME CUSTOMER WILL SEE A.

BENEFIT. TAX REFUNDS WERE REALLY LOW ANDTHAT HURT THE LOW-END CUSTOMER WHEN FOOD PRICES SOAR.WE THINK DOLLAR GENERAL AND DOLLAR TREE AND WALMART COULDBENEFIT. WE DO BELIEVE IN THAT TRADE.LISA: IN TERMS OF CREDIT CARDRECEIVABLES CONTINUING TO CLIMB, DO YOU THINK THAT'S AHEAD FAKE OR DO YOU THINK IT'S A WARNING SIGN? CHUCK:IS A YELLOW FLAG. IF YOU LOOK AT HOUSEHOLD DEBTIS STILL REALLY LOW.

THIS IS NOT 2008. ANNMARIE:THEY SAY THE AMOUNT OF BONDS COULD SEARCH TO 64 BILLION WELLABOVE THE 46 BILLION FROM A YEAR AGO.WHEN DO YOU GET CONCERNED? CHUCK:WE WILL CONTINUE TO MONITOR THE CREDIT DATA WE SEE IN THEDELINQUENCIES FOR RETAILERS WE COVER THAT HAVE CREDIT CARDBUSINESSES. KOHL'S, TARGET, LOWES. THEIR CREDIT TRENDS AREDETERIORATING BUT IS NOT A RED.

FLAG IN OUR OPINION. JONATHAN: CAN WE TALK ABOUT CONSUMERDELINQUENCIES, THERE ARE SO MANY COMPETING THEORIES. THE CONSUMER IS PRETTY DECENTBUT THERE HAS BEEN CLEAR DETERIORATION, WHICH ONE IS IT?CHUCK: WE WOULD LIKE TO SEE HOW THECONSUMER REACTS. AS WE MOVE THROUGH THE SPRINGWE THINK THAT SPENDING WILL CONTINUE TO ACCELERATE ANDTHAT'S A TREND WE COULD START TO SEE.WE WILL CONTINUE TO STUDY THE.

DATA AND IT'S IMPORTANT TO KEEPIN MIND WHEN UNEMPLOYMENT IS AT ITS LOWEST LEVEL SINCE THE1950'S, THE CONSUMER CAN SPEND. YOU SPOKE ABOUT VALUE, VALUEWAS INVOLVED. CONSUMERS WILL SPEND AT COSCOBUT THEY WILL ALSO SPEND FOR BIG TICKET ITEMS. JONATHAN:CHUCK, IS GOOD TO SPEAK TO YOU. ON MONDAY, JANE FOLEY, AND TOR STEN SLOK WITH HIS CALL FOR NORATE CUTS IN 2024. LISA:BOTH OF US TEND TOWARDS THE CATASTROPHIC.

I WONDER HOW MUCH OF THAT LISTIS POSITIVE? JONATHAN: AT THE END OF THE BOOK IS SAYSTHANK YOU TO ME AND TK. ANNMARIE:FOR ME NEXT WEEK IS LESS CATASTROPHIC THINKING BUT THEINFORMATION WE WILL FIND OUT OUT OF WASHINGTON.

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