>> we are starting to approach euphoria here. >> the tailwind from easy financial conditions is not surprising. >> there is begrudging acceptance the economy is not as fragile as people think. >> maybe we could have stronger job growth with inflation coming down. >> this is "bloomberg surveillance" with jonathan ferro, lisa abramowicz, and annmarie hordern. jonathan: live from new york city this morning, good morning, good morning. equity futures negative one third of 1%. this is "bloomberg surveillance" with a focus on china. the government acknowledging the

difficulty of hitting it. they need to hit it if you are tesla or apple. let's begin with apple. this from counterpoint research. iphone sales in china following 24%. lisa: how much it this weakness in china and how much is this the nationalism around huawei and going away from apple phones? these are the big questions from apple and tesla. how much is this is endemic of an economy that is slowing. jonathan: let's go through these numbers from tesla. tesla had a difficult session. the numbers from the china passenger car association, shipments out of the shanghai factory down 6% month on month and year down 19%. lisa: this is the reason you are seeing shares down 2%. tesla is down more than 50% from its peak in 2021.

this is very much a china story about demand for u.s. auto manufacturers. it is hard for them to hit the price point. it is also about the idea u.s. and china are moving farther apart. he saw this with amd and regular issues that would get in the way of commerce. jonathan: tesla is down 24% this year alone. we have lost a quarter of our market cap in two months. lease asking the right question. is this about growth in china or rising nationalism? annmarie: i think it is little bit about both. you look at apple with huawei, you saw the surge in people buying them even as apple is cutting prices because of patriotism. this is not going away. amd created a chip they thought the united states would give the green light come at the u.s. is saying not so fast. it will be much harder for

companies to do business in china regardless who wins the u.s. election in november. jonathan: the politics are complex and the economy is struggling. look at this from the government , we need policy support in joint effort from all fronts. they acknowledge the target they have put will be difficult to hit. lisa: they're also saying we welcome foreign investment in our manufacturing sector. is that going to be enough? do you think anyone will say i will throw you a couple billion dollars because you want it? there is nothing concrete and that is why you do not feel a lot of enthusiasm. jonathan: we are negative one third of 1% on the s&p. financial markets look something like this. the 10 year down two or three basis points. a low bit of dollar strength. the euro 1.0 849. coming up, break battle, matthew

bartlett i'm in bloomberg's and do current -- and bloomberg's enda curran. we begin with our top story. cracks form between the magnificent seven. greg battle saying tech is the part of the market with the biggest diversions but we think their ways to potentially hedge for diversify some of that risk. greg is with us around the table. let's get to the fragmentation in this big group of stocks. what is the signal? greg: part of this is not -- is these are not homogenous stocks. the catalyst has been this emergence of generative ai. the stocks most geared to that have done well.

what we seek their are stocks with different exposures and china being a key feature. jonathan: let's get to china. is that rising nationalism were economic growth slowed down. greg: the issue is a couple of those things intertwined. you look at the performance of china entities and that points to something more domestically cyclical. as we move forward towards the election the idea of tariffs and traits will be top of people's mind. lisa: you're giving this bearish message, doom and gloom, how much pushback to clients give you? greg: clients are cognizant of this. valuations are incredibly stretched. the news flow has been better. growth data has been better. we have been in this environment. people expect the fed to cut. there is this balance between

exuberance already priced in, crowding, but potentially very useful. lisa: if you think about these idiosyncratic stories, apple and tesla dealing with issues whether it is the smartphone cycle slowing down. electric vehicle cycle slowing down. if you get downside risk to those stocks how much could that be a catalyst? greg: it depends on what happens elsewhere. if you have these idiosyncratic stocks but you have gains in the labor market and you have the ai story rumbling on in the background and their positive catalysts to keep the market going. it leaves the market more vulnerable if you see the ai story slowing. if you see the data becoming too hot or too cold, than the fact we have these cracks elsewhere is something that can leave the

market more vulnerable. annmarie: do you categorize this as a bubble? greg: it is hard to categorize a bubble until it bursts. i they we have some of those characteristics. what differentiates this to prior bubbles is the stocks leading the market are cash generative stocks. although valuations are elevated come the story has been who can monetize ai, who can generate cash from it. i do not know if we are in a bubble but we are in a point worsening exuberance. jonathan: lisa called you bearish you of a price target of 5150. that is bearish in this market? greg: that is characteristic of where we are. the idea you get modest positive returns is seen as bearish. lisa: what are you seeing that other people are not that are upgrading their forecasts to 5500. talk about the

better-than-expected economic growth. greg: i am seeing it is already priced. we had this pivot from the fed in november and december. we have had better data. we have taken our target higher. we think we are following the story priced by the market. to look for an equity market that gives you materially higher returns than you can get from the risk-free rate in the bond market is something that will require a re-acceleration of earnings, further than what is already priced by the market. the issue is if you get that you risk having things cut their still priced in from the fed. i think it is a two way pull. lisa: this is a really important week, the most important since last week. i am curious what you're looking for in terms of nonfarm payrolls and also on the elections. we will get into that, but i'm curious what you think will be the most important event. greg: i think there is a lot of

political noise this week and the election is a big part of it. the thing about elections is very difficult to position for that when there a lot of water under the bridge. much more immediately we have the payroll data and the cpi. that is very important. what has been driving the market 's growth but also the narrative of disinflation. what we expect to get from the payrolls is a sequential calling from the hot print we saw last month, but is still a robust payroll print. in terms of cpi the consents is looking for a modest shift from the prior print. those things would be consistent with the disinflation narrative we are looking for. if you were to have a print that is too hot creates risk for market. annmarie: in a print that is soft we are then in line for a soft landing? greg: at the moment there is a symmetry that we are more worried about overheating.

it is not symmetric risk but you have the two tales. if you see the growth decelerate too rapidly people start to worry about growth. at the moment it feels like we are in the sweet spot of benign disinflation. i think the risks in the short-term or if the data comes in too hot. jonathan: that is kind of what nouriel said to us yesterday that the risk is upside risk and that is bad news for the stock market. lisa: if you get rates that stay higher for longer you get froth out of the market. we have seen a lot of companies be rate in sensitive. at what point does the rate sensitivity kick in? that to me as one of the key questions. we have not seen at. jonathan: i found yesterday impressive the fact that we were only down 1% even though tesla was down close to 7%. we could say signs of exuberance

, but at the end of the day, the fact we are still near all-time highs and we have apple down from the highs of the year by double digits, the likes of google have not done well either. tesla, one quarter of its market cap is gone, and we are still near all-time highs. greg: the driver of that is not broad-based support from the market come is because there up in four or five stocks that have had exceptional returns. jonathan: is that justified? we can all say this down to a handful of names. are the valuations justified? is it justified by the fundamentals? greg: the marginal moves we see may be justified by the fundamentals. what i mean is what we have seen is better this year. the issue is starting valuations are very elevated. one of the things we question is whether the right way to play

the rally is by the broad indices. if this is being driven by handful of stocks and you have to have high conviction what the path is over the next decade or so. jonathan: greg boutle will stick with us. s&p futures negative one third of 1%. let's get you an update on stories elsewhere this morning with dani burger. dani: advanced micro devices has hit a u.s. government roadblock and attempting to sign in ai -- attempting to sell in ai chip tailored for the chinese market. amd hope for a green light from the commerce department to sell the chip but u.s. officials told amd the chip was still too powerful. elon musk has lost his position at the top of the bloomberg billionaires index. tesla shares tumbled 7.2% yesterday. now jeff bezos is at the top with a net worth of more than $200 billion. elon musk's fortune is $198

billion. the gap between the pair was once as wide as $142 billion but is shrinking. tesla is down 50% from its 2021 peak. the international space station has four new residents after the successful docking of the spacex dragon spacecraft. the three nasa astronauts and one russian cosmonaut will oversee -- during their six-month stay. boeing's new star liner capsule is due to arrive in late april while the dream chaser many shuttle is due a month or two later. jonathan: thank you. up next, super tuesday has arrived. >> the poll numbers are very good. we are beating president biden in almost every poll. >> it is time for a new generational leader who can leave the negativity at the baggage behind and get to work for the american people. jonathan: the conversation

coming up next. live from new york city this morning, good morning. ♪

jonathan: stocks on the s&p 500 negative. pulling back around one third of 1%. yields a low bit lower. your yield on the 10 year

4.1818. super tuesday has arrived. >> poll numbers are very good. we are beating president biden in almost every poll. the voters can take a person out of the race very quickly. >> we can do better than 280-year-old candidates for president. it is time for a new generational leader who can leave the negativity and the baggage behind and get to work for the american people. jonathan: the biggest day of the primary season said to begin with voters in 15 states heading to the polls at a pivotal point for the gop nomination. donald trump holding a wide lead over his last remaining challenger. a strong performance today may all but secure a trump and biden rematch. joining us to discuss is matthew bartlett. my first question, define what

success looks like tomorrow morning for nikki haley. matthew: it is unclear. it will not be a good morning for nikki haley. she might wait until november. if donald trump loses that could be success. success could be a future effort by nikki haley. right now it is unclear. it is super tuesday but this is much more of a stress test for the general election between former president trump and current president biden. this is heading in that direction. i think this nomination will be wrapped up in two weeks. nikki haley is looking to get the prize without the winning, that might be sometime in the future. annmarie: does she end up endorsing the former president when he clinches the nomination? matthew: that is such a good

question. it seems as if she does not have what it takes to get the gop nomination, but it is quite possible her voters can unlock a general election win for either trump or possibly joe biden. the notion she stated this week that she may not ultimately endorse trump really leaves up to question where do her voters go and does trump make an appeal for that. does biden make an appeal for them? that is what i'm looking for today. what is the margins? can nikki haley sneak past the goalie in virginia or vermont, and what does her exit look like , and what does trump's speech look like? does he tried to welcome her or her supporters were does he go the vicious, vitriolic, it even vile speech like after new hampshire? annmarie: she has raised $1 million in the first few days of march and raised $12 million in

february. down from $17 million in january. she is still bringing in money. to she just a in this race to build war chest for her future? matthew: that is a good point. she outraised donald trump. donald trump has a cash crunch, personally and politically. that is absolutely worth noting. nikki haley has a set of supporters and a set of donors. they like her and they like her message. everybody knows this is not headed towards the nomination in 2024 or maybe even 2028, but they want her to soldier on because they like the spirit of what she is doing. it remains unclear how this ends because it is something of an illogical campaign. it is not a presidential campaign, it is a messaging campaign in that message is important for her and her supporters. lisa: we are talking about

getting to the general election with about one third of all republican voters going to the primaries. how much are we looking at potential policies from each presidential candidate, from president biden but also trump about what they plan to do with tariffs? what they plan to do with immigration? what their projection is for debt and tax cuts? all these things markets really care about? matthew: that is the key issue. what does the future look like for president biden, for president trump, for the american people? what are the issues? right now it seems to be campaigns absent a lot of ideas were motivation. it tends to be very personal. whether it is donald trump looking for revenge or joe biden saying i'm the only one who can beat donald trump. that is not a very compelling message. the economy being the top issue on voters minds. you would think both trump and biden would be on surveillance

making their case to the american public on the most pressing issues on hand. hopefully we will get much more substance as things develop. jonathan: no president former or sitting wants to answer questions on american tv. can you talk to me about policy thursday night when we hear from the president and get the state of the union address. what are the policy initiatives he will lead on more aggressively? matthew: this is going to be the biggest speech president biden has given in his life. this will set the tone not just politically in congress but more importantly for the campaign trail. he needs to make sure he can bring together the coalition he had in 2020, make sure the left flank, which has been somewhat agitated in recent months over foreign policy issues stays with him. he needs to reach out to middle america, to voters that may feel disenfranchised over inflation or economic angst.

he needs to make a compelling argument as well as his performance. in a town that does not make anything, that hardly does anything, how you present has an upside influence, whether you like it or not. jonathan: so true, and we appreciate the pitch for the interview. matthew bartlett. bramo, i know this is why you're frustrated. thursday night is the opportunity to talk about policy. what kind of policy will he discuss? lisa: what people are talking about is how long he will speak, can he present vigor. what i want to know is the economic projections. we talked about the trump trade the last time around. you talk about this a lot. can we repeat that? with president biden what goals are there to the ongoing fiscal spending. there key questions that affect this economy. jonathan: in the sequencing of

trump, greg boutle, it is your turn, was to go tax cuts and tariffs. this time it feels like an myco tariffs and tariffs. how do you set things up for clients when you discuss this issue? greg: much of this will not manifest until the back end of the year when we get the idea of who might win, whether it is a divided or united government. i think the reaction function now versus 2016 will be very different. post trump's victory in 2016, what we saw with reflationary policies well-received by the market. if we were to have a reflationary tail wind is that is helpful for markets now as we have cited rates as the biggest risk for equity markets? the thing we are most focused on his tariffs, trade, and deglobalization. you had a lot of china related news flow at the top of the program, not related to the elections but due to issues we have already seen there to the

likes of the more china exposed magnificent seven. tariffs and trade will be the key feature for the election and a lot of the rhetoric into november. annmarie: whether or not it is biden or trump there will be tariffs, but with trump it is looking like it will be more aggressive. trump is talking about a 60% blanket tariff on imports. greg: the way we have been talking about it is looking at the u.s. names most exposed to this. you have these cross winds in china where the china equity market has struggled and is potentially -- i do not call it a bullish inflection point but people are looking at it more closely. the u.s. names exposed to china have performed better. that is something we put in our outlook for 2024. you can take names exposed to china and put that as short china trade, put that in u.s.

thomistic cyclicals, or you can put it as something locally in china. jonathan: greg boutle of bnp paribas. 5150 is the are indeed target. coming up next, bloomberg's e nda curran. china has had aggressive goals. can they hit them? we will discuss, next. this is bloomberg. ♪

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jonathan: stocks pulling back on the s&p. down one third of 1%. on the nasdaq negative .6%. marginal losses, down .1%. apple struggling. nvidia up 3.5%. this'll be a thing for us. the breakup of the magnificent seven. lisa: we were talking about the magnificent one, the magnificent four. it seems like tesla has dropped out, people have relegated that to the back. now apple is facing questions that does not dog the likes of nvidia. jonathan: down two basis points the two year. before yesterday four consecutive days of falling two

year yields. yields higher across the curve. this morning we are lower, down two basis points on the two-year. ism services later today ahead of all of the jobs data later in the week. lisa: 10:00. we saw weaknesses in services last month. we see that continue. this will be one of the keys for people looking for inflation. one of the big questions underpinning all of our discussions is at what point the bond markets matter for stocks? is this stockmarket sustainable even if rates are materially higher. it depends on the day and the reason and the person you talk to. fundamentally that is one of the key questions. jonathan: i will not offer an opinion. we went from 4.1% in january to 4.7% in the last week. that is quite remarkable. lisa: at what point does the torsten slok view of the world take hold were may be the fed

does not cut rates, maybe you get rates that are higher. stocks can still gain. that is one of the potential outcomes. jonathan: equity futures slightly negative. want to finish on the euro. 1.0 852. totally unchanged going into the ecb. n.y.c. be leveling off after facing another plunge in a series of downgrades. shares of the company falling to the lowest level since 1996 following 26 and 23% -- following 26% and 23%. moody's lowering it into junk territory. the stock losing more than two thirds of its value so far this year. here is the good news if there is any common ethic this plays into the theme of the broader market. the ability of the market to come penta mid -- to compartmentalize issues. jp morgan closing at an all-time

high. if you go back to the difficulties of last spring, jp morgan was down 9%. for the mantle system there is a willingness to say it is an issue for them, it is not an issue for the others. lisa: is a management issue as much as it is a broader economic issue. that is a huge signal considering how much of a selloff in macro concerned the banking issues were last spring. this does tell you people are looking past this. annmarie: and we have jay powell on the hill tomorrow and he will be asked about this, this idea of compartmentalization, is that true when you have 80% of these regional banks holding commercial real estate loans. he will be grilled on whether he thinks this is idiosyncratic or not. jonathan: we have been going through the difficulties of apple and tesla. these are the headwinds they are facing in china as we discussed more and more about the breakup. iphone sales following 24% over

the first six weeks of this year. tesla continuing its fall after posting a 16% drop month over month in shipments from china according to data from the passenger car association. we are talking about a name that has lost a quarter of its value year to date. tesla down 24%. apple is no longer the darling of the equity market. down 9% year to date. lisa: is good you started the show this way. why is this happening? because of china or a slowdown in growth? is it the geopolitics of the matter? we have seen the smartphone cycle lag. we have seen the electric vehicle darling struggle with this question around adoption. then you add into that the sense of china does not want the u.s. being sold, the u.s. does not want companies being sold to china, that adding to the fact china is not growing.

you put these things together, hard to get too excited about potential growth. jonathan: we are allowed to say all of the above. growth in china, rising nationalism, and sector specific issues. we have seen so much bad news around the ev business. on the number one issue, growth in china, they have lofty ambitions. 5% growth target coming from the national people's congress. the ambitious goal matching that of last year, with the economy now facing deflation alongside a deepening property slump. defense spending said to gain 7%. endocrine -- enda curran joins us now. how difficult will it be to hit 5% this year? enda: it will be hard. he said that himself. we are talking about around 5%.

that is hard because of the base effect compared to last year. it is hard because china is still at its worst streak of deflation since the late 1990's. it is hard because we know they have not turned the corner on the housing crisis. the sentiment remains in the doldrums. it does suggest that the government will have to borrow and spend more. there was commentary about special government bonds of around $139 billion. some economists are suggesting that means authorities will put their money where their mouth is. the tone of the report is still along the lines of fiscal discipline. his ambition target, it will be a hard tart -- it is an ambitious target, it will be a hard target to hit. there is turnaround for the economy. that will be the growth driver for the global economy. this will reverse some of that.

lisa: how can they achieve this without adding to the debt. some people saying we welcome foreign investments does not work when we have people burned time and again internationally. what will drive growth it will not be leverage fueled? enda: markets themselves do not seem to be convinced by the reaction. by the way, the clause in terms of the canceled press conference by the premier does not speak to transparency confidence in china's economy. it is an ambitious growth target. the government sets it and will ensure that is met. talking about essential government bonds. the fiscal deficit was set at 3% for this year. amazing flexibility as the year goes on. there are some to digestion's they will be willing to bar up -- there are some suggestions they will be willing to borrow. they did not say houses are for living in and not for

speculating. that might suggest they are taking pressure off of the property of developers side. if they can get a turnaround on housing they will see a broader left. annmarie: that xi mantra has been in report since 2019. it does seem like this is been a big shift. what can they do in terms of shoring up the property sector? enda: they have taken piecemeal decisions to make it easier for property developers to get financing, easier to develop their projects. they brought down the cost of borrowing, the cost of mortgages. they have been taking piecemeal steps but none of it has turned it around and that is why some people are saying we are dropping this line about the property market -- maybe we will take even more steps. that goes to the colonel of china slow down. it is all about the real estate slump in mixup 20 to 25% of the economy. you can imagine the multiplier with that.

if you can turn that around that will have consequences with the commodity markets and lift the broader china story and we will have spillover effects. annmarie: they will also be increasing their defense target, the most in five years. what should we take when it comes to this figure? is an increase but we know china has been fighting a ton of corruption within their military spending. enda: they have been increasing it steadily over the years. it speaks a geopolitical security story. defense spending is back on the agenda everywhere. china is no different. they have been beefing up investment in their defense force for several years and i would imagine they looking ahead to the u.s. election later this year -- the current administration has maintained a hawkish stance towards china. if it changes they could double down on a hawkish stance towards china.

it fits the narrative of defense spending. jonathan: if we get a more hawkish approach to china, i want to talk about the blow to u.s. companies. are we seeing signs of nationalism start to hit apple in a more profound way, starting to hit tesla in a bigger way? is that a subtle shift that becomes a bigger shift over the next 12 months? enda: it could be. on the one hand the chinese government keeps preaching they are open for business. they did one foreign investment after portfolio flows fled the country. they do. to your point on the ground, we see action speak louder than words. i would say it is still pretty fragile sentiment for u.s. companies operating in china this side of the election and after. jonathan: thank you. enda curran. target in the premarket, these

numbers inspire confidence. saying all the right things about the fourth quarter. inventory coming down in much bigger way. lisa: when they talk about the full-year forecast -- if you dig beneath the surface, they confirmed bloomberg's previous reporting it plans to go up against walmart plus and some of these membership programs that have online benefits. it also talked about upgrading it stores and creating more shops like all to beauty. -- like ulta beauty. everyone is banking on the fact that 13-year-old girls have 15 facials. jonathan: that is what target is leaning into. lisa: we saw the same thing with macy's. they are all going to cash in on the sephora goldmine. i will -- jonathan: i will not going to that. here is your bloomberg brief

with dani burger. dani: it is the biggest day on the presidential primary category. former president donald trump is expected to win a majority of republican delegates. he picked up 29 more last night in north dakota, sweeping the caucuses. activist investor nelson peltz wants to restore the magic at disney. he published -- it suggests a partner for disney's traditional tv channels and a succession plan for ceo bob iger. his group holds $3.5 billion in disney stock and they are seeking an overhaul of the board. bitcoins prices nearing an all-time high driven by continued demand for the new u.s. bitcoin etf's. the etf has attracted almost $8 billion of inflow since january.

the market cap touched $1.35 trillion. that is your bloomberg brief. jonathan: staggering numbers. a programming note. the cio at blackrock joining us later and in 20 minutes we will discuss those numbers with blackrock. equity futures slightly lower on the s&p. up next, u.s. growth is the next market risk. >> there is a serious possibility as a no landing, that growth remains above potential and inflation remain sticky. jonathan: apparently that might be a problem for equity markets. that conversation is up next. ♪

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jonathan: stocks pulling back on the s&p 500. yields lower three basis points.

4.1837. pulling back ahead of a big week of central bank speak and economic data. the biggest risk, strong u.s. growth. >> people talk about a soft landing but there is a serious possibility of a no landing, that growth remains above potential, that inflation remain sticky. good news on growth, bad news for the market if that implies the fed will not cut as much. jonathan: good news would be bad news. investors preparing for two rounds of chairman powell testimony and u.s. payrolls to round out the week. the job market still expected to cool off, "temp hiring has been following uninterruptedly since march 2022, suggesting the recent uptrend in private payrolls will eventually reverse. joe joins us now to look at the labor market.

friday do you expect weakness or is that too early? joe: it is too early. there is a lot of distortion with the data and how the government does its adjustments. the early part of the year is difficult where you have a huge seasonal add needed in january and that distortion can spillover into february. last year you had a big january job gains and a strong report in february. potentially we will see over 200,000 jobs on friday. the temporary hiring i like because that tells us were future demand is and is slowing. jonathan: do you believe three inflation risk remains low even of these recent numbers and the easing of financial conditions, is that all about the labor market going forward or is it other things as well? joe: people talk about financial conditions easing and they have eased for investors. credit spreads are tightening. if you look at u.s. households,

they are paying mortgage rates. credit card rates, personal loans, commercial banks are tightening lending. the yield curve is still inverted. that suggests financial conditions are still tied. on the financial condition story i do not understand that. commodity prices are down sharply. we know rents will moderate significantly according to the bls own data. corrine headline pce year on year numbers, which is what you want to look like because of the residual seasonality, those are still coming down quite sharply. i do not understand the sticky inflation argument. if there is a concern about equities it is they have gone much further ahead of where fundamentals suggest, and if there is a recession the market has priced it. lisa: you think the federal reserve should be cutting rates more aggressively at this point? joe: i have been arguing the fed was going to break something. they did last march with the

regional bank crisis and if taken rates up too far too fast. inflation peaked in june 2022 when the fed began the first of three 75 point basis cuts. core inflation peaked in 2022. given the lag yesterday the fed has gone too much too far. companies have been able to lock in the low rates and we have spent over $3 trillion of excess federal spending relative to baseline in the last three years. that has helped but it does not mean there is not weakness below the surface. lisa: rate cuts are something of a political decision and this week will be talking a lot about that with jay powell on the hill talking to the house and the senate. some people saying if the fed were to cut rates aggressively ahead of the election, that would help biden get reelected. how do you view this through a political lens? you think that is relevant at a time where nobody wants to be accused of political bias at the fed?

joe: i believe it is a factor. we have not begun a rate hiking cycle and a presidential campaign since 1984. you cannot figure out what the fed did prior to that because they did not communicate as transparently. there is a political part of that and that is one of the reasons jay powell laid the groundwork for cuts in december and why he went on 60 minutes into the inflation numbers have not been good. if we keep rates where they are, real rates will expand. it was political in the proper way of preparing the markets for what i think will be easing. if they cut their will be complaints, and if they do not cut their will be complaints. annmarie: you think there's a cut off in the timeline, the last possible moment they could before the election so they can look like they can look like they're not being political even though they say they are not even thinking about being political? joe: june would be my guess. if you think you might be cutting in july and you can make the case inflation is coming down and you need to adjust

rates, why not make the move in june and then sit tight in july which will be sandwiched between the rnc and dnc convention. if they do not go by june it will be harder for them to start cutting. jonathan: raphael bostic said something similar about how we could start cutting and stop. they could cut interest rates and look around and see how it plays out. lisa: this is something people are speculating, that just because they cut once does not mean they are cutting cycle. that does not being priced into market because it looks like the kickoff date for an aggressive cutting session and that is one of the key questions. what is the terminal rate? jonathan: do think they could cut interest rates and just stop and not signal what comes next? joe: they could, it would be unusual. the fed cuts 75 basis points. it is possible. the cycle has been so unique.

they could cut next year or cut more. i do not think it is likely. i believe monetary policy is tight and there is a reason the lags are longer. i am troubled by that inverted yield curve and i believe that is sucking capital out of the banking system and there is a lot of credit crunch type things happening beneath the surface. we are seeing more anecdotal evidence the private markets are under duress. they will have to go more than 75, maybe 100. can they stop and start again? i do not know what is bad about that. i do not know why the fed has to say it knows what it's going to do and be so transparent. jonathan: i cannot member the last time the curve was not inverted. joe: monthly averages, it inverted in july 2022, right when inflation peaked in the fed went the first 75. jonathan: i want to finish on the politics and policy. i'm not going to ask you if you would serve in the trump administration.

i want the details on how you see the trade story playing out if the former president came back into the white house. could you walk us through your experience in trump's national economic council, what the thinking was and whether you think the thinking has changed or whether they would be more aggressive this time around. joe: i do not think anything has changed. the former president has been clear he wants to use tariffs. the former president is very transactional. he wants to do deals and get things done in the tariffs are just a means to have a conversation. he might start from the extreme side of things and come back to the middle. i do not think the trade policy will change that much. you will see more on shoring and see more energy production to basically bring some of the supply chains back. i think tariffs will be the negotiating point. what you got in trump one you will get in trump 2.0.

jonathan: what is the ultimate ask of china and europe? joe: on the european side -- germany has talked about it, they've not allocated the funds, the defense side that is part of it. in terms of china trade deficits are large. some of the chinese goods are coming in through mexico. leveling the playing field and trying to make it more fair trade. i do not think the president has anything against free-trade. he believes we write a competitive disadvantage because china does not have to hear the same kind of rulemaking and regulatory backdrop we have so there'll be changes to make it more even. the trade deficit improves. he wants a more robust economy. the manufacturing sector is highly cyclical. you would like to see that be rejuvenated. jonathan: appreciate the input. it is good to catch up.

potentially a future national economic council director. what did you make of that at the end? lisa: there is a dissonance in the likes of gary cohen and joe in the way they couch the former president's policies and the rhetoric we hear out of trump and what people say, which is if you take him at his word, this is what the policy is. in the past he has gone through with his word. there is a bit of a dissonance. annmarie: one thing i did take away from joe is when you hear trump talk about potentially it is more tariffs on china, maybe that is the direction of travel. it sounds like from joe that could be tempered so it would not be as extreme as the former president is talking about in public if he is just trying to do a carrot and stick approach of trying to get a deal. jonathan: does this work both ways? do you think the united states will drop tariffs on imported drugs?

annmarie: no. jonathan: the big tariffs the u.s. has stays, but if you have big tariffs on the united states will put ours up. is that how this works? lisa: it does not work. you're seeing it on both sides. what trump wants to do is similar to what biden wants to do. how do you game that out to come out with some sort of projection for 2025? jonathan: i am being snarky. what i think is the bigger issue is how much national security has crossed over into the realm of international trade and it is the national security lever they will pull on. in the next hour, bloomberg's josh wingrove, p or farragut, and constance hunter. live from new york city, this is bloomberg. ♪

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>> a possibility of what people refer to as a no landing. >> the risk of a no landing scenario. inflation staying high-end growth staying high. >> right now the risk is they could make a mistake and they could cut too soon and inflation could remain stickier for longer. >> how could the fend cut when inflation expectations are continuing to march higher? it is a challenge for the fed. >> i think the fed will have a hard time cutting rates. >> this is "bloomberg surveillance" with jonathan ferro, lisa abramowicz, and annmarie hordern. jonathan: the second hour of

"bloomberg surveillance" begins right now. good morning. this is bloomberg and the magnificent seven continues to break down. check out the performance year to date. nothing synchronized about this in any way. apple down 9%. tesla down 24. google down. microsoft positive 10%, amazon up 17. nvidia up 72%. lisa: is a question of who has the biggest ai exposure and pump your money into that. that is what we have seen all year. here is the angst underpinning the market. at what year does this become a craze that has gotten over it skis similar to what the electric vehicle hopes and dreams had. that is what we are seeing with tesla in addition to other issues. jonathan: jp morgan saying signs

of froth building. david coston saying valuations are supported by fundamentals. let's talk about the fundamentals of two names. i want to talk about apple and tesla. china specifically. jill varese for tesla have -- deliveries for tesla have struggled but what we have seen for apple is worst for the year. lisa: the first six weeks of the year data shows sales in china are down 24%. is this because of a slowdown in the chinese market, a de facto boycott in certain corners of apple or u.s. products in china? it is hard to pinpoint but apple already fell out of goldman sachs wish list. annmarie: if you're looking at patriotic buying you can look at huawei, you can choose a huawei phone. their sales are searching. tesla's issue is byd. tesla and apple are both cutting

prices. tesla last week in china is offering insurance subsidy but it is not enough to get their sales up. jonathan: let's draw a line between smartphones and ev's. ev is a struggle in china. it is a struggle in the united states for a host of reasons. adoption is not increasing in the way a lot of people hope for. jonathan: we saw that with ford -- lisa: we saw that with ford and gm pushing back and it is hard to know people are just getting ahead of that in terms of their excitement. if you talk to the ford cfo they say it will be an adoption cycle, just a little bit slower than we expected. with respect to tesla, they are a car company. they've been trying to be treated like a tech company, but now they are a car company and that was solidified by apple saying we are done. jonathan: maybe that requires a different multiple. the stock is down another 1% this morning.

the bond market shipping up as follows. a big two days for chairman powell around the corner. your yields on the 10 year down three basis points. 4.1837. the euro a touch weaker. coming up, samara cohen of blackrock wonders whether the stock market is a boom or a bubble. pierre gerrago, and constance hunter. we begin with our top story. boom or bubble. wall street is divided. jp morgan warning of froth in the market in writing "earnings projections for 2024 are coming down in the market appears complacent on the cycle." david coston writing "this time is different. we believe the valuation of the magnificent seven is supported by their fundamentals." samara cohen of blackrock joins us for more. wonderful to see you.

we have a lot to talk about in crypto and bitcoin. boom or bubble? samara: the important thing is one of the transformative -- one of the most transformed parts of markets today is participation of individual investors. there are probably 100 million american investors who are self directing their money. that is what we talk about when we say the self-directed investor. 30% of them are in etf's. investors are participating in single stocks but also participating in broad-based indexes and that gets lost a little bit. we could extend the story to china, which you were talking about before. there are emerging-market etf 's, but there also activities on china etf's, for the way u.s.

investor can expect a view on china. what you're saying seeing there is a bullish skew getting limited downside participation in china. jonathan: we hear the word trade versus investment. when they think about china are they thinking trade and not investment? samara: we are talking about short-term limited downside participation. what we are seeing is the transition from savers to traders to investors. lisa: you talk about individual retail investors not going into a specific name. how much are they thinking that trading specific names given the dominance of those names in the index? how much has that drawn in retail interest in a new way? samara: investors who want to trade index are trading the index. the reason we saw this step up in participation over the pandemic that has now participated is there is commission free trading for all

stocks, single stock or etf. much better experience on digital platforms, and a lot of information for better or worse coming through social media. investors have the access to determine if they want single stocks exposure. the decision to allocate into etf or index product is very specific to the index. lisa: i am wondering how you can gauge the appetite for risk at a moment when there seems to be a lot already baked into valuations and people are getting concerned about frothiness. do you get the sense that retail investors are still saying this is the time to start moving money out of cash and locking in longer-term yields, locking in the prominence of artificial intelligence? samara: it is artificial intelligence but even upstream of that i would say what does your fixed income allocation look like? last year was the year of cash. all of a sudden a lot of these savers realized i have to do

more than have my money sit in a bank account. i have opportunities in cash. now the question is they have to start worrying about investment risk. they have to think about their core fixed income allocation. then they have to think about where they want their equity allocations to be on the risk spectrum. jonathan: they have a new option with spot bitcoin etf. can you frame how big the inflows have been? samara: it is important to look at the inflows in the context of the category. there've not been etf's on bitcoin. this is the first time we saw etf center nasa class and the question at the beginning was investors have more options to participate in the bitcoin market than before but the inflows have gotten attention. jonathan: would you call it new money? is it from the crypto universe, or is it coming from elsewhere?

stuff previously invested in equities and fixed income coming to this market for the first time. samara: i've seen lots of analysis and i would say the range between how much is new money is between 50% and 75% new money, with the early days being recycling from other wrappers. you can see that in the trading volume. if i look across the bitcoin trading complex, etf's were 15% of trading volume in those early days. now it has leveled down to 6% to 8%. jonathan: what you see in -- lisa: what do you see in terms of the evolution this year, where people are shifting their investment strategies at a time yields are higher but expected to come down, and there is a discussion about rotation shifting in the equity space. samara: number one is determining what the appropriate fixed income allocation should be and where that is on the yield curve and this is part of

the bigger picure regime shift. how do you think about the portfolio now that we have had this change where we have new investors who have never had to consider inflation before. that is number one. number two is where do they go in their equity allocation? lisa: there was a great piece talking about the near-term profile of cash versus investment grade and government debt and it shows that t-bills have outperformed or basically been in line. how do you shift mentalities that have been entrenched by that and say this time is different? samara: education plays an incredibly important role. that is one of the things investors are looking to their advisors, looking to media, looking to digital platforms for . that is probably one of the biggest risks to those 100 million investors in the market right now. the biggest risks are the reinvestment risk. they are not moving out onto the

yield curve. number two, the diversification risk if they are looking to more volatile stocks or crypto explosion. jonathan: this is what i struggle with with bitcoin. what are the characteristics of it in the context of a broader portfolio? what is it there for? i understand the volatility and for people who want to play it makes a lot of sense, but in the context of a broader portfolio what characteristics does it offer me i cannot get from other asset class? samara: number one characteristic we do know is volatility. the number two thing we know, this is what led to the sec approving bitcoin etf's is investors are buying it. we are hearing from advisors they wanted another tool and toolkit to let their clients allocate to bitcoin. what are the use cases in portfolio allocation?

i would say it is an emerging body of research being written. jonathan: we are still figuring it out. samara: that is the space to watch. there are strong convictions. when we start to see model allocations including bitcoin, and we should be very specific we are talking about bitcoin, i think that will be an important story for 2024 at the use of etf's. jonathan: is it uncorrelated risk? what is it for? lisa: i think if you say uncorrelated, it seems to be correlated to risk on appetite. what point is it uncorrelated versus you want to feel cool? jonathan: is that what is for to feel cool? lisa: cool with your kids. hey kids, i have a bitcoin. jonathan: bitcoin is negative. samara cohen of blackrock is sticking with us. here is your bloomberg brief with dani burger. dani: target is berg -- target

is getting premarket. beat estimates with better inventory antigen meant -- better inventory management. it also launched a membership program to rival amazon prime. china set an ambitious 5% growth target for this year, putting renewed pressure on the nation's top leaders to unleash more stimulus to lift confidence in an economy hit by a property slump. analysts forecast the economy will expand 4.6% in 2024. counterpoint research says iphone sales in china fell 24% in the first six weeks of the year. to simulate demand apple had offered a discount on its website in january. apple fell 16% in market share to 19% a year ago. apple has fallen 9% since the start of the year and lost the title of the world's most valuable company to microsoft. jonathan: up next, on course for

a rematch in november. >> it is super tuesday, but this is more of a stress test for the general election between former president trump and current president biden. i think this nomination will be wrapped up in two weeks. jonathan: trump biden volume two. that conversation is up next. from new york city, good morning. ♪ the future is not just going to happen. you have to make it. and if you want a successful business, all it takes is an idea, and now becomes the future where you grew a dream into a reality. the all new godaddy airo. put your business online in minutes with the power of ai.

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is more of a stress test for the general election between former president trump and current president biden. i think this nomination will be wrapped up in two weeks. nikki haley is looking to get the prize without the winning. it is possible her voters can unlock a general election win for trump or possibly joe biden. jonathan: donald trump nikki haley going head-to-head across 15 gop primaries. trump expected to tighten his grip on the republican nomination, moving closer to a rematch. joining us to discuss is bloomberg's josh wingrove. out of those 15 gop primaries, can nikki haley win one. josh: he won the d.c. primary. we don't talk about that? [laughter] expectations are low.

our guest said this could be wrapped up in a couple weeks. i think it is wrapped up now. donald trump will be the nominee . the parties acting like he is the nominee. joe biden will be his party's nominee barring some surprise. this is where we are at. one thing interesting to watch is even in these races where donald trump has cruised too big victories over nikki haley, he is underperforming. he is not beating her by as much as the polls indicate. i will be watching for that. is there continued pulling error that overstates trump support? that is what the biden campaign is hoping for because all of the polls show trump leading biden. if the polls are overstating his lead against haley they might wonder whether they are overstating his lead against biden. as for biden we are watching as to whether he is the protest vote in states like north carolina. we saw this in michigan where the boat was scheduled for arab

voters, voters upset about the situation in gaza. broadly speaking it will be a good night for joe biden and donald trump. annmarie: for the undercurrent for trump it looks like he has a steep hill to climb, given the percentage of votes nikki haley is still getting in some of these primaries. you are at the white house yesterday with mark cuban and you ask him and he cast a ballot in the texas primary for nikki haley but he said when it comes to the general he will back joe biden over the former president. how many people are like that in the united states that trump will have to have a difficult time picking up? jonathan: this is the million -- josh: this is the million dollar question. we should be asking every nikki haley voter what will you do in november? demographically her voters look nothing like trump voters. they look more like the coalition joe biden put together.

to these people stay home? they hold their nose and vote for trump? and vote for biden? it is such a key factor. mark cuban told me his food for nikki haley was expressly a protest vote against donald trump. he waved off age concerns. he said if they were giving biden his last rites i would still vote for him over donald trump. annmarie: thursday we will get a sense of how the president is doing and the policies he would like to enact. what are you looking for in the state of the union? josh: this is biden's big campaign kickoff speech. we will hear a lot about costs and stuff you and i have heard before. we have struggled to get the message out. they passed infrastructure bill. by the way, we will hear billions of announcements over the next month on that bill on infrastructure. brace yourselves for that.

he wants to give the theory of the case that they are governing and he deserves an over term for governing. what our poll showed, 82% of voters think biden is too old or both biden and trump are too old. a lot of the questions will be on his delivery, can he quell concerns within his party, not just with republicans. on monday at we are expecting the federal budget to be announced. a wish list of congress. those are the three dominoes to kick things off. super tuesday come the state of the union, then the budget. jonathan: i want to pick up on something you repeated. not a lot of people know about it. i'm sick of politicians who blame the media. they have a responsibility as well. what are they doing about that and changing their approach? is he going to do more interviews? josh: he is starting to do more.

we saw magazine piece where he gave an interview. he gives very few interviews. they are trotting him out more. fight the age question by saying in private biden is very commanding and perceptive and drills down questions. they obviously have an opportunity to show more of that in public if they do were interviews. they'll be fanning out principles that are not named joe biden. we saw jill biden to a swing state store. cabinet's will be everywhere talking about these things. joe biden always told the obama people they were not taking a victory lap enough, they were not telling people what they have done. he set out to change that and he has ended up in a similar trap where the demands of the presidency pile up, you have to deal with stuff like gaza, and

you are not doing as much roadshow retail politics as you might want. right now some of their flagship stuff, awareness is not high. taking a step back, this idea of why they've not advertised some of their accomplishments, i think it is a deep point. the question is do they have a cohesive message that caters to all side of the party that they want to trot out, or don't they? is that part of the problem or the reason why you're not touting accomplishments, whether it is lowering prices, or lower gas prices, but how do they do

that? jonathan: samara, i want a final word on politics. what are you advocating for ahead of november? just ignore it? samara: what we know is four out of five americans are worried about their financial well-being in retirement. whoever wins, we know a couple of things are important. monetary policy is independent. investors have to figure out their fixed income allocations, particularly with fed easing. equity markets will reshape to accommodate the demands of increased participation of individual investors, whether that is an crypto or single stocks, that needs to be a priority of either administration. that individual investor participation has written -- has risen over both trump and biden. jonathan: is that another way of saying stocks will go up regardless of who is in the white house? samara: historically when the

economy grows stocks go up that has been true in general election years and that would be a good thing for the participation of investors. jonathan: samara cohen of blackrock. i would go back to japan and the conversation we have had earlier this week. we've been conditioned in america that stocks only go up. you get lost decades. in japan come in markets in hong kong, in certain markets in europe, even markets in tech. we had a lost decade. these things can happen. lisa: the reason people care about this is the why behind it. is it a demographic issue like in japan? in the u.s. is also the deficit issues. if you see yields rise, what that does to certain asset valuations and the growth projections going forward. jonathan: one thing that is assured is deficits and a bigger debt pile. lisa: are we going to have a liz truss moment?

i wonder if we will have something like that where the bond markets are like absolutely not, take that back. jonathan: i'm not sure the treasury market wants a liz truss moment. i think a liz truss moment caused chaos in global markets. i'm not sure a liz truss moment in treasury markets would be shaken off so well. this is not a liz truss moment. 4.58 on the two year. apple sales in china following 24% according to data from counterpoint. that conversation with pierre farragu is up next. ♪

jonathan: we are down .5 on the nasdaq. in the bond market, two-year, 10 year. lisa has a new warning, a liz

truss moment. lisa: well, let us see. jonathan: what is the inflation backdrop look like? if you have robust growth and yields are close to 5%, if that lines up and you have a president that says we will push even harder on domestic growth, then you have that pushback. does washington have the privilege of behaving recklessly? liz trusts is not the united states and the stock market. lisa: they are completely different but the site, i've been thinking about this. if you get the recipe you are

thinking about and has a protectionist policy that is inflationary and negative for growth, that is a problem when there are people saying that it matters we have this conversation. jonathan: that's like putting the micro wave on the u.s. economy. the euro down to 1.08. today we will talk about bitcoin with the looming production and supply drives the price 160% in the past six months taking it to 1.3 5 trillion. lisa: it raises this question of why. is it institutions to rally to

vacant and asset class? it doesn't have the same kind of fogginess it had in the past. is there an nft feeling? jonathan: how much is this new money? are they placing it into a blackrock etf or as a cash from the sidelines? lisa: you've heard this from investors who have said it was fair diversifier. it is a risk on asset class. jonathan: that's why i was surprised from blackrock what is the place of bitcoin in the

character or six i get from that asset class and the answer was, we are finding out. lisa: that's what we hear from a lot of people. it's like a religious feeling, this idea of what gets placed in term of moderate means of money. jonathan: that energy, that religious energy? lisa: like the follower's it's a very religious movement. jonathan: you're just imagining the email you're going to get next. lisa: you know me so well. i'm all for innovation. annmarie: you're describing a colts almost. jonathan: they are there at the

barrel of the camera. lisa: i want to learn more about it and i also think it raises questions across the border estimations. jonathan: digital track they down for a third quarter and tesla also confirming it launches a membership effort. that stock is flying by a person. lisa: they are turning it around. they saw declining growth. what i find interesting is the new model of these stores. loyalty programs, shipping

apparatus. jonathan: they had big difficulties last year that was a great lesson for the business world. lisa: we saw that with budweiser two. that's why you see this real pushback. jonathan: that's why i've given them a second chance. lisa: would you like to say anything about that? jonathan: i don't even drink bud light. sales of iphone falling and china. the latest blow for apple in the biggest smartphone market. apple introduced discounts to stimulate demand while they have cut prices by $180.

neutral rating on apple with the price target on 175. these two names apple and tesla fall under your coverage. is there any crossover in the challenges those names are facing in two different industries in china? pierre: if you look at apple's competition, the overall market is weak. it's not as significant data point we have to see how things go beyond the chinese new year. while in china they were able to

do why to why. in 2021, the iphone 12 we were expect being apple units to come down from 235 million but it did not happen. apple benefited a lot in china and this is not coming back, huawei is coming back and apple will lose share. jonathan: i wonder how you get a read on this, consumer nationalism. how do you identify that stock ?

pierre: that was on the table in 2021, the chinese consumer was pushing back on consumer products. we need to wait six more months. to see if they continue to gain share against apple. without huawei the chinese does not have an identity in the high and. end. it could be nationalism at play. annmarie: tesla and apple have cut prices could receive more of that? pierre: price coming has been

seen in the auto market. the husband market wide, tv makers of how to do that a lot. in the first two months of the year, they regain share against byd but overall the market remains very slow, very weak. you continue to see prices cut, tesla is lowering prices on insurance products or options which means the base price is not moving anymore. the first two months of the year

they're doing better than bye. i think tesla is finding a floor in china. lisa: is the big tech urgency we see in the united states vulnerable to a reality check in china when it comes to demand? to the ability to sell? creating a special trip for china and that not being good enough. how much is this being accurately priced? pierre: you need to dig deep to get the sense of it. for apple, if wally comes back

to where they were in 2021 there is a downside for apple. on the chip side most players have been very cautious. not taking on china. there is a chair brush and everybody wants to buy more chips. you take a step back and a broader picture, china is 20% of the technical system and that 20% is coming down.

and making it more difficult to sell western technology because of regulatory constraints. i think it's a 10, 15, 20 year process to see growth in china. lisa: it seems like apple and tesla have not fully priced in the risk from china in the other stocks are more insulated because they have price then a cut from china. pierre: especially on the semiconductor side of things. jonathan: this is great thank you for your wonderful perspective on the story. this is more nuance from company to company and industry to

industry. lisa: why we ask what is the linkage between tesla and apple. there is a sea change with the respected demand in china and the willingness to buy u.s.-made products. jonathan: let's give an update on other stories. dani: n.y.c. be drop to a low in moody's had to lower them again. and why cb has lost two thirds of its value this year. yvonne muska has lost its top position, jeff based services at the top with 200 billion versus musk's.

the international space station has more new residents. they will see the arrival of two new rocket ships during their stay. astronauts are expected in april. jonathan: and of side risk to inflation. >> it really is a major challenge for the fed when you have a tail wind as a result of their actions. jonathan: no rate cuts in 2024, we will discuss thought call next. buy from new york, this is bloomberg. ♪

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jonathan: lisa is getting so much love right now. lisa: you can come back to me next year. jonathan: i told you just forward them to tk. lisa: i don't want to be correlated with that. jonathan: correlated with tom? [laughter] an upside risk to inflation, muddying the path to rate because. >> every day you see more signs of easing.

it's a major challenge for the fed when you have a tailwind as a result of their actions but the market says their expectations are drifting higher. romaine bostick, and hunter writing this. a series of because will allow the economy to accelerate in the presence level decline. why is torsten slok wrong in your opinion? constance: when you have a productivity surge you can have an economy that is strong while it moderates. our group has a forecast that we

will have in hand for the fed the 2.1% on pce. they will have data that could allow them to cut and you have to ask question where should real rates be? was say they were to cut their 75 basis points this year. you go from restrictive to moderately restrictive. you still have restrictive rates within the economy. the financial conditions we look out on wall street are not the conditions the average consumer faces. they are dealing with higher interest rates on credit cards, auto loans, mortgages so high they are priced out of purchasing homes. if you on stocks financial conditions are easier but if you are younger, you have tight

conditions. jonathan: equity markets all-time highs, credit conditions loose, is not not important? constance: we don't think that re-acceleration will continue at pace. jonathan: what do you think fueled it? constance: inventory buildups and productivity. it surged in the third and fourth quarter. we think there is a lot underpinning the product cavity story. and i'm not even talking about the obvious like a i, firms are implementing those. you have a number of programs, you need to downsize the right size the absent programs you are

running before you can harness the power of ai. lisa: what'd are the challenges now check the people are saying these things are getting big and with ai and product cavity gains. are we replacing one story when the data set just inflation and things are may be heating up? constance: we know what's been happening with vehicle prices has been coming through into cpi with the lack. we expect those prices to start moderating. insurance prices have been high, home and auto has continued to

rise. we don't expect that to keep going up at the same pace. there is the oer component and how rents will play through. we will see market rates coming down and negative year-over-year. that will play through the next six months. lisa: there's disinflation and then there is weakness. is there a risk to wait and see this data come into play? constance: i think it pays for them to be cautious. thus her job. they need to be measured and because you have productivity it gives them extra policy space.

one of the things we are looking at closely is was happening in the labor market. how much of january was whether in we do web scraping of company earnings and what we see in the data and comments as firms are using hours to continue with labor hoarding. firms that are not coming to the market to issue debt are not seeing easy credit conditions. annmarie: they are not laying off people but restricting them to the least amount of hours

they can work to keep them on? constance: they say we don't want to let people go but that means less weekly/hourly earnings. you saw earnings go down in january because hours worked follow. jonathan: looking forward to the client? constance: not necessarily. jonathan: what number are you looking for? constance: looking for them to stay about the same if not come up a little bit. that would confirm there was some weather effect in january. but if they decline in line with the survey it would suggest that the labor hoarding has shifted to a new phase where firms will have to reduce arms. jonathan: the other numbers in

our survey, 200,000 is the regional estimate with the previous number at 350,000. lisa: i'm curious to see revisions. how much of we seen revisions downward by 100,000 jobs? jonathan: it's a hell of a start of the week. we have a lot to get to including a double dose of chairman powell. in the next hour, rick davis, laura goodwin, and tom narayan. a lot to talk about as we had towards economic data

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>> we are starting to approach euphoria here. >> there is an acceptance in the investment community that this economy is not as fragile as people think. >> because of ai the economy will continue to grow. this is bloomberg surveillance with jonathan ferro, lisa abramowicz and annmarie hordern. jonathan: this is bloomberg surveillance, the third hour and in many ways the week begins in a couple of hours when we get the ism services data. payrolls on friday. lisa: i would argue that could

be the biggest market mover of today. we did see a higher-than-expected increase in prices where everyone is banking on disinflation. jonathan: my favorite line that said the u.s. dollar is feasting on american exceptionalism. china puts out a 5% gdp growth and everyone is like can you hit it? there are big doubts. lisa: they don't want to borrow money and they want to continue deleveraging. where are they going to pay for this? that's an issue in the fact or not getting any conclusive ideas for that is leaving people lacking. jonathan: apple is down by

2%. lisa: premier lease is not easy for us to meet these targets. annmarie: keep coming to this idea, is a growth versus the idea of patriotic buying. why would she by a tesla versus a byd. same with apple, they are cutting prices but while the is doing well. lisa: is the china risk not adequately priced in? is it really just specific names

that could potentially be effective or is there a broader story here? jonathan: for u.s. companies listed in china. they have had a really tough time but does go the other way? i thought for a long time the chinese consumer would tolerate what was happening. they would want foreign autos and i wonder if we've seen something much bigger. if we get a president trump and he goes harder on tariff you could get a tit-for-tat with the consumer. lisa: the more you see consumers voting with their pocketbooks you see certain

chips not being able to be sold in china, is this priced in at a time where the u.s. is treated as a bastion of exceptionalism? jonathan: pnb paribas since how that this is our growth target and that would help us edit because it would boost confidence. lisa: if youth unemployment is too low, than just avoid it? does that work? jonathan: i'm not sure it will boost experience but we will see. the bond market with yields lower throughout the morning by three basis points at 4.17 in

the euro is out 1.0849. coming up, break davis in lauren goodwin. we will head to the payroll reports on friday. the performance on tesla and apple with a shadow over the markets. earnings keep surprising to the upside we think the magnificent seven will continue to deliver growth. i went back over your old calls and they have held up quite well. can you walk us through what you are looking for and where you been right? >> we started embracing optimism at the right time.

we are at the stage where potential growth is reflected higher. we've seen this supply-side improved driven by foreign-born workers and labor force participation. the ingredients are there for a sustained expansion of the u.s. economy which undercuts our conviction and earnings growth. jonathan: what about rate because? you were waiting for a loosening in the labor market before being confident in rate cuts. are you seeing in the sign that we are seeing deterioration in the labor market? elyse: we just have that payroll report. is the supply side of the equation that is helping ease the tightness of the labor

market and we shifted our rate cut expectations. that doesn't derail this optimistic equity outlook. we think multiples can stay where they are. lisa: where did you see this broadening outcome from since the smaller companies that are consumer facing art interest rate sensitive ones that will struggle more with rates higher for longer. elyse: the magnificent seven to the bulk of the heavy lifting to eke out that a gain. we think the remaining 493, ai,

health care innovation. lisa: my worry of the day, how much are we under pricing the risk of the china factors as some of the tech companies that have chinese businesses and have to deal with their footprint? elyse: it might be a company specific story and marcus are ready to deal with this. companies like microsoft and nvidia, they are earning stories are underpinned by results driven domestically. lisa: you mention some of the other 493 stocks and ai height being real.

if they put ai in the earnings report you are in? elyse: it matters a lot because we learned about hype around electric vehicles in the metaverse. we are seeing it translate to earning results. looking at what microsoft released in the fourth order, their contribution from ai doubled in the fourth quarter. we expect the impact to expand past enablers and beneficiaries because be a tailwind. jonathan: i used to have a segment after the opening bell and she would always talk about what she was worried about for at least three minutes. lisa: that was a good segment. jonathan: the producers want to

have another brammo's worry of the day. let's get your bloomberg brief. dani: the biggest day of the presidential primary. but are said to the polls for super tuesday. donald trump is expected to win the majority of republican delegates, he picked up 29. activist investor wants to restore the magic at disney. as suggested a review of the studio operation and succession plan for bob iger.

target up in the premarket with fourth-quarter earnings, targets buying fewer discretionary items and launching a membership program to rival amazon prime. jonathan: they do not have the inventory issues during the pandemic. lisa: can we talk about how difficult it must of been to be a buyer during the pandemic? jonathan: it took months to arrive and then nobody wanted it anymore. up next, decision day for nikki haley. >> we will do us much as we can as long as we are competitive.

jonathan: that decision, should she stay or should she go? that's up next. ♪ ♪ you have to make it. and if you want a successful business, all it takes is an idea, and now becomes the future. a future where you grew a dream into a reality. it's waiting for you. mere minutes away. the future is nothing but power and it's all yours. the all new godaddy airo. get your business online in minutes with the power of ai.

jonathan: equities down 5.3%. the bond market, down for basis points on the 10 year. down to basis points on the two-year. 4.58 on the two-year. the ism services reports in the payrolls report is just around the corner. this morning's decision day for

nikki haley. >> the voters could take this place out of the race very quickly. i really do believe that will be a unifying factor there. >> i want to be competitive as we can. as long as we are competitive, when 70% of americans say they don't want trump or joe biden. jonathan: nikki haley staying through super tuesday. right davis joins us for more. do we know what the threshold is for nikki haley to stay in this race? >> she has to be able to show people she has some level of competitive as. her low points have been the 20% she got an iowa in her high point in new hampshire.

can she stay there long enough to collect delegates? half of these are winner take all states. pull 400 of these delegates that go to trump because he can win the winner take all states. annmarie: what can the close primary say about trump and her with her staying in the race? rick: she has benefited from the open primaries so far which is how she has accumulated those percentages because she has crossover appeal.

there are poles indicating a third of the republican party does not like trump and doesn't want to vote for trump. that has to be where she gets the accumulation of votes in delegates. she does not have an infrastructure, she has money. is the case she could be making tonight to voters, give me more money to keep my campaign going? annmarie: when you look at today's primary is basically over but between now and then we don't expect another candidate to replace guided or trump. a lot of people are hopeful the republicans or democrats will put forward someone else.

could we see other one of them dropping out? rick: they call them the double haters, people who hate both candidates. 70% of voters wanted different candidate. neither candidate will drop out and the only thing that could cause them to not be on the ballot is a health concern. with two guys in the age group they are in, a health concern has to be something you pay attention to. this is what you'll be able to choose from and is in the big problem for joe biden because the idea that someone else will fill his shoes has kept a lot of his enthusiasm down. that campaign needs to prove that they are the candidate.

lisa: do we understand this pot ? this is my question heading into a season where we hear something about what's going to happen with respect to tariffs, deficit reduction. are we facing something that could be trust moment, a series of different policy measures at a time the u.s. is facing a resurgence a growth? rick: we will get a clear indication during the state of the union. what is his claim to a second term? what is he going to do? it's totally unclear. most of it has been rare hard action. we have heard very little from joe biden on what the plan is for the next four years.

i don't think you can expect any of that from donald trump. he is saying the same thing today as he did in 2016. none of that is likely to change. you not going to see a lot of new policy out of the republican side. this is up to the president. what is said that he's cannot offer to voters the stiffer the what is doing today because what he is doing today does not give them a fig. ? victory in november. jonathan: the pitch used to be i am not him is that mike and the work? rick: if he can communicate a new policy with inflation,

voters are getting comfortable with the economy and reward item was support on the economy for a change so he has to address the concern the country has in one of those is immigration. trump lambasts him over the border and he is only getting 25% approval rating on the border. it's the worst issue for him and the country and people are galvanized by the headlines with the amount of people heading across the border and making their ways to cities and creating pressure. jonathan: it is good to catch up with you, is such time of the

hour. forgive me, we will talk about politics. annmarie: we cannot avoid it. it comes out in every meaning but at the very least we know what we are getting with both. there is less uncertainty associated with the selection but the nerves are still there. jonathan: you remember that night in november 2016 and we'll remember the exception speech, and we talk about the trump trade and tariffs. how different will it be? elyse: he's still talking about

tariffs and deregulation. thus helping us lay out a scenario analysis and broad brush strokes this could look like something if he wins a potential dollar strength than of for yields. it could be good for small and mid cap equities. either way what we are encouraging investors to focus on is what you can control. let's talk about bigger picture global themes that will play out regardless like security. lisa: you talk about yields being higher. when do you jump the shark when talking about protectionist policies at the same time slowing growth? at what point to higher yields derailed?

elyise .5% is what gets us excited about seeing a little more value in terms of interest rates. we do think it will be fed policy that will provide that higher rate longer. lisa: i'm going to keep talking about this but everyone will ignore me. jonathan: back to the same question i always ask does washington retain the privilege of acting recklessly with the that. lisa: elyse, we enjoyed it.

this is where futures are on the s&p 500. futures are negative five point 3%. 10 year down five basis points at 4.16. two year at 4.58. coming up next, lauren goodwin on what investors will be looking as results come in. the prospect of a liz truss moment in america. jonathan: it sets us up for the perfect moment the prospect of a list trust moment. lisa: absolutely. jonathan: this is bloomberg. ♪

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jonathan: stocks on the s&p 500 negative by zero point 4%. reasons for the underperformance, tesla and apple. two pieces of that puzzle. the yield look like this, the 10 year yield down by two basis point. on the 10 year, we are down five basis points. >> we got a little bit of a selloff but people are saying that maybe carson hunters view of things is correct. ultimately, how many hot prints does it take for people to believe that maybe inflation is not fading as quickly as hoped? jonathan: we are feeding on a

diet rich in u.s. exceptionalism. eurodollar right now, 108.46. negative bio something like 1/10 10th of 1%. apple and tesla under pressure in china. data showing iphone sales in china slumping 24% in the first six weeks of the year. the slow down even after stimulation of demand. tesla will extend losses after data showed shipments plunged in february. the ev maker shipped 50,000 vehicles from the factory in shanghai. that is down about 60% from the previous month. lisa: is it a growth issue? we always have the growth targets for china. as ambitious as 5%. tesla and apple are still

struggling to remain competitive. everyone is talking about growth. on the other hand is patriotic buying from chinese consumers. we have a phone we can by for cheaper. jonathan: apple dropped prices and the competitive market share. that is a big problem. lisa: it is not just the end consumer but it is also the production. there are a lot of questions for apple to answer. is this just an apple and tesla story or a broader issue? i will keep asking. sort liz truss of like the liz truss -- sort of like the liz truss moment. jonathan: apple is down about 2% in the free market -- premarket. meeting with top officials in

washington, dc, a deal to free hostages but pricing is constructive approach to seeking a six-week cease-fire. the biden administration continuing to push its route on getting humanitarian aid into gaza. punch bullnose reporting that chuck schumer will meet with leaders today. lisa: this is huge. punch bowl news is reporting that speaker johnson will not meet ben. the issue is between netanyahu and gantz. if an election was held today, he would be the one to win. it is why netanyahu had a very frank conversation with him. member there is one prime minister of israel and that is me. speaker johnson wants to put some distance and not have this meeting with him.

what kamala harris said the over the day -- the other day, talking about an immediate cease-fire, you will see a read through for the president's speech on thursday. they watered down her speech. potentially you will see the president wrap it up. jonathan: voters heading to the polls in 15 states for super tuesday. the excitement is all but gone. donald trump is practically during the two have a victory over nikki haley, effectively ending her presidential bid. president biden faces no serious challenge of his own. democrats will be watching uncommitted protest votes over his handling of the war we just discussed. talk me through michigan. what will this look like tonight? lisa: from michigan the big question was for biden. this is a swing state. these are people who likely voted for biden in 2020.

it was a protest vote. biden is struggling up shoring individuals who voted for him, some of them are part of his base. trump has the base. the issue he has is winning over the nikki haley electorate. there are republicans who are more moderate and democrats do not want to see another four years of biden who may have voted for nikki haley. jonathan: here's a view on wall street on that issue. lauren goodwin of new york life investments, no matter the outcome, markets will be watching four areas of policy including how much money the government spends among where the government spends the money, foreign-policy and migration. i think you know where this conversation will go. good morning to you. let's talk about it. the liz truss moment. do we face the prospect of it? lauren: we will not face the

prospect of it later this year but the question is so important because what we have seen from both of these administrations is that they are very willing to spend. what they spend on is different. the reality that the deficit is likely to continue to be unsustainable is really important. it is one of the reasons why we expect long-term interest rates to be volatile and that to be an important part of portfolio construction. lisa: people could have said that the deficit was important one year ago. why is it more significant given the fact that everyone has been saying it will matter and it has not mattered no matter how much we talk about it? lauren: the tricky thing about debt sustainability is that it is death by 1000 cuts. you can make mistakes over again and it is not clear whether it is the 17th or 25th mistake that results in your liz truss moment. not only the level of debt, the flow of debt and the cost of debt in the u.s. economy becomes more important.

in the near term we dig about portfolio construction, that is about rate volatility as opposed to necessarily an upheaval of the u.s. debt markets which are so much deeper and well-capitalized elves have to even the u.k., which is an already well-capitalized economy. it remains an area where as governments continue to show profit, we should expect a conversation among investors to continue. lisa: when we talk about portfolio construction and higher yields which a number of investors are talking about, at what point do those higher yields become punitive for asset prices? lauren: 3.5 to 4.5% range on the 10 year right now is very reasonable. that is a wide range of reasonable outcomes for the 10 year relative to history, speaking to the volatility. 5% is where we see significant pain and likely credit in the

u.s. economy. we are not near that right now. volatility is not our favorite place to take risks. while we expect the fed's smooth to be a cut, -- the fed's next moves to be a cut, we have been looking to make a more neutral duration play. jonathan: this conversation started with how much to spend. can we talk about where to spend it? lauren: compared to what you would call a stereo typical democratic versus republican platform, not as much difference potentially than in past elections. one area where we see both administrations continue to spend is in brown energy in of the areas of policy where there is so much investment from

the democratic administration toward infrastructure which we expect to be sustained that brown energy does not leave the playbook entirely? lisa: where you see them the most far apart? lauren: a couple of areas. the extent of green energy and never structure investing is important. that is a global thing. that is important not only to global equity but also global bond markets. another area where we see major differences is in migration and immigration. when it comes to defensive border policy spending there compared to the more traditionally balanced focused on education and educated immigrants, these are areas where we see big differences and not just approach but also the root of the policy themselves. lisa: if there are differences, how will that spill over to the economy? it will be very different in terms of the labor market. lauren: widespread increases in

immigration over the years have played a role in the health of the labor market. we are speaking strictly on economic terms as opposed to belittle terms. we looked at what with the exact opposite situation look like. let's say you had mass deportation in the u.s. we have seen good historical examples of what those policies look like. from our research, you would see a 5.7% decrease in gdp growth if such a policy were to take place. an extreme policy is difficult to carry out. that is the type of difference you are seeing in terms of labor market effects. jonathan: i can spell one thing and that is international trade and security the coming one singular ship for this administration and the previous one as well. how are you thinking about trade in the years to come? lauren: this is one of the areas where the approach toward

policies different but the policies themselves are not very different at all. the reality is that for the competitiveness of the global economy moving forward, you have to be involved in energy and in semi conductor production. there has been much focus on bringing semi conductor production back to the u.s. that is not distinct between the two presidents. the approach and the language around this changes are different and specifically with respect to trade, i would expect to see a more likely uptick in tariffs in a republican presidency as opposed to a democratic presidency but we have not seen tariffs roll back in this democratic presidency. the idea that the u.s. or u.s. allies need to be an important part of semi conductor production ahead, very complicated supply chain, that has impacted not only the political environment, but also investment. we have not seen de-globalization. it is read globalization with money being spent to make this

happen. lisa: how much how we accurately price the ramifications from that in some of the big tech players? we say this today with apple and tesla both seeing the effects of potentially both a slowdown in the chinese consumer as well as the geopolitical risks. how much is that headwind in a way that is not really being talked about enough? lauren: the reality for the magnificent seven that have been so central to semi conductor production and use in the u.s. and the global economy so far, that enthusiasm is correct. the challenge is that it is seven companies. there will be video sequence these -- idiosyncrasies that will likely cause tumoult. what cracked the whole system was not somebody failing to present earnings, it was cisco

having 6% projected growth. we can have incredibly strong companies and see evaluations move lower. the way that we balanced that from a portfolio construction perspective is to acknowledge that these companies are showing strong profitability, good quality but they are not diversified. adding a layer of small and mid cap growth companies as well as a digital infrastructure layer makes it a nice package to stave off some of those idiosyncrasies . jonathan: is this about sectors or size? is it small versus large? large multinationals will have a difficult time with the policy changes that we are starting to see. lisa: in a number of the big tech names people are pricing in no upside from china. that is not the same for apple and tesla. they are much more intricately

connected. is this the known knowns or could you get some kind of black swan event? lauren: there could always be a black swan event. jonathan: lauren goodwin in new york with life investments, thank you. here is your bloomberg brief with danny berger. dani: americans are not paying nearly as much debt as they are on mortgages. interest paid on credit cards to student loans has had an annual rate of 375 billion dollars, the highest on record. americans are paying 370 $8 billion in annual mortgage interest. nicb plunged and had more downgrades yesterday. shares dropped to a 96 low. they cut its rating and moody's

lowered there's again. n.y.c.b. has lost two thirds of its values this year. iphone shares felt when he 4% during the first several weeks of this year. apple offered a discount on the site in stores in january but fell below a 16% market share from 19% one year ago according to research. apple shares have fallen 9% since the start of the year to lose the title of the world's most valuable company to microsoft. jonathan: that stock is down 2%. is that enough liz truss today? cool. next on the program, tesla hitting the brakes. >> it is more of finding a floor in china in a place where things have been setting the country into recent months. jonathan: we are 45 minutes out

from the opening bell. session lows, negative 0.4%. this is bloomberg.

jonathan: crash opened just around the corner. equity futures on the s&p 500 lower all morning. new session lows right now. yields lower by six basis points. on the 10 year, 415.45. tesla hitting the brakes. >> all ev makers have had to learn to maintain market share is moving back and forth. i think this lies more in us finding a floor in china and in a place where things have been

in the country in recent months. jonathan: tesla falling after china shipments plunged to the lowest level in over a year according to data from china's passenger car association. shipments for the ev maker shanghai factory falling 19% year-over-year. the stock is down nearly 25%. "tesla has in the past indicated plans to eventually reach 20 million vehicle sales per year. while we can envision a scenario where it becomes a major player in the u.s., we wonder if national champions in western europe and china limit the ability." let's start with the news out of china. how real is the slowdown in the chinese market? tom: you have to take it with a pinch of salt. there were some tough cuts that happened. byd went from 200,000 units to 120,000 units.

that is not to say that growth is not slowing. we knew that. we are in a low. period between the upcoming model and the upcoming affordable car. this is a long-term story when you think about tesla. we have to look at her from that lens. there is a slowdown happening but it is not something people should be overly worried about. jonathan: i was afraid to use the term national champions. is that what we will end up with, a national champion in china, a national champion in europe and america? tom: no automaker has ever gained more than 10% market share. there's is a reason for that. it is geopolitics. for that reason we only see tesla gaining maybe five point 5 million cars per year at maturity. for it to gobble up 20 million cars per year, what happens to

gm, ford? you can see governments will step in and probably not allow that to happen. lisa: there is a real issue and tesla might have a long-term good story with respect to being a dominant auto manufacturer but maybe not as much on the valuation side when it turns out it is a car company. it is not a tech company in an exclusive way although people would like it to be. does the valuation have to be set as a result of dealing with these sort of national champions and dilute -- the applicable tensions and the ebbs and flows of natural demand for these vehicles? tom: if you think this is a car company, you should stay away from this stock. my valuation for it being a car company is only $80 billion. the price target is a $1 trillion valuation. most of my valuation is on non-car things. it is autonomy, fsd, and battery storage which is a tremendous opportunity.

we have to look at the company beyond a car business. no car company has ever been more than $200 billion anyway. you have to look at this company from a lens outside of being a car company. lisa: how many of those other subsets, autonomy, robotaxi, are hinging other places other than the united states? their efforts focus on a time where people are looking for isolation from you a little tensions. tom: my valuation is predominately on the u.s. for these things. the robotaxi market, the auto market is a $3 trillion market. if you add robotaxi autonomy, that takes shares from planes, trains, it is a bedroom with wheels, an office with wheels. lisa: backup for one second. a living room on wheels? at a certain point, isn't it the talk ends if apple is like, i am

out? tom: i don't think so. autonomy and robotaxis could be the most significant thing to happen in our lives. it will save space in our cities. how many of us know someone who has been impacted in a car crash? it eliminates that almost entirely. legislators will regulate this. their fsd product already on the road today is tremendous and we will get the version 12 that will solve a lot of the problems. even though autonomy is a long-term thing, we have steps that we will get to to get us where we think we will get. lisa: before flying living rooms, want to go back to the nationalism. in china they control everything. at what point will they really become nationalistic do they just say we are no longer exporting these batteries for every other company to make electric cars, you have to buy our car? tom: i don't think they will do that.

let's be honest, chinese exports right now are 1% or 2% of auto's in the u.s. they are dependent on selling a lot of their info structure into european and u.s. organizations. they want to build factories in mexico and sell the cars overseas. it is whether or not the u.s. will be an obstruction to their obm's purchasing those batteries. jonathan: you said something about gm, ford and the u.s. government. you said the u.s. government would not let them fail. is this a state-sponsored industry? while the government allow shareholders to take all the upside? how will that work at the government has to step in? tom: this industry has a long history of the government stepping in and supporting this industry. jonathan: tons of it. but this feels like a government

objective. not for the manufacturers to survive but the end point. they set the goal. you will need to turn to ev. this is something they are pushing and that is new. tom: it is a change but we are starting to see some language pull back on that a little bit. the u.k. pulling back on the 2030 target, going to 2035. we are hearing some talk about loosing up -- loosening up restrictions. what is their goal? they want to protect jobs no matter what. if it means loosening some of these restrictions, that is probably what they will do. jonathan: isn't that a risk factor to this consumer who is interested in hybrids? tom: that's true. we are seeing that predominantly in the u.s.. less in europe. what is the old saying, providence doesn't move in a straight line.

it leans toward justice. we are in a low period. the early adopters gobbled up the $70,000 teslas. now the mainstream market does not know what an ev is. it is an education process that will take some time. we also need ev's that will work. we will get there. data re-prices will come down. it will take some time but battery prices will come down. jonathan: coming up tomorrow, we will catch up with liz and summers, kate moore. then payrolls report on friday. from new york city this morning, good morning to you all. this was "bloomberg surveillance."

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>> from new york city, i am matt in for jonathan ferro. tech under pressure battered and bruised. the victory lap is gold, record high. now down to the open and stocks kicks in in 30 minutes. >> everything you need to get set for the start of u.s. trading. this is bloomberg the open with jonathan ferro. matt: coming up, markets on edge ahead on -- ahead of chairman powell's economic data. target delivers a beat on apple and tesla sales disappoint in china.