Trump: Putin May Be Stalling End of War | Bloomberg Businessweek Daily 10/17/2025
Summary
Geopolitical Tensions: President Trump is positioning himself as a mediator in the ongoing Russia-Ukraine conflict, with plans for bilateral meetings with President Putin and President Zelensky to potentially lay the groundwork for peace.
US-China Trade Relations: The podcast highlights ongoing US-China trade negotiations, with US Treasury Secretary Scott Bassett planning talks with China's vice premier, signaling potential progress in trade discussions.
Market Reactions: US equity markets are experiencing relief rallies, partly due to easing concerns over US-China trade tensions and better-than-expected earnings from regional banks like Zions and Western Alliance.
Credit Market Concerns: Recent credit issues in regional banks have raised questions about potential systemic risks, with a focus on private credit markets and their lack of transparency.
Housing Market Dynamics: The podcast discusses the impact of high mortgage rates on housing affordability, with a notable increase in adjustable-rate mortgages as consumers seek more affordable financing options.
Company Performance: American Express sees a surge in stock price due to strong demand for its revamped platinum card, while Oracle faces challenges in meeting AI cloud demand, impacting its stock negatively.
Pharmaceutical Pricing: President Trump's comments on reducing the cost of weight-loss drugs like Ozempic have affected pharmaceutical stocks, including Eli Lilly, reflecting the sensitivity of the market to drug pricing announcements.
Government Shutdown Impact: The ongoing US government shutdown is beginning to affect federal workers, with an increase in unemployment benefit applications, highlighting the economic implications of prolonged political stalemates.
Transcript
This is Bloomberg Businessweek Daily, reporting from the magazine that helps global leaders stay ahead with insight on the people, companies and trends shaping today's complex economy. Plus, global business, finance and tech news as it happens, Bloomberg Businessweek Daily with Carol Massar and Tim Stanek back live on Bloomberg Radio, Television, YouTube and Bloomberg Originals. All right, folks, you have been listening to President Trump in the Cabinet Room, a packed room, no doubt about it. Key members of the president's administration certainly around him. Ukrainian President Volodymyr Zelensky there as well. And they covered a range of topics. But as you can guess, front and center with the Ukrainian president in that room talking about the potential for an end to the war between Russia and Ukraine. Now, three and a half years in a very good afternoon, everybody. A busy friday afternoon. I'm Carol Massar along. A fairly lipschultz team will be back on monday. We are across, of course, bloomberg platforms. I just want to kind of touch upon some of the headlights headlights headlines, i should say. Maybe it feels like sometimes deer in the headlights for some of us in terms of Russia. Ukraine president saying he thinks President Putin will agree to peace and that Ukrainian President Zelensky will be in touch on the upcoming meeting with Putin. We know yesterday we did hear from President Trump on another meeting after a two hour phone call that he had yesterday, a plan for the two leaders to meet again. But President Trump also barely talking about this being a double meeting. So the assumption is meeting with maybe President Putin, then maybe a meeting with President Zelensky to hopefully figure out a way to end this war. Yeah, he really spoke about being the mediator of this ongoing conflict in the big question that inevitably is how do we come to a resolution? What does that actually look like? When do these conversations turn into some form of action? And I think that's the thing that'll be interesting that may or may not come from this meeting with Zelensky, just given kind of how long and drawn out this could be. And then Trump also kind of acknowledging that it does seem, at least in the Q&A portion of that, that maybe Putin is potentially trying to drag this along as long as he can. So that will be certainly something to keep an eye on. One more thing. I want to mention that in that room we did get some questions from members of the press about U.S. and China and the trade talks. As you know, markets a week ago, we saw the equity market here in the U.S. sell off on concerns about talks breaking down. U.S. Treasury Secretary Scott Bassett was in the Cabinet room. He said he will talk with China's vice premier tonight and then meet him probably a week from tomorrow. In Malaysia. We're talking about he like Fang to prepare for their two presidents to meet. So president also weighing in saying China wants to talk and that he thinks a deal will be made that is good for both sides. So a lot coming at us. We're going to dig into all of these big stories. We've also got a great read on housing amid a lack of data from the U.S. government. So all that coming your way in the next 45 minutes or so. Right now, though, I do want to head to the nation's capital, check in with Bloomberg News senior editor for Technology and Strategic Industries, Mike Sheppard. On a day where we do see stocks right now at their best levels of the session, up about 32 points on the S&P 500, 151 to the upside on the NASDAQ 100, some of that on easing concerns about US-China trade, but also maybe breathing somewhat of a sigh of relief when it comes to regional banks. Some others reported their results and they came in better than expected after some of the concerns yesterday with Zions and Western Alliance. I said there is a lot coming at us. Mike Shepherd, come on in. On what we just heard from President Trump, I got to say. An F-bomb is not something we usually get from a president, but maybe it speaks to the difficult negotiations and how long this process has been going on. But what jumped out for you in that press conference and meeting with President Zelensky of Ukraine? Well, a couple of things stood out. One is his vision for this meeting that he plans to have with Vladimir Putin at some point in the near future. We don't have a date for it, but he does not see the two warring leaders of Vladimir Putin and below him or Zelensky actually sitting down together. It would be, as you had noted at the top, a pair of bilateral meetings that Trump would orchestrate and perhaps set the two men closer on a path toward peace. It really does seem that this session today is more to lay the groundwork than anything else. And there does seem to be a bit of deal making to happen between the U.S. and Ukraine in these discussions as well. A lot of viewers, Wolinsky came prepared to talk about what his country could offer the U.S. in terms of drone production and technology. This is an area where they have innovated, really. Necessity being the mother of invention. They've really made advances in drone production and technology to be able to counter Russia since the invasion in 2022. And one of the things that he would be looking to get in return would be some more capability and permission from the U.S. to strike deeper into Russia using U.S. weapons. And those possibly could include those Tomahawk missiles. Trump was non-committal on that, and that was another thing that stood out. So these are open questions that the two leaders will be discussing now. Now that they've chased the press out on that resounding note of the F-bomb. But but we'll have to see what comes further from this meeting and whether it will last as long as the Putin call of 2 hours yesterday. And Mike, how productive can this meeting be, in your view, given, as you mentioned, maybe it's just simply to lay the groundwork and get a sense of what Ukraine can do for the U.S.? Well, it really depends on how the two leaders continue to get along. And we saw that at the beginning of the year, late February, their first get togethers after Trump returned to office ended quite badly. And it really set relations between the U.S. and Ukraine on a bit of a tailspin. And it raised questions about whether Trump might walk away altogether from the Ukrainian side and seek to somehow force them into Russia's arms to reach a peace deal that they might not want. But Ukraine and President Zelensky have really taken pains to try to meet Trump more than halfway to meet them where he is. And you saw the president complimenting the Ukrainian leader on his suit, something that came up during that first meeting in February. Right. And and so it does seem that they are reaching some sort of understanding and that'll be critical, bailly to trying to get something actually done. This interpersonal dealmaking and diplomacy is Trump's hallmark, and Zelensky recognizes that. I felt like that stood out in a big way, right, Complimenting him on the suit. And it's like Zelensky kind of got the message to, okay, this is how we play ball. Having said that, just last question, Mike. These things can change. We've seen the relationship, certainly when it comes to Russia, Ukraine, go back and forth here it is hot and cold and you really don't know what you're going to get almost from day to day and week to week. And it also is a common strand in the China relationship with the U.S. as well. A week ago today, Carol, we were talking about, well, is this meeting between Trump and she even going to happen? And what about these 100% tariffs he's threatening? And now he is saying that, look, earlier today in an interview on Fox Business, he's saying, look, I recognize the the non viability of imposing such heavy tariffs and holding out the prospect of actually following through in this meeting. So you never know what you're going to get. And it will really also depend on Vladimir Putin and whether he truly will take some steps toward reaching the bargaining table with Wolinski. At some point since the Alaska meeting, Trump has been frustrated that Putin has not shown more or done more to achieve progress in this area. And that's prompted some harsh rhetoric from the U.S. president in this regard toward Putin and toward Russia as well, to see what the fruits of today are and what happens in Hungary if that meeting comes off. All right. Lots of stuff going on. It does feel like the ball is in President Putin's court, at least at this point. But let's see how it all plays out. Michael Shepard, thank you so much. Mike Shepard, senior editor for technology and strategic Industries at Bloomberg News there in our D.C. bureau. All right, folks, we're going to stay in the nation's capital, dig a little bit deeper into the story with a voice that so understands President Putin. She's, in fact, written a book, Putin's World Russia Against the West. And with the rest, she is Angela Stent, senior fellow at the American Enterprise Institute, former national intelligence officer for Russia and Eurasia at the National Intelligence Council. And she served in the Office of Policy Planning at the U.S. Department of State. A friend of the show, she joins us on this Friday. Angela, your takeaway on what we just saw in the Cabinet room in the. White House? Well, I still think that President Trump is kind of on a high from the Israel-Gaza peace deal. He really does want to get the Nobel Peace Prize. And so he and his relationship with Zelensky, as we just heard from your correspondent, has definitely improved greatly since February. Zelensky understands exactly what he has to do to deal with President Trump. And I think the fact that Zelensky yesterday met with business folks here to talk about joint production of drones and other military material, other potential business deals, also speaks to his his focus on telling President Trump, you know, the U.S. can make money from this, too. On the other hand, you know, we know that we thought at least that the president was fairly serious about supplying Ukraine with these long range Tomahawk missiles, with which Ukraine could strike quite deeply into Russia. And President Putin intervened. He requested a phone call. He got it yesterday. So I wouldn't say we're back to square one, but we're back to a situation where President Trump, I think, still believes that he can get Putin to agree to a ceasefire and a peace deal. Angela, with that in mind, who has the most power between the three leaders and who's facing the most pressure right now? Well, I think that Putin is feeling some pressure, but I think Putin still feels that he holds quite a lot of cards. He's in no hurry to end this war. He still believes Russia can win. I think President Trump has really more and more of a hurry to end the war. And clearly President Zelensky wants to see it end because of the terrible loss of life there. I think unlike in, let's say, the Israel Gaza situation, President Trump has much less leverage over President Putin that he had, say, of Prime Minister Netanyahu and others, and even to some extent over President Zelensky, because Russia still holds a lot of cards and it can always threaten, as it does periodically, that if, say, the Tomahawk missiles were given to Ukraine, that Russia would escalate and who knows what it would do with its nuclear weapons. So Putin, I think, still feels that he holds many cards here. Well, and, you know, I think about all of the conversations Angela, we've had since this war started. Hard to believe were, what, three and a half months, three and a half years in. It's really kind of shocking. Why would President Putin want to end this war? I mean, you we've talked about this with you. I mean, this isn't just about Ukraine. These are what he believes Russia should be, you know, going back to kind of its former glory. So is there really any reason that he would want to end the war? Is there possibly economic pressures? I mean, help me out here. I mean, the economic pressure is there. The sanctions have had an impact. They'd have more impact on President Trump gave the go ahead to the Senate bill, which I think 89 senators have agreed to support bipartisan to impose more sanctions on Russia. And I think, in fact, supplying Ukraine with these Tomahawk missiles, with maybe other weapons, if Putin really believes that he cannot win on the battlefield, that he might have to think about actually sitting down and negotiating, by the way. I don't think he's ready to sit down with President Zelensky. He said the president Zelensky is an illegitimate leader, but he'll certainly sit down with President Trump. He believes he's at war with the West. So I think the incentives here are just his concern, because Trump periodically says they're going to mean much harsher measures taken and he wants to offend those if he wants to make sure that those are not imposed on Russia. Angela, can a real cease fire into this war happen if we don't see all three are really the two primary people? And I'm talking about President Zelensky and President Putin in the same room. I mean, if you look at what happened, again, it's not a perfect analogy with the Israelis and then Gaza and the other Arab countries. There weren't that many direct negotiations. And you can have intermediaries. You could theoretically have the U.S. negotiating with Russia, with Ukraine, maybe some other intermediaries, and they could agree to a cease fire. I think that the meeting between Putin and Zelensky would be more relevant if they're actually going to have a peace deal. But I think you have to understand that there could be a cease fire, an armistice without them actually working out a peace deal. I mean, as there was really after the Korean War, I mean, that's how it ended. So you couldn't you could just have the guns are silent, but you can't really get this settled. What other countries could be stepping in to help support Donald Trump in the U.S. and kind of mediating this? And what would you expect from, I don't know, the European Union or other countries. So, I mean, Turkey has been quite active, President Erdogan, in intervening. I mean, when they had the initial talks after the war broke out to try and come up with a peace agreement, Turkey was very active there because Erdogan has pretty good relations both with Russia and Ukraine. I mean, theoretically, there's China. And I think in the beginning, you know, people in the West hoped that China would do more. But China really isn't neutral in this conflict. I mean, it's been supplying Russia with the wherewithal to continue the war. I mean, theoretically, it could. I think the European Union, that's much more difficult because Putin sees the Europeans as enemies, except, of course, for Prime Minister Viktor Orban. But his problem would be as an intermediary that he's been very critical of Zelensky. I mean, theoretically, it's neutral in this war, but it isn't really. So I think Turkey, maybe China, I don't know. Saudi Arabia was involved in the beginning in trying to get the two parties together. So there may be some other countries that could be involved in helping to negotiate this. How do you think President Zelensky feels when he's in a room and President Trump does mention Mr. Orban and that he's playing a role and there's going to be a meeting in Hungary. How do you think that comes off? Is that kind of like a reminder to Zelensky, like, keep your jacket on? Right. I mean, president. It's not going to say to him publicly, I hope, as he did in February, you don't have any cards. But I think, you know, President Zelensky and the Ukrainians realized that they have limited leverage in all of this and they're doing everything they can to, you know, support the US to to give business opportunities for the U.S. to get the U.S. to understand it would be much better at this war came to an end. But obviously there's a limit to what President Zelensky can do and I'm sure he'll be viewing this meeting in Budapest with a very wary eye. And Angela, just given your experience and your focus on the topic. What happens next in your view and how long does this drag on? Well, I mean, assuming that there is this meeting in Budapest with President Putin and we haven't even talked about how he's actually going to get there, this will be his first trip to Europe since the war broke out. Most of the airspace is close to him. But assuming he does get there, I'm assuming that there will be more discussions about the possibility of various things. Putin, I'm sure, will push the settlement that he thought that Steven Whitcomb had agreed to, but apparently happening, which is that Ukraine would have to see to Russia all of the four provinces that Russia claims to have annexed, not none of which Russia fully controls. Not once Ukraine would have to give some territory to Russia in return. That would be a quote unquote, land swap. There is some land that it might get back. So I think if, in fact, if it were to agree to that or if President Trump were to say that he would pressure. Yes. WOLINSKY to agree to that, that would be a possible way of getting to a cease fire. But unless Putin moderates his conditions, and the other one is Ukraine, say, saying that it will never join NATO. It's not so clear about the European Union then then I think it would be those are still I haven't heard anything from the Kremlin where they've moderated the maximum demands, where they always say we have to get to the root causes. And the root causes are they don't want a sovereign Ukraine that's integrated with the West. What are they so worried about, just the West and supporting Ukraine going forward? Is that what it's all about? Well, they're worried about that. And what about the example? What about if you actually had a successful, prosperous, more much more democratic Ukraine next door to you and that also might give the population in Russia something to think about. President Trump, how crucial is he in all of this, in your view? Oh, I think he's very crucial. I mean, I think, you know, under the Biden administration, there were no negotiations because the Biden administration essentially only had very few contacts with Russia after the full scale invasion. So I think President Trump is a very important playing player here. And I think he's going to have to decide how much pressure he's going to bring to bear on both sides and and what the US would be willing to accept from both sides as a reasonable precondition to a cease fire. Hey, one last question, 30 seconds. Does President Putin respect President Trump? I think he does. I think he recognizes that President Trump, even if he's sometimes unpredictable, the US is still the most powerful country in the world, and it does have the ability to make life more difficult for the Russians. So I think he does. Yeah. So glad we got some time with you as we always feel that way, Angela. Be well. Have a great weekend. Angela Stent, senior fellow at the American Enterprise Institute, author of Putin's World Russia Against the West, and with the rest, joining us there from Washington. All right, folks, we are seeing stocks take a move up to their best levels of the session. So maybe some of that has to be with what feels like easing tensions on multiple fronts for check on the trading day and your top business stories, let's head to Alexis Christopher. She's in for Charlie. Alexis, hey, you are right on all fronts. Carol, thanks so much. Stocks now back near their highs of the session. Investors shaking off those credit concerns that sparked a big sell off yesterday in regional banks. So stocks are getting a boost after President Trump said the U.S. is doing well in its trade negotiations with China, adding that it looks like that meeting with President Xi Jinping is going forward. Right now, the Dow industrials up more than 300 points. The S&P 500 adding 40. We've got the Nasdaq composite at its best level, up 142. Precious metals, though, are pulling back from their recent record rallies. We've got gold down nearly 2% and silver taking it on the chin today. Spot silver is down about 6%, biggest drop in about six months. Despite a volatile week. Those stocks actually got big inflows as investors put their cash to work equity funds, drawing $28 billion. Stocks that led yesterday's sell off are rallying back today as traders bet any bad credit bets were just one offs and not a part of a bigger crisis. We've got shares of Zions Corp up to about five and a half percent right now. Best level there. Western Alliance is rallying more than 2%. And investment bank Jefferies, which was caught up in that storm for its exposure to bankrupt auto parts retailer First Brands. It is up now better than 6% after Oppenheimer raised its rating to outperform. Got to mention American Express. It is up six and a half percent. Biggest gainer in the Dow earnings topping estimates as demand for its revamped platinum card surged for on demand news 24 hours a day. Subscribe to Bloomberg News now wherever you get your podcasts. I'm Alexis Christoff for us. That's your Bloomberg Business splash. All right, Alexis, thank you so much. Well, that has certainly been one thing on our mind. Everything we just got out of the White House and you can see how at this point, as Alexis pointed out, you know, we're seeing kind of a sigh of relief in the markets. Certainly a very different Friday than what we got one week ago. Having said that, there is something that continues to be on our mind, and that is what happened with two regional banks yesterday. Global credit markets on the edge still as fresh loan blowups, a full credit risk concerns and stir kind of memories of the 2023 U.S. regional banking crisis. And so we wanted to kind of get into this safe to say all of this. Baily I just take it back to Tuesday, Jp morgan's earnings and then Jamie Dimon kind of making some comments on that earnings call. Yeah, talking badly, if you will, about at least some products in in the private credit space and certainly an area that people have been pointing to. But maybe we are finally seeing issues bubbling to the surface or at least we have seen a few. Right. And we do have to start with Zions and Western Alliance yesterday after they said that they were victims of fraud on loans to funds that invest in distressed commercial mortgages gets my hairs tingling. Let's get to what Jamie Dimon said just in case you missed it. Here's what he had to say when it came to some credit concerns. And you should assume that ever something happens. Reed Scour all process, all procedures, all underwriting all everything. And you know, we think we're okay and all this stuff. But I my my intent goes up and things like that happen. I probably shouldn't say this, but when you see one cockroach, you're probably more, you know, And so we should everyone should be forewarned in this one. Yeah. It felt like all of our spidey senses went up. That, of course, was Jamie Dimon of JPMorgan on that bank's earnings call on Tuesday. So we wanted to dig a little bit deeper into the credit picture. With us is when he Caesar global head of strategy at credit sites joining us from Charlotte, North Carolina. Winnie, good to have you here. Markets a little yesterday were a little bit on edge, to say the least. Are there lots more credit, cockroaches out there in your view? In my view. So I'm not sure that there are necessarily a lot more cockroaches out there to the level that we've seen over the past few weeks. But I will say, as someone who's focused on credit for quite some time, you can usually follow the capital to challenges. And we've seen a tremendous growth in some private asset classes, private credit being one, and it's not particularly transparent. And that makes it really difficult to assess the true credit quality, true credit health of a big part now of the credit market, when there's been so much capital and perhaps not as much time to do really robust due diligence in underwriting and winning. What industries, though, could be most exposed to that? Because when I look at tricolor and first brands showing up in the auto space, But are there broader concerns? Yeah, this is a good question and one we've been mulling over with our autos analysts trying to assess is this something that is specific to just those handful of companies in terms of having through fraud issues, through structural issues from a business operation perspective, or do we need to give bigger thought to just the amount of debt capital that's outstanding, not just for auto OEMs or suppliers, but within the personal consumer finance space within ABS? And I think that it's always important to start to poke around. Now, when we look at where capital has flowed over the past five years or so, there've been a number of sectors that have grown quite tremendously. Know, when we think back to the kind of media and telecom backstops that we've seen for the past couple of years, that has to do a lot with the fact that just a lot of capital went into those sectors kind of leading into Covid and during the COVID pandemic. And so as we're looking forward, we always are looking at technology, software, data centers. All of these things that have just seen is such a robust amount of cash put to work. It's interesting that you say data centers because that seems like an area that could not be hotter, whether it's in the private or public markets. So if there are concerns in data centers, how long does that take to show up, though, just given that a lot of these are either starting to break ground or not even there yet? Yeah, it's a really good question, especially because of just the way that a lot of the data centers have been financed. We know we have these massive hyperscalers with a lot of cash flow that you know of. One data center is eventually, you know, not particularly successful. That's probably not going to be make it or break it. And there has been a lot of diversification in terms of how data centers have been financed with the in the ABC market within the world of private credit for investment grade. So I do think it's going to take some time to really assess, you know, what is the return on investment for all of the data center, investment for all the AI investment? I don't think that we're necessarily going to have a full picture within the next three, six, 12 months. But it might be, you know, here and there we start to see some things that are a bit more challenging on the headline perspective. You know, I do wonder, though, you know, it's interesting. I was looking at Zions and it got an upgrade today, but if I go back to October 13th, Moody's came out and said the outlook remains stable. I'm just putting it out there. And then you have what we got yesterday and we're learning more about it. And then you did have an analyst come out over at Baird and said actually upgraded to outperform from neutral analysts, noting the sell off seems excessive. So I just wonder, David Georges, the analyst, I just wonder, you know, it's it's hard to keep track of all this stuff, you know, And I do wonder. There has been so much sloshing around for a while. Is there a good chance that we miss it or we don't realize that there's a problem until we're too far in? I don't want to be exclamatory, but I just, you know, great financial crisis is hard to forget. It really is. It's really hard to forget. And especially when you look specifically at credit markets and where valuations stand today. Right. Investment grade trading at very tight spreads now well below 5% yield high yields, similarly very tight spreads below 7% on a yield basis. And when you think about what compensation am I getting for credit risk, it's much lower than it once was. So even if we don't have a widespread systemic blow up like we had with Covid, like we had with the GFC, the upside downside feels a bit more skewed at this point to the downside within credit markets. That's not to say you have to sell everything. There's nothing to buy. There's definitely a good number of very high quality issuers where you can click a coupon and feel reasonably okay about things. But the reality of credit markets is when you are lending, not every deal is going to be a homerun. Not every deal is even going to be a single. Sometimes there are going to be losses. And whether, you know, we have broad based systemic fraud, I don't think that that's necessarily the case. I'm not necessarily worried about that. But when I think at just what credit valuations are paying me to tolerate right now, it feels like this view is toward the downside. Hey, one thing I'm curious, Whitney, though, you know, private markets, we didn't really they were there during the great financial crisis, but not like they are today. How does that potentially complicate things and the opacity of it like that? We just don't know what's going on. Yes, it's true. It's hard to assess truly what is going on in private markets in aggregate. Now, the good thing about private markets so far is that there is still a lot of liquidity on the sidelines within private markets. Just all of the cash that's been deployed into private credit, private markets has not actually been fully invested. Also, we know that within private markets, it's a very fragmented lender and borrower relationship. There's just a lot of different types of companies that have been lent money to and then also lenders. And so to think about is this systemic, you would need to see some sort of event that was kind of widespread enough across the private markets to really pull all of that liquidity out. And given some of the structural considerations, that makes it a little bit more difficult to say, oh my gosh, private markets, this is the next systemic thing to be really, really worried about. But are private markets necessarily going to be just an ample source of liquidity without any problems, which has kind of been the case for the past few years? I don't know that that's going to be what we expect going forward. And when you just one more question here. When I look at or think back to the kind of fears around the collapse of Sbv, the big question was how inter-related are these banks? And also how scary can a dash to either pulling money out or shorting the stocks could be kind of to the entire system. Given where we are right now, when you look at kind of the backdrop, is that a risk? Is that at the top of people's minds in terms of what could be the next chip to fall and what does that mean? Or are we not there yet? Say we're not there yet. Talking to clients within the world of credit, people have been really constructive on the banking system as a whole. You know, having come through the regional banking crisis of 2023 with definitely some issues, some banks that did not make it through, but not necessarily seeing that kind of systemic collapse. And I think also the types of issues that we've seen more recently in the banking system having some loans that have just gone very bad, that that happens in the banking system, whereas in 2023, you had a very interesting dynamic with, you know, the rise in Treasury yields and the way that bank balance sheets were constructed that actually required the Fed to step in. And so, so far, I would say that what we're seeing is just kind of bad credit due diligence, which sometimes happens within the world of banking. Hopefully it is not a widespread issue versus something that could have become much more problematic had the Fed not stepped in in 2023. All right. So glad we could get some time with you as well. Whitney Caesar, she's global head of strategy at Credit CITES, joining us from Charlotte, North Carolina. Just a quick look at the markets. S&P 500 right now up about 5/10 of 1%. So just a touch back from those intraday highs, but Nasdaq and Dow Jones up similarly, Carol, just want to call out that we are on pace for the S&P 500 on the week to close up about 1.7, 1.8%. So not quite recouping the losses from last week, but another step in the right direction, at least when you look at kind of broader headline moves. Now, out of the 11 main sectors in the green in the S&P 500, is that a fair amount of volatility on any given day? It's been choppy, it's been choppy, paying attention to true social posts on other social media, as well as comments from certain areas of the White House. Absolutely. I'm looking at S&P 500 major industry groups, too. There are 11. Nine are higher in today's session. Consumer staples, the outperformer up about one and a quarter percent. All right. We're going to stay with kind of the narrative that now includes credit concerns. And we just talked about that a lot with when he sees are over at credit sites. Curious to see what our next guest has to say. Well known in terms of understanding land acquisition, real estate, housing and more. Great to be talking again with Katie Hubbard. She's executive vice president of capital markets at Walton Global. It's a privately owned asset and real estate investment company. It's got over four and a half billion of land assets under management and administration and more than 89,000 acres of land under ownership management throughout North America, with nearly 89% located across the U.S. They are though global and they do operate the retail industrial commercial sectors. Katie, good to have you here with us. I got to start with what is now courtesy of the last 24 hours, part of our narrative, and that is some credit concerns. Those bad loans reported by Zions in Western Alliance being traced back to the bankruptcy of a commercial real estate investment firm in Southern California earlier this year. I know not apples to apples with you, but I got to guess it's on your radar. First of all, any connection with any of this And and what can you tell us about your world and credit concerns? Carolyn Bailey, thanks so much for having me. The good news is there's no connection there, but we are definitely seeing some interesting things on credit and housing. Well, we're seeing on our site is that the adjustable rate mortgage is having a renaissance and arms are up 134% year over year. And people are really able to hit that magic five and a half percent mortgage rate and that's helping them qualify for and hit that affordability metric for people with hitting sort of income limitations. So we're seeing an increase in arms, 24% of our builder clients, which, you know, just as a reminder, Walden provides land banking for public homebuilders. So we have a really unique perspective behind the curtain of what's happening in homebuilding. And 24% of people taking out a mortgage are getting an adjustable rate mortgage right now. And that is tied to the silver, which is tied to the Fed funds rate. So we're looking to see for affordability factor going forward, rates coming down for people who are looking to get an arm. But we're seeing rates coming down. But I still think there and I'm interested in your thoughts, is there still concern about a consumer being able to afford housing and how that works out, just given the, again, a concern in issues we've been seeing showing up, especially for call it the lower third consumer here in the U.S.? Yeah, there definitely is a concern about half of people versus 2016 can actually have the income to be able to afford a house today versus what we're seeing just because of the affordability factor. Like you're saying, for five months in a row, we're seeing new homes actually cheaper than existing homes. So the market has some interesting dynamics and affordability being one of them. Yeah, it's interesting because we did have, you know, some data. We've seen prices of new home sales continue to fall amid high inventories. So that dynamic in terms of home builders. Are you continuing to see some pressure or them putting, you know, having lower prices here because they're trying to bring buyers in? Definitely. So if you look at inventory across the U.S., we're sitting at 2.6 homes per community unsold. But Southern California is really feeling the effects of that. There are five homes per community unsold and their sales. September net sales and new homes are down 30% in Southern California, where other parts of the country are doing just fine, where the home prices are really flat in the Northeast and Midwest and sales are sitting on about 1.5 homes per community where seasonal average were about 1.9. So we're seeing slightly elevated inventory and that's why starts and permits are down to 1.3 million homes and we're delivering 1.6 million. But we need to really deliver more homes at more affordable prices, too, to get back to equilibrium. Well, what's driving that in Southern California? It's just it's affordability. To your point, Bailey, it's just people can't afford the homes. And so it's bringing down bringing down prices not only on homes, but also we're seeing land prices in California and even in empty locations decrease, which is really unheard of Most of the time. Land prices are going up and being seen the locations across the rest of the country. But affordability is the problem there. But is that just people who have enough money or are leaving the state is that people just aren't having enough income? Inflation is driving the pinch. I'm from Southern California, and I'm actually pretty surprised by how stark those numbers are just given. It seems like an area that is doing quite well. Broadly speaking, no. It's really just it's it's people being taxed out and wanting to, you know, sell their houses there. And they're going to Idaho, they're going to Texas, they're coming to Colorado where I'm based. And it's just they're leaving for that affordability. They can sell their house and go pay cash and have much lower taxes. And that's just leaving the builders that are building and having to offer incentives. Lennar is one of the largest builders. They build 12% of all homes across the US and they're the largest builder in most of the sub communities. They're they're over building over 50% through having to offer 14 over 14% incentives to get that inventory moving. Hey, one thing I want to ask you, we talked to you a lot and I feel like we have over the last couple of years at this point, you know, you seem to often have about four and a half billion of land assets under management. Do you guys try to keep it at that number? It doesn't seem to change much. Yeah. So we are doing off balance sheet land financing for the builders. We're giving them maximum flexibility so that they can take that land when it's development ready and when the market has the demand for the product that it's zoned for. So it does stay about that, but that's just really off balance sheet financing. So we're buying the land for the builders and then they're taking it down as they need it across the country. Well, and in the land acquisition, what are the costs that you guys are seeing? Are you seeing also those are those prices are lower than than what they've been. It is very across the country. I mean, in A and B locations with good zoning where builders can get higher density use that land is worth a lot of money if they have the utilities, the water, the political wherewithal to build there, that's, you know, that's really worth gold. But if you're holding land that has some political opposition, you don't have the water, the utilities, then you're you know, you're going to be waiting till the next cycle. Really? Yeah. It's I guess when when you look at areas, though, that are more in demand, what regions stand out? In which regions are the opposite of Southern California to that respect? Yeah, it's interesting, really. The Midwest and the Northeast are are the darlings right now where they're not having any price depreciation and people are moving there because of the affordability factor. So they're absorbing the homes they're sitting on. The homebuilders are sitting on less inventory so they feel more comfortable and confident starting homes. But on the multifamily side are multifamily starts and permits are down as well. And there are certain markets like Austin, Nashville that are just overbuilt on class-A apartments. And so and we're also going to have $180 billion floating rate cliff coming in 2026 that you're seeing starts down across multifamily as well in certain markets. But in other markets where the demand is there and and the political wherewithal to get the zoning is there, then builders are doing just fine, like in Florida right now. Actually, surprisingly, Florida has swung the pendulum the other way, where they were five homes unsold per community and now they're down to three. Interesting. We know when it comes to housing in real estate, it's location, location, geography. There's so many different variations. Net net, though, kind of how we started this conversation, not seeing any crisis out there when it comes to any signs of things, certainly within your, you know, area that shows credit problems or a possible crisis brewing. Not at all. I mean, the requirements for credit scores are much more stringent post financial crisis. And so that's really cleared out any of those issues. So we're feeling very calm now where the average FICO score is over 720, you know, for somebody buying a home. So we don't see any type of financial crisis on the credit side and home building right now. And just very quickly, how would a I don't know, IPO of Fannie and Freddie impact your view of kind of your entire industry? Yeah. I mean, we because the Trump administration wants rates to come down. We don't see that happening in the near term because if it does go public and gets out of government and we don't have that government back to guarantee, then that would definitely spike rates up even, you know, up to 1 to 1 and a quarter percent. So we think there's going to be somewhere in the middle where there's going to possibly be privatization, but still some type of an insurance. We're going to get that government backed guarantee. So in the near term, we don't think that will happen just because that would cause rates to go up, which is not what the administration wants. Terrific stuff. Katy, thank you so much. Katy Harbert, executive vice president of capital Markets at Walton Global, joining us from Denver. We do want to mention something that crossed the Bloomberg terminal. The Armor Corps, Army Corps of Engineers will be immediately pausing more than $11 billion in lower priority projects, including in New York, San Francisco, Boston and Baltimore. This is coming from White House Budget Director Russell Vote. So, again, I'm assuming the assumption is that this has to do with the shutdown. Yeah, and they're calling out projects in New York, San Francisco, Boston and Baltimore. Also saying in that post more information will come. So certainly something that folks here in New York and around the country will be keeping an eye on. Yeah, absolutely. They shut down well into its third week here. Hey, folks, a quick check on the markets for you. You've got an S&P 500 that's just off its highs of the session, so up about half a percentage point. And the Nasdaq 100 also just off its highs. We did see some move up during that press conference that President Trump held at the White House. NASDAQ 100 a gain of 7/10 of 1%. I'm Carol Massar along with bailey lipschultz. Let's get to some of the stocks on the move on this friday. Bloomberg news process. That reporter emily griffo in the house. Where do you want to start? Let's start with oracle because that's a big move that we're seeing in that stock. It's down 7% right now, ticker o, r, c l. But the stock did see its biggest intraday drop since January when it was over, down about 8% a little bit earlier in the trading day. And it's all on concerns about fulfilling a I cloud demand, which I feel like is a theme that we've been hearing, but we don't talk about it. I also love a nice 8% move on, I don't know, $820 million, $1,000,000,000 company, right? Yeah, we're talking about big changes here, about over $65 billion of market cap being erased if the losses hold into the trading day and it's coming after they gave their long range financial outlook. That actually didn't seem that bad. They said overall annual revenue would total 225 billion by fiscal 2030. But a lot of analysts on Wall Street are saying that the fact that the stock actually dropped because of this target, that they gave signals, this concern that has been brewing not just for Oracle, but a lot of these tech companies that are spending on AI and now trying to prove what they like, what they can use this money for. So, okay, again, Oracle, one of the largest companies in the world, ticker RCL. Emily, another stock on the move. I don't know if you're a credit card holder. I am a credit card holder. I don't really play the luxury credit card, you know, thousand dollar fee type. And then you have to get to Sapphire versus Chase Sapphire Center. Oh, If you book a flight to Japan, it becomes worth it, because you know what I mean. But obviously, some people are into the platinum credit card game. So American Express ticker, AXP hitting a record high today and that stock price up 7%. They raised the lower end of full year guidance. So revenue now expected to grow 9% to 10% earnings per share for the third quarter beat estimates. And the company said that the platinum premium credit card business is doing well. It's been the strongest start we've ever seen with a refresh, the CEO said the engagement for this platinum card just has exceeded the firm's expectations. Because I don't I don't have a tick tock, though. I do spend time on Instagram and I feel like any time on social media someone is promoting the Amex platinum card, because if you pay the $895, well, you can get it back with Instacart and Uber and Spotify. And then to your point, well, that one flight to Japan that you might take is partly upgraded. I don't know. It's a bit roundabout, I. You get it? You got it. I've had American Express since I was in college and kind of grown with it. What I like about it is you got to pay at the end of the month. At the end of the year. Like, I don't know. There's just a lot about it that I like. That kind of keeps you honest. And I also feel like if I've ever had a problem, they've been really full, full disclosure that they've been really good about dealing with problems. And I'm not saying the other guys aren't, but right now I will say I do. It's expensive. I have a blue one because it's good for groceries and gas. But that's so right. This is the revamped platinum card that they're currently talking about. It's just exceeding expectations. These annuals keep going, right? I don't have the fee right in front of me, but I know it's gone up from what it used to be. It's a lot. It's triple digits. Can we talk about the GLP one drugs, most notably Eli. Eli Lilly? Yes. Eli Lilly. The stock is down about 2% right now. It's been falling all day after Trump said that the price of Ozempic could come down to just $150 a month. So Eli Lilly, they don't make ozempic. That's Novo Nordisk. That stock trading in Europe was down as well. But we're seeing Eli Lilly, they have similar weight loss drug. So that news from Trump weighing on the stock as well. He said that the cost of the drug made by novo talking about it was epic will soon be quote much lower and they're going to be 150 out of pocket. Madison muller goes into the nitty gritty of how eli lilly makes money from the weightlessness. What we're doing, you know, it's like, okay, text. So read it. Read her article because it's it's not exactly clear how this affects their revenue. But nevertheless, these announcements were sinking the stock price. They are moving at lower down 2%. Always rock. Emily Griffin check out our stock movers podcast. Five minute episodes of the biggest winners and losers in the stock market. Find it on Apple, Spotify or anywhere you get your podcast. Just want to mention a headline and story. Just crossing the Bloomberg, U.S. federal workers filed the most applications for unemployment benefits since the last government shutdown. That's according to the latest Labor Department data. So a bit more than 7000 initial claims filed nationwide starting to show up, I guess. Yes, exactly. All right. For those who are watching on TV, the close is coming your way. In just a moment, we're going to talk more about those GLP one drugs. We're going to stay on just all that's coming out. Investors, you know, banks, regional banks as well, That's for sure. This is.
Trump: Putin May Be Stalling End of War | Bloomberg Businessweek Daily 10/17/2025
Summary
Transcript
This is Bloomberg Businessweek Daily, reporting from the magazine that helps global leaders stay ahead with insight on the people, companies and trends shaping today's complex economy. Plus, global business, finance and tech news as it happens, Bloomberg Businessweek Daily with Carol Massar and Tim Stanek back live on Bloomberg Radio, Television, YouTube and Bloomberg Originals. All right, folks, you have been listening to President Trump in the Cabinet Room, a packed room, no doubt about it. Key members of the president's administration certainly around him. Ukrainian President Volodymyr Zelensky there as well. And they covered a range of topics. But as you can guess, front and center with the Ukrainian president in that room talking about the potential for an end to the war between Russia and Ukraine. Now, three and a half years in a very good afternoon, everybody. A busy friday afternoon. I'm Carol Massar along. A fairly lipschultz team will be back on monday. We are across, of course, bloomberg platforms. I just want to kind of touch upon some of the headlights headlights headlines, i should say. Maybe it feels like sometimes deer in the headlights for some of us in terms of Russia. Ukraine president saying he thinks President Putin will agree to peace and that Ukrainian President Zelensky will be in touch on the upcoming meeting with Putin. We know yesterday we did hear from President Trump on another meeting after a two hour phone call that he had yesterday, a plan for the two leaders to meet again. But President Trump also barely talking about this being a double meeting. So the assumption is meeting with maybe President Putin, then maybe a meeting with President Zelensky to hopefully figure out a way to end this war. Yeah, he really spoke about being the mediator of this ongoing conflict in the big question that inevitably is how do we come to a resolution? What does that actually look like? When do these conversations turn into some form of action? And I think that's the thing that'll be interesting that may or may not come from this meeting with Zelensky, just given kind of how long and drawn out this could be. And then Trump also kind of acknowledging that it does seem, at least in the Q&A portion of that, that maybe Putin is potentially trying to drag this along as long as he can. So that will be certainly something to keep an eye on. One more thing. I want to mention that in that room we did get some questions from members of the press about U.S. and China and the trade talks. As you know, markets a week ago, we saw the equity market here in the U.S. sell off on concerns about talks breaking down. U.S. Treasury Secretary Scott Bassett was in the Cabinet room. He said he will talk with China's vice premier tonight and then meet him probably a week from tomorrow. In Malaysia. We're talking about he like Fang to prepare for their two presidents to meet. So president also weighing in saying China wants to talk and that he thinks a deal will be made that is good for both sides. So a lot coming at us. We're going to dig into all of these big stories. We've also got a great read on housing amid a lack of data from the U.S. government. So all that coming your way in the next 45 minutes or so. Right now, though, I do want to head to the nation's capital, check in with Bloomberg News senior editor for Technology and Strategic Industries, Mike Sheppard. On a day where we do see stocks right now at their best levels of the session, up about 32 points on the S&P 500, 151 to the upside on the NASDAQ 100, some of that on easing concerns about US-China trade, but also maybe breathing somewhat of a sigh of relief when it comes to regional banks. Some others reported their results and they came in better than expected after some of the concerns yesterday with Zions and Western Alliance. I said there is a lot coming at us. Mike Shepherd, come on in. On what we just heard from President Trump, I got to say. An F-bomb is not something we usually get from a president, but maybe it speaks to the difficult negotiations and how long this process has been going on. But what jumped out for you in that press conference and meeting with President Zelensky of Ukraine? Well, a couple of things stood out. One is his vision for this meeting that he plans to have with Vladimir Putin at some point in the near future. We don't have a date for it, but he does not see the two warring leaders of Vladimir Putin and below him or Zelensky actually sitting down together. It would be, as you had noted at the top, a pair of bilateral meetings that Trump would orchestrate and perhaps set the two men closer on a path toward peace. It really does seem that this session today is more to lay the groundwork than anything else. And there does seem to be a bit of deal making to happen between the U.S. and Ukraine in these discussions as well. A lot of viewers, Wolinsky came prepared to talk about what his country could offer the U.S. in terms of drone production and technology. This is an area where they have innovated, really. Necessity being the mother of invention. They've really made advances in drone production and technology to be able to counter Russia since the invasion in 2022. And one of the things that he would be looking to get in return would be some more capability and permission from the U.S. to strike deeper into Russia using U.S. weapons. And those possibly could include those Tomahawk missiles. Trump was non-committal on that, and that was another thing that stood out. So these are open questions that the two leaders will be discussing now. Now that they've chased the press out on that resounding note of the F-bomb. But but we'll have to see what comes further from this meeting and whether it will last as long as the Putin call of 2 hours yesterday. And Mike, how productive can this meeting be, in your view, given, as you mentioned, maybe it's just simply to lay the groundwork and get a sense of what Ukraine can do for the U.S.? Well, it really depends on how the two leaders continue to get along. And we saw that at the beginning of the year, late February, their first get togethers after Trump returned to office ended quite badly. And it really set relations between the U.S. and Ukraine on a bit of a tailspin. And it raised questions about whether Trump might walk away altogether from the Ukrainian side and seek to somehow force them into Russia's arms to reach a peace deal that they might not want. But Ukraine and President Zelensky have really taken pains to try to meet Trump more than halfway to meet them where he is. And you saw the president complimenting the Ukrainian leader on his suit, something that came up during that first meeting in February. Right. And and so it does seem that they are reaching some sort of understanding and that'll be critical, bailly to trying to get something actually done. This interpersonal dealmaking and diplomacy is Trump's hallmark, and Zelensky recognizes that. I felt like that stood out in a big way, right, Complimenting him on the suit. And it's like Zelensky kind of got the message to, okay, this is how we play ball. Having said that, just last question, Mike. These things can change. We've seen the relationship, certainly when it comes to Russia, Ukraine, go back and forth here it is hot and cold and you really don't know what you're going to get almost from day to day and week to week. And it also is a common strand in the China relationship with the U.S. as well. A week ago today, Carol, we were talking about, well, is this meeting between Trump and she even going to happen? And what about these 100% tariffs he's threatening? And now he is saying that, look, earlier today in an interview on Fox Business, he's saying, look, I recognize the the non viability of imposing such heavy tariffs and holding out the prospect of actually following through in this meeting. So you never know what you're going to get. And it will really also depend on Vladimir Putin and whether he truly will take some steps toward reaching the bargaining table with Wolinski. At some point since the Alaska meeting, Trump has been frustrated that Putin has not shown more or done more to achieve progress in this area. And that's prompted some harsh rhetoric from the U.S. president in this regard toward Putin and toward Russia as well, to see what the fruits of today are and what happens in Hungary if that meeting comes off. All right. Lots of stuff going on. It does feel like the ball is in President Putin's court, at least at this point. But let's see how it all plays out. Michael Shepard, thank you so much. Mike Shepard, senior editor for technology and strategic Industries at Bloomberg News there in our D.C. bureau. All right, folks, we're going to stay in the nation's capital, dig a little bit deeper into the story with a voice that so understands President Putin. She's, in fact, written a book, Putin's World Russia Against the West. And with the rest, she is Angela Stent, senior fellow at the American Enterprise Institute, former national intelligence officer for Russia and Eurasia at the National Intelligence Council. And she served in the Office of Policy Planning at the U.S. Department of State. A friend of the show, she joins us on this Friday. Angela, your takeaway on what we just saw in the Cabinet room in the. White House? Well, I still think that President Trump is kind of on a high from the Israel-Gaza peace deal. He really does want to get the Nobel Peace Prize. And so he and his relationship with Zelensky, as we just heard from your correspondent, has definitely improved greatly since February. Zelensky understands exactly what he has to do to deal with President Trump. And I think the fact that Zelensky yesterday met with business folks here to talk about joint production of drones and other military material, other potential business deals, also speaks to his his focus on telling President Trump, you know, the U.S. can make money from this, too. On the other hand, you know, we know that we thought at least that the president was fairly serious about supplying Ukraine with these long range Tomahawk missiles, with which Ukraine could strike quite deeply into Russia. And President Putin intervened. He requested a phone call. He got it yesterday. So I wouldn't say we're back to square one, but we're back to a situation where President Trump, I think, still believes that he can get Putin to agree to a ceasefire and a peace deal. Angela, with that in mind, who has the most power between the three leaders and who's facing the most pressure right now? Well, I think that Putin is feeling some pressure, but I think Putin still feels that he holds quite a lot of cards. He's in no hurry to end this war. He still believes Russia can win. I think President Trump has really more and more of a hurry to end the war. And clearly President Zelensky wants to see it end because of the terrible loss of life there. I think unlike in, let's say, the Israel Gaza situation, President Trump has much less leverage over President Putin that he had, say, of Prime Minister Netanyahu and others, and even to some extent over President Zelensky, because Russia still holds a lot of cards and it can always threaten, as it does periodically, that if, say, the Tomahawk missiles were given to Ukraine, that Russia would escalate and who knows what it would do with its nuclear weapons. So Putin, I think, still feels that he holds many cards here. Well, and, you know, I think about all of the conversations Angela, we've had since this war started. Hard to believe were, what, three and a half months, three and a half years in. It's really kind of shocking. Why would President Putin want to end this war? I mean, you we've talked about this with you. I mean, this isn't just about Ukraine. These are what he believes Russia should be, you know, going back to kind of its former glory. So is there really any reason that he would want to end the war? Is there possibly economic pressures? I mean, help me out here. I mean, the economic pressure is there. The sanctions have had an impact. They'd have more impact on President Trump gave the go ahead to the Senate bill, which I think 89 senators have agreed to support bipartisan to impose more sanctions on Russia. And I think, in fact, supplying Ukraine with these Tomahawk missiles, with maybe other weapons, if Putin really believes that he cannot win on the battlefield, that he might have to think about actually sitting down and negotiating, by the way. I don't think he's ready to sit down with President Zelensky. He said the president Zelensky is an illegitimate leader, but he'll certainly sit down with President Trump. He believes he's at war with the West. So I think the incentives here are just his concern, because Trump periodically says they're going to mean much harsher measures taken and he wants to offend those if he wants to make sure that those are not imposed on Russia. Angela, can a real cease fire into this war happen if we don't see all three are really the two primary people? And I'm talking about President Zelensky and President Putin in the same room. I mean, if you look at what happened, again, it's not a perfect analogy with the Israelis and then Gaza and the other Arab countries. There weren't that many direct negotiations. And you can have intermediaries. You could theoretically have the U.S. negotiating with Russia, with Ukraine, maybe some other intermediaries, and they could agree to a cease fire. I think that the meeting between Putin and Zelensky would be more relevant if they're actually going to have a peace deal. But I think you have to understand that there could be a cease fire, an armistice without them actually working out a peace deal. I mean, as there was really after the Korean War, I mean, that's how it ended. So you couldn't you could just have the guns are silent, but you can't really get this settled. What other countries could be stepping in to help support Donald Trump in the U.S. and kind of mediating this? And what would you expect from, I don't know, the European Union or other countries. So, I mean, Turkey has been quite active, President Erdogan, in intervening. I mean, when they had the initial talks after the war broke out to try and come up with a peace agreement, Turkey was very active there because Erdogan has pretty good relations both with Russia and Ukraine. I mean, theoretically, there's China. And I think in the beginning, you know, people in the West hoped that China would do more. But China really isn't neutral in this conflict. I mean, it's been supplying Russia with the wherewithal to continue the war. I mean, theoretically, it could. I think the European Union, that's much more difficult because Putin sees the Europeans as enemies, except, of course, for Prime Minister Viktor Orban. But his problem would be as an intermediary that he's been very critical of Zelensky. I mean, theoretically, it's neutral in this war, but it isn't really. So I think Turkey, maybe China, I don't know. Saudi Arabia was involved in the beginning in trying to get the two parties together. So there may be some other countries that could be involved in helping to negotiate this. How do you think President Zelensky feels when he's in a room and President Trump does mention Mr. Orban and that he's playing a role and there's going to be a meeting in Hungary. How do you think that comes off? Is that kind of like a reminder to Zelensky, like, keep your jacket on? Right. I mean, president. It's not going to say to him publicly, I hope, as he did in February, you don't have any cards. But I think, you know, President Zelensky and the Ukrainians realized that they have limited leverage in all of this and they're doing everything they can to, you know, support the US to to give business opportunities for the U.S. to get the U.S. to understand it would be much better at this war came to an end. But obviously there's a limit to what President Zelensky can do and I'm sure he'll be viewing this meeting in Budapest with a very wary eye. And Angela, just given your experience and your focus on the topic. What happens next in your view and how long does this drag on? Well, I mean, assuming that there is this meeting in Budapest with President Putin and we haven't even talked about how he's actually going to get there, this will be his first trip to Europe since the war broke out. Most of the airspace is close to him. But assuming he does get there, I'm assuming that there will be more discussions about the possibility of various things. Putin, I'm sure, will push the settlement that he thought that Steven Whitcomb had agreed to, but apparently happening, which is that Ukraine would have to see to Russia all of the four provinces that Russia claims to have annexed, not none of which Russia fully controls. Not once Ukraine would have to give some territory to Russia in return. That would be a quote unquote, land swap. There is some land that it might get back. So I think if, in fact, if it were to agree to that or if President Trump were to say that he would pressure. Yes. WOLINSKY to agree to that, that would be a possible way of getting to a cease fire. But unless Putin moderates his conditions, and the other one is Ukraine, say, saying that it will never join NATO. It's not so clear about the European Union then then I think it would be those are still I haven't heard anything from the Kremlin where they've moderated the maximum demands, where they always say we have to get to the root causes. And the root causes are they don't want a sovereign Ukraine that's integrated with the West. What are they so worried about, just the West and supporting Ukraine going forward? Is that what it's all about? Well, they're worried about that. And what about the example? What about if you actually had a successful, prosperous, more much more democratic Ukraine next door to you and that also might give the population in Russia something to think about. President Trump, how crucial is he in all of this, in your view? Oh, I think he's very crucial. I mean, I think, you know, under the Biden administration, there were no negotiations because the Biden administration essentially only had very few contacts with Russia after the full scale invasion. So I think President Trump is a very important playing player here. And I think he's going to have to decide how much pressure he's going to bring to bear on both sides and and what the US would be willing to accept from both sides as a reasonable precondition to a cease fire. Hey, one last question, 30 seconds. Does President Putin respect President Trump? I think he does. I think he recognizes that President Trump, even if he's sometimes unpredictable, the US is still the most powerful country in the world, and it does have the ability to make life more difficult for the Russians. So I think he does. Yeah. So glad we got some time with you as we always feel that way, Angela. Be well. Have a great weekend. Angela Stent, senior fellow at the American Enterprise Institute, author of Putin's World Russia Against the West, and with the rest, joining us there from Washington. All right, folks, we are seeing stocks take a move up to their best levels of the session. So maybe some of that has to be with what feels like easing tensions on multiple fronts for check on the trading day and your top business stories, let's head to Alexis Christopher. She's in for Charlie. Alexis, hey, you are right on all fronts. Carol, thanks so much. Stocks now back near their highs of the session. Investors shaking off those credit concerns that sparked a big sell off yesterday in regional banks. So stocks are getting a boost after President Trump said the U.S. is doing well in its trade negotiations with China, adding that it looks like that meeting with President Xi Jinping is going forward. Right now, the Dow industrials up more than 300 points. The S&P 500 adding 40. We've got the Nasdaq composite at its best level, up 142. Precious metals, though, are pulling back from their recent record rallies. We've got gold down nearly 2% and silver taking it on the chin today. Spot silver is down about 6%, biggest drop in about six months. Despite a volatile week. Those stocks actually got big inflows as investors put their cash to work equity funds, drawing $28 billion. Stocks that led yesterday's sell off are rallying back today as traders bet any bad credit bets were just one offs and not a part of a bigger crisis. We've got shares of Zions Corp up to about five and a half percent right now. Best level there. Western Alliance is rallying more than 2%. And investment bank Jefferies, which was caught up in that storm for its exposure to bankrupt auto parts retailer First Brands. It is up now better than 6% after Oppenheimer raised its rating to outperform. Got to mention American Express. It is up six and a half percent. Biggest gainer in the Dow earnings topping estimates as demand for its revamped platinum card surged for on demand news 24 hours a day. Subscribe to Bloomberg News now wherever you get your podcasts. I'm Alexis Christoff for us. That's your Bloomberg Business splash. All right, Alexis, thank you so much. Well, that has certainly been one thing on our mind. Everything we just got out of the White House and you can see how at this point, as Alexis pointed out, you know, we're seeing kind of a sigh of relief in the markets. Certainly a very different Friday than what we got one week ago. Having said that, there is something that continues to be on our mind, and that is what happened with two regional banks yesterday. Global credit markets on the edge still as fresh loan blowups, a full credit risk concerns and stir kind of memories of the 2023 U.S. regional banking crisis. And so we wanted to kind of get into this safe to say all of this. Baily I just take it back to Tuesday, Jp morgan's earnings and then Jamie Dimon kind of making some comments on that earnings call. Yeah, talking badly, if you will, about at least some products in in the private credit space and certainly an area that people have been pointing to. But maybe we are finally seeing issues bubbling to the surface or at least we have seen a few. Right. And we do have to start with Zions and Western Alliance yesterday after they said that they were victims of fraud on loans to funds that invest in distressed commercial mortgages gets my hairs tingling. Let's get to what Jamie Dimon said just in case you missed it. Here's what he had to say when it came to some credit concerns. And you should assume that ever something happens. Reed Scour all process, all procedures, all underwriting all everything. And you know, we think we're okay and all this stuff. But I my my intent goes up and things like that happen. I probably shouldn't say this, but when you see one cockroach, you're probably more, you know, And so we should everyone should be forewarned in this one. Yeah. It felt like all of our spidey senses went up. That, of course, was Jamie Dimon of JPMorgan on that bank's earnings call on Tuesday. So we wanted to dig a little bit deeper into the credit picture. With us is when he Caesar global head of strategy at credit sites joining us from Charlotte, North Carolina. Winnie, good to have you here. Markets a little yesterday were a little bit on edge, to say the least. Are there lots more credit, cockroaches out there in your view? In my view. So I'm not sure that there are necessarily a lot more cockroaches out there to the level that we've seen over the past few weeks. But I will say, as someone who's focused on credit for quite some time, you can usually follow the capital to challenges. And we've seen a tremendous growth in some private asset classes, private credit being one, and it's not particularly transparent. And that makes it really difficult to assess the true credit quality, true credit health of a big part now of the credit market, when there's been so much capital and perhaps not as much time to do really robust due diligence in underwriting and winning. What industries, though, could be most exposed to that? Because when I look at tricolor and first brands showing up in the auto space, But are there broader concerns? Yeah, this is a good question and one we've been mulling over with our autos analysts trying to assess is this something that is specific to just those handful of companies in terms of having through fraud issues, through structural issues from a business operation perspective, or do we need to give bigger thought to just the amount of debt capital that's outstanding, not just for auto OEMs or suppliers, but within the personal consumer finance space within ABS? And I think that it's always important to start to poke around. Now, when we look at where capital has flowed over the past five years or so, there've been a number of sectors that have grown quite tremendously. Know, when we think back to the kind of media and telecom backstops that we've seen for the past couple of years, that has to do a lot with the fact that just a lot of capital went into those sectors kind of leading into Covid and during the COVID pandemic. And so as we're looking forward, we always are looking at technology, software, data centers. All of these things that have just seen is such a robust amount of cash put to work. It's interesting that you say data centers because that seems like an area that could not be hotter, whether it's in the private or public markets. So if there are concerns in data centers, how long does that take to show up, though, just given that a lot of these are either starting to break ground or not even there yet? Yeah, it's a really good question, especially because of just the way that a lot of the data centers have been financed. We know we have these massive hyperscalers with a lot of cash flow that you know of. One data center is eventually, you know, not particularly successful. That's probably not going to be make it or break it. And there has been a lot of diversification in terms of how data centers have been financed with the in the ABC market within the world of private credit for investment grade. So I do think it's going to take some time to really assess, you know, what is the return on investment for all of the data center, investment for all the AI investment? I don't think that we're necessarily going to have a full picture within the next three, six, 12 months. But it might be, you know, here and there we start to see some things that are a bit more challenging on the headline perspective. You know, I do wonder, though, you know, it's interesting. I was looking at Zions and it got an upgrade today, but if I go back to October 13th, Moody's came out and said the outlook remains stable. I'm just putting it out there. And then you have what we got yesterday and we're learning more about it. And then you did have an analyst come out over at Baird and said actually upgraded to outperform from neutral analysts, noting the sell off seems excessive. So I just wonder, David Georges, the analyst, I just wonder, you know, it's it's hard to keep track of all this stuff, you know, And I do wonder. There has been so much sloshing around for a while. Is there a good chance that we miss it or we don't realize that there's a problem until we're too far in? I don't want to be exclamatory, but I just, you know, great financial crisis is hard to forget. It really is. It's really hard to forget. And especially when you look specifically at credit markets and where valuations stand today. Right. Investment grade trading at very tight spreads now well below 5% yield high yields, similarly very tight spreads below 7% on a yield basis. And when you think about what compensation am I getting for credit risk, it's much lower than it once was. So even if we don't have a widespread systemic blow up like we had with Covid, like we had with the GFC, the upside downside feels a bit more skewed at this point to the downside within credit markets. That's not to say you have to sell everything. There's nothing to buy. There's definitely a good number of very high quality issuers where you can click a coupon and feel reasonably okay about things. But the reality of credit markets is when you are lending, not every deal is going to be a homerun. Not every deal is even going to be a single. Sometimes there are going to be losses. And whether, you know, we have broad based systemic fraud, I don't think that that's necessarily the case. I'm not necessarily worried about that. But when I think at just what credit valuations are paying me to tolerate right now, it feels like this view is toward the downside. Hey, one thing I'm curious, Whitney, though, you know, private markets, we didn't really they were there during the great financial crisis, but not like they are today. How does that potentially complicate things and the opacity of it like that? We just don't know what's going on. Yes, it's true. It's hard to assess truly what is going on in private markets in aggregate. Now, the good thing about private markets so far is that there is still a lot of liquidity on the sidelines within private markets. Just all of the cash that's been deployed into private credit, private markets has not actually been fully invested. Also, we know that within private markets, it's a very fragmented lender and borrower relationship. There's just a lot of different types of companies that have been lent money to and then also lenders. And so to think about is this systemic, you would need to see some sort of event that was kind of widespread enough across the private markets to really pull all of that liquidity out. And given some of the structural considerations, that makes it a little bit more difficult to say, oh my gosh, private markets, this is the next systemic thing to be really, really worried about. But are private markets necessarily going to be just an ample source of liquidity without any problems, which has kind of been the case for the past few years? I don't know that that's going to be what we expect going forward. And when you just one more question here. When I look at or think back to the kind of fears around the collapse of Sbv, the big question was how inter-related are these banks? And also how scary can a dash to either pulling money out or shorting the stocks could be kind of to the entire system. Given where we are right now, when you look at kind of the backdrop, is that a risk? Is that at the top of people's minds in terms of what could be the next chip to fall and what does that mean? Or are we not there yet? Say we're not there yet. Talking to clients within the world of credit, people have been really constructive on the banking system as a whole. You know, having come through the regional banking crisis of 2023 with definitely some issues, some banks that did not make it through, but not necessarily seeing that kind of systemic collapse. And I think also the types of issues that we've seen more recently in the banking system having some loans that have just gone very bad, that that happens in the banking system, whereas in 2023, you had a very interesting dynamic with, you know, the rise in Treasury yields and the way that bank balance sheets were constructed that actually required the Fed to step in. And so, so far, I would say that what we're seeing is just kind of bad credit due diligence, which sometimes happens within the world of banking. Hopefully it is not a widespread issue versus something that could have become much more problematic had the Fed not stepped in in 2023. All right. So glad we could get some time with you as well. Whitney Caesar, she's global head of strategy at Credit CITES, joining us from Charlotte, North Carolina. Just a quick look at the markets. S&P 500 right now up about 5/10 of 1%. So just a touch back from those intraday highs, but Nasdaq and Dow Jones up similarly, Carol, just want to call out that we are on pace for the S&P 500 on the week to close up about 1.7, 1.8%. So not quite recouping the losses from last week, but another step in the right direction, at least when you look at kind of broader headline moves. Now, out of the 11 main sectors in the green in the S&P 500, is that a fair amount of volatility on any given day? It's been choppy, it's been choppy, paying attention to true social posts on other social media, as well as comments from certain areas of the White House. Absolutely. I'm looking at S&P 500 major industry groups, too. There are 11. Nine are higher in today's session. Consumer staples, the outperformer up about one and a quarter percent. All right. We're going to stay with kind of the narrative that now includes credit concerns. And we just talked about that a lot with when he sees are over at credit sites. Curious to see what our next guest has to say. Well known in terms of understanding land acquisition, real estate, housing and more. Great to be talking again with Katie Hubbard. She's executive vice president of capital markets at Walton Global. It's a privately owned asset and real estate investment company. It's got over four and a half billion of land assets under management and administration and more than 89,000 acres of land under ownership management throughout North America, with nearly 89% located across the U.S. They are though global and they do operate the retail industrial commercial sectors. Katie, good to have you here with us. I got to start with what is now courtesy of the last 24 hours, part of our narrative, and that is some credit concerns. Those bad loans reported by Zions in Western Alliance being traced back to the bankruptcy of a commercial real estate investment firm in Southern California earlier this year. I know not apples to apples with you, but I got to guess it's on your radar. First of all, any connection with any of this And and what can you tell us about your world and credit concerns? Carolyn Bailey, thanks so much for having me. The good news is there's no connection there, but we are definitely seeing some interesting things on credit and housing. Well, we're seeing on our site is that the adjustable rate mortgage is having a renaissance and arms are up 134% year over year. And people are really able to hit that magic five and a half percent mortgage rate and that's helping them qualify for and hit that affordability metric for people with hitting sort of income limitations. So we're seeing an increase in arms, 24% of our builder clients, which, you know, just as a reminder, Walden provides land banking for public homebuilders. So we have a really unique perspective behind the curtain of what's happening in homebuilding. And 24% of people taking out a mortgage are getting an adjustable rate mortgage right now. And that is tied to the silver, which is tied to the Fed funds rate. So we're looking to see for affordability factor going forward, rates coming down for people who are looking to get an arm. But we're seeing rates coming down. But I still think there and I'm interested in your thoughts, is there still concern about a consumer being able to afford housing and how that works out, just given the, again, a concern in issues we've been seeing showing up, especially for call it the lower third consumer here in the U.S.? Yeah, there definitely is a concern about half of people versus 2016 can actually have the income to be able to afford a house today versus what we're seeing just because of the affordability factor. Like you're saying, for five months in a row, we're seeing new homes actually cheaper than existing homes. So the market has some interesting dynamics and affordability being one of them. Yeah, it's interesting because we did have, you know, some data. We've seen prices of new home sales continue to fall amid high inventories. So that dynamic in terms of home builders. Are you continuing to see some pressure or them putting, you know, having lower prices here because they're trying to bring buyers in? Definitely. So if you look at inventory across the U.S., we're sitting at 2.6 homes per community unsold. But Southern California is really feeling the effects of that. There are five homes per community unsold and their sales. September net sales and new homes are down 30% in Southern California, where other parts of the country are doing just fine, where the home prices are really flat in the Northeast and Midwest and sales are sitting on about 1.5 homes per community where seasonal average were about 1.9. So we're seeing slightly elevated inventory and that's why starts and permits are down to 1.3 million homes and we're delivering 1.6 million. But we need to really deliver more homes at more affordable prices, too, to get back to equilibrium. Well, what's driving that in Southern California? It's just it's affordability. To your point, Bailey, it's just people can't afford the homes. And so it's bringing down bringing down prices not only on homes, but also we're seeing land prices in California and even in empty locations decrease, which is really unheard of Most of the time. Land prices are going up and being seen the locations across the rest of the country. But affordability is the problem there. But is that just people who have enough money or are leaving the state is that people just aren't having enough income? Inflation is driving the pinch. I'm from Southern California, and I'm actually pretty surprised by how stark those numbers are just given. It seems like an area that is doing quite well. Broadly speaking, no. It's really just it's it's people being taxed out and wanting to, you know, sell their houses there. And they're going to Idaho, they're going to Texas, they're coming to Colorado where I'm based. And it's just they're leaving for that affordability. They can sell their house and go pay cash and have much lower taxes. And that's just leaving the builders that are building and having to offer incentives. Lennar is one of the largest builders. They build 12% of all homes across the US and they're the largest builder in most of the sub communities. They're they're over building over 50% through having to offer 14 over 14% incentives to get that inventory moving. Hey, one thing I want to ask you, we talked to you a lot and I feel like we have over the last couple of years at this point, you know, you seem to often have about four and a half billion of land assets under management. Do you guys try to keep it at that number? It doesn't seem to change much. Yeah. So we are doing off balance sheet land financing for the builders. We're giving them maximum flexibility so that they can take that land when it's development ready and when the market has the demand for the product that it's zoned for. So it does stay about that, but that's just really off balance sheet financing. So we're buying the land for the builders and then they're taking it down as they need it across the country. Well, and in the land acquisition, what are the costs that you guys are seeing? Are you seeing also those are those prices are lower than than what they've been. It is very across the country. I mean, in A and B locations with good zoning where builders can get higher density use that land is worth a lot of money if they have the utilities, the water, the political wherewithal to build there, that's, you know, that's really worth gold. But if you're holding land that has some political opposition, you don't have the water, the utilities, then you're you know, you're going to be waiting till the next cycle. Really? Yeah. It's I guess when when you look at areas, though, that are more in demand, what regions stand out? In which regions are the opposite of Southern California to that respect? Yeah, it's interesting, really. The Midwest and the Northeast are are the darlings right now where they're not having any price depreciation and people are moving there because of the affordability factor. So they're absorbing the homes they're sitting on. The homebuilders are sitting on less inventory so they feel more comfortable and confident starting homes. But on the multifamily side are multifamily starts and permits are down as well. And there are certain markets like Austin, Nashville that are just overbuilt on class-A apartments. And so and we're also going to have $180 billion floating rate cliff coming in 2026 that you're seeing starts down across multifamily as well in certain markets. But in other markets where the demand is there and and the political wherewithal to get the zoning is there, then builders are doing just fine, like in Florida right now. Actually, surprisingly, Florida has swung the pendulum the other way, where they were five homes unsold per community and now they're down to three. Interesting. We know when it comes to housing in real estate, it's location, location, geography. There's so many different variations. Net net, though, kind of how we started this conversation, not seeing any crisis out there when it comes to any signs of things, certainly within your, you know, area that shows credit problems or a possible crisis brewing. Not at all. I mean, the requirements for credit scores are much more stringent post financial crisis. And so that's really cleared out any of those issues. So we're feeling very calm now where the average FICO score is over 720, you know, for somebody buying a home. So we don't see any type of financial crisis on the credit side and home building right now. And just very quickly, how would a I don't know, IPO of Fannie and Freddie impact your view of kind of your entire industry? Yeah. I mean, we because the Trump administration wants rates to come down. We don't see that happening in the near term because if it does go public and gets out of government and we don't have that government back to guarantee, then that would definitely spike rates up even, you know, up to 1 to 1 and a quarter percent. So we think there's going to be somewhere in the middle where there's going to possibly be privatization, but still some type of an insurance. We're going to get that government backed guarantee. So in the near term, we don't think that will happen just because that would cause rates to go up, which is not what the administration wants. Terrific stuff. Katy, thank you so much. Katy Harbert, executive vice president of capital Markets at Walton Global, joining us from Denver. We do want to mention something that crossed the Bloomberg terminal. The Armor Corps, Army Corps of Engineers will be immediately pausing more than $11 billion in lower priority projects, including in New York, San Francisco, Boston and Baltimore. This is coming from White House Budget Director Russell Vote. So, again, I'm assuming the assumption is that this has to do with the shutdown. Yeah, and they're calling out projects in New York, San Francisco, Boston and Baltimore. Also saying in that post more information will come. So certainly something that folks here in New York and around the country will be keeping an eye on. Yeah, absolutely. They shut down well into its third week here. Hey, folks, a quick check on the markets for you. You've got an S&P 500 that's just off its highs of the session, so up about half a percentage point. And the Nasdaq 100 also just off its highs. We did see some move up during that press conference that President Trump held at the White House. NASDAQ 100 a gain of 7/10 of 1%. I'm Carol Massar along with bailey lipschultz. Let's get to some of the stocks on the move on this friday. Bloomberg news process. That reporter emily griffo in the house. Where do you want to start? Let's start with oracle because that's a big move that we're seeing in that stock. It's down 7% right now, ticker o, r, c l. But the stock did see its biggest intraday drop since January when it was over, down about 8% a little bit earlier in the trading day. And it's all on concerns about fulfilling a I cloud demand, which I feel like is a theme that we've been hearing, but we don't talk about it. I also love a nice 8% move on, I don't know, $820 million, $1,000,000,000 company, right? Yeah, we're talking about big changes here, about over $65 billion of market cap being erased if the losses hold into the trading day and it's coming after they gave their long range financial outlook. That actually didn't seem that bad. They said overall annual revenue would total 225 billion by fiscal 2030. But a lot of analysts on Wall Street are saying that the fact that the stock actually dropped because of this target, that they gave signals, this concern that has been brewing not just for Oracle, but a lot of these tech companies that are spending on AI and now trying to prove what they like, what they can use this money for. So, okay, again, Oracle, one of the largest companies in the world, ticker RCL. Emily, another stock on the move. I don't know if you're a credit card holder. I am a credit card holder. I don't really play the luxury credit card, you know, thousand dollar fee type. And then you have to get to Sapphire versus Chase Sapphire Center. Oh, If you book a flight to Japan, it becomes worth it, because you know what I mean. But obviously, some people are into the platinum credit card game. So American Express ticker, AXP hitting a record high today and that stock price up 7%. They raised the lower end of full year guidance. So revenue now expected to grow 9% to 10% earnings per share for the third quarter beat estimates. And the company said that the platinum premium credit card business is doing well. It's been the strongest start we've ever seen with a refresh, the CEO said the engagement for this platinum card just has exceeded the firm's expectations. Because I don't I don't have a tick tock, though. I do spend time on Instagram and I feel like any time on social media someone is promoting the Amex platinum card, because if you pay the $895, well, you can get it back with Instacart and Uber and Spotify. And then to your point, well, that one flight to Japan that you might take is partly upgraded. I don't know. It's a bit roundabout, I. You get it? You got it. I've had American Express since I was in college and kind of grown with it. What I like about it is you got to pay at the end of the month. At the end of the year. Like, I don't know. There's just a lot about it that I like. That kind of keeps you honest. And I also feel like if I've ever had a problem, they've been really full, full disclosure that they've been really good about dealing with problems. And I'm not saying the other guys aren't, but right now I will say I do. It's expensive. I have a blue one because it's good for groceries and gas. But that's so right. This is the revamped platinum card that they're currently talking about. It's just exceeding expectations. These annuals keep going, right? I don't have the fee right in front of me, but I know it's gone up from what it used to be. It's a lot. It's triple digits. Can we talk about the GLP one drugs, most notably Eli. Eli Lilly? Yes. Eli Lilly. The stock is down about 2% right now. It's been falling all day after Trump said that the price of Ozempic could come down to just $150 a month. So Eli Lilly, they don't make ozempic. That's Novo Nordisk. That stock trading in Europe was down as well. But we're seeing Eli Lilly, they have similar weight loss drug. So that news from Trump weighing on the stock as well. He said that the cost of the drug made by novo talking about it was epic will soon be quote much lower and they're going to be 150 out of pocket. Madison muller goes into the nitty gritty of how eli lilly makes money from the weightlessness. What we're doing, you know, it's like, okay, text. So read it. Read her article because it's it's not exactly clear how this affects their revenue. But nevertheless, these announcements were sinking the stock price. They are moving at lower down 2%. Always rock. Emily Griffin check out our stock movers podcast. Five minute episodes of the biggest winners and losers in the stock market. Find it on Apple, Spotify or anywhere you get your podcast. Just want to mention a headline and story. Just crossing the Bloomberg, U.S. federal workers filed the most applications for unemployment benefits since the last government shutdown. That's according to the latest Labor Department data. So a bit more than 7000 initial claims filed nationwide starting to show up, I guess. Yes, exactly. All right. For those who are watching on TV, the close is coming your way. In just a moment, we're going to talk more about those GLP one drugs. We're going to stay on just all that's coming out. Investors, you know, banks, regional banks as well, That's for sure. This is.