Market Outlook: Stocks are fluctuating near record highs amid positive earnings reports and anticipation of an upcoming inflation print, despite the ongoing government shutdown.
Precious Metals: Gold and silver have experienced their steepest drop in years, with gold down about 5.6%, attributed to a stronger dollar making these metals more expensive for buyers.
U.S.-Argentina Economic Deal: The U.S. Treasury has signed a $20 billion economic stabilization agreement with Argentina's central bank, described as a "bridge to a better economic future" rather than a bailout, aiming to support Argentina's economy amid its financial struggles.
Corporate Earnings: Coca-Cola and 3M reported strong earnings, with Coca-Cola benefiting from high demand for its zero-sugar drinks and 3M raising its full-year outlook due to better-than-expected sales and profits.
Media Mergers: Warner Brothers Discovery is considering a sale after receiving interest from multiple parties, including Netflix and Comcast, highlighting ongoing consolidation in the media industry.
Investment Opportunities: Despite market volatility, there are opportunities in undervalued assets in Europe and Japan, with Japan experiencing a surge in private equity deals that could unlock significant shareholder value.
AI and Market Dynamics: The AI sector is viewed as overheated, with concerns about potential misallocation of capital, while Airbnb's cautious approach to integrating AI tools reflects ongoing technological uncertainties.
Government and Economic Policy: The U.S. government shutdown continues to pose risks, with potential economic disruptions if prolonged, while bipartisan support exists for initiatives like employee ownership and housing supply improvements.
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 Stan event live on Bloomberg Radio, Television, YouTube and Bloomberg Originals. And a very good afternoon, everyone. Yes, indeed. This is Bloomberg Businessweek daily Carol Massar along with tim stanwick live here at bloomberg headquarters. We do have stocks bouncing around a little bit, but tim, they have been hovering near record again amid mostly positive earnings and an expected hope for an inflation print on friday. Yes, even though the government is shut down. Also, gold and silver posting their steepest drop in years. We have more on the trade in just a minute. And a reminder, Carol, we got some big earnings, too, after the bell. Yeah, let's just bring up some boards real quickly, because gold, we definitely have seen some big moves in today's session. I think we see gold, as you can see, down about 5.6%. Same thing. We've seen silver pulling back. We know that this has been a rather dramatic trade for some time. So we're going to dig into all of these market factors throughout the next 60 minutes. We'll also get into the U.S. assist for Argentina. Why? Why now? What might it really be all about? We've got a great voice on that. Our own Erik Schatzker settling in here in our studio. Plus, as I mentioned, lots of earnings happening after the close. Netflix is the big one. Reporting results amid a changing media landscape that includes Warner Brothers Discovery shopping itself around. Bloomberg's Luca Shaw is going to be joining us fresh off that conversation just a couple of weeks ago with Netflix co-CEO Greg Peters. And yeah, they talked about the potential for making a deal. All right. And we're also going to get into working towards financial security to create an inclusive economy. All of that coming your way over the next hour. Bloomberg Businessweek Deli. Let's kick it off with a check on the trade. Here is Alexis Pistorius. Busy day. Guys, thanks very much. You and all the major averages hovering near their record highs, but the Dow Jones Industrial Average really adding to yesterday's big bounce up now about 300 points. The broader market, S&P 500, it's up about ten. The Nasdaq composite has been bouncing in and out of the green, now down about nine points. We've been mentioning mentioning it all day. But gold is getting knocked down after going on that spectacular record run. It is down now about five and a half percent. Biggest one day drop in about 12 years. We've got the stronger dollar making gold and other precious metals more expensive for buyers. Coca-Cola's earnings beat the street share is bubbling up now about 4%. It's helping to lead the Dow higher as well. Coke reporting strong demand for a zero sugar drink. It's also set to launch its cane sugar trademark soda here in the U.S. this fall. And it's going to start offering many seven and a half ounce single serve cans priced at less than two bucks to target target lower income consumers. We've got shares of three M hitting a four year high today as the parent of Post-it notes and Scotch tape posts, better than expected quarterly sales and profits. It also increased its full year outlook shares of three up 6% and Netflix near the flat line here ahead of its earnings report due out after the closing bell. Results expected to get a boost from advertising revenue and the K-Pop animated movie K-Pop Demon Hunters. Oh, by the way, Netflix is reportedly among the companies interested in buying some or all of Warner Brothers studios told me it was a busy day for on demand news 24 hours a day. Subscribe to Bloomberg News now wherever you get your podcasts. I'm Alexis Christofferson. That's your Bloomberg Business Flash. Send it back over to Carol and Tim. All right, Alexis in for Charlie Pellet. Yep. Alexis is right. It's a busy day. I kind of don't know where to start. Oh, actually, we didn't know where to start. We wanted to talk about what is going on between the U.S. and Argentina. We did mention that Argentina's peso weakened to our fresh record, and Bonds gave back most of their gains as U.S. Treasury Secretary Scott Benson's latest boost to the nation proved short lived. The US Treasury signed an economic stabilization agreement with the Central Bank of Argentina, again coming from the Treasury secretary, Scott Best, and he put that post out on him. The Secretary characterized the Treasury's $20 billion swap line with the crisis prone nations central bank as a, quote, economic stabilization deal. He said the agreement is, quote, a bridge to a better economic future for Argentina, not a bailout. We had a lot of questions, Carol, and one voice we wanted to get on the program today. He has no idea. But we were like, now we're going to talk to Eric. We need to talk to Eric Erik Schatzker is here. We are talking about his Bloomberg New Economy editorial director. He's covered numerous global financial markets, cycles and crises. He's interviewed various Latin American leaders, including Venezuelan President Maduro, former Argentinian President Mauricio Macri. Hopefully I'm saying it correctly. I'm probably I'm not. He also had a September cover story on Secretary Bessant from Bloomberg Businessweek. You are the voice. We wanted to talk to you. Thank you for having me. No, I speak the truth. We speak the truth. Why is this happening? And why Argentina? Why does the U.S. want to do this? Well, so there's I think we can unpack this in three ways. One is, why is the U.S. doing this? The second is, what exactly have we got here? And the third would be how might it all and perhaps in tears. I'll I'll take on the why. And this actually goes back to that story you mentioned that I did about Scott Bastian, the treasury secretary for Bloomberg Businessweek in September. I spoke to the treasury secretary back in late July. And at the time he told me that one of his overarching goals in office as the secretary of the Treasury was to, quote unquote, lock in dollar supremacy. And I asked him, well, how do you do that? And he said, and I didn't appreciate the significance of it at the time, was by facilitating swaps through the Treasury Department as opposed to the way that swaps have traditionally been facilitated, which is by the Fed from central Bank, the central bank. Now, there is precedent for this. The Treasury Department did that from Mexico back in the mid-nineties during the peso crisis, and it helped. And maybe it'll help Argentina, but it appears that under the Trump administration. The government's focus is on again, cuts to the Y. It's not just about locking in dollar supremacy. It's using the dollar as an economic tool to support countries with which the United States feel it has some kind of ideological kinship or some kind of trading relationship. It's not like Argentina has been one of America's major trading partners. It has not. The amount of bilateral trade that goes on between those two countries is a fraction of what it is with the United States and Mexico, where the United States and Canada or even the United States and Europe. So in that respect, it's unusual. I think if you think about it, though, in terms of locking in dollar supremacy and using the dollar as an economic tool and a tool of geo strategy, if you will, it begins to make a little more sense. You said that there are three different elements that we could we could talk about with this. One is how another one is how this could end. Well, let's talk about the what is it that we're actually talking about here? You mentioned that the treasury secretary today talked about it as a bridge to a better economic future and not a bailout and not a bailout. But the operative word there is bridge, because bridge means something from here to there. In other words, what's the there? This is a bridge. Until when? Right? Is it a bridge until after Argentina's midterm elections on the 26th of this month, Sunday is it? And Trump seemed to suggest as much the other day when he said, well, you know, if Malay doesn't win, we'll get rid of the swap line. So that's one possibility. Is it a bridge until Argentina decides to abandon the peso peg, which starts in Asia? The Minister for Deregulation and State Trends Transformation said was in the cards just last week when I interviewed him here in New York. Is it a is is it a bridge until the $20 billion runs out, which might happen because Argentina was burning through a billion and a half dollars with a foreign currency reserves a week, a billion and a half a week before the swap plan was put in place. Is it until Argentina's economy can eventually support an exchange rate at this level? It certainly can't right now. Or maybe is it a bridge until I don't know, President Trump just loses patience or President Melaye does something to annoy him. It's got to be any of those. It's a lot of questions. It's a lot of like possible scenarios. You know, Bloomberg report out yesterday that Jamie Dimon is visiting Argentina this week, kind of an unprecedented show of support for the government at the mean at the same time we've had I think it's the Wall Street Journal reporting that banks are having a hard time kind of getting around this without some kind of guarantees. Nobody knows. Nobody knows what Argentina is pledging as collateral. In fact, nobody has seen the agreement. To our knowledge, the banks themselves, which are playing intermediary roles here, don't know what Argentina has agreed to pledge, you know, so that the United States isn't just on the unlimited losing end of a bad trade. And that is possible here. Right. The big difference between what's going on here and the comparison that everybody wants to make with the trade that broke the Bank of England that the Treasury secretary was involved in when he worked for George Soros and Stan Druckenmiller back in the early 1990s. The big difference here is that then the UK had nobody backstopping them. Now Argentina has the United States back it, backstopping it. But as I say, nobody knows until when. Nobody knows if there are any mechanisms that have been put in place to make the U.S. taxpayer, if you will, hold should the Treasury Department sustain losses on this trade. I've heard that Argentina's uranium reserves may be involved, that some kind of preferential access to Argentine markets might be involved. Who knows? It's just it's it's like it's like a ready, aim fire. You know what? We're we're a fire, you know, ready, aim in the sense that the swap plan was put in place. And then it appears, since no document has surfaced yet, that all of the mechanics behind it are being taken care of after the fact. I don't know. But my point is that if anybody knows he or she hasn't thought it was meant to say, hey, I know. Yeah. The treasury secretary, as you mentioned, described this as a bridge to a better economic future for Argentina, not a bailout. Is the not a bailout part a fair way to describe it? In your view, is this not a bailout? I think a bailout is in the eye of the beholder. In some respects. It's unquestionably a gift to President Melaye ahead of these midterm elections. It isn't working for the time being. Right. The peso fresh weakened today to a fresh low and Argentine bonds which had gained earlier on the formal announcement of this agreement, have since given up those gains and I think are posting losses. So it would appear to. Be a gift in the sense that the peso exchange rate or the peg to the dollar is unsustainable. Melaye doesn't want to allow the peso to float freely. He wants to maintain this peg so that Argentine inflation is under control. A critical, critical economic consideration going into the midterms. So even if Argentina, it's like there's no question of the peso peg or to be abandoned today. It's not like inflation would. Inflation would show up immediately, but it wouldn't show up in official statistics. Excuse me for some time to come. But Argentines are so conditioned to this, right? They know what would happen. Again, I want to go back to you and I know we've got a couple more minutes here, but Eric, the US involvement and again, it may be a relationship President Trump wants to have with the president of Argentina. But I mean, Bloomberg editors wrote an opinion piece, Why isn't the IMF coming in here? And the other question we as a group have been trying to figure out, is it also to kind of keep China at bay? Is there that aspect as well? Argentina also has an existing $18 billion currency swap with China that goes back well before starts. And Edgar was the central bank governor. I think it may go back to 2015 and perhaps even before that. There has been some talk that one of the conditions behind or at least one of the underlying conditions to the swap with the Treasury would be that Argentina somehow winds up that previous swap agreement with the Chinese. Who knows? As far as why the IMF isn't involved, I think the easy answer to that question is how many months, what to take the IMF to get its act together. This was something that this was a perceived need on the part of the Argentine government, the Malay government, heading into these critical midterm elections that I'll repeat are just five days away. Sunday, Right? Right. Yeah. There's no way there's no conceivable way that the IMF, in my mind, given everything that we've observed in our careers and everything we know that precedes that, there's no way that it could possibly acted without much haste. So before we let you go, how could this end? What could it mean for the U.S. if it's a bad trade? Well, if it's a bad trade, it could. I find it hard to believe that the United States would put itself in a position to ultimately lose money, but it may lose money on paper and have to recover that money just like somebody who has left been left holding the bag on a bad debt by liquidating some kind of Argentine assets or somehow, you know, turning preferential access into Argentine assets or Argentine markets into value over time, that wouldn't look good. And again, it all depends on how long this bridge is. We have seen in the credit markets that you can paper things over for an awfully long time before either things reflate and you're able to cash out at par or you have to ultimately take some losses. So it's not like that's necessarily going to happen next week. It's not like it's necessarily going to happen next month or next quarter, even next year. But if Belaid doesn't succeed and if the Argentine economy doesn't continue to revive and inflation doesn't remain under control, it's hard to see how the speculative pressure against the peso won't continue. And we may even see I don't know. We can only speculate here that $20 billion may not end up being enough. All right. We just got schooled by Erik Schatzker In a good way. In a good way. Thank you so much, Eric. Pleasure. So appreciate it. It's what we needed to know. Bloomberg New Economy Editorial Director Erik Schatzker Quick headline Crossing the Bloomberg Walmart shares just down about 4/10 of a percent. This as the giant retailer pausing job offers to candidates requiring H1-B visas. So we're going to follow this and monitor it. You can read more about it. It's on the Bloomberg. Hey, let's shift gears a little bit and talk about geopolitics, about U.S. earnings, also about what's happening here with the U.S. economy. I spend the movement to resolve the geopolitical conflicts, gold and silver dropping, perhaps movement in Europe and Ukraine toward a 12 point plan to end Russia's war and more. Here with the risk factors coming out financial markets right now is Ben Inker, co-head of asset allocation and portfolio manager of the GMO Dynamic Allocation ETF, GMO, along with us from Boston. With all of us coming out of what matters, what is top of mind for you? Ben We're just off of that conversation with Erik Schatzker about Argentina. There's a lot coming out investors right now. And pretty volatile. They have been jumpy. Even though where we are near records and there's a lot of uncertainty about what's going on in the world. What we are trying to focus on when we're talking to our clients is there still are a bunch of interestingly cheap assets out there which are not priced for, you know, perfect, perfect outcomes. So even though there's a lot to be worried about, there's a lot of stuff we find really interesting and are talking to our clients about getting invested in. All right. Not so fast. I'm not going to go to the good stuff yet because we just came off, you know, an important conversation about Argentina. Does that matter to you guys? Are you talking about it? Are you concerned about that? Let's just go there. I kind of want to go through a laundry list. Matter not are not so important. I mean, Argentina matters a lot to Argentina. Unfortunately, it doesn't matter that much to the rest of the world. Right. Argentina has, you know, staggered from crisis to crisis for most of the last century. They're in another one. It's a difficult situation. I am somewhat sympathetic to what Malaysia has been trying to do, but the mechanism by which he's trying to do it, which is fixing his currency at an overvalued level, that it's really hard for that to end well, no matter who you've got on your side, it's really hard for that to end well. I don't think the world will fall to pieces if Argentina finds itself in another debt crisis because, my God, they have spent more time in debt crises than they have outside of. All right, speaking of debt crisis, there are some worried about the US debt fiscal position and we've got a government shutdown. Jamie Dimon saying, you know, hey, it's never good when a government is shut down. Government shutdown a problem in your view? It's certainly not great. And the longer it goes on, the more problems it creates. There are you know, if this goes on further and people more and more people are not getting checks, whether those are direct government employees or people, depending on on some of the payments that are going to get stopped soon, that is a problem for the economy. There are things that need the the government's participation to happen kind of ideas and M&A and stuff like that. So you don't want it to go on for longer than it absolutely has to? I would say the concern is it's not clear how this one ends. It's not clear that either side has any has has shown any interest in budging. So fingers crossed that we can end this relatively soon. But it it isn't a problem the first day the government shuts down, but as it goes longer, it creates more problems for those keeping track. It is day 21 of the government shutdown right now. Ben, I told you we had a long list that investors are dealing with right now. We have a long list for you. We think about the I spend quite a bit. We start shares of alphabet fall today just on news that open Air is teasing a new browser that is AI enabled. We expect to get some details on that a little later today. The air bubble or what some say is an air bubble. I know you think it's an air bubble. Why should we be concerned? Well, I mean, there's a couple of reasons to be concerned. One is the companies have gotten to be a very big piece of the of the U.S. stock market. And if they fall, that's that's a lot of wealth lost. I would say kind of the bigger concern for the economy is the aggregate I spend in the data centers and the energy behind them. And all of that is getting to be meaningful across the economy. And there's sort of two levels of concern. One is, is this a misallocation of capital? Are there going to be significant losses? Because, you know, we are building data centers that are not going to get used or what happens if this does stop? I mean, the nice thing when data centers are being built by the likes of Alphabet and Amazon and Microsoft is they're not really doing it out of debt. They're doing it out of cash flow. So they're not in danger themselves from the misallocation of capital. But the economy has a lot riding on this continuing, and we do think it's gotten somewhat overheated. And some of the deals that that one hears about are kind of weirdly in disturbingly circular and suggest that maybe not even all the demand that appears to be there is real. Yeah. Yeah, certainly. Something we've been talking about a lot. I want to switch gears to what we see in gold and silver today. Seeing their steepest sell off in years. Investors locking in profits. Concerns at the recent historic rally in the precious metals left them overvalued. That's hour right through on the Bloomberg terminal. When you look at gold and silver, when you look at some of the different moves in asset classes, I don't know. What is it telling you? Is all of our all of these moves making sense to you based on the fundamental backdrops? Well, I certainly think that gold and silver kind of had every right to fall sharply after how sharply they rose. I mean, gold in particular, is a very speculative asset. Right? It's very hard to come up with this fair value for gold. It doesn't have cash flows associated with it. People buy it in the hopes it will go up or they buy it in the fear that other things will go down. And it has in recent months gone up in an unsustainably fast way. Maybe there's some short squeeze aspects of it. And I don't know whether, you know, Diwali has caused some demand to fall off at a time where there is there is some selling pressure. But when you have a market that becomes as manic as the precious metals market has been, it's going to be volatile and there's going to be two way volatility. And the thing about an asset that doesn't have a definable fair value is, man, it can fall a lot if it wants to. The assumption that gold is a long store is a long term store of value. Maybe that's true over 100 years, but if you are hoping your gold will be worth the same next year as it was this year, it's a much more volatile asset than anything you could. You'd really want to put those kinds of short term hopes up. So, Ben, given everything that we've spoken to you about in more. The question of asset allocation comes up in how investors should be positioning themselves in this environment. You're co-head of asset allocation at GMO and look at asset allocation. That's obviously personal and depends on where people are in life. But but big picture, given that you think we're in some sort of bubble with A.I., you're not necessarily buying the gold story. How should people be positioning themselves right now? Well, look, if there is an air bubble going on, one nice thing is that is largely a U.S. phenomenon. And Europe and Japan and most of the rest of the world, they just don't have the air plays that's hurt them in relative performance the last few years. But it does mean that if the air bubble bursts, you don't have a lot to lose. We see a lot of good value in in Europe. We see good value in Japan. And the other thing going on in Japan that is really spectacular is a revolution in the market for corporate control. There have been more deals in the first nine months in Japan, private equity type deals, merger deals than we have ever seen in a similar period. And that has the potential to unlock huge amounts of value for shareholders. So we really are fascinated by and excited about the prospects in both the public and private markets for Japan. And there's a lot of really cheap stock still in Europe and we think the European economy has less at stake in the AI game. So I am sure everybody listening to this has, you know, has has the money in the stocks as it is. But diversifying some into some of the cheaper stocks in Europe and some of the really interesting things in Japan, particularly Japanese small caps, there's really good potential for returns in both places. All right. Got to run covered a lot, Ben. Thank you. Ben anchor, co-head of asset allocation, portfolio manager of the GMO Dynamic Allocation ETF over at GMO. Hey, Valens crossed the Bloomberg summit lines crossed the Bloomberg terminal. Apple's effort to reinvent the iPad by adding a giant foldable screen has hit a development hurdles potentially delaying the planned launch. This according to a report by Mark Gurman. The stock briefly did take a little bit of a dip. It's recovered Apple shares up right now by about half a percentage point. All right, back to the markets we go. We do have stocks across the board higher on this Tuesday. But let's get a breakdown of what exactly is going on. For that, we toss things back over to Alexis. Christopher's in for Charlie. Hey, Alexis. Thanks, Carol. 224 on Wall Street and stocks are mostly higher amid this flood of earnings reports. The Dow Jones Industrial Average adding to yesterday's big rally gaining 313 points. The S&P 500 is up ten, but the Nasdaq composite slipping 14. Yields are lower. The ten year yield below 4% now at 3.95%. The two year yield down to 3.45%. And gold has been a big topic today, down about five and a half percent. Biggest drop in about 12 years as investors start to lock in some profits after that record run up. Wal-Mart has paused offers to candidates requiring H-1B visas. That's according to people familiar with the matter. It's the latest example of how the Trump administration's $100,000 visa fees are disrupting the workforce. General Motors having a great day. Stock is up better than 15%, helping to lead the Dow higher after third quarter earnings and revenue topped estimates. The automaker also raised its guidance and reduced its expected impact from tariffs this year. And what a week for Beyond Meat after soaring 127% yesterday, it's up another 87% today. That's after Roundhill investments added beyond meat to its Roundhill meme stock ETF Beyond Meat, also announcing a deal today with Walmart to expand distribution to more stores across the U.S. for on demand news 24 hours a day. Subscribe to Bloomberg news now wherever you get your podcasts. I'm Alexis Christophe. That's the Bloomberg business flashback to Carol and Tim. All right, Alexis, thanks so much. Bloomberg Misses Bloomberg's Lucas Shaw and team have been on the Warner Brothers Discovery story for a while now. The latest reporting has Warner Brothers shares soaring as we speak. That stock was it up about 10%, Tim? Yeah, it's up 9.6% as we speak. All right. So a big kick to the upside. Here's what's going on. This is after the company came out and said it's considering a possible sale after receiving unsolicited interest from multiple parties. Netflix and Comcast are among those weighing bids for parts of the media and entertainment company, according to people with knowledge of the matter. So it made us say, wait a minute, because did you forget Netflix co-CEO Greg Peters caught up with Bloomberg's own Luca shot at Bloomberg Screen Time just earlier this month. Check it out. There've been some reports around you guys being interested in Warner Brothers Discovery. Is there any truth to that? I would say this. You know, we come from a deep heritage of being builders rather than buyers. I also think that it's, you know, one should have a reasonable amount of skepticism around big media mergers. They don't have an amazing track record over, you know, the history of time. So, you know, I would say it's our also it's our responsibility to evaluate all our options. There's Netflix co-CEO Greg Peters with Bloomberg's Lucas Schott Bloomberg Screen Time. That was back on October eight, less than two weeks ago. Let's go to Bloomberg. News bureau in L.A. right now. And to Bloomberg News, a managing editor for Media Entertainment, Lucas Shaw. He's the force behind Bloomberg's screen time and writer of the Screen Time newsletter. Lucas, I don't know. I was listening to that conversation live when you were doing it with Greg Peters, and it sounded like the builders, not buyers part. Really stuck out to me and talking about the history of mergers that have gone sour in the industry. But it sounds like, at least according to your reporting along with Kelsey, that they could be in the in the game for it. Well, I think the Build not buy is still the Netflix mantra. It's a company that has avoided doing major M&A throughout its entire history. Some of that informed by co-founder Reed Hastings experience at his prior company, a software company where that kind of grew through a lot of mergers and it didn't end very well for him or for the company. But they do take a look at everything. They study it, they run the data. And I think Greg Peters colleague, co-CEO Ted Sarandos, has always been kind of enamored of studios and lots and if they could get their hands on Warner Brothers, the studio, and perhaps more importantly, the characters and IP that Warner Brothers owns and that HBO owns, that's something that Netflix would be very interested in. They have no interest in the cable networks like TNT, TBS, CNN. I don't even think they have very much interest in the HBO streaming service because they can just feed the content into Netflix. So if there is a way to do a deal that gets them what they want without the stuff they don't want, they're open to it. But my read on the situation, even though we have reported that Netflix and Comcast are interested, which is true, is that you've got one very clear interested party in Paramount and you have the Warner Brothers Discovery wanting to either get a better offer from them or find someone else or have more leverage in these conversations. And so they're basically saying, that's it, we're for sale, come and make an offer. And they want to get as many people in the tent as possible so they have as much leverage as possible. All right. So Lucas, Warner Brothers, as you said, rebuffed Paramount Skydance's initial takeover around $20 a share for being too low, according to those familiar. So is this still alive deal? Are we expecting Paramount's guidance to come back? Yeah, definitely. It is still alive. Deal. There are still conversations happening. I think there have been reports that Paramount has made several offers. They are very clearly exploring how best to proceed. Do they need partners? Do they need to be hostile and go public with it? You know, what is the number at which the Warner Brothers Discovery Board has to say yes, even if management doesn't want to do the Paramount deal, because it would likely lead to their dismissal. But I would not expect Paramount skydance's to to walk away just because they're in kind of soliciting other bids. Is it plausible for us to think that Warner Brothers Discovery could remain an independent company when the dust settles, that no deal could be done? It's looking increasingly unlikely. I think it is possible that they'd go through with the split and do a deal after that or come up with some arrangement in which there is still a split. But one piece goes to one of these buyers, but it's not feeling because they're already going to split the company. So I think, you know, a year from now, 18 months from now, the odds of Warner Brothers Discovery being a whole and independent company are incredibly unlikely. But what exact shape it takes, we don't know yet. So let's play out the Netflix part of this a little more, Lucas, because I'm intrigued with the idea of Netflix actually getting the studio, but not being interested necessarily in the legacy TV networks that that are part of Warner Brothers Discovery. What would what would happen to that legacy side of the business if the studio were to get sold to Netflix or another buyer? Well, it's hard to know because we I don't think they're progressed enough in those talks for me to have the answer. But look, Warner Brothers Discovery was already going to spin off its TV networks. It can continue to do that, right? It can say, okay, that studio and streaming business that was going to be one part of kind of one entity going forward that can go to Netflix and it's up to Netflix where they can negotiate how the HBO network fits into that or the HBO streaming service fits into that, or they can find another buyer for that, right? If if they've come to an agreement, if they feel like Netflix has made a great offer for just the studio and the lot and maybe some of the HBO programming, maybe they can take the rest of that and package it up and where where Comcast, which is spinning out and Versant, which is its cable networks, is interested. Maybe those two can come together. Now, once you're dealing with the SpinCo, it gets very complicated for tax reasons about what you can and can't do, because one of the reasons they choose to spin is to save money on taxes. But there is a lot I think they are trying to project optionality here. Well, for Warner Brothers Discovery, I'm assuming they want to get as much as they can for all of their assets. Can they do that by breaking it apart? Is that really the smartest route but maybe more complicated versus just getting rid of the company in one full shot? Well, they clearly think that there is more value in the parts than they're getting value that in the hole right now. That's one of the reasons if they're doing the split spin, however you want to talk about it, because they think the parts are worth more than the whole is currently being valued. So, yes, I think they feel like they could sell the studios in streaming for as almost as much as the whole company is trading at right now. The real question would be if you do that, is there is there actual value in the cable networks that are left over, which, you know, I guess we'll find out. They're certainly not going to be as frothy and market for those as there would be for for studio and streaming people who work there certainly hope there's value. Just real quickly, is there a clock ticking on this or could this drag on for a little bit longer? It could drag on. I spoke to an investor earlier today who would be said they'd be surprised if they saw this resolved this year. I you know, I don't know if that's the case, but they have they have opened up a process. You think back about how long the Paramount's guidance process ended up taking. It was, you know, a year before there was a deal and then another year for it to actually go through. So I would imagine, you know, we've got, at a minimum, a few months left. Okay. Netflix happening now happening after the bell. We'll hear about their latest quarter and the upcoming current quarter that we're in right now. K-Pop demon hunter certainly going to be a star of the call. What else do we need to understand about today's report? I mean, Netflix earnings, especially now that they don't report subscriber numbers, are a little less interesting than they used to be. It's a company that has been very steady. Investors tend to want fireworks. They want huge beats. And Netflix sometimes delivers that, but most often they do, Especially recently. I feel like they've delivered sort of modest beats. You know, most people expect them to post pretty good results. They had the movie the summer. They've had a steady stream of new programming. And Netflix has told us all along that their programming in the back half of the year is much better than in the first half. The question with earnings is always expectations, right? The street expectations for the company are already really high, so even if the numbers are pretty solid, they might not live up to what investors want or expect. 20 seconds, Lucas. Does anybody really care now that there's like the Warner Brothers dive? Is that what they don't really care? Because, you know, look, Netflix is a $500 billion company said its results matter. All right. So appreciate it. Lucas Shaw, thank you so much. Bloomberg News managing editor of Media and Entertainment. Also, the force, as we said earlier, behind Bloomberg's screen time. I do want to mention some headlines crossing the Bloomberg terminal. This coming from Senate Majority Leader Thune speaking to reporters at the White House just moments ago. He said he's hopeful this will this will be the week the shutdown, the US government shutdown ends. He says they are planning another vote on the stopgap bill tomorrow. So that, of course, goes on. We are getting ready to enter what, our fourth week? Yeah, this is this is day 21 of the shutdown. Meantime, markets mixed right now. The S&P 500 up close to 2/10 of 1%. The Nasdaq composite down just shy of 1/10 of 1%. The Dow up to the upside of 300 points. It's 7/10 of 1% higher. When we come back, we're going to get into what and who is an economy for that one. Bloomberg Businessweek Daily continues on this Tuesday. It's 240 on Wall Street. I'm Alexis Christoph for us. And the Dow Jones Industrial Average hitting an intraday record on the back of strong earnings from Coca-Cola. And three and we've got the Dow up now 284 points. It briefly crossed 47,000 just a short time ago. The broader market is mixed with the S&P 500 up nearly eight. NASDAQ composite, though, is down 17. And gold and silver seeing their steepest sell off in years as investors lock in profits over concerns at that recent historic rally in the precious metals left them overvalued. Spot gold now down more than 5%. Right now we have got gold still up 60%, though, so far this year. The Trump administration plans to buy 1 million barrels for the U.S. Strategic Petroleum Reserve, taking advantage of low oil prices to begin filling the depleted stockpile. WTI crude now at 5782. The barrel and shares of General Electric are higher after the company raised its full year outlook for a second consecutive quarter as the jet engine maker cashes in on strong air travel demand and high demand for maintenance and new engines. We've got shares of GE up now 7/10 of 1%. And Warner Brothers Discovery appears to be the belle of the ball. The Hollywood studio and media giant reportedly receiving buyout interest from multiple parties, including Netflix and Comcast. Warner Brothers announced earlier this year that it would split into two separate companies. It's now rethinking those plans. Shares of Warner Brothers up about 10% for on Demand news 24 hours a day. Subscribe to Bloomberg News now wherever you get your podcasts. I'm Alexis Christopher. That's your Bloomberg Business flash. Let's send it back to Carol and Tim. All right. We will take it. Thank you so much, Alexis. Well, what and who is an economy for? It's a great question, considering that as we have often talked about, Tim, not all individuals, as we know, benefit equally at any given time from an economy or economic environment. Right. We talk a lot about the K-shaped recovery. Yeah. Coined by William Marius, Peter Atwater. He did that years ago. And it seems like it's I don't know, it's more prominent now than it was even just a few years ago. Yeah, it definitely has has been very sticky when we talk about our economic environment. So in this week's Are Women Money and Power, we are exploring how shifts in economic wealth we continue do this. Increasingly, those shifts toward women is creating huge implications on how vast sums are invested. Philanthropy is done in the way that wealth is passed on to the next generation. So with more, we welcome Ida Rademacher. She is vice president and co-executive director of the Aspen Financial Security Program at the Aspen Institute. She on this Tuesday, is joining us from the New Jersey Performing Arts Center in Newark, New Jersey, where the first ever Aspen Ideas Economy conference is underway. And it is all about entrepreneurship and shared economic growth. We should point out Bloomberg Philanthropies is a sponsor of the event. Of course, Michael Bloomberg is the founder of Bloomberg L.P. and Bloomberg Philanthropies. Nice to have you here on Bloomberg. Tell us a bit more about why you guys wanted to create a separate event that was more focused on economic impact. Yeah, thanks. Great to talk to you, Carolyn. Tim, this is indeed the first the inaugural and latest extension of the Aspen Ideas Festival, which is in many ways Aspen's front door, if you will, to all the different kinds of things we do. It's our 75th anniversary at the institute. And when you think about when we were founded, we've been hearing about it lately as post-World War two, the big bang of institutions, the general agreement on tariff and trade, the first time that the whole world went on, the global currency of the US dollar as a as a reserve currency. It was a time when there was a real conversation in the world between communism, socialism and capitalism about what was the right way to organize an economy in service of society. And when you fast forward 75 years and we look at international supply chains and the pandemic and all the different ways that we're experiencing seismic shifts in technology and politics, everything changed with changing at once. And it felt like a really important time to go back to our roots and say, What's a first Principles conversation about the role of an economy and society? Let's not ignore the actual reality of what's happening out here, but how do we ground a critical conversation about the global forces of change in an economy back in real places and real people? And that's why we're here in Newark to launch Aspen ideas economy? Well, a lot has changed in those 75 years, including what's going on today, the demographic shifts that we've seen underway, the idea of immigration and booming in the US and then coming to a pretty drastic halt this year. The idea of Americans living longer, that was certainly the focus of a discussion that you had earlier this week called wealth ownership and lifelong prosperity, declining relative wages, frequent career transitions, concentrated wealth, slowing growth, eroding trust in and. Institutions straining social ties. Tell us a little bit about that discussion and what you took away from it. Yeah, there's been a layering of conversations over the last day and a half already on exactly these themes. We are in many ways. We had a big conversation this morning. Both the governor and Reihan Salam, the president of the Manhattan Institute, talking about immigration and H1-B visas and and what has been the role of immigration and both re energizing culture, but also the economy over time, but also how that had this interesting blend of opportunity when the native born population in the U.S. was also growing. And now that you have a place where places not just in the U.S., but when you look at Europe, you know, what is the population decline looking like? What are the implications of that for the economy and for how that permeates through society when it comes to workforce and the kind of this economy, the k-shaped economy you talked about, It's not just a k-shaped economy in terms of the income distribution center happening. It's also a k-shaped economy in terms of productivity, in which sectors are experiencing that and driving an average number that actually masks the really interesting conversation that's happening about the world of the essential economy and the world of the digital economy. And where is productivity driving for? We're having a big conversation about A.I. and the what we call the IP of AI. You know, what is going to change people's ability to make a living from their own creative endeavors in this space? So, you know, it's an Aspen Ideas Festival. It's meant to be modeled on the jazz festival. There's too much happening. There's so many ways to take things in. And if we do this right, people are walking away with some new sticky ideas in their head that are going to help them approach their day jobs or the way they see the world with some fresh takes and some new ideas. Certainly this interesting conversation and Kevin Hassett said it last night about capital income and labor income. That's another big conversation. Hey, one thing I'm going to jump in on because it really made us perk up when you mentioned the H-1B visas, because we just had a story across the Bloomberg about how Walmart has paused offers to candidates requiring H-1B visas, according to people familiar with the matter. And kind of just this being the latest example of how the Trump administration's $100,000 visa fees are disrupting workforces. You mention it, and I don't want to get political, but I do think about the economy is so tied to it in administration. Is there a theme, a narrative that is coming out in regard to policies from the White House or from the administration and whether it's good or bad for the US economy now and going forward? Yeah. Well, you know, it's a it's a good question. And we've all been grappling with how how this is and isn't political. The great thing about the the conversations so far are. With with the set of economists that have been here. Part of this is just about what do we know from the past that helps us understand what are that what is actually happening right now? The good news is that there's actually been much more lifting up of some areas of bipartisan opportunity. And some of that has been, you know, last night some of that was really around some of the work on employee ownership. This is a very driven by both sides. The even the issues of capital accounts from birth has real bipartisan support. A lot of the work on housing supply, lots of things, whether or not it is a political issue, the economics of it are that supply and demand drive prices. And when we lower the demand, when we lower the supply of talent for jobs, what does that do not only to the in the short term, but in the long run? For whatever reasons, people have an economic rationale of what it's going to achieve and that their goal in the short term, there's a lot of disruption, a lot of instability that's never good for markets and good for the ability to continue to keep a flywheel of economic growth going. Well for you to check in with you, good luck with the rest of the event and hope we can reach out to you in the future. I'd love to continue this conversation, Ira, about America. She is vice president and co-executive director of the Aspen Financial Security Program at the Aspen Institute. And their event, their first ever Aspen Ideas Economy conference happening this week. We are just a little over an hour from the close of equity trading on this Tuesday afternoon. The Dow up close to 300 points off the best levels of the day, but still up 6/10 of 1%. The S&P 500 up 1/10 of 1%. The Nasdaq, Carol, in the red, down about 1/10 of 1%. Most rates during the Bloomberg Open air looks to replace the drudgery at junior bankers workload. We're going to dig into that in the next hour. Having said that, when we come back on this Tuesday, stocks on the move. This is Bloomberg. This is Bloomberg Businessweek Daily with Carol Massar and Tim Stent event on Bloomberg Radio and Television. All right, everybody. Coming up on the last hour of trading on this Tuesday, and you've got stocks bouncing around here, but we are up just a hair on the S&P 500, up 1/10 of one percentage point. NASDAQ 100, call it flat, just up two points. Keep in mind, we've got a bunch of earnings after the close, including Netflix. So we'll be watching for that one and breaking it down. And Tim Sandvik along with Carol Massar. Let's take a look at some stocks on the move today. We are joined by a Bloomberg News equities reporter, Alexandra Semenov. Alex, what is on your radar? Always great to join you guys. A little bit of a sign of reassurance today for investors who just last week were worried about regional banks and what they were telling us about their credit health. Zions today reported that its profit actually topped analyst estimates despite a $50 million loss from an alleged fraud to a commercial real estate investor group in Southern California. Their earnings were pretty solid. They reported $222 million worth of net income today, just beating forecasts Monday, rather, also charging off $56 million of bad loans for that alleged fraud. Last week, Zions had reported a credit loss of $50 million out of $60 million caused by that commercial real estate portfolio. And that kind of triggered some concern about credit given the other recent alone blow ups from companies like Tricolor Holdings and first brand groups. But it appears so far that this is really contained. Goldman Sachs CEO David Solomon even today said that those were isolated incidents. So those earnings kind of a testament of that. And we're going to hear from Western Alliance after the close today, which was the other bank along with Zions, that folks were worried about last week for similar reasons. Let's take Airbnb. What's going on there? Yeah, that's an interesting one, because at a time when it seems like everyone is signing deals with open air, Airbnb actually said, not quite yet. We're actually not ready to partner up at this point. Its CEO, Brian Chesky, said that he didn't integrate his company's online travel app with open air charge up because its connective tools, quote, aren't quite ready yet. Airbnb will monitor the development of charging species integration and may consider a tie up in the system. This is just a first idea. Listen, I have been experimenting with certain albums. Yeah. I asked one a question today and there's a little note at the bottom that says, Make sure you verify everything. And I asked it a simple question, and then I double checked with a different source and it wasn't the right answer. And I said, Actually, I think it's this. And LLC is like, you're right, it is that. Oh, so the tech is not perfect. Yeah. Yeah, by any means. Yeah, I guess so. Be careful. Steps by Brian Chesky to be a little bit skeptical here. And the interesting thing is he's actually good friends with Openai CEO Sam Altman and said that they'll kind of be working together and know he consulted him on some of the development of that third party feature. So perhaps in the future there will be a deal, but it's not ready to maybe Chesky get a text. It's like, you know, from Altman, Hey, no drinks tonight. Yeah, we're not having drinks tonight. Remember the. Just kidding. The conference a couple of weeks ago where they were announcing all the different partnerships. TripAdvisor was one of them, for example. That's right. And every time a company was mentioned, the company's share price would shoot higher as a result. It's interesting to see kind of maybe a little bit of this was at the Openai developers, right? All the stocks that shot are shot up based on their being mentioned. So maybe a critical rise is not a bad. I got to point out, though, that Airbnb is up 1.4% right now, outperforming the broader market, even as it didn't just because of this story, I guess perhaps mention of it. Yeah. Just doing well together. Yeah, that's interesting. All right. Take us to another earnings story, Adidas. So it lifted its earnings forecast for the year amid strong demand for its retro sneakers. You guys have probably seen them. The Adidas Gazelles. I know they're so popular, everyone's trying to get their hands on them. It also took some effort to mitigate the impact of tariffs. The German sportswear company now expects to generate an operating profit of about €2 billion, according to a statement with preliminary results. That's about $2.3 billion. That is up from the previous forecast of 1.7 to €1.8 billion. And it's currently currency neutral sales will grow by about 9%. It's had a really good two years. Its CEO said that it's trying to keep up that momentum, specifically with the popularity of those retro sneakers. I haven't. The gazelle has been around forever. Forever. And everything is making a comeback now. I didn't I never knew they were new. They were gone. I thought you were out for a while. You were. You were ahead of the game, too. No. Or I just have a closet full of that. I don't know. I don't. I do have a stance. Smith though, Stan Smith. Some Adidas stuff. You don't have it. You don't have a I don't know. Gisele's No, I'm not. I'm not a Sneakerhead Really? Yeah, I know. It's surprising, but you have a bunch of sneakers. But you seem to like. Well, not right now, but you see, you can buy sneakers. Don't wear the same shoes all the time. Yeah, it's hard to. You will have to. It's hard to find comfortable shoes. You just put on sneakers, didn't you? Yeah. They're comfortable. Okay. All right. Didn't you have hookahs before that? Yeah, but I was, like, three years ago. And there's something else, though, Carol. We've been doing this together for a long time now. I know. I get to keep up better. I'm on my second pair of sneakers. All right, all right, all right, all right. A lot of sneakers. Back off. Back off. I'm a new balance, girl. You are. Oh, everybody's buying New Balance. Very, very. That's what everybody says. They're like dad looking sneakers, but they're. They're kind of big, but they're comfy. Not offended by that. It's okay. All right, Alexandra, seven ever. Thank you so much. Check out our Stock Movers podcast. Five minute episodes, biggest winners and losers in the stock market. You can find it on Apple, Spotify or anywhere you get your podcasts. Sneaker guy. Sneaker guy up 6/10 of 1% on the Dow right now to the tune of 291 points to the upside. The S&P 500 up a little more than 1/10 of 1%. The Nasdaq just down less than 1/10 of 1%. When we come back, as promised, we're going get to the most read story on the Bloomberg terminal about what the more than 100 ex investment bankers are doing it open. I love, love, love this story. If you're watching on TV, the close is coming your way in just a moment, but do not go anywhere tonight, continuing right here on Bloomberg Businessweek Daily.
Deal with Argentina, Potential WBD Takeover | Bloomberg Businessweek Daily 10/21/2025
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 Stan event live on Bloomberg Radio, Television, YouTube and Bloomberg Originals. And a very good afternoon, everyone. Yes, indeed. This is Bloomberg Businessweek daily Carol Massar along with tim stanwick live here at bloomberg headquarters. We do have stocks bouncing around a little bit, but tim, they have been hovering near record again amid mostly positive earnings and an expected hope for an inflation print on friday. Yes, even though the government is shut down. Also, gold and silver posting their steepest drop in years. We have more on the trade in just a minute. And a reminder, Carol, we got some big earnings, too, after the bell. Yeah, let's just bring up some boards real quickly, because gold, we definitely have seen some big moves in today's session. I think we see gold, as you can see, down about 5.6%. Same thing. We've seen silver pulling back. We know that this has been a rather dramatic trade for some time. So we're going to dig into all of these market factors throughout the next 60 minutes. We'll also get into the U.S. assist for Argentina. Why? Why now? What might it really be all about? We've got a great voice on that. Our own Erik Schatzker settling in here in our studio. Plus, as I mentioned, lots of earnings happening after the close. Netflix is the big one. Reporting results amid a changing media landscape that includes Warner Brothers Discovery shopping itself around. Bloomberg's Luca Shaw is going to be joining us fresh off that conversation just a couple of weeks ago with Netflix co-CEO Greg Peters. And yeah, they talked about the potential for making a deal. All right. And we're also going to get into working towards financial security to create an inclusive economy. All of that coming your way over the next hour. Bloomberg Businessweek Deli. Let's kick it off with a check on the trade. Here is Alexis Pistorius. Busy day. Guys, thanks very much. You and all the major averages hovering near their record highs, but the Dow Jones Industrial Average really adding to yesterday's big bounce up now about 300 points. The broader market, S&P 500, it's up about ten. The Nasdaq composite has been bouncing in and out of the green, now down about nine points. We've been mentioning mentioning it all day. But gold is getting knocked down after going on that spectacular record run. It is down now about five and a half percent. Biggest one day drop in about 12 years. We've got the stronger dollar making gold and other precious metals more expensive for buyers. Coca-Cola's earnings beat the street share is bubbling up now about 4%. It's helping to lead the Dow higher as well. Coke reporting strong demand for a zero sugar drink. It's also set to launch its cane sugar trademark soda here in the U.S. this fall. And it's going to start offering many seven and a half ounce single serve cans priced at less than two bucks to target target lower income consumers. We've got shares of three M hitting a four year high today as the parent of Post-it notes and Scotch tape posts, better than expected quarterly sales and profits. It also increased its full year outlook shares of three up 6% and Netflix near the flat line here ahead of its earnings report due out after the closing bell. Results expected to get a boost from advertising revenue and the K-Pop animated movie K-Pop Demon Hunters. Oh, by the way, Netflix is reportedly among the companies interested in buying some or all of Warner Brothers studios told me it was a busy day for on demand news 24 hours a day. Subscribe to Bloomberg News now wherever you get your podcasts. I'm Alexis Christofferson. That's your Bloomberg Business Flash. Send it back over to Carol and Tim. All right, Alexis in for Charlie Pellet. Yep. Alexis is right. It's a busy day. I kind of don't know where to start. Oh, actually, we didn't know where to start. We wanted to talk about what is going on between the U.S. and Argentina. We did mention that Argentina's peso weakened to our fresh record, and Bonds gave back most of their gains as U.S. Treasury Secretary Scott Benson's latest boost to the nation proved short lived. The US Treasury signed an economic stabilization agreement with the Central Bank of Argentina, again coming from the Treasury secretary, Scott Best, and he put that post out on him. The Secretary characterized the Treasury's $20 billion swap line with the crisis prone nations central bank as a, quote, economic stabilization deal. He said the agreement is, quote, a bridge to a better economic future for Argentina, not a bailout. We had a lot of questions, Carol, and one voice we wanted to get on the program today. He has no idea. But we were like, now we're going to talk to Eric. We need to talk to Eric Erik Schatzker is here. We are talking about his Bloomberg New Economy editorial director. He's covered numerous global financial markets, cycles and crises. He's interviewed various Latin American leaders, including Venezuelan President Maduro, former Argentinian President Mauricio Macri. Hopefully I'm saying it correctly. I'm probably I'm not. He also had a September cover story on Secretary Bessant from Bloomberg Businessweek. You are the voice. We wanted to talk to you. Thank you for having me. No, I speak the truth. We speak the truth. Why is this happening? And why Argentina? Why does the U.S. want to do this? Well, so there's I think we can unpack this in three ways. One is, why is the U.S. doing this? The second is, what exactly have we got here? And the third would be how might it all and perhaps in tears. I'll I'll take on the why. And this actually goes back to that story you mentioned that I did about Scott Bastian, the treasury secretary for Bloomberg Businessweek in September. I spoke to the treasury secretary back in late July. And at the time he told me that one of his overarching goals in office as the secretary of the Treasury was to, quote unquote, lock in dollar supremacy. And I asked him, well, how do you do that? And he said, and I didn't appreciate the significance of it at the time, was by facilitating swaps through the Treasury Department as opposed to the way that swaps have traditionally been facilitated, which is by the Fed from central Bank, the central bank. Now, there is precedent for this. The Treasury Department did that from Mexico back in the mid-nineties during the peso crisis, and it helped. And maybe it'll help Argentina, but it appears that under the Trump administration. The government's focus is on again, cuts to the Y. It's not just about locking in dollar supremacy. It's using the dollar as an economic tool to support countries with which the United States feel it has some kind of ideological kinship or some kind of trading relationship. It's not like Argentina has been one of America's major trading partners. It has not. The amount of bilateral trade that goes on between those two countries is a fraction of what it is with the United States and Mexico, where the United States and Canada or even the United States and Europe. So in that respect, it's unusual. I think if you think about it, though, in terms of locking in dollar supremacy and using the dollar as an economic tool and a tool of geo strategy, if you will, it begins to make a little more sense. You said that there are three different elements that we could we could talk about with this. One is how another one is how this could end. Well, let's talk about the what is it that we're actually talking about here? You mentioned that the treasury secretary today talked about it as a bridge to a better economic future and not a bailout and not a bailout. But the operative word there is bridge, because bridge means something from here to there. In other words, what's the there? This is a bridge. Until when? Right? Is it a bridge until after Argentina's midterm elections on the 26th of this month, Sunday is it? And Trump seemed to suggest as much the other day when he said, well, you know, if Malay doesn't win, we'll get rid of the swap line. So that's one possibility. Is it a bridge until Argentina decides to abandon the peso peg, which starts in Asia? The Minister for Deregulation and State Trends Transformation said was in the cards just last week when I interviewed him here in New York. Is it a is is it a bridge until the $20 billion runs out, which might happen because Argentina was burning through a billion and a half dollars with a foreign currency reserves a week, a billion and a half a week before the swap plan was put in place. Is it until Argentina's economy can eventually support an exchange rate at this level? It certainly can't right now. Or maybe is it a bridge until I don't know, President Trump just loses patience or President Melaye does something to annoy him. It's got to be any of those. It's a lot of questions. It's a lot of like possible scenarios. You know, Bloomberg report out yesterday that Jamie Dimon is visiting Argentina this week, kind of an unprecedented show of support for the government at the mean at the same time we've had I think it's the Wall Street Journal reporting that banks are having a hard time kind of getting around this without some kind of guarantees. Nobody knows. Nobody knows what Argentina is pledging as collateral. In fact, nobody has seen the agreement. To our knowledge, the banks themselves, which are playing intermediary roles here, don't know what Argentina has agreed to pledge, you know, so that the United States isn't just on the unlimited losing end of a bad trade. And that is possible here. Right. The big difference between what's going on here and the comparison that everybody wants to make with the trade that broke the Bank of England that the Treasury secretary was involved in when he worked for George Soros and Stan Druckenmiller back in the early 1990s. The big difference here is that then the UK had nobody backstopping them. Now Argentina has the United States back it, backstopping it. But as I say, nobody knows until when. Nobody knows if there are any mechanisms that have been put in place to make the U.S. taxpayer, if you will, hold should the Treasury Department sustain losses on this trade. I've heard that Argentina's uranium reserves may be involved, that some kind of preferential access to Argentine markets might be involved. Who knows? It's just it's it's like it's like a ready, aim fire. You know what? We're we're a fire, you know, ready, aim in the sense that the swap plan was put in place. And then it appears, since no document has surfaced yet, that all of the mechanics behind it are being taken care of after the fact. I don't know. But my point is that if anybody knows he or she hasn't thought it was meant to say, hey, I know. Yeah. The treasury secretary, as you mentioned, described this as a bridge to a better economic future for Argentina, not a bailout. Is the not a bailout part a fair way to describe it? In your view, is this not a bailout? I think a bailout is in the eye of the beholder. In some respects. It's unquestionably a gift to President Melaye ahead of these midterm elections. It isn't working for the time being. Right. The peso fresh weakened today to a fresh low and Argentine bonds which had gained earlier on the formal announcement of this agreement, have since given up those gains and I think are posting losses. So it would appear to. Be a gift in the sense that the peso exchange rate or the peg to the dollar is unsustainable. Melaye doesn't want to allow the peso to float freely. He wants to maintain this peg so that Argentine inflation is under control. A critical, critical economic consideration going into the midterms. So even if Argentina, it's like there's no question of the peso peg or to be abandoned today. It's not like inflation would. Inflation would show up immediately, but it wouldn't show up in official statistics. Excuse me for some time to come. But Argentines are so conditioned to this, right? They know what would happen. Again, I want to go back to you and I know we've got a couple more minutes here, but Eric, the US involvement and again, it may be a relationship President Trump wants to have with the president of Argentina. But I mean, Bloomberg editors wrote an opinion piece, Why isn't the IMF coming in here? And the other question we as a group have been trying to figure out, is it also to kind of keep China at bay? Is there that aspect as well? Argentina also has an existing $18 billion currency swap with China that goes back well before starts. And Edgar was the central bank governor. I think it may go back to 2015 and perhaps even before that. There has been some talk that one of the conditions behind or at least one of the underlying conditions to the swap with the Treasury would be that Argentina somehow winds up that previous swap agreement with the Chinese. Who knows? As far as why the IMF isn't involved, I think the easy answer to that question is how many months, what to take the IMF to get its act together. This was something that this was a perceived need on the part of the Argentine government, the Malay government, heading into these critical midterm elections that I'll repeat are just five days away. Sunday, Right? Right. Yeah. There's no way there's no conceivable way that the IMF, in my mind, given everything that we've observed in our careers and everything we know that precedes that, there's no way that it could possibly acted without much haste. So before we let you go, how could this end? What could it mean for the U.S. if it's a bad trade? Well, if it's a bad trade, it could. I find it hard to believe that the United States would put itself in a position to ultimately lose money, but it may lose money on paper and have to recover that money just like somebody who has left been left holding the bag on a bad debt by liquidating some kind of Argentine assets or somehow, you know, turning preferential access into Argentine assets or Argentine markets into value over time, that wouldn't look good. And again, it all depends on how long this bridge is. We have seen in the credit markets that you can paper things over for an awfully long time before either things reflate and you're able to cash out at par or you have to ultimately take some losses. So it's not like that's necessarily going to happen next week. It's not like it's necessarily going to happen next month or next quarter, even next year. But if Belaid doesn't succeed and if the Argentine economy doesn't continue to revive and inflation doesn't remain under control, it's hard to see how the speculative pressure against the peso won't continue. And we may even see I don't know. We can only speculate here that $20 billion may not end up being enough. All right. We just got schooled by Erik Schatzker In a good way. In a good way. Thank you so much, Eric. Pleasure. So appreciate it. It's what we needed to know. Bloomberg New Economy Editorial Director Erik Schatzker Quick headline Crossing the Bloomberg Walmart shares just down about 4/10 of a percent. This as the giant retailer pausing job offers to candidates requiring H1-B visas. So we're going to follow this and monitor it. You can read more about it. It's on the Bloomberg. Hey, let's shift gears a little bit and talk about geopolitics, about U.S. earnings, also about what's happening here with the U.S. economy. I spend the movement to resolve the geopolitical conflicts, gold and silver dropping, perhaps movement in Europe and Ukraine toward a 12 point plan to end Russia's war and more. Here with the risk factors coming out financial markets right now is Ben Inker, co-head of asset allocation and portfolio manager of the GMO Dynamic Allocation ETF, GMO, along with us from Boston. With all of us coming out of what matters, what is top of mind for you? Ben We're just off of that conversation with Erik Schatzker about Argentina. There's a lot coming out investors right now. And pretty volatile. They have been jumpy. Even though where we are near records and there's a lot of uncertainty about what's going on in the world. What we are trying to focus on when we're talking to our clients is there still are a bunch of interestingly cheap assets out there which are not priced for, you know, perfect, perfect outcomes. So even though there's a lot to be worried about, there's a lot of stuff we find really interesting and are talking to our clients about getting invested in. All right. Not so fast. I'm not going to go to the good stuff yet because we just came off, you know, an important conversation about Argentina. Does that matter to you guys? Are you talking about it? Are you concerned about that? Let's just go there. I kind of want to go through a laundry list. Matter not are not so important. I mean, Argentina matters a lot to Argentina. Unfortunately, it doesn't matter that much to the rest of the world. Right. Argentina has, you know, staggered from crisis to crisis for most of the last century. They're in another one. It's a difficult situation. I am somewhat sympathetic to what Malaysia has been trying to do, but the mechanism by which he's trying to do it, which is fixing his currency at an overvalued level, that it's really hard for that to end well, no matter who you've got on your side, it's really hard for that to end well. I don't think the world will fall to pieces if Argentina finds itself in another debt crisis because, my God, they have spent more time in debt crises than they have outside of. All right, speaking of debt crisis, there are some worried about the US debt fiscal position and we've got a government shutdown. Jamie Dimon saying, you know, hey, it's never good when a government is shut down. Government shutdown a problem in your view? It's certainly not great. And the longer it goes on, the more problems it creates. There are you know, if this goes on further and people more and more people are not getting checks, whether those are direct government employees or people, depending on on some of the payments that are going to get stopped soon, that is a problem for the economy. There are things that need the the government's participation to happen kind of ideas and M&A and stuff like that. So you don't want it to go on for longer than it absolutely has to? I would say the concern is it's not clear how this one ends. It's not clear that either side has any has has shown any interest in budging. So fingers crossed that we can end this relatively soon. But it it isn't a problem the first day the government shuts down, but as it goes longer, it creates more problems for those keeping track. It is day 21 of the government shutdown right now. Ben, I told you we had a long list that investors are dealing with right now. We have a long list for you. We think about the I spend quite a bit. We start shares of alphabet fall today just on news that open Air is teasing a new browser that is AI enabled. We expect to get some details on that a little later today. The air bubble or what some say is an air bubble. I know you think it's an air bubble. Why should we be concerned? Well, I mean, there's a couple of reasons to be concerned. One is the companies have gotten to be a very big piece of the of the U.S. stock market. And if they fall, that's that's a lot of wealth lost. I would say kind of the bigger concern for the economy is the aggregate I spend in the data centers and the energy behind them. And all of that is getting to be meaningful across the economy. And there's sort of two levels of concern. One is, is this a misallocation of capital? Are there going to be significant losses? Because, you know, we are building data centers that are not going to get used or what happens if this does stop? I mean, the nice thing when data centers are being built by the likes of Alphabet and Amazon and Microsoft is they're not really doing it out of debt. They're doing it out of cash flow. So they're not in danger themselves from the misallocation of capital. But the economy has a lot riding on this continuing, and we do think it's gotten somewhat overheated. And some of the deals that that one hears about are kind of weirdly in disturbingly circular and suggest that maybe not even all the demand that appears to be there is real. Yeah. Yeah, certainly. Something we've been talking about a lot. I want to switch gears to what we see in gold and silver today. Seeing their steepest sell off in years. Investors locking in profits. Concerns at the recent historic rally in the precious metals left them overvalued. That's hour right through on the Bloomberg terminal. When you look at gold and silver, when you look at some of the different moves in asset classes, I don't know. What is it telling you? Is all of our all of these moves making sense to you based on the fundamental backdrops? Well, I certainly think that gold and silver kind of had every right to fall sharply after how sharply they rose. I mean, gold in particular, is a very speculative asset. Right? It's very hard to come up with this fair value for gold. It doesn't have cash flows associated with it. People buy it in the hopes it will go up or they buy it in the fear that other things will go down. And it has in recent months gone up in an unsustainably fast way. Maybe there's some short squeeze aspects of it. And I don't know whether, you know, Diwali has caused some demand to fall off at a time where there is there is some selling pressure. But when you have a market that becomes as manic as the precious metals market has been, it's going to be volatile and there's going to be two way volatility. And the thing about an asset that doesn't have a definable fair value is, man, it can fall a lot if it wants to. The assumption that gold is a long store is a long term store of value. Maybe that's true over 100 years, but if you are hoping your gold will be worth the same next year as it was this year, it's a much more volatile asset than anything you could. You'd really want to put those kinds of short term hopes up. So, Ben, given everything that we've spoken to you about in more. The question of asset allocation comes up in how investors should be positioning themselves in this environment. You're co-head of asset allocation at GMO and look at asset allocation. That's obviously personal and depends on where people are in life. But but big picture, given that you think we're in some sort of bubble with A.I., you're not necessarily buying the gold story. How should people be positioning themselves right now? Well, look, if there is an air bubble going on, one nice thing is that is largely a U.S. phenomenon. And Europe and Japan and most of the rest of the world, they just don't have the air plays that's hurt them in relative performance the last few years. But it does mean that if the air bubble bursts, you don't have a lot to lose. We see a lot of good value in in Europe. We see good value in Japan. And the other thing going on in Japan that is really spectacular is a revolution in the market for corporate control. There have been more deals in the first nine months in Japan, private equity type deals, merger deals than we have ever seen in a similar period. And that has the potential to unlock huge amounts of value for shareholders. So we really are fascinated by and excited about the prospects in both the public and private markets for Japan. And there's a lot of really cheap stock still in Europe and we think the European economy has less at stake in the AI game. So I am sure everybody listening to this has, you know, has has the money in the stocks as it is. But diversifying some into some of the cheaper stocks in Europe and some of the really interesting things in Japan, particularly Japanese small caps, there's really good potential for returns in both places. All right. Got to run covered a lot, Ben. Thank you. Ben anchor, co-head of asset allocation, portfolio manager of the GMO Dynamic Allocation ETF over at GMO. Hey, Valens crossed the Bloomberg summit lines crossed the Bloomberg terminal. Apple's effort to reinvent the iPad by adding a giant foldable screen has hit a development hurdles potentially delaying the planned launch. This according to a report by Mark Gurman. The stock briefly did take a little bit of a dip. It's recovered Apple shares up right now by about half a percentage point. All right, back to the markets we go. We do have stocks across the board higher on this Tuesday. But let's get a breakdown of what exactly is going on. For that, we toss things back over to Alexis. Christopher's in for Charlie. Hey, Alexis. Thanks, Carol. 224 on Wall Street and stocks are mostly higher amid this flood of earnings reports. The Dow Jones Industrial Average adding to yesterday's big rally gaining 313 points. The S&P 500 is up ten, but the Nasdaq composite slipping 14. Yields are lower. The ten year yield below 4% now at 3.95%. The two year yield down to 3.45%. And gold has been a big topic today, down about five and a half percent. Biggest drop in about 12 years as investors start to lock in some profits after that record run up. Wal-Mart has paused offers to candidates requiring H-1B visas. That's according to people familiar with the matter. It's the latest example of how the Trump administration's $100,000 visa fees are disrupting the workforce. General Motors having a great day. Stock is up better than 15%, helping to lead the Dow higher after third quarter earnings and revenue topped estimates. The automaker also raised its guidance and reduced its expected impact from tariffs this year. And what a week for Beyond Meat after soaring 127% yesterday, it's up another 87% today. That's after Roundhill investments added beyond meat to its Roundhill meme stock ETF Beyond Meat, also announcing a deal today with Walmart to expand distribution to more stores across the U.S. for on demand news 24 hours a day. Subscribe to Bloomberg news now wherever you get your podcasts. I'm Alexis Christophe. That's the Bloomberg business flashback to Carol and Tim. All right, Alexis, thanks so much. Bloomberg Misses Bloomberg's Lucas Shaw and team have been on the Warner Brothers Discovery story for a while now. The latest reporting has Warner Brothers shares soaring as we speak. That stock was it up about 10%, Tim? Yeah, it's up 9.6% as we speak. All right. So a big kick to the upside. Here's what's going on. This is after the company came out and said it's considering a possible sale after receiving unsolicited interest from multiple parties. Netflix and Comcast are among those weighing bids for parts of the media and entertainment company, according to people with knowledge of the matter. So it made us say, wait a minute, because did you forget Netflix co-CEO Greg Peters caught up with Bloomberg's own Luca shot at Bloomberg Screen Time just earlier this month. Check it out. There've been some reports around you guys being interested in Warner Brothers Discovery. Is there any truth to that? I would say this. You know, we come from a deep heritage of being builders rather than buyers. I also think that it's, you know, one should have a reasonable amount of skepticism around big media mergers. They don't have an amazing track record over, you know, the history of time. So, you know, I would say it's our also it's our responsibility to evaluate all our options. There's Netflix co-CEO Greg Peters with Bloomberg's Lucas Schott Bloomberg Screen Time. That was back on October eight, less than two weeks ago. Let's go to Bloomberg. News bureau in L.A. right now. And to Bloomberg News, a managing editor for Media Entertainment, Lucas Shaw. He's the force behind Bloomberg's screen time and writer of the Screen Time newsletter. Lucas, I don't know. I was listening to that conversation live when you were doing it with Greg Peters, and it sounded like the builders, not buyers part. Really stuck out to me and talking about the history of mergers that have gone sour in the industry. But it sounds like, at least according to your reporting along with Kelsey, that they could be in the in the game for it. Well, I think the Build not buy is still the Netflix mantra. It's a company that has avoided doing major M&A throughout its entire history. Some of that informed by co-founder Reed Hastings experience at his prior company, a software company where that kind of grew through a lot of mergers and it didn't end very well for him or for the company. But they do take a look at everything. They study it, they run the data. And I think Greg Peters colleague, co-CEO Ted Sarandos, has always been kind of enamored of studios and lots and if they could get their hands on Warner Brothers, the studio, and perhaps more importantly, the characters and IP that Warner Brothers owns and that HBO owns, that's something that Netflix would be very interested in. They have no interest in the cable networks like TNT, TBS, CNN. I don't even think they have very much interest in the HBO streaming service because they can just feed the content into Netflix. So if there is a way to do a deal that gets them what they want without the stuff they don't want, they're open to it. But my read on the situation, even though we have reported that Netflix and Comcast are interested, which is true, is that you've got one very clear interested party in Paramount and you have the Warner Brothers Discovery wanting to either get a better offer from them or find someone else or have more leverage in these conversations. And so they're basically saying, that's it, we're for sale, come and make an offer. And they want to get as many people in the tent as possible so they have as much leverage as possible. All right. So Lucas, Warner Brothers, as you said, rebuffed Paramount Skydance's initial takeover around $20 a share for being too low, according to those familiar. So is this still alive deal? Are we expecting Paramount's guidance to come back? Yeah, definitely. It is still alive. Deal. There are still conversations happening. I think there have been reports that Paramount has made several offers. They are very clearly exploring how best to proceed. Do they need partners? Do they need to be hostile and go public with it? You know, what is the number at which the Warner Brothers Discovery Board has to say yes, even if management doesn't want to do the Paramount deal, because it would likely lead to their dismissal. But I would not expect Paramount skydance's to to walk away just because they're in kind of soliciting other bids. Is it plausible for us to think that Warner Brothers Discovery could remain an independent company when the dust settles, that no deal could be done? It's looking increasingly unlikely. I think it is possible that they'd go through with the split and do a deal after that or come up with some arrangement in which there is still a split. But one piece goes to one of these buyers, but it's not feeling because they're already going to split the company. So I think, you know, a year from now, 18 months from now, the odds of Warner Brothers Discovery being a whole and independent company are incredibly unlikely. But what exact shape it takes, we don't know yet. So let's play out the Netflix part of this a little more, Lucas, because I'm intrigued with the idea of Netflix actually getting the studio, but not being interested necessarily in the legacy TV networks that that are part of Warner Brothers Discovery. What would what would happen to that legacy side of the business if the studio were to get sold to Netflix or another buyer? Well, it's hard to know because we I don't think they're progressed enough in those talks for me to have the answer. But look, Warner Brothers Discovery was already going to spin off its TV networks. It can continue to do that, right? It can say, okay, that studio and streaming business that was going to be one part of kind of one entity going forward that can go to Netflix and it's up to Netflix where they can negotiate how the HBO network fits into that or the HBO streaming service fits into that, or they can find another buyer for that, right? If if they've come to an agreement, if they feel like Netflix has made a great offer for just the studio and the lot and maybe some of the HBO programming, maybe they can take the rest of that and package it up and where where Comcast, which is spinning out and Versant, which is its cable networks, is interested. Maybe those two can come together. Now, once you're dealing with the SpinCo, it gets very complicated for tax reasons about what you can and can't do, because one of the reasons they choose to spin is to save money on taxes. But there is a lot I think they are trying to project optionality here. Well, for Warner Brothers Discovery, I'm assuming they want to get as much as they can for all of their assets. Can they do that by breaking it apart? Is that really the smartest route but maybe more complicated versus just getting rid of the company in one full shot? Well, they clearly think that there is more value in the parts than they're getting value that in the hole right now. That's one of the reasons if they're doing the split spin, however you want to talk about it, because they think the parts are worth more than the whole is currently being valued. So, yes, I think they feel like they could sell the studios in streaming for as almost as much as the whole company is trading at right now. The real question would be if you do that, is there is there actual value in the cable networks that are left over, which, you know, I guess we'll find out. They're certainly not going to be as frothy and market for those as there would be for for studio and streaming people who work there certainly hope there's value. Just real quickly, is there a clock ticking on this or could this drag on for a little bit longer? It could drag on. I spoke to an investor earlier today who would be said they'd be surprised if they saw this resolved this year. I you know, I don't know if that's the case, but they have they have opened up a process. You think back about how long the Paramount's guidance process ended up taking. It was, you know, a year before there was a deal and then another year for it to actually go through. So I would imagine, you know, we've got, at a minimum, a few months left. Okay. Netflix happening now happening after the bell. We'll hear about their latest quarter and the upcoming current quarter that we're in right now. K-Pop demon hunter certainly going to be a star of the call. What else do we need to understand about today's report? I mean, Netflix earnings, especially now that they don't report subscriber numbers, are a little less interesting than they used to be. It's a company that has been very steady. Investors tend to want fireworks. They want huge beats. And Netflix sometimes delivers that, but most often they do, Especially recently. I feel like they've delivered sort of modest beats. You know, most people expect them to post pretty good results. They had the movie the summer. They've had a steady stream of new programming. And Netflix has told us all along that their programming in the back half of the year is much better than in the first half. The question with earnings is always expectations, right? The street expectations for the company are already really high, so even if the numbers are pretty solid, they might not live up to what investors want or expect. 20 seconds, Lucas. Does anybody really care now that there's like the Warner Brothers dive? Is that what they don't really care? Because, you know, look, Netflix is a $500 billion company said its results matter. All right. So appreciate it. Lucas Shaw, thank you so much. Bloomberg News managing editor of Media and Entertainment. Also, the force, as we said earlier, behind Bloomberg's screen time. I do want to mention some headlines crossing the Bloomberg terminal. This coming from Senate Majority Leader Thune speaking to reporters at the White House just moments ago. He said he's hopeful this will this will be the week the shutdown, the US government shutdown ends. He says they are planning another vote on the stopgap bill tomorrow. So that, of course, goes on. We are getting ready to enter what, our fourth week? Yeah, this is this is day 21 of the shutdown. Meantime, markets mixed right now. The S&P 500 up close to 2/10 of 1%. The Nasdaq composite down just shy of 1/10 of 1%. The Dow up to the upside of 300 points. It's 7/10 of 1% higher. When we come back, we're going to get into what and who is an economy for that one. Bloomberg Businessweek Daily continues on this Tuesday. It's 240 on Wall Street. I'm Alexis Christoph for us. And the Dow Jones Industrial Average hitting an intraday record on the back of strong earnings from Coca-Cola. And three and we've got the Dow up now 284 points. It briefly crossed 47,000 just a short time ago. The broader market is mixed with the S&P 500 up nearly eight. NASDAQ composite, though, is down 17. And gold and silver seeing their steepest sell off in years as investors lock in profits over concerns at that recent historic rally in the precious metals left them overvalued. Spot gold now down more than 5%. Right now we have got gold still up 60%, though, so far this year. The Trump administration plans to buy 1 million barrels for the U.S. Strategic Petroleum Reserve, taking advantage of low oil prices to begin filling the depleted stockpile. WTI crude now at 5782. The barrel and shares of General Electric are higher after the company raised its full year outlook for a second consecutive quarter as the jet engine maker cashes in on strong air travel demand and high demand for maintenance and new engines. We've got shares of GE up now 7/10 of 1%. And Warner Brothers Discovery appears to be the belle of the ball. The Hollywood studio and media giant reportedly receiving buyout interest from multiple parties, including Netflix and Comcast. Warner Brothers announced earlier this year that it would split into two separate companies. It's now rethinking those plans. Shares of Warner Brothers up about 10% for on Demand news 24 hours a day. Subscribe to Bloomberg News now wherever you get your podcasts. I'm Alexis Christopher. That's your Bloomberg Business flash. Let's send it back to Carol and Tim. All right. We will take it. Thank you so much, Alexis. Well, what and who is an economy for? It's a great question, considering that as we have often talked about, Tim, not all individuals, as we know, benefit equally at any given time from an economy or economic environment. Right. We talk a lot about the K-shaped recovery. Yeah. Coined by William Marius, Peter Atwater. He did that years ago. And it seems like it's I don't know, it's more prominent now than it was even just a few years ago. Yeah, it definitely has has been very sticky when we talk about our economic environment. So in this week's Are Women Money and Power, we are exploring how shifts in economic wealth we continue do this. Increasingly, those shifts toward women is creating huge implications on how vast sums are invested. Philanthropy is done in the way that wealth is passed on to the next generation. So with more, we welcome Ida Rademacher. She is vice president and co-executive director of the Aspen Financial Security Program at the Aspen Institute. She on this Tuesday, is joining us from the New Jersey Performing Arts Center in Newark, New Jersey, where the first ever Aspen Ideas Economy conference is underway. And it is all about entrepreneurship and shared economic growth. We should point out Bloomberg Philanthropies is a sponsor of the event. Of course, Michael Bloomberg is the founder of Bloomberg L.P. and Bloomberg Philanthropies. Nice to have you here on Bloomberg. Tell us a bit more about why you guys wanted to create a separate event that was more focused on economic impact. Yeah, thanks. Great to talk to you, Carolyn. Tim, this is indeed the first the inaugural and latest extension of the Aspen Ideas Festival, which is in many ways Aspen's front door, if you will, to all the different kinds of things we do. It's our 75th anniversary at the institute. And when you think about when we were founded, we've been hearing about it lately as post-World War two, the big bang of institutions, the general agreement on tariff and trade, the first time that the whole world went on, the global currency of the US dollar as a as a reserve currency. It was a time when there was a real conversation in the world between communism, socialism and capitalism about what was the right way to organize an economy in service of society. And when you fast forward 75 years and we look at international supply chains and the pandemic and all the different ways that we're experiencing seismic shifts in technology and politics, everything changed with changing at once. And it felt like a really important time to go back to our roots and say, What's a first Principles conversation about the role of an economy and society? Let's not ignore the actual reality of what's happening out here, but how do we ground a critical conversation about the global forces of change in an economy back in real places and real people? And that's why we're here in Newark to launch Aspen ideas economy? Well, a lot has changed in those 75 years, including what's going on today, the demographic shifts that we've seen underway, the idea of immigration and booming in the US and then coming to a pretty drastic halt this year. The idea of Americans living longer, that was certainly the focus of a discussion that you had earlier this week called wealth ownership and lifelong prosperity, declining relative wages, frequent career transitions, concentrated wealth, slowing growth, eroding trust in and. Institutions straining social ties. Tell us a little bit about that discussion and what you took away from it. Yeah, there's been a layering of conversations over the last day and a half already on exactly these themes. We are in many ways. We had a big conversation this morning. Both the governor and Reihan Salam, the president of the Manhattan Institute, talking about immigration and H1-B visas and and what has been the role of immigration and both re energizing culture, but also the economy over time, but also how that had this interesting blend of opportunity when the native born population in the U.S. was also growing. And now that you have a place where places not just in the U.S., but when you look at Europe, you know, what is the population decline looking like? What are the implications of that for the economy and for how that permeates through society when it comes to workforce and the kind of this economy, the k-shaped economy you talked about, It's not just a k-shaped economy in terms of the income distribution center happening. It's also a k-shaped economy in terms of productivity, in which sectors are experiencing that and driving an average number that actually masks the really interesting conversation that's happening about the world of the essential economy and the world of the digital economy. And where is productivity driving for? We're having a big conversation about A.I. and the what we call the IP of AI. You know, what is going to change people's ability to make a living from their own creative endeavors in this space? So, you know, it's an Aspen Ideas Festival. It's meant to be modeled on the jazz festival. There's too much happening. There's so many ways to take things in. And if we do this right, people are walking away with some new sticky ideas in their head that are going to help them approach their day jobs or the way they see the world with some fresh takes and some new ideas. Certainly this interesting conversation and Kevin Hassett said it last night about capital income and labor income. That's another big conversation. Hey, one thing I'm going to jump in on because it really made us perk up when you mentioned the H-1B visas, because we just had a story across the Bloomberg about how Walmart has paused offers to candidates requiring H-1B visas, according to people familiar with the matter. And kind of just this being the latest example of how the Trump administration's $100,000 visa fees are disrupting workforces. You mention it, and I don't want to get political, but I do think about the economy is so tied to it in administration. Is there a theme, a narrative that is coming out in regard to policies from the White House or from the administration and whether it's good or bad for the US economy now and going forward? Yeah. Well, you know, it's a it's a good question. And we've all been grappling with how how this is and isn't political. The great thing about the the conversations so far are. With with the set of economists that have been here. Part of this is just about what do we know from the past that helps us understand what are that what is actually happening right now? The good news is that there's actually been much more lifting up of some areas of bipartisan opportunity. And some of that has been, you know, last night some of that was really around some of the work on employee ownership. This is a very driven by both sides. The even the issues of capital accounts from birth has real bipartisan support. A lot of the work on housing supply, lots of things, whether or not it is a political issue, the economics of it are that supply and demand drive prices. And when we lower the demand, when we lower the supply of talent for jobs, what does that do not only to the in the short term, but in the long run? For whatever reasons, people have an economic rationale of what it's going to achieve and that their goal in the short term, there's a lot of disruption, a lot of instability that's never good for markets and good for the ability to continue to keep a flywheel of economic growth going. Well for you to check in with you, good luck with the rest of the event and hope we can reach out to you in the future. I'd love to continue this conversation, Ira, about America. She is vice president and co-executive director of the Aspen Financial Security Program at the Aspen Institute. And their event, their first ever Aspen Ideas Economy conference happening this week. We are just a little over an hour from the close of equity trading on this Tuesday afternoon. The Dow up close to 300 points off the best levels of the day, but still up 6/10 of 1%. The S&P 500 up 1/10 of 1%. The Nasdaq, Carol, in the red, down about 1/10 of 1%. Most rates during the Bloomberg Open air looks to replace the drudgery at junior bankers workload. We're going to dig into that in the next hour. Having said that, when we come back on this Tuesday, stocks on the move. This is Bloomberg. This is Bloomberg Businessweek Daily with Carol Massar and Tim Stent event on Bloomberg Radio and Television. All right, everybody. Coming up on the last hour of trading on this Tuesday, and you've got stocks bouncing around here, but we are up just a hair on the S&P 500, up 1/10 of one percentage point. NASDAQ 100, call it flat, just up two points. Keep in mind, we've got a bunch of earnings after the close, including Netflix. So we'll be watching for that one and breaking it down. And Tim Sandvik along with Carol Massar. Let's take a look at some stocks on the move today. We are joined by a Bloomberg News equities reporter, Alexandra Semenov. Alex, what is on your radar? Always great to join you guys. A little bit of a sign of reassurance today for investors who just last week were worried about regional banks and what they were telling us about their credit health. Zions today reported that its profit actually topped analyst estimates despite a $50 million loss from an alleged fraud to a commercial real estate investor group in Southern California. Their earnings were pretty solid. They reported $222 million worth of net income today, just beating forecasts Monday, rather, also charging off $56 million of bad loans for that alleged fraud. Last week, Zions had reported a credit loss of $50 million out of $60 million caused by that commercial real estate portfolio. And that kind of triggered some concern about credit given the other recent alone blow ups from companies like Tricolor Holdings and first brand groups. But it appears so far that this is really contained. Goldman Sachs CEO David Solomon even today said that those were isolated incidents. So those earnings kind of a testament of that. And we're going to hear from Western Alliance after the close today, which was the other bank along with Zions, that folks were worried about last week for similar reasons. Let's take Airbnb. What's going on there? Yeah, that's an interesting one, because at a time when it seems like everyone is signing deals with open air, Airbnb actually said, not quite yet. We're actually not ready to partner up at this point. Its CEO, Brian Chesky, said that he didn't integrate his company's online travel app with open air charge up because its connective tools, quote, aren't quite ready yet. Airbnb will monitor the development of charging species integration and may consider a tie up in the system. This is just a first idea. Listen, I have been experimenting with certain albums. Yeah. I asked one a question today and there's a little note at the bottom that says, Make sure you verify everything. And I asked it a simple question, and then I double checked with a different source and it wasn't the right answer. And I said, Actually, I think it's this. And LLC is like, you're right, it is that. Oh, so the tech is not perfect. Yeah. Yeah, by any means. Yeah, I guess so. Be careful. Steps by Brian Chesky to be a little bit skeptical here. And the interesting thing is he's actually good friends with Openai CEO Sam Altman and said that they'll kind of be working together and know he consulted him on some of the development of that third party feature. So perhaps in the future there will be a deal, but it's not ready to maybe Chesky get a text. It's like, you know, from Altman, Hey, no drinks tonight. Yeah, we're not having drinks tonight. Remember the. Just kidding. The conference a couple of weeks ago where they were announcing all the different partnerships. TripAdvisor was one of them, for example. That's right. And every time a company was mentioned, the company's share price would shoot higher as a result. It's interesting to see kind of maybe a little bit of this was at the Openai developers, right? All the stocks that shot are shot up based on their being mentioned. So maybe a critical rise is not a bad. I got to point out, though, that Airbnb is up 1.4% right now, outperforming the broader market, even as it didn't just because of this story, I guess perhaps mention of it. Yeah. Just doing well together. Yeah, that's interesting. All right. Take us to another earnings story, Adidas. So it lifted its earnings forecast for the year amid strong demand for its retro sneakers. You guys have probably seen them. The Adidas Gazelles. I know they're so popular, everyone's trying to get their hands on them. It also took some effort to mitigate the impact of tariffs. The German sportswear company now expects to generate an operating profit of about €2 billion, according to a statement with preliminary results. That's about $2.3 billion. That is up from the previous forecast of 1.7 to €1.8 billion. And it's currently currency neutral sales will grow by about 9%. It's had a really good two years. Its CEO said that it's trying to keep up that momentum, specifically with the popularity of those retro sneakers. I haven't. The gazelle has been around forever. Forever. And everything is making a comeback now. I didn't I never knew they were new. They were gone. I thought you were out for a while. You were. You were ahead of the game, too. No. Or I just have a closet full of that. I don't know. I don't. I do have a stance. Smith though, Stan Smith. Some Adidas stuff. You don't have it. You don't have a I don't know. Gisele's No, I'm not. I'm not a Sneakerhead Really? Yeah, I know. It's surprising, but you have a bunch of sneakers. But you seem to like. Well, not right now, but you see, you can buy sneakers. Don't wear the same shoes all the time. Yeah, it's hard to. You will have to. It's hard to find comfortable shoes. You just put on sneakers, didn't you? Yeah. They're comfortable. Okay. All right. Didn't you have hookahs before that? Yeah, but I was, like, three years ago. And there's something else, though, Carol. We've been doing this together for a long time now. I know. I get to keep up better. I'm on my second pair of sneakers. All right, all right, all right, all right. A lot of sneakers. Back off. Back off. I'm a new balance, girl. You are. Oh, everybody's buying New Balance. Very, very. That's what everybody says. They're like dad looking sneakers, but they're. They're kind of big, but they're comfy. Not offended by that. It's okay. All right, Alexandra, seven ever. Thank you so much. Check out our Stock Movers podcast. Five minute episodes, biggest winners and losers in the stock market. You can find it on Apple, Spotify or anywhere you get your podcasts. Sneaker guy. Sneaker guy up 6/10 of 1% on the Dow right now to the tune of 291 points to the upside. The S&P 500 up a little more than 1/10 of 1%. The Nasdaq just down less than 1/10 of 1%. When we come back, as promised, we're going get to the most read story on the Bloomberg terminal about what the more than 100 ex investment bankers are doing it open. I love, love, love this story. If you're watching on TV, the close is coming your way in just a moment, but do not go anywhere tonight, continuing right here on Bloomberg Businessweek Daily.