November 4, 2025 • 21 mins
Your morning briefing, the business news you need in just 15 minutes.
On today's podcast:
(1) The current environment for large mergers and acquisitions is quite “constructive” for 2026 and 2027, particularly in the US, according to the chief executive officer of Goldman Sachs
(2) The global stock rally hit a speed bump as uncertainty over the Federal Reserve’s policy outlook and earnings from Palantir Technologies Inc. made investors more cautious.
(3) Alphabet sold $17.5 billion of bonds in the US, after issuing €6.5 billion ($7.48 billion) of notes in Europe, adding to a wave of borrowing from technology companies as they invest aggressively in artificial intelligence.
(4) Prime Minister Keir Starmer warned that his government will make “tough but fair decisions” in what’s expected to be a tax-raising budget later this month.
(5) Zohran Mamdani’s lead heading into the New York mayoral election has withstood a furious push from Republicans, establishment Democrats and a coalition of Wall Street dealmakers, leaving Democrats to face a familiar question should he win on Tuesday.
Podcast Conversation: Men’s Groups (Not ‘Boys Clubs’) Quietly Emerge in Big Business
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Transcript
Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:09):
This is the prely Big Day BAQ podcast. Good morning,
It's Tuesday, the fourth of November. I'm Caroline Hepkeitt in London.
Speaker 1 (00:15):
And I'm Stephen Caroline Brussels. Coming up today. Goldman Sachs
CEO again says he believes a significant stock sell off
is coming, but it's nothing to be afraid of.
Speaker 2 (00:25):
The UK's Prime Minister Kis Starmer says the upcoming budget
will see tough but fair decisions, plus.
Speaker 1 (00:32):
That you use climate fight heats up. Ministers meet to
hash out a deal on the next stage of targets
to cut emissions.
Speaker 2 (00:38):
Let's start with the roundup of our top stories.
Speaker 1 (00:41):
David Solomon, the CEO of Goldman Sachs, says he believes
stocks could fall by as much as twenty percent, but
he doesn't think that means people should be reallocating their investments.
The view from one of All Street's biggest names echoes
his previous comments on the market and comes as global
stocks have dropped partly due to uncertainty about rate cuts
and concerns about lofty tech valuations. Speaking at the twenty
(01:04):
twenty five Global Financial Leader's Investment Summit, Solomon said a
market pullback should be expected.
Speaker 3 (01:11):
It is likely they'll be, you know, at ten to
twenty percent drawn down in equity market sometime in the
next twelve to twenty four months. And I'd say there
are very few people in this room that don't think
that that's a meaningful possibility. It doesn't mean that the
general direction of capital flows, investment portfolio allocations changing. It
just means things run and then they pull back, so
people can reassess.
Speaker 1 (01:31):
Solomon out of the Goldman's advice is to remain investors.
The comments are echoed by Morgan Stanley's CEO Ted Pick.
He said we should welcome the possibility that there could
be ten to fifteen percent drawdowns. Meanwhile, Capital Group CEO
Mike Gitlin told the summit that while corporate earnings are strong,
what's challenging our valuations?
Speaker 2 (01:51):
Well, the warnings film CEOs come as shares impalente fell
in extended trading after earlier gaining as much as seven percent.
Following the company's latest set of results. Palenteer raises annual
revenue outlook to four point four billion dollars and it
beat analyst estimates for third quarter sales, but concerns about
the company's record valuation led to a pullback from some traders.
(02:15):
Palentine has been one of the biggest beneficiaries of the
AI boom. It shares her up more than one hundred
and fifty percent this year, but the company now has
the highest price to sales ratio in the S and
P five hundred. Jill Lurier is head of technology research
at DA Davidson.
Speaker 4 (02:32):
This is a company with a four billion dollar run
ray that's growing sixty three percent. There's nothing even remotely
close to that, which is how we got to the
situation where valuations are at unprecedented levels, not just for
them but for any software company, and that seems to
persist as long as they can continue to raise the bar.
(02:54):
Let's not forget that's sixty three percent is an acceleration
from the fifty percent last quarter, which was faster than
the quarter before that.
Speaker 2 (03:03):
Gil Leurier, speaking there as tech stocks more broadly, rallied
on the news that Amazon had signed a seven year
deal with open ai for computing power. Open ai will
pay Amazon Web Services thirty eight billion dollars for access
to hundreds of thousands of Nvidia chips.
Speaker 1 (03:23):
In the UK, the Prime Minister Kiir Starmer says his
government will make tough but fair decisions in its upcoming budget.
The warning comes as the Chancellor considers dozens of possible
tax increases to fill a fiscal whole of as much
as thirty five billion pounds. Bloomberg's UK politics reporter Joe
May's says her options are limited.
Speaker 5 (03:42):
She has this manifesto pledge not to increase taxes on
working people. So that's why we are talking about things
like an exit charge when you leave the country, paying
perhaps twenty per cent tax.
Speaker 4 (03:52):
On your holdings.
Speaker 5 (03:53):
We are talking about things like larger properties paid more
in council tax perhaps. But her problem is that there's
a large of money to be raised and it's not
clear how much these kind of narrow taxes on the
wealthy would raise.
Speaker 1 (04:06):
Are UK Government reporter Joe May speaking there, Bloomberg understands
that Reeves wants to take He wants to use a
potential productivity downgrade from the Office for Budget Responsibility to
simplify the UK's tax system and make it fairer. New
pre budget analysis from the Resolution Foundation think tank suggests
unexpectedly strong pay growth may offset the anticipated downgrade, leaving
(04:30):
the Chancellor with a fiscal hold that may be smaller
than many private forecasters expect.
Speaker 2 (04:37):
In the US, voters are heading to the polls and
the biggest set of elections ahead of next year's midterms.
Governor races are being held in Virginia and New Jersey,
and a new mayor will be elected in New York City.
Polling shows Democratic nominees or in ma'am Donnie has a
lead in that race. Frank Lnce, politics and communications consultant,
(04:58):
says he expects a tough set of results for the Republicans.
Speaker 6 (05:02):
The way that the voters usually react in an off
year election, which this is, is that they punished the
party in power. It just happens every two years, and
I think it's going to happen this time too.
Speaker 2 (05:14):
Thank Lant, Speaking there on Bloomberg's balance of power. President
Trump has endorsed the former New York Governor Andrew Cuomo,
saying that he would be reluctant to send federal funding
to his hometown if Ma'm Danny is elected. Michael Bloomberg
has endorsed Andrew Cuomo in the mail race and donated
to a super pack supporting Cuomo. Bloomberg is the founder
(05:35):
and majority owner of Bloomberg LP, the parent company of
Bloomberg Television and Radio.
Speaker 1 (05:41):
Sadi Aramco has reported profits that beat analysts estimates as
a boost and production outweigh the impact of weaker oil prices.
Net income adjusted for one time items rose by zero
point eight percent to the equivalent of around twenty eight
billion dollars in the third quarter. That's compared to a
year earlier. The result that surpassed market expectations, as free
(06:02):
cash flow also exceeded the dividend payout, and.
Speaker 2 (06:07):
Lastly, top CEOs at Western companies are cautiously optimistic that
China's long retail downturn is coming to an end. Several
firms have posted strong results in China in recent weeks,
suggesting a rebound in consumer spending. Bloomberg's freddie Fulston has.
Speaker 7 (06:22):
More Laoreal added as LVMH just a few companies signaling
an uptick in consumer confidence in China. It comes as
Beijing has pledged to significantly boost consumption in its economy
over the next five years, but it's no mean feat
amid an uncertain job market and a lingering real estate crisis. Esday,
(06:45):
Lorder's CEO Stefan de la Favoried told Bloomberg there's some
momentum building and the market is starting to accelerate, but
stop short of declaring a full comeback, saying there's still
some caution in China. In London, Fredi Fulston, Bloomberg Radio, and.
Speaker 1 (07:03):
Those are our top stories on the markets this morning.
The Mscish Pacific Index down by nine tenths of one percent,
the Nika and Tokyo one point three percent lower, the
Cospian souls down by two point three percent. European stock
future is firmly in the red as well, down seven
tenths for eurostocks fifty Wall Street. We're seeing futures lower
as well, nine tenths for SMP mini's one point two
percent for NASDAK futures. The ten year treasury yields down
(07:24):
to basis points at four point zero nine percent.
Speaker 2 (07:29):
Well, in a moment, we'll be discussing more on whether
equity markets are due for downturn. Plus, is the EU
retreating from its leadership role in limiting climate change? That
coming up next. But this story caught our attention. This
is the story of men's groups in big companies. This
(07:49):
is really an interesting story, isn't it.
Speaker 1 (07:51):
Yeah, I mean our college Jeff Green and Saijo Kashan
have been writing about this as well, despite the fact
that I mean, I know certainly I rolled my eyes
a bit when I read the head of this as well,
because you kind of think like, do men need more representation?
Are they not represented enough at leadership roles in companies
or with for example, higher salaries is in the case
of many companies and corporate roles as well, but it
(08:12):
is something that is happening in companies like in the
UK Channel four and BA Systems or two of them
who've spoken to our colleagues for this piece as well.
I suppose if you think about it, you know there
are groups for other community groups for other communities at work.
You know, you could have LGBTQ groups for example. Yeah,
(08:34):
it works, so why not have a men's group as well?
In one argument for it. It's an interesting piece because
I think it examines both sides of this argument. You
can argue it both ways. Yes, you can speak to people.
Speaker 2 (08:50):
It's just interesting that the companies that they cite essay,
Lorder and BAE Systems, you can kind of you can
understand why in some way, those are the companies that
stand out. Essay, Lord has got larger female workforce. BA Systems,
you know, they the huge defense contractor. They are larger
(09:12):
groups that are focused on men's health, you know, their
physical wellbeing and perhaps even their financial health. But yeah,
I think it's it's a very good topic to think
about though.
Speaker 1 (09:22):
Yeah, I mean that the argument that these groups provide
support to people to talk about health issues or other
issues at work is sort of the goal. And they're
also very conscious about not being perceived as a boys club.
They're open to women to join as well, and some
of them have been co founded by women as well. Look,
it's a corporate trend that's out there are colleagues of reporters.
Are it's worth a read or put a link to
the story in our podcast show notes.
Speaker 2 (09:44):
Okay, well, let's think about the markets now. The comments
from the Goldman Sachs CEO and others warning about this
possibility of a ten to twenty percent draw down in
equity markets in the next year or two. Let's being
in Blue Big TV Aca Quitti Gupta now for more
on this had Actually market is particularly in the US
hitting a record high off to record high in recent months.
(10:05):
Is this warning film Solomon film others that things could
come down any surprise. It's also quite a broad brush
warning about a drill down.
Speaker 7 (10:14):
Yeah.
Speaker 8 (10:15):
I think it's Newton's law, maybe the second or the third,
that what goes up has to come down. I wasn't
very good at science, hence since the career in journalism,
but I think that's exactly what's happening here in this market.
You are seeing an exponential rise. This isn't your constant
kind of grind higher that you've seen in past decades.
This is a ultimately the almost kind of a stock
chart that's going basically vertical, and that is where a
(10:36):
lot of people are starting to get nervous. But before
I came on here, I did look up the year's
day performance of the S and P five hundred. We're
had sixteen and a half percent year to date, so
a ten percent draw down would give us, again rough math,
this isn't exactly how the math works, but still an
almost seven percent gain when you look at the S
and P five hundred, which actually has beaten previous years
of index performance. So that's I think kind of the
(10:58):
tone that a lot of these executives are taking, which
is that, yes, there's a lot of momentum, Yes there's
a lot of excitement. Not all of it is backed
up by the fundamentals, because so much of it is
based on growth you're going to see in five, ten,
maybe fifteen years, and then of course you never know
what happens in that longer timeframe. And for that reason,
because so much of it is pegged to speculation, is
(11:18):
peg tow expected growth, you could see some sort of
crashdown to reality. But again they've all kind of cushioned
all their statements by saying that even that crashdown wouldn't
be the worst thing.
Speaker 1 (11:28):
Polunteer is an interesting example in the question of tech
valuations as well and whether or not they are stretched,
because the results are, on the face of it, extremely strong,
but as you say, investors still wondering about the outlook
down the line.
Speaker 8 (11:40):
It's a really fascinating one because Palenteer is ultimately a
data service company. It does data software, and one of
the real key reasons that it became such an ai
kind of popular stock is because a lot of the
defense contracts from the US government started utilizing Palenteer's data services.
So not only did it become a technology company and
(12:00):
ultimately an AI company because they were investing heavily in
those as well, it had kind of the stamp of
approval from the US government, which if you look at
other contractors that the US government uses, like lockeed Martin
for example, or Boeing, when they had more exposure to
those federal contracts, you do start to see this kind
of inbuilt premium of it being viewed as kind of
a safe stock because so much of it comes, so
(12:20):
much of the revenue comes from those federal contracts. I
think what's really interesting here, and you can see this
in these numbers. Their bookings are actually up, their sales
numbers are up, their profit is up. On the surface,
everything looks great, but this is where the classic kind
of adage of Wall Street comes in, where you buy
the room or sell the news. And that's kind of
what's happening here. To your point, Steven about valuations, this
idea that so much of this is baked into these
(12:43):
market that when you actually see that come to fruition,
when you see those goat and those numbers actually show up,
everyone kind of says Okay, well that's exactly what we expected.
Let's take some money off the table now, because now
we don't know what happens next. You're not just seeing
it in the palanteer space. You're seeing this in defense
stocks in Europe as well, because so many people have
priced in this massive momentum tied to government contracts with
(13:03):
the mix of AI, and then when you actually start
to see and value it on the multiples that it's
trading at, you say, wait a second, maybe it needs
to come down a little.
Speaker 2 (13:11):
Well, also, does it help or hinder? When the CEO is,
as he always is, typically bullish. This is Alex Krp
of Palenti is saying these are arguably the best results
that any software company has ever delivered. I mean, if
people are worried about valuations, you know you can make
that argument does it help or hinder? Look, just lastly,
though there are still loads of big deals happening. Alphabet
(13:34):
Meta have also a conducted big bond sales recently. Is
there still big demand from investors on the debt side?
Speaker 8 (13:44):
There absolutely is. I think where maybe tech companies are
getting punished in the equity market, they're getting rewarded in
the bond market. Excuse me. I think this is really
crucial here because in the equity market, and again, what
happens the equity market affects the bond market. It kind
of changes the valuation and the issuance and the rates
that you can offer in the bond market as well.
(14:04):
But think about it, a lot of credit investors have
been lacking a forum in whish to get involved in
the AI trade as a bond market investor. So this
is kind of the dynamic that a lot of companies
are taking, kind of taking a bet on. You saw
it with Oracle and the massive I think over thirty
billion dollar issue as they did in the States. I
think what's interesting in the last twenty four hours is
that Alphabet came in and they did a double debt sale.
(14:27):
They did it in the United States and dollars and
then three billion in Euros as well, which tells you
that this capital markets deal activity boom you're seeing is
not just an American phenomenon. It is actually bleeding into Europe.
And I think that's really crucial. Not only are they
coming to market, there is their over subscribed deals. People
want in on this trade in the bond market.
Speaker 2 (14:45):
Okay, Christy, thank you so much for being with us today.
That has been a big TV anchor. Qritti Gupta stay
with us. More from Bloomberg Day Bacube coming up after.
Speaker 1 (14:54):
This at the next stage of the European Union's climate
transition hangs in the Ballads, with ministers meeting and Brussels
to hash out a deal on the emissions cuts they
expect to deliver over the next fifteen years, so that's
twenty forty. They're aiming to sign off on an updated
climate pledge ahead of the COP thirty summit in Brazil,
which starts in a few days time. Our reporter Micaal
Cabala is here with me in the Brussels studio for
(15:16):
more this morning. Micaal, what exactly our minister is debating
here in Brussels today.
Speaker 9 (15:21):
It's likely to be a big, long day of climate
talks here in Brussels. European Union environment ministers are essentially
meeting to agree on new targets for cutting greenhouse gas
emission emissions. One major proposal is to reduce carbon emissions
by ninety percent by twenty forty compared with nineteen ninety levels.
(15:44):
That essentially is a key step intermediary steps. This ultimate
goal off the U to reach net zero by twenty
to fifty. This is days before the COP thirty talks
Kaikoff in Brazil, and that sort of leads me to
to the other goal that they're trying to reach today,
which is to reach a deal on an emissions target
(16:05):
for twenty thirty five, which signatories of the Paris Agreement
are supposed to submit to the UN. The EU has
already missed a deadline to submit that pledge, and with
top U officials traveling to the COP in just the
coming days, the Minister's meeting sort of the final push
(16:27):
to put a seal on those agreements.
Speaker 2 (16:29):
The thing is, we've seen a pullback in terms of
climate targets in the US under President Chump. How has
that debate then influenced or played out in Europe.
Speaker 9 (16:39):
Yeah, it's an interesting debate. Europe is a cop between
economic worries back home and really that shifting landscape where
the US is pulling back from from their climate leadership.
But there's always been a debate on these ambitious goals
in Europe. Attention has tradition turned to the bloc's major economies, Germany,
(17:03):
has concerns over its imbattle really card industry, and other
countries in Central Europe are worried about their heavy industries.
Hungary and Slovakia not expected to support that ninety percent
target for example. What's also interesting to look at is France,
the other economic heavyweight. It's traditionally been a leader on
(17:28):
climate ambitions, remembers it's home to this enormous nuclear energy
fleet and the Paris Agreement itself. Recently, we're we're seeing
is Paris is also stressing that need for more competitive industries,
and it's been seeking concessions on language in some of
the proposals that might be that are debated today. The
(17:49):
broader green agenda in the EU is also under some strain.
The EU has delayed its anti deforestation law by year,
for example, and in the last to two weeks of
fifty French and German CEOs wrote to their leaders urging
them to rethink corporate climate rules like a directive that
(18:10):
obligates and requires them to have a detailed transition plan. Now,
none of that really means that the EU will back
out of its climate ambitions. The EU institutions are very
very clear about that. They say we are staying in
the course, but some of those emerging worries about competitiveness
means it's more difficult to put industries and all the members,
(18:34):
all the twenty seven members on one side of the debate.
Speaker 1 (18:37):
And look CEOs have been very vocal about this as well.
You know, if you think about Ryanair's Michael O'Leary also
being very clear, as he often is and forthright about
his views on some of these climate rules. Let's to
take a listen to what he had to say about
some of these measures when he spoke to Bloomberg yesterday.
Speaker 10 (18:53):
There's a real I feel like schizophrenia in Europe. You
have most of the growth economy Sweden, Croatia, Hungary, Italy
have worked out environment or abolishing their environmental tax on
air travel because they're I feel like a break on
growth and they're being rewarded with dramatic growth. We're switching
capacity to those countries. The three countries who don't get
(19:13):
it are the dumb Germans, the stupid French, and Rachel Reeves.
Speaker 1 (19:18):
Michael O'Leary from Ryan are there now. He of course
not shy in sharing his views about things like this,
and he never really has been either but are do
those comments land better now among the debate among European
leaders than necessarily they had before, given the broader debate
between competitiveness and maintaining this climate leadership.
Speaker 9 (19:38):
Yeah, he doesn't mean those words the e. It's a challenge.
What the you is seemingly trying to do is to
link the climate goals and competitiveness, not setting those two
words against each other. Now we have the dragi and
the and the letter reports, so warning that the that
(19:59):
you're risks falling behind the US and China. Brussels is
now shifting its tone. It's talking about industrial strength and simplification,
all of that this attempt to cut red tape, speed
up permits and at the same time as the phrase goes,
stay the course on climate goals.
Speaker 1 (20:18):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 2 (20:24):
Look for us on your podcast feed every morning, on Apples,
Spotify and anywhere else you get your podcasts.
Speaker 1 (20:30):
You can also listen live each morning on London Dab Radio,
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Speaker 2 (20:36):
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I'm Caroline Hepka and.
Speaker 1 (20:45):
I'm Stephen Carroll. Join us again tomorrow morning for all
the news you need to start your day right here
on Bloomberg Daybreak Europe
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:09):
This is the prely Big Day BAQ podcast. Good morning,
It's Tuesday, the fourth of November. I'm Caroline Hepkeitt in London.
Speaker 1 (00:15):
And I'm Stephen Caroline Brussels. Coming up today. Goldman Sachs
CEO again says he believes a significant stock sell off
is coming, but it's nothing to be afraid of.
Speaker 2 (00:25):
The UK's Prime Minister Kis Starmer says the upcoming budget
will see tough but fair decisions, plus.
Speaker 1 (00:32):
That you use climate fight heats up. Ministers meet to
hash out a deal on the next stage of targets
to cut emissions.
Speaker 2 (00:38):
Let's start with the roundup of our top stories.
Speaker 1 (00:41):
David Solomon, the CEO of Goldman Sachs, says he believes
stocks could fall by as much as twenty percent, but
he doesn't think that means people should be reallocating their investments.
The view from one of All Street's biggest names echoes
his previous comments on the market and comes as global
stocks have dropped partly due to uncertainty about rate cuts
and concerns about lofty tech valuations. Speaking at the twenty
(01:04):
twenty five Global Financial Leader's Investment Summit, Solomon said a
market pullback should be expected.
Speaker 3 (01:11):
It is likely they'll be, you know, at ten to
twenty percent drawn down in equity market sometime in the
next twelve to twenty four months. And I'd say there
are very few people in this room that don't think
that that's a meaningful possibility. It doesn't mean that the
general direction of capital flows, investment portfolio allocations changing. It
just means things run and then they pull back, so
people can reassess.
Speaker 1 (01:31):
Solomon out of the Goldman's advice is to remain investors.
The comments are echoed by Morgan Stanley's CEO Ted Pick.
He said we should welcome the possibility that there could
be ten to fifteen percent drawdowns. Meanwhile, Capital Group CEO
Mike Gitlin told the summit that while corporate earnings are strong,
what's challenging our valuations?
Speaker 2 (01:51):
Well, the warnings film CEOs come as shares impalente fell
in extended trading after earlier gaining as much as seven percent.
Following the company's latest set of results. Palenteer raises annual
revenue outlook to four point four billion dollars and it
beat analyst estimates for third quarter sales, but concerns about
the company's record valuation led to a pullback from some traders.
(02:15):
Palentine has been one of the biggest beneficiaries of the
AI boom. It shares her up more than one hundred
and fifty percent this year, but the company now has
the highest price to sales ratio in the S and
P five hundred. Jill Lurier is head of technology research
at DA Davidson.
Speaker 4 (02:32):
This is a company with a four billion dollar run
ray that's growing sixty three percent. There's nothing even remotely
close to that, which is how we got to the
situation where valuations are at unprecedented levels, not just for
them but for any software company, and that seems to
persist as long as they can continue to raise the bar.
(02:54):
Let's not forget that's sixty three percent is an acceleration
from the fifty percent last quarter, which was faster than
the quarter before that.
Speaker 2 (03:03):
Gil Leurier, speaking there as tech stocks more broadly, rallied
on the news that Amazon had signed a seven year
deal with open ai for computing power. Open ai will
pay Amazon Web Services thirty eight billion dollars for access
to hundreds of thousands of Nvidia chips.
Speaker 1 (03:23):
In the UK, the Prime Minister Kiir Starmer says his
government will make tough but fair decisions in its upcoming budget.
The warning comes as the Chancellor considers dozens of possible
tax increases to fill a fiscal whole of as much
as thirty five billion pounds. Bloomberg's UK politics reporter Joe
May's says her options are limited.
Speaker 5 (03:42):
She has this manifesto pledge not to increase taxes on
working people. So that's why we are talking about things
like an exit charge when you leave the country, paying
perhaps twenty per cent tax.
Speaker 4 (03:52):
On your holdings.
Speaker 5 (03:53):
We are talking about things like larger properties paid more
in council tax perhaps. But her problem is that there's
a large of money to be raised and it's not
clear how much these kind of narrow taxes on the
wealthy would raise.
Speaker 1 (04:06):
Are UK Government reporter Joe May speaking there, Bloomberg understands
that Reeves wants to take He wants to use a
potential productivity downgrade from the Office for Budget Responsibility to
simplify the UK's tax system and make it fairer. New
pre budget analysis from the Resolution Foundation think tank suggests
unexpectedly strong pay growth may offset the anticipated downgrade, leaving
(04:30):
the Chancellor with a fiscal hold that may be smaller
than many private forecasters expect.
Speaker 2 (04:37):
In the US, voters are heading to the polls and
the biggest set of elections ahead of next year's midterms.
Governor races are being held in Virginia and New Jersey,
and a new mayor will be elected in New York City.
Polling shows Democratic nominees or in ma'am Donnie has a
lead in that race. Frank Lnce, politics and communications consultant,
(04:58):
says he expects a tough set of results for the Republicans.
Speaker 6 (05:02):
The way that the voters usually react in an off
year election, which this is, is that they punished the
party in power. It just happens every two years, and
I think it's going to happen this time too.
Speaker 2 (05:14):
Thank Lant, Speaking there on Bloomberg's balance of power. President
Trump has endorsed the former New York Governor Andrew Cuomo,
saying that he would be reluctant to send federal funding
to his hometown if Ma'm Danny is elected. Michael Bloomberg
has endorsed Andrew Cuomo in the mail race and donated
to a super pack supporting Cuomo. Bloomberg is the founder
(05:35):
and majority owner of Bloomberg LP, the parent company of
Bloomberg Television and Radio.
Speaker 1 (05:41):
Sadi Aramco has reported profits that beat analysts estimates as
a boost and production outweigh the impact of weaker oil prices.
Net income adjusted for one time items rose by zero
point eight percent to the equivalent of around twenty eight
billion dollars in the third quarter. That's compared to a
year earlier. The result that surpassed market expectations, as free
(06:02):
cash flow also exceeded the dividend payout, and.
Speaker 2 (06:07):
Lastly, top CEOs at Western companies are cautiously optimistic that
China's long retail downturn is coming to an end. Several
firms have posted strong results in China in recent weeks,
suggesting a rebound in consumer spending. Bloomberg's freddie Fulston has.
Speaker 7 (06:22):
More Laoreal added as LVMH just a few companies signaling
an uptick in consumer confidence in China. It comes as
Beijing has pledged to significantly boost consumption in its economy
over the next five years, but it's no mean feat
amid an uncertain job market and a lingering real estate crisis. Esday,
(06:45):
Lorder's CEO Stefan de la Favoried told Bloomberg there's some
momentum building and the market is starting to accelerate, but
stop short of declaring a full comeback, saying there's still
some caution in China. In London, Fredi Fulston, Bloomberg Radio, and.
Speaker 1 (07:03):
Those are our top stories on the markets this morning.
The Mscish Pacific Index down by nine tenths of one percent,
the Nika and Tokyo one point three percent lower, the
Cospian souls down by two point three percent. European stock
future is firmly in the red as well, down seven
tenths for eurostocks fifty Wall Street. We're seeing futures lower
as well, nine tenths for SMP mini's one point two
percent for NASDAK futures. The ten year treasury yields down
(07:24):
to basis points at four point zero nine percent.
Speaker 2 (07:29):
Well, in a moment, we'll be discussing more on whether
equity markets are due for downturn. Plus, is the EU
retreating from its leadership role in limiting climate change? That
coming up next. But this story caught our attention. This
is the story of men's groups in big companies. This
(07:49):
is really an interesting story, isn't it.
Speaker 1 (07:51):
Yeah, I mean our college Jeff Green and Saijo Kashan
have been writing about this as well, despite the fact
that I mean, I know certainly I rolled my eyes
a bit when I read the head of this as well,
because you kind of think like, do men need more representation?
Are they not represented enough at leadership roles in companies
or with for example, higher salaries is in the case
of many companies and corporate roles as well, but it
(08:12):
is something that is happening in companies like in the
UK Channel four and BA Systems or two of them
who've spoken to our colleagues for this piece as well.
I suppose if you think about it, you know there
are groups for other community groups for other communities at work.
You know, you could have LGBTQ groups for example. Yeah,
(08:34):
it works, so why not have a men's group as well?
In one argument for it. It's an interesting piece because
I think it examines both sides of this argument. You
can argue it both ways. Yes, you can speak to people.
Speaker 2 (08:50):
It's just interesting that the companies that they cite essay,
Lorder and BAE Systems, you can kind of you can
understand why in some way, those are the companies that
stand out. Essay, Lord has got larger female workforce. BA Systems,
you know, they the huge defense contractor. They are larger
(09:12):
groups that are focused on men's health, you know, their
physical wellbeing and perhaps even their financial health. But yeah,
I think it's it's a very good topic to think
about though.
Speaker 1 (09:22):
Yeah, I mean that the argument that these groups provide
support to people to talk about health issues or other
issues at work is sort of the goal. And they're
also very conscious about not being perceived as a boys club.
They're open to women to join as well, and some
of them have been co founded by women as well. Look,
it's a corporate trend that's out there are colleagues of reporters.
Are it's worth a read or put a link to
the story in our podcast show notes.
Speaker 2 (09:44):
Okay, well, let's think about the markets now. The comments
from the Goldman Sachs CEO and others warning about this
possibility of a ten to twenty percent draw down in
equity markets in the next year or two. Let's being
in Blue Big TV Aca Quitti Gupta now for more
on this had Actually market is particularly in the US
hitting a record high off to record high in recent months.
(10:05):
Is this warning film Solomon film others that things could
come down any surprise. It's also quite a broad brush
warning about a drill down.
Speaker 7 (10:14):
Yeah.
Speaker 8 (10:15):
I think it's Newton's law, maybe the second or the third,
that what goes up has to come down. I wasn't
very good at science, hence since the career in journalism,
but I think that's exactly what's happening here in this market.
You are seeing an exponential rise. This isn't your constant
kind of grind higher that you've seen in past decades.
This is a ultimately the almost kind of a stock
chart that's going basically vertical, and that is where a
(10:36):
lot of people are starting to get nervous. But before
I came on here, I did look up the year's
day performance of the S and P five hundred. We're
had sixteen and a half percent year to date, so
a ten percent draw down would give us, again rough math,
this isn't exactly how the math works, but still an
almost seven percent gain when you look at the S
and P five hundred, which actually has beaten previous years
of index performance. So that's I think kind of the
(10:58):
tone that a lot of these executives are taking, which
is that, yes, there's a lot of momentum, Yes there's
a lot of excitement. Not all of it is backed
up by the fundamentals, because so much of it is
based on growth you're going to see in five, ten,
maybe fifteen years, and then of course you never know
what happens in that longer timeframe. And for that reason,
because so much of it is pegged to speculation, is
(11:18):
peg tow expected growth, you could see some sort of
crashdown to reality. But again they've all kind of cushioned
all their statements by saying that even that crashdown wouldn't
be the worst thing.
Speaker 1 (11:28):
Polunteer is an interesting example in the question of tech
valuations as well and whether or not they are stretched,
because the results are, on the face of it, extremely strong,
but as you say, investors still wondering about the outlook
down the line.
Speaker 8 (11:40):
It's a really fascinating one because Palenteer is ultimately a
data service company. It does data software, and one of
the real key reasons that it became such an ai
kind of popular stock is because a lot of the
defense contracts from the US government started utilizing Palenteer's data services.
So not only did it become a technology company and
(12:00):
ultimately an AI company because they were investing heavily in
those as well, it had kind of the stamp of
approval from the US government, which if you look at
other contractors that the US government uses, like lockeed Martin
for example, or Boeing, when they had more exposure to
those federal contracts, you do start to see this kind
of inbuilt premium of it being viewed as kind of
a safe stock because so much of it comes, so
(12:20):
much of the revenue comes from those federal contracts. I
think what's really interesting here, and you can see this
in these numbers. Their bookings are actually up, their sales
numbers are up, their profit is up. On the surface,
everything looks great, but this is where the classic kind
of adage of Wall Street comes in, where you buy
the room or sell the news. And that's kind of
what's happening here. To your point, Steven about valuations, this
idea that so much of this is baked into these
(12:43):
market that when you actually see that come to fruition,
when you see those goat and those numbers actually show up,
everyone kind of says Okay, well that's exactly what we expected.
Let's take some money off the table now, because now
we don't know what happens next. You're not just seeing
it in the palanteer space. You're seeing this in defense
stocks in Europe as well, because so many people have
priced in this massive momentum tied to government contracts with
(13:03):
the mix of AI, and then when you actually start
to see and value it on the multiples that it's
trading at, you say, wait a second, maybe it needs
to come down a little.
Speaker 2 (13:11):
Well, also, does it help or hinder? When the CEO is,
as he always is, typically bullish. This is Alex Krp
of Palenti is saying these are arguably the best results
that any software company has ever delivered. I mean, if
people are worried about valuations, you know you can make
that argument does it help or hinder? Look, just lastly,
though there are still loads of big deals happening. Alphabet
(13:34):
Meta have also a conducted big bond sales recently. Is
there still big demand from investors on the debt side?
Speaker 8 (13:44):
There absolutely is. I think where maybe tech companies are
getting punished in the equity market, they're getting rewarded in
the bond market. Excuse me. I think this is really
crucial here because in the equity market, and again, what
happens the equity market affects the bond market. It kind
of changes the valuation and the issuance and the rates
that you can offer in the bond market as well.
(14:04):
But think about it, a lot of credit investors have
been lacking a forum in whish to get involved in
the AI trade as a bond market investor. So this
is kind of the dynamic that a lot of companies
are taking, kind of taking a bet on. You saw
it with Oracle and the massive I think over thirty
billion dollar issue as they did in the States. I
think what's interesting in the last twenty four hours is
that Alphabet came in and they did a double debt sale.
(14:27):
They did it in the United States and dollars and
then three billion in Euros as well, which tells you
that this capital markets deal activity boom you're seeing is
not just an American phenomenon. It is actually bleeding into Europe.
And I think that's really crucial. Not only are they
coming to market, there is their over subscribed deals. People
want in on this trade in the bond market.
Speaker 2 (14:45):
Okay, Christy, thank you so much for being with us today.
That has been a big TV anchor. Qritti Gupta stay
with us. More from Bloomberg Day Bacube coming up after.
Speaker 1 (14:54):
This at the next stage of the European Union's climate
transition hangs in the Ballads, with ministers meeting and Brussels
to hash out a deal on the emissions cuts they
expect to deliver over the next fifteen years, so that's
twenty forty. They're aiming to sign off on an updated
climate pledge ahead of the COP thirty summit in Brazil,
which starts in a few days time. Our reporter Micaal
Cabala is here with me in the Brussels studio for
(15:16):
more this morning. Micaal, what exactly our minister is debating
here in Brussels today.
Speaker 9 (15:21):
It's likely to be a big, long day of climate
talks here in Brussels. European Union environment ministers are essentially
meeting to agree on new targets for cutting greenhouse gas
emission emissions. One major proposal is to reduce carbon emissions
by ninety percent by twenty forty compared with nineteen ninety levels.
(15:44):
That essentially is a key step intermediary steps. This ultimate
goal off the U to reach net zero by twenty
to fifty. This is days before the COP thirty talks
Kaikoff in Brazil, and that sort of leads me to
to the other goal that they're trying to reach today,
which is to reach a deal on an emissions target
(16:05):
for twenty thirty five, which signatories of the Paris Agreement
are supposed to submit to the UN. The EU has
already missed a deadline to submit that pledge, and with
top U officials traveling to the COP in just the
coming days, the Minister's meeting sort of the final push
(16:27):
to put a seal on those agreements.
Speaker 2 (16:29):
The thing is, we've seen a pullback in terms of
climate targets in the US under President Chump. How has
that debate then influenced or played out in Europe.
Speaker 9 (16:39):
Yeah, it's an interesting debate. Europe is a cop between
economic worries back home and really that shifting landscape where
the US is pulling back from from their climate leadership.
But there's always been a debate on these ambitious goals
in Europe. Attention has tradition turned to the bloc's major economies, Germany,
(17:03):
has concerns over its imbattle really card industry, and other
countries in Central Europe are worried about their heavy industries.
Hungary and Slovakia not expected to support that ninety percent
target for example. What's also interesting to look at is France,
the other economic heavyweight. It's traditionally been a leader on
(17:28):
climate ambitions, remembers it's home to this enormous nuclear energy
fleet and the Paris Agreement itself. Recently, we're we're seeing
is Paris is also stressing that need for more competitive industries,
and it's been seeking concessions on language in some of
the proposals that might be that are debated today. The
(17:49):
broader green agenda in the EU is also under some strain.
The EU has delayed its anti deforestation law by year,
for example, and in the last to two weeks of
fifty French and German CEOs wrote to their leaders urging
them to rethink corporate climate rules like a directive that
(18:10):
obligates and requires them to have a detailed transition plan. Now,
none of that really means that the EU will back
out of its climate ambitions. The EU institutions are very
very clear about that. They say we are staying in
the course, but some of those emerging worries about competitiveness
means it's more difficult to put industries and all the members,
(18:34):
all the twenty seven members on one side of the debate.
Speaker 1 (18:37):
And look CEOs have been very vocal about this as well.
You know, if you think about Ryanair's Michael O'Leary also
being very clear, as he often is and forthright about
his views on some of these climate rules. Let's to
take a listen to what he had to say about
some of these measures when he spoke to Bloomberg yesterday.
Speaker 10 (18:53):
There's a real I feel like schizophrenia in Europe. You
have most of the growth economy Sweden, Croatia, Hungary, Italy
have worked out environment or abolishing their environmental tax on
air travel because they're I feel like a break on
growth and they're being rewarded with dramatic growth. We're switching
capacity to those countries. The three countries who don't get
(19:13):
it are the dumb Germans, the stupid French, and Rachel Reeves.
Speaker 1 (19:18):
Michael O'Leary from Ryan are there now. He of course
not shy in sharing his views about things like this,
and he never really has been either but are do
those comments land better now among the debate among European
leaders than necessarily they had before, given the broader debate
between competitiveness and maintaining this climate leadership.
Speaker 9 (19:38):
Yeah, he doesn't mean those words the e. It's a challenge.
What the you is seemingly trying to do is to
link the climate goals and competitiveness, not setting those two
words against each other. Now we have the dragi and
the and the letter reports, so warning that the that
(19:59):
you're risks falling behind the US and China. Brussels is
now shifting its tone. It's talking about industrial strength and simplification,
all of that this attempt to cut red tape, speed
up permits and at the same time as the phrase goes,
stay the course on climate goals.
Speaker 1 (20:18):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 2 (20:24):
Look for us on your podcast feed every morning, on Apples,
Spotify and anywhere else you get your podcasts.
Speaker 1 (20:30):
You can also listen live each morning on London Dab Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 2 (20:36):
Our flagship New York station is also available on your
Amazon Alexa devices. Just say Alexa Play Bloomberg eleven thirty.
I'm Caroline Hepka and.
Speaker 1 (20:45):
I'm Stephen Carroll. Join us again tomorrow morning for all
the news you need to start your day right here
on Bloomberg Daybreak Europe
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