September 26, 2025 • 31 mins
Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF.
US personal spending rose at a solid clip in August for a third month, suggesting consumers continued to power the economy despite elevated inflation.
Consumer spending, adjusted for changes in prices, increased 0.4% last month, according to Bureau of Economic Analysis data out Friday.
The consecutive strong gains in consumer spending add to evidence of a solid economy in the current quarter, building upon even greater growth in the prior period than previously thought. However, maintaining such momentum hinges in large part on the labor market, which has shown signs of faltering with slower hiring and more moderate wage gains.
Americans are also still dealing with sticky inflation, which risks staying elevated as President Donald Trump’s tariffs trickle through the economy. The so-called core personal consumption expenditures price index, which excludes food and energy items and is favored by the Federal Reserve, rose 0.2% from July. From the prior year, the gauge held stubbornly at 2.9%.
While many companies initially held off on raising prices as they worked through built-up inventories, profit margins are at risk unless firms pass along some of the higher costs.
Today's show features:
- Elizabeth Renter, Senior Economist at NerdWallet, and Bloomberg TV and Radio International Economics & Policy Correspondent Mike McKee, on the August PCE report and the US labor market
- Bloomberg News Justice Department Reporter Chris Strohm on Former FBI Director James Comey being charged with lying to Congress and obstruction
- Bloomberg News Finance Reporter Max Abelson on revelations about the support network for Jeffrey Epstein
- Carol Schleif, Chief Market Strategist at BMO Private Wealth, on stock market valuations
See omnystudio.com/listener for privacy information.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News. This is Bloomberg business
Week Daily reporting from the magazine that helps global leaders
stay ahead with insights on the people, companies, and trends
shaping today's complex economy. Plus global business, finance and tech
(00:23):
news as it happens. The Bloomberg Business Week Daily Podcast
with Carol Masser and Tim Stenebeck on Bloomberg Radio.
Speaker 2 (00:32):
Hey listen, folks. We did get a key inflation gauge.
It came out earlier this morning. It grew at a
slower pace last month. We also got some data on
a resilient US consumer. We also saw incomes growing, and
yet US consumer sentiment fell in the month of September
to a four month low on growing concerns about the
impact of high prices and personal finances. Richmond Fed President
(00:52):
Thomas Barkin spoke with Bloomberg TV and Radio international economics
correspondent and policy correspondent Michael McKee before this morning's of
US economic reports, and you talked about the Fed's dual
mandate and keeping an eye on all the data as
it continues to come in.
Speaker 3 (01:08):
It's a low hiring environment, but the labor supply is
also short and you have to be very attentive to
that balance because it could get out of balance right.
Similar on the inflation side, you do have these cost
pressures and four and a half years of inflation over target.
On the other hand, you're not seeing that show up
and spikes and inflation in the real time numbers.
Speaker 4 (01:28):
We are seeing what.
Speaker 3 (01:29):
Seems to be a productivity boom, and so I think
you have to be very attentive to how little we
know about how each of our mandate variables is going
to play out. And so, you know, I feel like
very adaptive is the way to think about it as
and that's part of why I'm not being prescriptive into well,
it's this many cuts over this period of time, because
I think we're going to see and learn a lot as.
Speaker 5 (01:49):
We go here.
Speaker 2 (01:50):
Adaptive and attentive sounds like data dependent. That is Richmond
FED President Thomas Barkin. Earlier this morning on Bloomberg with
Bloomberg TV and Radio International Economics and Policy course Mike
joining us from DC along with Elizabeth rent Or, senior
economist at the personal finance company nerd Wallet. We'll get
to her in just a moment, but Mike, I do
want to start with you this morning's data drop of
(02:12):
US data and what you heard from Fed President Barkin.
Does it all kind of mesh with what we got
in the latest FED decision and commentary.
Speaker 6 (02:23):
Maybe not.
Speaker 7 (02:25):
And that's the situation that Tom was describing, is we
came out of the FED meeting thinking that they were
going to do a rate cut in October and there
was a good chance of another one in December. And
then over the last four or five days, we've gotten
a number of data points that suggest that the economy
may be rebounding from a summer low, maybe stronger than
(02:46):
we thought. Second Quarter growth was revised up, and today
we got better than expected spending numbers from consumers. So
at this point it's really hard to say what's going
to happen. The one thing we know from today PCEE
report is that inflation is not going down. It didn't
get any worse, but it is still a closer to
three percent than the Fed's two percent target. So it
(03:10):
just kind of beans that those who are in the
middle for the Fed, they're probably going to be waiting
till much closer to October twenty ninth to make any
kind of decision.
Speaker 8 (03:21):
Mike, is there a shoe to drop when it comes
to inflation as a result of tariffs, because we did
have so many companies pull forward goods purchases before tariffs hit,
and we just haven't seen it show up. We're going
to start hearing from companies in the middle of next
month for their latest earnings report, but we're not seeing
the spikes in inflation like he was talking about to you.
Speaker 7 (03:42):
Well, we have seen some We've seen prices go up
for some goods, and there are expectations that will continue
to see that. It depends, as you mentioned, on inventories
and how fast those are worked down and then supply
chain adjustments. It's very hard to say exactly when things
are going to hit, but economists do expect and the
Fed does expect to see inflation rise over the next
(04:04):
couple of months. Then the question is does it go
down again or does it keep going up because maybe
the President is continuing to put on additional tariffs. The
one thing that we can probably into it is that
Americans are not happy. The consumer sentiment numbers went down
because of inflation, and even though it doesn't have a
(04:27):
lot to do with the President's tariffs, Gasoline prices have
gone up. Meat prices have gone up. Turkey prices have
gone up there for different reasons. But when you go
to the grocery store, it's all just inflation to you.
Speaker 2 (04:41):
Yep.
Speaker 6 (04:41):
I don't do a lot of the shopping in my house.
My husband tends to do.
Speaker 8 (04:44):
My daughter do.
Speaker 9 (04:46):
No.
Speaker 2 (04:46):
My people are my husband and my daughter. But man,
they brought some steaks and I was like, how much
did they cost? When they told me, I was like, whoa, Elizabeth,
come on in on this. Because we are continuing to
get data points, how does that cross with what we
did get from the and your view on where the
economy is and what needs to be done in terms
of monetary policy.
Speaker 10 (05:05):
Well, I think largely what Spin said is accurate. You know,
the FED is trying to keep their eye on the ball.
We're all trying to keep our eye on the ball.
But there's a lot of balls in the air right now,
and some of them are flying in completely different direction.
So it's really hard to suss out where things are headed.
When it comes to inflation, Yes, it ticked up just slightly,
but it's not showing real acceleration right now. To your point,
(05:27):
consumers are feeling a bit of a burn more than
that headline number would have you believe. You know, food
inflation rose last month according to today's data, and that's
something we all interact with on a weekly, if not
daily basis.
Speaker 4 (05:39):
We see that number.
Speaker 10 (05:40):
And so that's definitely playing into consumer sentiment. Also, we're
more exposed to all of this talk about the economy, right,
We're all talking a lot about when inflation is going
to pick back up, the impact of tariffs, and so
that's in the back of consumers heads as well, So
they anticipate a lot of potentially bad stuff happening as
of yet, wen't haven't seen it translate into reduce spending
(06:00):
from a big picture overall, I'd say this week we
got some more of those mixed messages though. Right consumer
spending is strong despite weak sentiment. The economy continues to
grow according to the GDP figures. I say, if there's
some good news out of this week in addition to
the consumer spending, is that the initial claims came down
the unemployment claims, So that's a bright spot I suppose
(06:22):
on the recent past labor market.
Speaker 2 (06:26):
You know, I'm thinking of a conversation that Tim and
I had yesterday with the CFO of a firm, right,
and we talked to the CEO just a couple of
weeks ago and they're saying they're pretty busy. There's a
lot of activity on their platform. We were thinking, well,
wait a minute, how does this mesh with maybe a
slowdown in consumer you know, concerns about the consumer and
they our own Stuart Paul kind of weighing in that, well,
what's happening is people are buying, but they're buying and
(06:47):
taking longer to pay for things, and that's why they're
making use of that place.
Speaker 8 (06:50):
Like essentially, if he sees a service such as though
that being used, then it could be a sign about
the way the consumer's feeling. Elizabeth, I want to go
to you on next week and the non farm payer
print that we're expecting a week from now, we'll be
sitting here talking about that number. Fifty thousand is the
number of jobs that economy is surveyed by Bloomberg expect
to be added to the economy. How is the labor
(07:11):
market in your view?
Speaker 10 (07:13):
The labor market is hanging in there, you know. I
think the big question next week is not only what
we're going to see in the jobs data, but if
we're going to see the jobs data.
Speaker 2 (07:21):
You know, if the I saw that story right, if
there's a shutdown, the BLS would delay the next US
jobs report.
Speaker 10 (07:28):
Right, And this is crucial data for monetary policy, as
you all know. I mean, ideally, if there is a shutdown,
it will be brief, as recent ones have been, and
the FED will still have that data in hand before
their next meeting.
Speaker 4 (07:40):
Regardless of when we get it.
Speaker 10 (07:42):
I anticipate that data is going to show, you know,
weaker job growth as we've seen over the past several months.
But I do believe the unemployment rate is going to
remain relatively steady. The break even rate, or the number
of jobs we have to add each month in order
for the unemployment rate to remain steady, is decreasing. And
that's because the labor force is decreasing.
Speaker 7 (08:03):
Right.
Speaker 10 (08:03):
We know we're not getting as many immigrants right now,
and some immigrants that we're already here, already working, maybe
leaving the workforce. The magnitude of that a little uncertain,
but I do believe that's going to help hold that
unemployment rate where it is.
Speaker 2 (08:16):
Mike, saving thirty seconds for you, because I think we
have to bring up Fed Governor Lisa Cook this case
before the Supreme Court. President Trump wants the Supreme Court to,
I guess give him the okay to fire her.
Speaker 6 (08:29):
She's fighting it as well.
Speaker 2 (08:30):
Just quickly, what do we know, what might we get
in terms of news, either today or potentially over the weekend.
Speaker 7 (08:36):
Well, a decision could come any time by the Court,
and they have tended to move quickly in these Trump
firing officials cases, except that in this case there are
a lot of miquey filings, friends of the court, filings
that the justices may want to wade through. And also
we've seen in a couple of controversial cases that some
(08:57):
justices want to dissent, and so that takes some time
to write. So we don't exactly know when we are
going to get this decision. If the Court allows her
to stay in the job, then we kind of lose
the headlines for a year or so while it goes
through lower courts. And if they fire her, then of
course we'll be back here immediately talking with you about
(09:19):
what happens next to the FED.
Speaker 2 (09:20):
Right, and we talk about whether or not we have
an independent FED anymore.
Speaker 6 (09:23):
All right, Mike McKee, thank you so much. There in DC.
Speaker 2 (09:26):
Bloomergs Mike McKee along with Elizabeth Renter, senior economist at
Nerd Wallet.
Speaker 8 (09:30):
Stay with us more from Bloomberg Business Week Daily coming
up after this.
Speaker 1 (09:39):
You're listening to the Bloomberg Business Week Daily Podcast. Catch
us live weekday afternoons from two to five eastering. Listen
on Apple Karplay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 2 (09:52):
Well, former FBI director James Comey has been charged with
lying to Congress an obstruction related to testimony he gave
in twenty twenty, accelerating President Trump's push for legal action
against his perceived political enemies. Now after the indictment, Comy
said in a video on Instagram that he is not afraid.
His lawyer to Tim has come out with a statement.
Speaker 8 (10:13):
Yeah, as lawyer said, Jim Comy denies the charges filed
in their entirety. We look forward to vindicating him in
the courtroom. I want to bring in Bloomberg News Justice
Department reporter Chris Strome. He joins us from Washington, DC. Chris,
a relatively short indictment. What exactly is James Comy alleged
to have done?
Speaker 5 (10:34):
Well?
Speaker 4 (10:34):
The process? Here?
Speaker 11 (10:35):
Is highly unusual. The charges are highly unusual. There's two
charges against Comy. It's for lying and obstructing a congressional
proceeding related to testimony he gave in September of twenty twenty,
which was just about five years ago, which was right
up against the statute limitations for DOJ to go get
these charges.
Speaker 2 (10:54):
So I got to say, all of us are I
think doing a deep dive to try and remember if
I can't even remember what happened on my so to
think about what happened in five years ago. Although when
you start doing it, you were like, oh, yeah, we
day Monday was the Tailanell press conference.
Speaker 8 (11:08):
It was it was that's all I remember.
Speaker 6 (11:10):
Well done, well done.
Speaker 2 (11:11):
So but Chris take us back there and what it
is that he is charged with lying about.
Speaker 4 (11:19):
Yeah.
Speaker 11 (11:19):
So, during the hearing, it was before the Senate Judiciary Committee,
he was asked about a situation in which his deputy,
Andrew McCabe had leaked information to the Wall Street Journal
about Hillary Clinton, and Komy.
Speaker 4 (11:36):
Was asked if he stood by previous.
Speaker 11 (11:38):
Testimony he had given that he didn't authorize the leak,
and he said he did. Now the Justice Department is
trying to say that Komy wasn't telling the truth because
he was involved in authorizing the leak. And it goes
back actually to twenty sixteen when there was a dispute
(11:59):
between Komy and his deputy Andrew McCabe regarding the leak.
McCabe had said that Comy approved of the leak after
the Wall Street Journal reported on it, and Kmy said
he had no memory of that. The Justice Department Inspector
(12:19):
General looked into this and issued a report that found
that Komy was telling the truth and McCabe was lying
about it. And so essentially Comy was reiterating that he
had no knowledge of the leak, but the Justice Department
is trying to say, well, Andrew McCabe said, you did
(12:42):
have knowledge of the leak, and so therefore.
Speaker 4 (12:46):
We are going to charge you with lying.
Speaker 11 (12:48):
Now, the Justice Department might have some additional information, but
this has been well investigated and to our knowledge, there's
no new information that would that would prove Kmy was lying.
Speaker 8 (13:01):
So it raises the question and back to what Patrick Fitzgerald,
the lawyer for James Comy, said, he denies the charges
filed and we look forward to vindicating him in the courtroom.
Does it make it too a courtroom.
Speaker 4 (13:14):
It's hard to know. At this point.
Speaker 11 (13:15):
Comy is going to have an initial appearance on October ninth.
I'm sure that his lawyers are going to move to
just dismiss the charges before they ever go to trial.
Getting charges dismissed is very difficult, so it's you know,
probably more likely that they will end up going to trial.
(13:35):
I would expect Comy and his lawyers to call for
a quick trial because they believe the facts are on
their side and that Komy can get equitted.
Speaker 2 (13:43):
What about a history lesson for everybody, a civic lesson
for everybody.
Speaker 6 (13:48):
I mean, do presidential.
Speaker 2 (13:49):
Powers extend to something like this and using the Justice
Department to maybe go after presidential foes?
Speaker 11 (13:57):
Well, this has been one of the raging debates under
the Trump administration, both the first Trump administration but definitely
under this second administration. How far do Trump's powers go
as president? Now, Trump will say that he controls the
Justice Department, that he can order prosecutions, that he is
the chief law enforcement officer. Historically, the Justice Department has
(14:20):
maintained independence from the White House and from the president,
but that's largely.
Speaker 4 (14:28):
Based on norms and traditional practices.
Speaker 11 (14:34):
There's no law or regulation that says the president can't
interfere in prosecutions.
Speaker 2 (14:42):
Yeah, I guess I would say some presidential historians would
also suggest that maybe a google the Watergate like at
this point right.
Speaker 8 (14:49):
Well, that time we had a lot of pushback from
Republican senators who made their way to the White House,
And we haven't heard that this time.
Speaker 2 (14:56):
Around, right, So, like, we'll see, We'll just have to,
I guess, kind of wait and see how this plays out.
Interesting story, another one certainly on our mind. Chris, Thank
you so much for running through it for us. Chris Strom,
He's Justice Department. Justice Department reporter joining us from Washington, DC.
Speaker 8 (15:17):
Stay with us more from Bloomberg Business Week Daily coming
up after this.
Speaker 1 (15:25):
You're listening to the Bloomberg Business Week Daily Podcast. Catch
us live weekday afternoons from two to five eas during
Listen on Apple Karplay and Android Auto with the Bloomberg
Business app, or watch us live on YouTube.
Speaker 8 (15:39):
In the meantime, we continue to piece together the life
of Jeffrey Epstein. Bloomberg News has gone through more than
eighteen thousand emails from Epstein's personal Yahoo account that was
obtained by Bloomberg News that cash revealing Carol a sweeping
array of details about not just his public life, but
his private life as well.
Speaker 2 (15:56):
Exactly we want to get into it. It is today's Bloomberg
Big Take. Bloomberg News finance reporter Max Ableson part of
the team who wrote it. He's here in studio, Max,
so good to have you here. Another incredible read. It
is among our most read stories on the Bloomberg First
of all, step back. We've been covering this, right, these
emails remind everybody, the emails that Bloomberg got access to
(16:17):
what you guys have been going through.
Speaker 5 (16:19):
Yeah, that's right.
Speaker 9 (16:19):
It's been one of the highlights of my you know,
twenty years in journalism to be a part of this
team with Siria Matu and Jason Leopold and if Benny Morrison,
many others.
Speaker 5 (16:29):
So, you know, Epstein who remains.
Speaker 9 (16:33):
So profoundly central to the public imagination and yet.
Speaker 5 (16:36):
Such a profound enigma.
Speaker 9 (16:38):
Bloomberg News obtained you know, thousands, more than ten thousand,
more than eighteen thousand emails. And I want to be clear,
these are these are private emails. These aren't things that have.
Speaker 5 (16:49):
Been recycled through.
Speaker 9 (16:52):
It's not things everyone knows about this new stuff and
it's from it's from a private email dress actually, for example,
where there was one email where someone says, listen, I
need to talk to you about something private. What email
would be good and he writes back and says this
one to give.
Speaker 5 (17:09):
You a sense of what we're talking about here.
Speaker 9 (17:12):
And my colleagues, including Harry Wilson and others, did some
really remarkable reporting on Peter Mendelssohn, who lost his job
as the UK bassador of the United States.
Speaker 5 (17:20):
Exactly in the week of their story.
Speaker 9 (17:23):
And Avin Benny Benny Morrison and Jason Leopold have done
and others had done great work on Gillian Maxwell and
really carefully showing that her relationship to Epstein was just
just much deeper and that partnership was much closer than
either either have had admitted. And what this story, which
which I wrote with this this wonderful team, what this
(17:43):
story is about is, in some ways, I hope you know,
not the usual.
Speaker 5 (17:47):
You know, Epstein is of course, in some.
Speaker 9 (17:48):
Ways a story about sex and sex crimes. But I
think what you'll find is that what this story is
about is about what I what I cover. It's it's
really a story about money and a storry about power
and a story about connections. And that's how we talked
about it with our editors, including Lauren Eder.
Speaker 2 (18:04):
And it's a but can I just pump in in
that there's a bunch of people pictures, and I'll be
honest with you, I.
Speaker 5 (18:08):
Think when we both I didn't recognize most of them.
Speaker 8 (18:11):
Well, that's what I think was so notable about this.
I mean, there are certainly the names that have been
associated with Epstein for years, like Alan Derschowitz, for example,
and there's new information, new emails from there in a
conversation that your team had with him about that. But
there's also a name that I'd never seen before, Mary Spaeth,
somebody who's a crisis strategist. She was director of media
relations at one time for the White House under Ronald Reagan.
(18:33):
What did she what role did she serve?
Speaker 5 (18:36):
Well?
Speaker 9 (18:36):
Thanks for that question, because I think what's special about
the piece and I hope viewers and listeners check it out.
I think what makes it a valuable piece of journalism,
especially at this moment when Epstein.
Speaker 5 (18:47):
Is really in the news and is all of a sudden.
Speaker 9 (18:50):
It has gone from being an exclamation point to a
real question mark. And there are a lot of questions
about what's going to happen now over the next few
days and weeks and months with Epstein and his files.
What our story is about and why Mary Spaith comes
up is that it's about the depth and the breadth
of his relationships. And you know, it is not a
(19:11):
story about Republicans versus a story about democrats. It's a
story about powerful people, and it's a story about different
kinds of power. It's a story about academics and researchers,
people who made it make it into high elite echelons
of intellectual life. It's about people who offer, like Mary
Spaith offers a basically strategy for people who are in trouble,
(19:32):
crisis strategy, public relations. And it's a story about counselors
and lawyers. And to answer your question about Mary, there
was a point, believe it or not, where investigators are
closing in Jeffrey Epstein. This is early two thousand and eight.
You know, he's about to go to jail for the
It's like about a year, it's a little bit longer
(19:53):
than a year. And after that he's a free man
for a very long time. I think about a decade
until the twenty nineteen charge sex trafficking, and then he dies.
Speaker 5 (20:02):
He's found dead in prison for jail right after that.
Speaker 9 (20:06):
But back in two thousand and eight, investigators are circling
Epsea's in trouble and what do we find in these emails?
But these draft apology options where she sends him three
different kinds of apology apologies. One is one's very meek,
talks about his memories of being a kid.
Speaker 5 (20:25):
It's actually found it very deep.
Speaker 9 (20:28):
You know all of us remember being kids and having
to apologize. Second one is very short, it's really terse.
But the third one, it's the word we use.
Speaker 5 (20:39):
Is elegaic, and it is. He cites William James.
Speaker 9 (20:42):
I'm hoping it's the first Bloomberg News story that calls
out William James, nineteenth century American philosopher. Talks about the
hour of terror and the hour of say shifty, how.
Speaker 5 (20:52):
About that word?
Speaker 9 (20:53):
And he talks about the American dream, talks about the
American dream and a substantial rewards, and he says, this
is a public and heartfelt apology.
Speaker 8 (21:03):
I just want to say, Space Firm was hired through
a lawyer to provide communications options for mister Epstein and
his legal team, she said. In response to questions for
the story, she said, quote, I ultimately terminated the engagement
because of my discomfort with it.
Speaker 9 (21:14):
That's right, that's right, Thanks for saying that. I think
it's really important, out of fairness that we add things
like that. And you know, she also said, you know,
because of confidentiality and privilege, she can't comment further. But
you know, we don't know, We don't know what was
going on here. I want to be clear with our viewers.
You know, for all we know, Epstein was really very
(21:35):
close to saying sorry, but he did not. He did
not in the sense of giving a broad apology, certainly
to his victims.
Speaker 5 (21:44):
And I want to be clear.
Speaker 9 (21:45):
The US Department of Justice says there are more than
a thousand of them, more than a thousand of them,
and Epstein did not give a heartfelt William James quoting
apology as far as we know.
Speaker 5 (21:56):
But our story shows what it could have potentially sounded
like if he had.
Speaker 2 (22:01):
It's why we say there are so many questions still
out there. And you guys, by going through these emails,
maybe This is not direct conclusions, but you start to
piece together, you know, kind of a little bit more
of the life around Jeffrey Epstein. Max, thank you as always,
Max abel Abelson. He's financial reporter at Bloomberg News. This
is the big take.
Speaker 6 (22:19):
Check it out on the Bloomberg.
Speaker 8 (22:21):
Stay with us. More from Bloomberg Business Week Daily coming
up after this.
Speaker 1 (22:29):
You're listening to the Bloomberg Business Week Daily podcast. Catch
us live weekday afternoons from two to five e's during
Listen on Applecarplay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 2 (22:43):
All right, TikTok, everybody, just about eighteen nineteen minutes to
go until we wrap up.
Speaker 6 (22:46):
The trade for the day and for the week overall.
Speaker 2 (22:49):
We are expecting a down week on the S and
P five hundred, this after three consecutive weeks have gained. However,
there is one name that is definitely on our radar.
I've had to play around with.
Speaker 6 (22:59):
The game that I'm going to talk about with my TV.
Speaker 2 (23:01):
Colleagues, because as soon as we saw the headline popping
about Electronic Art said to be near a takeover by
silver Lake, initially reported by the Wall Street Journal, This
is about a fifty billion dollars maybe.
Speaker 6 (23:14):
Deal to go private. That's big that according to people familiar,
that would be massive.
Speaker 8 (23:19):
It's not just silver Lake but also sadier Abia's public
investment fund. This, according to people with knowledge of the matter.
The video game maker is known for madd An NFL,
the SIMS and then Carrol's favorite battlefield.
Speaker 6 (23:31):
I walk by every.
Speaker 8 (23:32):
Playing that all the time.
Speaker 5 (23:33):
Love it.
Speaker 8 (23:33):
Couldningnounce a deal as soon as next week, said the
person who has not to be identified discussing confidential information.
Speaker 2 (23:38):
Stock up about fourteen percent as we speak, So we
said it could be a fifty billion dollar take private.
Right now, the market cap at forty eight point two billion.
All right, let's talk about not necessarily that unless she
wants to, but let's talk about the stocks overall for
the day, for the week. Carolschlife is back with us
chief market strategist at BMO Private Wealth, joining us from
(23:59):
Minneapolis Private Wealth. By the way, three hundred and fifteen
billion dollars in assets under management. And I got to say,
if you're lucky enough to have a four oh one
K and you've looked at it recently and you're buying
the market Carol, you're pretty happy.
Speaker 12 (24:12):
It combs up.
Speaker 13 (24:13):
Yeah, yeah, you're pretty happy. And it almost doesn't matter
what segment you're in. And it's actually better to have
spread it around this year because in particular, diversification, which
we preach all the time, is work.
Speaker 12 (24:27):
It definitely worked this year.
Speaker 8 (24:28):
So let's let's talk a little bit about valuations, because
earlier this week we heard from fed JJ Powell. He
was asked about stock valuation. There was not a rational
exuberance moment, No, there was not. He did say it's
not a time of elevated its financial stability risks. But
he also said, Carol, Carol, s some asset prices elevated
(24:50):
versus historical levels, and by many measures, equity prices are
fairly highly valued.
Speaker 14 (24:56):
Is he right?
Speaker 13 (24:58):
Yeah, they're rich. But it's also important to put the
caveat in there. And actually the piece I wrote this
week for our field was called beer Hunting, and we
talked about valuations in there. And one of the things
it's important to recall is that valuations are not what
kills a bear market, nor do they kills a bull market,
or do they revive a bear market. Things can stay
(25:19):
over or undervalued for a great length of time, and
it's usually something structural that breaks that brings markets down.
And so yes, the valuations are high, but earnings estimates
and GDP estimates have been brought down low because no
one knows exactly how to filter through all the impacts
of everything thrown us this year. And the one theme
(25:42):
that's been very consistent is the resiliency of businesses, the economy,
and consumers.
Speaker 2 (25:48):
You know, it's kind of wacky, right, like we just
in terms of the moods of this market, Like you
go back to January and I think we weren't you know,
we were still in the Biden economy and people were
still talking about us exceptionalism. And then we got the
inauguration and the White House started, you know, implementing executive
(26:12):
orders and different initiatives. And then of course the tariffs
and we saw a stock sell off and then we've
seen the bounce back as things kind of eased when
it comes to tariffs. It's just been kind of all
over the place. Is there a dynamic though to this market?
Speaker 6 (26:28):
You know that you kind of can cling to.
Speaker 13 (26:31):
I think the dynamic we've been claimed to and the
thing we've urged investors to cling to all years to
follow the fundamentals and to look at companies and to
listen to what companies are doing and watch what they're doing.
And it's interesting because we also had in addition to
all of that, we also had the big disconnect between
the hard data and the soft data for a long time,
or the sentiment, and you still see inklings of that,
(26:53):
particularly among consumers.
Speaker 12 (26:56):
But we've also encouraged.
Speaker 13 (26:58):
Clients to step back and think through this is really
the mirror image of what you had in Trump one
point zero or when he came in there. You had
a lot of really optimistic things going on with the economy,
and then we had tariffs hit in the back half
of that, and then we had COVID, and everybody.
Speaker 12 (27:13):
Had a collective lack of recall of.
Speaker 13 (27:17):
What came before COVID in a lot of cases this
time around, if you recall after the election and into
early January, we came in with a lot of optimism.
Wall Street staffed up thinking we were going to have
all the M and A and IPOs and all of
that go on, and then we got hit all of
a sudden with tariffs and trade policy and geopolitical issues
(27:37):
and markets took a step back and looked at that,
and now we're back to where a lot of that
stuff's pushed aside. Markets are desperately trying to get to
the other side of tariffs and focus on something else.
Speaker 12 (27:48):
But business is through it all.
Speaker 13 (27:50):
And that's one of the advantages we have is that
we bank multi generational businesses and we also manage the
money for those businesses when we'll liquidity events happen, and
so we're plugged into a lot of that. And when
we talk to the business owners and the commercial teams
we have that serve those those business owners, they've told
us throughout their adapting and adopting as best they can,
(28:13):
and they're nervous, but they still have to grow and
they have to continue to do business because they have
shareholders and bankers and employees.
Speaker 8 (28:22):
What are they nervous about.
Speaker 13 (28:25):
I think they're just nervous like anybody else, trying to
figure out, you know, where does the next policy changer
shift come from?
Speaker 8 (28:33):
Where there's I think the answer is social that's where
it comes from.
Speaker 14 (28:37):
Maybe it's social media, but you know, the hard part
is is it amplifies moves too, and even you know,
even when you go do a search on social media,
your search is going to feed your your.
Speaker 12 (28:51):
Personal personal preferences.
Speaker 13 (28:54):
If you will, you have to be active about searching
a variety of sources or active about searching out something
that's going to be neutral and down the middle. And
so yeah, it's definitely been a challenging year, but it's
a big process of having to write every week really
helps because we're trying to sort through the okay of
all of this stuff going on, right, what is impact
(29:15):
for portfolios moving forward?
Speaker 2 (29:17):
Carol, But I thought it was interesting that you said
that the work that you guys are doing for businesses
that even though there's some concerns and uncertainty and fears
out there, that they're making decisions right because they have
to run a business and if it's a competitive world
as we all know, and if they kind of delay
miss something, there's potential that they're going to lose share,
(29:38):
right and they're going to fall behind it, so that
they're pulling you know, that they're actually moving ahead with things, even.
Speaker 6 (29:44):
Like we see the IPO market. That's a good sign.
Speaker 13 (29:47):
Yeah, it's a great sign. And we've been talking about
for some time. When you look at the stats of
what's out there because we've had such a locked up
IPO market for such a long time. I've seen some
estimates recently of as many as thirty thousand companies that
are revenue and earnings generated mature companies in venture capital
(30:07):
and private capital portfolios.
Speaker 12 (30:09):
If even one percent of those go public, you know.
Speaker 13 (30:12):
The other thing that's really interesting is when you were
tracking the earnings as they came in in the second quarter,
they're technically according to Bloomberg, there were only four hundred
and ninety seven names in the S and P five hundred.
So we've had this net reduction of public companies out
there and so having some IBOs because we peaked in
(30:32):
terms of public companies back in nineteen ninety six I
think it was, and currently there are more ETFs than
there are publicly held companies in the US.
Speaker 2 (30:43):
Interesting, wait, all right, wait, we got to go, but
we got to come back on that point in the future,
because I think it's an interesting dynamic to this market
and what it says Caryl.
Speaker 6 (30:57):
Thanks glad we could reconnect Carrol's life.
Speaker 2 (31:00):
She's cheap market strategic at Female Private Wealth joining us
from Minneapolis.
Speaker 1 (31:04):
This is the Bloomberg Business Weekdaily Podcast available on Apple, Spotify,
and anywhere else you get your podcasts. Listen live weekday
afternoons from two to five pm Eastern on Bloomberg dot Com,
the iHeartRadio app tune In, and the Bloomberg Business app.
You can also watch us live every weekday on YouTube
(31:25):
and always on the Bloomberg terminal
Bloomberg Audio Studios, Podcasts, radio News. This is Bloomberg business
Week Daily reporting from the magazine that helps global leaders
stay ahead with insights on the people, companies, and trends
shaping today's complex economy. Plus global business, finance and tech
(00:23):
news as it happens. The Bloomberg Business Week Daily Podcast
with Carol Masser and Tim Stenebeck on Bloomberg Radio.
Speaker 2 (00:32):
Hey listen, folks. We did get a key inflation gauge.
It came out earlier this morning. It grew at a
slower pace last month. We also got some data on
a resilient US consumer. We also saw incomes growing, and
yet US consumer sentiment fell in the month of September
to a four month low on growing concerns about the
impact of high prices and personal finances. Richmond Fed President
(00:52):
Thomas Barkin spoke with Bloomberg TV and Radio international economics
correspondent and policy correspondent Michael McKee before this morning's of
US economic reports, and you talked about the Fed's dual
mandate and keeping an eye on all the data as
it continues to come in.
Speaker 3 (01:08):
It's a low hiring environment, but the labor supply is
also short and you have to be very attentive to
that balance because it could get out of balance right.
Similar on the inflation side, you do have these cost
pressures and four and a half years of inflation over target.
On the other hand, you're not seeing that show up
and spikes and inflation in the real time numbers.
Speaker 4 (01:28):
We are seeing what.
Speaker 3 (01:29):
Seems to be a productivity boom, and so I think
you have to be very attentive to how little we
know about how each of our mandate variables is going
to play out. And so, you know, I feel like
very adaptive is the way to think about it as
and that's part of why I'm not being prescriptive into well,
it's this many cuts over this period of time, because
I think we're going to see and learn a lot as.
Speaker 5 (01:49):
We go here.
Speaker 2 (01:50):
Adaptive and attentive sounds like data dependent. That is Richmond
FED President Thomas Barkin. Earlier this morning on Bloomberg with
Bloomberg TV and Radio International Economics and Policy course Mike
joining us from DC along with Elizabeth rent Or, senior
economist at the personal finance company nerd Wallet. We'll get
to her in just a moment, but Mike, I do
want to start with you this morning's data drop of
(02:12):
US data and what you heard from Fed President Barkin.
Does it all kind of mesh with what we got
in the latest FED decision and commentary.
Speaker 6 (02:23):
Maybe not.
Speaker 7 (02:25):
And that's the situation that Tom was describing, is we
came out of the FED meeting thinking that they were
going to do a rate cut in October and there
was a good chance of another one in December. And
then over the last four or five days, we've gotten
a number of data points that suggest that the economy
may be rebounding from a summer low, maybe stronger than
(02:46):
we thought. Second Quarter growth was revised up, and today
we got better than expected spending numbers from consumers. So
at this point it's really hard to say what's going
to happen. The one thing we know from today PCEE
report is that inflation is not going down. It didn't
get any worse, but it is still a closer to
three percent than the Fed's two percent target. So it
(03:10):
just kind of beans that those who are in the
middle for the Fed, they're probably going to be waiting
till much closer to October twenty ninth to make any
kind of decision.
Speaker 8 (03:21):
Mike, is there a shoe to drop when it comes
to inflation as a result of tariffs, because we did
have so many companies pull forward goods purchases before tariffs hit,
and we just haven't seen it show up. We're going
to start hearing from companies in the middle of next
month for their latest earnings report, but we're not seeing
the spikes in inflation like he was talking about to you.
Speaker 7 (03:42):
Well, we have seen some We've seen prices go up
for some goods, and there are expectations that will continue
to see that. It depends, as you mentioned, on inventories
and how fast those are worked down and then supply
chain adjustments. It's very hard to say exactly when things
are going to hit, but economists do expect and the
Fed does expect to see inflation rise over the next
(04:04):
couple of months. Then the question is does it go
down again or does it keep going up because maybe
the President is continuing to put on additional tariffs. The
one thing that we can probably into it is that
Americans are not happy. The consumer sentiment numbers went down
because of inflation, and even though it doesn't have a
(04:27):
lot to do with the President's tariffs, Gasoline prices have
gone up. Meat prices have gone up. Turkey prices have
gone up there for different reasons. But when you go
to the grocery store, it's all just inflation to you.
Speaker 2 (04:41):
Yep.
Speaker 6 (04:41):
I don't do a lot of the shopping in my house.
My husband tends to do.
Speaker 8 (04:44):
My daughter do.
Speaker 9 (04:46):
No.
Speaker 2 (04:46):
My people are my husband and my daughter. But man,
they brought some steaks and I was like, how much
did they cost? When they told me, I was like, whoa, Elizabeth,
come on in on this. Because we are continuing to
get data points, how does that cross with what we
did get from the and your view on where the
economy is and what needs to be done in terms
of monetary policy.
Speaker 10 (05:05):
Well, I think largely what Spin said is accurate. You know,
the FED is trying to keep their eye on the ball.
We're all trying to keep our eye on the ball.
But there's a lot of balls in the air right now,
and some of them are flying in completely different direction.
So it's really hard to suss out where things are headed.
When it comes to inflation, Yes, it ticked up just slightly,
but it's not showing real acceleration right now. To your point,
(05:27):
consumers are feeling a bit of a burn more than
that headline number would have you believe. You know, food
inflation rose last month according to today's data, and that's
something we all interact with on a weekly, if not
daily basis.
Speaker 4 (05:39):
We see that number.
Speaker 10 (05:40):
And so that's definitely playing into consumer sentiment. Also, we're
more exposed to all of this talk about the economy, right,
We're all talking a lot about when inflation is going
to pick back up, the impact of tariffs, and so
that's in the back of consumers heads as well, So
they anticipate a lot of potentially bad stuff happening as
of yet, wen't haven't seen it translate into reduce spending
(06:00):
from a big picture overall, I'd say this week we
got some more of those mixed messages though. Right consumer
spending is strong despite weak sentiment. The economy continues to
grow according to the GDP figures. I say, if there's
some good news out of this week in addition to
the consumer spending, is that the initial claims came down
the unemployment claims, So that's a bright spot I suppose
(06:22):
on the recent past labor market.
Speaker 2 (06:26):
You know, I'm thinking of a conversation that Tim and
I had yesterday with the CFO of a firm, right,
and we talked to the CEO just a couple of
weeks ago and they're saying they're pretty busy. There's a
lot of activity on their platform. We were thinking, well,
wait a minute, how does this mesh with maybe a
slowdown in consumer you know, concerns about the consumer and
they our own Stuart Paul kind of weighing in that, well,
what's happening is people are buying, but they're buying and
(06:47):
taking longer to pay for things, and that's why they're
making use of that place.
Speaker 8 (06:50):
Like essentially, if he sees a service such as though
that being used, then it could be a sign about
the way the consumer's feeling. Elizabeth, I want to go
to you on next week and the non farm payer
print that we're expecting a week from now, we'll be
sitting here talking about that number. Fifty thousand is the
number of jobs that economy is surveyed by Bloomberg expect
to be added to the economy. How is the labor
(07:11):
market in your view?
Speaker 10 (07:13):
The labor market is hanging in there, you know. I
think the big question next week is not only what
we're going to see in the jobs data, but if
we're going to see the jobs data.
Speaker 2 (07:21):
You know, if the I saw that story right, if
there's a shutdown, the BLS would delay the next US
jobs report.
Speaker 10 (07:28):
Right, And this is crucial data for monetary policy, as
you all know. I mean, ideally, if there is a shutdown,
it will be brief, as recent ones have been, and
the FED will still have that data in hand before
their next meeting.
Speaker 4 (07:40):
Regardless of when we get it.
Speaker 10 (07:42):
I anticipate that data is going to show, you know,
weaker job growth as we've seen over the past several months.
But I do believe the unemployment rate is going to
remain relatively steady. The break even rate, or the number
of jobs we have to add each month in order
for the unemployment rate to remain steady, is decreasing. And
that's because the labor force is decreasing.
Speaker 7 (08:03):
Right.
Speaker 10 (08:03):
We know we're not getting as many immigrants right now,
and some immigrants that we're already here, already working, maybe
leaving the workforce. The magnitude of that a little uncertain,
but I do believe that's going to help hold that
unemployment rate where it is.
Speaker 2 (08:16):
Mike, saving thirty seconds for you, because I think we
have to bring up Fed Governor Lisa Cook this case
before the Supreme Court. President Trump wants the Supreme Court to,
I guess give him the okay to fire her.
Speaker 6 (08:29):
She's fighting it as well.
Speaker 2 (08:30):
Just quickly, what do we know, what might we get
in terms of news, either today or potentially over the weekend.
Speaker 7 (08:36):
Well, a decision could come any time by the Court,
and they have tended to move quickly in these Trump
firing officials cases, except that in this case there are
a lot of miquey filings, friends of the court, filings
that the justices may want to wade through. And also
we've seen in a couple of controversial cases that some
(08:57):
justices want to dissent, and so that takes some time
to write. So we don't exactly know when we are
going to get this decision. If the Court allows her
to stay in the job, then we kind of lose
the headlines for a year or so while it goes
through lower courts. And if they fire her, then of
course we'll be back here immediately talking with you about
(09:19):
what happens next to the FED.
Speaker 2 (09:20):
Right, and we talk about whether or not we have
an independent FED anymore.
Speaker 6 (09:23):
All right, Mike McKee, thank you so much. There in DC.
Speaker 2 (09:26):
Bloomergs Mike McKee along with Elizabeth Renter, senior economist at
Nerd Wallet.
Speaker 8 (09:30):
Stay with us more from Bloomberg Business Week Daily coming
up after this.
Speaker 1 (09:39):
You're listening to the Bloomberg Business Week Daily Podcast. Catch
us live weekday afternoons from two to five eastering. Listen
on Apple Karplay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 2 (09:52):
Well, former FBI director James Comey has been charged with
lying to Congress an obstruction related to testimony he gave
in twenty twenty, accelerating President Trump's push for legal action
against his perceived political enemies. Now after the indictment, Comy
said in a video on Instagram that he is not afraid.
His lawyer to Tim has come out with a statement.
Speaker 8 (10:13):
Yeah, as lawyer said, Jim Comy denies the charges filed
in their entirety. We look forward to vindicating him in
the courtroom. I want to bring in Bloomberg News Justice
Department reporter Chris Strome. He joins us from Washington, DC. Chris,
a relatively short indictment. What exactly is James Comy alleged
to have done?
Speaker 5 (10:34):
Well?
Speaker 4 (10:34):
The process? Here?
Speaker 11 (10:35):
Is highly unusual. The charges are highly unusual. There's two
charges against Comy. It's for lying and obstructing a congressional
proceeding related to testimony he gave in September of twenty twenty,
which was just about five years ago, which was right
up against the statute limitations for DOJ to go get
these charges.
Speaker 2 (10:54):
So I got to say, all of us are I
think doing a deep dive to try and remember if
I can't even remember what happened on my so to
think about what happened in five years ago. Although when
you start doing it, you were like, oh, yeah, we
day Monday was the Tailanell press conference.
Speaker 8 (11:08):
It was it was that's all I remember.
Speaker 6 (11:10):
Well done, well done.
Speaker 2 (11:11):
So but Chris take us back there and what it
is that he is charged with lying about.
Speaker 4 (11:19):
Yeah.
Speaker 11 (11:19):
So, during the hearing, it was before the Senate Judiciary Committee,
he was asked about a situation in which his deputy,
Andrew McCabe had leaked information to the Wall Street Journal
about Hillary Clinton, and Komy.
Speaker 4 (11:36):
Was asked if he stood by previous.
Speaker 11 (11:38):
Testimony he had given that he didn't authorize the leak,
and he said he did. Now the Justice Department is
trying to say that Komy wasn't telling the truth because
he was involved in authorizing the leak. And it goes
back actually to twenty sixteen when there was a dispute
(11:59):
between Komy and his deputy Andrew McCabe regarding the leak.
McCabe had said that Comy approved of the leak after
the Wall Street Journal reported on it, and Kmy said
he had no memory of that. The Justice Department Inspector
(12:19):
General looked into this and issued a report that found
that Komy was telling the truth and McCabe was lying
about it. And so essentially Comy was reiterating that he
had no knowledge of the leak, but the Justice Department
is trying to say, well, Andrew McCabe said, you did
(12:42):
have knowledge of the leak, and so therefore.
Speaker 4 (12:46):
We are going to charge you with lying.
Speaker 11 (12:48):
Now, the Justice Department might have some additional information, but
this has been well investigated and to our knowledge, there's
no new information that would that would prove Kmy was lying.
Speaker 8 (13:01):
So it raises the question and back to what Patrick Fitzgerald,
the lawyer for James Comy, said, he denies the charges
filed and we look forward to vindicating him in the courtroom.
Does it make it too a courtroom.
Speaker 4 (13:14):
It's hard to know. At this point.
Speaker 11 (13:15):
Comy is going to have an initial appearance on October ninth.
I'm sure that his lawyers are going to move to
just dismiss the charges before they ever go to trial.
Getting charges dismissed is very difficult, so it's you know,
probably more likely that they will end up going to trial.
(13:35):
I would expect Comy and his lawyers to call for
a quick trial because they believe the facts are on
their side and that Komy can get equitted.
Speaker 2 (13:43):
What about a history lesson for everybody, a civic lesson
for everybody.
Speaker 6 (13:48):
I mean, do presidential.
Speaker 2 (13:49):
Powers extend to something like this and using the Justice
Department to maybe go after presidential foes?
Speaker 11 (13:57):
Well, this has been one of the raging debates under
the Trump administration, both the first Trump administration but definitely
under this second administration. How far do Trump's powers go
as president? Now, Trump will say that he controls the
Justice Department, that he can order prosecutions, that he is
the chief law enforcement officer. Historically, the Justice Department has
(14:20):
maintained independence from the White House and from the president,
but that's largely.
Speaker 4 (14:28):
Based on norms and traditional practices.
Speaker 11 (14:34):
There's no law or regulation that says the president can't
interfere in prosecutions.
Speaker 2 (14:42):
Yeah, I guess I would say some presidential historians would
also suggest that maybe a google the Watergate like at
this point right.
Speaker 8 (14:49):
Well, that time we had a lot of pushback from
Republican senators who made their way to the White House,
And we haven't heard that this time.
Speaker 2 (14:56):
Around, right, So, like, we'll see, We'll just have to,
I guess, kind of wait and see how this plays out.
Interesting story, another one certainly on our mind. Chris, Thank
you so much for running through it for us. Chris Strom,
He's Justice Department. Justice Department reporter joining us from Washington, DC.
Speaker 8 (15:17):
Stay with us more from Bloomberg Business Week Daily coming
up after this.
Speaker 1 (15:25):
You're listening to the Bloomberg Business Week Daily Podcast. Catch
us live weekday afternoons from two to five eas during
Listen on Apple Karplay and Android Auto with the Bloomberg
Business app, or watch us live on YouTube.
Speaker 8 (15:39):
In the meantime, we continue to piece together the life
of Jeffrey Epstein. Bloomberg News has gone through more than
eighteen thousand emails from Epstein's personal Yahoo account that was
obtained by Bloomberg News that cash revealing Carol a sweeping
array of details about not just his public life, but
his private life as well.
Speaker 2 (15:56):
Exactly we want to get into it. It is today's Bloomberg
Big Take. Bloomberg News finance reporter Max Ableson part of
the team who wrote it. He's here in studio, Max,
so good to have you here. Another incredible read. It
is among our most read stories on the Bloomberg First
of all, step back. We've been covering this, right, these
emails remind everybody, the emails that Bloomberg got access to
(16:17):
what you guys have been going through.
Speaker 5 (16:19):
Yeah, that's right.
Speaker 9 (16:19):
It's been one of the highlights of my you know,
twenty years in journalism to be a part of this
team with Siria Matu and Jason Leopold and if Benny Morrison,
many others.
Speaker 5 (16:29):
So, you know, Epstein who remains.
Speaker 9 (16:33):
So profoundly central to the public imagination and yet.
Speaker 5 (16:36):
Such a profound enigma.
Speaker 9 (16:38):
Bloomberg News obtained you know, thousands, more than ten thousand,
more than eighteen thousand emails. And I want to be clear,
these are these are private emails. These aren't things that have.
Speaker 5 (16:49):
Been recycled through.
Speaker 9 (16:52):
It's not things everyone knows about this new stuff and
it's from it's from a private email dress actually, for example,
where there was one email where someone says, listen, I
need to talk to you about something private. What email
would be good and he writes back and says this
one to give.
Speaker 5 (17:09):
You a sense of what we're talking about here.
Speaker 9 (17:12):
And my colleagues, including Harry Wilson and others, did some
really remarkable reporting on Peter Mendelssohn, who lost his job
as the UK bassador of the United States.
Speaker 5 (17:20):
Exactly in the week of their story.
Speaker 9 (17:23):
And Avin Benny Benny Morrison and Jason Leopold have done
and others had done great work on Gillian Maxwell and
really carefully showing that her relationship to Epstein was just
just much deeper and that partnership was much closer than
either either have had admitted. And what this story, which
which I wrote with this this wonderful team, what this
(17:43):
story is about is, in some ways, I hope you know,
not the usual.
Speaker 5 (17:47):
You know, Epstein is of course, in some.
Speaker 9 (17:48):
Ways a story about sex and sex crimes. But I
think what you'll find is that what this story is
about is about what I what I cover. It's it's
really a story about money and a storry about power
and a story about connections. And that's how we talked
about it with our editors, including Lauren Eder.
Speaker 2 (18:04):
And it's a but can I just pump in in
that there's a bunch of people pictures, and I'll be
honest with you, I.
Speaker 5 (18:08):
Think when we both I didn't recognize most of them.
Speaker 8 (18:11):
Well, that's what I think was so notable about this.
I mean, there are certainly the names that have been
associated with Epstein for years, like Alan Derschowitz, for example,
and there's new information, new emails from there in a
conversation that your team had with him about that. But
there's also a name that I'd never seen before, Mary Spaeth,
somebody who's a crisis strategist. She was director of media
relations at one time for the White House under Ronald Reagan.
(18:33):
What did she what role did she serve?
Speaker 5 (18:36):
Well?
Speaker 9 (18:36):
Thanks for that question, because I think what's special about
the piece and I hope viewers and listeners check it out.
I think what makes it a valuable piece of journalism,
especially at this moment when Epstein.
Speaker 5 (18:47):
Is really in the news and is all of a sudden.
Speaker 9 (18:50):
It has gone from being an exclamation point to a
real question mark. And there are a lot of questions
about what's going to happen now over the next few
days and weeks and months with Epstein and his files.
What our story is about and why Mary Spaith comes
up is that it's about the depth and the breadth
of his relationships. And you know, it is not a
(19:11):
story about Republicans versus a story about democrats. It's a
story about powerful people, and it's a story about different
kinds of power. It's a story about academics and researchers,
people who made it make it into high elite echelons
of intellectual life. It's about people who offer, like Mary
Spaith offers a basically strategy for people who are in trouble,
(19:32):
crisis strategy, public relations. And it's a story about counselors
and lawyers. And to answer your question about Mary, there
was a point, believe it or not, where investigators are
closing in Jeffrey Epstein. This is early two thousand and eight.
You know, he's about to go to jail for the
It's like about a year, it's a little bit longer
(19:53):
than a year. And after that he's a free man
for a very long time. I think about a decade
until the twenty nineteen charge sex trafficking, and then he dies.
Speaker 5 (20:02):
He's found dead in prison for jail right after that.
Speaker 9 (20:06):
But back in two thousand and eight, investigators are circling
Epsea's in trouble and what do we find in these emails?
But these draft apology options where she sends him three
different kinds of apology apologies. One is one's very meek,
talks about his memories of being a kid.
Speaker 5 (20:25):
It's actually found it very deep.
Speaker 9 (20:28):
You know all of us remember being kids and having
to apologize. Second one is very short, it's really terse.
But the third one, it's the word we use.
Speaker 5 (20:39):
Is elegaic, and it is. He cites William James.
Speaker 9 (20:42):
I'm hoping it's the first Bloomberg News story that calls
out William James, nineteenth century American philosopher. Talks about the
hour of terror and the hour of say shifty, how.
Speaker 5 (20:52):
About that word?
Speaker 9 (20:53):
And he talks about the American dream, talks about the
American dream and a substantial rewards, and he says, this
is a public and heartfelt apology.
Speaker 8 (21:03):
I just want to say, Space Firm was hired through
a lawyer to provide communications options for mister Epstein and
his legal team, she said. In response to questions for
the story, she said, quote, I ultimately terminated the engagement
because of my discomfort with it.
Speaker 9 (21:14):
That's right, that's right, Thanks for saying that. I think
it's really important, out of fairness that we add things
like that. And you know, she also said, you know,
because of confidentiality and privilege, she can't comment further. But
you know, we don't know, We don't know what was
going on here. I want to be clear with our viewers.
You know, for all we know, Epstein was really very
(21:35):
close to saying sorry, but he did not. He did
not in the sense of giving a broad apology, certainly
to his victims.
Speaker 5 (21:44):
And I want to be clear.
Speaker 9 (21:45):
The US Department of Justice says there are more than
a thousand of them, more than a thousand of them,
and Epstein did not give a heartfelt William James quoting
apology as far as we know.
Speaker 5 (21:56):
But our story shows what it could have potentially sounded
like if he had.
Speaker 2 (22:01):
It's why we say there are so many questions still
out there. And you guys, by going through these emails,
maybe This is not direct conclusions, but you start to
piece together, you know, kind of a little bit more
of the life around Jeffrey Epstein. Max, thank you as always,
Max abel Abelson. He's financial reporter at Bloomberg News. This
is the big take.
Speaker 6 (22:19):
Check it out on the Bloomberg.
Speaker 8 (22:21):
Stay with us. More from Bloomberg Business Week Daily coming
up after this.
Speaker 1 (22:29):
You're listening to the Bloomberg Business Week Daily podcast. Catch
us live weekday afternoons from two to five e's during
Listen on Applecarplay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 2 (22:43):
All right, TikTok, everybody, just about eighteen nineteen minutes to
go until we wrap up.
Speaker 6 (22:46):
The trade for the day and for the week overall.
Speaker 2 (22:49):
We are expecting a down week on the S and
P five hundred, this after three consecutive weeks have gained. However,
there is one name that is definitely on our radar.
I've had to play around with.
Speaker 6 (22:59):
The game that I'm going to talk about with my TV.
Speaker 2 (23:01):
Colleagues, because as soon as we saw the headline popping
about Electronic Art said to be near a takeover by
silver Lake, initially reported by the Wall Street Journal, This
is about a fifty billion dollars maybe.
Speaker 6 (23:14):
Deal to go private. That's big that according to people familiar,
that would be massive.
Speaker 8 (23:19):
It's not just silver Lake but also sadier Abia's public
investment fund. This, according to people with knowledge of the matter.
The video game maker is known for madd An NFL,
the SIMS and then Carrol's favorite battlefield.
Speaker 6 (23:31):
I walk by every.
Speaker 8 (23:32):
Playing that all the time.
Speaker 5 (23:33):
Love it.
Speaker 8 (23:33):
Couldningnounce a deal as soon as next week, said the
person who has not to be identified discussing confidential information.
Speaker 2 (23:38):
Stock up about fourteen percent as we speak, So we
said it could be a fifty billion dollar take private.
Right now, the market cap at forty eight point two billion.
All right, let's talk about not necessarily that unless she
wants to, but let's talk about the stocks overall for
the day, for the week. Carolschlife is back with us
chief market strategist at BMO Private Wealth, joining us from
(23:59):
Minneapolis Private Wealth. By the way, three hundred and fifteen
billion dollars in assets under management. And I got to say,
if you're lucky enough to have a four oh one
K and you've looked at it recently and you're buying
the market Carol, you're pretty happy.
Speaker 12 (24:12):
It combs up.
Speaker 13 (24:13):
Yeah, yeah, you're pretty happy. And it almost doesn't matter
what segment you're in. And it's actually better to have
spread it around this year because in particular, diversification, which
we preach all the time, is work.
Speaker 12 (24:27):
It definitely worked this year.
Speaker 8 (24:28):
So let's let's talk a little bit about valuations, because
earlier this week we heard from fed JJ Powell. He
was asked about stock valuation. There was not a rational
exuberance moment, No, there was not. He did say it's
not a time of elevated its financial stability risks. But
he also said, Carol, Carol, s some asset prices elevated
(24:50):
versus historical levels, and by many measures, equity prices are
fairly highly valued.
Speaker 14 (24:56):
Is he right?
Speaker 13 (24:58):
Yeah, they're rich. But it's also important to put the
caveat in there. And actually the piece I wrote this
week for our field was called beer Hunting, and we
talked about valuations in there. And one of the things
it's important to recall is that valuations are not what
kills a bear market, nor do they kills a bull market,
or do they revive a bear market. Things can stay
(25:19):
over or undervalued for a great length of time, and
it's usually something structural that breaks that brings markets down.
And so yes, the valuations are high, but earnings estimates
and GDP estimates have been brought down low because no
one knows exactly how to filter through all the impacts
of everything thrown us this year. And the one theme
(25:42):
that's been very consistent is the resiliency of businesses, the economy,
and consumers.
Speaker 2 (25:48):
You know, it's kind of wacky, right, like we just
in terms of the moods of this market, Like you
go back to January and I think we weren't you know,
we were still in the Biden economy and people were
still talking about us exceptionalism. And then we got the
inauguration and the White House started, you know, implementing executive
(26:12):
orders and different initiatives. And then of course the tariffs
and we saw a stock sell off and then we've
seen the bounce back as things kind of eased when
it comes to tariffs. It's just been kind of all
over the place. Is there a dynamic though to this market?
Speaker 6 (26:28):
You know that you kind of can cling to.
Speaker 13 (26:31):
I think the dynamic we've been claimed to and the
thing we've urged investors to cling to all years to
follow the fundamentals and to look at companies and to
listen to what companies are doing and watch what they're doing.
And it's interesting because we also had in addition to
all of that, we also had the big disconnect between
the hard data and the soft data for a long time,
or the sentiment, and you still see inklings of that,
(26:53):
particularly among consumers.
Speaker 12 (26:56):
But we've also encouraged.
Speaker 13 (26:58):
Clients to step back and think through this is really
the mirror image of what you had in Trump one
point zero or when he came in there. You had
a lot of really optimistic things going on with the economy,
and then we had tariffs hit in the back half
of that, and then we had COVID, and everybody.
Speaker 12 (27:13):
Had a collective lack of recall of.
Speaker 13 (27:17):
What came before COVID in a lot of cases this
time around, if you recall after the election and into
early January, we came in with a lot of optimism.
Wall Street staffed up thinking we were going to have
all the M and A and IPOs and all of
that go on, and then we got hit all of
a sudden with tariffs and trade policy and geopolitical issues
(27:37):
and markets took a step back and looked at that,
and now we're back to where a lot of that
stuff's pushed aside. Markets are desperately trying to get to
the other side of tariffs and focus on something else.
Speaker 12 (27:48):
But business is through it all.
Speaker 13 (27:50):
And that's one of the advantages we have is that
we bank multi generational businesses and we also manage the
money for those businesses when we'll liquidity events happen, and
so we're plugged into a lot of that. And when
we talk to the business owners and the commercial teams
we have that serve those those business owners, they've told
us throughout their adapting and adopting as best they can,
(28:13):
and they're nervous, but they still have to grow and
they have to continue to do business because they have
shareholders and bankers and employees.
Speaker 8 (28:22):
What are they nervous about.
Speaker 13 (28:25):
I think they're just nervous like anybody else, trying to
figure out, you know, where does the next policy changer
shift come from?
Speaker 8 (28:33):
Where there's I think the answer is social that's where
it comes from.
Speaker 14 (28:37):
Maybe it's social media, but you know, the hard part
is is it amplifies moves too, and even you know,
even when you go do a search on social media,
your search is going to feed your your.
Speaker 12 (28:51):
Personal personal preferences.
Speaker 13 (28:54):
If you will, you have to be active about searching
a variety of sources or active about searching out something
that's going to be neutral and down the middle. And
so yeah, it's definitely been a challenging year, but it's
a big process of having to write every week really
helps because we're trying to sort through the okay of
all of this stuff going on, right, what is impact
(29:15):
for portfolios moving forward?
Speaker 2 (29:17):
Carol, But I thought it was interesting that you said
that the work that you guys are doing for businesses
that even though there's some concerns and uncertainty and fears
out there, that they're making decisions right because they have
to run a business and if it's a competitive world
as we all know, and if they kind of delay
miss something, there's potential that they're going to lose share,
(29:38):
right and they're going to fall behind it, so that
they're pulling you know, that they're actually moving ahead with things, even.
Speaker 6 (29:44):
Like we see the IPO market. That's a good sign.
Speaker 13 (29:47):
Yeah, it's a great sign. And we've been talking about
for some time. When you look at the stats of
what's out there because we've had such a locked up
IPO market for such a long time. I've seen some
estimates recently of as many as thirty thousand companies that
are revenue and earnings generated mature companies in venture capital
(30:07):
and private capital portfolios.
Speaker 12 (30:09):
If even one percent of those go public, you know.
Speaker 13 (30:12):
The other thing that's really interesting is when you were
tracking the earnings as they came in in the second quarter,
they're technically according to Bloomberg, there were only four hundred
and ninety seven names in the S and P five hundred.
So we've had this net reduction of public companies out
there and so having some IBOs because we peaked in
(30:32):
terms of public companies back in nineteen ninety six I
think it was, and currently there are more ETFs than
there are publicly held companies in the US.
Speaker 2 (30:43):
Interesting, wait, all right, wait, we got to go, but
we got to come back on that point in the future,
because I think it's an interesting dynamic to this market
and what it says Caryl.
Speaker 6 (30:57):
Thanks glad we could reconnect Carrol's life.
Speaker 2 (31:00):
She's cheap market strategic at Female Private Wealth joining us
from Minneapolis.
Speaker 1 (31:04):
This is the Bloomberg Business Weekdaily Podcast available on Apple, Spotify,
and anywhere else you get your podcasts. Listen live weekday
afternoons from two to five pm Eastern on Bloomberg dot Com,
the iHeartRadio app tune In, and the Bloomberg Business app.
You can also watch us live every weekday on YouTube
(31:25):
and always on the Bloomberg terminal
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Tim Stenovec
Carol Massar
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