Awesome.
>> All right, we are uh awaiting earnings
in like 36 hours that could decide the
fate of this market. 30 minutes until
the start of the cash trade. I'm Matt
Miller
>> and I'm Katie Grifeld. Bloomberg open
interest starts right now.
[Music]
Coming up, a dramatic escalation. And
the president moves to fire Fed Governor
Lisa Cook, but she refuses to resign,
setting up a legal battle. Meanwhile, on
the trade front, President Trump
threatens fresh tariffs and export
controls in retaliation against digital
taxes on American tech companies. And in
corporate news, AT&T shakes up the
telecom industry with a deal that may
help it stay afloat and fend off any
regulatory concerns. Did I mention it's
23 a $23 billion deal?
>> I'm about to say that again. So, let's
talk about it. AT&T will buy Spectrum
licenses from Echoar for $23 billion in
cash. This should add to coverage in
more than 400 markets across the United
States. You take a look at the share
reaction right now. Echoar, as you might
imagine, up about 82% pre-market.
Absolutely soaring. AT&T as well. Even
with that $23 billion price tag, you can
see shares up about a half a percent. So
investors feeling pretty good about
this.
>> All right. And uh Eli Liy's experimental
obesity pill helped patients lose 9.6%
of their body weight in a trial that
moves the company one step closer to a
potential approval. It looks like uh the
market is taking that um as a positive
uh as a positive piece of news right now
with the shares up 3% in the pre-market.
We know Katie that typically investors
like to see these uh these therapies
help patients shed as much weight as
possible, but side effects are also an
important part of it.
>> Absolutely. Side effects and the
corresponding dropout rate really in
focus here. Let's dig into some of the
details with Bloomberg health reporter
Damen Garde who joins us now. So shares
up about 3% pre-market. A much better
reaction than what we saw earlier this
month.
>> Absolutely. So, these data follow on the
arguably more important results that we
got earlier this month of how Lily's
pill fared in people diagnosed with
obesity. The latest ones were people
with obesity and type 2 diabetes. That
initial reaction was one of pretty
massive disappointment. Lily had its
worst day in about two decades and lost
about hundred billion dollars in market
value. So, today's improvement kind of
has to be viewed in that context. But I
think zooming out as Matt mentioned this
is the final hurdle they had to cross in
order to submit their plans to the FDA
and win FDA approval for this pill. So
the expectations I think longterm have
come down based on the data we've seen
both in terms of the percentage weight
loss and the gastrointestinal side
effects. But in the long term this is
still expected to become a multi-billion
dollar product once Lily can market in
the US.
>> When when will we be able to buy this
pill? And
>> he's asking for a friend
>> and what kind of side effects are we
talking about? is 10% seems perfect to
me. Perfect.
>> Sure. So 2026 would be the earliest that
the FDA would approve this and
presumably Lily, you know, is working
with all expediency to get that filing
in and to market it as soon as possible.
The side effects are relatively high.
We're talking about these are somewhat
uncomfortable topics for morning
television, but diarrhea, nausea,
gastrointestinal issues, these are
similar to those that we've seen in
other medicines in this class like
Wiggoi, OMIC, uh Lily's other medicine,
Zeppbound. So, not milder, not better
than those.
>> No, not at least according to the
clinical data we've seen. It's a little
on par with some side effects. It might
be a little higher than you might get
from Wiggoi or Ompic. The allure of this
medicine really is the fact that it is a
once daily oral pill. It's a small
molecule. It's much easier to take than
the weekly injections or easier maybe a
stretch. More convenient. And I think
there are people who would prefer a
daily pill to a weekly injection.
>> I mean, I'd take the shot if it meant
fewer side effects, right? Am I
editorializing a little too much here?
>> You might be. You might. It's turning
into the Matt Miller.
>> Uh Damen, great to get the facts on
this. Really appreciate it. And
interesting to see the market reaction
because typically uh if it's less than
double digit percentages, you know,
you'd expect the market to to sell this
stock, but it's up again 3% in the
pre-market. We mentioned AT&T's plan to
buy $23 billion worth of Spectrum
licenses from Echoar, adding to coverage
in virtually every US market. Bloomberg
Tech co-host Carolyn Hyde joins us with
this for me as a former telecom's
reporter. Pretty exciting. Katie, her
eyes are like glazing over at the idea
of buying spectrum.
>> But I play an interested person on TV
>> and you care because you want to be able
to call your family and friends whenever
you want with 5G with whatever is going
in in terms of the actual broadband
going into your home. And for that you
need spectrum. You need to buy it. And
this is why AT&T is wanting to improve
its coverage around the United States.
Echoar, more importantly, has been
basically been pushed to sell off its
spectrum. It wasn't doing enough with
the Spectrum that it had already bought
and Brendan Carr, who's over at the FCC,
was getting more and more frustrated by
this. In fact, we had to see the
chairman of Echo Star go in to meet
Trump and talk about all of this. They
were potentially going to file for
bankruptcy. They were missing bond
payments. Then they've really been
cajolled into selling this off. So,
they're getting a nice chunk of change.
They're also still able to offer mobile
offerings with a partnership with AT&T.
and AT&T is able to continue to build up
the infrastructure play in the United
States. This is actually important if
you think about the amount of ultimate
access we're going to need to data if
we're all going to keep using chatbt in
the way that we are. So this is about US
infrastructure at the end of the day.
>> Absolutely. And we could go on and on
about
>> Did I make that sexy enough? being
vaguely interested in compelling and I
mean you really put it into context
nightlessly that this matters if you're
just a average person walking around
with a cell phone
>> and an AT&T
>> contract because if you have a Verizon
contract
>> you know you maybe you already have no
problem uh calling everyone from
anywhere and using chatbt.
>> Let's talk about uh another piece of
news in your world though and that is
what's going on with export taxes. You
have President Trump vowing to impose
fresh tariffs uh basically on
semiconductors on American technology
saying that these aren't designed to
harm or discriminate. But still a lot of
question marks here. This has been a
frustration for Trump since the previous
administration back in 2019. remember
France, other parts of the EU membership
started to impose these digital services
taxes. Basically saying, look, if you're
Meta and you're going to sell
advertising within your offering to my
citizens, I want a cut of that. I want
to be able to tax you. But it's all very
awkward as to how they tax them. So, it
wasn't on profits, it was on revenue.
So, they get about 3% of revenues which
is sold in their countries. The UK does
2%. But most notably, Trump has been
aggravated by what he sees as an impact
on the US winners and therefore he wants
that taken off the table. It's so
notable that in the agreement just a
week ago or so that we got between EU
and the US, the EU has specifically said
we are not touching the digital markets
act, the digital services taxes thus far
because they want that as a chip on the
table to be able to get their wine into
the US without being tariffed. So all of
this is the ongoing tariff battle. It's
interesting that almost AMD and Nvidia
are going to get impacted if we don't
get a settlement on taxes that are
currently impacting Meta, Amazon,
Alphabet. So, there's a bit of a
switcheroo here. Interestingly, Nvidia,
AMD are both higher pre-market. So, I
don't think people are particularly
worried about
>> I mentioned at the top um 36 hours until
we may get a new narrative. I meant
really 31 hours, right? Because it's
after the bell tomorrow, Nvidia
earnings. Yeah.
>> How much are you focused on that on your
program at 11:00 today?
>> I mean, not at all. I mean, we're so
obsessed. And this is a company that's
going to deliver basically 50% revenue
growth, earnings per share growth, all
about China. But this really is
basically an equivalent macro
bellweather as the Fed. It's what a $4
trillion company. And it's all about the
AI euphoria that we've seen that drives
the S&P 500 and the NASDAQ to be really
resilient despite this ongoing tariff
headwind.
>> Absolutely. Uh looking forward to those
earnings as Matt said, could totally
change the narrative. That is Caroline
Hyde of Bloomberg Tech. You can catch
her at 11:00 a.m. You know, on the close
yesterday, we were having a really
interesting conversation with Natasha
Sarin of the Yale Budget Lab. Basically
speaking about, you think about all of
the capex that's going on by these uh
big tech companies that if you think
about the US economy, XAI, we could look
like we're in a recession.
>> Yeah. No, it's interesting that could be
the main driver of the economy just like
it is the main driver of you know
earnings growth in the market and the
main driver of the gains that we've seen
in equity indexes. That would make
sense.
>> Yeah, definitely. So, we'll get an
update on the state of AI and tech
spending tomorrow. But let's turn back
to politics right now. President Trump
moving to remove Fed Governor Lisa Cook
over allegations of falsifying mortgage
loans. Cook has remained defiant, saying
she refuses to quit despite the
pressure. Former New York Fed President
and Bloomberg opinion columnist Bill
Dudley joined Bloomberg earlier today.
>> This is a real assault on the Federal
Reserve's independence. I'm sort of
surprised that the markets are so
relaxed about this now. Maybe that's
because we don't know where this is
going to go. We don't know whether Lisa
Cook is going to be able to stay in
office. Uh it certainly looks like the
bar to getting her out is quite high.
There's no precedence for this. So we
don't really know what the law is until
the courts actually rule on it.
For more, we're joined now by Michael
McKe. He is Bloomberg's international
economics and policy correspondent. And
of course, Mike, I'm going to ask you
the question that no one really knows
the answer to at this point. And that
is, does President Trump have the
authority to do this?
>> We don't know. Uh it appears he does
not. And that's uh what we're waiting to
find out because we don't know if she's
actually fired or not. It's so far been
just a battle on social media basically
with the president saying, "I have
determined that there is sufficient
cause to remove you from your position."
And Cook responding, "President Trump
purported to fire me for cause when no
cause exists under the law and he has no
authority to do so." And she said, "I
will not resign." So what happens if she
shows up at the Fed building today? Does
the Fed let her in? Does the president
send over US marshals to take her out?
We don't know. That all has to play out
yet. So, there are a bunch of questions
still to be determined. The first one
is, is she actually fired? And then what
does for cause mean? The president can
only fire somebody for cause, but what
she is alleged to have done. And there's
no proof yet that it took place before
she was on the board. And courts have
generally held that it has to be
malfeasants in office or uh ignoring
what your responsibilities are while
you're in office. What can the Fed do or
say? They don't have the details either,
so they can't really come to her defense
or push her out the door. They have to
wait for the evidence process to work
its way out. And then how much of an
economic threat is this? That's the
thing that Bill Dudley was surprised
that the markets haven't picked up on
yet because it could mean higher
inflation if the Fed is pushed by a
replacement to lower rates.
>> It doesn't seem like that serious an
allegation.
um writing uh one mistruth on uh
mortgage application coming from a
president who's been criminally
convicted of uh 34 counts of falsifying
business records. Right. So, it seems
like he just wants to push her off the
Fed so that he can get somebody who is
more in line with his uh take on um
interest rates uh on in that seat. And I
wonder why the bond market isn't in that
case um reacting more strongly in any
part of the curve right now. I mean, it
would seem like that uh should erode
confidence in our uh institutions, in
the Fed specifically, and it doesn't
look like the bond market really cares.
My guess is that at this point, because
these questions are unanswered, the bond
market is betting that Trump won't get
away with it. Now, if it moves forward,
if she's removed, she goes to court and
asks for an injunction and the court
says no, uh you have to leave until this
is adjudicated, which is what happened
in the cases of the uh other people that
Trump had tried to fire, then the market
might react more strongly because then
it becomes a real possibility. And given
all the momentum in the equity market
right now, you don't see stocks moving
even though on tariff day they drop
significantly, probably for the same
reason. They're thinking this is a
distraction by Trump. It's not going to
happen. And so we can go on and party.
And again, if something does come
through that suggests Trump is taking
over the Fed, that would be a lot more
concerning.
>> Well, to your point on inflation, we
also heard uh from Michael Foli over at
JP Morgan writing that perhaps the more
relevant outcome of a successful removal
of Cook is that other governors could
potentially be exposed to removal as
well. This would add to upside inflation
risks, but perhaps just too many
unknowns at this point for the market to
truly price that in. Our thanks, of
course, to Bloomberg's Michael McKe
following this story and so many others.
Let's check in on these futures, which
don't look too stressed out at the
moment. You have the S&P 500 pretty much
unchanged pre-market. The Nasdaq 100 a
little bit more direction, but as Matt
said, of course, Nvidia earnings after
the belt tomorrow could rewrite the
script right now. The Nasdaq 100 down
slightly. the Russell 2000. Actually, I
can't think of a reason why. A little
bit higher this morning, even as you do
have a slight move higher in rates,
Matt.
>> Yeah, a little bit of a move higher in
rates, but maybe um small cap investors
are betting that the Fed really will go
forward with a cut. Right now, the world
interest rate probability function on
the Bloomberg puts an 86 12% chance of a
cut at the September meeting and still
has the Fed cutting down to below 3% by
the end of uh 2026. Coming up, more on
the turmoil unfolding in Washington.
We'll get the view of Terry Haynes. He
is the founder um of Pangia Policy and
he has fantastic historical context to
add uh to this. This is Bloomberg open
interest.
Let's get to high interest. Look at
what's making headlines around the
world. Interactive Brokers Group is
climbing in pre-market trading after
news. It will join the S&P 500 index
before trading opens on Thursday and it
will replace Walgreens. So, Interactive
Brokers, IBKR,
rising 2.8%.
If we looked at Walgreens, it may be
down in in the pre-market. Who knows?
That's just my guess. The hair care
product maker uh Ollex said it will buy
Ollex OPX. It will buy the beauty
focused biotech company Pervala
BioScience. It's the first acquisition
for Ollex. The company has been on a
bumpy ride since it IPOed in 2021. And
billionaire investor Warren Buffett shut
down speculation of a blockbuster
railroad mega merger, saying his
company, Bergkshire Hathway, is not
looking to buy another train company.
Shares of CSX, ticker CSX, fell on the
news, squashing investor hopes that
Bergkshire's rail unit BNSF
would acquire the rival railroad
operator. Katie,
>> yeah, that's certainly pressure shared
yesterday as well. But let's get back to
our top story and that is President
Trump escalating his battle to exert
more control over the Federal Reserve.
Here's former Fed chair vice chair that
is Lael Brainer speaking to Bloomberg on
the president's move to fire Fed
Governor Lisa Cook.
>> I think the Federal Reserve is in an
incredibly difficult position here. But
you have to remember this is not about
an individual governor. This is really
an unprecedented attack on the
independence of the Federal Reserve as
an institution, which means higher
inflation, potentially less credibility,
even higher long-term interest rates,
bad for the economy.
For more, we're joined now by Terry
Haynes. He is Pangia Policy founder.
Terry, great to have you with us. I'm
taking a look at your uh most recent
report. You write that if President
Trump intends the Cook business on as
more pressure on the Fed to lower
interest rates that likely backfires.
Tell us why.
>> Well, fundamentally because the uh the
governors have shown themselves
impervious to pressure starting with Pal
on down. Uh if they uh they're not going
to bend or buckle based on everything
that's gone on in the last four or five
months, I doubt very much that they're
going to do that now. Uh even POW at
Jackson Hole, I think, is overread by
the markets, frankly. uh regulator, you
want regulators to say their openness to
to declare their openness uh to new
data, potentially new uh indicators and
uh so Pal saying that he was open to it
uh isn't exactly a land rush. It's it's
more of a regulator saying that this
this is what he or she might do. Uh so
in that context uh I don't think that uh
anything that might happen with Governor
Cook uh we don't know the facts behind
uh the allegations. Uh certainly uh I
don't think anything that goes on with
Governor Cook is going to change the
view of the board materially one way or
the other.
>> Uh what do you think would happen if
Lisa Cook were replaced and the
president then had four members on the
seven uh person board of governors? Do
you believe the kind of conspiracy
theory that they would then act um as a
majority to fire all the regional
presidents?
>> Um you know what Matt I think what's
what's happening here is and one market
seem to understand is this is really
about two things. one of which is talked
about a lot which is the interest rates
uh business and pressuring. The other
isn't talked about so much, although
both Trump and particularly Treasury
Secretary Bessant have been very
explicit about this, including in the
long form interview that uh that that
your colleagues at surveillance did with
Bessant week before last. U they talk
about making the Fed a more dynamic
institution, one that that that is much
more interested in getting past data and
uh and kind of supporting the core
economic mission of the country. Uh
that's very much what they're up to.
That's music that's music to the ears of
lots and lots of people in the markets
frankly because they've you know they
people come on your air every day and
decry the uh you know the cold data
driven mantra that uh is is part of the
pal chairmanship uh you know so they see
the opportunity to for the Fed to become
more dynamic and forward-looking as
frankly a good thing. So, uh, you know,
but beyond that, you know, I think this
is much less about the individual, uh,
you know, the individual firings and all
the rest. And for the record, just to
wrap up, I'm not somebody that thinks
that the president has the ability to,
uh, uh, to remove governors willy-nilly,
although the uh, the four cause
exception has not been litigated before.
that fundamentally the Fed is a creature
of Congress, was created by Congress,
uses Congress as constitutional
authority. Uh, which is why the
president's ability to do anything about
the Fed is very limited in the first
place. It's pretty much that simple.
>> Well, I mean, does the president
really want to remove Lisa Cook because
of deceitful and possibly criminal
conduct, as he says? Do you think his
base believes that he cares that much
about deceitful and criminal conduct? um
or is this uh another attempt to attack
Fed independence? And shouldn't that
worry especially investors in US assets?
>> Well, the president will want who the
president will want. And the president
always under the current system, the
president always gets to nominate Fed
governors. Uh but but equally
fundamentally, it's up to Congress to uh
to to provide advice and consent on
those governors and decide who uh who
gets to be a Fed governor. That's not a
rubber stamp. uh you know the as
recently as 222 23 uh when President
Biden uh wanted uh Bloom Rascin as
governor as if I remember correctly as
the vice chair and the Democratic Senate
said no. So uh you know Trump's got you
know Trump doesn't have the ability to
unilaterally impose his will upon the
Federal Reserve Board of Governors
anyway. Presidents always believe
they've got people uh queued up who who,
you know, might vote as they wish. Uh
they are very frequently disappointed in
that regard. Biden himself was very was
disappointed. He thought he had the cons
the continuation of a very doubbish Fed
when when Pal was renominated along with
Cook and some others and he was
immediately disappointed because they
moved talkish almost instantly.
>> All right, Terry, great to get some time
with you. Really appreciate it. Terry
Haynes there of pangia policy. I'm sure
we'll be talking much more about this
and hopefully more with Terry as well.
Coming up, Monetta strategist Ethan
Devit on the market impact of the
overhaul or potential overhaul at the
Federal Reserve. This is Open Interest.
We are just seconds away from the start
of trading on this, the day before kind
of the day before Nvidia comes out with
earnings. Right now, nothing happening
in futures. Uh right now we're down 7/10
of 1% just for the record. The all-time
high is 6468.
We closed about 30 points below that
yesterday. So, we're still like up there
at at these heights. Um but we just
can't make any forward progress. NASDAQ
futures down as well. Russell 2000's uh
Russell 2000 futures as Katie says, God
knows why. Um they're up about 1/10enth
of 1%. Elect is a power company uh
generating trading electrical power that
operates in the upper Midwest. So for
the fantastic people of that part of the
country, that stock is up 50% with
reinvested dividends over the last 5
years. Better than a stick in the eye.
Freshworks ringing the bell at the
NASDAQ provides software solutions for
small and midsize businesses to
communicate over email and phone and
social networks. Uh the stock is down
62% since 2021. So there you have it.
Let's get to Eli Liy. Uh Eli Lilly's
experimental obesity pill helped
patients lose 9.6% of their body weight
in a trial that moves the company one
step closer to potential approval.
Remember, they came out with the first
of two studies earlier this month.
Really poorly received. This one going
over a little bit better. Uh side
effects and the dropout rate coming down
as well. I believe you can see that Eli
Lilly shares higher by about 3% right at
the open mat. Still lower on the year,
but climbing out of that hole.
>> All right. So, I think that's a
fascinating story. possibly more
interesting to Katie than the AT&T
story, which is I mean, they're adding
spectrum. This is what their customers
want. This is what their investors want.
They're buying it from Echoar for $23
billion. It's a cash deal. You can see
AT&T shares are unched.
Um, so for spending $23 billion, having
your shares unchanged is, I think,
pretty good. Um, Echoar shares are up
80%.
Um, Echoar had been, I guess, um, urged
to get rid of this spectrum because they
were like not doing enough with it. But
now at can use it and Echoar can ride on
those coattails. Let's get back to the
broader markets right now. Ethan Devit
joins us. Monetta, chief global market
strategist. And Ethan, I'll start with
the Lisa Cook question because it's the
hot story right now, but it doesn't seem
to be moving markets. The president is
attempting to fire Lisa Cook from uh the
Federal Reserve Board of Governors. She
says she won't go. No one knows how this
is going to turn out, but bond yields
aren't rising significantly and equities
aren't falling significantly. So, does
it matter?
>> I'd say markets are definitely queasy
about this. We've seen this reaction in
the past. Anytime an overture like this
has been really shot across the bow at
Turman Powell, they markets will react
slightly. So there's a queasiness, but
this is not a typical kitchen table
issue because the Fed is kind of a
longdated structural almost an abstract
concept in terms of its independence.
Much more of a kitchen table issue is
something more concrete like we had last
week, the uncertainty and the cold
shower that was poured around AI. So I'm
not surprised to see markets kind of
lackluster in their response to this.
But it is a queasiness and uneasiness
and let's just see where it ends. Well,
Ethan, let's talk about that a little
bit because say that Trump is successful
here, that Lisa Cook is removed and uh I
believe that gives President Trump four
of seven Fed governors. What is the
market reaction look like? What is the
potential trade there? Because so far
we've heard that that would probably
long rates higher. Not that you're
seeing that too much this morning.
>> Well, markets don't always know what's
good for them and right now they would
probably receive very well a jump jumbo
rate cut in September. Certainly one
rate cut is being expected and that is
certainly the direction of travel that
uh Trump dominated Fed would bring is
more rate cuts and markets would welcome
that. But then we look to the long end
of the yield curve. We can see that the
gap between the short and longdated
bonds is one of the largest it's been
and it's getting larger. And this is a
pattern that we're seeing repeated
across the world. We're seeing the same
thing in 30-year guilts in the UK. When
markets see that they are not confident
in the fiscal or monetary direction of a
country, they vote with their feet very
decisively. So I'd say that's that it's
the sugar rush that would come from cut
rate cut rates um in the short term.
That's why markets are reacting I think
in quite a positive way.
>> Let's talk about the markets and the a
little bit of a rotation that we saw
over the last week. Obviously Friday was
uh a banner uh day for bulls, but I
wonder if you want equal weight exposure
here or do you want to stick with that
mega cap concentration? If you have more
of a value tilt, I'm guessing that you
want to look uh more into the underloved
uh industrials, financials, asset
managers. What say you?
>> I say definitely equal weight. Markets
are going to display different levels of
volatility according to whether it's the
mega cap or everything else. Everything
else, the kind of volatility that that
equity displays is the type of
volatility that I think investors have
now come to expect with their equity
allocation. the e the volatility they're
going to see in mega caps is something
totally different entirely probably
twice that volatility. So yes, they need
to hold both, but they need to have a
much stronger stomach for owning the
mega cap tech stocks only. So I would
not lean in to an overweight in those
positions. I would be equal weight and
as we can see there is some appreciation
right now. Certainly for financials,
they've had a good tailwind and there
like the pharmaceuticals like that Eli
Liy you showed um and a little bit more
trading on fundamentals which is more of
a positive side. And finally, I'm not
surprised that Warren Buffett is not
getting into railroads. That
infrastructure ship may have sailed, but
the infrastructure that is really
exciting investors is around data center
and the other picks and shovels around
AI. And I'd say that is a very good
stable long-term trade at the moment.
>> Well, Ethan, let's talk a little bit
more about those mega cap tech names
because we have Nvidia reporting after
the bell tomorrow. And even if you are
in an equal weight sort of setup here
when it comes to this equity market,
Nvidia feels too big to ignore. Put it
into context though when it comes to
sort of the mood music in markets. How
important are those numbers after the
bell tomorrow?
>> Nvidia will always be the canary in the
coal mine for any indication of trend
around AI or a change in um in in demand
patterns or maybe a change in the
efficacy and the productivity gains. And
certainly we had a harbinger of that
with the MIT report last week. So there
will be a zealots focus on the Nvidia
earnings and really just a telegraphing
from them as to what's ahead. They are
still the market leader. They have first
mover advantage and I don't think
investors can get away from an
overweight Nvidia with the way it's
heading in terms of its market cap
really ramp up. any concern about um
inflation as we've seen, you know, CPI
and PPI tick up, but a lot of people are
saying um that we're not going to see
the real tariff effects until Q3, maybe
Q4. Of course, those people were
previously saying Q2, but they continue
to push push that back.
>> Definitely inflation is a nagging
concern. Again, just to look across the
world in the UK, we had a 3.8% number
that really sent chills through markets.
We do know that the tariff effect will
be maybe transitory in that it's oneoff
but it is still to come. Um we know that
those numbers have been absorbed by
companies up to now and are the
transmission effect has not really been
seen. So yes, we are concerned about
inflation and that's why I would share
the view of your your previous guest
around what this actually means in terms
of the Fed. Does it mean that they will
simply throw off the guardrails in terms
of monetary easing? Probably not because
they have to look at the data if
inflation starts to get out of control
well beyond their previous target. They
simply cannot in their right minds cut
rates with abandon.
>> All right, Ethan. And of course, we'll
get an update on inflation, at least in
the US, when it comes to Friday's PCE
numbers. Great to get some time with
you. That is Monetta, chief global
market strategist, Ethan Devon.
Meanwhile, let's get a check on this
stock market right now. We're just under
eight minutes into the session. You can
see it's pretty quiet at the index
level. When it comes to the absolute
change in the S&P 500 right now, uh it's
lower, but by less than a tenth of a
percent. You take a look at the split
though, gainers versus losers. You do
have more losers than winners right now.
But up at the top, your biggest gainer
in the S&P 500 is Eli Liy. As we've been
discussing, they got some good news when
it comes to the second trial for their
obesity pill. That is worth a gain of
about 3.4%. You also have Broadcom uh
higher this morning as to International
Business Machine, IBM, and AMD as well.
But then you take a look at the downside
and this explains the conundrum we're in
at the index level. You have Apple,
Alphabet, Nvidia, and Metal all lower
this morning. Of course, we're really in
wait and see mode when it comes to the
tech sector ahead of Nvidia results
tomorrow. But let's take a look at the
sector breakdown as well. It's what you
would expect. You have healthcare up at
the top. Thank you, Eli Liy. Higher by
about 3/10en of a percent. Utilities and
industrials having a good day as well.
I'm going to go ahead and call tech
unchanged. But then you go down the
list. Consumer staples, energy, and
communication services are your big
losers today. that sector, communication
services, off by about a half a percent.
Matt,
>> all right, very cool uh look at the S&P
and a breakdown of the industry groups.
Coming up, we're going to talk about
AMD. Those shares are popping on a
partnership with IBM to create a quantum
supercomput. Could the pendulum be
swinging? Does Nvidia have real
competition here? Could we be talking
about an all-new AI leader sometime in
the distant future? This is open
Welcome back to Open Interest. A check
on the stock market right now. The S&P
500 trying to decide what to do.
Currently unchanged at the moment. You
do have the tech names a little bit
higher in the NASDAQ 100 maybe by a
tenth of a percent or so, but it's the
small caps that are outperforming so far
this morning. the Russell 2000 higher by
about 4/10en of a percent. It seems like
bond traders are pretty locked and
loaded on the idea that we're going to
get a September rate cut. Maybe that's
what's coming through in the small cap
today, but we'll keep an eye on it.
Meanwhile, it's time now for our top
call. Some of the analyst action in
focus this morning. First up, Puric Dr.
Pepper getting downgraded over at HSBC
after the company announced yesterday
that would it would buy the owner of
Pete's Coffee for $18 billion. Investors
are concerned about the company's plan
to finance that acquisition with a mix
of cash and debt. Shares currently off
by about one and a half percent. Next
up, we have Canada Goose getting
upgraded to a buy over at Baird. The
analyst says that its improved product,
merchandising focus, and marketing
investment are driving momentum. And
finally, AMD is getting upgraded to a
buy over at Truis because it's seeing
more AI traction with its customers. AMD
shares higher by nearly 2%. Matt Miller,
>> have you still never had a Dr. Pepper?
>> Still have never had a Dr. Pepper.
>> Never tried a Dr. Pepper.
>> No. And I don't own a Canada Goose uh
coat. And I don't know how I interact
with AMD, but I probably do.
>> Hey, uh you may be interacting more and
more with AMD in the future. Let's talk
about that because they are partnering
with Big Blue to build a quantum centric
supercomput. Here with more on what that
is is Mandep Singh, global head of tech
research for Bloomberg Intelligence.
Mandep obviously it sounds cool.
>> Uh but how soon is Katie going to be
interacting with a quantum ccentric
supercomput?
>> Well, even if she is interacting with
it, it'll be abstracted from her that in
the sense she may not even know that
she's interacting with a quantum
computer because that's what these
hyperscalers have done. They've put
everything on the cloud in a way where
you can just click a button instantiate
a server or a service and you know even
deploy your chatbot or build up your
website. So to my mind you know what AMD
is doing is really kind of partnering
with uh an IBM simply because you don't
know what the next big thing in
semiconductor chips would be. I mean
obviously it's AI chips right now but
hyperscalers are competitors to all of
these semiconductor companies and so if
you are an AMD or any other chip maker
you want to create an ecosystem where
you can partner with someone and I think
uh that's what AMD is trying to do here.
>> Well the less I know the better. You
know I I say that I don't interact with
AI because I don't use chat GBT but I'm
sure that it's in my daily life whether
or not I like it. Let's talk a little
bit about what this means for AMD. You
think about the competitive landscape of
the chip industry. I mean Nvidia just
running away with it. A real competitive
moat there. What does this mean for
where AMD falls?
>> Well, so the one thing that has changed
this year is everyone is excited about
reasoning models. So far, you know, uh
what we have seen is AI progress was
driven by how good pre-training was and
pre-training was determined by scaling
laws. If you threw more compute, the
model will keep getting better. This
year with the reasoning models, with the
success of OpenAI 03 and other reasoning
models, everyone has realized you don't
need to spend as much on pre-training.
you can do a lot more at inference time
and that is uh what is creating an
opportunity for you know likes of AMD
because uh with training Nvidia almost
has 100% share but with inference that's
where your smaller players like AMD like
Cerebra Samanova that's uh where the
hypers scale own chips come into play
because you you don't need the cutting
edge chips for inferencing as you do for
training. He's telling me that because I
interviewed the CEO of Samanova a couple
times.
>> There you go.
>> And I thought it was such a cool story.
I want to uh pivot to um the digital
taxes that President Trump, he's had
long had a problem with digital taxes
that other countries put on
>> basically uh US champions, our
hyperscalers. Um and now he's
threatening perhaps export curbs in
order to combat those or new tariffs.
How does this change the picture for an
AMD, for an IBM, for an Nvidia?
>> I mean, I think it changes it more for
big tech than for chip makers. I don't
think uh you know, the export curves are
actually be applied. It will be more a
negotiation tactic. But for a
hyperscaler,
>> well, they'll add export taxes. I mean,
Nvidia and AMD already have agreed to
pay export taxes.
>> Yeah. But you know for a hyperscaler
which has a sizable EU business and it
was quite restrictive in the sense you
had to abide by the digital markets act
or the digital services act in the US in
the EU. So so from that perspective I do
think you know this may ease up the
regulations a little bit if he's
successful and that means uh probably
more profits in in the region for
hyperscalers. I don't think it changes
uh you know anything in a big way for
the semiconductor companies
>> and Mandep we would be remiss not to ask
you directly about Nvidia earnings after
the bell tomorrow. I mean you take a
look at what investors and what the sell
side are saying heading into this
report. It seems like the tone is that
this is going to test Wall Street's
faith in the AI boom that we're going to
get an update of course on capex but I
feel like you could say that every
earning season.
>> Yeah. Well, in in this case, I think
this is the first time they'll be
reporting full Blackwell numbers. So,
think about, you know, GPT5 and all the
latest models that have been released.
It's on their Hopper architecture. Now
that Blackwell is in full production and
they're shipping it in bulk, what does
that change in terms of, you know, the
training and the large language models
race and how does that influence, you
know, the buildup of these clusters
going forward? because they're talking
about Reuben, the uh architecture
following Blackwell. So, I I think it's
important for them to lay out the story
in terms of how successful Blackwell is
and what it means for ASPs and margins.
>> Well, the implied one-day move for
Nvidia shares is about 6% in either
direction. So, should be fun either way.
>> Are you using E ego on your Bloomberg?
>> E Go on your Bloomberg.
>> I like that. If you use e space spp
>> you get a great picture of the previous
reporting quarters and the bandwidth
there
>> just an embarrassment of riches when it
comes to that Bloomberg terminal mandep
to preview some of the action with you
that is Mandep Singh of Bloomberg
Intelligence and good news coming up
next we're going to talk more about AT&T
looking to expand its US coverage in a
$23 billion deal with Echoar that
conversation up next this is open
This is Bloomberg Open Interest. I'm
Matt Miller. Let's get a check on what
stocks are doing about 22 minutes into
the session. We're looking at very
little change here. Uh red arrows, but
the S&P 500 at 6436,
just about 3 uh two points below the
all-time high of 6468.
the NASDAQ 100 off but only onetenth of
1%. In terms of what's going on in uh
well, first of all, uh in bonds, you can
see the 2-year yield right now actually
moving down about uh three basis points,
369. I did see the long end moving a
little higher. Nvidia off a third of 1%.
So, that doesn't help anything. AMD, as
we were just talking about, up one and
uh a third, 1.4%.
Eli Lily after a drug, a pill that it's
developing to fight obesity, helped
customers in a trial lose a little bit
less than 10% of their weight, but had
the same or even worse side effects than
the shot. Still, that's up and Novo
Nordisk is down. Telephone uh buying
that Spectrum up half a percent right
now and Echoar selling that Spectrum up
almost 80%. Katie.
>> Well, for more on that deal, we're
joined now by Bloomberg telecom reporter
Kelsey Griffith. And Kelsey, it's
interesting. Of course, Echoar shares
higher in a big way right now. But so
too are AT&T shares. If you look at
these numbers in isolation, you might
have expected to see AT&T shares lower
today given that $23 billion price tag.
But it seems like traders are voting
with their feet and saying that the
logic here makes sense.
>> Yes, there are a couple uh factors that
we need to look at here. First of all,
AT&T has been looking to expand their
spectrum portfolio for quite a while.
And this mid and lowband spectrum that's
really valuable for mobile wireless
services is really few and far between
at this point. So, Dish and Echoar is
helping unlock um a greater portion of
AT&T's network with this sale. And for
Dish, it's also great because it helps
them uh kind of uh take another step
toward resolving a regulatory probe that
I've been hanging over them. I'm I'm
just wondering if this helps AT&T catch
up to Verizon, which had more spectrum,
especially in the most used bandwidth.
So, um I know Verizon also has far more
subscribers. Does this help AT&T to get
a leg up on the competition?
>> It absolutely does. At least in terms of
AT&T Spectrum portfolio, this is going
to help them leapfrog over Verizon and
start catching up to T-Mobile's spectrum
position. Uh we're also going to see
some um expansion of the infrastructure
that AT&T has access to uh in terms of
of these these spectrum assets and
that's really going to help potentially
immediately as soon as this deal closes
uh consumers are going to get that
benefit.
>> All right. So um in terms of
the the funding and and leverage BI
Bloomberg Intelligence says net leverage
could tick up to three times it closes a
cash deal. Uh, right. But does AT&T have
the money to do a $23 billion cash deal?
How does their outstanding debt look
right now? Does this put them in a
problem in that sense?
>> Well, I think AT&T is looking at this as
a huge investment into the future of the
company that is going to pay dividends
down the road. Unfortunately, my
reporting hasn't taken me into um
looking at the specifics of the balance
sheet this morning, but I can tell you
that this is a very important investment
investment that they're making and I
think that's what the market is reacting
to.
>> I always look at the DDIS page.
>> I know you do. So on the Bloomberg
terminal, if you type DDIS, and this is
something I learned when I was a
telecoms reporter, you know, a young cub
in uh Frankfurt covering Deutsche
Telecom. Total debt at AT&T is 143.3
billion dollars.
>> Certainly seems like a lot.
>> So it is a huge amount. Um
and as I said, BI is worried about the
leverage taking up there a little bit.
So this is something that we'll continue
to cover. Kelsey, great to get some time
with you. really appreciate um helping
us sort out the competitive position of
telephone versus Verizon versus
T-Mobile. Coming up in the next hour, E
Toro, global market strategist Lai Aoner
joins us on President Trump's pressure
on the Fed. Plus, Mark Rosen, the CEO of
the company behind brands like J. C.
Penney and Brooks Brothers and the head
of Cadillac's F1 team joins the show.
This is Open Interest.
We are 30 minutes into the trading day.
Welcome to Bloomberg Open interest. I'm
Matt Miller
>> and I'm Katie Grold. We are awaiting
some economic data landing at 10:00 a.m.
on the dot. You take a look at equity
markets not doing much right now and
volume just uh pancaking right now.
>> Pancaking. Coming up in dramatic
escalation. The president moves to fire
Fed Governor Lisa Cook. She refuses to
resign and this sets up a big-time
battle.
>> Meanwhile, on the trade front, President
Trump threatens fresh tariffs and export
taxes on American tech.
>> And as more retail results roll in,
we'll get a read on the consumer with
the CEO of Catalyst Brands, the company
behind JC Penney, and a brand I grew up
with, Brooks Brothers.
>> There you go. Meanwhile, we do have uh
conference board consumer confidence
figures hitting right now for August.
Coming in a little bit above
expectations at 97.4. That is also
slightly above the prior read of 97.2.
So, let's break it down now with Michael
economics and policy correspondent. So,
what to make of this? What to make of
this survey data? uh this really when
you look at all the three major uh
indexes that they publish shows very
little change in the way consumers are
looking at things during the month of
August. Uh the initial report of uh
consumer confidence for August was at
965. Uh so the estimate rather was 965.
So it is a little better than expected.
There was a thought that this would
parallel what we saw in the Michigan
numbers with the uh confidence with
confidence dropping a little bit because
the tariffs were actually imposed this
month. But it doesn't look like that's
the case. Present situation uh just
barely moved from 131 uh to basically 13
2.8 to 131. So it did go down in a
revision and the expectations index uh
goes down uh in a revision from 76 to
74.8. So people aren't feeling better,
but they're not feeling terribly bad
about it at this point.
>> So this survey essentially tells us the
same thing as uh the unemployment
number, right? Um
we're at a good level. Um but the
question is are we worsening?
>> Well, we we're not worsening terribly,
but we we haven't hit the heights yet
either of where a good number is for the
conference board. So, we're still
waiting to see if people will act on
what they're doing. I'm just calling up
the release now because one thing we
want to see in this is the buying plans
and uh it looks at this point like uh
people are saying um they're
still hanging in there. In terms of
automobiles, uh 12% that's up from 11.3.
Homes uh 5.7 unchanged and major
appliances 8.2. two up from 7.4. So, as
long as people are feeling uh bad about
this, they're still not saying we're
going to cut back on spending. And
>> major appliances are the bane of my
existence.
>> That's that's what would matter.
>> But could somebody invent an air
conditioner that lasts longer than a
decade at least uses the same gas? You
know, would my boiler please work for an
entire year? I can't even get through a
season.
>> Well, that's why they have you counted
in the yes, I'm going to purchase
something category. And uh we were
talking with I think it was Ethan Devitt
who made the point that uh when it comes
to the other big story of the morning of
course President Trump saying that he
intends to fire Fed Governor Lisa Cook.
It's not exactly a household table
discussion sort of thing that's going to
rise to that level necessarily in the
same way that inflation might for
example. So I would assume that you
wouldn't see that come into surveys of
consumer confidence such as this.
>> No, I wouldn't think that this would
really register with the American
people. They have no idea probably who
Lisa Cook is, but if it registers in the
markets and we've seen only a small
amount because pe people in the markets
at this point probably don't expect
Trump to succeed. So they don't think
it's a terrible problem. But obviously
if it looks like he's going to take over
the Fed and that would lower rates
dramatically and raise inflation, you'll
get a big market reaction and that would
set people off. They may not know the
cause of it, who Lisa Cook is, but they
would know that their 401ks were in
trouble and that uh the overall market
went down, which they would see as a
sign the economy is in trouble.
>> She went to Oxford. Lisa Cook,
>> that's pretty good.
>> Before getting her PhD at Berkeley,
>> and then what was she a professor at
Michigan State?
>> She taught at Harvard and then she went
to Michigan State.
>> Sparties, which I'm a fan of the
Sparties obviously because they're not
the University of Michigan. I knew you
were going to say
>> Mike McKe. Thank you very much uh for
that roundup. Mike McKe with the
conference board numbers and a little
bit more on the Lisa Cook saga that at
least at our tables we'll continue to
discuss. Let's bring in e Toro global
market strategist Lai Aoner right now to
talk about the effects on the market. We
don't see much in terms of um the
pressure on the Fed here. I guess this
market right now is all about Nvidia. Is
that fair to say? uh 30 hours ahead of
earnings
>> to some extent. I think Matt that's fair
to say although I would say that the Fed
independence questions are impacting the
Treasury markets. We're seeing the curve
steepening, dampening the demand on the
long side and I do think that inflation
worries is still top of mind as well. So
we are seeing that in the treasury
market at the moment but it is fair to
say that for this week um Nvidia uh
earnings is is top of mind. We do expect
good results and obviously the fact that
it's carrying now 8% of the S&P 500.
It's it's quite important to monitor
this very closely.
>> We need to get the countdown clock up on
the screen. 30 hours to go until Nvidia
reports earnings after the bell
tomorrow. So that of course is the mega
cap of mega cap tech names. Let's talk
about mid and highquality small caps.
You highlight that in your notes as an
area that you're interested in which I
find interesting because it seems like
investors just keep leaving that sort of
sector for dead here. Lai, what is the
bullish case there?
>> Look, I think again higher for longer
rate environment is still intact. That's
why we're saying that go look at high
quality small caps. I'm talking about
S&P 600 and not necessarily the broader
Russell 2000. Right? So, we're saying
that look, small caps are now cheapest
since 2001. And obviously, the fact that
near-term rate cuts seem to be coming. I
think this will be a positive boost for
um these, you know, mid to uh small cap
range. Again on the high quality we're
saying that cash is not as abundant,
liquidity is not as abundant as say uh
pre- pandemic and therefore you need to
take a look at those companies with high
quality cash generation that can cover
their uh debt as well in the long term.
>> One of the reasons in addition to that
high interest rate environment that you
mentioned that uh has been given to me
as a reason why small caps can't seem to
get off the ground is that you have
fewer companies going public. Maybe
we're starting to see some bounce back
when it comes to the IPO market, but
certainly uh not back to any sort of
normal level because you have companies
just staying private for longer and as
such you don't have that typical premium
that you can follow of small companies
go public and then they get bigger and
then they graduate up into the midcap
index. I wonder how you think about that
because it seems like an existential
problem for that size tier.
Look, I think that again given the fact
that the Fed is eager to again resume
their um easing policy uh cycle is quite
positive for IPOs is quite positive for
M&A activity overall as well. So it's
again we need to take a look at how
inflation number will come at this
stage. Obviously they are very um
concerned about the labor market and the
the growth profile of the economy. As
long as I would say there's not a major
recession, it will be positive for these
type of um activities and also again for
for small caps to perform well. Lai um
if there is a disappointment in earnings
I mean not just Nvidia but let's say out
in uh the next earnings season or policy
disappointment uh you know real pressure
on the Fed that creates um a true lack
of confidence in US institutions. How do
you hedge on the downside?
Look, I I it's it's interesting given
the fact that obviously uh the MAX 7 are
taking so much of the S&P 500 in terms
of their weight and as we've said the
Fed independence is definitely um
damping demand for treasuries and
treasuries have not been delivering 10
months since the first rate cut which is
quite interesting. So again to your
question how how do we how do we uh make
some defensive allocations in our
portfolios? We're saying that obviously
real assets, commodities,
infrastructures in this environment will
do well. We like uncorrelated
diversifiers. Think about obviously
gold, digital assets. Bitcoin's
volatility has come down on the
long-term basis uh which again increases
the institutional investment um in the
space as well which will help volatility
go down even further and it is an
uncorrelated diversifier as well on a
long-term basis. We again like multi
asset income strategies and we like
regional and international value plays
as well to to hed hedge ourselves again
uh from that concentration risk that
we're seeing in the market right now.
>> All right LA great to get some time with
you have a great rest of your day. That
is it Toro global market strategist LA
Akener. Meanwhile it's going to look at
some of the single stocks moving this
hour. We start with AMD partnering with
IBM to build quantum supercomputers. uh
that is giving a look to shares which
I'm sure we'll show in a second and we
just learned what supercomputers are
quantum supercomputers from Mandep Singh
there it is
>> you may not even interact with them
directly KD
>> I hope not
>> but you will uh still be connected so
AMD up one a half% Echoar after that $23
billion cash sale of its spectrum up 78%
to what I believe is an all-time high
and this is interesting
>> IBKR interactive broker is down.
>> Yeah.
>> 4/10en of 1%. Makes me makes me want to
look up Walgreens.
>> What's going on there? Of course, uh the
news there, the reason that we're
surprised is that we learned that
Interactive Brokers will join the S&P
500 replacing Walgreens. So, you take a
look at the uh longer term chart of
IBKR. Uh it's had a really big runup
since the April lows. So, maybe there
was some anticipation that it was going
to get this boost. And maybe it's a sell
the news type of situation here.
>> All right. Yeah, maybe uh people knew
were betting on it and now are taking
profits. If you look at the longer term
picture, uh IBKR up um 389%.
>> Pretty handsome chart you got
>> over the past 5 years. So Interactive
Brokers has doubled, tripled,
quadrupled, almost quintupled over the
past five years. Walgreens is down 60%
over the past five years. So um getting
absolutely stomped
>> sign of the times
>> and that's one reason why it's getting
taken out of the standard and pores 500
index. Walgreens today down about 210 of
1%. Coming up, President Trump has moved
to democratize access to alternative
assets. That's how he put it in his
executive order. We'll speak to Atomic
Invest CEO David Dindy about the move
next. This is Bloomberg Open Interest.
Let's get out of high interest. Look at
world. Eli Liy's experimental obesity
pill helped patients lose 9.6% of their
body weights in a trial that moves the
company one step closer to a potential
approval. This is the second of two
trials Lily is using to show health
regulators that its drug is safe and
effective. The first trial disappointed
investors. The obesity pill market is uh
expected to grow by $95 billion by 20
uh30. Today it looks like investors are
pleased. Secretary of Commerce Howard
Lutnik is suggesting the government is
looking at the defense sector when it
comes to taking potential stakes in
companies. His comments come after an
unorthodox deal in which the US obtained
a 10% share in Intel. Lutnik singled out
Lockheed Martin, claiming the company
makes much of its revenue because of the
US government. And in your mind, you can
go so much further from there. US
investments in renewable energy projects
plunged this year as developers
responded to White House policy shifts
targeting the sector. New analysis from
Bloomberg's BNEF shows that investments
fell by 20.5 billion dollars or 36% in
the first half of the year. Meanwhile,
in the EU, investment in renewables has
surged to nearly $30 billion in the
first half of the year according to the
report. And earlier this month,
President Trump issued an executive
order easing access for asset classes
like private equity and crypto in
retirement accounts. ICI CEO Eric Pan
discussed the challenges facing this
plan.
>> I think right now there are a lot of
limitations. So there are limitations on
what ETFs can invest in. There are
limitations on what regular mutual funds
and collective investment trusts can do
and then separately it is how do we get
it actually into 401k offerings. uh
right now a lot of people you go work
for a company uh you have someone who
makes a decision as to what's available
to you. So right there the Orisa rules
have to be changed to make it possible.
All right I think the second question is
one of the most interesting and joining
us to talk a little bit more about this
is David Dindy. He is Atomic Invest CEO.
He also co-founded the company. David,
great to have you in here with us. uh
how would your company, which has
already kind of led the way in um
helping retail investors get pieces of
these kind of assets, how is a company
like Atomic going to help them put them
in their 401ks? So to take a step back,
it's important first of all to
understand what Atomic does. So we're
not a direct to consumer application.
Instead, we partner with companies and
institutions that are looking to offer
different investing products to their
clients. So we partner with companies
like Nerd Wallet, companies like
BlueVine, companies like Yield Street
that provide access to private market
investments to their clients. And so the
way that Atomic could work in this
particular space is actually to work
with retirement plan providers and
record keepers to be the custodian for
these underlying private market
investments uh in their plans. So the
the uh the balance that I guess
regulators are trying to strike here is
allowing um people in their retirement
accounts to have um access to these what
are fairly risky and sometimes illquid
products and um keeping them safe right
from blowups. Uh how do you think this
is going to work? like obviously some
alternative investments um the ill
liquidity isn't a problem since they're
retirement accounts. On the other hand,
when you say yield, I think about
crypto. So, how's that going to work?
>> So, you're right. You know, liquidity is
one of the gating factors for broader
acceptance of private market
investments. But if you think about it
in the context of a retirement plan, you
know, typically these are longerdated
investment plans. And so when we speak
to practitioners in the space, many of
them are looking at putting it into
target date funds and having it be a
small slice, maybe 5 to 10% of the
overall allocation. As for crypto, I do
believe that there are advancements
happening in the tokenization space to
actually provide even more liquidity on
top of these private market investments.
>> I'm curious what demand looks like. Uh
we were speaking to Deb Bdon of Schroers
yesterday on the close. They recently
put out a study that found that 45% of
the investors that they surveyed would
actually like to add private assets into
their uh retirement plans. And I wonder
if you have any sense of what that
demand looks like because we know that
you know the the the issuers who
actually h are trying to offer this up
certainly want to make this happen. But
uh does the end investor thinking about
their retirement plan truly want this as
well? So I think the proxy that we use
to gauge demand for private market
investments in retirement plans is what
we're actually seeing in taxable
accounts. So as mentioned we are already
providing access to private market
investments and taxable accounts and
we're seeing it as a product that's
actually gaining quite a lot of steam
especially private credit funds. U most
of our investors at least you know with
some of our partners are investing huge
sums uh to get additional yield in those
products.
>> Well you mentioned private credit and
that's something else I was curious
about. We say private assets, but that's
a pretty broad umbrella. You think that,
you know, the average person has heard
about private equity, might have some
idea of what that means? Private credit
hasn't been socialized to the same
degree. It feels like
>> it hasn't it hasn't been. It's only been
in the last, you know, maybe since 2010
uh that it's become a lot more
commonplace for people to invest in
private uh credit. But I'd say for the
mass retail investor, it hasn't been
truly accessible mainly because of
accreditation requirements. And at the
same time, there aren't that many
platforms that are giving access to
these uh securities in a way that is
accessible. So in a fractional way for
example
>> this that's that's why I think yield
street is so interesting because you can
do uh private credit uh litigation
finance art collectibles and then the
fractional ownership is something that
you were uh doing even before that
partnership at Atomic. I remember before
you even had your partnership with Nerd
Wallet. Your business has grown
significantly since then. Um and to that
uh point you've got some new financing.
tell us about the latest round.
>> Yeah, so we just closed a $30 million
raise um from different venture capital
firms as well as institutions like
Nationwide, Erie Insurance, Into It as
well as Aqualine and Brewer Lane. Um you
know, the company has grown
significantly over the last year. We've
more than 52fold the number of investing
accounts that we serve. We've tripled
revenue. We now trade about $20 billion
on an annualized basis. And so this
round is very exciting to allow us to
broaden our mandates in serving
traditional financial institutions as
well as companies in different regions
of the world.
>> All right, David, great to get some time
with you again here on Open Interest.
Appreciate you coming back. Atomic
Invest co-founder and CEO David Dindy.
Still ahead, General Motors breaks into
F1 with a superstar Cadillac driving
team. We'll speak to the CEO of Cadillac
F1 later this hour. This is Bloomberg
Open Interest.
Let's get a check now on the stock
market. Uh using the move screen, which
is the most dynamic way to look at the
S&P or any of the big indexes. Uh you
can see right here that we have 240
stocks gaining, 260 stocks down. So the
breath is to the downside. However, we
continue to rise higher uh as you can
see here right now at 6445.
So about uh 23 points I should say away
from an all-time high. Nvidia has turned
around. When I looked at the uh
chicklets earlier, it was down about a
quarter% now. It's up 2/3 of 1%. That
helps Eli Liy also one of the biggest
point additions to the S&P 500. On the
downside, you have Apple and Google
weighing on uh the index. Let's take a
look at the breakdown in terms of the
sectors here. Um, industrials are the
biggest gainer, 6/10en of 1% followed by
tech and materials. You see healthcare
there not doing quite as well as it uh
was when Katie last checked or at least
at that point it was one of the only
gainers. Now you've got five sectors on
the rise, six sectors to the downside.
energy the biggest weight here as oil
falls consumer staples and communication
uh services. That's your uh alphabet and
Apple uh right there. Um Katie, we're
about to get ready for back to school or
in some cases the first time you send
your kid to school season.
>> That's true. I will say that Starbucks
brought back the pumpkin spice latte
today, I believe. So, summer's over and
coming up, the back to school bust.
Parents tighten their budgets as higher
prices start to sting. Sting rather.
Catalyze brands CEO Mark Rosen joins us
next with insight. This is open
It's the second biggest retailing event
of the year, the back to school season.
And as students sharpen their pencils,
parents are shaving their budgets. A new
study out from Deote shows that spending
will decline this year as tariffs begin
to inflate prices. Here with more is
Callus brand CEO Mark Rosen. Catalyst
owns brands such as J C Penney and
Brooks Brothers among others. Uh Mark,
pleased to have you with us. Let's talk
a little bit about the expectations
because we've seen this, right? That
people are concerned about prices
continuing to go higher here. Even
though the rate of inflation has cooled
down, the absolute levels are still
high. How is that shaping up from your
perspective?
Yeah. What I think what we're seeing
this holiday season is certainly I think
for parents there is a little bit more
uncertainty about the economy but at the
same time their kids are going back to
school and you know I think that is a
unique thing about all of our brands
from Aeropostal to J Penney to Lucky
Brand is that we can mo make both the
parents happy because they're going to
find an incredible value when they come
into our stores but we can also make
kids happy because the other thing that
we know for sure is happening is kids
are going back to school and they want
to go back to school and their parents
want them to go back to school with the
confidence of having the latest style
and the latest fashion. So, they're
going to come into Aeropostal, they're
going to find the newest trends, which
is wide um widelegg, baggy, relaxed
denim, but they're going to find that it
is buy one get one free, which is an
incredible value when you walk out the
door. So, that both the parent and the
kids are going to be happy.
>> I wonder what the effect of tariffs are
going to be, Mark. I look at those
brands. Um, some of them, you know, I
grew up with Brooks Brothers was my
first suit. Uh, but I imagine a lot of
them are making uh getting the textiles
and selling them, cutting and selling
them in foreign countries. So, how does
um how do these higher tariffs affect
your margins and then the price that
consumers pay?
>> Right. I think that's been actually one
of the advantages and one of the
strength is we've come together as
Catalyst brands. So, as you know, um,
Catalyst was formed with this
combination back in January. And as we
looked at, um, how we come to life for
the consumer, we come to life, whether
it's Brooks Brothers or Aeropla, Lucky
or J. C. Penney, in a very unique way
for the customer. So, that denim's going
to look unique. That suit's going to
look unique. At the same time, what
we're focused on is how do we take the
power of Catalyst behind the scenes for
everything that the consumer doesn't see
and put that together so that we can
bring consumers the best possible price
and the best possible value. And that's
where really our sourcing teams are
working to put together all the denim
that we buy across the portfolio, all of
the fleece that we buy across the
portfolio so that we make sure when
we're coming to life for the consumer,
we're bringing them the best value.
Because especially at times right now,
that's incredibly important is to have
great fashion at an outstanding value.
>> Right. But those things, Mark, are not
made in America. So, um, you know, the
age of cone mills denim is long gone.
Um, you've got to import them. They're
cut and sewed overseas and they're going
to have tariffs at least 15%.
Are you taking that into your margins or
are you passing that on to uh to the
consumer?
We announced at the beginning of the
back to school season that we were going
to hold pre-tariff pricing on all of the
key items. So whether that's denim,
t-shirts, backpacks, or fleece, we're
holding pre-tariff pricing, really last
year's pricing on this year's back to
school items. It's really a job of our
merchants to to be the buying agents for
our customers. And we know what's most
important for them at that time. And so
at Back to School, we know those are the
most important items and we're holding
prices on those items to make sure the
consumer sees the best value. You will
see us do similar things as we go into
the holiday season.
>> And Mark, you bring up denim and I want
to talk a little bit about what we're
seeing in the apparel space when it
comes to what's going on, of course,
with American Eagle, their denim ad with
Sydney Sweeney. You saw seemingly a
response from Gap over the weekend with
their own denim ad. I wonder as the CEO
of Catalyst Brands how you approach
advertising in this day and age.
>> Right. So, uh, last week you also saw us
introduce our Addison Ray fit in our
Lucky Brand stores, you know, denim
focused. And Addison, um, we actually
took the Maggie fit, which was a '9s
heritage fit. Addison Ray was wearing
that. Our team actually sent her a pair
of the jeans and she helped us co-design
uh, a new product based on that. at
Maggie Gene that we introduced last week
and you know it was incredible um
incredible on social and we've seen
really strong um response in in store
sales and we're seeing a younger
customer come in for that as they're
finding that product in social. So we
think there's a you know that there's
real potential for those collaborations.
>> Matt, in case you're wondering wondering
Addison Ray is a Tik Tocker who now is a
pop star. She came out with her debut
album. Uh, okay. So, a musician.
>> Yes.
>> From Tik Tok. I Pepsi. There was a long
time when I didn't know who Drake was.
So, I don't have the best uh the best
pop culture. Although, Sydney Sweeney is
uh a name that I know. Um I I want to
dig deeper into what's going to happen
to Brooks Brothers here, Mark, because I
think a lot of people grew up getting a
first suit at Brooks Brothers, getting
shirts made at Brooks Brothers. Um, uh,
the the fleece is a is a brand that I
think touches especially people on Wall
Street, our viewers. Um, so are we going
to see these brickandmortar stores come
back? Are you going to be selling it
through J C Penney and online? I mean,
what's your what's your plan for this
iconic American brand?
>> Yeah, we're really pleased actually with
the results that we've seen in Brooks
Brothers. Brook Brooks Brothers had uh
has had really strong comp store sales
so far this year. Um and really great
product out there. I think as we're
talking about back to school, if you go
into Brooks Brothers right now, you'll
see our university shop, which is really
bringing in a younger customer with
things like rugies and V-neck sweaters
and and sort of the nostalgic um past of
varsity and going back to school. So,
we're seeing some really positive things
in that brand. And when you talk about
physical stores, we were also really
excited this summer to open a brand new
flagship store at 195 Broadway, kind of
in the heart of the financial district.
So those fullric Brooks Brothers stores
are very profitable for us and you will
see us continue to grow because we
believe that full price store in the
right mall has a lot of potential.
>> And Mark, you know, we've talked about
some of the different brands that you
have uh under your stable, Brooks
Brothers being one of them. When you
look at the the landscape overall, you
are starting to see some consolidation
among consumer brands. Do you think that
there's room to add to your portfolio
here?
>> Our focus right now, like like I said,
we came together in January and and
we're really building the combined power
of Catalyst and putting together our
sourcing operations, putting together
our store operations, and making sure
that everything we do behind the scenes
we do in the most efficient way so that
we can bring the consumer the best
value. And then we're focused on the
front end of making sure that each of
our brands comes to life in a unique and
distinct way for consumers. If you look
across the portfolio from Brooks
Brothers to JC Penney to Eddie Bowerard
to Nautica to Lucky and Aerop Postal,
right? They each come to life in a
different way. We are building a
platform and we believe as we build
those core capabilities that we can add
more brands into the platform and and
those brands are going to benefit from
that combined power of sourcing and and
store operations and supply chain to
bring the consumer great brands at a
better value.
>> All right, Mark, great to get some time
with you. Really appreciate it. uh as
you prepare for I guess your busiest
season. Catalyst Brand CEO Mark Rosen
getting ready for back to school at uh
JC Penney, Aerop Postal, uh Eddie Bower,
Brooks Brothers, and more. Let's get a
check on what's going on in the markets
right now. We do see um well, we've
pretty much unchanged on the S&P, but we
were in the red and now we're in the
green as Nvidia swings from uh losses to
gains. The NASDAQ uh doing a little bit
better up two ten of 1%. The 10-year
yield
>> rising a little but 427 42790 still at a
pretty low level.
>> Yeah, pretty much un when it comes to
the 10-year yield. I will note that on
the S&P 500 trading volume is off by 28%
from its 30-day average. So that's the
whole story. There is some action to be
found underneath the surface though. So
let's take a look at some of the
individual movers here. And we do have
analyst upgrades from Baird retailers
VUPC Corp and can the goose raise to
outperform the firm citing clarity with
tariffs which is interesting because it
feels like there's still a lot of big
question marks out there.
>> We've gone through this before I think
but do you know who Jeff Spicoli is?
>> I we've definitely gone through it
before and I still don't know.
>> He made Vans famous in Fast Times at
Rishmont High. Eli Liy's weight loss
pill uh moves ahead after a trial shows
that pat pat patients lost 9% of their
body weight in the uh in the trial and
the shares are up 2.9% which is better
than last time when they lost more
weight but I guess it's because this
means they moved one step closer to an
approval here.
>> Yeah, and this is good news for Eli Liy.
This year has been about trying to get
their mojo back. I mean they're still
down about 7% year to date, but today's
movement certainly helps.
>> Coming up, I'm very excited for this. I
know
>> Cadillac securing the services of two of
the most popular and beloved drivers in
uh Formula 1 ahead of their debut. We'll
speak to Dan Towers, Cadillac F1 CEO
next. This is Bloomberg Open interest.
An iconic American luxury brand is
joining Formula 1 next year. GM's
Cadillac team will make its debut with
two superstar drivers. 10-time Grand
Prix winner Valtry Boas and six-time
Grand Prix winner Sergio Czecho Perez.
Here with us now is Cadillac F1 CEO Dan
Towers. Dan, it's great to have you uh
here with us. I'd love to first just get
a a little bit of a background check on
how you got into this business from
running Gamebridge from being an
insurance executive to now running teams
across NASCAR, Indie Car, and starting
next year Formula 1.
>> Yeah. Yeah. So, it really started in
sponsorship, you know, with the team and
a a partnership with Andredy. But then
kind of when we look at TWWG Global, the
parent um of our company and what Mark
Walters built in a sports media company,
we saw we saw a a thesis in motorsport
to, you know, to get involved in, you
know, to really focus on Formula 1, but
not just Formula 1. It's really every
major motorsport globally from Australia
MV8 supercars to sports cars, NASCAR,
Indie Car, Formula E. Um, and now
Formula 1. So, we're very excited about
that.
>> So, it's it's I think really cool that
you have the resume you do because I
always when I talk to Mark Roy, I ask
him, "How do you convert motorsports
fans into buyers of Chevys, Cadillacs,
Corvettes, what have you." Um, you know,
because you run this insurance company
and that's how you get your start here.
I guess you've had great experience in
doing those conversions. Now, you hire
people like Valter Boas. I want to take
a look at the tweet that he put out uh
this morning. This is a guy who not only
is he an incredibly talented driver,
obviously a a Grand Prix winner, um but
he knows marketing, too. This is what he
posted this morning. I guess it
dedication to an American brand here.
>> Yeah, we're so excited about these two.
I mean, they're both, you know,
characters. Um, you know, they have
storied careers in Formula 1, but
they're not done. This is the next
chapter. You know, they're the chosen
two for the Cadillac Formula 1 team to
hit the grid in in 2026. and we're super
excited about them.
>> So, how long are you giving the team
before you expect that you're going to
win a race or a championship?
>> You know, it is going to be a process. I
mean, Formula 1's the pinnacle of
motorsport. It's so difficult. The
smallest difference can make a huge
difference on track, but I think that's
where their experience comes in. You
know, we'll have over a thousand people
working on this team. And so, a lot of
times people just think about the driver
of the car, but it's a team sport, you
know, and so that leadership and
experience, knowing what to expect for a
brand new team. So even though we have
all these experienced people in Formula
1, they've got to work together. We've
got to build team chemistry. And so
Czecho and Valtry, you know, are the
perfect choice to help, you know, just
bring that experience, give feedback on
the car, get the team working together.
They know what to expect. They've been
there before.
>> So you're going to kick it off with
Ferrari powertrains. Y
>> you bring your own Cadillac powertrains
in a few years down the road, but I'm
guessing you're going to have to pay
almost half a billion dollars um to get
in and then what $250 a year. How long
until you think you can become
champions, you know, um it's going to
take a few years, but um you we're very
excited about that. We're committed to
this process. It is a multi-billion
dollar investment. In total, you know,
we'll have over 600,000 square feet of
manufacturing under roof in the US
between Indianapolis and Charlotte, you
know, between the team and the power
unit company. Um, and all those people
working together. We also have a base of
operations in Silverson. So, this is a
global operation for Cadillac Formula 1.
Um, and so really when we hit the grid,
you know, it's a new chassis and a new
power unit next year. So, it kind of
mixes up the competitive landscape in
Formula 1. And so, we get to figure out
where, you know, where do we stack up
against these teams? none of these cars
will have been on the track, you know,
together when we get there. And then
what I'll be looking at is what is our,
you know, what does our progress look
like? What's the upward trajectory of
that team? Because that really gets to
the question of how long till we win a
till we win a race, you know, how long
till we get on a podium. But the
ambitions for this team are high and uh
the resources are tremendous. And so
together with General Motors, with Mark
Royce and the tremendous team there,
Mary and Mark, you know, we're going to
be working hard to make sure that that
we're competing at the top of the food
chain in Formula 1. I wonder what this
means for the Cadillac brand because all
right, they have had um in the past I
guess the monster in the 1950s at um Lal
and of course I just went to Lal this
year to see them with team Joda and
their hypercar is amazing but um you
don't you hadn't previously thought
about them as um a sports car brand.
Obviously, they had the CTS-V and now
they have the Blackwing, which are, you
know, creme de la creme. But
>> what do you think this does for Cadillac
sales?
>> Well, I think it's they're really
pushing technology and innovation, you
know, with this new series of cars that
they're that they're coming out with.
And I think, you know, Cadillac
continues to see their market share
increasing, you know, rap quite rapidly.
So, I think it's the perfect time for
Cadillac to come into Formula 1 to
really even start to push a younger
demographic that we're seeing, you know,
the growth in Formula 1. And so uh and
so I think as I've talked to to fans,
everyone has a Cadillac story, you know,
and so there's a strong connection to
that brand. So combined with the new
products that Cadillac's coming out with
and then the relevancy of being in
Formula 1 competing against Mercedes,
Ferrari, McLaren, Aston Martin, and the
likes, I think it's a it's a good
combination for Cadillac
>> and going to be an amazing rivalry with
Ford. I mean, I was thinking of Lal
about how cool it'll be when Ford goes
into the hypercar. Uh, but that's only
for like niche like totally dedicated
car freaks. This is F1 now. I mean, one
of the most
>> popular in America. It's up there with
NASCAR now, I think. Um, and Ford's
going to enter F1 next year, too. So,
how do you feel about that uh cross town
rivalry, GM versus
>> You know, it's interesting. It's It's
very different. I think Ford's
partnership with Red Bull is at a much
different level. I think what we have
with GM here is an is an equity
partnership, not a sponsorship. their
integration. They're leading the power
unit development. They're not assisting
in the power unit development. So, the
participation of GM and Cadillac in this
versus Ford and Red Bull, very, very
different. But yet, you still have these
American motorsport powers, automobile,
you know, powers, you know, going
head-to-head. But then when you think
about you've got one in seven Americans
that identify as a fan in Formula 1. So,
that's over 50 million Americans say
they're a fan of Formula 1, but they're
not yet watching races. So, the real key
is going to be how do we convert those
fans into race watching fans? How do we
convert them into Cadillac fans, which I
think will then they'll see the bump in,
you know, car sales.
>> All right. I'm pretty excited.
>> I know you are.
>> Can you tell, Katie?
>> I can tell. Yes.
>> Dan, thanks so much for joining us. Dan
Tower there of Cadillac F1. By the way,
for more um of this kind of excitement
about cars, check out my podcast. Every
week, Hannah Elliot and I put out a new
uh episode of our podcast, Hot Pursuit,
which you can download on Bloomberg.com,
on Spotify, on Apple Podcast, wherever
you listen.
>> You have a podcast?
>> Yes, it's called Hot Pursuit. Yeah,
>> you should download it.
>> I should. Uh anyway, coming up on this
show, Open Interest, President Trump
moving to ou Fed Governor Lisa Cook.
We'll head to Washington Nets for the
latest. This is Open Interest.
President Biden uh wanted uh Bloom
Rascin as governor as if I remember
correctly as the vice chair and the
Democratic Senate said no. So uh you
know Trump's got you know Trump doesn't
have the ability to unilaterally impose
his will upon the Federal Reserve Board
of Governors anyway. the presidents
always believe they've got people uh
queued up uh who who you know might vote
as they wish. Uh they are very
frequently uh disappointed in that
regard.
>> That was Terry Haynes pangia policy
founder speaking to us last hour.
President Trump taking actions to fire
Fed Governor Lisa Cook. She is defiant
and refuses to quit. Joining us now from
the White House is Bloomberg, Washington
correspondent Tyler Kendall. So Tyler,
um Katie and I are just wondering what's
going to happen next. Like are we
watching at the Federal Reserve to see
if she's going to go into work today? Is
it possible that someone will block her?
How does it look?
>> Well, that's going to be one of the
biggest questions here, Matt, is what
comes next here. But what's clear is
that there are legal questions that need
to be answered first. And that's
probably going to define the path that
we see this takes. Because as you all
know there is a very high bar to remove
a Federal Reserve official, a protection
that was actually bolstered by the US
Supreme Court earlier this year. You'll
recall they heard a pair of cases
related to firings at other independent
agencies. And the Supreme Court had
ruled that the Trump administration was
allowed to oust those officials,
including one at the National Labor
Relations Board, but did signal that it
would shield Federal Reserve officials
due to what they called the Fed's unique
structure. Now, in order to remove a fed
official, I know you've been talking
about it on this program, the White
House would have to demonstrate what's
known as cause. The thing is cause isn't
explicitly defined anywhere, though it's
historically meant to mean malfeasants
or uh neglect of duties,
responsibilities related to uh the job.
And President Trump had outlined in his
letter yesterday that the White House
felt that it had sufficient cause in his
words over these allegations of mortgage
occupancy fraud. But at this point, it
is really unclear whether or not that
meets that high legal bar. And certainly
to Cook, it doesn't seem that she feels
that it does. We did get a statement
from her through her attorney where she
said that she does not believe that
President Trump ultimately has this
authority and that she isn't going to
resign. It's really important, of
course, for us to put into context here
that no formal charges have been brought
against Cook, though the Justice
Department says that it's going to
investigate this. But just to wrap up
for your original question, the thing
that we're all watching for here is
whether or not Cook applies for this
injunction, which would essentially
reinstate her while the legal process
plays out. That of course would have big
uh implications for the day-to-day job,
but also uh looking forward to that
September meeting. So, that's what I'm
keeping my my eye out for.
>> All right, Tyler, really appreciate your
reporting. That is Bloomberg's Tyler
Kendall. She is live outside the White
House. Of course, it's interesting to be
having these conversations, Matt, and
seeing the non reaction in markets right
now. I mean, you have the S&P 500. It's
been in a trading range all day. Maybe a
little bit of movement you saw in the
bond market overnight, but yields pretty
much unchanged on the 10-year yield
because there's still a lot of
questions. First of foremost is whether
or not Trump actually has the authority
to do this.
>> Yeah, it seems pretty unresolved right
now, and that may be why we don't see a
lot of reaction in the market. One place
where we do see a lot of reaction is in
Cracker Barrel shares. And this is also
reaction to President Trump, though
having nothing to do obviously with Lisa
Cook. President Trump tweets out,
"Cracker Barrel should go back to the
old logo. Admit a mistake based on
customer response, the ultimate poll,
and manage the company better than ever
before. They got a billion dollars worth
of free publicity if they play their
cards right." And he's not wrong.
>> I Yeah, I don't think he's alone in that
opinion. And it seems like uh reaction
to the logo itself, politics aside, has
been pretty uniformly negative.
>> All right, coming up tomorrow, it's
Invidia Day. Kim Forest, CIO at Bokeh
Capital joins us as well as Margie Patel
from Allspring.