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13:56
PDT

Tariffs are causing job losses and price increases in both the U.S. and Canada.

Lana Payne Unifor U.S.Canada Trump Canadian whisky rye whisky whey protein motorcycles toilet paper fishing rods cement PRIVATE

– Political pressure is mounting in the U.S. regarding the negative impacts of tariffs.

– The Canadian economy is experiencing material impacts from ongoing trade tensions.

– Public sentiment in Canada is against U.S. products due to retaliatory tariffs.

– A favorable trade deal is necessary to rebuild trust between the U.S. and Canada.

trade tensionstariff impactspolitical pressureeconomic contraction

▸ Full transcript

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Analysis

The ongoing trade tensions between the U.S. and Canada are intensifying, with tariffs leading to job losses and increased prices in both countries. The situation is expected to worsen before any resolution is found, impacting critical sectors and raising political pressure in the U.S. as midterm elections approach.

Smart money should note that the political landscape in the U.S. is shifting, with growing dissent among Republicans regarding the effectiveness of tariffs. This could lead to potential policy changes that may alleviate some economic pressures, but trust between the two nations will require a substantial and favorable trade deal to rebuild.

13:54
PDT

Tariffs are causing job losses and price increases in both the U.S. and Canada.

Lana Payne Unifor U.S.Canada Trump National President PRIVATE CL=F

– Political pressure is growing in the U.S. against the current tariff strategy.

– Recent tariff adjustments indicate a potential shift in U.S. policy.

– The economic impact on Canadian GDP is expected to be significant if tariffs persist.

– Trust between U.S. and Canadian consumers may take time to rebuild even if a deal is reached.

trade tensionspolitical pressuretariff impact

▸ Full transcript

Important inputs. And I think what you saw in the last retaliation from the president, so the motorcycles, all of the things that you've just mentioned, is we also saw some walking back of some tariffs, which was interesting to me. So tariffs on things like toilet paper and fishing rods and cement and road salt. And this is because what you're seeing is political pressure now growing in some of the states, from even Republicans themselves saying, look, these tariffs are not working for us in our states right now. And so we need more of that to happen. All right, Anna. Really great to have you. Lana Payne, Unifor, National President there, representing hundreds of thousands of Canadian workers now being affected by additional tariffs and bans on Canadian products. We're going to set you up for what to watch over the next 24 hours in financial markets when we come back after the break. This is Bloomberg. What should we do? Is this just for rich people? How do you know what to choose? We get a lot of smart people together. We're analyzing all of the data. We're doing research. And we're pulling all that together to think about what would be the best investment today that will make money in the future. Invest...

Analysis

The ongoing trade war between the U.S. and Canada is intensifying, with tariffs leading to job losses and increased prices for consumers in both countries. Political pressure is mounting in the U.S. as some states, including Republican strongholds, are beginning to push back against the tariffs, indicating a potential shift in strategy may be necessary.

Smart money should note that the political landscape is changing, with tariffs now being questioned even by those who initially supported them. This could signal a forthcoming negotiation phase that may lead to a resolution, but the economic impact on both Canadian and American workers is already materializing and could worsen before it improves.

13:52
PDT

Tariffs and import bans are escalating between the U.S. and Canada.

President Trump Canadian workers Canadian economy American workers American companies American manufacturers auto sector BI GDP

– Canadian GDP is at risk of a material decline due to ongoing trade tensions.

– American manufacturers, especially in the auto sector, are also negatively impacted.

– The situation may worsen before any potential resolution is reached.

– Public sentiment on both sides could hinder future negotiations.

trade tensionstariff impacteconomic slowdown

▸ Full transcript

Hammered with tariffs that went against the very agreement that President Trump initially signed? Yeah, and we should be clear, too. I mean, we have tariffs, and then we have basically total bans. And that import ban on your brandies and whiskies takes effect at the end of this month; the whey protein, that's a total ban; motorcycles, that's a total ban. And then you're getting 50% duties on your motorboats and mattresses and a lot of stuff like that. Give me a sense here. I guess of when you start to see a material economic impact, and we had the chief economist of your Chamber of Commerce on yesterday, and he was starting to quantify that. I know BI, our own analysts have done an assessment, and it said, if this continues to drag on, we're talking about a material hit to Canadian GDP. Yes, I mean, there's no doubt that that's going to be the result. We've been saying this for 18 months, that it's having an impact on the Canadian economy, particularly on Canadian workers in the critical sectors that have been tariffed by the U.S. administration. But this is not the only impact. It's also having an impact in America, and it's having an impact on American workers. It's having an impact on American companies. It's having an impact on American manufacturers, particularly in the auto sector. And this is what I think defies reason for a lot of us right now is why would you hurt the very companies that are at the top of the list.

Analysis

The ongoing trade tensions between the U.S. and Canada are intensifying, with significant tariffs and import bans impacting both economies. Canadian workers in critical sectors are feeling the strain, and the potential for a material hit to Canadian GDP is becoming increasingly evident.

Smart money should note that the tariffs are not only affecting Canadian industries but are also harming American manufacturers, particularly in the auto sector. This interconnected impact suggests that a resolution may be necessary to stabilize both economies and restore trust in cross-border trade.

13:50
PDT

North American farmers are optimistic ahead of harvest, while European farmers face uncertainty post-harvest.

Agco Eric Hansonia U.S.Canada Brent crude Lana Payne Carney

– Tariff impacts are quantifiable but inject significant uncertainty into market dynamics.

– Farmers prefer market access over short-term government support.

– Public sentiment against U.S. products complicates trade negotiations.

– A favorable trade deal is essential for rebuilding trust between U.S. and Canadian markets.

trade tensionstariff impactsmarket accesspublic sentiment

▸ Full transcript

The trade deal that really put us in a place where a lot of these industries would not survive in the long run. And that's why in the end the kinds of concessions that the U.S. was looking for during those trade talks became untenable for Canadian negotiators. So we're in a very intense stage now in the trade war and we have to do everything I believe to try and de-escalate, but also I fear this may be many months away. Well, I want to go back though just about three weeks or so ago, because I mean Carney had come out and I think he had urged a lot of the provincial governments to put U.S. alcohol products, whiskey, back on the shelves. And there was a bit of a backlash to that by the public. And I do wonder that, even on the off chance that somehow the governments are able to actually find some common ground and sort of tamp things down, is the public ready to tamp that down? I mean, there's been a lot of animosity generated on both sides of the border against U.S. and Canadian-made products. Does that just go away if we do strike a deal? Well, it has to be a good deal. And I think if it is a good deal, you're going to see some trust being rebuilt and it'll start with, you know, obviously putting booze back on the shelves here in Canada. And the reason Canadians were upset about that request was it was more, we haven't seen the results of getting.

Analysis

The ongoing trade tensions between the U.S. and Canada are intensifying, with fears that the situation may worsen before it improves. The public's animosity towards U.S. products complicates potential negotiations, highlighting the need for a favorable deal to rebuild trust.

Smart money should note that the uncertainty surrounding tariffs is affecting market dynamics, particularly in agriculture and alcohol sectors. The reliance on government support for farmers indicates a fragile market environment that could lead to volatility in related commodities and stocks.

13:48
PDT

Tariff disputes are escalating between the U.S. and Canada.

Lana Payne U.S.Canada Trump And Lana United States

– Political discussions are focusing on the economic impact of tariffs ahead of midterms.

– Job losses and increased prices are significant concerns for American workers.

– Canadian industries, especially distilleries, are feeling the pressure from retaliatory tariffs.

– The situation may worsen before any resolution is reached.

trade tensionstariff impactpolitical influence

▸ Full transcript

Lead to job losses and increased prices for both countries. Uniform national president, Lana Payne, joins us right now. Talk a little bit more about this. And Lana, we last talked when this sort of tit for tat was still just at the tip point. Now we're tit for tat for tit for tat. When does this end? Do you have any anticipation as to whether the negotiators on both sides of the border here might actually find a way to bring this to an end? I actually fear it may get a little bit worse before it gets better. That's my sense of things. But what we are seeing in the United States right now, obviously with the midterms coming up, is a lot of political discussion in districts and ridings and states about the cost of these tariffs for Americans. This is something that we've said from the beginning that the tariffs will drive up the price of things for American workers, but it also is costing American workers their jobs. And the same thing, you know, obviously in Canada, we have been hammered with these tariffs for 18 months right now. Well, give me a sense. I know the last time we had you on, I think we talked a lot more about the auto side, but one of the new sort of retaliatory tariffs that Trump has put on specifically affects Canadian whiskies, rye whiskies, as well as other food products like whey proteins as well. I know you represent, your union represents distilleries and wineries here. How

Analysis

The ongoing tariff disputes between the U.S. and Canada are intensifying, with fears that the situation may worsen before it improves. The political climate in the U.S. is amplifying concerns about rising costs and job losses for American workers due to these tariffs.

Smart money should note that the political discussions surrounding tariffs are not just economic issues but are also tied to upcoming midterm elections, which could influence policy decisions. The impact on Canadian industries, particularly distilleries and food products, highlights the broader economic ramifications of these trade tensions.

13:46
PDT

Higher diesel prices are a concern for farmers but are offset by rising ethanol demand.

Agco Eric Hansonia Brazil North America Europe Deere AI Der Ende

– Grain prices have increased over 30% in the last 90 days.

– Brazilian farmers are holding back due to high inflation and political uncertainty.

– The North American agricultural market is expected to improve as harvest approaches.

– Tariff uncertainties are impacting market dynamics and farmer decision-making.

agricultural market dynamicsenergy pricesBrazilian economytariff impacts

▸ Full transcript

Investieren heute, das Geld in der Zukunft machen wird. Investieren, wie die Zukunft sich anschaut. Der Ende des Jobs oder der Ende des Menschen-Strengers. Wir sehen die endlosen Funken, die die AI-Hike fühlen. Während andere die Stimme folgen, folgen wir dem Geld.

Analysis

The discussion highlighted the mixed impact of rising energy prices on farmers, with higher diesel costs being offset by increased ethanol demand and rising grain prices. The introduction of E15 opportunities in the new farm bill could provide a significant tailwind for farmers, indicating a potential shift in market dynamics.

Brazilian farmers are currently facing high input costs and inflation, leading to a significant downturn in the combine market, down 40%. This regional disparity in agricultural performance suggests that North American farmers may benefit from favorable conditions, while Brazilian farmers remain cautious amid political uncertainty.

13:44
PDT

Brent crude prices rising above $100/bbl.

Brent crude S&P 500 Eric Hansodia AGCO Washington E15 CEO S&P 500 PRIVATE

– S&P 500 declines for three straight days.

– Farmers face a 29% increase in oil-related expenses.

– Short-term government support is seen as insufficient.

– Biofuel regulations could provide long-term demand stability.

energy pricesagricultural costsbiofuel regulationsmarket access

▸ Full transcript

Financial targets are kind of dependent on help from Washington for U.S. farmers. Well, I think farmers would all tell you they may need it in the short term for some support, but they don't want to count on support. They want to count on market access. So biofuels would be fantastic if we had more biofuel regulation, the E15 thing. That'd be great to provide a long-term planning horizon for demand that they can count on. That type of thing, they would love to count on Washington. Short-term support bills, they appreciate them, but it's a little bit more of a band-aid. They don't make long-term decisions based on those. Eric, really appreciate you coming. Remain great. Thank you. Eric Hansodia, CEO and chair of Agco. All right, let's take a quick look at how markets ended on the day: the S&P 500 finishing down for a third straight day. And that's largely because of the second line on your screen, a 4% pop in Brent crude futures back above 100 bucks a barrel for the first time since July. This is Bloomberg. The small things, you'll see more closely. Because where others only see details, you'll see the possibilities. This is for everyone who makes a big difference from small inputs. This is for the craft of finance.

Analysis

Brent crude futures surged 4% to surpass $100 a barrel for the first time since July, contributing to a decline in the S&P 500 for the third consecutive day. Farmers are increasingly concerned about rising fuel costs, with expectations of a 29% increase in oil-related expenses, which could impact their cash flow and purchasing decisions.

13:41
PDT

Oil prices hit $100 a barrel amid Middle East tensions.

Kevin Crowley Eric Hansodia AGCO USDA Iran Middle East Russia Ukraine Brazil Deere The North American North America

– Global storage levels are reportedly exhausted, increasing market anxiety.

– Farmers' fuel costs projected to rise 29%, affecting their cash flow.

– Ethanol demand and grain prices are rising, providing some offset for farmers.

– Tariff uncertainties are complicating market forecasts and farmer purchasing behavior.

geopolitical riskagricultural input coststariff uncertainty

▸ Full transcript

The North American farmer is benefiting from the timing of rising prices just before their harvest. In contrast, the European farmer plants crops that are harvested in the summer, so the price increase occurred after their harvest. The North American market is the most enthusiastic, while Brazil is the least optimistic, with Europe in the middle. The ongoing issues in the Middle East and in Russia and Ukraine complicate demand forecasting in Europe. We have the widest range of forecasts we've ever had, and while we can manage through various scenarios, we would prefer more certainty regarding tariffs and trade policy. If the Strait of Hormuz could open up, it would create more certainty for buyers of capital goods, allowing for better long-term planning. The tariff issue is back in the news, and it affects our business in both direct and indirect ways. The cost impact is about 1% of our global sales, as only 20% of our business is in North America. The more challenging aspect is the uncertainty it creates in market dynamics, which can lead farmers to pull back on purchases.

Analysis

Oil prices have surged to $100 a barrel due to escalating tensions in the Middle East, with concerns about global storage levels exacerbating market fears. Farmers are facing increased costs, with fuel and related expenses expected to rise significantly, impacting their cash flow and purchasing decisions.

13:39
PDT

Oil prices hit $100 a barrel amid Middle East tensions.

Kevin Crowley Gisec Global AGCO USDA Brazil Deere AI US CEO PTX Die Digital Die Quantum CL=F

– Global storage levels are reportedly exhausted, increasing market fears.

– Farmers' fuel expenses expected to rise significantly this year.

– Grain prices have increased over 30% in the last 90 days.

– Brazilian farmers are holding back due to high inflation and uncertainty.

energy pricesagriculture costsMiddle East tensions

▸ Full transcript

Die Digital-Order ist nicht von Technologie selbst definiert. Soverein AI reschapst Digital-Independenz, und die Agenz des AI verwendet Entscheidungen. Die Quantum verabschiedet neue Möglichkeiten. Alle Verbrauchungen sind ein cyber-firstes Mindest. Das ist warum die Zukunft mit Gisec Global die mittel-eastern und afrikanisch größte Cyber-Sicherheit verabschiedet. Wir schämen die Politik, wir streiten die Innovation, wir protecten die Digital-Order. $100 a barrel for the first time since July and well those refined products going up even more. Bloomberg senior US oil reporter Kevin Crowley joins us right now to talk a little bit more about this and Kevin obviously this is tied to the still unresolved and now apparently escalating situation in the Middle East do we have any sense here as to that correlation and more importantly how much further prices might go. Well that's right yeah there's been escalating tensions in the Middle East there's been a lot of conflict this week. And the latest this afternoon is we have a story out from an Iranian official saying that they are prepared to continue this conflict at an even more intense level. So there's really no sign of this conflict ebbing away. And that's what's caused oil prices to head up to $100 a barrel or so. I mean, the big concern is that we've now exhausted a lot of the global storage that was available to us early on in the crisis. And so those kind of buffers have now been drawn down, which is really spooking the markets this afternoon. Well, I am curious too. I mean, this has obviously become a story, at least for markets, and for that matter for businesses and consumers alike, that it's a little bit less about what a barrel of oil costs and more about what those refined products cost. There's been a lot of discussion about these crack spreads, the difference between crude prices and those refined prices. Those are completely out of whack. Do we have any sense or have you heard from any of the other groups? Sense here, is that going to be a global story or is it going to be confined to certain regions, certain continents? Yeah, probably certain regions, certain continents. Unfortunately, it's the people who can lease the forts to pay these prices will be the people who will be forced to cut back. I mean, we saw this in parts of Asia earlier on in the crisis. But we may also start to see this here in the US. I mean $6 a gallon for diesel puts a lot of strain on trucking, shipments and even agriculture too. Yeah, it's about $5.90 out here in the New York area. Kevin, great to see you. Kevin Crowley, senior U.S. oil reporter. And of course the pressure of higher energy prices goes far beyond just what we're paying at the pump. Farmers, they're filling the pinch too. Navigating cost pressures from oil and of course everything that oil goes into, including fertilizer. Eric Hansodia joins us right now. He's the CEO and chair of AGCO, one of the world's biggest agriculture equipment makers. Eric, great to have you here. Yeah, great to be on the radio. Before we start talking about just kind of your business overall, I do want to ask you a little bit about oil prices because I saw the USDA had some updated figures where they were kind of expecting fuel and related expenses and oil expenses for farmers specifically to rise about 29% this year. And that was a number that was put out before this latest bump-up that we've seen in oil prices. Give me a sense here as somebody who has to sell to these farmers are you concerned that they're just gonna have a little bit less cash in their pocket? So that's a bit supportive of the top line pricing for them. Well that's what I was curious about too because obviously an energy shock is bearish, but obviously for farmers, so a certain extent if you're a certain type of farmer, there is maybe a potential upswing to this, upside to this I should say. Does that balance out though enough? Yeah, so for the green farmer there is some offsetting there. They don't like paying the higher diesel fuel prices. That's certainly an issue. But they also see the ethanol demand going up. And if you see the grain price over the last 90 days, they're up above 30%. So, and there's more opportunities for E15 all year round in the new farm bill. So these are all interrelated. That would be a great tailwind for farmers. Well, talk to me then. I'm gonna use this as a segue, talk a little bit about your this precision PTX business that you have. First of all, I just need to just kind of articulate what it basically, it's just kind of these autonomy guidance. It's basically technology, but it could be retrofitted, not only to add co-products, but to any brand? Is that true? Yeah, you nailed it. So what does that do for the farmer in a situation like this? Well, so it's a very unique business in that our engineers are designing retrofit modules, means technology put on an existing machine of any brand under our competitive brands as well. It gives that machine new capability. You can automate a task. In times like this, when farmer margins are squeezed and they've been for a number of years, it allows a farmer to get the latest and greatest cutting edge technology without having to buy a whole new machine. So instead of a $500,000 planter, they can maybe upgrade for $150,000. So it keeps their... Current raw transcript: turnkey from the factory, they can buy Fent with the best technology in the marketplace. If they wanted to have an existing machine regardless of who they bought from before, but they don't want to purchase a brand new one, then they have the retrofit market. So it opens up the tam of the entire marketplace. We can serve any farmer. So it's a much broader service. Does that bring in new customers or is it just kind of keeping your existing customers tethered? No, but the predominant to customer base of this retrofit business, PTX, is competitive equipment. Got you. into the door with with customers we normally wouldn't serve. You know I asked Kevin about some of the regional differences with regards to the impact on oil prices, oil oil prices, but I'm also curious about the regional differences with regards to just ag I mean there's kind of you have the North American story Which is one thing and then I was kind of looking and I was looking at Brazil the combine market there was down if I got This right something like 40% yeah, that's huge. It's huge. What's going on? Well Brazil has there's some of the things they're saying and there's some things unique there's some of the things they're saying of high input costs and all farmers are dealing with high input costs on fuel fertilizer things like that But Brazil also has high inflation I mean interest rates Which is putting a big squeeze on farmers and a lot of uncertainty in the election They've got two candidates. They're kind of polar opposites unclear who's gonna win big difference in farmers So the Brazil farmers are essentially holding back for right now. Yeah, and yeah, that big like it was that next the month of early October will get that election. I saw Deere actually kind of said that overall for Ag market that this was going to be sort of the bottom.

Analysis

Oil prices have surged to $100 a barrel due to escalating tensions in the Middle East, with concerns about depleted global storage adding to market anxiety. Farmers are facing a 29% rise in fuel-related expenses, which could squeeze their cash flow despite potential upsides from increased grain prices and ethanol demand.

13:37
PDT

Oil prices hit $100 a barrel amid Middle East tensions.

QTS Chris Wright Kevin Crowley AGCO USDA Iran Middle East PTX

– Farmers face a 29% rise in fuel-related expenses this year.

– Grain prices have increased over 30% in the last 90 days.

– Ethanol demand is expected to rise, benefiting certain farmers.

– Precision technology allows cost-effective upgrades for farmers.

energy pricesagricultural technologymarket dynamics

▸ Full transcript

So that's a bit supportive of the top line pricing for them. Well, that's what I was curious about too because obviously an energy shock is bearish, but obviously for farmers, so a certain extent if you're a certain type of farmer, there is maybe a potential upswing to this, upside to this I should say. Does that balance out though enough? Yeah, so for the green farmer there is some offsetting there. They don't like paying the higher diesel fuel prices. That's certainly an issue. But they also see the ethanol demand going up. And if you see the grain price over the last 90 days, they're up above 30%. So, and there's more opportunities for E15 all year round in the new farm bill. So these are all interrelated. That would be a great tailwind for farmers. Well, talk to me then. I'm going to use this as a segue, talk a little bit about your this precision PTX business that you have. First of all, I just need to just kind of articulate what it basically, it's just kind of these autonomy guidance. It's basically technology, but it could be retrofitted, not only to add co-products, but to any brand? Is that true? Yeah, you nailed it. So what does that do for the farmer in a situation like this? Well, so it's a very unique business in that our engineers are designing retrofit modules, means technology put on an existing machine of any brand under our competitive brands as well. It gives that machine new capability. You can automate a task. In times like this, when farmer margins are squeezed and they've been for a number of years, it allows a farmer to get the latest and greatest cutting edge technology without having to buy a whole new machine. So instead of a $500,000 planter, they can maybe upgrade for $150,000. So it keeps their...

Analysis

Oil prices have surged to $100 a barrel due to escalating tensions in the Middle East, with concerns about global storage levels exacerbating market fears. Farmers are facing increased costs from higher diesel prices, but rising grain prices and ethanol demand may provide some offsetting benefits for certain agricultural sectors.

The interplay between rising oil prices and agricultural costs highlights a complex dynamic where some farmers may benefit from higher grain prices despite increased operational costs. The introduction of precision technology that allows farmers to upgrade existing machinery could mitigate some financial strain, enabling them to maintain productivity without significant capital investment.

13:35
PDT

Oil prices hit $100 a barrel amid Middle East tensions.

Blackstone QTS Chris Wright Kevin Crowley Eric Hansodia AGCO USDA Middle East Iran US CEO New York CL=F

– Global storage levels are critically low, raising market concerns.

– Farmers are projected to see a 29% rise in fuel-related expenses.

– Higher diesel prices could strain trucking and agriculture sectors.

– Demand for refined products is outpacing supply.

energy pricesagricultural costsgeopolitical risk

▸ Full transcript

Is that going to be a global story or is it going to be confined to certain regions, certain continents? Yeah, probably certain regions, certain continents. Unfortunately, it's the people who can lease the forts to pay these prices who will be forced to cut back. I mean, we saw this in parts of Asia earlier on in the crisis. But we may also start to see this here in the US. I mean, $6 a gallon for diesel puts a lot of strain on trucking, shipments, and even agriculture too. Yeah, it's about $5.90 out here in the New York area. Kevin, great to see you. Kevin Crowley, senior U.S. oil reporter. And of course, the pressure of higher energy prices goes far beyond just what we're paying at the pump. Farmers, they're feeling the pinch too. Navigating cost pressures from oil and of course everything that oil goes into, including fertilizer. Eric Hansodia joins us right now. He's the CEO and chair of AGCO, one of the world's biggest agriculture equipment makers. Eric, great to have you here. Yeah, great to be on the radio. Before we start talking about just kind of your business overall, I do want to ask you a little bit about oil prices because I saw the USDA had some updated figures where they were kind of expecting fuel and related expenses and oil expenses for farmers specifically to rise about 29% this year. And that was a number that was put out before this latest bump-up that we've seen in oil prices. Give me a sense here as somebody who has to sell to these farmers, are you concerned that they're just going to have a little bit less cash in their pocket?

Analysis

Oil prices have surged to $100 a barrel due to escalating tensions in the Middle East, with concerns about depleted global storage exacerbating market fears. The impact of rising energy costs is extending beyond consumers to farmers, who are facing significant increases in fuel-related expenses, potentially reducing their cash flow.

13:32
PDT

Oil prices hit $100 a barrel due to Middle East tensions.

Kevin Crowley Iran Bloomberg US Middle East PRIVATE CL=F

– Iranian officials indicate a willingness to escalate conflict.

– Global storage buffers are nearly exhausted, raising market concerns.

– Refined product prices are significantly out of sync with crude prices.

– Crack spreads suggest potential supply chain issues.

geopolitical riskenergy prices

▸ Full transcript

$100 a barrel for the first time since July, and those refined products are going up even more. Bloomberg senior US oil reporter Kevin Crowley joins us right now to talk a little bit more about this. Kevin, obviously this is tied to the still unresolved and now apparently escalating situation in the Middle East. Do we have any sense here as to that correlation and, more importantly, how much further prices might go? Well, that's right. Yeah, there's been escalating tensions in the Middle East, and there's been a lot of conflict this week. The latest this afternoon is we have a story out from an Iranian official saying that they are prepared to continue this conflict at an even more intense level. So there's really no sign of this conflict ebbing away, and that's what's caused oil prices to head up to $100 a barrel or so. I mean, the big concern is that we've now exhausted a lot of the global storage that was available to us early on in the crisis. And so those kinds of buffers have now been drawn down, which is really spooking the markets this afternoon. Well, I am curious too. I mean, this has obviously become a story, at least for markets, and for that matter for businesses and consumers alike, that it's a little bit less about what a barrel of oil costs and more about what those refined products cost. There's been a lot of discussion about these crack spreads, the difference between crude prices and those refined prices. Those are completely out of whack. Do we have any sense or have you heard from any of the other groups?

Analysis

Oil prices have surged to $100 a barrel for the first time since July, driven by escalating tensions in the Middle East and a warning from an Iranian official about intensifying conflict. The depletion of global storage buffers is raising concerns in the market, indicating potential further price increases.

Smart money should note that the focus is shifting from crude oil prices to the costs of refined products, which are currently misaligned with crude prices. This discrepancy in crack spreads could signal underlying supply chain issues that may affect consumer prices and overall market stability.

13:30
PDT

AI is redefining digital independence and decision-making.

Gisec Global Middle East Africa AI Die Digital Die Quantum Alle Verbrauchungen

– Quantum technology is opening new opportunities.

– A cyber-first approach is becoming essential.

– Political challenges are arising against innovation.

– Investment in cybersecurity is likely to increase.

cybersecurityAI innovationquantum technology

▸ Full transcript

Analysis

The digital order is being reshaped by AI, which is redefining digital independence and decision-making processes. The emergence of quantum technology is creating new opportunities, emphasizing the need for a cyber-first approach to consumption and security in the Middle East and Africa.

Smart money should note that the political landscape is being challenged by innovation in cybersecurity, indicating a shift in how digital infrastructure is protected. This could lead to increased investment opportunities in cybersecurity firms that align with these emerging trends.

13:28
PDT

Data center companies are investing in grid reliability.

Tag Griesen QTS Blackstone Chris Wright Virginia Texas Pennsylvania AOL CEO Energy Secretary Chris Wright PRIVATE

– Community benefits agreements are being prioritized.

– Potential for utility bill reductions is being explored.

– Demand for data centers is exceeding current supply.

– Proactive community engagement may reduce regulatory risks.

data center growthcommunity engagementenergy infrastructure

▸ Full transcript

Invest in the grid. Data center companies that are responsible developers focus their energy on ensuring that we pay for all the costs associated with generation, all the costs associated with transmission, and all the costs associated with the upgrade of the transmission system. In the end, what that should do, Romain, is give the citizens a more reliable grid at the expense of the data center companies. And it's not a hard equation. We just need to get the message out that we want to pay our fair share. Responsible developers are paying their fair share. But I think we can do more. I think we could actually start talking about what about a rate payer reduction? If we are sitting in there in a community, which we have done many times, my leadership team and I go into communities and say three things. One, we're going to provide you with a community benefits agreement, helping you upgrade your infrastructure within your community. Number two, pilot a payment in lieu of taxes. That means we're pulling taxes forward to give the benefit early to that community. And number three, how do we provide them with a reduction in their utility bills, not an increase? We need to take this issue off the table. It's not complicated. I think the messaging out there has just been missed. All right, Tag. That's a great place to leave it. Tag Griesen, the co-CEO of QTS. And as I just said, U.S. Energy Secretary Chris Wright will be joining Bloomberg in the next hour. Stick around for that and stick around for our conversation up next with the CEO.

Analysis

Data center companies are focusing on investing in the grid to ensure reliable energy supply, with a commitment to cover all associated costs. They are also exploring community benefits agreements and potential utility bill reductions to improve public perception and support for their infrastructure projects.

Smart money should note that the demand for data centers is currently outstripping supply, indicating a robust growth trajectory for the sector. Additionally, the proactive approach of data center firms in addressing community concerns may mitigate regulatory risks and enhance their long-term viability.

13:26
PDT

QTS sees strong demand for data centers, outpacing supply.

QTS Tag Greason Blackstone Governor Attit Governor Shapiro Virginia Texas Pennsylvania AOL Bloomberg

– Innovative water-cooling technology is being implemented to address environmental concerns.

– Long-term planning with major companies is a key strategy for QTS.

– Responsible growth is emphasized to improve community relations.

– Potential backlash from rising utility costs is being proactively managed.

data center demandsustainable infrastructurecommunity relationsinstitutional investment

▸ Full transcript

loop system which does not consume water at all. You actually charge the system once and then you circulate that water and you cool all the operation of the data center without consuming any water. There's a way to actually strike a balance to give back and make communities better than we found them when we got there. Yeah, and I think we're showing some graphics there of how exactly that technology works on screen. Obviously a giant in this space with regards to the number of data centers. You're building out more. Blackstone has touted this as probably one of its better investments that it has made, which says a lot because they make some good investments. But you know the bear case right now is that are we overbuilding? Is there going to be enough demand down the line to meet what's in the pipeline right now with regards to these number of data centers? Yeah, the answer is yes. I think the demand signals are very clear and we've been working very closely with the largest companies and the highest investment-grade companies in the world on long-term planning that gives us great confidence that we're building infrastructure today that will be productive in years to come. And those relationships start with sitting down and understanding what the demand signals are at the base level and then building infrastructure that supports that demand. And right now I think demand is far outstripping supply and I'm not worried about that at all. Especially as you, in addition, you wear a lot of hats; you're also an advisor to the energy department to Chris.

Analysis

The demand for data centers is projected to outstrip supply, with QTS's co-CEO Tag Greason expressing confidence in long-term planning with major companies. The use of innovative water-cooling technology aims to address environmental concerns while supporting the growing digital economy.

Smart money should note that the current infrastructure build-out is not just about capacity but also about responsible growth, which could enhance community relations and mitigate potential backlash against rising utility costs. The focus on sustainable practices may provide a competitive edge in attracting institutional investment in the data center sector.

13:24
PDT

QTS is focused on responsible growth in AI infrastructure.

QTS Governor Attit Governor Shapiro Virginia Texas Pennsylvania AI Uber Eats

– Collaboration with state governors aims to balance community needs and economic growth.

– Concerns about electricity prices and water usage are being proactively addressed.

– The critical infrastructure supports essential services, enhancing its investment appeal.

– New initiatives may improve QTS's public perception and regulatory environment.

AI infrastructure growthsustainable practicescommunity engagementregulatory landscape

▸ Full transcript

to disclosing some of the incentives, water use, power use, and kind of putting back into the community something that the governor of Virginia has also talked a lot about as well. Tell me more about that. Yeah, I think there is this idea and QTS is very focused on it that you can actually have tremendous growth. You can have success in states like Texas and Virginia and Pennsylvania and you can do that in a responsible way. And to do that we're working with state governors like Governor Attit, Governor Shapiro. We're working with other state governors to find the right balance between guardrails that will provide the right protections for our citizens, but also allow us to continue to drive the digital economy. To be honest with you, it is about the digital economy. We talk a lot about AI, but everything we do in that critical infrastructure supports our daily life. It supports things like this show. It supports telehealth. It supports remote working. It supports remote learning. Uber Eats, like everything we do on a daily basis is supported by that critical infrastructure. We just got to find that balance to make sure that the communities feel comfortable and that we're not taking advantage of what's happening in the space. So that's some of the positive aspects of it. Some of the negative aspects we mentioned one was potentially higher electricity prices for some people but also there's a lot of concerns about the use of water whether the current water supply will be drained whether the current water supply will be polluted in some way or another. I'm told that QTS is now signing onto a new initiative that is directly related to addressing.

Analysis

QTS is emphasizing the importance of responsible growth in the AI infrastructure sector, collaborating with state governors to balance community protections with economic development. Concerns about higher electricity prices and water usage are being addressed through new initiatives aimed at ensuring sustainability in operations.

Smart money should note that the focus on responsible growth and community engagement could enhance QTS's reputation and operational stability, potentially leading to favorable regulatory outcomes. The emphasis on critical infrastructure supporting daily life highlights the essential nature of these investments, which may attract long-term institutional capital despite short-term challenges.

13:22
PDT

Private credit market sees outflows, particularly in BDCs.

Oak Hill Advisors T. Rowe Price Goldman Sachs Digital Bridge Mark Gansi Tag Greason QTS Blackstone AOL AI CEO As Secretary Bissette

– Wider spreads of 25 to 50 basis points make senior secured debt attractive.

– Institutional investors are increasing their allocations to private credit.

– AI data center boom is under scrutiny for its impact on the power grid.

– Improved communication about AI infrastructure's importance is needed.

private credit marketAI infrastructureinstitutional investmentpolitical risk

▸ Full transcript

Billified cell towers ultimately slowed down our build-out and wireless communications in the late 90s, and the industry had to answer a call. We're at that moment in the data center industry; we're at that moment in AI. It's come full circle. As Secretary Bissette said today, our industry has to do a better job of explaining the utility and, most importantly, the criticality of national security in building AI and infrastructure. We can't have this become a political lightning rod. Digital Bridge CEO Mark Gansi recently made a pretty impassioned defense of why we need these data centers and why these companies need to do a little bit more to actually sell this to the public. The AI data center boom, of course, is testing the limits of the power grid and the patience of voters facing higher utility bills. Tag Greason is one of the people trying to thread that needle as co-CEO of Blackstone-owned QTS data centers and as a former legislator representing Loudoun County, Virginia, the so-called data center alley where two-thirds of global internet traffic passes through, a legacy of AOL. I think, Tag, great to have you here. Yeah, Romain, thanks for having me. Sure thing. I do want to start there and just kind of tell me what a lot of the, not just data center CEOs, but all these tech CEOs have gotten wrong so far in the way that they're communicating this AI infrastructure build-out to the public. Yeah. When you think about the AI infrastructure build-out, I think the key word there is infrastructure build-out. The AI leadership in the United States is...

Analysis

The private credit market is experiencing outflows, particularly in BDCs, with wider spreads of 25 to 50 basis points making senior secured debt attractive at a 9% return. Despite concerns over transparency in private credit, institutional investors are adding to their positions, indicating confidence in the market's integrity and potential for returns.

The AI data center boom is facing scrutiny as it tests the power grid and voter patience with rising utility bills. Industry leaders must improve communication about the critical role of AI infrastructure in national security to avoid political backlash and ensure continued investment in this sector.

13:20
PDT

Wider spreads in private credit present buying opportunities.

Oak Hill Advisors T. Rowe Price Goldman Sachs Jamie Dimon SOFR Alle Sporten Bloomberg Power Players New PRIVATE

– Significant amount of triple C debt maturing without refinancing options.

– Institutional investors are increasing allocations to private credit.

– Distress ratios in high yield and loan markets remain low.

– The market is not currently in a credit cycle due to lack of recession.

distressed creditprivate creditmarket opportunities

▸ Full transcript

Sie sind das große Ganze nur gut getanzt. Das ist für die, die in allem ein Muster erkennen. Das ist für die Kraft der Finanz. Alle Sporten sind im Bloomberg-Inzit gegründet. Join us! Bloomberg Power Players New York, September 10th, 2026.

Analysis

The market is witnessing a significant opportunity in distressed credit, particularly in the triple C debt segment, where a substantial amount of debt is coming due without refinancing options. The current environment, characterized by wider spreads and a low distress ratio, suggests that smart capital can capitalize on irrational selling in the market.

Investors should note that while there are concerns about transparency in private credit, the fundamentals remain strong, with institutional investors increasing their allocations. The combination of distressed and private credit capabilities positions firms to provide necessary capital solutions, potentially leading to attractive returns in a market where many are indiscriminately selling.

13:18
PDT

Institutional investors are increasing allocations to private credit.

Oak Hill Advisors T. Rowe Price Goldman Sachs ROM CEO AI QTS Data Center Tag Greason The Clothes PRIVATE GC=F

– Attractive returns of 9% unleveraged are driving interest.

– Partnership with T. Rowe Price has accelerated growth for Oak Hill Advisors.

– Focus on returns and client relationships is prioritized over growth.

– Redemption requests are not deterring long-term institutional investment.

private credit marketinstitutional investmentreturns focus

▸ Full transcript

With all of the noise and the redemptions while they are continuing to come, the reality is that the private credit market is actually two-thirds held by institutions. Our long-term institutional investors are actually adding to private credit because they see the opportunity in a 9% unleveraged return, low-double-digit return with leverage. And so I think T.U.O. has added to our access to the wealth channel. We have O-Credit, we have O-Flex, we have other products with Goldman Sachs partnership. And so there's just lots of opportunity to tap into their $1.9 trillion set of relationships. So, I mean, with the growth that you've had since 2021 or whatever that deal was done with, would that have been possible without T-ROM? Well, I'd like to think we would have grown without T-ROM. But I'd say at the same time there's no doubt that they have helped accelerate our growth. But again, it's not about growth, it's about returns, it's about client relationships, it's about meeting the needs of your investors. But yes, I believe they helped accelerate our growth. Glenn, great to have you. Always good to see you. August, the founder and CEO of Oak Hill Advisors. When we come back, we're gonna talk about the AI Data Center boom and some of the political backlash to it. Tag Greason is gonna be joining us. He's the co-CEO over at QTS, but also a former legislator and a current advisor to the Department of Energy. That's coming up next here on The Clothes, right here on Bloomberg.

Analysis

The private credit market is seeing institutional investors increasing their allocations, drawn by attractive returns of around 9% unleveraged and low double digits when leveraged. The partnership with T. Rowe Price has accelerated growth for Oak Hill Advisors, enhancing access to a vast network of relationships worth $1.9 trillion.

Smart money should note that despite redemption requests, institutional confidence in private credit remains strong, indicating a potential mispricing in the market. The focus on returns and client relationships over mere growth suggests a strategic positioning that could yield significant advantages in the current environment.

13:16
PDT

OHA expands fund mandate to include real asset lending.

OHA Glenn August T-Row Price Rob Sharps Row Price

– High demand for AI infrastructure and data centers noted.

– Significant spread dispersion in credit markets observed.

– Triple C debt faces refinancing challenges with a maturity wall approaching.

– Investors with distressed credit capabilities can find attractive opportunities.

private creditcredit market dispersionAI infrastructure investment

▸ Full transcript

But let me just push back on that one second, because of course one of the biggest criticisms right now about private credit is that some of this calm that we're seeing, or the lack of sort of an implosion, is sort of more about the quarterly marks and the lack of transparency rather than anything related to the actual credit itself. I don't believe that. I think that we believe we have integrity in our marks. We all use outside sources. And while there may be some differences between certain funds, by and large it is in the right direction and at the right level. And I believe that if you look at the loan market as a proxy, you're seeing the dispersion and we can basically work through it. Basically, it's really about manager selection and being able to pick credit and work out credit. And so if you avoid those idiosyncratic challenges, if you seize opportunistically where there's dispersion where people are indiscriminate sellers of the wrong piece of the wrong company. Do you think we can make really attractive returns? I do have to ask you, we're just at T-Row Price. We did a big broadcast on there last week. We talked to Rob Sharps, and he name-checked you and OHA. That was a big acquisition for them back in 2021. Why did you think that was sort of the proper place for OHA to be under that T-Row Price? Well, I think that a couple of things. One, the investment culture, the focus on returns, history, tradition. We have almost a 40-year track record in the credit space team.

Analysis

OHA's recent amendment to its fund prospectus allows for a 30% allocation to real asset lending, particularly in AI infrastructure and data centers, indicating a strategic pivot towards sectors with high capital demand. The current credit market shows significant dispersion, with a stark contrast in spreads between high-quality and distressed assets, presenting opportunities for selective investors to capitalize on irrational selling behaviors.

13:14
PDT

Wider spreads in private credit range from 25 to 50 basis points.

BDC Jamie Dimon SOFR

– Current returns on senior secured debt are attractive, around 9% on a levered basis.

– The distress ratio in the high yield market is at 5%, indicating low overall distress.

– A recession is needed to trigger a broader credit cycle.

– Idiosyncratic risks are prevalent, with significant dispersion in credit quality.

private credit opportunitiescredit market dispersion

▸ Full transcript

Redemption requests in BDCs, in particular, and the amount of money that went into that market last year have led to net outflows in the BDC space. Supply and demand technicals matter; when there's less demand for new private credit, having a lot of dry powder allows you to seize on that opportunity at wider spreads. We're seeing 25 to 50 basis points wider spread. When you think about SOFR plus 475, 500, a 9% return in a senior secured piece of paper seems very attractive to us on a levered basis. I do want to go back to your comment about your use of the word dispersion. I know what it was almost a year ago when the old Jamie Dimon cockroach comment came out, and we made a lot of hay over that for months. But I understand the idea of dispersion. When does dispersion or when do these idiosyncratic risks amalgamate into a broader credit cycle? Great question. The answer is we are not in a credit cycle because you need a recession to have a credit cycle. If you look at where we are today, the distress ratio in the high yield market is 5%, which is actually at the low end of the last 5, 10, and 20 years. If you look at the loan market, we're at 9%, which is also in the middle, but in the loan market, it's made up of 5% everyday cockroaches and 4% software.

Analysis

The private credit market is experiencing wider spreads, with BDCs seeing outflows and a shift in demand dynamics. The current distress ratio in the high yield market remains low, indicating that we are not in a credit cycle yet, as a recession is necessary for that to occur.

Smart investors should note the significant opportunity in private credit, particularly with the potential for attractive returns in senior secured debt. The dispersion in credit quality suggests that selective investment strategies could yield substantial rewards as the market adjusts to changing conditions.

13:12
PDT

S&P 500 sees third consecutive day of modest losses.

S&P 500 Brent crude Apple Skyworks Qualcomm OHA Glenn August CLOs CLO AI DXY

– Brent crude futures rise approximately 4% to around $101 per barrel.

– Triple C debt faces record high spreads, while single B debt is at historic lows.

– Significant amount of triple C debt maturing in 2027-2029 poses refinancing challenges.

– Investors with distressed credit capabilities can find lucrative opportunities.

credit market dispersiondistressed assetsprivate credit opportunitiesCLO structure issues

▸ Full transcript

Trade of a seller who is a motivated seller in some cases for irrational reasons because of the structure of a CLO. We love being on the other side. That's how we make money. Picking credit, being on the other side of people that are selling in some cases irrationally. I remember a few months ago you talked about this idea of having dry powder to take advantage of some of these opportunities outside of just, you know, software AI. Did you find anything out of it? Sure. We have done, we have deployed a lot of capital. We have a distressed fund. We have a special situations fund in Europe we are absolutely ramping up both of those funds and see opportunity. And if you go back what is really happening this besides this differentiation where 10% of the market is trading at record level spreads in the triple C bucket you have a hundred and fifty billion dollars of debt coming due that's triple C debt in twenty-seven, twenty-eight, twenty-nine. Those deals were done during twenty, twenty-one, twenty-two by and large, and that was the peak year in transactions. And those deals can't get refinanced in the market. So there is a need for capital solutions to come in with new money because the CLOs are not incentivized to buy triple C paper. They're not incentivized to convert debt into equity. And so when you have a distressed capability and a private credit capability and can bring that together to provide capital to refinance these balance sheets it's an extraordinary opportunity. So I mean so just so I understand so part of this in terms of opportunity you found.

Analysis

The market is experiencing significant dispersion, particularly in the credit markets, with triple C debt facing record high spreads while single B debt is at historic lows. This presents a unique opportunity for investors who can differentiate between quality credits and distressed assets, especially as a substantial amount of triple C debt is set to mature in the coming years without refinancing options available.

Investors with distressed and private credit capabilities are well-positioned to capitalize on the need for capital solutions in the current environment. The structural issues within CLOs are leading to irrational selling, creating opportunities for those willing to engage in selective credit picking and provide refinancing solutions.

13:10
PDT

High yield market shows significant spread dispersion.

CLOs software companies high yield market single B double B triple C

– Single B and double B spreads are at historic lows.

– Triple C spreads are at their widest levels.

– CLOs are driving irrational selling in the loan market.

– Investors need to differentiate between quality credits.

credit market dispersionCLO impactmaturity wall risks

▸ Full transcript

Months ago, there were good software companies and bad software companies, and they are not all the same. If there's one word to describe what's going on in software and the credit markets today, it's dispersion. The high yield market and the loan market show that the single B and double B portions are at top-decile spreads, meaning the lowest spreads they've been in 20 years. In contrast, the triple C portion of the market is at the 93rd to 98th percentile, i.e., the widest level, and the spread between single Bs and triple Cs is the widest. This trend indicates that when something becomes triple C, it is often thrown out. Since 70% of the loan market is controlled by CLOs, there is almost indiscriminate and irrational selling. For investors who can pick credit and differentiate between good and bad credits, especially in software or other segments, there is an opportunity. Additionally, those who can work out troubled credits will be well-positioned as the maturity wall looms.

Analysis

The credit markets are experiencing significant dispersion, with single B and double B spreads at their lowest in 20 years, while triple C spreads are at their widest levels. This trend indicates a growing divide in credit quality, leading to irrational selling in the loan market, particularly influenced by CLOs controlling 70% of the market.

Smart investors should focus on identifying quality credits amidst this volatility, as the maturity wall looms large. The ability to differentiate between good and bad credits will be crucial for navigating this challenging environment, especially as the market reacts disproportionately to credit downgrades.

13:07
PDT

OHA's fund now allows 30% allocation to real asset lending.

OHA Glenn August OFLEX CEO AI DXY

– There is significant demand for AI compute and data centers.

– Investments in energy transition projects are becoming attractive.

– The supply of capital for AI infrastructure is outpacing demand.

– Higher spreads are expected due to the capital imbalance.

AI infrastructurereal asset lendingenergy transition

▸ Full transcript

of a retail-facing interval fund earlier this year with a broad mandate for finding opportunities in public and private credit. That mandate did expand a bit last week with the fund OFLEX amending its prospectus to provide for up to 30 percent allocation to quote real asset lending, which includes infrastructure, power, data centers, and related equipment. The founder and CEO of OHA, Glenn August, joins us here in Studio 2. Great to see you again, Glenn. I do want to start off with that filing. I saw it. I was kind of looking for something new to kind of start us off in. And I'm just kind of wondering sort of about if you are actually making a real move into AI infrastructure. I know it's a real asset lending. But give me a sense here as to what that umbrella can do. There is an extraordinary demand for AI compute. There is an extraordinary demand for data centers. And we're talking about hundreds of billions, ultimately trillions of dollars. And we see opportunity in financing some of that build. You obviously have to be very, very selective. We're not looking forward to owning a data center out 15 years, but in many cases, buying into the energy transition to power those data centers, the infrastructure with guaranteed commitments over a five-year period of time, those make attractive relative value and absolute value to us. And we think the amount of capital that's needed versus the amount of capital that's there to buy, the supply is greater than the demand, which means that the spreads go up. And for us, we're always the...

Analysis

OHA's retail-facing interval fund has expanded its mandate to allow for a 30% allocation to real asset lending, targeting sectors like infrastructure and data centers. This move reflects a growing demand for AI compute and data center financing, indicating a potential shift in investment focus towards energy transition projects that support these technologies.

Smart money should note the imbalance between the capital needed for AI infrastructure and the available capital, which is driving up spreads. This presents an opportunity for selective investments in energy transition projects that offer guaranteed commitments, enhancing both relative and absolute value for investors.

13:05
PDT

S&P 500 down about 0.5% for the day.

S&P 500 Brent crude Apple Skyworks Qualcomm CFTC SEC Bloomberg ICE ETF IQ VIX S&P 500 AAPL PRIVATE CL=F

– Brent crude futures up approximately 4%, nearing $101 per barrel.

– Apple shares closed down 0.3% after a brief intraday gain.

– Suppliers like Skyworks and Qualcomm gaining traction amid new product launches.

– Rising diesel and natural gas prices signal potential inflationary concerns.

oil price impacttech stock volatilityportfolio diversification

▸ Full transcript

ETF IQ Mondays on Bloomberg. The countdown is on. Everything you need to get the edge at the end of the market day. This is the close. Welcome back to the close. Remain Bostic here. Third straight day of losses for the benchmark S&P 500, modest losses to be sure, down about a half a percent on the day. Stocks right now are really taking their cues from the commodity market and more specifically the oil market. Brent crude futures are up about 4% right now, camped out right around $101 per barrel. But of course, everyone is talking much more about some of those refined products with diesel prices camped out right around record highs on average. Nat gas futures, particularly over there in Europe, are also pushing back to multi-year highs. Their 10-year yield is up 5 basis points to 4.8 and change, and the VIX is slightly elevated on the day. As far as some of the individual movers, people were looking for a little bit of a bump out of Apple. It jumped about 2% on an intraday basis but closed down about 3-tenths of a percent. Typically, the shares don't really perform all that much on the day of these big product announcements, but they do tend to outperform over the months that follow. Skyworks, a core name, as well as Qualcomm, some of Apple's key suppliers, are getting a little bit more of a bid as a lot of people start to look at the components that are going to go into those new iPhones, those new AirPods, and those new watches. And just how.

Analysis

The S&P 500 experienced its third consecutive day of losses, closing down about half a percent, influenced by rising oil prices, with Brent crude futures reaching around $101 per barrel. Despite a modest intraday gain, Apple shares closed down slightly, reflecting typical market behavior on product announcement days, while suppliers like Skyworks and Qualcomm saw increased interest as investors anticipate demand for new Apple products.

Smart money should note the significant rise in diesel prices and natural gas futures in Europe, which could indicate broader inflationary pressures. Additionally, the focus on the S&P 500 equal weight index suggests a shift in investor sentiment towards mitigating concentration risk in large-cap tech stocks, highlighting a potential trend in portfolio diversification strategies.

13:02
PDT

S&P 500 down 0.5%, driven by rising oil prices.

S&P 500 Brent oil Casey's Apple Meta DataDog Bloom Energy Alumina Ever Pure Trade Desk Builders FirstSource Nike CL=F AAPL PRIVATE DXY

– Brent oil trading at $101 per barrel, up 3.6%.

– Casey's stock down 14% post-earnings report.

– Increased flows into the S&P 500 equal weight index noted.

– Ongoing discussions about perpetual futures with regulators.

oil price impactS&P 500 rebalancinginvestor sentimentperpetual futures

▸ Full transcript

The question has somewhat been answered as to date, and the questions are now about perpetuals, and we've moved on in essence. Alright, well unfortunately out of time, I was going to ask you about your push into the private market as well. Oh, I think it's hard. And always great to see you, and you're welcome back anytime. Thank you. Catherine Clay, the CEO of S&P Dow Jones Indices, and just again we should note Bloomberg indexes is a direct competitor as you get the closing bells here in New York, which has been a clearly down day here, Tyler, with the S&P down about a half a percentage point, but we saw all the Russell, the mid caps, as well as Dow transports really taken a lot harder, down about a percentage point each, and that does appear to be linked to that spike that we saw in oil prices. Right, exactly, crude oil trading above a hundred dollars a barrel today for the first time since July, Brent reaching a hundred and one dollars as we continue to see heightened tensions in the Middle East. Just taking a look here at the sectors, the biggest ones in the red: industrials leading the way here, also information technology as well as consumer discretionary. Yeah, and as far as Apple, which of course was the stock of the day, not much movement down for a third straight day, only about three tenths of one percent after rallying 15% into today's big announcement. That does it for Tyler, I will catch up with you tomorrow, but the close does continue. When we come back, we're going to talk a little bit more about AI, we're going to talk a little bit more about private credit. We're going to have the Oak Hill Advisors founder and CEO, Glenn August, joining us live in studio in just a second. Right here on the close, right here on Bloomberg.

Analysis

U.S. stock indices are down across the board, with the S&P 500 declining about 0.5% as oil prices surge above $100 a barrel amid rising tensions in the Middle East. Individual stocks like Casey's are down 14% following disappointing earnings, while the S&P 500 rebalancing is causing notable movements in various names, both entering and exiting the index.

Smart money should note the increased investor demand for the S&P 500 equal weight index as a hedge against concentration risk in big tech. The ongoing discussions around perpetual futures and regulatory engagement with the SEC and CFTC could signal shifts in market access and investment strategies in the near future.

12:59
PDT

Index committees maintain independence to represent the U.S. equity market accurately.

S&P 500 CFTC SEC ICE Washington Hyperliquid TradeXYZ CEO IP S&P 500 CL=F

– Discussions are ongoing with regulators about equity index perpetual futures.

– Hyperliquid markets may provide new trading opportunities for investors.

– Investor access to new markets is a priority for index providers.

– The S&P 500 remains a key benchmark for equity performance.

index independenceperpetual futuresmarket accesstrading innovation

▸ Full transcript

We have human-led independent index committees that sit behind closed doors and have these discussions all the time and issue consultations to market participants and stakeholders when the topic needs further comments. The independence of our index committees actually gives me a lot of confidence that we are truly representing the U.S. equity market as the S&P 500's objective is to do. We only have about a minute left, but I wanted to ask you about perpetual futures. Because you have this sort of historic move in terms of this license and hyperliquid, which isn't offered to U.S.-based investors. I had just sat down with the CFTC chair and the ICE CEO about the idea of bringing perpetual future contracts when it comes to commodities, oil, and energy. I'm curious if you're talking to any Washington regulators when it comes to an approved version of an equity index perpetual here in the U.S. You have to deal with both the SEC and the CFTC. Yeah, I mean it's a great question. You know we are of course in touch with the CFTC and the SEC and Washington in general on a continual basis. But as an independent index provider, we have less skin in the game in terms of how they decide to regulate these new perpetual markets. And so, you know, we have the benefit of saying we want to provide access to the end investor by bringing our licensed IP into new markets and Hyperliquid or TradeXYZ is one of those examples where we have licensed the S&P 500.

Analysis

The discussion highlighted the independence of index committees and their role in accurately representing the U.S. equity market, particularly the S&P 500. Additionally, there is ongoing dialogue with regulators regarding the potential introduction of perpetual futures for equity indices in the U.S., which could enhance market access for investors.

Smart money should note the increasing interest in perpetual futures and the potential regulatory developments that could reshape trading dynamics. The mention of hyperliquid markets indicates a shift towards more accessible trading options, which could attract new investor flows and alter traditional market structures.

12:57
PDT

Rising demand for S&P 500 equal weight index indicates a shift in investor strategy.

S&P Dow Jones Indices Apple Dow Jones Indices Equate Index AAPL S&P 500

– Concerns over concentration risk in big tech are influencing portfolio decisions.

– Investors are prioritizing diversification to manage risk.

– The equal weight index has crossed significant milestones in investor flows.

– Trust in indices remains crucial for risk management and comparability.

indexing strategydiversificationmarket trust

▸ Full transcript

What really differentiates an index provider is the governance, it's the controls, it's making sure that the process is transparent and has high integrity. And that's where indexing really matters. So those companies that have been in indexing for a long time, like S&P Dow Jones Indices, have paid so much attention to actually what makes these indices persistent. Not just in today's markets or yesterday's markets, but in tomorrow's markets. We actually spend a lot of time thinking about how we bring what we do so well into new markets that are emerging into different parts of the world where we have less presence. So no, I don't think that index becomes less relevant and let's face it, we live in a world where trust is fragile. If it's one thing indices bring into the marketplace, it's trust. It's actually knowing how a benchmark is going to perform, how to use it for risk management and for comparability. Well, if we bring in the Apple headlines today, I'm wondering if you're seeing an increase in investor demand for the S&P 500 equal weight index as a way to kind of escape that big tech risk. We are actually, I mean, it's a great point, you know. The concentration risk in the S&P 500 has been topical as of late. But what we've seen is a lot of flows into the equal weight product which is not a market cap index. So, you know, this is the great thing about indexing. These are benchmarks where the end investor gets to choose based on their risk profile and what they want for their portfolio. So it should be no surprise that we've crossed some big milestones in the Equate Index.

Analysis

Investor demand for the S&P 500 equal weight index is rising as concerns about concentration risk in big tech persist. This shift indicates a strategic move by investors seeking to diversify their portfolios amidst fragile market trust.

The increasing flows into the equal weight index suggest that investors are actively seeking alternatives to mitigate risks associated with large-cap tech stocks. This trend highlights a broader market sentiment that favors diversified exposure over concentrated positions, which could reshape investment strategies moving forward.

12:55
PDT

S&P Dow Jones Indices is adjusting its portfolio due to reconstitution.

S&P Dow Jones Indices S&P 500 hedge funds Dow Jones S&P 500

– Market participants are preparing for stock inclusions and exclusions.

– Concerns exist about hedge funds front-running the rebalancing.

– The S&P 500's process has stood the test of time and remains unchanged.

– Volatility may arise from anticipation of index changes.

index rebalancingmarket volatilityhedge fund strategies

▸ Full transcript

You just name the names that are going in and the ones that are coming out. So market participants have plenty of notice about what needs to come in and out of the portfolio. So you're going to see the adjustments based on the reconstitution on the rebalance. And I think everybody is just, you know, planning for the rebalance and planning to get the issues in that need to come in and the stocks that are coming out out. And I think as you said, this is something that happens, you know, routinely. And so I think the market knows exactly how to handle the index rebalances. There has been some concerns though about people trying to front run this. I mean, not trying, they do. And does that matter? I mean, I know it's basically we're talking what, two and a half weeks, whatever it is, from the announcement to the actual switch over here. But we see all we see the sort of front running of it. And there's been a lot of talk as to whether S&P Dow Jones should maybe either change the calendar in some way, does it matter to you? Do you think it has an impact? Yeah, I think that you can't change things that are ultimately gonna try to be gamed in a way that maybe hedge funds wanna position themselves ahead of rebalance. I think we have had a process that has stood the test of time. You know, I always think back to the S&P 500, which is around 70 years old by now. And I think when you have something like the S&P 500 with the incredible amount of assets that are tied to that, you don't change things just willy-nilly. It's something that you really think about. I think across all index rebalances, there's always people anticipating what's going in, what's coming out. That's not a game you're going to change just by moving a rebalanced data or addressing it in that manner. And I think we're very careful to make sure that the S&P 500 stays the leading, you know, index equity benchmark in the world.

Analysis

The S&P Dow Jones Indices is experiencing significant adjustments due to the recent reconstitution, with market participants preparing for the inclusion and exclusion of various stocks. Concerns about front-running strategies by hedge funds have emerged, but the integrity of the S&P 500 index remains a priority, with no immediate changes to the rebalancing process planned.

Smart money should note that while front-running is a concern, the established process of index rebalancing has proven resilient over decades. The anticipation of changes in index composition can create volatility, but the long-term stability of the S&P 500 as a benchmark is unlikely to be compromised by short-term trading strategies.

12:53
PDT

S&P 500 down 0.5% amid rising oil prices.

S&P 500 Brent oil Iran Casey's Bloom Energy Alumina Trade Desk Builders FirstSource Nike Catherine Clay CEO Builders First S&P 500 CL=F AAPL META DXY

– Brent oil trading at $101 per barrel, up 3.6%.

– Treasury yields rising, disappointing bond buyback program.

– Casey's down 14% after disappointing earnings.

– S&P rebalancing impacting various stocks.

oil price impactTreasury yield trendsS&P rebalancing

▸ Full transcript

The monster that the Russell was, but of course potentially has an impact on the markets. Right, and the markets in the U.S. stock index are down across the board. If we take a look at the S&P 500 in the red, down about five tenths of one percent as oil today really weighed on the market. Brent oil crossing a hundred dollars a barrel for the first time since July, right now trading at a hundred and one dollars per barrel, that is up about three point six percent amid the heightened tensions in Iran. Also, Treasury yields today approach ties as investors seemed disappointed that the Treasury's six billion dollar bond buyback program wasn't bigger. The ten years slightly pairing some earlier losses with yields right now trading up about four basis points. And then lastly, of course, from main allies on Apple on the heels of today's event, that stock down now about three tons. As far as individual movers in the S&P, Meta and Datadog leading the charge to the downside. Casey's down 14%, that's on the back of a somewhat disappointing earnings report. And there are quite a few other names that are also moving and have been moving over the last few days centered around that S&P rebalancing, including names like Bloom Energy, Alumina, and Everpure, which are set to join the S&P 500 this month. Meanwhile, you have some other names that are getting kicked down just a notch like Trade Desk, Builders FirstSource, even Nike as well. Joining us right now to talk a little bit more about this live in studio is Catherine Clay. She's the CEO of S&P Dow Jones.

Analysis

U.S. stock indices are down across the board, with the S&P 500 declining about 0.5% as Brent oil prices cross $100 per barrel for the first time since July, driven by heightened tensions in Iran. Additionally, Treasury yields are rising as investors express disappointment over the size of a recent bond buyback program, impacting market sentiment further.

The S&P rebalancing is causing notable shifts, with several companies like Casey's experiencing significant declines post-earnings. Meanwhile, names like Bloom Energy and Alumina are set to join the S&P 500, indicating potential volatility as market participants adjust their positions in response to these changes.

12:51
PDT

SpaceX's Q2 revenue reached $7.8 billion.

SpaceX Tesla Russell Bloomberg Scarlett Foo PRIVATE TSLA

– Largest Russell reconstitution in history occurred this year.

– Many large-cap value names shifted to large-cap growth strategies.

– Market speculation surrounds Tesla's future performance.

– Portfolio adjustments reflect changing investor sentiment.

growth stocksmarket reallocationtech sector performance

▸ Full transcript

It's that online that it's somehow different and that the offering is different. It's actually very consistent. But when she's here, she can have her app open and everything that she's doing here can be very similar to what she's doing at home. And I think that consistency is quite important. When news breaks, this is going to be a complicated report. Bloomberg has you covered. SpaceX, second quarter revenue, 7.8 billion. For all the context and clarity you need. A lot of speculation. What could happen with Tesla? Here at first on Bloomberg. Bringing you the latest business news wherever and whenever it happens, I'm Scarlett Foo, reporting from America's biggest military shipyard. This is Bloomberg. This year was the largest Russell reconstitution in history across the majority of our portfolios. So a lot of the names that we had held in our large-cap value strategy went into large-cap growth. Several of the names in our large-cap growth strategy when.

Analysis

SpaceX reported second quarter revenue of $7.8 billion, indicating strong performance amidst market speculation about Tesla's future. The largest Russell reconstitution in history has shifted many names from large-cap value to large-cap growth strategies, reflecting significant portfolio adjustments.

Smart money should note the implications of the Russell reconstitution, as it may signal a broader trend in market sentiment towards growth stocks. Additionally, the strong revenue from SpaceX could bolster investor confidence in tech and aerospace sectors, potentially influencing related equities.

12:47
PDT

S&P 500 down 0.4%, Russell 2000 down 1.4%.

Apple Walter Pysack LightShed Partners S&P Dow Jones Indices Catherine Clay OKL Advisors Glenn August S&P 500 Russell 2000 CEO OKL Shed Partners AAPL S&P CL=F

– Market concerns driven by rising oil prices and yields.

– Potential inflationary pressures could lead to tighter monetary policy.

– Investor sentiment may be shifting towards risk-off assets.

inflation concernsmarket volatility

▸ Full transcript

That could have added obviously billions of revenue if it was successful. It's things like that. It's not necessarily generating new ideas. It's managing the great and huge R&D investment that Apple makes every year. Alright, well, we got to leave it there. Walter Pysack, partner over at LightShed Partners here on the big product launched by the new CEO of Apple. When we come back, we turn back to the broader markets, which have been on the back foot all day largely because of concerns about a rise in oil prices and a rise in yields. The S&P is down about four tenths of a percent. The Russell 2000 is down 1.4. We're going to catch up with Catherine Clay, the CEO of S&P Dow Jones Indices, and Glenn August, the CEO of OKL Advisors. Thus is it for the craft of finance. What's the coolest thing you can grow with money? What do you actually do? Is this just for rich people? How do you know what to choose?

Analysis

The broader markets are experiencing a downturn, with the S&P 500 down approximately 0.4% and the Russell 2000 down 1.4%, primarily due to rising oil prices and increasing yields. This market movement signals investor concerns about inflationary pressures and potential impacts on economic growth.

Smart money should note that the rise in oil prices could exacerbate inflation, leading to tighter monetary policy from central banks. Additionally, the increase in yields may indicate a shift in investor sentiment towards risk-off assets, which could further impact equity valuations.

12:45
PDT

Apple's new hardware focus under CEO John Ternes.

Apple John Ternes Tim Cook CEO But Tim Cook Mark Irman Vision Pro AAPL

– Introduction of a foldable phone signals a return to core strengths.

– Tim Cook's ongoing influence suggests strategic continuity.

– Premium pricing at $2,000 could drive significant revenue.

– Concerns about market saturation and consumer demand persist.

hardware innovationpremium pricingleadership transition

▸ Full transcript

Not one centered on logistics. Here's John Ternes' big rollout. How did you think it went and what are your long-term views? Is this going to create a pipeline for faster innovation at the company? Well, they got the new CEO that we wanted, you know, a product-focused CEO, as you pointed out. But Tim Cook obviously looms large over this entire presentation. It's not like he just whipped out a foldable phone. Overnight, Tim Cook was at the presentation and as your own Mark Irman reports, Tim Cook is still going to get paid a hefty amount of money to stay on as an executive chairman, but it was a good first presentation for Ternus and really for Apple in general because it returns them to their roots of just cranking out good hardware. Right, it's been a while, right? The last real hardware that we had was the Vision Pro, which was undoubtedly a flop. You know, before that, I guess you could say that the AirPods as well, you know, very good product obviously, but in terms of the phone category, this seems like it's going to be a big winner and at $2,000, every purchase of one is effectively two iPhones. Right? Yeah, when do you get to a point though where we start to see like Ternus himself start to put more of a stamp on the product lineup? I mean, we've done the reporting, I mean, this actually predated him on the hardware side. I mean, it was sort of Tim Cook's vision. Obviously, Ternus can take credit for bringing it to market, but there's now the what next? What do you want to see next? I mean, he's not new to the company. He's been there a while. He's been working on a lot of these problems.

Analysis

Apple's recent presentation under new CEO John Ternes showcased a renewed focus on hardware innovation, particularly with the introduction of a foldable phone. This marks a significant shift back to Apple's core strengths, especially following the lackluster performance of previous products like the Vision Pro.

Investors should note that while Ternes is stepping into a pivotal role, the influence of Tim Cook remains strong, suggesting continuity in strategic vision. The pricing of the new phone at $2,000 indicates a premium positioning that could drive substantial revenue, but it also raises questions about market saturation and consumer demand.

12:41
PDT

Signet Jewelers raised earnings guidance for the second time this year.

Signet Jewelers JK Sement Apple Banter Zales JK CEO Diamond Tennis Bracelet Diamond Tennis Snack Die Bedeutung Game Changers Locker Room PRIVATE

– Strong same-store sales and positive comp across fine jewelry brands reported.

– Higher price point goods are driving average retail expansion.

– Lab-grown diamonds are expanding the consumer base in fashion jewelry.

– CEO emphasizes confidence in meeting future targets despite market pressures.

retail performanceconsumer trendsjewelry market dynamics

▸ Full transcript

Die kleinen Basiken sind wirklich unser Geschäft. Das spricht zum Diamond Tennis Bracelet, Diamond Tennis Snack, Studs, die Klassik sind neu für Gen Z, als sie in die Kategorie stecken. Ich denke, sie sind die großen Drei-Wers. JK, ich appreciate es. JK, Sement, Signet, CEO von Juller, Die Bedeutung ist ca. 22% der besten Zeit, bis zum Juni 2020. Wir werden in ein Moment zurück. Das ist Bloomberg. mit den Voices schapen, das Zukunft der Sport und Business, wo Game Changers connecten, von der Bordroom zu der Locker Room, ein Platz für bolde Ideen, Powerful Insights und hohe Impact-Komversationen.

Analysis

Signet Jewelers raised its earnings outlook for the second time this year, driven by strong same-store sales and positive momentum across its fine jewelry brands. The CEO expressed confidence in meeting future targets, highlighting the importance of their core business fundamentals and the impact of higher price point goods on performance.

The company is navigating challenges such as rising gold costs and tariffs, yet it has managed to beat expectations without relying heavily on tariff refunds. The shift towards lab-grown diamonds is also seen as a category expander, potentially attracting a broader consumer base while maintaining a strong presence in the natural diamond market.

12:39
PDT

Apple's foldable iPhone demand estimates range from 10 to 14 million units.

Apple Signet Jewelers Morgan Stanley IDC Bloomberg JK Semanitc PAM Jamie JK

– Signet Jewelers raised its earnings outlook for the second time this year.

– Positive same-store sales reported across all fine jewelry categories.

– Signet's strategy includes a focus on both natural and lab-grown diamonds.

– Higher gold costs and tariffs are impacting lower-priced jewelry goods.

demand forecastingretail performancesupply chain risk

▸ Full transcript

That's kind of elevating, I guess, more of the natural diamonds side of this business. You're hired away from Mattel to run Zales and Banter. I'm just kind of curious as to what the thought process is. I mean, obviously these are experienced retailers, experienced marketers, but where are you actually trying to push the Signet umbrella next? Well, I think, look, I think we've shown and have battle-tested the right strategy for the business to really restore performance while we transform it. Something I'm really proud of. Now we've got the right team in place. And I think you mentioned two really strong additions to our team. I think PAM brings great jewelry industry expertise and is really a perfect fit for what that positioning is within our portfolio and is already hitting the ground running and helping us to move forward. And with Jamie, what you get is somebody who not only knows the category and has been proven in multiple industries, but has experience turning a brand around. And I think that background is invaluable as you think about that balance that we want to strike while we perform and transform at the same time. I think that's true. We've had other additions to the team and at the core of all of them are specific additions to really deepen some of the jewelry industry expertise and to position ourselves with the talent to lead the transformation that we believe is possible with Signet. Hey, real quick, JK, I mean, obviously the holidays.

Analysis

Apple's upcoming product launch is generating significant demand forecasts, with estimates ranging from 10 to 14 million units in the first year. Signet Jewelers is experiencing strong momentum, raising its earnings outlook for the second time this year, driven by solid fundamentals and positive same-store sales across all fine jewelry categories.

The market is closely watching how Apple will manage supply against rising demand, particularly with its high-priced foldable models. Meanwhile, Signet's strategic team additions and focus on both natural and lab-grown diamonds could position it well for growth, especially as it navigates higher gold costs and tariffs impacting lower-priced goods.

12:37
PDT

Signet Jewelers raised earnings guidance for the second time this year.

Signet Jewelers JK Semantick Morgan Stanley Apple Tim Cook Steve Jobs John Scully Steve Wozniak IDC Bloomberg Intelligence

– Strong same-store sales indicate positive momentum in the core business.

– Lab-grown diamonds are stabilizing and expanding the market.

– Higher-end natural diamonds are seeing increased demand.

– The company is well-positioned for the upcoming holiday season.

consumer behaviorjewelry market dynamics

▸ Full transcript

Prices compressed. I grabbed the latest data. I believe wholesale prices have plunged 88 to 96% since 2018. When we're talking about the consumer and drawing in more of those toward the fine jewelry, jewelry end of the spectrum, how are you balancing those needs when it comes to natural versus lab? And does that help you to bring in some other consumers that might not have been there otherwise? Yeah, I think it's, I think the beautiful thing about our business is we've got a broad portfolio. And certainly we center on sort of the middle of America and that mid-tier consumer. But we play at the high end. We allow the middle tier to be able to flex up. And we also have some exposure at low end. And so both sides of that equation matter for us. I think you talk about that decline since 2018. Lab-grown diamond as a market is much more stable and frankly whatever pressure modestly up or down on the wholesale cost doesn't factor into retail economics that much. I think we also see opportunity on the natural diamond side particularly as you look at higher-end price points. That is true in both our engagement and bridal businesses as well as fashion. One of the things we have talked a lot about is lab-grown diamond is really a category expander as it relates to fashion. So much of fashion jewelry purchase even in the fine jewelry category has been.

Analysis

Signet Jewelers raised its earnings outlook for the second time this year, driven by strong same-store sales and positive momentum in its core business. The CEO highlighted the importance of both natural and lab-grown diamonds in attracting a diverse consumer base, particularly in the mid-tier market.

The stability of the lab-grown diamond market, despite fluctuations in wholesale prices, presents a unique opportunity for Signet to expand its customer reach. Additionally, the company's focus on higher-end natural diamonds could capitalize on the growing demand in the engagement and bridal segments, indicating a strategic positioning for future growth.

12:34
PDT

Signet Jewelers raised earnings outlook for the second time this year.

Signet Jewelers JK Semantick United States GC=F

– Positive same-store sales across all fine jewelry brands.

– Higher price point goods driving average retail expansion.

– Challenges from rising gold costs and tariffs remain.

– Confidence in strong holiday performance despite supply chain pressures.

supply chain riskconsumer spendingtariff impact

▸ Full transcript

Really hinges on the fine jewelry part of our business. A lot of our unit performance actually happens in our Banter brand, which is a lower percentage of revenue but a disproportionate amount of our unit velocity. So when you look, all of our fine jewelry brands were positive comp across all categories. Average retail expansion is certainly a big part of that story. That's really coming from growth on higher price point goods, solid, flat to slightly up in those middle price points. And then, you know, I think one of the things that we as an industry are grappling with is you look at higher gold costs, tariffs, et cetera. What pressure that puts on lower price point goods. And, you know, for us, our reset on those products really happens as we come through this third quarter into the fourth quarter. And we're confident that we are positioned well to have a good holiday. Well, I'm glad that you brought up tariffs because you got a somewhat unexpected boost from tariff refunds. How much did that help actually boost your margins? And also, where are you still exposed when it comes to the supply chain? And we look at an administration that is continuing to rebuild the tariff wall, as they like to call it. Yeah, you know, a great thing about this quarter is we beat expectations absent any of the direct tariff refunds. So for us, it's actually a smaller number. There's not that much that we direct import and we're subject to direct tariff that we paid as a company. But the fact that we delivered on the top line and actually delivered the margin flow through.

Analysis

Signet Jewelers reported stronger-than-expected same-store sales and raised its earnings outlook for the second time this year, indicating solid performance driven by higher price point goods. The company is confident in its positioning for the upcoming holiday season despite challenges from rising gold costs and tariffs.

The unexpected boost from tariff refunds contributed positively to margins, although the direct impact was smaller than anticipated. Signet's ability to exceed expectations without relying heavily on tariff refunds suggests robust underlying demand and operational efficiency, which could be a signal for sustained growth in the jewelry sector.

12:32
PDT

Signet Jewelers raised earnings outlook for the second time this year.

Signet Jewelers JK Semantick Apple CEO JK Bloomberg Tech Wall Street AAPL PRIVATE

– The company reported stronger than expected same-store sales.

– This is the fifth positive comp in six quarters for Signet.

– CEO expresses confidence in meeting future targets.

– The jewelry sector may be benefiting from shifting consumer spending.

consumer spendingluxury goods

▸ Full transcript

$999 is a big psychological level that might find buyers in the market the one there before. All right, well, we're gonna start to find out in about a month and a half's time at the coast of Bloomberg Tech as we continue to look at Apple. Those shares are kind of oscillating between gains and losses. We're gonna make a pivot here because if you maybe don't want to splurge on an iPhone, well maybe you want to splurge on jewelry. Shares of Signet Jewelers shining bright on pace for their best day since 2020. The jewelry retailer raised its earnings outlook for the second time this year, reporting stronger than expected same-store sales. Please to say joining us right now is the CEO of Signet Jewelers, JK Semantick. JK, great to have you here on the program. You know, we were just talking about Apple and all the high expectations. There were a lot of high expectations for you going into this quarter. Wall Street was expecting you to raise your guidance, and you did. How confident are you that you're going to be able to meet that target going forward? Yeah, well, thanks. Thanks for having us. And we're confident. If you look at our performance, it's really driven off of solid fundamentals within our core business and a lot of new news that we shared today that we really think positions us for growth moving ahead. But if you break it down, this is our second raise in the year, our five out of the last six quarters positive comp and really good momentum in the business as we navigate into what's a critical time period for us, position ourselves for fourth quarter. But give me a sense here.

Analysis

Signet Jewelers raised its earnings outlook for the second time this year, indicating strong same-store sales and solid fundamentals driving growth. This marks the fifth positive comp in six quarters, positioning the company favorably as it heads into a critical fourth quarter.

The confidence expressed by Signet's CEO suggests that the jewelry sector may be experiencing a resurgence, potentially driven by consumer spending trends. This could indicate a shift in discretionary spending away from tech products like the iPhone towards luxury goods, which smart investors should monitor closely.

12:30
PDT

Apple's foldable phone launches at $1,999.

Apple Morgan Stanley IDC Steve Jobs Theatre OK Bloomberg Intelligence Phone Pro AAPL PRIVATE

– Sales estimates range from 10 to 14 million units in the first year.

– Analysts predict millions of units could ship in December.

– Pricing strategy will significantly impact Apple's bottom line.

– Consumer preference may still lean towards more affordable iPhone models.

premium pricingconsumer demandproduct launch

▸ Full transcript

It came up first as a video on the screen, but then everyone saw it in the Steve Jobs Theatre. People really immediately started to recalculate how demand will look in the first instance. So you just had IDC on right there saying in the first 12-month generation cycle, 10 million units, Bloomberg Intelligence has 14, but people see that actually shifting on the demand side. So whether Apple can meet supply with that extra demand is amazing. But there's a piece of technology remaining. You know, it is amazing to see it up front and up close. So give me a sense here, kind of like what's next. I mean, I understand we have the product launch, official launch coming up in terms of being able to buy it here. But are we talking about a situation where you think the foldable will be sort of material in terms of the number of units sold? Or do you get a sense that people will just still gravitate to the more affordable, and I put that in quotation marks, iPhone Pro models? Yeah. You can certainly model for it. OK, the starting gun is October 23rd, right, when the thing ships. But the $1,999 base, 256 gigabyte of storage, is the entry level. And then that goes up to two terabytes at $3,200. You know, there are some on the street that are so bullish, like Morgan Stanley, that think even in the December quarter alone, they'll ship millions of units. Now, the pricing is important because it will impact the bottom line, but if they do sell four to six million units.

Analysis

Apple's upcoming foldable phone, priced starting at $1,999, is generating significant demand, with estimates suggesting between 10 to 14 million units could be sold in the first year. Analysts are optimistic about the sales potential, with some projecting millions of units shipped in the December quarter alone, despite the high price point.

The pricing strategy will be crucial as it directly impacts Apple's bottom line, and the market's response to this premium product could redefine consumer expectations for foldable devices. Smart money should note that while the foldable may attract attention, the more affordable iPhone Pro models could still dominate sales, indicating a bifurcation in consumer preferences.

12:28
PDT

Tim Cook prioritizes strategic relationships over operational management.

Apple Tim Cook John Scully Steve Jobs Steve Wozniak China United States OpenAI Johnny Ive CEO And Woz Bloomberg Tech AAPL PRIVATE USDCNH DXY

– The foldable phone's high price point could challenge consumer acceptance.

– Apple's historical success hinges on product experience and marketing.

– John Scully emphasizes the importance of AI in future product development.

– Apple's premium pricing strategy remains a core aspect of its brand.

AI integrationpremium pricingstrategic relationships

▸ Full transcript

Build a company on principles that he believed in. He made Apple incredibly successful in his era. When he took over from Steve Jobs, I think the value of the company was like $340 billion. And as we know, it's a multi-trillion dollar company today. So my sense is Tim Cook has nothing to prove. Tim Cook is not focused on running the business. He is focused on the relationships with China. He's focused on the relationships with the president of the United States, and things that are beyond the domain of running the business. So I don't think that's an issue of concern or conflict for the new CEO or for Tim Cook. John, I really appreciate it. I do have a final question. Are you going to have to pre-order this phone, like everybody else, or do, as a former CEO, do they just kind of send you one in the mail automatically? No, I go to the store just like everybody else. By the way, so does Steve Wozniak. Woz is a great friend of my wife, Diane, and I. He is his wife, Janet. And Woz is always one of the first in line. Every time something comes out, and it won't be any different this year either. All right, yes, he certainly is. And wish him and certainly his wife well. And we wish you well too, John. Really appreciate you giving us the time. John Scully there, the former CEO of Apple. We want to go back out to Cupertino where the host of Bloomberg Tech, Ed Ludlow, has been out there all day long. And Ed, you actually were in the room. You got to actually see.

Analysis

Tim Cook's leadership has transformed Apple from a $340 billion company to a multi-trillion dollar entity, focusing more on relationships than day-to-day operations. The upcoming foldable phone priced at $2,000 raises questions about its market positioning and potential alienation of consumers, but Apple’s premium branding may mitigate these concerns.

12:26
PDT

Apple's foldable phone targets premium market segment.

Apple OpenAI Sam Altman Johnny Ive Ternus AI But Ternus AAPL

– Ternus acknowledges existing devices as competitive threats in AI.

– OpenAI is seen as a significant competitor to Apple.

– The market is still in early stages of AI integration.

– Apple's historical success hinges on product quality and consumer experience.

AI competitionpremium pricing strategy

▸ Full transcript

It's much about the way the fashion industry has never had to worry about pricing so much, as long as they didn't fail in terms of the quality of the experience of what people wanted with the fashions that were sold. So I think Apple's going to do just fine, even though this is a pretty high price, $2,000. Yeah. And they obviously are no stranger to premium pricing and exploiting that. You mentioned OpenAI. I do have to ask you about kind of how Ternus started this off, kind of talking about Apple's place in the world of artificial intelligence, which has been criticized for a long time. And I know I saw recently you kind of called OpenAI as one of the biggest competitive threats to Apple. But Ternus came out today and he made it clear. Everybody's trying to create all these new AI-related devices. And he says, look, there's about one and a half billion people walking around with the perfect device for that already in their pocket. What did you make of that statement? Well, I think he's right. Who are still in the early days of AI. And I think Ternus is smart enough to know that he's gonna have to have winning products as AI becomes much more important. But let's go back about two years ago when Sam Altman hired Johnny Ive and said, I want you to make a product for OpenAI that can be as important for the era of AI intelligence as the iPhone was in the era of the internet. And that was a pretty big ask. And so we haven't seen yet.

Analysis

Apple's new foldable phone, priced at $2,000, is positioned as a premium product, reflecting the company's strategy of leveraging high pricing while maintaining quality. Ternus emphasized that many consumers already possess devices capable of AI functionalities, indicating a competitive landscape where Apple must innovate to stay relevant.

12:24
PDT

Apple's foldable phone priced under $2,000, with higher models above $3,000.

Apple Sam Altman OpenAI Johnny Ive AI CEO AAPL

– Trade-in values could reach $1,200, incentivizing upgrades.

– The foldable phone represents a significant redesign after nearly 20 years.

– AI integration is expected to enhance user experience and product differentiation.

– Market expectations for premium products remain high.

product innovationpremium pricingAI integration

▸ Full transcript

Experience has to be something which is going to be as defining as what the product looks like. Do you think the next innovation needs to come to market any faster? We're talking about how this is the first major redesign of the iPhone in nearly two decades. When you are talking about this idea that AI is pushing companies to innovate, is this enough to not just keep Apple competitive, but to also really differentiate the company when it comes to this market? Well, let's go back about two years ago when Sam Altman, who's the co-founder and CEO of OpenAI, hired Johnny Ive. Well, Johnny Ive was the person when I was there who was the brilliant industrial designer. He created every product that was of significance that Apple had after he joined. And the thing I would say there is that you've got to have products that are at price points that are based upon what the market expects in terms of what they get. In the case of Apple, it's always been a premium product company and it's always been able to deliver the value of a premium product. So in the case of this new phone which is foldable, I think it's got to live up to the expectations of the best possible foldable phone. I've wanted a foldable phone for almost seven years.

Analysis

Apple's upcoming foldable phone is set to launch at a starting price just under $2,000, with higher configurations exceeding $3,000. The trade-in program could significantly enhance consumer uptake, offering up to $1,200 for older devices, making the upgrade more appealing.

The introduction of a foldable phone after nearly two decades of design consistency indicates a strategic pivot for Apple, potentially leveraging AI to enhance user experience. This move not only aims to maintain Apple's premium market position but also to redefine consumer expectations in the smartphone sector.

12:22
PDT

Apple's foldable device could drive 13% growth in the foldable market.

Apple Tim Cook Steve Jobs John Scully Nivella Popal IDC CEO AI The Newton Tim Berners World Wide Web AAPL

– Aggressive pricing and high trade-in values may attract new customers.

– Consumer interest in foldables may increase significantly due to Apple's brand loyalty.

– The device's positioning as a productivity tool or luxury item remains to be clarified.

– AI integration is a key focus for Apple's new product strategy.

AI integrationconsumer electronicsproduct positioning

▸ Full transcript

The Newton was introduced after I left Apple, but the mistake in the Newton was that it came before there was any experience with digital networks. Remember, this was years before Tim Berners-Lee introduced the World Wide Web. It was years before there were digital cell phones on the market, and it actually took almost 20 years before the market had all those other pieces in place for a product like the Newton or like the iPhone or like the Blackberry. It just was too early. If we pull on your marketing expertise, continue to do so here. I wanted to ask you about the price point because we're looking at that starting model just under $2,000. Does that risk alienating any of Apple's consumer base? And how would you look at this moving forward? Would you market this as a productivity tool, as a high-end luxury item, both, maybe neither? Well, first of all, I would market it for what I think it has to do best, and that it has to be trusted intelligence. What makes Apple different with a new CEO coming in is that it's not just about making a product that's ideal for the internet; it's making a product that is ideal for the era of AI, and AI means intelligence that can do useful things. And AI is all about experience. I remember the early conversations Steve Jobs.

Analysis

Apple's recent announcement of a foldable device priced just under $2,000 is expected to significantly boost the foldable market, projecting a growth of nearly 13%. The aggressive pricing and high trade-in values may attract a substantial number of Apple loyalists who have previously shied away from foldables, indicating a potential shift in consumer sentiment towards this product category.

The introduction of a foldable phone at this price point raises questions about its positioning—whether as a productivity tool or a luxury item. The emphasis on trusted intelligence and AI capabilities could redefine consumer expectations and market dynamics, suggesting that Apple is not just launching a new device but is also setting a new standard for what consumers expect from technology in the AI era.

12:20
PDT

Apple's new foldable phone priced at $2,000 is expected to boost the foldable market significantly.

Apple John Ternos Steve Jobs Newton Macintosh CEO AAPL

– Over 30% of Apple users indicated they would likely buy a foldable if Apple released one.

– Aggressive trade-in offers could facilitate consumer upgrades despite high device costs.

– The number of new products from Apple is unprecedented, indicating a strong product pipeline.

– John Ternos' leadership is anticipated to enhance product appeal and market acceptance.

product innovationconsumer electronicsmarket competition

▸ Full transcript

At the start of this new era? Well, I'm excited and I think a lot of people are. John Ternos has an excellent reputation as someone who understands products. Products are more than building them and supplying them through the channels. Products are about focusing on what makes people really want a product and really appreciate it. And then word of mouth becomes incredibly powerful in terms of acceptance of products. And that's always been true with Apple. So I think it's a great time. And I think the number of products that are coming out, I've never seen so many products come out at one time from Apple. The foldable product is something I've wanted for a long time. I'm excited about it. But I'm excited about many of the things he's bringing to the market. So it's a pretty cool time at Apple. You know, one of my colleagues said this morning that this is probably the first time in a while where Apple had to get on stage, a CEO, and actually explain why we need a certain product. And he's talking about basically the foldable phone, a phone that's going to cost $2,000 right out of the gate. I think about some of the product launches you oversaw, such as the wildly successful Macintosh iterations, and then of course, some of the less successful ones like the Newton. What was the separation between what was a success and what was not? Was it the product itself or the way it was marketed? Well, I think in the case of the Mac, I mean, the real credit has to go back to Steve Jobs. But when it first came to market, it was not successful.

Analysis

Apple is launching a new foldable phone priced at $2,000, which has generated excitement among consumers and analysts alike. The introduction of this product, along with a range of other new offerings, signals a pivotal moment for Apple as it seeks to capture a larger share of the smartphone market, particularly in the foldable segment.

Smart money should note that consumer interest in foldables may be reignited by Apple's entry, especially given that over 30% of surveyed Apple users expressed a likelihood to purchase a foldable if Apple produced one. The aggressive trade-in offers, potentially reaching up to $1,200, could further incentivize upgrades and drive sales despite the high price point of the new devices.

12:15
PDT

New foldable phone priced at $2,000, with higher configurations above $3,000.

Apple Tim Cook John Scully Nivella Popal IDC US CEO Senior Director John Ternes Steve Jobs AAPL PRIVATE

– Trade-in values could reach up to $1,200, enhancing upgrade appeal.

– Strong interest from non-tech consumers for the new foldable.

– Potential for increased market share in the premium smartphone segment.

– Aggressive pricing strategy may boost overall sales despite high initial costs.

premium pricing strategyconsumer adoptiontrade-in incentives

▸ Full transcript

The foldable phone is sold out everywhere, especially since the price came in lower than expected, but it's still touching $2,000. The higher configurations are even going to go above $3,000, including a two-terabyte version, so it's still a hefty price tag. What's really going to move the vote is going to be the trade-ins. They talked about it, but we've been told that the trade-ins are going to go up as much as $1,200, the highest trade-in in the US, in partnership with the carriers. This applies to devices up to four years old, including the iPhone 14. With that, you're just paying an extra $700 to $800, rolled over 36 months or so. It's going to be a very compelling upgrade story. I personally know 10 friends who said they're going to get the next foldable from iPhone. Nivella really appreciated it. Nivella Popal, Senior Director of Data and Analytics over at IDC. John Ternes, the eighth CEO of Apple. But if we're being honest about it, there have really only been three CEOs that have been consequential to these companies: Steve Jobs, Tim Cook, and John Scully. John Scully joins us after the break, right here on the close, right here on Bloomberg. Thank you for watching.

Analysis

Apple's new foldable phone is priced at $2,000, with higher configurations exceeding $3,000, but aggressive trade-in offers could make it a compelling upgrade for consumers. The trade-in value could reach up to $1,200, making the effective cost significantly lower for users looking to upgrade from older models.

Smart investors should note that the strong trade-in program could drive adoption rates, especially among existing iPhone users who have been hesitant to switch to foldables. Additionally, the interest from non-tech consumers indicates a broader market potential for Apple's foldable strategy, which could enhance their overall market share in the premium segment.

12:13
PDT

Apple's iPhone Duo priced competitively at $100 more than existing foldables.

Apple Google Samsung Tony Wong T-Row Price Nabila Popola IDC AI CEO ASP Phone Duo Phone Pro AAPL

– Consumer interest in foldables increases with Apple's entry, with over 30% indicating likelihood to purchase.

– Overall smartphone shipments projected to decline 17%, but foldables may see growth due to Apple's influence.

– Apple's premiumization strategy aligns with rising costs in the tech market.

– Siri's improvements could enhance user engagement and adoption of new devices.

premiumizationfoldable market growthAI integrationconsumer behavior shift

▸ Full transcript

The software-hardware integration and the fit and finish of the Duo is unlike anything we've seen on any other foldable phone. The foldable phones on the market today feel plasticky and a bit finicky, and what Apple is showing here makes everything else seem like a prototype. This is really beginning a new era for the foldable phone market and Apple. This was the most innovative product we saw today from Apple, and it's going to be the beginning of a long roadmap of new devices, all with displays and AI embedded throughout. So, Mark, are those higher-end features helping Apple justify the premium cost for consumers who haven't owned a foldable phone? If you look at the foldable phone market, Apple's device, the Duo, only comes in at $100 more than what I now consider to be vastly inferior products from Google and Samsung. If you look at it from that comparison, it's a steal. If you compare the price difference between an iPhone 18 Pro, which is now about $1,200, and an iPhone Duo, that's an $800 delta, which is significant. But if you're only comparing foldable to foldable, they're right there with everyone else and a few hundred dollars less than the top end of Samsung, although Samsung has a much bigger display. In addition to that foldable phone, they refreshed the rest of the iPhone Pro lineup and announced some new smartwatches. For $20, you get an upgraded case with wireless charging, an extra hour of battery life, and swipe sensors on the earbud stems for volume control. For $150, that's a compelling product, and now noise cancellation in the $130 version of the AirPods will become an even bigger part of Apple's strategy moving forward. Given the presence of Siri AI on the iPhone and synchronization with the AirPods, new AI features like live translation are emerging. The AirPods aren't a big update, but the tweaks and pricing make them more compelling. The 18 Pro and 18 Pro Max are the second generation of new designs that Apple typically sells better than the first generation. This is a continuation of what we saw last year. Not much to write home about here, but again, a compelling upgrade. The $100 price increase is marginal compared to what some people on the street believed. But if you've been reading Power On, you knew it would only be $100. Real quickly, Mark, when can I actually get my hands on these things? The Apple Watch is open for pre-order today. The AirPods and the new iPhones go on pre-orders Saturday, September 12, and those three devices, other than the Duo, will be available on September 18. The iPhone Duo is coming a little later, with pre-orders beginning in mid-October, October 16, and the release date is October 23. Tony, were you impressed by what you heard today? Yeah, I thought it was an exciting event. We have a new CEO, a new form factor, right as we're coming out of the cusp of agent AI for consumers. I was impressed. I think that the $2,000 foldable phone is something the market's been waiting for a long time. It increases the total addressable market. In addition, at that price point, I think we're seeing Apple move to more premiumization. That's needed to deliver more value to the customer and move up the pricing stack. We've also got cost inflation in the market with memory. I think that flywheel of delivering more capabilities, increasing the ASP, moving up the stack, and improving margins is going to be a big story, along with improving the upgrade cycle. What are you looking for now from an execution and financial risk perspective? The adoption rate, the rollout, bottlenecks in the supply chain? The key thing I'm looking for is actually in Siri. Are they really improving? What kind of jobs can it do for the consumer? I think real personal agents are something that Apple has a competitive moat around. They know the context, they have the personalization, and they've built a great ecosystem. Expected to grow the most of any tech company in a year, but when you look at the long-term arc, the sustainability and duration of runway improved because they keep introducing more products, like foldables and more services, and just improving the mix of it. They're more of a steady-eddy compounder that delivers value for the personal computing ecosystem, which has grown more impressively than estimates have been over the last 10 years. What do you think about it? I really appreciate it. Tony Wong, portfolio manager of the Science and Tech Equity Strategy over at T-Row Price. As we continue our coverage of Apple's latest product launch, there are still concerns about what the appetite will be at that price point. We want to go out to Cupertino, California, where Nabila Popola is sitting. She's the senior director of data analytics over at IDC. Nabila, I first want to start off with the broader smartphone market because you and your folks over at IDC just put out a report saying that we were actually expected to see a significant drop overall for smartphone shipments down about 17% this year. Will the new lineup of phones, the iPhone Pro and the Duo, change that in any material way? Hi, thank you for having me. Based on everything we've seen today, we had expected a new foldable to launch and this move of the baseball. Global foldable shipments would have declined at a double-digit rate without Apple, but now you're talking about 13% growth. Given the aggressive price that Apple announced today, which is way lower than what we were expecting, we might just have to pull the foldable forecast up a bit. If we're seeing consumer fatigue with foldables, why is Apple going to be different? Foldables have been around for eight years, and every year there are critics and consumers asking when Apple will make a foldable. There are plenty of consumers in the iOS camp who never ventured into the foldables that existed in the Android world because they weren't compelling enough. We've done surveys asking if Apple made a foldable, would you be interested? Over 30% said they would most likely buy it, indicating that Apple is appealing to a significant segment of consumers.

Analysis

Apple's launch of the iPhone Duo and its aggressive pricing strategy is expected to significantly boost the foldable phone market, projecting a growth of almost 13%. The interest from Apple loyalists, who previously avoided foldables, indicates a potential shift in consumer behavior that could redefine market dynamics.

12:11
PDT

Apple's new foldable phone, the Duo, priced at $2,000, is positioned as a premium product.

Apple Tim Cook Skyworks Corning Qualcomm Mark Kerman Tony Wong T-Row Price Nabila Popola IDC Google Samsung AAPL

– The smartphone market is projected to decline by 17% this year, raising questions about demand for new models.

– Apple's strategy includes expanding its product lineup and improving service offerings.

– The introduction of AI features in devices like AirPods may enhance user engagement.

– Apple's pricing strategy for the Duo is competitive compared to existing foldable phones.

product innovationpremium pricingsmartphone market trends

▸ Full transcript

and get expected to like grow the most of any tech company in a year. But when you look at the long-term arc of it, the sustainability and the duration of runway improved because they keep introducing more products, like foldable, like more services, and just improving the mix of it. I think they're kind of more a steady-eddy compounder that delivers a capsule value for the personal computing ecosystem, Tam, which has actually grown a lot more impressively than I think estimates have been 10 years ago. What do you think about it? Tony, I really appreciate it. Tony Wong, portfolio manager of the Science and Tech Equity Strategy over at T-Row Price. As we continue our coverage here of Apple's latest product launch, obviously still some concerns here about what the appetite will be at that price point. We want to go out to Cupertino, California right now, where Nabila Popola is sitting. She's senior director of data analytics over at IDC. And Nabila, I first want to start off with the broader smartphone market because you and your folks over at IDC just put out a report saying that we were actually expected to see a significant drop overall for smartphone shipments down about 17% this year. Will a new lineup of phones, the iPhone Pro and the Duo, change that in any material way? Hi, thank you for having me. So, based on everything that we've seen today, we had kind of expected a new foldable to launch and this move of the baseball.

Analysis

Apple's product launch showcased a new foldable phone, the Duo, which is priced competitively against existing models from Google and Samsung. Despite a challenging smartphone market, the introduction of innovative products may help Apple sustain its growth trajectory and expand its addressable market.

The foldable phone market is evolving, and Apple's entry with the Duo at a premium price point suggests a strategic shift towards higher-value offerings. This could enhance Apple's margins and upgrade cycle, particularly as the overall smartphone market is expected to decline significantly this year.

12:08
PDT

Apple's foldable phone priced at $2,000 targets premium market segment.

Apple Tony Siri CEO AI ASP AAPL

– Focus on Siri's improvements may enhance user experience and retention.

– Higher ASP and premiumization strategy could boost margins.

– Cost inflation in memory is a key factor affecting pricing.

– Execution risks include adoption rates and supply chain bottlenecks.

premiumizationAI integrationsupply chain risk

▸ Full transcript

grow price with Apple, the biggest waiting in his fund. Tony, were you impressed by, as an investor, were you impressed by what you heard today? Yeah, I thought it was an exciting event. We have a new CEO, a new form factor, right as we're coming out of the cusp of agent AI for consumers. And so, you know, I was impressed. I think that, you know, the $2,000 foldable phone is something that the market's been waiting for, for a long time. It increases the total addressable market. In addition, like at that price point, like I think we're seeing Apple move to more of a premiumization. And so, you know, that's kind of needed in order to deliver more value to the customer, you know, move up the pricing stack. And then we've also got cost inflation in the market with memory. And so I think that that kind of flywheel of like delivering, you know, more capabilities, more, you know, increase the ASP moving up the stack and improving the margins is going to be a big story, you know, and improving the upgrade cycle as well. Right, I was going to follow on that. What are you looking for now from an execution and financial risk perspective? The adoption rate, the rollout, bottlenecks in the supply chain? Yeah, I think that, you know, the key thing that I'm looking for is actually in Siri. Like, you know, are they actually really improving in well, what kind of jobs can it do to complete for the consumer? Because I think that like real personal agent is something that Apple has a real, I think competitive mode around. They know the context, they have the personalization. They essentially have built this great ecosystem.

Analysis

Apple's introduction of a $2,000 foldable phone signals a shift towards premiumization, expanding the total addressable market and enhancing customer value. The focus on improving Siri's capabilities could provide Apple with a competitive edge in the personal assistant space, leveraging its ecosystem for better user personalization.

Investors should note the potential for improved margins and upgrade cycles driven by higher average selling prices (ASP) and the ongoing cost inflation in memory. The success of this new product line will hinge on execution, particularly in adoption rates and supply chain management.

12:06
PDT

Apple's AirPods now feature wireless charging and improved battery life.

Apple AirPods iPhone Duo Siri AI AI Pro Max Power On Apple Watch The Air Phone Duo AAPL

– The iPhone Duo is priced competitively against existing foldable phones.

– Pre-orders for new devices start on September 12, with releases on September 18.

– Apple's integration of AI features in products may enhance consumer adoption.

– Analysts remain cautiously optimistic about the impact of these updates on sales.

consumer electronicsAI integrationproduct launch

▸ Full transcript

For $20, you get an upgraded case which has wireless charging, an extra hour of battery life, and you get the swipe sensor on the earbud stems themselves so you can swipe up and down to adjust your volume control. For $150, that's a very compelling product, and now noise cancellation in the $130 version, the AirPods are going to become an even bigger part of the Apple strategy moving forward, given the presence of Siri AI on the iPhone and the synchronization with the AirPods, new AI features like live translation. So the AirPods, not a big update, but more compelling around some of the tweaks and the pricing. And then the 18 Pro and 18 Pro Max, the second generation of new designs that Apple typically sells better in the first generation. This is really a continuation of what we saw last year. Not a ton to write home about here, but again, a compelling upgrade. And a $100 price increase, very marginal compared to what you saw some people on the street believing. But if you've been reading Power On, you knew it would only be $100. But we read it every time it comes out. Real quickly, Mark, when can I actually get my hands on these things? So the Apple Watch is open for pre-order today. The AirPods and the new iPhones go on pre-orders Saturday, September 12. And those three devices, other than the Duo, will be available on September 18. So about a week and a half from now. The iPhone Duo is coming a little later. The pre-orders are beginning in mid-October, October 16, and the release date is October 23. So about...

Analysis

Apple's recent product announcements include upgrades to the AirPods and the introduction of the iPhone Duo, which features a compelling price point and enhanced AI capabilities. Analysts note that while the updates are not groundbreaking, they align with Apple's strategy to integrate AI across its product line, potentially increasing consumer adoption.

The modest price increase for the iPhone Duo compared to competitors suggests a strategic positioning to capture market share in the foldable phone segment. Additionally, the timing of the product launch amidst broader market trends indicates that Apple is leveraging its ecosystem to enhance user engagement and drive sales.

12:04
PDT

Apple's Duo foldable phone priced at $1,200, only $100 more than competitors.

Apple Google Samsung Mark Kerman iPhone Duo iPhone Pro smart watches AI So Mark Phone Duo Phone Pro AAPL GOOGL DXY

– The Duo's quality and integration set a new standard in the foldable market.

– Apple's product launch indicates a focus on a long-term roadmap for innovative devices.

– The pricing strategy may attract new customers to the foldable phone market.

– Apple's refreshed iPhone Pro lineup and new smartwatches complement the Duo launch.

product innovationfoldable technologymarket expansion

▸ Full transcript

I think the software-hardware integration and the fit and finish and polish of the Duo is unlike anything we've seen on any other foldable phone. The foldable phones on the market today feel plasticky and a bit finicky, and what Apple is showing here makes everything else seem like a prototype. This is really the beginning of a new era for the foldable phone market and Apple. This was the most innovative product we saw today from Apple, and it's going to be the beginning, as we talked about, of a long roadmap of new devices, all with displays and AI embedded throughout. So Mark, is it those higher-end features that help Apple to justify that premium in cost for consumers that at this point haven't owned a foldable phone if they're trying to expand the base of people that are buying them? What's crazy is you look at the foldable phone market, and Apple's device, the Duo, only comes in at $100 more than what I now consider to be vastly inferior products from Google and Samsung. So if you look at it from that comparison standpoint, it's a steal. If you look at the price difference between what you're getting from an iPhone 18 Pro, so that's now coming in about $1,200 versus an iPhone Duo, so that's an $800 Delta, that's a big difference. But if you're only comparing foldable to foldable, they're right there with everyone else, and they're a few hundred dollars less than the top end of Samsung, but Samsung has a much bigger display. In addition to that foldable phone, they obviously refreshed the rest of the iPhone Pro lineup. They announced some new smart watches.

Analysis

Apple's new foldable phone, the Duo, is positioned as a premium offering in the foldable market, priced only slightly higher than competitors while delivering superior integration and quality. This product launch signals a significant shift in Apple's strategy, emphasizing a long-term roadmap of innovative devices featuring advanced displays and AI capabilities.

The pricing strategy for the Duo suggests that Apple is not only targeting existing foldable phone users but also aiming to attract new customers who have yet to experience foldable technology. This could expand Apple's market share in the foldable segment, especially as the device is competitively priced against lower-quality alternatives from Google and Samsung.

12:02
PDT

Apple's new product lineup includes a foldable iPhone, Apple Watch, and AirPods.

Apple Tim Cook Skyworks Corning Qualcomm Mark Kerman Ternus AI Apple Watch Now Apple Bloomberg News And Mark AAPL PRIVATE

– Apple shares typically do not rise on product announcement days.

– Suppliers like Skyworks and Qualcomm received modest bids.

– Ternus emphasized an AI vision during the keynote.

– Market reaction indicates cautious optimism in the smartphone supply chain.

product launchesAI technologyconsumer electronics

▸ Full transcript

On a device that close to 1.5 billion people already have in their pockets. Together with the new line-ups of Apple Watch and AirPods, these products will help people create, communicate, and be more productive and entertained, while staying healthy and active in ways that are more personal and intelligent than ever. They represent the very best of Apple, the curiosity to imagine what's possible, the care to get every detail right, and the conviction to build products that make a real difference in people's lives. I couldn't be more proud of the teams across Apple who made today possible. Now Apple shares don't typically rise on the days of these product announcements, and today really is no different. They had spent most of the session in the red, poking into the green as we get closer to the close. Meanwhile, some of its suppliers in the broader smartphone ecosystem, like Skyworks, Corning, Qualcomm, and others, are getting a modest bid as we march to those closing bells. Let's bring in Mark Kerman, our managing editor for technology coverage here at Bloomberg News. And Mark, I feel like you've been writing about this product event for what seemed like almost as long as Tim Cook has been around. You saw it, I know what you've written. Did everything you write show up today on stage with Ternus and company? I think Apple and Ternus, they completely knocked it out of the park. I think you said it best actually at the top of your segment. Ternus started the keynote by articulating an AI vision.

Analysis

Apple's product launch event showcased new devices, including a foldable iPhone, Apple Watch, and AirPods, but shares remained mostly in the red, reflecting typical market behavior on announcement days. Despite the tepid investor response, suppliers like Skyworks, Corning, and Qualcomm saw modest gains, indicating some optimism in the broader smartphone ecosystem.

Smart money should note that while Apple’s stock often dips post-announcement, the positive movement in supplier stocks suggests a potential rebound in the supply chain, driven by consumer adoption of new technologies. Additionally, Ternus's emphasis on AI during the keynote may signal a strategic pivot that could enhance Apple's competitive edge in the tech landscape.

12:00
PDT

Apple's stock (AAPL) rose slightly post-launch but investor enthusiasm is muted.

Apple Signet Jewelers Jared Kay Jewelers Morgan Stanley Muse Brent TV Vision Pro Bloomberg Business Week Daily Romaine Bostick Wall Street Week AAPL PRIVATE

– Signet Jewelers (SIG) shares jumped 21% after raising its outlook for the second time this year.

– Consumer spending on jewelry remains strong, particularly for special occasions.

– Analysts are bullish on new offerings from companies like Muse, indicating potential upside.

– Market correlation between stocks and bonds is under pressure due to rising oil prices.

consumer spendingtech innovationluxury goodsmarket correlation

▸ Full transcript

Not you know people are lining up, right? Like me saying, is it really gonna drive a meaningful upgrade cycle or is it gonna be something like the Vision Pro that the Apple nerds, the more Germans in the world buy? Well, he's definitely, I think he's had a case for it. I mean, Evelyn, would you buy the foldable phone? I really do miss my flip phone from back in the day, I can't deny. It's not a phone though, kids. This is true. It's not gonna be fun to... I mean, it really does look like it looks like an iPhone. So cool. Yeah, I see it. And then you open it and then it's the bigger screen and everything just moves there. It does feel like the phones are getting bigger and bigger and bigger. Look at that. I don't know, I'm finding that kind of cool. Alright. It's like a mini version. We gotta go. Emily, thank you so much for jumping in here. She is right. Tim's going to join us for the next two hours. He will be back here on Bloomberg Business Week Daily. Avalon, thank you so much. If you are watching on TV, the close is coming your way with Romaine Bostick, so be sure to check it out. This is Bloomberg. Join me each week on Wall Street Week for stories of capitalism from business, markets, economics, tech, and climate. More than what you need to know, it's what you need to think about. The countdown is on. You need to get the edge at the end of the market day. This is The Close.

Analysis

Apple's recent launch of the foldable iPhone and new versions of its products has resulted in a slight uptick in its stock, but investor response remains tepid due to prior expectations. Meanwhile, Signet Jewelers has seen a significant stock increase after raising its outlook, indicating strong consumer demand for jewelry despite broader economic pressures.

The market's reaction to Apple's product launch suggests that the excitement around new technology may not translate into immediate stock performance, especially after a substantial run-up in price. Conversely, Signet's performance highlights a potential resilience in consumer spending in the luxury sector, which could be a key area of focus for investors amid economic uncertainty.

11:58
PDT

Signet Jewelers' stock jumped 21% intraday.

Signet Jewelers SIG Morgan Stanley Mandy AI Kay Jewelers Avalon Pernell Bloomberg News Equities AAPL SIG PRIVATE

– The company raised its outlook for the second time this year.

– Consumer spending on jewelry remains strong despite economic pressures.

– 13% of Signet's stock flow is short, indicating potential volatility.

– Analysts are bullish on consumer adoption of new offerings.

consumer spendingluxury goodsshort interest

▸ Full transcript

Emails, book your plane tickets, sell items online. Analysts are generally pretty bullish about the new offering. Morgan Stanley actually highlighted that consumer adoption will, of course, be the biggest key metric as Muse continues to ramp. But the success data see is not necessarily priced into the stock as is, so there could be some potential upside there. Yeah, it's interesting. Our own Mandy was saying, kind of pointing out, their release here on a day when Apple had its big product announcement was also talking about AI. So fun to see that one. And let's go to something a little bit different. A little bit more tangible than an AI agent. Yes, Signet Jewelers, that is ticker SIG, currently jumping 21% most intraday since last April. For those not familiar, that's the parent company of Jared and Kay Jewelers. That's after they boosted their outlook for the second time this year. Shoppers are continuing to splurge on jewelry, especially for special occasions like weddings, despite these broader macroeconomic pressures. City also highlighted in a note that they expect that the solid quarter and also the third quarter guidance should generally calm market fears about how exactly jewelry and diamonds are going in the markets. Hmm, yeah, stocks up twenty percent now year to date but about 13% of the flow is short so there are some questions out there. Investors are definitely watching it. Good good bunch of stocks thank you so much really appreciate it. Avalon Pernell, she's Bloomberg News Equities reporter. Check out our stock movers.

Analysis

Signet Jewelers (SIG) surged 21% intraday after boosting its outlook for the second time this year, indicating strong consumer demand for jewelry despite macroeconomic pressures. Analysts note that the solid quarter and optimistic third-quarter guidance may alleviate market fears regarding the jewelry sector's performance.

The market's reaction to Signet's positive outlook suggests that consumer spending on luxury items remains resilient, particularly for special occasions like weddings. With 13% of the stock's flow short, there may be potential for a short squeeze if the positive sentiment continues to build.

11:56
PDT

Apple's stock is up 0.7% after product launches.

Apple John Ternus AAPL CEO Carol Master Emily Graffaio Avalon Pernell Bloomberg News Phone Pro AAPL PRIVATE

– Investor response is muted despite recent gains.

– New CEO John Ternus's leadership is under scrutiny.

– Historical trends suggest potential post-launch stock dips.

– Market expectations were likely already priced in.

product launchCEO transitioninvestor sentiment

▸ Full transcript

Potentially, maybe could be hurt a little bit more. Having said that, we do want to get you some stocks on the move on this Wednesday. I'm Carol Master along with Emily Graffaio, and let's get to Avalon Pernell. She is Bloomberg News equities reporter, and she's got to start with Apple, right? We're just kind of focusing on it. Of course, that's ticker AAPL. It has turned green. Now it's now itching up about seven-tenths of a percentage point right now. And that's after the firm has basically, everybody already knows, held an event, launching the foldable iPhone and also rolling out new versions of the iPhone Pro, AirPods, and also smartwatches. The launch was already widely expected and anticipated, so not too, too surprising to see the tepid response from investors, especially considering it's already gone up about 14% just since June 25th. Yeah. So definitely interesting, but also worth noting that John Ternus is still, this is his big event and big debut as the new CEO of the company. So definitely something we're going to be keeping an eye out for. Yeah, we'll see if it finishes the day in the green. Because what tends to happen on these device debuts is that the stock turns lower, at least on the day; this would be at least breaking that streak if we do end up higher. Yeah, we'll see, right? Because it's been bouncing around a little bit, coming off of their big product announcements. All right, so from Apple to another one of Mac 7, the used to be fang. We just keep moving on. Anyway, we're talking about, well, it's not a fang, was it?

Analysis

Apple's stock (AAPL) is showing a slight increase of about 0.7% following the launch of its foldable iPhone and new versions of its products, which was largely anticipated by the market. Despite the positive movement, investor response remains tepid, likely due to a 14% rise in the stock since late June, indicating that expectations were already priced in.

The debut of new CEO John Ternus coinciding with this product launch is noteworthy, as it could signal a shift in strategy or innovation under new leadership. Historically, stocks tend to dip post-product launches, so maintaining upward momentum could indicate stronger investor confidence in Ternus's vision for the company.

11:54
PDT

Stocks and bonds are both under pressure.

Brent Bloomberg JPMorgan Chat GPT Joe Matthew Kaylee Lines David Gerrite Bloomberg Business Week Daily Carol Masser Tim Steneveck Bloomberg Radio PRIVATE CL=F

– Brent oil prices have risen to $101.

– Rising oil prices may indicate inflationary pressures.

– Market dynamics are shifting, affecting investment strategies.

– Retirement planning is becoming more complex for individuals.

inflation riskretirement planningmarket volatility

▸ Full transcript

From the world of politics to the world of business, Joe Matthew and Kaylee Lines deliver news, insight, and analysis live every weeknight. Balance of Power weeknights at 10 p.m. London time only on Bloomberg. Bringing you up-to-the-minute news whenever and wherever it happens. I'm David Gerrite in Aspen, Colorado. And this is Bloomberg. This is Bloomberg Business Week Daily with Carol Masser and Tim Steneveck on Bloomberg Radio and Television. All right, everybody. We're coming up on the three o'clock hour here on Bloomberg Business Week Daily trying to remember who I was where I am. I just wanted to vacation here. I think it's a Wednesday. Well, it's a weird week. Like yes, it's a short week. Yeah, everyone's just getting back into it. Monday was gone. Right start of fall kind of I was talking to my friends. I was like back to school. I know, I know, but you still feel it and there's definitely something in the air. Yeah, speaking of in the air, we have seen those stocks and both bonds under pressure today, which you don't necessarily see that correlation, but it's happening again higher oil prices. 101 on Brent.

Analysis

Stocks and bonds are under pressure today, influenced by rising oil prices, which have reached $101 on Brent. This unusual correlation between stocks and bonds suggests a shift in market dynamics that investors should closely monitor.

The increase in oil prices may signal inflationary pressures that could impact monetary policy decisions. Additionally, the current market environment reflects a growing complexity in retirement planning, as individuals face challenges in saving adequately amidst rising living costs and changing investment landscapes.

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