Traders Brace for Fed Day

>> THIS IS "BLOOMBERG BUSINESSWEEK DAILY", REPORTING FROM THE MAGAZINE THAT HELPS GLOBAL LEADERS STAY AHEAD WITH INSIGHT ON THE PEOPLE, COMPANIES, AND TRENDS SHAPING TODAY'S COMPLEX ECONOMY. PLUS GLOBAL BUSINESS, FINANCE, AND TECH NEWS AS IT HAPPENS. "BLOOMBERG BUSINESSWEEK DAILY" WITH CAROL MASSAR AND TIM STENOVEC LIVE ON BLOOMBERG READY , TELEVISION, AND BLOOMBERG ORIGINALS. CAROL: GOOD AFTERNOON, EVERYBODY. WE ARE ACROSS BLOOMBERG PLATFORMS. RADIO, TV, YOUTUBE AND BLOOMBERG ORIGINALS. WE HAVE GOT TECH STOCKS LEADING THE WAY AGAIN. TIM: WE ARE WAITING ON BIG EARNINGS. ALPHABET, AMAZON, MICROSOFT, INTEL TO NAME A FEW. WE ALSO GET SANDISK TOO. CAROL: WESTERN DIGITAL LAST WEEK. IT'S AN IMPORTANT PART OF THE AI TRADE. THEY NEED THE HARD DISK DRIVES. YOU HAVE TO STORE ALL THAT AI. IT IS ALL CONNECTED. CAROL: LET'S NOT -- TIM: LET'S NOT FORGET THE FED KICKING OFF ITS POLICY MEETING. CAROL: LET'S TALK ABOUT WHAT WE WILL COVER IN THE NEXT 60 MINUTES. WHY THE FED MAY FACE IS MOST CONFUSING ECONOMY YET. ENDA CURRAN HAS A PIECE OUT ABOUT THAT. WE ARE CURIOUS WHAT'S TOP OF MIND FOR HIM. TIM: ALSO THE VOTE IN ISRAEL SEEN AS A REFERENDUM ON BENJAMIN NETANYAHU, THE COUNTRY'S LONG SERVING BY MINISTER. THE NUANCE BETWEEN THE LEADING CANDIDATES. CAROL: IT IS ALL HAPPENING AS WE SPEAK. WE GET A READ ON THE GLOBAL ECONOMY. ULTA ASSET MANAGER CEO WILL BE ALONG IN A FEW MOMENTS. LOOKING FORWARD TO WHAT HE IS SEEING SPECIFICALLY WHEN IT COMES TO DIFFERENT TYPES OF REAL ESTATE AND THE DATA CENTER PLATFORMS. TIM: ARE YOU READY FOR THE MARATHON? CAROL: NO. I'M NOT A RUNNER. TIM: GO FOR A RUN? CAROL: I RUN AROUND A LOT INTO THE STUDIO. TIM: ELIUD KIPCHOGE IS COMING BY. YOU MAY KNOW HIM, TWO TIME OF A GOLD MEDALIST, MULTIPLE TIME MAJOR MARATHON WINNER. FIRST PERSON IN HISTORY TO RUN A MARATHON IN UNDER TWO HOURS. LOOKING FOR THAT CONVERSATION. I FEEL THE NEED FOR SPEED. CAROL: LET'S GET YOU GOING. LET'S CHECK THE TRADE. TECH STOCKS LEADING THE CHARGE HERE. CHARLIE: THANK YOU VERY MUCH. THE DOW LOWER NOW. THE S&P AND NASDAQ ARE BOTH RUNNING HIGHER. S&P UP 42. 7718 NOW. WE BEGIN AS A BASELINE BECAUSE WE HAVE NASDAQ 100 INDEX UP 1.2%. NASDAQ COMPOSITE UP 1.1%. THE PHILADELPHIA STOCK EXCHANGE SEMICONDUCTOR INDEX UP NOW BY ABOUT 3.3%. DOW INDUSTRIALS UP, LITTLE CHANGED. BOEING CERTAINLY WEIGHING ON THE DOW, DOWN NOW BY 9.4%. TWO-YEAR AT -- THE 30-YEAR, 5.30%. FEDERAL RESERVE POLICYMAKERS BEGIN THEIR TWO DAY MEETINGS. SPOT GOLD UP 1%. $4058 AN OUNCE. WEST TEXAS ENEMY ACCRUED, $99.83 A BARREL. BRENT CRUDE, $113.73. IT IS DOWN BY 1.3%. LOTS OF TECH EARNINGS OVER THE NEXT COUPLE OF DAYS. TOMORROW FROM ALPHABET AND MICROSOFT. ALPHABET UP BY 1.3%. MICROSOFT DOWN .2%. AMAZON ON THURSDAY UP BY 2%. FOR ON-DEMAND NEWS 20 FOR HOURS A DAY SUBSCRIBED TO BLOOMBERG NEWS NOW OR EVER GET YOUR PODCASTS. THAT IS A BLOOMBERG BUSINESS FLASH. CAROL: APPRECIATE IT. CHARLIE PELLETT, THANK YOU SO MUCH. THE FED KICKED OFF THAT TWO DAY MEETING TODAY. CENTRAL BANK PEERS IN THE EURO ZONE IN JAPAN WILL PROBABLY KEEP INTEREST RATES STEADY THIS WEEK BEFORE POTENTIAL FURTHER HIKES. CHAIR KEVIN WARSH, WHO IS IS SKEWED -- ISSUED GUIDANCE. LET'S PUT IT OUT THERE. HE WILL FACE A TRICKY TEST AT HIS POST MEETING. YOU WERE JUST CHEWING PEANUTS. TIM: I DON'T KNOW WHAT'S GOING ON. CAROL: HE DOESN'T LIKE TO DO IT AND DOESN'T WANT TO DO IT. HE PROBABLY WILL NOT OFFER MUCH INSIGHT ABOUT DECEMBER BUT HE MAY ALSO NOT WANT TO SWAY MARKET BETS AWAY FROM THE CURRENT EXPECTATION FOR A HIKE. IT'S AN INTERESTING POSITION TO BE IN. TIM: PROBABLY NOT ENVIABLE. WITH MORE ON THE FED DECISION AND HOW THE FEDERAL RESERVE IS NAVIGATING THE ECONOMY AS COMPLEX ANYTIME OUTSIDE OF A CRISIS, ENDA CURRAN JOINS US. WHAT DOES MAKE THIS ECONOMY SO COMPLICATED? ENDA: THERE ARE SO MANY PUSH AND PULL FACTORS ALL AT ONCE. YOU HAVE THE MARKETS FROZEN IN THE HOUSING PRICES REMAINING HIGH. BOND YIELDS ARE SEWING BUT STOCK MARKETS KEEP HITTING NEW HIGHS OR AT LEAST STAYING I. CONSUMER SPENDING STRONG BUT SEVERAL INDICATORS OF CONSUMER SENTIMENT IN THE DOLDRUMS. UNEMPLOYMENT LOW, WAGE GAINS HARDER TO GET AND THE AI STORY WHICH EITHER IS GOING TO BE A PRODUCTIVITY REVOLUTION OR THE END OF HUMANITY. TIM: OK, THANKS ENDA. THAT'S ALL WE NEED. ENDA: I'LL COME BACK LATER. CAROL: MAYBE YOU WON'T. ENDA: EXACTLY. IT'S NOT THAT WE HAVE NOT SEEN COLLOCATED TIMES BEFORE. RIGHT NOW THERE ARE A LOT OF CONFLICTING SIGNALS. IN THE MIDDLE IS THE FED. THEY HAVE TO DECIDE WHETHER OR NOT TO LIFT BORROWING COSTS TO KEEP A LID ON INFLATION WITHOUT HURTING THE NON-AI PART OF THE ECONOMY. THAT IS THE HARD PART. CAROL: IS IT A GOOD ECONOMY OR JUST GOOD FOR SOME? I FEEL LIKE WE HAVE GUESTS ON THAT ARE LIKE, IT'S A GOOD ECONOMY, LOOK AT THE SPENDING, AND EARNINGS. ENDA: I DOUBT IT POINTS TO A STRONG ECONOMY. GDP GROWTH IS STRONG. CORPORATE PROFITS ARE STRONG. THOSE ARE GOOD HEADLINES BUT WHEN YOU DRILL INTO THE DATA YOU GET A DIFFERENT PICTURE. TAKE RETAIL SPENDING OR CONSUMER SPENDING. A LOT OF PEOPLE WILL TELL YOU IT'S THE HIGHER INCOME EARNERS DURING THE SPENDING. LOWER INCOME WORKERS ARE FEELING THE PAIN. BIG COMPANIES ARE DOING WELL. SMALLER BUSINESSES WILL TELL YOU THE COST OF A LOAN AT THE BANK IS EXPENSIVE FOR THEM. THEY FACE RISING INSURANCE COSTS AND RISING COSTS FOR BUYING THE MATERIAL THAT THEY NEED. EVERYONE HAS A DIFFERENT STORY ON IT. IT IS A STRONGER ECONOMY BUT I THINK THE UNIFYING NARRATIVE, THE HOUSEHOLD AND BUSINESS, IS THAT THE COSTS ARE HIGH AND INCREASING AND THAT IS WHERE ATTENTION IS AT THE MOMENT. TIM: WHERE ARE THE CAUSE HIGHEST FOR CONSUMERS? ONE OF OUR REGULARS GET IN TOUCH WITH ME AND HE SAYS YOU TALK ABOUT HIGH OIL PRICES AND GAS PRICES TOO MUCH. THE DATA SHOWS THAT IS NOT HITTING AMERICANS' SPENDING AS HARD AS YOU GUYS, THE MEDIA, ARE MAKING IT OUT TO BE. YOU HAVE THE IPHONE DUO THAT IS $2000 SELLING OUT ON HIS FIRST DAY THAT IT'S FOR SALE. YOU HAVE SO MANY CONSUMERS COMPLAINING ABOUT BASIC COSTS. HELP US MAKE SENSE OF THOSE ECONOMIES. ENDA: IT GOES BACK TO THE CONFLICTING SIGNAL I SPOKE ABOUT EARLIER. IF YOU HAD STOPPED SOMEWHAT IN JANUARY AND SAID THE STRAIT OF HORMUZ WOULD BE CLOSED AND THE WORLD TO GO THROUGH AN ENERGY SHOT, OK. HERE WE ARE GROWTH IS ACCELERATING. GDP THIS WEEK SHOWING STRONGER FIGURES. THAT IS THE CASE BUT NONETHELESS INFLATION FIGURES FOR SEPTEMBER SHOWED AN ACCELERATION IN BROAD-BASED PRICE PRESSURES. NOT JUST ENERGY RELATED. WE ARE SEEING SPILL OVER MERCHANDISE GOODS. TOY PRICES ARE INCREASING. THAT IS FOR DIFFERENT REASONS BUT TARIFFS ARE PART OF IT AS WELL. IT HAS NOT SLOWED SPENDING OR THE ECONOMY THE WAY YOU MIGHT'VE THOUGHT BUT IT SPILLING OVER IN TERMS OF COSTS FOR DIESEL. FARMERS ARE COMPLAINING ABOUT IT. IF FARMERS COMPLAIN, FOOD DELIVERY COSTS GO UP. THEY CAN'T BE RULED THAT THAT THE ENERGY STORY WILL NOT SPILL OVER. CAROL: YOU HAVE ALIGNING YOUR COLUMN, MOST CONCERNING OF ALL SOME OF THE MOST IMPORTANT ECONOMIC DEVELOPMENTS OF 2026 POTENTIALLY BE ON THE FED'S CONTROL, LIKE THE WAR THE MIDDLE EAST THAT IS CAUSING HIGHER ENERGY PRICES. THAT IS THE TRICKY WICK. ENDA: THAT'S A PROBLEM. SHORTAGE OF CHIPS, BIG DEMAND, SOARING BECAUSE OF IPHONE. INTEREST RATES WILL NOT BE IMPACTED BY IPHONES BUT THAT'S PART OF THE CHALLENGE FACING THE FED. CAROL: GOOD STUFF AS ALWAYS. WE THINK ABOUT THE FED DECISION, WHICH WILL HAVE IN LESS THAN 24 HOURS FROM NOW. ENDA CURRAN, THANK YOU SO MUCH. ECONOMIC REPORTER IN THE BLOOMBERG NEWS D.C. NEWS BUREAU. THAT'S A FOCUS FOR INVESTORS TODAY. WE ARE VERY CLOSELY WATCHING ELECTIONS AROUND THE GLOBE. IT'S A BUSY SEASON. WE ARE GETTING READY FOR OUR MIDTERMS NEXT WEEK. WE ARE WATCHING WHAT'S GOING ON IN ISRAEL. TIM: VOTING HAS BEEN UNDER WAY WHERE IT'S A LITTLE AFTER 8:00 IN THE EVENING BEFORE THE POLLS CLOSE. THE OUTCOME OF VOTING IN ISRAEL BEING A REFERENDUM ON BENJAMIN NETANYAHU, THE COUNTRY'S LONGEST-SERVING PRIME MINISTER. I WANT TO BLINKEN --I WANT TO BRING IN ETHAN BRONNER. THEY SAY THIS WILL DECIDE HIS FATE. THE FIRST SINCE THE OCTOBER 7 ATTACKS. WHAT DOES THIS MEAN FOR POSSIBLY FOR NETANYAHU'S POLITICAL CAREER? ETHAN: WHAT IT MEANS IS IF HE LOSES, HE WILL NO LONGER BE PRIME MINISTER. IT'S A VERY TIGHT RACE. ALL THE POLLS FOR TWO YEARS HAVE SHOWN A KIND OF RAZOR THIN MARGIN. ON THE OTHER HAND, THERE IS AN INCREDIBLE AMOUNT OF TURNOUT AND THE IMPRESSION ONE GETS IS THAT THE TURNOUT IS BEING DRIVEN BY SUPPORTERS OF THE OPPOSITION. IT MAY TURN AGAINST NETANYAHU MORE THAN WE HAD THOUGHT UNTIL NOW. ONE OF THE REASON TO THINK THAT IS THAT HE AND HIS PARTY HAVE ASKED FOR AN EXTENSION OF THE VOTING HOURS. THE ELECTION COMMITTEE IS THINKING ABOUT IT. I DON'T THINK THEY WILL SAY YES BUT THE ARGUMENT IS WE'VE HAD PROBLEMS AND DELAYS AND THERE'S BEEN A SENSE OF PANIC ON THAT SIDE. IT IS HARD TO KNOW HOW TO MEASURE IT. IT DOESN'T LIKE YOU COULD BE THE BEGINNING -- IT COULD BE THE BEGINNING OF THE END OF HIS ERA. CAROL: FASCINATING IF YOU THINK ABOUT THE LONG RUN HE'S HAD. ONE THING I WANT TO ASK, ISRAEL HAS HAD THESE COALITION GOVERNMENTS. NO POLITICAL PARTY HAS EVER WON A MAJORITY. IT DEPENDS ON THE OUTCOME BUT ARE WE EXPECTING TO SEE THAT AGAIN? ETHAN: ABSOLUTELY. NO PARTY HAS EVER -- IN THE EARLY YEARS OF THE STATE THE MAIN PARTIES HAD 30 OR 40 MANDATES. NOW IT IS IN THE 20'S. ABSOLUTELY WHEN WE TALKED ABOUT NEITHER SIDE, WERE TALKING ABOUT THE BLOCKS THAT HAVE ORGANIZED THEMSELVES ALREADY. NETANYAHU, THE ULTRA-ORTHODOX, AND THE NATIONAL RELIGIOUS ON ONE SIDE AND THE CENTER, CENTER-RIGHT ON THE OTHER. YEAH, WE ARE TALKING ABOUT THE BLOCKS. THEY WILL BE A LOT OF HORSETRADING WHEN THE VOTING ENDS TO FIGURE OUT WHO CAN GET TO 61. TIM: BACK TO THE NATIONAL ELECTION, THE CHALLENGE THAT NETANYAHU FACES, EXPLAIN THE NUANCE BETWEEN THE TWO POSITIONS OF THE LEADING CANDIDATES RIGHT NOW. AS I HEARD YOU TALK ABOUT BEFORE, ETHAN, IT IS NUANCED. THERE IS A LOT OF NUANCE THERE. ETHAN: A LOT OF NUANCE. ON THE BROAD QUESTIONS WHEN THE WORLD LOOKS FROM AFAR, THE SECURITY ISSUES, THE QUESTIONS OF ISRAELI TROOPS IN LEBANON AND SYRIA AND GAZA AND THE WEST BANK, NONE OF THAT IS GOING TO CHANGE IN ANY FUNDAMENTAL WAY. THERE IS NO MOOD BY EITHER GROUP TO ENCOURAGING A PALESTINIAN STATE. BUT IF IN FACT THE OPPOSITION DOES WIN, THERE WILL BE A CRACKDOWN ON SETTLER VIOLENCE AND I THINK WHILE THE PRIME MINISTER WANTS TO GO AHEAD SOON AND AGGRESSIVELY TO START OF THE WAR AGAIN IN IRAN, HE WANTS TO TAKE HIS TIME AND DOES NOT WANT TO GO FOR REGIME CHANGE. HE WAS ONLY MAKE SURE THE NUCLEAR PROGRAM IS KEPT IN CHECK . THERE ARE IMPORTANT DIFFERENCES THERE. THERE IS A GENERAL SENSE IF THE OPPOSITION WERE TO COME IN, IT WOULD SEEK TRANSPARENCY, GREATER RELATIONSHIPS WITH THE UNITED STATES AND THE REGION. CAROL: WHAT IS IT MEAN FOR THE ECONOMY? IF WAR CONTINUES OR IS A PRIORITY, WHAT DOES IT MEAN FOR THE ISRAELI ECONOMY? ETHAN: GREAT QUESTION. THE ECONOMY HAS SURPRISINGLY IN THREE YEARS OF WAR DONE WELL. THE TEL AVIV STOCK EXCHANGE HAS OUTPERFORMED THE EXCHANGES AND OTHER COUNTRIES. BUT THERE ARE VERY BIG DRAGS ON THE ECONOMY. RIGHT NOW THERE'S A BRAIN DRAIN IS PEOPLE ARE AFRAID OF GETTING STUCK IN THE SITUATION AND MOVING TO OTHER COUNTRIES. THERE IS AN ENORMOUS AMOUNT OF MONEY BEING SPENT ON DEFENSE BY THIS GOVERNMENT. AGAIN, IF THE OPPOSITION WERE TO WIN, WE EXPECTED EXPECT LESS MONEY GOING TO WAR. THE LIKELIHOOD PEOPLE WOULD STOP LEAVING SO MUCH AND MAYBE START TO COME BACK, THOSE THINGS ARE VERY IMPORTANT FOR THE ECONOMY BECAUSE THE PEOPLE LEAVING ARE THE HIGHER EARNERS IN HIGH TECH, DOCTORS, THOSE KINDS OF PEOPLE. THAT'S A BIG ISSUE. UNDERLYING THIS BATTLE IS WHAT KIND OF ISRAEL LIES IN THE FUTURE? ONE IT IS MORE TEL AVIV ORIENTED, MORE PROFESSIONAL, SECULAR, WESTERN OR MORE NATIONAL, RELIGIOUS? THAT IS A BATTLE THAT NO MATTER WHAT HAPPENS TONIGHT WE WILL NOT KNOW THE ANSWER TO THAT QUESTION. IT'S A VERY INTENSE SET OF BATTLES GOING ON HERE. TIM: OUTSIDE OF THE COUNTRY'S BORDER, ETHAN, THE RELATIONSHIP ISRAEL HAS WITH THE U.S., I'M WONDERING HOW THEY CAN CHANGE BASED ON WHO WINS THE ELECTION. ETHAN: THAT'S A GREAT QUESTION BECAUSE I THINK THE DISILLUSIONMENT WITH ISRAEL WITH THE UNITED STATES HAS JUST ACCELERATED SO INTENSIVELY IN THE LAST FEW YEARS THAT IT DOES NOT SEEM LIKELY IT CAN GET BETTER SOON. IT CAN'T GET BETTER I WOULD THINK IT PRIME MINISTER NETANYAHU STAYS IN OFFICE. IF THERE IS A CHANGE, I THINK THERE WILL BE SOME PERIOD OF TIME WHEN THE REPUBLICANS AND DEMOCRATS WILL START TO TALK TO THE NEW GOVERNMENT AND SEE WHETHER THERE COULD BE A COOLING OF THE TEMPERATURES. IT'S AN ENORMOUS ISSUE. PRIME MINISTER NETANYAHU SAID WE MAY HAVE TO FACE SANCTIONS FROM SOMETHING LIKE THE UNITED STATES WHICH WAS UNIMAGINABLE A FEW YEARS AGO. THAT IS ONE OF THE REASONS PEOPLE WHO ARE WORRIED ABOUT THE COUNTRY THINK WHAT IS NEEDED, WHETHER OR NOT YOU LIKE NETANYAHU IS A CHANGE OF GOVERNMENT BECAUSE THINGS BECOME SO PROBLEMATIC UNDER HIM IN TERMS OF HIS FOREIGN RELATIONS. CAROL: WHAT HAPPENS TO THE CHARGES AGAINST HIM THAT WERE FACING HIM BEFORE THE WAR? DO THEY COME DEPENDING ON THE OUTCOME OF THIS BACK -- ETHAN: HE'S ON TRIAL. HE'S BEEN ABLE TO DELAY A LOT OF THE TRIALS FOR A LONG TIME AND AS PRIME MINISTER HE IS PERMITTED WHILE UNDER INDICTMENT TO SIT AS PRIME MINISTER. IF YOU NO LONGER PRIME MINISTER, HE CAN BE ANOTHER KIND OF MINISTER BY ISRAELI LAW. THE TRIAL WILL GO FORWARD AND I THINK THERE IS NOT AN INCONSEQUENTIAL POSSIBILITY HE WOULD BE SENT TO PRISON. I DON'T THINK IT IS VERY LIKELY BUT WE DON'T KNOW. THEY HAVE SENT SEVERAL OTHER LEADERS TO PRESENT IN THIS COUNTRY AND THERE ARE FRAUD AND BREACH OF TRUST. THE BRIBERY CHARGE ACCORDING TO THE JUDGES SEEMS THE WEAKEST BUT THE OTHERS WOULD CARRY SOME KIND OF PRISON TERM. IT IS NOT OUT OF THE QUESTION. CAROL: IT WAS BRIBERY, FRAUD, AND BREACH OF TRUST. ETHAN: CORRECT. I MUST SAY THAT THE JUDGES HAVE TWICE TOLD THE PROSECUTOR'S THEY ARE NOT IMPRESSED WITH THEIR BRIBERY CHARGE, WHICH IS THE MOST SEVERE THE THREE. TIM: HOW QUICKLY COULD THIS BE SET IN MOTION IF HE LOSES IN THIS ELECTION? ETHAN: THE TRIAL? THE TRIAL WILL GO ON THROUGH APPEALS. I THINK IT WILL GO ON FOR SEVERAL YEARS. HE IS 77. IT'S A LITTLE HARD TO SEE THE COUNTRY SENDING AN 80-YEAR-OLD TO PRISON WHO SPENT SO MANY YEARS IN PUBLIC SERVICE. . I THINK -- I DON'T KNOW. IT'S A VERY, VERY BIG QUESTION. THE CHARGES ARE SERIOUS AND THE TRIAL HAS GONE ON A LONG TIME. HE DECLINED A PLEA DEAL SOME YEARS AGO. CONCEIVABLY HE COULD TAKE ONE NOW WITH THE PROSECUTORS WOULD BE LESS APT TO GIVE HIM ONE IF HE IS OUT OF POWER BECAUSE HE LOST. CAROL: AROUND 4:00 WALL STREET TIME WE WILL GET SOME INSIGHT INTO THE EXIT POLLS. ABOUT 30 SECONDS HERE. HOW LONG WILL IT TAKE TO FIGURE OUT AN OUTCOME? MIGHT IT BE DAYS, WEEKS, OR WILL BE NO -- SAY AGAIN. ETHAN: WE WILL NOT KNOW IMMEDIATELY. WE WILL ONLY KNOW WITH THE TREND IS AND IF THE TREND -- UNLESS IT IS A BLOWOUT FOR THE OPPOSITION, IT SEEMS VERY UNLIKELY WE WILL KNOW WHAT KIND OF GOVERNMENT WE ARE LOOKING AT FOR QUITE A WHILE. PROBABLY A MATTER OF WEEKS I WOULD SAY. IT WILL TAKE A WHILE FOR THAT TO SHAKE OUT AND FOR THE PRESIDENT TO DECIDE WHO GETS TO FORM THE NEXT GOVERNMENT. CAROL: ALWAYS INVALUABLE. ETHAN, THANK YOU SO MUCH. ETHAN BRONNER, BLOOMBERG NEWS ISRAEL CHIEF FROM THE TEL AVIV EURO. TIM: ARE READ ON THE GLOBAL ECONOMY THROUGH HARRISON STREET ASSET MANAGEMENT, THE CEO JOINING US NEXT ON "BLOOMBERG BUSINESSWEEK DAILY." ♪ CHARLIE: IT IS 2:21. WE CHECK MARKETS ALL DAY LONG. THE DOW BACK IN THE GREEN. S&P AND NASDAQ ADVANCING. NASDAQ 100 RALLYING BY 1.2%. TECH COMPANIES LIFTING STOCKS AT OF INDUSTRY GIANTS INCLUDING ALPHABET, MICROSOFT AND AMAZON. THE S&P IS UP 42. 7719. THE DOW UP 21. NASDAQ UP 1.1%. NASDAQ 100 INDEX A LITTLE BETTER, UP BY 1.2%. MAG 7 INDEX, BLOOMBERG MAG7 INDEX UP .9% FOR STUFF THE PHILADELPHIA -- UP .9%. 10-YEAR, 4.99%. GOLD UP BY 1%. A RETREAT FOR CRUDE. RIGHT AROUND $100 A BARREL ON WTI. WAS TRADING BELOW $100. WTI DOWN ONE POINT 7%. BRENT CRUDE, $114. THE TRUMP ADMINISTRATION IS OFFERING AS $5 BILLION IN FINANCING THE CONSTELLATION ENERGY TO UPGRADE AND MODERNIZE THE NUCLEAR OPERATOR'S FLEET OF REACTORS IN ILLINOIS, MARYLAND, AND PENNSYLVANIA. SHARES OF CONSTELLATION ARE GAINING NOW BY OVER 2%. FOR ON-DEMAND NEWS 24 HOURS A DAY SUBSCRIBED TO BLOOMBERG NEWS NOW WHEREVER YOU GET YOUR PODCASTS. I'M CHARLIE PELLETT. THAT IS A BLOOMBERG BUSINESS FLASH. CAROL: THANK YOU SO MUCH. THE ALT ASSET MANAGER HARRISON STREET OUT WITH A NOTE. REAL ESTATE RECOVERY UNDERWAY, OUTCOMES BECOMING INCREASINGLY DIVERGENT ACROSS SECTORS, MARKETS, ASSETS, OPERATORS AND CAPITAL STRUCTURES. ENTERING 2026, MANY ANTICIPATED DECLINING INTEREST RATES, ACCELERATING TRANSACTION ACTIVITY, AT A FASTER NORMALIZATION OF CAPITAL MARKETS. INSTEAD ECONOMIC GROWTH REMAINED RESILIENT, INFLATION HAS PROVEN MORE PERSISTENT. JEW POLITICAL UNCERTAINTY HAS INCREASED. TIM: YOU CAN MAKE PLANS BUT, YOU KNOW. CAROL: WE ARE DELIGHTED TO HAVE A BACK WITH US. CHRISTOPHER MERRILL AT THE ALTERNATIVE ASSET MANAGEMENT. 110 BILLION DOLLARS IN ASSETS UNDER MANAGEMENT AND HE'S HERE IN STUDIO. GOOD TO HAVE YOU HERE WITH TIM AND ME. IT IS FUNNY. WE THINK THIS AND THEN WE GET THAT. HOW IS THAT IMPACTING THE PLAYS FOR YOU? CHRISTOPHER: THANK YOU FOR HAVING ME. I THINK FOR OUR BUSINESS WE HAVE BEEN FORTUNATE FOR 20 YEARS TO FOCUS ON ESSENTIAL SERVICE ASSETS, THINGS RIGHT EDUCATION, HEALTH CARE. CAROL: STUDENT AND SENIOR HOUSING. CHRISTOPHER: INFRASTRUCTURE. REAL ESTATE EQUITY AND DEBT AND THE NICE THING IS THAT IS NOT THROUGH FINANCIAL ENGINEERING. THEY ARE DEMOGRAPHIC-DRIVEN. THE ASSET CLASSES CAN PERFORM WELL IN INFLATIONARY ENVIRONMENTS. THEY CAN PERFORM WELL WHETHER WE ARE HIGHER FOR LONGER INTEREST RATES. WE THINK THE ASSET CLASSES ARE GOING TO DO WELL. IT'S FOCUSING ON THE REGULAR HEALTH SYSTEMS AND IT'S GOOD FUNDAMENTAL INVESTING. TIM: THERE'S A LOT I WANT TO GET TO WITH YOU AND IT HAS THE BACKDROP OF THE AI BOOM WE SEE HAPPENING NOW. DATA CENTERS. A LOT OF PEOPLE ARE THINKING, HOW CAN I DIVERSIFY AWAY FROM CONCENTRATION RISK WHEN IT COMES TO AI? IS THAT POSSIBLE TO DO THROUGH YOUR PRODUCTS? SENIOR HOUSING, HEALTH CARE, UNIVERSITY. I DON'T KNOW. CHRISTOPHER: YOU HAVE TO THINK ABOUT AI IN EVERYTHING YOU DO BUT HARD ASSETS, WE ARE SEEING AN INCREASE FROM -- WE HAVE A GLOBAL CLIENT BASE. WE HAVE CAPITAL FROM ASIA, THE MIDDLE EAST, EUROPE. WE ARE CERTAINLY SEEING INCREASING TO HARD ASSETS. THESE ARE ASSETS WE CAN REPRICE ON A REGULAR BASIS BUT YOU HAVE TO PEEL BACK THE ONION AND THINK ABOUT HOW AI WILL AFFECT EDUCATION. WE WANT TO BE WITH SCHOOLS THAT ARE EMBRACING AI, ONLINE LEARNING, SO WE FOCUS ON THE BIG POWER UNIVERSITIES. WHAT HAPPENS AT A MEDICAL OFFICE WITH AI? WITH TECHNOLOGY ADVANCEMENTS? YOU HAVE TO PEEL BACK THE ONION BUT THE NICE THING ABOUT HARD ASSETS IS YOU CAN -- TIM: IS IN-PERSON HIGHER EDUCATION AT RISK? CHRISTOPHER: PROBABLY 50% TO 20% OF UNIVERSITIES WILL GO OUT OF BUSINESS OVER TIME SO YOU HAVE TO BE CAREFUL WHERE YOU WANT TO HIRE. CAROL: WE ARE STARTING TO SEE THAT. TIM: GETS A TINY SLIVER OF UNIVERSITIES. CHRISTOPHER: WE WANT TO FOCUS ON THE BIGGER ENROLLMENT TAKERS AND POWER FOUR SCHOOLS. YOU HAVE TO BE CAREFUL. TIM: WILL THOSE SCHOOLS CONTINUE TO ATTRACT STUDENTS REGARDLESS OF THE TECHNOLOGICAL -- TECHNOLOGY THAT CAN BE OFFERED IN A VIRTUAL ENVIRONMENT? CHRISTOPHER: THOSE ARE THE SCHOOLS AND WILL OFFER SOME ONLINE CLASSES BUT HOW ARE WE GOING TO UTILIZE AI? THOSE ARE SCHOOLS I CAN OFFER THE SPORTS, THE SOCIAL ENVIRONMENT AND THOSE ARE SCHOOLS WE ARE SEEING ACTUALLY -- WE ARE SEEING ENROLLMENT INCREASES IN THEM. TIM: YOU CAN'T PUMP A KEG VIRTUALLY, CAROL. CAROL: NOT YET. WHAT ABOUT DEMOGRAPHICS. PEOPLE ARE HAVING LESS KIDS. IT'S IMPACTING ACADEMIA. IT'LL IMPACT EVERYTHING WHEN IT COMES TO REAL ESTATE DEMAND. CHRISTOPHER: YOU HAVE TO BE CAREFUL ABOUT WHAT UNIVERSITIES YOU CHOOSE. WE ARE SEEING ENROLLMENT INCREASING. CAROL: LIKE PUBLIC UNIVERSITIES. CHRISTOPHER: THE ENROLLMENT TAKERS THAT NEED CAPITAL RELATIONSHIPS WITH PRIVATE EQUITY. WE ARE WORKING WITH OFF-CAMPUS HOUSING. WHEN YOU THINK ABOUT DEMOGRAPHICS, LOOK AT HEALTH CARE AND THE AGING POPULATION. YOU ARE STARING AT A WALL AND A HUGE NUMBER OF PEOPLE TURNING 80. ALMOST 2 MILLION EVERY YEAR. ONE OF THREE PEOPLE AT SOME LEVEL OF DEMENTIA OR HEARING POST 85. WE ARE NOT CREATING ENOUGH PRODUCT. THAT IS THE CHALLENGE WITH THE ENVIRONMENT AND TARIFF ISSUES IN HIGHER INTEREST RATES. THERE'S NOT ENOUGH SUPPLY SO THAT IS MAKING IT DIFFICULT WHEN YOU LOOK AT THIS. FOR THOSE THAT OWN PORTFOLIOS AND HAVE ASSETS, GREAT OCCUPANCY, GREAT YEAR YOUR GROWTH. CAROL: WHAT KIND OF SENIOR HOUSING? MY DAD WAS IN SENIOR HOUSING AND IT WAS EXPENSIVE. ARE YOU TALKING ABOUT HIGHER END IN TERMS OF THE ECONOMIC AFFORDABILITY/ -- AFFORDABILITY? CHRISTOPHER: THERE'S A DIFFERENT PRICE POINTS IN EACH STATE AND THAT'S WHAT YOU NEED TO FOCUS ON, AFFORDABILITY IN THE MARKET. WHEN YOU THINK ABOUT SENIOR HOUSING, IT IS CONTINUING CARE AND INDEPENDENT ASSISTANT LIVING CARE, PRIVATE PAY, RENTAL. WE WANT TO FOCUS TOO MUCH ON SKILLED NURSING AND END-OF-LIFE PUBLIC PAY. CAROL: DOES MEDICARE PAY FOR MOST OF THIS ? CHRISTOPHER: IN A LOT OF CASES WITH STUDENT HOUSING WE THE PARENTS ON THE LEASE. WITH SENIOR HOUSING, IS THE KIDS ON THE LEASE. IT IS A CIRCLE OF LIFE. TO YOUR POINT, THERE'S A LOT OF GREAT WAYS AI CAN HELP US WITH SOME OF THESE ASSETS AND PROVIDING A BETTER CUSTOMER INSURANCE. TIM: ARE YOU OPERATING THE SENIOR CARE FACILITIES? CHRISTOPHER: WE WORK WITH LOCAL PARTNERS. TIM: ARE THEY HAVING ISSUES GETTING STAFF? CHRISTOPHER: THAT'S A VERY TOUGH ISSUE AND THAT'S WHY WE HAVE BEEN DOING IT FOR 20 YEARS AND WE HAVE SOME GREAT PARTNERS. THAT HAS BEEN OUR SECRET SAUCE. THE RELATIONSHIP WITH FOLKS THAT ARE ABLE TO DEAL WITH HIRING AND MOVE PEOPLE TO DIFFERENT LOCATIONS. WE HAVE TRIED TO FOCUS ON THOSE PARTNERS. THE NEW ENTRANTS ARE HAVING A HARD TIME WITH THAT. CAROL: I BET THAT IS DIFFICULT. DATA CENTERS. YOU SAID YOU HAVE GOT $70 BILLION YOU INVESTED. WHAT CAN YOU TELL US ABOUT THE DEMAND AND SUPPLY DYNAMIC RIGHT NOW? ANY SIGNS OF SLOWDOWN? CHRISTOPHER: IT'S OFF THE CHARTS WHEN YOU THINK ABOUT THE NEED AND DEMAND. IS THE ACCESS TO POWER AND HOW WE WILL GET ENOUGH POWER. CAROL: IS IT SLOWING DOWN SIGNIFICANT? CHRISTOPHER: A LOT OF INVESTORS ARE TAKING RISK ON BUYING LAND TO GET ACCESS TO POWER. HE COULD TAKE A LONG TIME. OUR STRATEGY IS MORE ABOUT ALMOST NET LEASING TO HYPERSCALERS WHERE WE ARE SIGNING LONG LEASES AND THERE'S ACCESS TO POWER. WE ARE JUST PROVIDING THEM THE CORE AND SHELL. CAROL: ALREADY THERE. CHRISTOPHER: HOW DO WE MANAGE RISK? WE WANT TO THINK ABOUT WHO WE HAVE A GOOD RELATIONSHIP WITH. UNIVERSITY, HEALTH SYSTEM. NORTHERN VIRGINIA IS A HUGE MARKET RIGHT NOW. THERE'S A NUMBER OF NODES ACROSS THE COUNTRY WHERE YOU GET GREAT ACCESS TO POWER IN VERY GOOD MARKETS. THE CHALLENGE IS YOU ARE SEEING THINGS POP UP IN PLACES WHERE IF THE ASSET -- IF SOMETHING HAPPENS TO THE TENANT, THE REUSE IS DIFFICULT. YOU HAVE TO BE CAREFUL ABOUT WHAT MARKETS YOU WANT TO BE IN AND WHAT TYPES OF ASSETS. CAROL: WHAT IS THE MOST OPPORTUNISTIC FOR YOU GUYS ARE NOW? CHRISTOPHER: EACH STRATEGY HAS A DIFFERENT RETURN PROFILE. WHAT WE TRIED TO LOOK DO IS BE RELEVANT TO OUR CLIENTS. WE HAVE CLIENTS ALL OVER THE GLOBE, A NUMBER OF PRIVATE WEALTH CLIENTS. IT IS TRYING TO OFFER PRODUCTS FOR THEM THAT ALLOW THEM TO DIFFERENTIATE THEIR PORTFOLIOS. WHETHER IT IS EXPOSURE IN EUROPE, CANADA, THE U.S., WE HAVE FUNDS. TELL US, WE TRY TO CREATE DIVERSIFIED PRODUCTS. WE DON'T WANT HAVE TO PUT ALL THE MONEY IN ONE STRATEGY. WE WANT TO CREATE DIVERSIFIED FUNDS BECAUSE RIGHT NOW SENIOR HOUSING IS A HIGH CONDITIONED GAME, WE WANT TO INVEST MORE THAN HAVE IT ALL IN ONE STRATEGY. THAT IS WHERE SOMEONE CAN MAKE A MISTAKE. TAKING LARGE POOLS OF CAPITAL AND PUTTING THEM INTO FRAGMENT SEGMENTED INTO LARGE WAY. TIM: TO THE OUTCOMES OF THE MIDTERMS AFFECT YOUR STRATEGY AT ALL? CHRISTOPHER: WE HAVE TRIED TO DEVELOP A STRATEGY SUCH THAT WHEN YOU THINK ABOUT INVESTING IN BASE ASSETS IT IS RESILIENT AND GOOD AND BAD TIMES. IT CERTAINLY WILL HAVE SOME IMPACT ON WHAT MIGHT HAPPEN WITH INTEREST RATES, WITH RENT GROWTH, WITH SUPPLY. IT WILL NOT IMPACT PEOPLE NEED TO BE EDUCATED OR IMPACT PEOPLE -- THE AGING POPULATION. IT WOULD ALLOW IN CERTAIN SITUATIONS LIKE WITH OBAMACARE TO PUSH MORE PEOPLE TO DOCTOR VISITS AND PUSH OUR MEDICAL OFFICE STRATEGY. CERTAIN THINGS MIGHT ALTERNATELY BECAUSE OF IT. FOR US, IF YOUR FOCUS ON ESSENTIAL SERVICES, YOU HATE TO SAY IT BUT WE CAN PERFORM AT A HIGHER RATE ENVIRONMENT. WE CAN PERFORM WHATEVER THERE IS BECAUSE THEY OUR ASSETS TO SET OR SOCIAL INFRASTRUCTURE. CAROL: 8% ARE NOT PRESENT WHEN MAKE IT TRICKY FOR YOU GUYS? CHRISTOPHER: IT MIGHT BE TRICKY TO DEVELOP. FOR THE EXISTING PORTFOLIO YOU START SEEING HIGHER GROWTH RATES. PC MORE DEMAND FOR EXISTING PORTFOLIOS. AS CAPITAL COMES INTO THE MARKET THERE IS NOT CAPITAL CHASING RETAIL AND OFFICE. BOY, WE WOULD LOVE TO BUY PORTFOLIOS FROM YOU BECAUSE WE WANT THE SEGMENTS. WE HAVE BEEN VERY ACTIVE SELLERS. ONE THING I'M PROUD OF -- CAROL: BUYING AND SELLING? CHRISTOPHER: $6 BILLION WERE $7 BILLION THIS YEAR. WE WANT TO RETURN CAPITAL TO INVESTORS. TIM: NO, YOU PLAY -- IT IS LIKE YOU PLAY EVERYWHERE. WHAT IS AN AREA YOU DO NOT WANT TO BE IN? CHRISTOPHER: WE DON'T WANT TO BE AN ASSET CLASSES WHERE WE ARE TRYING TO TIME MARKETS, TRYING TO TIME CYCLES, ECONOMIC CYCLES. WE JUST WANT TO BE -- IF IT DOESN'T HAVE THE ESSENTIAL SERVICES COMPONENT, THE NEED-BASED FEEL TO IT, WE DON'T WANT TO PLANET. CAROL: ANY PART OF ESSENTIAL SERVICES COMPONENT THAT IS A TREND WE ARE NOT TALKING ABOUT THAT WE SHOULD BE? WE HAVE TALKED ABOUT PEOPLE BUILDING HOMES FOR PEOPLE WHO HAVE A UNIVERSAL -- UNIVERSAL BASIC INCOME BECAUSE THEY THINK ABOUT THE E IMPACT OF AI. CHRISTOPHER: A BIG THING THAT IS GOING IS GOING TO BE WITH THE BIG HEALTH SYSTEMS AND BIG UNIVERSITIES. PUBLIC-PRIVATE PARTNERSHIP. THE NEED FOR WORKING WITH THE PRIVATE SECTOR BECAUSE THERE IS SO MUCH DEFERRED MAINTENANCE AND A LACK OF CAPITAL. CAROL: THANK YOU SO MUCH. YOU GOT IT IN. CHRISTOPHER MERRILL, CO-FOUNDER AND GLOBAL CHIEF EXECUTIVE OFFICER AT CARSON STREET ASSET MANAGEMENT. WHEN WE COME BACK -- TIM: ARE YOU FAST? CAROL: THE NEXT GUEST IS, BIG TIME. ♪ ELIUD KIPCHOGE ETHAN BRONNER CHARLIE: IT IS 2:40. WE CHECK MARKETS ALL DAY LONG HERE AT BLOOMBERG. THE DOW BACK IN THE RED. IT'S BEEN SWINGING BETWEEN GAINS AND LOSSES. LOOKING AT A DECLINE OF 11 POINTS ON THE DOW INDUSTRIALS. BEING WEIGHED DOWN BY BOEING SHARES. AFTER EARNINGS DOWN BY 10.2%. THE DOW DOWN UNDER 1/10 OF 1%. S&P HOLDING ON TO AGAIN TODAY OF JUST ABOUT .5%. WE ARE ROUGHLY 1.5% AWAY FROM A RECORD ON THE S&P. THE NASDAQ COMPOSITE INDEX HIGHER BY 1.1%. THE NASDAQ 100 UP 1.2 PERCENT. NASDAQ COMPOSITE UP 1.1%. THE PHILADELPHIA STOCK EXCHANGE SEMICONDUCTOR INDEX UP 3.3% RIGHT NOW. TWO-YEAR YIELD, 4.73%. 10-YEAR, FOUR POINT 99%. GOLD, $4056 AN OUNCE. I GAIN OF 1% ON THE PRECIOUS METAL. WEST TEXAS ENEMY ACCRUED, $99.98 A BARREL. BRENT CRUDE, $114. LOWERED BY 1.5 PERCENT COCA-COLA HAS RAISED HIS 2026 FULL YEAR OUTLOOK ON A STRONG INTERNATIONAL DEMAND FOR SODA, ESPECIALLY ITS ZERO SUGAR DRINKS. SHARES ARE DOWN TODAY BY 1.3%. PEPSICO IS LOWER BY 1.9%. WE HAVE SHARES OF HILTON TRADING LOWER, DOWN BY 2.6% AFTER THE HOTEL OPERATOR GAVE A FORECAST FOR ADJUSTED EARNINGS-PER-SHARE FOR THE FOURTH QUARTER THAT DID FALL SHORT OF THE AVERAGE ANALYST ESTIMATE. HILTON SHARES ARE DOWN NOW BY 2.6%. ALL OF THIS WITH MAJOR TECH EARNINGS COMING OUT THIS WEEK. WE WILL HEAR FROM THE LIKES OF ALPHABET, MICROSOFT AND AMAZON. AMAZON WILL BE THURSDAY. ALPHABET AND MICROSOFT REPORT TOMORROW. WE HAVE ALPHABET UP 1.3%. MICROSOFT SHARES DOWN .4%. AMAZON HIGHER BY 2%. APPLE HAS ROLLED OUT ITS NEW 24 INCH IMAC AN ENTRY-LEVEL MACBOOK PRO WITH A 14 INCH SCREEN, MARKING A PAIR OF KEY UPDATES IN AN END TO END THE COMPANY'S COMPUTER LINE. I'M CHARLIE PELLETT. THAT IS A BLOOMBERG BUSINESS FLASH. CAROL: YOU KNOW LOTS OF POLITICAL RACES ARE GOING ON IN THE COUNTRY AND AROUND THE WORLD. WE HAVE BEEN COVERING IT. OUR NEXT GUEST IS IN THE MIDST OF ANOTHER SERIES OF RACES. HE'S UNDER UNDERTAKING HIS WORLD TOUR, A MULTIYEAR JOURNEY THAT WILL SEE HIM RACE MARATHONS ACROSS EVERY CONTINENT WHILE CONNECTING WITH RUNNERS AROUND THE GLOBE. TIM: IS ONE OF THE GREATEST MARATHON RUNNERS OF ALL TIME. FOUR TIME OF THE BIG METALS, INCLUDING TWO MARATHON GOLD MEDALS, MULTIPLE TIME MARATHON WINNER, AND THE FIRST PERSON IN HISTORY TO RUN THE MARATHON IN UNDER TWO HOURS. ALSO A TIME PARTNER OF NIKE, WORKING WITH THE COMPANY SINCE 2003. WE HAVE WITH US ELIUD KIPCHOGE FROM OREGON. WELCOME. SO GOOD TO HAVE YOU ON THE PROGRAM. THIS IS THE FIRST TIME WHEN WE SENT OUT AN ALERT THAT SOME OF WILL BE ON THE SHOW THAT COLLEAGUES ARE GETTING QUESTIONS FROM THEIR KIDS FOR US. WE HAVE A LOT OF QUESTIONS FOR YOU. I WANT TO START WITH YOUR CURRENT RACE AND JOURNEY, THE WORLD TOUR. TELL US ABOUT THE WORLD TOUR AND WHAT IT MEANS YOU PERSONALLY, MORE BROADLY THE MESSAGE YOU WANT TO SEND TO THE WORLD. ELIUD: THANK YOU VERY MUCH. WE ARE GOING AROUND THE WORLD. ALL SEVEN CONTINENTS IN THE NEXT THREE YEARS. THAT IS THE MAIN REASON. I ALWAYS SAY THAT GOING AROUND THE WORLD IS THE ROUTE BUT THE MAIN REASON ARE THE PEOPLE. TO MAKE SURE I SELL THE SPIRIT OF RUNNING TO EVERYBODY. TELL PEOPLE THAT RUNNING SPRINGS TOGETHERNESS AND IT IS HEALTHY. CAROL: OUR UNDERSTANDING IS THAT THIS WORLD TOUR AND THE RACES YOU HAVE BEEN DOING -- CONGRATULATIONS BECAUSE YOU HAD A GREAT RACE AT THE NIKE MELBOURNE WHERE YOU SET A NEW COURSE RECORD. CONGRATULATIONS ON THAT AS YOU CONTINUE ON WITH THIS. MY UNDERSTANDING IS THAT YOU ARE INSPIRED BY THE BELIEF THAT NO HUMAN IS LIMITED. I UNDERSTAND THE SENSE OF COMMUNITY. TALK A LITTLE BIT MORE ABOUT THAT. ELIUD: I AM INSPIRED BY NO MAN IS LIMITED. THE REAL MEANING IS THAT TO TELL EVERYBODY YOU ARE NOT LIMITED AT ALL. THERE IS NO IMPOSSIBILITY. LET US GO ON. IT'S NOT ABOUT TURNING AROUND. IT'S ABOUT BEING THE PROFESSION, THE ENGINEER, THE DOCTOR, THE LAWYER, A PROFESSIONAL ROLE. THE PROFESSIONAL CAN GET A PROJECT, WORK ON THAT PROJECT. WE CAN ASPIRE ALL AND INSPIRE HUMANITY. THAT IS WHAT I'M SAYING AND THAT IS WHAT I AM THRIVING ON AS I'M RUNNING AROUND THE WORLD. TIM: THERE MUST'VE BEEN MOMENTS IN YOUR CAREER AND JOURNEY WHERE YOU FELT LIKE YOU HAVE HAD TO OVERCOME OBSTACLES. AGAIN, I WANT TO GO TO QUESTIONS WE RECEIVED FROM MEMBERS OF THE BLOOMBERG COMMUNITY. OUR OWN MICHAEL SHEPARD'S SON BENJI HAS A QUESTION FOR YOU ABOUT THE HARDEST THING MENTALLY YOU HAVE FACED THROUGHOUT YOUR CAREER AND HOW YOU OVERCAME IT. BENJI IS TRAINING RIGHT NOW AND THIS IS SOMETHING HE GOES THROUGH. ELIUD: IT'S IN THE MIND. WHEN I WAS PREPARING TO RUN UNDER TWO HOURS, THAT WAS THE BIG OBSTACLE. I ASKED MYSELF WHO IS RUNNING AND TRYING TO GET TO TWO HOURS. WHAT CAN I DO? I TRUSTED MYSELF. I BELIEVED IN MYSELF. I BELIEVE IN 19. I SAID I WILL WORK FOR IT WITHOUT ANY -- THAT IS WHAT HAPPENED. I RAN UNDER TWO HOURS. I WAS SUCCESSFUL AS FAR AS MOVING THE POSSIBILITIES IN PEOPLE'S MINDS. CAROL: BUT HAS BEEN THE MOST CHALLENGING WORKOUT THAT YOU HAVE DONE? ELIUD: THE MOST CHALLENGING WORKOUT IS TRACK WHERE I NEED TO WORK ON THE CLOCK, THE TIME. SEVERAL TIMES. THAT WAS THE HARDEST WORKOUT I'VE EVER HAD. TIM: ONE THING THAT HAS CHANGED A LOT IN RECENT YEARS HAS BEEN THE WAY THAT ENDURANCE ATHLETES THINK ABOUT NUTRITION. I'M WONDERING WHAT YOU HAVE DEVELOPED BASED ON SCIENCE, BASED ON EXPERIENCE, WHAT IS THE WAY YOU FUEL DURING A RACE? ELIUD: FUELING IS THE GAME CHANGER. PICKING THE RIGHT FUEL EVERY FIVE KILOMETERS. TRYING TO TAKE IN A SMALL AMOUNT WILL HELP YOU AS FAR AS GOING TO THE END OF THE MARATHON. FUELING UP AND RECOVERY. THAT GIVES YOU MORE ENERGY. I ENCOURAGE EVERYONE TO FUEL VERY WELL BECAUSE THE MARATHON IS LONG. IT IS LIKE LIFE. [LAUGHTER] CAROL: SO TRUE. I WANT TO GO BACK TO SOME OF THE QUESTIONS MICHAEL SHEPARD'S SON BENJI WANTED TO ASK BECAUSE IT'S A GREAT ONE. WE OFTEN HAVE REGRETS. WE THINK BACK HOW WE C COULD HAVE DONE SOME INDIFFERENT. WHAT WOULD YOU CHANGE ABOUT YOUR TRAINING HABITS EARLY IN YOUR CAREER AS A RUNNER, IF ANYTHING? ELIUD: I CAN SEE I WOULD BE MORE DISCIPLINED WHEN I WAS YOUNGER. I WOULD TRY TO TRAIN EVERYDAY AND FOCUS. TRY TO RECOVER WELL. TRAIN IN A GOOD WAY. I THINK I WOULD TRAIN MORE THAN IT IS NOW. I ALWAYS SAY TO PEOPLE A MAN CANNOT BUY YESTERDAY SO MOVED BY WITH WHAT WE HAVE TODAY. TIM: WE HAVE TALKED ABOUT TRAINING. WE TALKED ABOUT FUELING. WE TALKED ABOUT MENTAL RESILIENCE. THE EQUIPMENT IS WHERE I WANT TO END WITH YOU. YOU ARE A LONG TIME NIKE ATHLETE AND WHERE SHOES. CAN YOU TALK ABOUT THE TECHNOLOGY THAT HAS EVOLVED ON THE FOOT AND WHERE IT IS TODAY AND WHERE YOU THINK IT WILL GO? ELIUD: TECHNOLOGY DRIVES THE WORLD. IT DRIVES RUNNING. OUR SHOES ACTUALLY IS THE BEST AS FAR AS TECHNOLOGY IS CONCERNED. I BELIEVE THE WORLD CANNOT GO BACK. WE ARE GROWING EVERY DAY. TRYING TO BRING THE RIGHT SHOES THROUGH TECHNOLOGY WHICH CAN HELP US TO RECOVER VERY FAST. IT CAN HELP OUR MUSCLES. I THINK IT IS GOOD. THE FUTURE MEANS MORE PEOPLE CAN LOVE RUNNING AND PUSH THEIR LIMITS. MORE RUNNING COMMUNITY TO COME IN AND ENJOY RUNNING. I'M LOOKING FORWARD TO A BEAUTIFUL FUTURE WHERE PEOPLE AROUND THE WORLD WILL RUN USING THE SHOES AND A HAPPY WAY. CAROL: THERE IS NOTHING LIKE SPORTS TO BRING PEOPLE TOGETHER WITH A SENSE OF COMMUNITY AND WE SAW THAT WITH THE WORLD CUP. THANK YOU FOR CARVING TIME FOR US. ELIUD KIPCHOGE JOINING US FROM OREGON. WE WILL GO FROM OREGON TO TEXAS AND BLOOMBERG INVEST DALLAS. IT'S A GATHERING OF THE EXCHANGES, ISSUERS, INVESTORS, BANKS, REGULATORS AND MARKET STRUCTURE LEADERS AT HOW TEXAS THERE ARE $4 TRILLION OF MARKS ON SPONSOR BOOKS RIGHT NOW. IF YOU LOOK AT CURRENT EXIT RATES, IT WILL TAKE NINE YEARS, 9.5 YEARS TO CLEAR THAT BACKLOG. THE COMPANIES THAT ARE GOING PUBLIC ARE GOING SO MUCH LATER. IF YOU LOOK AT TODAY'S ISSUANCE, THE MARKET CAP OF AN IPO TODAY IS ABOUT $2.5 BILLION. THAT IS FOUR TIMES LARGER THAN IT WAS IN 2020 THROUGH -- 22 TO 23 YEARS AGO AND THAT IS NOT HEALTHY. IF YOU LOOK AT SPACEX, ARGUING THE MOST IMPORTANT BUSINESS OF OUR GENERATION, IF NOT HER LIFETIME, THEY WENT PUBLIC THIS SUMMER AT $1.7 TRILLION. THE LARGEST IPO EVER. 24 YEARS AFTER WAS FORMED AND THEY HAD 31 FINANCING ROUNDS AND RAISED $12 BILLION PRIOR TO GOING PUBLIC. THE STEEPEST PART OF THE GROWTH CURVE HAD ALREADY BEEN HARVESTED BY THE TIME HE CAME TO MARKET. THE SCHOOLTEACHER IN EL PASO DID NOT SHARE IN THE GAINS. THE FIREFIGHTER IN KANSAS CITY DID NOT SHARE IN THOSE GAINS. IT IS HEALTHY IF WE INTRODUCE NEW COMPETITION INTO THE PUBLIC -- INTO THE PUBLIC MARKETS THAT MAKES BEING PUBLIC EASIER AND LESS FRICTION. I WAS DISAPPOINTED TO HEAR SOME OF THE OTHER EXCHANGES RECENTLY SUGGEST IT IS A GOOD THING THAT PUBLIC COMPANIES INCUBATE LONGER. I THINK IT IS JUST THE OPPOSITE. WE NEED TO WORK TO REDUCE THE FRICTION THAT WE HAVE IN OUR PUBLIC MARKETS SO IT IS EASIER TO GO PUBLIC SO THAT THE EVERYDAY INVESTOR CAN SHARE IN THE GAINS AND THEY JUST DON'T END UP WITH MATURITY THAT ENDS UP IN THEIR RETIREMENT. DANI: IT'S A PRIVATE EQUITY PROBLEM. YOU HAVE A LOT OF PRIVATE EQUITY THAT SAT ON THE ASSETS FOR A WHILE, MORE LIQUIDITY OPTIONS. IT IS THEM, NOT THE EXCHANGE. WHERE THE EXCHANGES THE DOMINANT ONES FALLING FOR THIS? JAMES: THE PRIVATE MARKETS HAVE DONE PRECISELY WHAT THEY SHOULD'VE DONE. THEY FILLED THE VOID THE PUBLIC MARKETS CREATED. THE SIMPLE FACT IS WE FED A LISTING DUOPOLY IN THE LAST 30 YEARS DURING A PERIOD MARKET ISSUANCE IS UP FOUR TIMES. IF YOU LOOK AT REVENUES IN THE LATE 1980'S, THEY WENT OUT AT $12 MILLION AND NOW IT'S $220 MILLION. IF YOU LOOK AT THE PROSPECTUSES, 15 YEARS AGO, THE AVERAGE SPENT MORE TIME DESCRIBING THE BUSINESS THAN IT DID TALKING ABOUT THE RISK OR WHAT COULD GO WRONG WITH IT. TODAY THEY ARE 2.5 TIMES MORE PAGES, INK, SPENT DISCUSSING THE RISKS THAN THERE ARE ON THE UNDERLYING OPPORTUNITY. LOOK AT THE ANTHROPIC FILING YESTERDAY. A 400 PAGE PROSPECTUS. 100 PAGES -- 100 PAGES ON RISK DISCLOSURES. THERE IS SOMETHING SYSTEMICALLY WRONG THERE AND IS BUILT UP OVER TIME. THE TEXAS STOCK EXCHANGE LOOKS AT THAT AND WE ARE SINGULARLY FOCUSED ON BEING AN ISSUER LINE EXCHANGE. TO THE EXTENT WE CAN WE HAVE PARTNERED WITH THE STATE OF TEXAS AND INCREASINGLY WITH THE FEDERAL REGULATOR TO REDUCE THE FRICTION. THE REASON WHY COMPANIES ARE GOING PUBLIC LATER OR WE HAVE LOST HALF THE NUMBER OF PUBLIC COMPANIES IN THE COUNTRY IS BECAUSE IT HAS BEEN TOO BURDENSOME, TOO COSTLY AND LEGALLY TREACHEROUS TO BE A PUBLIC COMPANY. YOU SEE QUITE A LOT THAT'S HAPPENED IN THE STATE OF TEXAS. CAROL: YOU HAVE BEEN LISTENING TO JAMES LEE OF THE TX SE GROUP SITTING, BLOOMBERG'S DANI BURGER AT BLOOMBERG INVEST IN DALLAS. IF YOU WANT TO LISTEN TO THE CONVERSATION OR CHECK OUT THE OTHER CONVERSATIONS, HAD TO LIVE GO ON THE BLOOMBERG TERMINAL. OR DISCUSSIONS TO COME. TIM: WE ARE SEEING A DAY WHEN TECH STOCKS -- HE WAS TALKING NOW ABOUT THAT ANTHROPIC AS1. LET'S CALL THAT ONE FOR 2%. THE S&P UP ABOUT HALF A PERCENTAGE POINT. THE DOW IS FLAT. CAROL: LET'S GET TO SOME STOCKS ON THE MOVE ON THIS TUESDAY. WITH US IS LIFE STRATEGIST TATIANA DARIE. >> WE HAVE TO TALK ABOUT GOING. DOWN 10%, THE SECOND-LARGEST DECLINER IN THE S&P 500. THAT IS THE LARGEST DROP SINCE THE APRIL TARIFF SO SOME SIGNIFICANT MOVES. THE COMPANY LOWERED ITS FULL-YEAR AIRCRAFT DELIVERY TARGET FOR THE 737 MAX JETS AND IT SAYS IT NEEDS MORE TIME TO GO TO A HIGHER AND MORE SUSTAINABLE PRODUCTION RATE. IT DELIVERS -- DELIVERS ARE THE SINGLE MOST IMPORTANT METRIC FOR THE COMPANY SO CLOSELY WATCHED. THAT HAS STAGNATED IN THE THIRD QUARTER WHICH IS WHAT LED TO THIS MORE CAUTIOUS VIEW LARGELY DUE TO WING MANUFACTURING AND ENGINE DELIVERY ISSUES. THE CEO SAYING THE STABILIZATION PERIOD WILL STRETCH INTO NEXT YEAR. AS A PASSENGER THAT DOES NOT LOOK THAT BAD TO ME. TIM: THAT NOTWITHSTANDING, I THINK IT'S FAIR TO SAY THAT BOEING INVESTORS HAVE BEEN VERY PATIENT. CAROL: IT IS ONE THING AFTER ANOTHER. IT IS KIND OF TRICKY, THE UPS AND DOWNS. TRYING TO FIGURE OUT THE LONGER-TERM PATH CONSIDERING THEY ARE ONE OR TWO DOMINANT PLAYERS WHEN IT COMES TO JETS AND PLANES IN THE WORLD. BOEING. LET'S GO TO HILTON. TATIANA: ANOTHER HOUSEHOLD NAME. SHARES ARE DOWN 2%. A BIT ON THE TOP AND BOTTOM LINES ON A STRONG TRAVEL SEASON IN THE U.S.. EPS GUIDANCE FELL SHORT OF ESTIMATES. IT IS SEEING STRONG U.S. AND EUROPEAN PERFORMANCE WHICH IS ENCOURAGING. AVAILABLE ROOM HAS DRIVEN BY ABOUT 7%. THE WEAKNESS CONTINUES IN THE MIDDLE EAST AND PARTS OF ASIA SPECIFICALLY IN CHINA WHICH SPEAKS TO THEIR WEAKER CONSUMERS AND BMO CAPITAL NOTING THAT HEADWINDS IN THE NEW DEVELOPMENT AREA WITH THIS HIGHER BORROWING COSTS AND THAT IS WHY THE COMPANY HAS TO LEAN INTO ITS LOWER IN BRANDING TO CONTINUED TO DRIVE GROWTH. IT WAS DESCRIBED AS A HIGH BAR TO MEET AS SHARES WERE UP 20% THIS YEAR. PRETTY HIGH EXPECTATIONS GOING INTO THAT. CAROL: NOT DOING TOO SHABBIER TODAY. TIM: SOME WEAKNESS IN THE MIDDLE EAST. UPS. TATIANA: EXTENDING GAINS TO 5% AFTER ITS NUMBERS BEAT AND RAISED QUARTER AS THE COMPANY BENEFITING FROM PURGING HIGHER PRICES, NOT ONLY FOR FUEL BUT ALSO BECAUSE OF RESILIENT DEMAND. STRENGTH OF THE DOMESTIC SEGMENT WAS VOLUME DRIVEN, WHICH THE ANALYST IS A GOOD SIGN OF DEMAND, ESPECIALLY OF THE HOLIDAY SEASON. ANOTHER IMPORTANT UPDATE IS OF THE COMPANY APPEARS TO BE MOVING PAST ITS HEADWINDS WITH AMAZON, WHICH IS FORMERLY THE BIGGEST CUSTOMER. THAT EFFORT IS WRAPPING UP AND INVESTORS ARE LOOKING AT BRIGHTER DAYS AHEAD. CAROL: MORE VOLUME IS A POSITIVE SIGN, RIGHT? A LOT OF PACKAGES COMING TO MY DOOR RIGHT NOW. TIM: I THOUGHT IT WAS ABOUT EXPERIENCES. CAROL: IT IS. IT'S ALSO ABOUT THAT STUFF COMING IN. TATIANA, THINK YOU VERY MUCH. BLOOMBERG NEWS MARKETS LIFE STRATEGIST. FOR MORE CONVERSATIONS, CHECK OUT THE STOCK MOVERS PODCAST. BIG WINNERS AND LOSERS IN THE STOCK MARKET. FIND ON APPLE, SPOTIFY, OR ANYWHERE YOU GET YOUR PODCAST. TIM: COMING UP NEXT IF YOU'RE STICKING WITH US ON YOUTUBE, A BLOOMBERG ORIGINALS. WE ARE TALKING PRODUCTION MARKETS WITH SEAN PATRICK MALONEY, FORMER CONGRESSMAN. WE GET A CHECK OF REIT'S IN THE REAL ESTATE INDUSTRY WITH THE