Open Interest 11/3/2026

[00:00:00] Danny Berger: Three days of declines heading into Election Day. It's 30 minutes until the start of your cash equity trade. I'm Danny Berger and I'm Isabelle Lee. Bloomberg Open Interest starts right now. Election Day is here. Voters head to the polls to deliver their biggest verdict yet on President Trump's second term. Meanwhile on the geopolitical front oil swings and that's as Tehran again signals openness to talk despite U.S. strikes on Iran. And Wall Street is split on AI with money managers warning of a bubble while bank CEOs stay bullish. You are a bubble reporter Danny. Actually yesterday I googled your LinkedIn page and your stories. I was like who said we're in a bubble. Yeah. I want to be clear. I didn't do these most recent bubble interviews. They were in Hong Kong. So you can't blame me for these ones. I cannot blame you for this. But we have elections day. We have so many things going on. But we also have earnings. And you're looking at Apple. It's down by four percent. [00:00:57] Isabelle Lee: In pre-market lower after its first earnings report under CEO John Ternas. And it delivered a mixed outlook. The company sees stronger than expected holiday sales but warned that margins will come in below estimates. So Danny investors are just really being more selective when it comes to the big tech trade. The rewarding cloud growth but really questioning the enormous spend that we're seeing. It's true. And Apple has been one of these AI [00:01:18] Danny Berger: havens. Is it worth the premium that it's been assigned. We're going to talk about that with Craig Moffitt later in the show. On Palantir another company out with earnings yesterday. It signaled a slowdown in the growth investors have come to expect from its AI software results. It's renewing a debate over whether its premium valuation can hold if sales growth starts to cool. Just another example is a bell of high expectations for AI related earnings and not living up to those. Absolutely. And it's just getting higher and higher. And let's dig into the [00:01:48] Isabelle Lee: earnings of Bloomberg tech host Ed Ludlow. Ed let's start first with Apple because margins are becoming a bigger concern. Apple is warning about rising memory costs and also spending more on AI next year. How does that those two in your view continue to put pressure on the stock [00:02:02] Ed Ludlow: ahead. I mean Apple's pre-market decline is held from the moment in the call where they gave that guidance for the holiday quarter December quarter which is Apple's fiscal first quarter of 27. So the growth outlook is good 7 percent to 10 percent growth for fiscal one queue is above consensus at the low end. But when they got to margins that was the story. The expectation of 45 to 46 percent you can look at different ways consensus was 47 percent for that one queue. Or you can look at what's been happening sequentially margins of 47.9 percent in Q4 50 percent in Q3 those fiscal quarters. And what's interesting here is like there are two things happening. Memory pricing is clearly still an impact for Apple. Right. And they were very clear that the guide reflects that memory environment. But a lot of the sell side are also looking at their spending on getting Siri AI more competitive. And that spending on Siri AI is also a factor that is that is a weight on margins as well. So you know Danny mentioned the valuation question and the spending outlook for Apple. I thought that was really interesting. I mean the same for Apple this [00:03:10] Danny Berger: idea that it's been kind of a haven. It's been rallying. It can't be said for Palantir. Palantir is basically flat on the year. And yet it sinks again after giving a guidance that disappoints. How much was even baked into this company to begin with that it needed to beat in a big [00:03:25] Ed Ludlow: way in order to avoid this fate. So again you know the market is looking over a longer time horizon with Palantir. The guide on a full year basis or for this coming quarter was above consensus. But it demonstrates sequentially slowing growth. And on a year on year basis slowing growth as well. Right. And so the story for Palantir is that it is finding its growth in that U.S. commercial category blue chip American companies that are spending and is less reliant or there is a more even balance with the amount of money it is getting from the public sector the U.S. government and U.S. commercials. But what I found so interesting is go to the Bloomberg intelligence react. And if you look at the growth story if it is decelerating what I would argue is that there is evidence there that the frontier labs are taking some market share or they're having an impact in Palantir's market. Palantir from its data analytics tools right through to its work in AI. You know there was a lot of evidence that when corporates are willing to spend early in the cycle Palantir was a beneficiary. Now they face competition from a broader group of AI [00:04:30] Danny Berger: labs. Interesting. Thank you so much. That's Bloomberg text. Bloomberg tech kicking off in just under two hours time. Now another stock that we're watching this morning Disney falling just a third of one percent. Sources say the entertainment giant giant is planning thousands of job cuts asking some managers to target 20 percent in annual savings. CEO Josh DiMario aims to reinvest a portion of the savings into other divisions of the company. Joining us now is Geetha Raganathan Bloomberg intelligence media analyst. Another story of more restructuring at Disney. Geetha what difference do we expect this round to make. Yeah. Thanks so much Danny. So I think you know we've seen all [00:05:08] Speaker 4: these small targeted cuts coming from Disney ever since Josh DiMario took over as CEO in March of 2026. I think this one will be the broadest and the most sweeping. And really there are two things that I think he's trying to do here. So one is it's going to be the big deal. So I think it's going to be the big deal. It's going to be the big deal. It's going to be the big deal. It's going to be the big deal. It's going to be the big deal. It's going to be the big deal. It's going to be the big deal. It's going to be the big deal. So this you know all of these savings are obviously going to feed into that. I think investors are obviously looking for that double digit EPS story to keep continuing into the future. And then more importantly, as you just pointed out Danny is to take some of those savings from these job cuts and basically reinvest them in the growth parts of and by growth part of the business. I mean really the streaming business. This is this is an area where they need to invest heavily in order to grow margins as well as revenue sustainably. But Gita can Disney cut [00:06:03] Isabelle Lee: these this deeply without hurting the company's growth prospects because they wanted to move some of those money into TV and to your point also [00:06:10] Speaker 4: streaming and other technologies. I think they are. I think you know Josh tomorrow here is taking really a very long term view of the company. And if you really look at the look at you know the stock price is about over the past year or so it's been flattish. So really I mean the company has been performing well. But I would say or you know I would argue that maybe it's lost some of its magic along the way. And for that magic to come back they really kind of need to you know reenergize the narrative here. There are you know all the parts of the business are actually working. The studio seems to be back on track. We've had Toy Story kind of deliver outstanding results. You have Avengers Doomsday that's coming up. That's going to probably have a monstrous you know opening as well. Parks are actually holding up reasonably well. We've heard of you know Universal actually talking about a slowdown. We're not seeing that in Disney. So all of the different parts are working. But you know they do need something broader bigger to kind of reenergize that narrative. And I think this is going to do exactly that with Josh tomorrow. We're really looking to take some of these savings and kind of reinvest it and kind of fund that self growth of you know kind of narrative here. [00:07:18] Isabelle Lee: Lisa thank you for those insights. Geetha Raganathan of Bloomberg Intelligence. Turning to politics. The House and Senate are up for grabs in the midterm elections. Polls are open today. But tens of millions of early ballots have already been cast. President Trump offered his final remarks ahead of the polls opening. [00:07:32] Speaker 5: A good portion of them. We will win in a landslide. Now that doesn't happen because usually whoever the sitting president is Republican or Democrat good or bad good president. Great president. But for some reason the sitting president doesn't win the midterms. But we gave this a very strong shot. [00:07:57] Isabelle Lee: Joining us now is Bloomberg Washington correspondent Tyler Kendall. Tyler, today is the day. You have a long night ahead of you as well as Danny. How much of this in your view is a referendum on Donald Trump and a referendum on the Democratic Party's own direction. [00:08:13] Speaker 6: Well we know that top of mind for American voters is the economy and affordability. And a lot of them are linking it to the president's actions. Whether that be the conflict in Iran or the president's tariff policies especially in some of these midwestern states. Reliably red places like Kansas. Which our own analysts at Bloomberg economics say they saw the biggest shift in voter sentiment two months ahead of the election. It came from some of these reliably red states. Republicans at this point are definitely on the back foot. If you look at the map on your screen right now they are defending seats in all of these states except for one. And that's Michigan where we have retiring Senator Gary Peters. Now we got a whole flurry of polling yesterday including from The New York Times and Siena which shows that Democrats are leading in a lot of these battlegrounds. Though we should caution some of the results were one in the margin of error and we don't really know what's going to happen. Susan Collins for example in her race was behind by a few percentage points against her Democratic challenger. [00:09:09] Danny Berger: It was the same picture six years ago when she ran for reelection and now she has held this seat since 1996. For Wall Street though I can't help but to imagine the highest stakes part of this race is going to be happening on the local level with the different referendums on data centers. [00:09:22] Speaker 6: What are we watching in there. I don't think there has been a single issue that has bridged Americans partisan divide quite like opposition to data centers. There are a lot of these local referendums. In fact Ohio is the state that has the most on the ballot many of them dealing with bands and potential guardrails around what it means for these to go up in their community. So far across the country leading up to election day we've already seen a 300 construction moratoriums ultimately put in place. Now the race there. Senator share of former senator Sherrod Brown our viewers may know him as the former head of the Senate banking committee. This is one of those races that big tech is going to be watching very closely especially if he resumes that position on top of the Senate banking committee. The crypto pack putting a lot of money into that fair shake has poured 30 million dollars into that race against the former senator. Tyler thank you so much looking forward to all of your coverage throughout the day. [00:10:14] Danny Berger: That's Tyler Kendall and our special coverage will kick off starting at 7:00 p.m. New York time and also experience Bloomberg's coverage for free during the U.S. elections on Bloomberg.com and in the Bloomberg News app sign up now. You can use that QR code on your screen. Some of the other individual sectors and indexes this morning having kind of a better day. But Isabel this is what we had yesterday. We came into the morning with a big rally and a big rebound. Then you get this drip feed of news specifically about more companies tapping bond markets and you start to get tech turning. We had it again this morning meta offering a five part bond offering. For now the market is holding up. But in the shadow of elections there's this real AI and AI spending fear. [00:10:57] Isabelle Lee: You've made up you made a great point earlier that AI is really at the center of it all which is why data centers also. And it makes you think with all of this debt coming to the market will it change the way investors assess big tech and how we look at the balance sheets. And also can the debt market handle all of this debt we're seeing. I mean it's really phenomenal. I think surveillance earlier had a chart and the numbers are just staggering. [00:11:16] Danny Berger: I mean I can't help. I'm sure this is not actually the case but there could be this sweet irony if these data center moratoriums actually pass. And it's a good thing for markets because the market says it automatically means the brakes need to be pumped on some of the data center spendings because they're being required to because of the politics. We have some individual movers as well. Let's take a look at those with that is normal Linda. Hey Nora. Hey Danny. [00:11:38] Speaker 7: First up Pfizer raising its outlook for the year. That's after better than expected results from the company growth from newer medicines including cancer treatments helping offset another decline in COVID sales. You're seeing shares of Pfizer lower by about eight tenths of a percent. Next up Shopify plunging. That's despite results that were largely in line with expectations. The problem here is that investors were expecting more. The holiday quarter outlook wasn't strong enough to meet the bar that was already priced in to the stock. So shares of that company lower by 16 percent. And finally grab raising its revenue and profit forecast. After better than expected results from this quarter. The company also adding about three million monthly users giving it confidence that stronger ride hailing and demand for food delivery can actually offset regulatory pressure. Shares of the company higher by about 10 percent. Those are your morning movers. Danny. [00:12:28] Danny Berger: Nora thank you very much. And also right on cue the headline crossing meta raising 15 billion dollars in its U.S. bond offering. Coming up we're going to get more on tech. Apple specifically their holiday outlook and margin concerns. Craig Moffitt of Moffitt Nathanson is going to be joining us just on the other side of this break. You're watching Open Interest. [00:12:47] Isabelle Lee: Now to high interest. A look at what's making headlines around the world. President Trump says USA to Israel will end at the close of this year. Arguing the country no longer needs the roughly four billion dollars in annual support. Trump says Israel would still be able to purchase American weapons. And October was a brutal month for many of the world's biggest hedge funds. A bond market sell off renewed AI concern and Brazil's surprise election created widespread volatility hitting both credit and equity strategies. JP Morgan says there was seemingly quote nowhere to hide though some quantitative funds bucked the trend. And Apple forecasting stronger than expected holiday sales but rising costs are squeezing margins. Revenue rose 12 percent held by strong iPhone and Mac demand. Still higher memory costs. Siri AI spending weaker iPad wearables and China. Results doubled the outlook. Danny. [00:13:57] Danny Berger: Let's dig into this even more. Moffitt Nathanson founder partner partner and senior research analyst Craig Moffitt joins us now. He has a neutral rating on the stock with a $283 price tag target notably lower than even where it is in the pre-market. And Craig you've been writing about this this idea that Apple's valuation of a safety trade does yesterday's earnings show that indeed it has overshot. [00:14:20] Speaker 8: Yeah. Good morning Danny. It has overshot. And I think look the problem with being perceived as a safety stock like Apple has become is that it doesn't leave any room for complications. And I think what we saw last night in the forward guidance for the fourth quarter is there's at least a little hair on the stock now. And that's that's a different position than what we've been in where everything has been so clean. If if Apple weren't trading at going into last night's print at 36 times forward earnings there might have been a little room for forgiveness I suppose on on some of the challenges that they cited for the fourth quarter. But at 36 times it was priced for perfection. And that's the problem with safety is when the valuation gets too high it's not safe anymore. [00:15:13] Isabelle Lee: So without a meaningful reacceleration and earnings growth how then do you justify that value. And is that straight is that trade still working in your view. [00:15:21] Speaker 8: Well you're right. I think there's going to now be a more difficult narrative for them to support the valuation because there are a number of things that were. Look if it were just that memory prices are rising we knew that there's another hundred basis points that's going to have to come out of people's margin expectations in the fourth quarter. That's worse than expected. But if that's all it was I I think investors might have been able to get past that. I think the bigger issue and there were some supply constraints by the way that will will limit their ability to to keep growing iPhone sales in the fourth quarter. But I think the bigger issues are actually around service and the services business. You saw an eight and a half percent guide that gives you leaves you 3 percent below consensus for services growth rate. The services growth rate was below 10 percent for the first time in four years. And there are some real headwinds to services. Google search volumes are slowing down as we saw from Google's print a couple of weeks ago or a week and a half ago. And we're also seeing people moving outside of the Apple ecosystem to do payments. That was the outcome of the epic games trial. If you'll recall was limiting what Apple can charge if you go outside of Apple to do transactions. And so you're starting to see some of those pressures. And then longer term you have real pressures that are potentially much more profound about agentic commerce and and agentic interactions that potentially start to commoditize the Apple ecosystem and make it just a hardware platform again. Those kinds of concerns I think probably cap the valuation for the balance of this year and and and and potentially well into 2027. Well notably turn this is [00:17:25] Danny Berger: background is in hardware and not necessarily in services. And I just wonder given that Craig was the duo a dud. What do you make of its release. Some of the pushback concerns that some of the screens were cracking this this kind of feeling that maybe this wasn't the shock and all release that maybe Apple was hoping for. [00:17:45] Speaker 8: I'm not sure that's right. It's the duo is off to a great start with respect to demand. I think we knew going in that the problem was going to be supply rather than demand. You can't get one. So the wait times are out until well into January. That's not necessarily because there's such enormous demand. It's simply there's such limited supply. It's definitely a black eye that you've had this kind of crack gate of the cracking screens. I wouldn't make too much of that. I think that. But look at the the duo and foldables as a category are 10 years old now. Samsung's had them for a long time. There are some real innovations with the duo that make it a very good product I suppose. But it's not for everyone. And I think the bigger issue is just remember that if you're buying a duo you would be buying something else instead. In fact very possibly you'd be buying both an iPhone and an iPad instead. And so it's not going to be a step change for the growth rate of the business. It's simply it's a nice product and it has a nice halo around it. But it's not a big margin driver a big volume driver or or ultimately a real answer to the questions that that are facing the company around the future of the ecosystem. We have around 30 seconds here. [00:19:12] Isabelle Lee: But I want to ask you about China because that's still a key market. But revenue came in lower than expected. How concerned are you about [00:19:18] Speaker 8: Apple's competitive advantage in that nation. I don't think it's a matter of competitive advantage there. They've actually been gaining share in China. The issue is just the China market is very soft. Last year there were enormous subsidies from the Chinese government that created a really tough compare. And and now I think you've got volumes falling in China quite sharply across the entire spectrum of smartphones. Apple's doing better than its fair share I suppose. But it's it's a tough market. That's much more of a macro issue I think than a China specific micro problem for Apple. Great insights. Craig Moffitt of Moffitt Nathanson. Thank you for joining us. Coming up in the next hour [00:20:02] Isabelle Lee: Meredith Withney joins us to break down what's driving the broader market and where she sees the biggest risk. This is Boomer Golden Interest. Three days of losses little changed on your S&P in the future session with just few minutes to play for until your markets open. The [00:20:18] Danny Berger: Nasdaq outperforms. It has been taking a beating. It's also been falling for the past three sessions. The Nasdaq 100 now down more than 10% of its peak. 50% of members are down 20% or more from their peak. Ten-year yields move higher by a basis point as Brent crude is down by about nine tenths. Now some of the individual movers Isabel and I are looking at this morning. Meta another company tapping the bond market yet again looking to raise $15 billion through the U.S. dollar portion of its bond offering. It's planning to raise at least 20 billion in the U.S. and Europe to help fund its massive AI infrastructure build out. And AMD reports after the bell testing yet again another AI [00:21:07] Isabelle Lee: outlook. Investors want to see whether demand for its AI chips can keep accelerating as the market gets more and more selective about AI spending. [00:21:15] Danny Berger: And finally bloom energy also moving higher this morning up by seven and a third of a percent. A deal to win with California resources to develop lower carbon power projects across the state. That agreement could expand bloom's fuel cell technology as companies look for cleaner more reliable sources of electricity. Just four minutes to go until your opening bell. We're going to begin the trading day with Manu Life's Emily Roland. That's up next. This is open interest. All right. Let's get your trading day started to bellows until the election polls close for today. You're watching Bloomberg open interest on this election midterm day Tuesday. I'm Danny Berger alongside Isabel Lee. Not a whole lot of movement S&P futures. Both these markets declined for three consecutive days. It's been bruising for the Nasdaq. AI has been fueling the sell-off. It's now down the overall index 10% from its highs with more than 50% of its members, Isabel, falling into a correction more than 20%. It's been a really tough going for tech. And now we have the midterms and data centers to [00:22:30] Isabelle Lee: contend with. Absolutely tough. And Apple doesn't help because the stock is down by more than 3% and Danny. And that's after the first earnings under CEO John Turnus delivered a mixed outlook. The company sees stronger than expected holiday sales but warrant margins will come in below estimates. The CFO of Apple himself said that margin pressures will be a headwind. And this is something to watch, [00:22:48] Danny Berger: especially ahead of AMD. Yeah. And then we also had Palantir. Their outlook, they signaled a slowdown in the growth that investors have come to expect from this AI company. By the way, the stock is only up about a third of 1% this year. So this isn't an Apple that had a lot to prove. But even still, it's getting crushed by 6%. It's renewing the debate over whether its premium valuation can hold if sales growth starts to cool. Let's get into these markets further. Joining us now is Manulife, John Hancock, co-chief investment strategist Emily Rowland. Emily, let's start with what's happening in tech yesterday. It seemed like it would be a rebound. And then we quickly fade. And this is a Nasdaq, as I mentioned to Isabel, that's been getting punished. Are we something near a market bottom? Or is this just the start of a market [00:23:33] Speaker 9: pushback against these AI companies? Yeah, Danny, what we're seeing is investors are pushing back on this idea of massive capex spending plans. And you're seeing some of the biggest names in the index fail to meet earnings expectations. You know, Apple's certainly an example in terms of the margin pressure and the higher input costs there. But we've seen a really hot and cold earnings season. You've had sectors like energy, tech, financials, industrials see huge beats. And frankly, 30% earnings growth with an 81% beat rate is pretty great. And meanwhile, you've got these big names in comm services and consumer discretionary really struggling here. In some parts of the market, you're seeing beats that just aren't getting rewarded. So even if you got the earnings picture right, you got the stock picture wrong. So a lot of challenges here. Certainly a lot of questioning around this, you know, equity issuance that could top something like $1.3 trillion over the next 12 months. There's a lot of skepticism about how well that's going to be received. I'm glad you mentioned that because we're seeing big tech use massive [00:24:40] Isabelle Lee: investment programs largely to cash flow. But we're now seeing these companies increasingly tap the debt markets. I mean, Danny just talked about Meta earlier. How significant of a shift is that? And what does it tell you about the huge scale of the AI build out? [00:24:52] Speaker 9: Yeah, it's notable. If you look at hyperscaler issuance, it's totaling about $270 billion right now. But that is in the context of a $12 trillion investment grade bond market. So it's about 2%. It is big. It is a problem if it gets bigger. But frankly, it's a lot easier to be diversified on the bond side than it is if you look at the AI trade on the equity side, where every index on the planet has basically become a giant AI index. You look at value outperforming growth by 25% this year. A lot of that is the fact that you've got 20% of the Russell 1000 value in tech emerging market equities being driven by just three stocks in semi and memory names there. So it's a challenge to own things that aren't AI. I think that's probably the biggest challenge for asset allocators right now on the equity side. Little bit easier to be diversified on the fixed income [00:25:49] Danny Berger: side. But the fixed income side keeps getting more of these bond offerings as we've been discussing here, Emily, and I wonder what you make of that. The fact that spreads are widening spreads for these tech players versus other IG bonds are the most elevated since 2003. This is something Lisa pointed out on surveillance this morning. Does it surprise you that we continue to have them tap bond markets? Are they just completely hyperscalers price insensitive at this moment? It does feel that way. And it is being absorbed. We are, to your point, though, [00:26:19] Speaker 9: seeing some spread widening. If you look at the broader high yield bond market, we're right around 340 basis points over Treasuries. But when you go down further in the risk spectrum, triple C's are really important to watch right now. We're looking at an 11% spread over Treasuries right now. A lot of that is software names. So we are seeing, you know, you know, fixed income markets sort of push back a little bit. And but what it's doing is it's tightening financial conditions. And that helps in terms of the Fed. So we have seen the bond market take a hike out. We're now looking at one in December and then one in April. March or April of next year. So as financial conditions are tightening a bit in AI, you're seeing that translate into the Fed's reaction function potentially from here, which is something that markets, I think, are a little bit sort of satiated by right now. It does make you think, Emily, whether bondholders are comfortable lending to these companies on the hopes that the AI infrastructure will be enough to pay out everything. But do you think that this will start to crowd out corporate borrowers or do you think this will push upwards borrowing costs? Yeah, I mean, we could see some modest sort of backup in bond yields here. But we really are watching other things as being more important drivers in terms of bond yields. So one is around inflation expectations. It's been very, very modest. We look at things like tips, break evens. They started the year at 225. We're at 234 right now. In terms of the deficit, you know, that's another sort of element that people are saying. It's been very, very modest. We look at things like tips, break evens. They started the year at 225. We're at 234 right now. In terms of the deficit, that's another sort of element that people are saying is causing this backup in bond yields to increase. We're not really seeing that because if we were, the term premium would have gone up. So the yield curve would have steepened meaningfully, and we're actually seeing flattening over the course of the year. So really, most of the backup in yields has been around growth expectations, and that's being reflected in the short end rising here. We think that we've seen a fiscal sugar rush in the United States over the course of this year, primarily through the one big, beautiful bill that's incentivized all this capex spending. We've seen tax refunds elevated, more defense spending. We actually see that sugar rush fading into 2027. Those that have children know when you give them sugar, there tends to be a hangover associated with that. So we actually see growth slowing as we head into 2027 as that sugar rush fades, and we think that can help bring bond yields lower, in addition to the fact that we're seeing disinflation out of the all-important shelter component of inflation. So we do see all of those factors being overriding and actually having the ability to bring yields down into next year. [00:29:00] Danny Berger: Emily, before we let you go, can we do some scenario analysis? What are you expecting from the results of today? Whether Dems just take one chamber or both chambers, is there anywhere that you would expect for there to be an outsized market impact? [00:29:13] Speaker 9: Danny, I can't believe it took us five minutes to talk about them. I'm so happy about that. We got to talk about earnings and macro things. That was great. No, but in all seriousness, we do look at the election as being, you know, a potential clearing event. We look back, you know, all the way to 1950, and we found that in every midterm election year, the 12 months later, stocks were higher 100% of the time. And the average annual return is about 15%. So that's something that's worth looking at. You know, unless there's a very severe outcome either way, in terms of a Republican sweep, which is unlikely, or a Democratic sweep, which gives them filibuster capabilities, which is also unlikely. It's probably that nothing gets done. Investors like that. They like the certainty of the election being over, and they like the idea of not much getting done in Washington. So that's our base case right now. Really not a big event for markets, in our view. [00:30:10] Danny Berger: Yeah, I was going to say, I was just hoping to give both you and our viewers a little bit of relief, because I know that's all today will be about. Emily, thank you so much for joining us. We appreciate your time. Emily Roland from Manulife, John Hancock. All right, let's get a check on your equity markets right now, because we are higher. We're moving higher by about a third of 1% this morning. Can we snap three consecutive days of losses that in each scenario has been tech that's been dragging us down? NVIDIA, that's turning around this morning, up 3.3%, but only 165 stocks are up. So we're up on poor breath, but it is the big names that are higher. AMD will be reporting earnings later. That's up 4.7% to the downside. Apple keeps getting beat up after their earnings, which showed that margins were getting worse, more spending to try to get Siri to keep up with AI competition. Palantir also disappointing on the growth of their AI services. Looking at some of the individual sectors this morning, Infotech is doing well, which is really why the overall market is doing well, too. Consumer Staples having a really rough go of it. I'm pleased to say we're going to have Meredith Whitney in the next hour, and we'll get in to the consumer. That's down 1.1%. Again, for a market, Isabel, that's up a third of a percent. So far, about 10 minutes into your trading day. [00:31:20] Isabelle Lee: And Dani, Emily and all the other guests you've had have always said that the clearing event will be at the midterms, but then HSBC actually just released a note saying that to them, it's really still AI and renewed escalation in the Middle East. So I guess there's really a lot more to say on whether it will be a clearing event, and I guess we'll find out later when you're on the program at 7 p.m. [00:31:37] Danny Berger: Hopefully we'll actually have results. This is the thing, right? Like, can it be a clearing event if we don't know the congressional makeup for a few days to come? [00:31:44] Isabelle Lee: Yeah, that's fair. More to come on the show. Oil swinging on reports of further diplomacy in the U.S.-Iran conflict. We'll discuss that and more next. This is Bloomberg Open Interest. [00:32:07] Danny Berger: Time now for some top calls. Let's get into it with Nora Melinda with some of the analysts' action. Hey, Nora. [00:32:12] Speaker 7: Hey, Dani. First up, Rosenblatt downgrading Roku to neutral from buy. That says the Fox deal looks closer to completion. The firm says that Roku is already trading very close to the value of the takeover, leaving limited upside from here. Shares, though, they are still higher in trading today. Next up, Barclays upgrading Bloom Energy to overweight from equal weight and saying that demand is ramping even faster than anticipated. The firm pointing to more customer deposits and new supply commitments, saying that demand is getting, quote, harder to ignore. And finally, J.P. Morgan upgrading Cloudflare to overweight from neutral after the stock's 20% pullback over the past month. The firm thinks the sell-off has made the valuation more attractive and sees revenue growth accelerating from here. Those are your top calls. Isabel. [00:32:56] Isabelle Lee: Nora, thank you so much for those. Turning to the Middle East, oil swinging as conflicting headlines on the U.S.-Iran conflict keep traders on edge. Brent trading around $103 a barrel, a science of a new diplomacy fuel hopes of a potential deal. Joining us now is Charles Gaurav and Bloomberg reporter covering oil and shipping. Charles, how is the market pricing in oil? Do they still think it's a short-lived outcome, or are they starting to price in really a risk premium when it comes to the oil price? [00:33:26] Speaker 10: Yeah, thanks for having me today. I just got up from my desk where I was watching prices pretty much somersaulting. So I think it's sort of hard to say exactly where we stand. For some background on where we are, yesterday we saw prices plunge on renewed signs of potential diplomacy. There was a message from Iran's president signaling that the supreme leader had potentially allowed for some more leeway in talks over a resolution to the conflict. But then this morning we had once again started to edge higher and recover some of those losses and turn them a bit more into some gains, still down a bit. But now it seems as though we are juggling on the one hand reports that are signaling more of a bullish trajectory. This morning there were reports that U.S. strikes on Iran, and now we're also seeing a bunch of conflicting headlines and unconfirmed reports on the status of diplomacy. So I think the upshot is that it would be very challenging to be trading this environment right now with so much uncertainty, really clouding the outlook. And that makes it hard to give me to give a great answer to your question right now. [00:34:34] Danny Berger: That's what I wanted to get into, Charles, because we did see on X Iran's security chief commenting, saying that the U.S. needs to act on seven different conditions for Hamus to reopen. This is the thing every time we get any positive news, as we did yesterday, that we could expect diplomacy to reign supreme. Trump mouths the words no when a reporter asks him if they're going to strike on Iran post-midterms, that the Iranian supreme leader has essentially given his government the ability to negotiate with the United States. What do you make, then, of the huge drop we saw yesterday and continued drop in oil prices today, if this continues to be the back-and-forth ping-pong of good news followed by skepticism? [00:35:16] Speaker 10: Yeah, it really does feel like we have been here so many times now, and it's very difficult to know what to make exactly of the status of those negotiations. So much unclear signaling, and it's going to probably take a little bit of time before we have a bit more clarity on where the negotiations stand. I think one thing that we can look at with a bit more certainty right now is that there are flows continuing to flow through the Vital Strait of Hormuz, and as a result of that, we are seeing some easing in the market for real-world barrels, so barrels that you would be getting today versus what we're trading in the speculative futures markets, and that is a sign that there is some easing underway at the same time that we continue to see Persian Gulf producers getting more barrels out, even as Iran has continued to have its exports stymied by the U.S. blockade. [00:36:08] Isabelle Lee: And when you look at global oil supply, how vulnerable are they right now? [00:36:13] Speaker 10: Well, it's a fragile environment, given that we have seen governments pretty much using their emergency supplies throughout the course of this conflict. But at the same time, there has been a fragile, if patchwork, fragile, if delicate patchwork of flows that have been able to continue to resiliently get through Hormuz, as we've seen tankers turning their transponders off in a shuttle trade that has enabled these, you know, exporters to continue to get their oil on the market, on the market. But at the same time, the real challenge is that traders continue to worry that at any given moment, there could be a change to the conflict that could really make that trade impossible. It's a fragile trade that could be disrupted if, say, there were strikes that escalated and made those cargos harder to get onto the global market. [00:37:06] Danny Berger: Hey, Charles, thank you so much for joining us. That is Bloomberg's Charles Gourvan, as oil takes another leg lower this morning, down by 1%. Coming up, some of the world's largest asset managers are sounding risks about the AI boom. We're going to hear from them next. This is Open Interest. [00:37:32] Speaker 11: I can't tell you that it'll go without bumps in the coming years, but I can say when you step back and you look kind of 5, 10 years from now, I'm very excited. [00:37:43] Speaker 12: We are living, in my mind, the greatest technological advances I've seen in my lifetime. And it takes a long time for that to come into businesses. [00:37:53] Speaker 11: Right now, if you look at demand and you look at supply, it's hard to call it a bubble at this point. You could try to be half a step behind if you want, either as the on the demand side and supply side. You can't be two phases behind. Yes, there has been $500 billion of AI financing, but that's not what's driving the level of rates. [00:38:14] Speaker 13: I know there's lots of doom and gloom around, but I think there's lots of tactical trades around. [00:38:20] Danny Berger: Some of the biggest names in global finance, speaking in Hong Kong, divided over the risks of the AI boom. Joining us now is Bloomberg Finance Editor, Catherine Chaglinski. Kat, we have the banking CEO saying, of course, this isn't a bubble, and maybe that's quite self-serving for them to say that, considering how involved they are in this trade, and then Manny Roman, among others, saying maybe this has gone too far. Where are kind of the dividing lines on Wall Street right now? [00:38:42] Speaker 13: Yeah, and I think those dividing lines are getting a little more stark these days, because I do agree, like, the banks are benefiting a lot from this AI boom. They're financing stuff. They're working on structuring deals that are getting done. So I think they're, you know, the sentiment on a lot of Wall Street is that the AI infrastructure boom is here to stay. But I do think there's a lot of questions about how durable it is. And, you know, like, you listen to David Solomon, he said, you know, there's going to be bumps in the road. And I think we're starting to see a little bit of those bumps come through. [00:39:12] Isabelle Lee: So how is Wall Street positioning itself when it comes to AI? Are they starting to look at it less of a growth and more as a political and economic risk, perhaps, ahead of the midterms? [00:39:20] Speaker 13: Well, I think they are very focused on that political and economic risk, because you really can't do a data center in America these days without sort of questioning how do voters think about it, how do communities think about it. It is a hot topic. And so I think Wall Street does take that into consideration. Like, you don't want to exactly fund a bunch of data centers in an area that, you know, is going to fight back tooth and nail against these projects. So I think that factors a lot into sort of Wall Street's considerations of these deals. But I do think that the sentiment among a lot of Wall Street leaders is that there's still capital. It just might come from, like, different areas. I think, you know, it's a great point. [00:39:56] Danny Berger: And the AI build-out story feels like it's as much about the technology as it is a capital market story. I mean, just in the past few days, medical, Oracle, all of them in a big way tapping bond markets. [00:40:06] Speaker 13: Bond markets and equity markets, which I think is so fun. It's like you're really seeing them have to say, OK, we need to go beyond the sort of initial pools of capital that we're tapping and look even further. So we had Oracle, $10 billion in bonds, $9 billion in equity. I will note, so the equity was at about an 11% distance. And I think that does speak to this idea that you want to raise capital, but the market's not always going to be so easy about it. Like, you know, people are concerned about sort of the AI trades, about who's at risk here. And I think we're seeing that sometimes in these deals being priced. [00:40:39] Isabelle Lee: When you talk to the sources in your team and your team members, how much are they risking the risk of a change in congressional structure and how that will affect a lot of the regulation, especially when it comes to AI? [00:40:50] Speaker 13: Well, I think it's they definitely have a sharp focus on it. You know, especially these days, so much is tied up in sort of how Congress is going to react. I mean, like you think about Wall Street's year. They, you know, they got passed with the Clarity Act sort of not going through. And I think many of them expressed concerns about sort of certain aspects of the Clarity Act. So I do think going forward, it's going to be all eyes on sort of who wins the House, who wins the Senate, and how that might factor into sort of regulations and how much time these regulations might take. You know, I think if we do see a change in control, that could factor in a lot. [00:41:24] Danny Berger: I was just looking at Apollo had earnings up this morning and basically their new loans were at a record. And that's not surprising considering how much they're lending to the AI data center build-out. I just wonder, you know, beyond classic Wall Street banks, but into also the alternative asset managers, just how much is wrapped up on this kind of singular theme? [00:41:42] Speaker 13: Well, a lot. And, you know, I think it's tricky for these firms because there's a lot of concentration risk in this sector, right? Like, you want to go after the chip makers, but there's only kind of a few really solid chip makers out there. You want to go after some of the big data center developers, the hyperscalers, but there's kind of a limited amount of pocket. So I do think, you know, a lot of these companies, Apollo, any of the private credit firms, they're benefiting, and they probably will still benefit. But it'll be interesting to see, you know, how selective they become with certain names and certain pockets of the industry. [00:42:15] Danny Berger: Catherine, thank you so much for joining us. Catherine Chiglinski, Apollo, I should know, as you see it there, is down 3.5%. Yes, lending was very robust, but net income swung to a loss because of higher rates. We're going to continue the conversation, this one specifically on Bloomberg deals. I'm going to be speaking to I-Squared Capital founder Sadiq Waba at noon for an election day special. Deals will be today on Tuesday, not its usual Wednesday scheduled time. A quick check on markets as we head to the end of the hour. We are pushing higher by a third of a percent. The Nasdaq up half a percent, bouncing back after three consecutive days of losses, even with 10-year yields moving higher. Coming up in the next hour, Meredith Whitney on the state of the consumer and how she sees midterms impacting markets. Plus, Gary Gensler discusses how the election will change how Washington regulates the financial sector. All that coming up in hour two. It is 30 minutes into the trading day following Apple earnings ahead of elections. Welcome to Bloomberg Open Interest. I'm Danny Berger alongside Isabel Lee. Matt Miller still off. And it is a market that has found something of a footing. We'll see if it sticks. It certainly didn't yesterday. Three consecutive days of losses is today the turnaround with the Nasdaq now down 10% from its high. We'll see if this makes a difference crossing in just a few moments' time. We are now getting economic data, jolts, factory orders, and durable prices. Let's break all of it down. Joining us is Michael McKee, Bloomberg's International Economics and Policy Correspondent. Mike, what do you see in? [00:43:56] Speaker 14: Well, what we're seeing here is a rise in job openings that is fairly significant. This is September data, though. 7,523,000 openings counted by the Labor Department compared with 7,079,000 in the month of August. The job openings rate, 4.5%, up from 4.3%. The quits rate, which everybody follows, 2.1%. That is up from 1.9%. So that's supposed to be a suggestion that people are feeling better about their opportunities to get another job. And we did see in the consumer confidence numbers last week that people were feeling better about the labor market. So things seem to be getting a little better on the labor front, although I caution again, this is September data. It's two months old, but it is somewhat encouraging for the Fed in terms of whether they have to worry about the labor market or not. Factory orders are out up 1.8% after a three-tenths rise last month, which, this is also September data. And this is telling you that things are a little bit better on the factory and manufacturing front, durable goods orders 1.9% up from 1.8%. Now, the thing about factory orders is they do represent a revision to durable goods, but basically they add in non-durable goods as well. So we saw a rise in non-durable goods, I don't have the exact figure in front of me, but to make up that 1.8% rise overall. So good news on that front as well. Although, again, these are both September numbers, so they're not going to make a whole lot of difference in what the Fed does coming up in December. [00:45:35] Isabelle Lee: Mike, when you look at the health of the U.S. economy towards the year-end, how are you assessing it? Do you think that it's healthy and the spending is going to be resilient to offset enough the weakness, or do you think that we're starting to see crap? [00:45:46] Speaker 14: That's two different questions. The economy is pretty healthy right now. We don't seem to have any problems in the labor market. Unemployment remains low. There are a lot of job openings. The AI job apocalypse is not yet upon us, and AI productivity is not yet upon us. The issue is really inflation and how people feel about that and what they might do about that, and the fact that, and we'll see more on Friday with the jobs report, hourly earnings, the fact that people's paychecks are not keeping up with inflation. So do they pull back? And then on the business spending side, have companies spent about what they're going to spend for the rest of the year in terms of loading up on AI stuff? We have to watch the data for those pieces of information. [00:46:29] Danny Berger: Mike, thank you so much. Looking forward to breaking down all the jobs data as it comes this week. That is Bloomberg's Michael McKeon. Of course, we will get payrolls on Friday. Joining us now is Meredith Whitney, CEO of Meredith Whitney Advisory Group. Meredith, great to see you. And look, this is something that you and I have talked about for most of this year. For months, you've basically been ringing the alarm bells. There's a consumer squeeze, and it's especially important heading into the midterms. You've been saying that this would be costing Republicans the Senate. Here we are heading into voting, the last of voting to happen tonight. Do you still believe that? Is the Senate in play just by pure fact of where the consumer is? [00:47:07] Speaker 15: I believe so. There's not a doubt. This is a referendum on affordability and the economy. And to take a page out of Mike McKee's playbook, one thing that's really interesting. So the BLS data on incomes came out last week, last Thursday. And what it said, and this is the White House talk track, specifically Kevin Hassett, is that all economic brackets had an increase in income levels. But what it doesn't say, and if you look under the hood, is that the bottom 20 percent of consumers, I think the bottom 50 percent of households are really squeezed. But specifically with the BLS data, the bottom 20 percent of consumers got really impacted far into 2025, fiscal 2025, by the one big, beautiful bill, which cut off one in four recipients of SNAP. That's food stamps. And that amounts to 24 percent of their income. So when you look at are you better off than you were two years ago, the resounding answer is no. And particularly for the bottom 20 percent of the of the of households. But I say for 50 percent of households, they're absolutely worse off. And I think that's going to be a massive referendum today. And I expect a big, you know, as many people do, blue tsunami. [00:48:39] Isabelle Lee: Inflation has cooled from its peak, but affordability is still really a huge issue. Is this much less about inflation and more about how Americans are living and surviving day to day and about the higher cost of living all throughout the nation? [00:48:51] Speaker 15: I believe so. I think from an inflation standpoint, what you see happening is people making choices. So the bottom 50 percent are making choices between filling up part of their tank with gas and groceries. And if you look at the spending on groceries, it's been flat to negative since the beginning of the year. So that's been I mean, that is a very sad state of affairs for the economy. The higher end is absorbing the higher cost of inflation and that I see that in weekly credit card data. So the credit card balances, which are not indicative of revolving balances just on suspending. Inflation looks like it's it's it's past its peak, but it from a food and gas perspective, it really hits hard on the lower end. So I think the affordability is about all of those things. [00:49:46] Danny Berger: But on a headline data level, the data doesn't necessarily show that we get jolts like we did just moments ago, as Mike was telling us. Yes, it is for September. But it would suggest given the quits rate and job openings that this is still a labor market where workers are needed, where the job apocalypse over A.I. isn't happening. And then it means that this is a market that's pricing in Fed cut 77 percent odds hikes rather that they hike in December. Treasuries are selling off again. Meredith, what happens just given your view of the consumer and where it is really weak. What happens when we continue to get hikes? What happens to the lower part of the K? What happens to the consumers that are [00:50:24] Speaker 15: feeling the crunch already? Well, to the extent of the job market, that means people are paying their bills. So credit quality is pristine. And as long as people have jobs, they'll pay their bills. I think higher rates are less impactful on the lower end. And here's why. Because the lower end aren't borrowing. They don't have access to traditional credit. And so the rates that they're paying are already extremely high. I'll give you an example. So when when consumers are not living paycheck to paycheck, but payday to payday through daily wage access products, they're paying a fee for that product. If you annualize that fee, the average fee, it works out to over 160 percent APR. A rise in rates is not going to move the needle that much. I mean, that's already a prohibitively expensive product for consumers. So I've always said, it's very expensive to be poor. And so the rise in rates isn't really going to impact. What it will impact is housing and rocket that reported last week, the largest originator of both mortgages and home equity products, had a very dismal outlook for the housing market for next year. Now, the housing market this year is already the slowest existing sales market on record. And we're looking at another year for that. So I think you see a stagnant housing market. And that's that's definitely [00:52:00] Isabelle Lee: impacted by higher rates. This weren't the thick of the midterms. Do you think that a change in Congress could actually lead to a meaningful change in affordability measures. [00:52:09] Speaker 15: It's unlikely. Right. So that you think there's very little they can do on food and there's very little they can do on on gas. So like your your former guest said from Bloomberg. Inventories are extremely low. So while the forward curve is lower for for for for oil next year. I think the closer we get to next year it'll move higher because because you've got to restock. And I think you'll you'll probably see hoarding. So I expect gas prices to remain constant. And I don't think there's much you can do on on food prices. So I'm not sure that Congress can do much on affordability. [00:52:50] Danny Berger: All right. Meredith you're going to stick with us much more to discuss. That's Meredith Whitney. And for more on the health of the economy you can check out our latest big take featuring an alternative view on inflation based on millions of data points compiled by the Bloomberg economics team and really doing a fantastic job of putting that together. Highly recommend everyone read that one. Let's get a check on your markets about 40 minutes into your trading day. We are higher by three quarters of a percent for the Nasdaq. But Isabel it is a big bounce back again. Fifty three percent or thereabouts of members of the Nasdaq 100 are in a bear market are down 20 percent. The market is full force [00:53:26] Isabelle Lee: pushing back against what it sees as A.I. concerns. A.I. concerns and the clearing event that everyone's been saying with the midterm is. I don't think that even a clean result in the midterms will help dig out the Nasdaq 100 from its correction territory. Help Apple with its disappointing sales or even Palantir. It's really A.I. and maybe midterm elections. It's a confluence of reasons then. It's really not just one. I think it's such a good [00:53:47] Danny Berger: point because in order for the midterms to be a clearing event it needs to be the reason things have been selling off. And I'm not quite sure they are. Let's get some of the individual movers by the way. With that is Norma Melinda. Hey Nora. Hey guys. [00:53:58] Speaker 7: First off Disney planning thousands of layoffs with managers asked to find 20 percent in annual cost savings. Sources telling Bloomberg the CEO plans to reinvest some of those savings back into the business including film and TV programming. You see shares of Disney are lower by about three tenths of a percent. Next up on Sammy delivering a better than expected sales forecast and striking another deal. The chip maker agreeing to buy Ferrick a voltage regulator tech company for six hundred million dollars in cash. Shares of on Sammy are higher by about two point six percent. And finally shares of Palantir. They're falling. That's despite another blowout quarter with U.S. commercial revenue growing one hundred and forty nine percent from a year ago. The results were overshadowed though by an outlook that points to a potential slowdown in sales growth. Shares of that company down by about four point eight percent. Those are your morning movers. Isabel. Thank you so much [00:54:49] Isabelle Lee: Nora for those. Coming up Apple delivers a mixed outlook to investors in its first quarterly report under CEO John Ternus. That's next and more. This is Bloomberg Open Interest. Now to high interest. A look at what's making headlines around the world. New York has reported its first measles death in 30 years. That's after a child died amid a growing outbreak. The state has recorded over 170 cases while almost 5,000 infections have been reported nationwide this year. And Apollo shares are falling after a mixed quarter overshadowed record lending. The firm originated a hundred and a hundred and seventy billion dollars. But investors focus on an earnings miss higher funding costs and a weaker than expected retirement services. And Apple forecasting stronger than expected holiday sales. But rising costs are squeezing margins. Revenue rose twelve percent held by strong iPhone and Mac demand. Still higher memory costs. Siri A.I. spending weaker iPad wearables in China results clouded the outlook. [00:56:00] Danny Berger: That's right. Let's discuss further with Bloomberg intelligence senior analyst on our own. On our own. The market is voted. What has been your take on what we got from Apple yesterday. [00:56:11] Speaker 16: You know I think the big one is the margins and the impact from higher memory costs because to be honest we were looking for this kind of a decline in margins almost for six months. But you know you have to give good marks to them for good execution. So far. But you know there comes a time when even they can't hold back all these rising input costs. So we're going to see that in product gross margins over the next not just next quarter. [00:56:33] Isabelle Lee: But we think that's going to continue throughout the next 12 months. We had a guest earlier Craig Moffitt of Moffitt Nathanson and he said that Apple is increasingly seen as this A.I. safety trade to you. Do you think that this defensive premium is becoming a little bit more expensive. [00:56:46] Speaker 16: Anurag. See it's a that's it that depends on how nervous market gets for the trade. But frankly speaking when you look at Apple's valuation piece of the other companies like Microsoft and Amazon and Google and even Nvidia. I mean it is quite you know you could say steep compared to them. But the question is you know why is that the case. I think you are absolutely right. It is for a lot of people who are afraid of A.I. investments are going into Apple as a safety trade. So it's not driven by its own fundamentals. But you could say you know the overall market [00:57:16] Danny Berger: market. You know it's going to be very good. You know it's going to be very good conditions. This is also John Ternas's first debut one of his first debut on the earnings call. How do we rate him and how he performed. Now excellent. I mean I did a very good job of [00:57:27] Speaker 16: explaining to people where his focus is going to be product and product development design. He talked a lot about duo the one area I want to figure out a little bit more or do a little more research on is their services business because I think for the first time I'm seeing them you know consistently in the high single digit growth rate that has not been the case for many years. And you know that's an area because that is a very high margin business. You know it is in the 70s and it is one of the bigger profit drivers for Apple. But at the same time they gave very good guidance for the December quarter. I was not looking at you know them growing between 7 to 10 percent in this quarter. And a lot of that would depend on supply. And I think a lot of that has to do with the duo. [00:58:10] Danny Berger: Hey Anurag thank you so much for joining us Bloomberg intelligence senior analyst Anurag Rana. And let's bring it back in Meredith Whitney CEO of Meredith Whitney advisory group. We're working through this earning season Meredith. And so far it's been strong maybe a slight deceleration but from something that was incredibly strong. And we've seen really big reactions one day reactions from some of these stocks. Is this a case where this is a concerning deceleration or is 3Q just a victim of the success of the first and second quarter so far this year. Well I think that investors are looking at you know is this [00:58:44] Speaker 15: sustainable and are these peak earnings. So you know are the past nine months peak earnings and what what's going what's going on going forward. That's certainly the case for financials. I mean if you look at the barn burner earnings I mean it seems like so long ago it was you know last month when the when the banks reported they sold off dramatically because it was the sustainability of earnings. And and I think that's the case for a lot of these stocks. I mean if you look at the concentration of winners and the massive amount of losers this year you know most of the names that I look at look at are barely up and some are down you know as much as 20 30 percent. So it hasn't been a market with great breadth. And you have seen incredibly volatile swings. But that said the swings I mean Apple's not down that much today. And you know met is up. So you I think people want to own like a very concentrated group of names and they're waiting on others. So investors are now really punishing whenever they don't [00:59:53] Isabelle Lee: see the cloud growth that they want or any kind of growth that they want. Do you think markets need to see returns now or do you think it's just really the bigger investment plans in the future that they want to see and the returns down the line. It depends on you know who's [01:00:06] Speaker 15: investing. If you look at the amount of retail investing it's gone up dramatically and those are going to be more of a trader meant mentality. So I don't think you see you know on positioning you see you know big market moves when you see big de leveraging. Those are institutional investors. But on the on the volatility with specific names I think that's a lot of retail trading. Is there something more Meredith also to another story that's really been [01:00:36] Danny Berger: continuing for the past few quarters. And that is layoffs. Disney looking at more for themselves. Microsoft offering buyouts. There's a story out right now about you know we're trying to unlock more cost savings with productivity. What is going on right now. Is this again just an extension from what we've seen or is this idea that you need to rein in cost picking up in a big way that ultimately again back to the economy [01:00:59] Speaker 15: impact the labor market. Well if you look at Disney stock price I feel like a Disney stock price has been 112 for the last four or five years. Right. It's gone nowhere. So they've really got to do something. And cost cutting is one thing they can do. And so I think that some companies have been remiss about laying off. Microsoft is not one of them. The first wave occurred you know a few years ago when companies required people to come back to work set amount of days a week. And that was a that was a vote on attrition another way to lay people off inexpensively. But the layoffs should be increasing. The good thing is you know they're you know a lot of job opening so people can can find jobs. But I think that probably the most the scariest thing that I saw and this isn't new data but Amazon saying that they were going to have 300,000 fewer jobs over several years at largely in their warehouses like you've got a lot of big layoffs coming just because of robotization not necessarily A.I. So I think that it's the job issue at the job environment is going to be one really worth a lot of paying a lot of attention. I don't know when it happens but it will happen. Right. That's when we talk about the consumer [01:02:24] Isabelle Lee: spending and the resilience of it. Estee Lauder just reported earnings and they also cited the resilience of consumer spending. How much do you [01:02:30] Speaker 15: think. How. What percentage of that do you think is financed by credit. Oh I think very little is financed by credit. Because if you look at credit card balance growth for until this year it was negative. And that's largely because banks like Capital One were squeezing out their less than prime customers. And so you've seen a big even a synchrony squeezing out a lower end customers. So so credit card balances have only risen. I believe because of higher ticket prices not because of the frequency of spending. And so if you look at spending data. The last spending data we we got will get October spending data next week. But the last spending data we we got was September's. You see less foot traffic. And the only increase in spending is higher ticket prices. So I wonder if Estee Lauder higher sales are because they've increased pricing and it hasn't been a volume driven issue. So you have people making choices about what they're spending. Now of course the high end seems impervious to any type of inflation shock or gas price shock or food price shock. They're still spending. But everybody else is making choices. Meredith you've been so excellent on this. Thank you so much for joining us. Meredith [01:03:56] Danny Berger: Whitney. Still ahead. We're going to discuss what the midterms could mean for U.S. foreign policy from Iran to China. Leslie Benjamiri of the Chicago Council on Global Affairs will be joining us. This is open interest. Nearly an hour into your trading day stocks holding on to gains attempting to snap three consecutive days of losses. The Nasdaq outperforms as it has been underperforming. It is up three quarters of a percent after falling more than 10 percent from its October 6 high. We had jolts data that showed job openings plentiful. The quits rate also moved up suggesting some comfort with this labor market. That's pushed tenure yields up by about four basis points even as Brent crude comes in by about seven tenths of one percent. Coming up we're going to take a deep dive into some of the key races to follow in today's election. This is open interest. [01:05:05] Speaker 5: A good portion of them we will win in a landslide. Now that doesn't happen because usually whoever the sitting president is Republican or Democrat. Good or bad. Good president. Great president. But for some reason the sitting president doesn't win the midterms. But we gave this a very strong shot. President Trump speaking last night almost already [01:05:27] Danny Berger: excusing a possible loss. His last address before Election Day. The House and the Senate are up for grabs in what may be many tightly contested races. And we have team coverage across the country. Washington correspondent Tyler Kendall is here with us in New York. Romaine Bostick in Michigan and Julie Fine is in Texas. Tyler let's start with you. What are expectations like heading into tonight. [01:05:54] Speaker 6: Well we have to keep in mind this is all going to come down to the margins Danny. Democrats only need a net gain of three seats to retake the Senate which will be more of an uphill battle if you will. But if you look at the battleground map when it comes to the Senate races. Republicans are defending in seven out of eight of them. The only one currently held by a Democrat is in Michigan where Romaine is. And we're seeing all those economic headwinds really hit American voters as they go to the polls today. The national average for a gallon of gas $4.15. Now with that said Republican strategists have told us here at Bloomberg News that their private data is showing a path for them to retain control. But it's going to come down to turnout. And that's why President Trump went to these reliably red states in a bid to try to get more people from his base to head to the polls. Even if they're unhappy with his policies we'll have to see where it goes from here because President Trump no doubt is going to be watching tonight. According to the official schedule he's going to be in the East Room at 7 p.m. Eastern for a viewing party. Plus keep in mind Republicans have a major cash advantage. The GOP and its top three super PACs have raised $2.1 billion to Democrats $1.4 billion. Now Danny and Isabel a lot of the votes are already baked in. We're seeing historic early voting. So far according to the University of Florida's tracker 59 million Americans have cast their ballots that more that's more than 13 [01:07:13] Isabelle Lee: million more than what we saw last time around. All right Tyler thanks. And one of the races dealing headlines is the Senate race in Michigan. Bloomberg the close co-host Romain Bostic joins us from outside of Detroit. Romain. Absolutely one of the more [01:07:27] Speaker 17: consequential races across the nation right now. Certainly one of the most watch. I had a chance yesterday to catch up with the campaigns of both of both candidates. Abdul El Sayed the Democratic progressive who has really sort of taken this state by storm. Closing out his campaign with a rally at the Majestic Theater in downtown Detroit. About 600 people packing into that. Elizabeth Warren joining him on stage. A senator from Massachusetts as was the rapper Common. Abdul Sayed focusing very closely right now on affordability and economic issues. But then just about 30 minutes north of where he was I had a chance to catch up with the Mike Rogers campaign up in Rochester hills. A much different approach here. They focus a lot here on their own Republican nominees. Joining them on stage was a gubernatorial Republican candidate as well as several other Republicans running for office in the state. One person though who wasn't there was Haley Stevens. Of course she of course made a lot of waves over the last couple of days. The Democratic representative from Michigan throwing her support behind the Republican candidate. And while she wasn't there Mike Rogers invoked her name several times calling her decision in his words to put country over party. A courageous act. An act that he hopes will help to sway some Jewish American as well as black American voters away from the Democratic Party and into the Republican camp. And sweep him into the Senate. A race with plenty of twists and turns. In Texas where you are Julie though this is perhaps what has Wall Street's concentration. Where it has its attention. You have the race [01:09:02] Danny Berger: The race between Paxton and Tallarico but also data centers on the ballot to Julie. What do you can tell. What can you tell us about how things are shaping up there. [01:09:10] Speaker 18: up there? Well we just heard Tyler Kendall talk about turnout. In Texas let's look at some numbers. In 2022 about 5.5 million people early voted. This time around in this midterm election you're looking at over 7.7 million. So that is a huge difference. Danny you just talked about data centers. Both candidates discussed them during the election. James Tallarico saying they were definitely an issue. There need to be regulations. Ken Paxson saying that as well but also saying the importance of having them in terms of business that will certainly play a role. It's played a role in the governor's race as well. Now let's talk about money. The Senate race shaping up to be the most expensive in history. Almost 600 million dollars spent on ads alone. That's before the that's from the primary on up though. That's not just the general election. That's the primary on up. But again extremely expensive. If you live here you can't spend two minutes watching television right now without seeing an ad. Democrats are trying to flip a seat. Democrats have not won statewide office in the state of Texas in more than three decades. It is certainly an uphill battle. But one Democrats say quietly they're cautiously optimistic about. However for Republicans they have seen this before. Let's look at 2018. That's when Beto O'Rourke was running against Ted Cruz. He came within two two point six points of winning that race. However as you know Ted Cruz remains the senator. Democrats are still looking for that elusive win in statewide office here in the state of Texas. All right. Thanks so much. [01:10:52] Isabelle Lee: to Bloomberg's Tyler Kendall here in New York. Romaine Bosick in Michigan and Julie Fine in Dallas. Looking forward to all your coverage especially ahead of this specials tonight. And joining us now is Leslie Benjamoury the Chicago Council on Global Affairs President and CEO. Leslie we have just a few hours until polls close tonight. How are you making sense of all of this. It seems like there's so many moving parts from the U.S. to Iran war to the Fed and to the affordability issues as well as inflation. Yeah. It's hard to know. I mean we think that most voters are concerned about their own daily experience about affordability. But we know they're all [01:11:22] Speaker 19: sorts of issues. Some people are turning up because they don't like the large data centers. I just drove from Chicago to Wisconsin on Thursday and went by one of them. I mean they are extraordinary. So there are multiple motivations. I think the fact that so many people are voting. I'd certainly tell us one of the most important things that people are passionate. They are unhappy. They don't think the country is heading in the right direction. Remember that was the same thing in the last presidential election. Most people didn't feel like the country was heading in the right direction. That doesn't tend to be good for incumbents. But this is a very difficult very different political situation. From my perspective we're very aware that foreign policy factors actually quite a lot in part through the lens of you know the impact on gas. The Iran war is deeply unpopular and people see its impacts here at home. But I think they also see the impacts of the instability globally. And that resonates in multiple ways. So it's an extraordinary day. You say it's only a couple of hours. It feels like a lifetime until those polls close. People are watching them closely. But you know I think as we look ahead. What's really interesting to many of us is that congress is suddenly going to become a political fact. It's been you know largely irrelevant for the first two years of President Trump's presidency. Regardless what happens in the Senate it looks very clear that the House will go Democrat. And that immediately means that much of the activity in Washington is going to be not only in the White House. And obviously there's a lot of questions that that raises. One is how does that affect the president. Two is will the parties remain internally aligned or we see not only oversight at temps of the president investigations. The Democrats say they're going to go hard on investigations of corruption. But will those parties hang together internally because as we know so many people are watching individual races to see which part of the Democratic Party succeeds or fails. Not only you know whether they be Republicans but but whether progressives or moderates turn out to be more popular. [01:13:37] Danny Berger: Leslie I'm also interested in how this all factors if Congress is in play again with the Middle East. Already you're starting to see some ramifications dare I say with the president saying this morning that they're going to end military aid for Israel by year end because of many on the left using that essentially as a way to campaign against others saying we should stop military aid. And the president says we'll all do it first. So you can't use that as a talking point. But what do you expect and what differences can there be made if you get a Democratic House or maybe both chambers of Democrats coming in. What difference does that make to the U.S.'s current involvement in the Middle East and war in Iran. [01:14:14] Speaker 19: OK so two things. One is on Iran and one is on Israel. They're clearly both very closely related. On Israel we know that there is a longer term change in the American electorate and its willingness to support Israel provide military assistance without conditions. That was already changing as younger generations of Jewish Americans feel less commitment to Israel. But obviously the war in Gaza really changed the mood here in the United States. But the election also will have a significant impact on the noise. Whether President Trump takes Congress's efforts to potentially restrain U.S. support for Israel, whether he takes us seriously, regardless what he said this morning, one can be very skeptical. I think that if a Democratic Congress is elected that that will be one thing that they aim to do in part by holding back appropriations of money. But ultimately the president as we know has tremendous executive authority. What he can do if he wishes to change course is he can use Congress as an excuse if he wishes to withhold more support for Israel. But what we're seeing right now is a president who so far has and this goes right to you know the question on many Americans mind which is really immediately about the war with Iran. He has threatened to re-up that war right after the midterm elections. We know that there are negotiations ongoing. I have seen some uncharacteristically optimistic people who are deeply expert thinking those negotiations might have some impact. But probably even more people who think we are returning to war and whether Congress will have any real impact on this. Certainly they'll make noise. But whether they'll be able to restrain a U.S. president who you know if he does lose in the way that the polls suggest will feel that loss. Will feel humiliated will feel defeated and will have a lot of power to make his own decisions about what he does when it comes to the war with Iran. And he has a situation which is which is unsettled unresolved and where America's hand is much less influential than it used to be. And I think he will want to regain some influence over the strait and over that situation. [01:16:43] Danny Berger: Hey Leslie we really appreciate your time. That's Lindsay Benjamuri of the Chicago Council on Global Affairs. And tune in to Bloomberg's special coverage starting tonight at 7 p.m. New York time of this midterm election race. And experience Bloomberg's coverage for free during the U.S. election on Bloomberg.com and in the Bloomberg News app. Sign up now. Let's get a check on your markets this morning heading in to the midterms. Just how much will this change things for markets. Is it a clearing event. We're up eight tenths of one percent for the Nasdaq. That outperforms tenure yields. Those are up by three and a half basis points. Also higher by one and a half percent. The ten-year yield moving after jolts coming in showing a less tight more tight labor market than perhaps some had assumed this was September data though. We're going to be getting October jobs report at the end of this week. Let's look at some single name movers. With that is Nora Melinda. Hey Nora. [01:17:35] Speaker 7: Hey Danny. First up shares of Apple are lower this morning. That's after the company's first earnings report under CEO John Ternus delivered a mixed outlook. The company sees stronger than expected holiday sales but did warn that margins will come in below expectations. And that's pushing shares of the company down by about 2.6 percent. Now sticking with earnings Shopify also under pressure after the company's quarterly revenue fell short of expectations for the very first time in four years. Now disappointing subscription solutions revenue were really what we're weighing on results. Shares of Shopify pointing lower by about seven percent. And finally Taco Bell taking a bigger than expected hit from this summer's cyclospora outbreak involving lettuce that was sold at its restaurants. But the chain is bouncing back and now outpacing competitors. That's according to results from parent company Yum Brands and shares of Yum Brands are higher by about six-tenths of a percent. Do you guys eat Taco Bell? [01:18:28] Danny Berger: I don't actually. Do you, Danny? I don't. Wait, was it you that told me you've never had Taco Bell before? Yes, I've never had Taco Bell. Yeah, yeah, yeah. Sorry to blow up your spot on national TV, on international TV. International TV. [01:18:39] Isabelle Lee: Yeah, maybe I'll try it after that news. Or maybe don't. Or maybe don't. [01:18:44] Danny Berger: Or a breakout is the worst time. Or maybe the best time. Like this might be the best time to be eating lettuce, right? Because everybody is so concerned. Like it's a great time. And they check their supply chains. [01:18:54] Isabelle Lee: I live life on the edge, so why not, Danny? And then I'll text you when something happens. Or don't. Or be bedridden for hours. Coming up, we have Gary Gensler, MIT Sloan professor and former SEC chair, joining us for his read on the midterms. This is Bloomberg Open Interest. [01:19:21] Danny Berger: In a recent podcast, former SEC chair Gary Gensler says change in the House and Senate will start a wide range of oversight hearings, including investigations in what has been done over the past two years. Gary, I'm pleased to say joins us now, MIT Sloan professor, co-host of the Power and Consequences and former SEC chair. Gary, great to see you. Voting is happening now. Can we just do a little bit of scenario analysis? If Democrats take the House tonight, as they're widely expected to, what's the first thing you'd expect them to do on financial regulation? [01:19:54] Speaker 20: Well, I think it will be a wide-ranging look from Democrats in control of the House, and I think probably in control of the Senate, looking at what the Trump administration has done to rollback protections for investors in our capital markets and rollback protections. Look, they largely shuttered the Consumer Financial Protection Bureau. So you would think that if it's she's got the gavel, Chair Warren is going to take quite a close look at that. But it's also going further than the Consumer Bureau, issues around housing and housing affordability, I think, are very much on Democrats' mind. And then financial stability issues as well, whether it's a close look at private credit and then what we might call the big AI trade, how everything's interconnected. Look, Danny, they'll also take a really close look at the president's own families' investments in various things, in prediction markets, in crypto and the like. And I think there'll be some oversight hearings bringing corporate executives up to Capitol Hill to explain some of this. [01:21:05] Isabelle Lee: And Gary, a change in Congress could mean more gridlock, and that comes at a time when there are major questions, to your point, about crypto, prediction markets, affordability, national debt. Do you think that political dysfunction could be the bigger risk than any one individual policy? [01:21:19] Speaker 20: Well, I think that tomorrow, Wednesday, November 4th, is basically the kickoff for the 2028 election cycle. I know, I know the listeners are going, oh, my God, I've had it enough already. But you're going to have at least a dozen and maybe 20 members running on the Democratic side. We'll see it all play out also on the Republican side for the presidential. And I think that Congress will use their investigative tools and oversight tools to understand better what happened in this administration, but also for legislating. I think that there's, look, there's a long history, and President Trump will have to be part of this, but there's a long history in the last two years of an administration to getting things done. Bill Clinton did it in his last two years. Ronald Reagan did it in his last two. Look, sometimes you have real comeuppance, too. In George W. Bush's last two years, we had the financial crisis. And I do think, Danny, we're going to have a repricing of our equity markets and repricing of our debt markets as this AI trade probably tops and then gets a retrenchment in the next 18 months. But I think Democrats will reach out and see if there's some bipartisan things that can be done. Maybe it's on tariffs and trade. And I do think there's bipartisan consensus to end this war in Iran. But, again, it's up to the president whether he'll play ball with, I think, what there'll be some bipartisan consensus on. [01:22:58] Danny Berger: This SEC, Gary, they've roughly, Bloomberg did the number crunching. They filed roughly 300 enforcement actions in the fiscal year of 2026, ending September 30th. If that's a third fewer than last year, that's approximately half its annual average output dating back to 2018. Is the cop off the beat? And is this something that a new Congress needs to hold the SEC accountable for? [01:23:25] Speaker 20: Well, I do think this administration, and even much broader than the Securities and Exchange Commission, has let investors and consumers down and has been less the proverbial pop on the beat. And I think Congress will weigh in and sort of say, where were you on what was going on in the capital markets? And I think that's fair for them to do that. But I do think that there's additional issues about how we address affordability in the cap and how we address fairness in the capital markets. Look, I also think there's really real issues about whether that which the president has pushed forward at the SEC, at the CFTC, at the banking regulators, is good policy for companies that are issuing in our capital markets. [01:24:21] Isabelle Lee: Gary, what about AI? It's becoming a major political and market issue. Do you think that Washington is moving fast enough to address the risks that come with the AI development, or are we risking being a crypto again? [01:24:35] Speaker 20: Isabel, in a word, no. Washington is not moving quickly enough. But there's a big difference to crypto. Artificial intelligence is transformative. It's truly changing our economies. But I think there's four clouds on the horizon. One is about jobs. And the American public are concerned about what it would do for my jobs and other people's jobs. Two is what I will call responsible AI, that it's used in a way that doesn't defraud us and then still allocates, let's say, auto loans or mortgages fairly across society. Three is a really big crowd around AI safety. Like you have Dario Amodi talking about this. And saying, look, we can't really keep the algorithms aligned with us humans. And then I do think there's a storm cloud about a retrenchment. I think the whole AI can still be positive long-term, but we're going to have a repricing in the capital markets. [01:25:37] Danny Berger: Hey, Gary, thank you so much for joining us. That's the former SEC chair, Gary Gensler, co-host of the Power and Consequences podcast. And tune in to Bloomberg's special midterms coverage starting tonight at 7 p.m. New York time. You're watching Open Interest. And Markets rebound after three days of losses, but will it stick heading in to midterm elections tonight? We're up half a percent for the S&P, nine tenths for the Nasdaq. Joltz data pushing the 10-year yield up higher by two basis points. And catch me on a special edition of Bloomberg deals today at 12 p.m. New York time. But after that, Isabel, it's weather today, and the election will be a clearing event. [01:26:18] Isabelle Lee: I really struggle to see how market-moving this election will be, and I think investors are already positioned for a divided Congress. But maybe I sound like a grumpy old lady. [01:26:26] Danny Berger: That you are certainly not. I guess we'll find out tomorrow when Isabella and I are back on your screen for Open Interest. We will have with us John Stolfitz of Oppenheimer, Evercore Chairman Emeritus Ralph Schlossstein, and Abby Joseph Cohen of Columbia Business School. You are watching Bloomberg TV.