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- [00:00]
Carol Massar
So have you heard the story about the prescription plan? With savings automatically built in, it's where a family of any size can feel confident the cost of their medication won't hold them back. Go to CMK Co Stories to learn how CVS Caremark helps members save just by being members. That's CMK Co Stories.
- [00:25]
Bloomberg Announcer
Being a small business owner isn't just a career, it's a calling. Chase for Business knows how much heart and effort go into building something of your own. Manage all your business finances, from banking to payments to credit cards, all in one place with Chase's digital tools. Plus access online resources designed to help your business thrive. Learn more@chase.com business chase for business make more of what's yours. The Chase Mobile app is available for select mobile devices. Message and data rates may apply JPMorgan Chase Bank NA Member FDIC Copyright 2026 JPMorgan Chase Co.
- [01:00]
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- [01:41]
Bloomberg Announcer
Bloomberg Audio Studios Podcasts Radio News.
- [01:47]
Podcast Host
This is Bloomberg Business Week 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. The Bloomberg Business Week Week Daily Podcast with Carol Massar and Tim Stanweck on Bloomberg Radio.
- [02:10]
Tim Stenovec
We just want to get a check on kind of how we ended up today and as we get ready for some more big mega cap tech earnings, we're talking about Alphabet and Amazon coming our way over the next couple of days. Eric Weiner is in the house, back with us. Senior Editor Equities Americas at Bloomberg News here in our Bloomberg Interactive Broker Studio. A lot coming out investors. Certainly we watch for headlines that impact the trade here. Is it still really though largely about earnings for the most part, although some policies like we saw with the homebuilders today, certainly impacted by some things that could come from the White House.
- [02:42]
Eric Weiner
Well, right now, as far as today is concerned, Anthropic really freaked out the market. And software has been selling off software. Stocks in particular within tech have really done poorly. I mean, if you look at like the Magnificent Seven, you can see Microsoft has really come down more than the others and that's spending on AI and that's also software. So today you got a lot of movement around what is at risk, who is going to survive AI, who isn't going to survive AI. And as these tools come out and they take the place of other data providers, you saw like the London Stock Exchange down, you saw S and P Global down. Yeah, really weird, really weird reactions. And it's because people are afraid that they're going to be replaced. That's different than the big mega cap earnings where you got Google coming in. Google, well, Alphabet, they're up like 10%. They were the best performer last year. The question is they're within spitting distance of Nvidia, you know, of passing them as the biggest, as the biggest stock in the world.
- [03:54]
Tim Stenovec
Market cap.
- [03:55]
Eric Weiner
Yeah, yeah. So I mean it's, will they, will they justify that rally?
- [04:00]
Tim Stenovec
Well, you know, speaking of this, and we're watching earnings so closely, just want to mention, Eric, Super Micro Computer crossing the Bloomberg terminal. We are seeing the stock pop initially here in the aftermarket. Let's go to the outlook. The company talking about seeing third quarter net sales of at least 12.3 billion. That is way above the street estimate of 10.25 billion. Sees third quarter adjusted EPS at least 60 cents a share. That's 8 cents better than what the street is forecasting. And what's always key is what we're seeing in terms of margins. And right now we're looking back at the second quarter adjusted gross margin, Tim, 6.4%. That was a little light, 6.52%. But nonetheless, check in. Supermicro up about 9% here in the aftermarket.
- [04:43]
Carol Massar
Yeah, the company seeing third quarter net sales at least 12.3 billion, beating estimates of $10.25 billion. Eric, before we let you go, does this, this report from Supermicro a sigh of relief after volatility like today?
- [04:57]
Pat Clark
Sure.
- [04:58]
Eric Weiner
I mean, and we're seeing examples of this today, may have been overdone. I mean, that is a lot of what we've hear analysts, what we've heard from traders. It's just, you know, it could have been kind of a deep seek moment where you know, people initially react and then sort of come back to the table and think, well, maybe that was.
- [05:14]
Tim Stenovec
Overdone and we should say our Mandeep Singh of Bloomberg Intelligence said, you know, software is not all going away. And he said some of it could have been a valuation story as well.
- [05:23]
Eric Weiner
Exactly. So I mean, and you saw like Palantir did really well. They haven't done great this year, but they got a bounce today because of their earnings. So you know, it's it's sort of a moving target when you're talking about AI with winners and losers and we're just still in the very early innings.
- [05:39]
Carol Massar
Eric Weiner, Senior Editor, Equities Americas at Bloomberg News we wanted to talk to you for longer, but we had a busy show, so please come back again.
- [05:47]
Tim Stenovec
We'll do it.
- [05:48]
Advertisement Voice
Support for the show comes from public on public you can build a multi asset portfolio of stocks, bonds, options, crypto and now generated assets which allow you to turn any idea into an investable index. With AI. It all starts with your prompt. From renewable energy companies with high free cash flow to semiconductor suppliers growing revenue over 20% year over year, you can literally type any prompt and put the AI to work. It screens thousands of stocks, builds a one of a kind index and lets you back test it against the S&P 500. Then you can invest in a few clicks. Generated assets are completely customizable and based on your thesis, not someone else's. Go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market paid for by Public Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors, llc. SEC Registered Advisor Generated Assets is an interactive analysis tool. Output is for informational purposes only and is not an investment recommendation or advice. Complete Disclosures available at public.comDisclosures Foreign.
- [07:02]
From iShares, you get access to both monthly income and growth potential in one simple ETF. It's the best of both worlds. Discover Bali iShares Large Cap Premium Income Active ETF iShares the market is yours. Visit www.ishares.com to view a perspective for investment objectives, risks, fees, expenses and other information that you should read and consider carefully before investing. Risks include principal loss and the use of derivatives, which could increase risks and volatility. Monthly income is not guaranteed. Prepared by BlackRock Investments, LLC.
- [07:28]
Bloomberg Announcer
Small businesses are the pulse of every community. They bring people together, create opportunities and drive growth. With a widespread presence in communities across the country, Chase for Business supports small business owners at a local level that makes it possible for you to connect, learn from each other and grow together. There's a real commitment to seeing small businesses succeed. The Chase for Business team has knowledge and expertise that span a wide range of financial areas. They can help you make more informed decisions as you navigate the complexities of running your business. They'll help your business grow with individual guidance and convenient digital tools all in one place. With that guidance and your determination, you can take your business farther and help build a brighter future for your community. Learn more@chase.com business chase for business Make More of what's Yours the Chase Mobile app is available for select mobile devices. Message and data rates may apply JPMorgan Chase Bank NA Member FDIC Member Copyright 2026 JPMorgan Chase Co. You're listening to the Bloomberg Businessweek Daily Podcast. Catch us live weekday afternoons from 2 to 5 Eastern. Listen on Apple CarPlay and Android Auto.
- [08:38]
Tim Stenovec
With the Bloomberg Business app or watch us live on YouTube.
- [08:44]
Carol Massar
Well, our markets Live blog today pointing out that Neil Dutta of Renaissance Macro notes that something typically goes wrong in the stock market when a new Fed chair takes over. Years that saw a Fed leadership change also saw big S&P 500 drawdowns, an average of 17% to the downside for the past four chairs alone. Dutta writing in a note today that quote, if past is prologue, I would not be surprised to see the new Fed chair tested, especially given the circumstances of his ascension to the job. A newfound policy dove tasked with convincing those around the FOMC likely suspicious of the motivations to his position. Neil joins us now. He's partner and head of Economic research at Renaissance Macro Research. He joins us from New Jersey. Neil, good to see you. You also write in the note that you've been tracking how warsh sentiment has changed since his time as a Fed governor during the Great Financial Crisis 2006-2011, I believe. What did you find?
- [09:42]
Neil Dutta
Well, good to be with you. I found what you'd expect, which is he's been hawkish throughout his ENT career, up until about six months, during which he's been interviewing for the Fed job for a president who calls himself a low interest rate person. Shocking, I know.
- [10:00]
Tim Stenovec
Isn't it like kind of baffling? I think when I, when the name was announced, Neil, I was kind of like, wait, did I miss something? Like, so what do you think's going on here? Or do you, do you feel like, you know, it's interesting. Was it Gavin Newsom who was who did a big interview with our Bradstone and just said, you know, kind of the rule of law is In a part his view in terms of this presidency. But he said one of the things the President does pay attention to is financial markets. And do you think that was kind of in his thinking when he said, I got to get, I got to put a Fed chair in that the markets respect?
- [10:33]
Neil Dutta
Yeah, I don't, I mean, I don't know. I don't, I don't know how to think about that. I mean, I think the upshot to all this is that the Fed is bigger than any one person.
- [10:41]
Carol Massar
Right.
- [10:41]
Neil Dutta
It's a, it's an institution with lots of people. It's a, it's an institution that's driven by consensus building. And there are a lot of people on the FOMC that rotated in and out from the regional Fed banks, and they're no slouches, you know, like someone like Lori Logan or Beth Hammock. You know, their expertise, I think, is considerably stronger in lots of places than Kevin Warsh. So I don't think they're going to be intimidated by Kevin Warsh sitting around that table. So I think the upshot here is that the Fed is bigger than any one person, and that probably limits a lot of the sort of anxiety that you might get to markets. I mean, the real test of all of these positions, in my opinion, is really in times of, of crisis, you know, not, not so much when things are normal.
- [11:33]
Carol Massar
So we're going to get to crisis in just a second. But first, I'm wondering if we're, we're putting the cart before the horse at this point because of what we've heard from Senator Thom Tillis and the fact that he will not back a nominee until the probes into Jay Powell are settled. What does that mean for the, for the outlook?
- [11:54]
Neil Dutta
Well, typically when you have, you know, the sort of changing of the guard, if you will, it takes about 90 days from the time the person is nominated by the President to when they're confirmed by the Senate. We'll see how long this one goes. You know, typically the hearing is scheduled before the committee, so scheduled about a month after the person is nominated. Now, if Senator Tillis decides to kind of stick to his guns, I mean, he's got nothing to lose. He's not up for reelection. You know, we'll see. I mean, you know, I think, as is the case with any nominee, the longer they. It's like a fish out of water, right? I mean, what happens if a fish is out of water long enough? It starts to smell. And, and so I think that's. That's the risk I think you run if you, if both sides kind of hunker down. I mean, the President has basically said let it go on for as long as it needs to, you know, but to get Tillis to back down, the President will need to back down from the investigation.
- [12:52]
Tim Stenovec
Hey, you know, I do wonder what a wash Fed will be like, Neal, having seen like you, lots of different Fed chairs and I remember a time where I feel like you didn't really hear from a lot of Fed speakers and now it's just such the norm. Is he going to be a quieter Fed chairman so that we're not going to be able to pick up cues and speeches that he's going to be giving potentially, if again, he is indeed Fed chair, the next Fed chair?
- [13:18]
Bloomberg Announcer
Yeah.
- [13:19]
Neil Dutta
I mean, I think that's been one of his sort of critiques of the Fed is that they talk too much.
- [13:23]
Tim Stenovec
Do you agree?
- [13:24]
Neil Dutta
I, you know, sometimes yes, I do. I mean, I think that there's something to be said for that. But there's also, you know, like with everything, there's a lot of incongruencies in what, in what he's talking about. Right. So, you know, during his time as a governor, you know, I don't really recall any meaningful speeches that Warsh gave on the economic and policy outlook. And he probably looked at that as a sort of form of forward guidance that he didn't really believe in. But you know, he kind of is all about like use less discretion in terms of policy. Right. We should have more of a rules based framework. But I think what's interesting about that now is a lot of what he's talking about in terms of, you know, trying to get rates down, at least up front, is an appeal to discretion. Like, how else would you describe the sort of golden age, right? The thesis that they have to kind of bring rates down. Right. Like we're in an economic golden age. It's a productivity boom, Nehru's low. We can cut rates without stoking inflation. Obviously that's an appeal to discretion at some level. So you're actually going to need a lot of data to convince the people around the table to kind of buy into that theory. You can't just will it into the Fed's policy. The other thing I would say he's also a big critic of forward guidance. Now one of the things we know about forward guidance, right, this is, you know, basically guidance on interest rates, right? Is that helps move, you know, that. So that basically allows like movements in the front end of the yield curve. To translate more into the back end of the yield curve. Right. Because the markets anticipate what will come as a result of what the Fed's doing. Now, if you get away from forward guidance, that kind of goes away and it pushes up term premiums, which all else equal, makes longer term interest rates higher, which is something they've said they want to get down. You know, one of, one of, one of Warsh's big criticisms back in 2024 was that the Fed wasn't able to get the entire curve down in 2024, even though they cut interest rates.
- [15:27]
Advertisement Voice
Rates.
- [15:28]
Neil Dutta
I think what that misses is the fact that longer term rates fell into the cut.
- [15:33]
Jamie Madera
Right.
- [15:34]
Neil Dutta
Had they not had forward guidance, that wouldn't have happened, in which case they may have had to cut even more.
- [15:39]
Tim Stenovec
Yeah.
- [15:39]
Neil Dutta
So look, I mean, there's a lot of like, interesting little nuances that we can talk about for hours, frankly.
- [15:47]
Tim Stenovec
Well, one nuance I want to ask you, and maybe it isn't just a nuance, but I do wonder about the connection with Stanley Drunkenmiller. We talked about this with our Eric Schatzke and the ties that he has. Famed investor, well known on Wall street, certainly to the Bloomberg audience. To you that he has ties to Besant, the Treasury secretary. Right. Scott Besant, as well as to Kevin Warsh. I think the FT even talked about the Financial Times, about the rise of the shadow Fed chair, meaning Druckenmiller. Just got about 30 seconds. Is that maybe something that could be a reality very quickly?
- [16:25]
Neil Dutta
I mean, I don't know. I think a lot of this sort of enthusiasm for a Treasury Fed accord is quite misplaced.
- [16:32]
Bloomberg Announcer
Okay.
- [16:33]
Neil Dutta
You know, I'm not sure I buy into that. Again, that goes back to this issue around qe. Like, why did the Fed have qe? Did they do it to bail out the federal government? Or did they do it because the federal government wasn't doing anything? I mean that if you go back to that time, Carol, we were talking about how the government was doing a sequester and austerity and you know, I think that kind of gets the causality around policy backward.
- [16:56]
Tim Stenovec
All right, listen, we always appreciate when you jump up on Bloomberg, so thank you so much, Neil. Have a great week. Neil Dutta, he's partner head of economics at Renaissance Macro Research, joining us from New Jersey.
- [17:09]
Podcast Host
This is the Bloomberg Business Week daily podcast. Listen live each weekday starting at 2pm Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station Just say Alexa play. Bloomberg 11:30.
- [17:28]
Carol Massar
Bloomberg News Real estate reporter Pat Clark joins us here in the Bloomberg businessweek studio. What did you find out? How would this work?
- [17:35]
Pat Clark
Well, there are details still to be negotiated, right, but it would be what's typically known as a rent to own or pathway to homeownership program where private investors acquire homes from homebuilders. These could be homes potentially that are sort of built specifically tailored for this program. So maybe built on the smaller side.
- [17:53]
Carol Massar
So not built yet.
- [17:54]
Pat Clark
Not built yet. And they could be built for this program, acquired by private investors who would then rent the homes out and then with some sort of opportunity for renters to convert into owners. Usually the way that's worked is there's some sort of help or at least in more recent iterations on the model, there's some sort of program to help renters save a down payment. Some of the talk around this is that, you know, would there be a role for federally backed mortgages, you know, does do Fannie and Freddie get involved in some way bring down the cost of, you know, cost of in interest payments when you actually go and buy the home that you've been renting?
- [18:33]
Tim Stenovec
So private investors, Pat, find them, provide the money up front for home builders to build and then who gets all the permitting and all that good stuff that's always so much fun?
- [18:43]
Pat Clark
Well, the builders have to build the homes. But I think, you know, the way one person described it to me is like builders are in the, they're in the moving business, not the storage business, if like you indulge that cliche. And so the builders are, the builders know how to get the homes built, built and then they give them to someone else, right, who can hold them on a balance sheet and figure out how to management manage them. I mean, managing these kinds of properties is not, not necessarily the pitfalls before.
- [19:10]
Tim Stenovec
In this rent to own, you report it in your story.
- [19:13]
Pat Clark
It's one pitfall. It's, you know, it's complicated, right. Who's supposed to take care of the home during a of time when it's own, you know, when, when ownership is sort of transitory. So that's, that's certainly one thing. It should be easier with newly built homes, right. If you're doing this, the way this has been done in the past usually is you buy an existing home and you know, which comes with, which could come with all sorts of like deferred maintenance in it. Whereas these homes, you know, you would imagine could even have a builder warranty on them. And so that should be easier. The hard part really is coming up with a scheme that lets people convert to homes.
- [19:49]
Carol Massar
Another challenge, I think, and I'm no real estate expert, but I'm told the three most important things when it comes to real estate are location, location, location. I've heard that before. Where are these homes going to be built? Because it kind of doesn't matter if you create a million homes in places where people don't want to live.
- [20:04]
Advertisement Voice
Sure.
- [20:05]
Pat Clark
You know, that's, I think that that seems like the less hard problem to.
- [20:11]
Carol Massar
Really, to me personally, because that's where as to Carol's point, the permitting comes in. Because a lot of, a lot of the challenges of the affordability crisis is zoning and the fact that a lot of these places that are highly desirable with expensive home prices, you can't build because of density issues.
- [20:26]
Pat Clark
Yeah, I guess that could be an issue. I mean, there's also like, we're talking about lots and lots of newly built single family homes. These have to go in the suburbs. They have to go where there's land to build them on. And you know, as.
- [20:39]
Tim Stenovec
But is that where people want to live? Like that goes, I guess the argument, Pat, because we've been talking about it, affordability, you know, this better than we do, like for decades. And so you have so many people working in these major cities, be it New York, be it la, and the ability to live close, so you're not commuting an hour, two hours or three hours or whatever the heck it is. You know, it's difficult. So to find that affordable housing that is close to where the jobs are. Is that where this, I mean, if you're buying, if you're building single family homes, that might not be the case.
- [21:12]
Jamie Madera
Sure.
- [21:12]
Pat Clark
That's, that's fair. Right. Is like, can you actually find a market for these kinds of properties? I mean, there's, there's, it's not as though there are not homes being, you know, homes are being built in the suburbs. Right, right. Some of them are built. You know, a lot of capital is formed around this idea of built to rent, which is homes that are built for the purpose of renting out. Very often in communities, you know, in whole communities almost. Sometimes people call them horizontal apartment built buildings. I think those are renting. I mean, it's possible that, you know, not every project has rented as well as the developer thought it would when they started, because that happens too. And, and I think any time you think about building at scale, there's a real estate cycle to contend with. But I, you Know, I think that there are plenty of markets where you could find demand for this kind of product.
- [22:02]
Carol Massar
I'm wondering about the companies that could benefit here. Lennar is up 3% on a day when the broader market is lower. We're seeing homebuilders in general higher, apart from just a handful who are potential winners here.
- [22:16]
Pat Clark
Yeah, I think anyone in the new home space, right. Like builders, building supply. You know, I don't. It's. I wasn't able to unearth a lot of details regarding investor, you know, who. Who is forming the capital to do this. Right. And. And who gets to invest in this and on what kinds of terms. But you can certainly see opportunities.
- [22:37]
Tim Stenovec
So is it a fund is created and then home builders tap into that fund? Is that kind of how it works, or. We don't know yet. And the other thing that, like I was thinking is that, okay, now you have investors involved, you have home builders involved. These are all layers that have to make some money on this project. And I'm curious about how expensive these might be. I know the whole idea is about affordable homes, but I. Do you think about people taking a piece of the action and how that drives up prices, essentially?
- [23:03]
Pat Clark
I think it's complicated.
- [23:05]
Eric Weiner
I think there's.
- [23:05]
Jamie Madera
There's.
- [23:06]
Tim Stenovec
It always is.
- [23:06]
Pat Clark
You know, I think we tried to get this across in the story. This is a, this is a complex idea, and it may prove too complex to actually, you know, operationalize. But the, you know, it's, you know, at the same time, I think you could think about it as it may turn out that this is an idea that the housing industry, broadly, is trying to put in front of the Trump administration because, you know, both sides recognize that there is a housing affordability crisis and it needs to be addressed in some way. Everyone has an interest in doing something. And so, you know, if it turned out this was a conversation starter, I wouldn't be shocked. At the same time, you know, we have Trump accounts, right? We have Trump. We have these. This does seem to fit a template that, you know, some people have at least pushed from just idea to something that exists in the real world. And so it wouldn't shock me if that happened.
- [24:03]
Tim Stenovec
We're actually going to talk about Trump accounts a little bit later on.
- [24:05]
Bloomberg Announcer
No, it's interesting.
- [24:05]
Tim Stenovec
Would they be called Trump homes?
- [24:07]
Pat Clark
That's the way people are talking about them now. Yeah.
- [24:09]
Tim Stenovec
All right. Interesting.
- [24:09]
Carol Massar
It's one way to get it in front of the president. Right?
- [24:11]
Tim Stenovec
Yeah. Truly know your audience, as some might say. Pat, great story. And it is a Bloomberg exclusive. So highly recommend that everybody check it out on The Bloomberg@Bloomberg.com, pat Clark thank you. He is Bloomberg News Real Estate Reporter joining us right here in studio.
- [24:25]
Advertisement Voice
Support for the show comes from public on public you can build a multi asset portfolio of stocks, bonds, options, crypto and now generated assets which allow you to turn any idea into an investable index with AI. It all starts with your prompt. From renewable energy companies with high free cash flow to semiconductor suppliers growing revenue over 20% year over year, you can literally type any prompt and put the AI to work. It screens thousands of stocks, builds a one of a kind index and lets you back test it against the S&P 500. Then you can invest in a few clicks. Generated assets are completely customizable and based on your thesis, not someone else's. Go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market paid for by Public Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors llc SEC Registered Advisor Generated Assets is an interactive analysis tool. Output is for informational purposes only and is not an investment recommendation or advice. Complete disclosures available at public.com disclosures.
- [25:38]
With volley from iShares, you get access to both monthly income and growth potential in one simple ETF. It's the best of both worlds. Discover Bali iShares Large Cap Premium Income Active ETF iShares the market is yours. Visit www.ishares.com to view perspectives for investment objectives, risks, fees, expenses and other information that you should read and consider carefully before investing. Risks include principal loss and the use of derivatives, which could increase risks and volatility. Monthly income is not guaranteed. Prepared by BlackRock Investments, LLC.
- [26:04]
Bloomberg Announcer
Being a small business owner isn't just a career, it's a calling. Chase for Business knows how much heart and effort go into building something of your own. That's why they make business growth their priority. The Chase team takes the time to understand your mission, where you are now and where you want to go. Their broad range of solutions is designed with you in mind so you can bring your ideas to life. From banking to payment acceptance to credit cards, you can conveniently manage all your business finances all in one place with their digital tools. Looking for tips and advice, Their online resources are always available to give you the solutions you need to help your business thrive. See how your business can get stronger and go farther with Chase for Business. Learn more@chase.com business chase for business make more of what's yours. The Chase Mobile app is available for select mobile devices. Message and data rates may apply JPMorgan Chase Bank NA Member FDIC Member Copyright 2026 JPMorgan Chase Company.
- [27:03]
Podcast Host
You're listening to the Bloomberg Business Week daily podcast. Catch us live weekday afternoons from 2 to 5pm Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube.
- [27:18]
Tim Stenovec
It is time now for our weekly discussion focused on women, money and power. We speak to some of the most influential women that are out there from across the world of finance, really across the business world. Great to have back with us, Jamie Madera. She is managing director, head of U.S. wealth Advisory and head of retirement at the world's largest asset manager. We're talking about blackrock and she's here in studio. How are you? How are you?
- [27:38]
Jamie Madera
I'm good. It's great to be here.
- [27:39]
Tim Stenovec
It's great to have you here. And I do want to kind of start with that because I think about these funds, what it might mean for more Americans. We talk about the ability to create wealth and that's whether it's to buy a house, to just think about your retirement. What do you think this means in terms of retirement planning for more Americans?
- [27:57]
Bloomberg Announcer
Yeah.
- [27:57]
Jamie Madera
So look, I think first of all, taking a step back retirement, right? It is such an interesting conversation. It is changing so drastically. The ecosystem, everything about it is changing. And when you think about anything we can do as a society to help people save earlier, invest earlier and fund those longer lives, that is a great thing. And when you think about what these accounts will do for helping people actually put money away towards their retirement, but they start at a much younger age. It is about time in the market, Right. You just need to have more time. And the idea of helping people start saving earlier is a wonderful thing.
- [28:33]
Carol Massar
So you give this the seed amount of money and then hopefully the people who get that have exposure to the market and then they start to give more as well. I think the challenge for a lot of people might be they don't necessarily have the money to add to that. So, you know, it's a complicated, it's a complicated program. I think one that won't necessarily or it's a simple program, but a complicated issue that won't necessarily solve. If we think about from the broader perspective of Americans being prepared for retirement, what are you seeing from, from clients out there right now making sure that in an environment like this where we're seeing some volatility. Charlie was just talking about double digit declines in some software names today because of disruption from, from AI. What are you hearing from them about how to hold on to their assets?
- [29:16]
Jamie Madera
Yeah. So if we take a step back and we think about what are we trying to solve for when we talk about helping more Americans achieve retirement security. So retirement security means the freedom to choose what's next, the freedom to do what's next, the freedom to support your longer life. And when we talk to clients about it, it's two things. It's, it's giving appropriate access to the full power of the capital markets and it's managing risk across these longer lives. And when you think about how you pull those two things together, that's what we focus on with our clients. In fact, BlackRock, a lot of people don't realize we're a retirement company. Right. People think of BlackRock in many ways. We're a retirement company. Over half of the assets, half of our 14 trillion is in service of helping people save for retirement. Right. Back in 1993 we created, invented this elegant design of a solution which is a target date fund that helps people access the capital markets and then manages them through an appropriate way so that when they retire they have money to use during their retirement. The challenge is the world's changed, right? So people are living longer. The responsibility of retirement saving is now so much more on the individual than ever before. And the capital markets have evolved so much so you need to almost rewire the whole thing and understand and figure out what are you solving for and the resources and tools do you have to deliver on that.
- [30:32]
Tim Stenovec
So what, Jamie, what are some of the things that you think about in that rewindering?
- [30:35]
Jamie Madera
Yeah. So there's two really big themes. The first is we talk about people living longer. People are living longer and they've always been focused on saving to get to a certain number. But who knows what that number should be? And how do you actually then convert that and do the math to figure out how much income that should get you. So the first one is all about turning savings into income. And you think about pension plans for years. What's the benefit of a pension? You get a defined benefit, a defined income stream and to date 401k plans haven't provided that. More and more people are asking for it. Over 50% of Americans are more scared of outliving their assets than dying. Like that's a really scary thing. And what they're really saying is I need clarity on figuring out how much income can I get and how do you actually give Me the lifetime income, the guaranteed income to get there. And so one of the things that we've been talking with our clients about is a target date fund that has the option of embedded lifetime income provided by an insurance company. And so you've elegantly brought together the Target Date fund solution, which is the number one solution for any 401k plan. But you've now embedded it into that, or you've embedded lifetime income into that.
- [31:45]
Carol Massar
Is that an annuity that goes in there then?
- [31:47]
Jamie Madera
Yeah, it's the option. So, you know, we do think that, first of all, people need choice and people want options. And the beautiful thing about Life Path Paycheck, which is our Target Date fund with income, is not only does it give you the option to get that guaranteed income and annuity provided by an insurance company, but it also helps you figure out what that income could be and how much it could be to throughout your life.
- [32:09]
Carol Massar
Well, how is this different than people saving assets and then supplementing Social Security with selling some of those assets every year when they. When they reach retirement? Is there an aversion then to selling the assets? And people want income generated from the assets instead of actually disposing of the assets?
- [32:27]
Jamie Madera
Look, I think at the end of the day, we're all human, right? And you want some sort of security. That's the beautiful thing about Social Security. It gave you some type of security. And so you could do the math and figure out what your withdrawal is and how you actually sustain those assets that you've saved. And you can work with an advisor or various tools to do that. That's a perfectly fine approach. Or you could also get the security of having that guaranteed income and having that income stream for you. And we call it Life Path Paycheck because people work and work and work, and then suddenly they retire and they say, well, where is my income coming from? And so through Life Path Paycheck, you actually get that paycheck after you stop working. Fascinating.
- [33:05]
Tim Stenovec
And one of the things before, before we wrap up is, you know, we talk a lot about the wealth, the great wealth transfer, and whether it's to a younger generation, but increasingly, again, you talk about people living longer. Women tend to outlive men. And I am curious, are you having more conversations with women, either as part of a marriage or a partnership, and kind of planning around that idea that, okay, one of us might not be around and it's likely to be maybe the woman who lives longer?
- [33:35]
Jamie Madera
Yeah. So average longevity rates have increased by seven years over the past two decades. Now, when you think about women. Women, as you say, tend to in general outlive men. The other thing that's interesting is in partnerships, more often than not the woman is younger and so she has that bigger gap to fill. You know, when we talk to women about retirement savings, this is where security really matters. The confidence. Let me know I have some type of guarantee and then I will use the rest of my savings on discretionary items or doing the things I want to do. Confidence, security and clarity. Clarity. Clarity is the big word for everyone. Let me know how much I need and how I'm going to fund it.
- [34:16]
Tim Stenovec
It sounds so simple, right? But it's amazing how that's it's not there. And you're right. I think people get to the end and they're like, wait a minute, this isn't what I expected. Never enough time. Come back soon.
- [34:26]
Jamie Madera
I will.
- [34:26]
Tim Stenovec
Love it. Love it. Jamie Majora, she's managing director, head of U.S. wealth Advisory and head of retirement over at BlackRock, joining us right here in studio.
- [34:34]
Podcast Host
This is the Bloomberg Business Week Daily Podcast podcast available on Apple, Spotify and anywhere else you get. Your podcasts listen live weekday afternoons from 2 to 5pm eastern on bloomberg.com the iHeartRadio app tunein and the Bloomberg Business app. You can also watch us live Every weekday on YouTube and always on the Bloomberg Terminal.
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