BI Weekend: Luxury, Railroad, and Machinery 2026 Outlook

Summary

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Bloomberg Intelligence Podcast: BI Weekend – Luxury, Railroad, and Machinery 2026 Outlook

Date: January 2, 2026
Hosts: Scarlet Fu and Paul Sweeney
Guests: Deb Akin, Jonathan Goldstein, Lee Klaskow, John Butler, Nathan Naidu, Christopher Chiolino, Bill Keenan

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Episode Overview

This episode offers a comprehensive market outlook for 2026, focusing on key sectors: luxury goods, North American railroads, telecoms & satellites, cloud gaming, and U.S. machinery. Additionally, it explores the intersection of finance and storytelling with a discussion about the new Wall Street film "Bull Run." The hosts and Bloomberg Intelligence analysts discuss growth prospects, sector-specific headwinds like tariffs and technological shifts, and the evolving role of artificial intelligence and globalization.

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Key Segments & Insights

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1. Luxury Goods Outlook for 2026

Guest: Deb Akin – Bloomberg Intelligence Luxury Goods Analyst
Timestamps: 02:12–07:51

• 2025 Performance Recap & Green Shoots in China

  • The sector ended 2025 with 3–4% growth, led by the U.S. and Middle East, but dragged by weak demand in China in the year’s first half.
  • Signs of recovery emerged late, with two-thirds of major luxury companies showing growth in China by Q3.

    “We’re calling green shoots into the end of the year.” – Deb Akin (02:59)

• Tariff Overhangs

  • Overall impact has lessened; leading brands have absorbed extra costs by passing on 6–7% price increases, particularly in the U.S.
  • Anticipated price increases for 2026 are smaller (2–3%), which could ease consumer concerns.

• Chinese Consumer Travel & Spending

  • Survey suggests Chinese consumers are preparing to travel more to Europe, which may bode well for luxury spending abroad.
  • Political tensions dampen travel to Japan, but destinations like Korea, Singapore, and Australia see increased Chinese tourism.

• Supply Chain Operations

  • Heritage luxury brands primarily manufacture in Europe, better weathering tariffs compared to entry-level brands dependent on Asian production.

• Handbags as Investment Assets

  • High-end bags, notably Hermès, retain or increase value and are perceived as investments.
  • The mid-market sector (e.g., Tapestry, Coach) also performed well, while ultra-high-end remained resilient.

    "If you bought at Hermès, you have a just as good or a better correlation than if you’d have held gold.” – Deb Akin (06:57)

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2. Sports Investments & Cricket in the UK

Guest: Jonathan Goldstein – Co-founder and CEO, Caine International, Chelsea FC director
Timestamps: 08:05–13:15

• Chelsea FC Investment & Achievements

  • Proud of the club’s global expansion and the women’s team’s continued dominance.

• Valuations & Alternative Sports Investments

  • Rise in U.S. and UK sports franchise values pushes investors to seek opportunities in emerging markets/sports, such as cricket.

  • Cricket’s “The Hundred” competition in the UK is modeled on India’s IPL, offering promising growth and high broadcast rights values.

    “It’s a great window of the summer in the UK… you have a good base.” – Jonathan Goldstein (10:41) “You can’t just pick up a sport and put it in each country unless there is an underlying desire…there’s so much competition in the U.S.” – Jonathan Goldstein (12:05)

• Cricket’s U.S. Future

  • While local cricket communities are vibrant (notably in NY), cultural barriers and entrenched major leagues limit mainstream breakthrough.

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3. 2026 Outlook: North American Railroads

Guest: Lee Klaskow – Bloomberg Intelligence, Senior Transport Analyst
Timestamps: 15:24–20:12

• Earnings & Demand Projections

  • Earnings growth expected to accelerate to high single digits in 2026, but demand outlook remains tepid—particularly due to tariff uncertainty and "stop and go" shipping patterns.
  • CSX and Canadian Pacific/Kansas City are positioned to outperform in volume growth; Norfolk Southern projected as flat.

• Tariff Effects

  • Impact varies: Canadian rails hit on metals, autos, forest products; U.S. rails (e.g., Union Pacific) face challenges via import volatility.

    “It’s really creating a level of uncertainty among shippers…not allowing the rails to operate as fluid as they possibly can.” – Lee Klaskow (17:30)

• M&A Landscape

  • The proposed Union Pacific–Norfolk Southern merger faces a high regulatory bar; only a 40–45% chance of approval.
  • Regulatory focus is on competition enhancement and public benefit, with a ruling likely in early 2027.

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4. 2026 Telecom & Satellite Sector

Guest: John Butler – Bloomberg Intelligence, Senior Telecom Analyst
Timestamps: 20:24–24:42

• Revenue & Competitive Dynamics

  • Wireless pricing promotions likely to intensify as AT&T and Verizon’s new CEOs seek to restore growth, especially at Verizon.

  • Fixed wireless broadband is a key area of subscriber growth.

    “The bullets are really flying in wireless right now…Dan Schulman at Verizon…is very focused on volume.” – John Butler (20:39)

• Satellite Partnerships & Coverage Expansion

  • Starlink (T-Mobile) and AST SpaceMobile (AT&T, Verizon) are partnering with telecoms to provide satellite-based connectivity, aiming for near-universal coverage.

    "It's almost like cell sites in space at this point." – John Butler (22:53)

• 6G Roadmap

  • 6G standards are in early development, with potential arrival around 2030; focus for now remains on mid-cycle 5G improvements.

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5. Cloud Gaming & AI Acceleration

Guest: Nathan Naidu – Bloomberg Intelligence, Technology Research Analyst
Timestamps: 24:57–27:48

• Decline of Consoles & Rise of Mobile

  • Console gaming will persist as a niche; cloud infrastructure and mobile devices will drive mainstream growth.

  • Gen Alpha and Z prefer mobile gaming due to convenience; they spend significant daily screen time gaming.

    “...why not? …If they can have the same experience on a mobile device, why not, right?” – Nathan Naidu (25:22)

• Technological Challenges & Outlook

  • Latency, dictated by proximity to cell towers and data centers, is the key pain point; improving global 5G and 4G coverage is reducing this gap.
  • Mobile gaming’s share of user attention and spending power will only grow over the decade.

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6. US Machinery Sector 2026 Outlook

Guest: Christopher Chiolino – Bloomberg Intelligence, Senior US Machinery Analyst
Timestamps: 29:23–34:44

• Sector at an Inflection Point

  • After years of downturn, machinery earnings are poised for a rebound, driven by power generation, infrastructure, and reshoring investments.

  • The most positive outlook is for construction equipment; ag machinery remains challenged by weak farm fundamentals and export uncertainty.

    "We believe that the U.S. machinery earnings are likely approaching a inflection point in 2026..." – Christopher Chiolino (29:39)

• Caterpillar’s (CAT) Bull Run

  • Optimism remains for CAT and Cummins due to their exposure to the booming power generation market and data center infrastructure.
  • Caterpillar’s backlog is at record levels, powered by expanding large engine capacity.

• Agricultural Equipment Outlook

  • 2026 could mark the trough for ag machinery, with volumes at a 40+ year low.

  • Export market weakness, especially in China purchases, keeps the outlook cautious.

    “Crop prices are still low…until we get tangible progress on China executing on purchase orders, I think farmers are just going to be hesitant to go out and spend on equipment.” – Christopher Chiolino (33:25)

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7. Wall Street Storytelling: ‘Bull Run’ Film

Guest: Bill Keenan – Writer and Producer
Timestamps: 34:52–41:40

• Film Summary

  • “Bull Run” is based on Keenan’s tongue-in-cheek memoir of his time as an outsider in investment banking—a world he portrays as high-pressure and comically absurd rather than solely corrupt.

    “It’s not so much about the corruption as it is about just observing the absurdity that goes on in this world.” – Bill Keenan (35:46)

• Banking Reality vs. AI Future

  • Much of entry-level banking work is rote and could be outsourced or automated (AI), but those early years create bonding experiences.

    “Do I need to be sitting at the printer at 2:00 in the morning on a Tuesday? I mean, can’t AI do this for me?” – Paul Sweeney (40:08) “To have that experience as a human, to pay your dues, there’s huge value to that." – Bill Keenan (40:11)

• Film Production Challenges

  • Filmed during the pandemic in one location, requiring creative adaptation of an experience that’s largely internal and solitary into something visually compelling.

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Notable Quotes

| Timestamp | Speaker | Quote | |-----------|---------|-------------------------------------------------------------------------| | 02:59 | Deb Akin | "We’re calling green shoots into the end of the year." | | 06:57 | Deb Akin | "If you bought at Hermès, you have a just as good or a better correlation than if you’d have held gold." | | 10:41 | Jonathan Goldstein | "It’s a great window of the summer in the UK… you have a good base." | | 12:05 | Jonathan Goldstein | "There’s so much competition in the U.S. for all the major sports...I think cricket will find itself even harder." | | 17:30 | Lee Klaskow | "It’s really creating a level of uncertainty among shippers…not allowing the rails to operate as fluid as they possibly can." | | 20:39 | John Butler | "The bullets are really flying in wireless right now…Dan Schulman at Verizon…is very focused on volume." | | 22:53 | John Butler | "It's almost like cell sites in space at this point." | | 25:22 | Nathan Naidu | "...why not? …If they can have the same experience on a mobile device, why not, right?" | | 29:39 | Christopher Chiolino | "We believe that the U.S. machinery earnings are likely approaching a inflection point in 2026..." | | 33:25 | Christopher Chiolino | “Crop prices are still low…until we get tangible progress on China executing on purchase orders, I think farmers are just going to be hesitant to go out and spend on equipment.” | | 35:46 | Bill Keenan | "It’s not so much about the corruption as it is about just observing the absurdity that goes on in this world." | | 40:08 | Paul Sweeney | “Do I need to be sitting at the printer at 2:00 in the morning on a Tuesday? I mean, can’t AI do this for me?” | | 40:11 | Bill Keenan | “To have that experience as a human, to pay your dues, there’s huge value to that." |

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Timestamps Index

• Luxury Goods: 02:12–07:51
• Sports Investments/Cricket: 08:05–13:15
• Railroads: 15:24–20:12
• Telecoms & Satellites: 20:24–24:42
• Cloud Gaming: 24:57–27:48
• Machinery: 29:23–34:44
• Wall Street Film: 34:52–41:40

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Tone & Style

The episode maintains a conversational, data-driven style with moments of humor and candor, especially in the film segment. Analysts deliver deep dives into each sector, providing actionable intelligence with a global perspective and a pragmatic view of both risks and opportunities ahead.

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This summary captures the essential highlights and expert analysis of the original episode, providing a comprehensive guide for listeners and non-listeners alike.

Transcript

[Scarlet Fu]

Ditch the complexity. Intuit Enterprise Suite delivers AI native ERP power that is intuitive and intelligent. Scale faster with advanced control. Getting started in days, not months. Learn [e-mail] Enterprise and get the power you need. Bloomberg Daybreak is your best way to get informed first thing in the morning, right in your podcast feed. Hi, I'm Karen Moscow.

[Lee Klaskow]

And I'm Nathan Hager.

[Paul Sweeney]

Each morning we're up early putting together.

[Lee Klaskow]

The latest episode of Bloomberg Daybreak US Edition. It's your daily 15 minute podcast on.

[Paul Sweeney]

The latest in global news, politics and international relations.

[Scarlet Fu]

Listen to the Bloomberg Daybreak US Edition podcast each morning for the stories that matter with the context you need.

[Lee Klaskow]

Find us on Apple, Spotify or anywhere you listen.

[Scarlet Fu]

Bloomberg Audio Studios Podcasts Radio News this is Bloomberg Intelligence with Scarlet Fu and Paul Sweeney.

[Paul Sweeney]

How do you think the Fed is looking at tariffs, the uncertainty of tariffs?

[Scarlet Fu]

Let's take a look at the sectors and how they perform.

[Paul Sweeney]

A lot of investors getting whipsawed every.

[Scarlet Fu]

Day by news events, breaking market headlines and corporate news from across the globe. Could we see a market disruption, a market event?

[Paul Sweeney]

People just too exuberant out there.

[Scarlet Fu]

You see some so called low quality stocks driving this short term rally. Bloomberg Intelligence with Scarlet Fu and Paul Sweeney on Bloomberg Radio, YouTube and Bloomberg Originals.

[Paul Sweeney]

On today's Bloomberg Intelligence show, we dig inside the big business stories impacting Wall street and the global market.

[Scarlet Fu]

Each and every week we provide in depth research and data on some of the 2000 companies and 130 industries our analysts cover worldwide.

[Paul Sweeney]

Today we'll look at the outlook for US railroad transportation, telecoms and cloud computing business for 2026.

[Scarlet Fu]

Plus, we speak with the writer and producer of the film Bull Run on capturing the excess and high octane world of Wall Street.

[Paul Sweeney]

But first, we lean into the world of luxury. According to the most recent Bloomberg Intelligence research, the recovery of luxury goods makers in 2026 hinges on limited price increases and a shift toward volume led growth.

[Scarlet Fu]

For more poll and guest host Norma Linda spoke with Deb Akin, Bloomberg Intelligence Luxury Goods Analyst.

[Deb Akin]

We started out 2025 with an expectation that we'd move back to growth and that certainly didn't materialize through the first half of the year, but we seem to be ending at around 3 to 4% growth as we exit 2025. Now the US has been robust Middle east doing very well, but particularly in the first half of the year it was China which was the drag. And what we've noticed as we end the year we've actually just heard on a fireside chat over the last few days from l' Oreal where they're mentioning high end beauty doing very well out of the US but also in China too. So they're adding to what we've heard from the luxury companies where we've seen two thirds of luxury companies and most of the top 10 switch into growth in China in Q3 from a low base from negatives a year ago, but actually that we're calling green shoots into the end of year.

[Scarlet Fu]

How are these companies holding up as it relates to tariff overhangs?

[Deb Akin]

Yeah, so we did a lot of work around May time and again through July and August with the different tariff rates moving around and what we've actually seen it was less detrimental overall in our numbers. We probably think that eps won't be pulled as much as was expected because there have been some cost savings and the biggest companies and those that were where brands were really in favor have managed to pass on price and generally because these companies operate on high gross margin the cost into the US they've moved around 2 to 4% on additional price into the US as well as 2,3% from the beginning of the year. So some of those brands have absorbed passing through 6,7% pricing to the US consumer and we think into 2026 that moves nearer to 2 to 3% overall so as be less intimidating for the consumer overall 2026. So it's one of our drivers for the year ahead.

[Paul Sweeney]

Deb, talk to us about the Chinese consumer. Are they not traveling? So is that an impact for New York and London and Paris and things like that?

[Deb Akin]

We actually have a survey out of our Asia office that we've just incorporated into a travel document which we'll be producing, but this piece of work has already produced and actually on October versus May the China consum. China is looking to travel more into Europe to start with. So that's the first big positive. I think part of that is just on the way the tariff situation has gone maybe so that will be the first time that we're looking for them to come back. So versus three months ago they're looking at traveling outside of Asia. But overall what we call the China cohort that's actually really operating more avidly across the Asia region. We're not seeing so much travel from Chinese into Japan and of course we know that there are. There's some political commentary there as well. So we wouldn't expect that to pick up next year. But we are seeing Korea, Singapore, Australia and others being positive and the first move to Europe should hopefully indicate that towards the end of the year and as tariffs settle more in 2026 that we see some of that return to the US as well.

[Scarlet Fu]

And sticking with China, how are we thinking about supply chain operations as it relates to a lot of these luxury firms, especially stemming from China?

[Deb Akin]

Yeah, so if we think about maybe if we, we look at it from some of the the aspirational entry level luxury companies, then they will have some production moving around the Asia region. But if we think about the heritage traditional higher end luxury companies, then most of their production is France, Italy, some Portugal, some parts of southern Spain. Not so much going on in the Asia region. And so they've been able to manage on the 20% tariff from made in Europe over to the US more so than some of the peer group. For example, one of our entry level that we call branded affordable jewelry, Pandora producers out of Thailand, it's really suffered in terms of share price this year versus some of the Asian retail jewelers who've done very, very well on the price of gold.

[Paul Sweeney]

So you got to explain this whole handbag thing to me, Deb. I was in Italy in September. We toured some place factories or artisan shops where they make these handbags and they sell them for tens of thousands of dollars in euros. What is going on there? Who buys that?

[Deb Akin]

It has, I always say if you bought at Hermes, you have a just as good or a better correlation than if you'd have held gold. So I think that these bags, particularly for sought after material, the craftsmanship and the fact that they have continued value are seen as investment pieces. And so we have the middle ground if we look over the last year and one of the things that we think for 2026, bags from Tapestry, from coach Ralph Lauren, others as well as Ready to Wear have done very, very well. Resonated with the consumer who's been a little bit more skeptical on the consumer sentiment side and maybe shopp around $1,000 or so. But at the very high end there hasn't been much of a move. So we've seen Hermes, Brunello, Cucinelli and others doing very, very well at that high end.

[Paul Sweeney]

Our thanks to Deb Akin, Bloomberg intelligence luxury goods analyst. We move next to a conversation with Jonathan Goldstein, co founder and CEO of Caine International. It's an alternative asset manager specializing in real estate investment solutions.

[Scarlet Fu]

Jonathan's real estate and experiential investments have helped him morph into sports related investments. In 2022 he also became director and co owner of Chelsea Football Club, a prominent soccer club in the English Premier League.

[Paul Sweeney]

He shares details about his new club and what it means to be part of a growing ownership group.

[Jonathan Goldstein]

Well, I'm on the board of Chelsea and obviously the buyout was led by my partner Todd Bowley, and in partnership with Clear lake back in 2022. Team's doing well, obviously. Huge success in the summer in New York, winning the club World cup championship, which was a proud moment for the fans. The, the women's team done extraordinarily well winning the Women's Premier League for multi times in a row last summer. So, you know, we're very proud of the development since we've been involved in 2022, we think there's more to come. We're very excited.

[Paul Sweeney]

So the valuations on some of these franchises, whether it's huge franchises like in the English Premier League or the National Football League here in the US just beyond the realm of arguably even 100 millionaires, these are billionaires, if not private equity, corporate money. So that leads some people to say, hey, I'm going to go to some of these smaller sports or where I can maybe get some better value. How about cricket? Trent Rockets, what's the play there? And I don't know. That's all I got. Cricket.

[Jonathan Goldstein]

First of all, let me explain the way that the hundred competition works that we've invested in and try and put it in an American language, please. Let's assume you have a baseball game.

[Nathan Naidu]

Yep.

[Jonathan Goldstein]

Where you have 100 pitches per side and the objective is to score as many runs off those 100 pitches as you can to short form nature of the game, two to two and a half hours. Exciting. Every pitch is important. And this is what the English Cricket Board created five years ago in London in the UK with the hundred with eight franchises around the country. Now it modeled itself on the Indian Premier League, which obviously has been a phenomenal product for the Indian population and globally. For those who like cricket, it has the second most valuable broadcast rights a game in the world behind the NFL on a per game basis. There are larger broadcast contracts, but not on a per game basis. So we have watched this competition in the UK and we thought there was a significant opportunity for us to get involved, add value. And we watched other people get involved, obviously. And there's, you know, of the eight teams, four of them are owned directly by Indian Premier League teams.

[Paul Sweeney]

Okay.

[Jonathan Goldstein]

One of them is owned by a group of what they call themselves the tech titans from the west coast of America. You know, the Microsoft CEO by way of example.

[Paul Sweeney]

Okay.

[Jonathan Goldstein]

And so, you know, a lot of, you know, Indian heritage, love cricket. And so we thought, you know, here is a significant opportunity to create the baby product to the IPL and over five to ten years grow that. It's a great window of the summer in the uk, Obviously you have to have just like in America, a good external climate to play cricket. You want to get outdoors, you can't play in the rain, just like baseball. So it's a great time mid July to mid August where there's a window for an opportunity to build huge product and broadcast and spectator. And I think what's really important is that you're building in a country which has an undercurrent of love for the sport. So therefore you have a good base.

[Paul Sweeney]

Thing for me to go see. I'm not to see a cricket match.

[Jonathan Goldstein]

Well, I'm going to invite you next summer. I think what, what we're doing here and what playing back to your initial question. We've watched the valuations of the NFL teams, of the, you know, the baseball teams. I mean, Todd obviously led the way with the Dodgers, you know, over 10 years ago at just around $2 billion. And we've seen what trades are happening today. You know, we saw, you know, the valuations been put on the NFL teams recently and even the MLS is trading at very high levels. So, you know, you try and see a situation where you think you can add value and grow a franchise and grow a business.

[Scarlet Fu]

Jonathan, do you see a future for cricket in the us?

[Jonathan Goldstein]

I think there's a future for most sports in most places. It depends upon the depth of demand and the depth of local participation. I don't think you can just pick up a sport and put it in each country unless there is an underlying desire. But in my view, there's a much greater opportunity in the UK because of the, the inherent nature, the love of cricket that people grew up with. And I think there's so much competition in the US for again, basketball and baseball and football and all the major sports. I think the MLS has made a breakthrough, but it hasn't really got up to the top table. And I think if you look at how many years that's been at it, I think cricket will find itself even harder. To get to that top table in.

[Paul Sweeney]

The US go to any of the parks in Queens, Brooklyn across the street from my house. World class cricket dudes out there.

[Scarlet Fu]

Yeah, yeah, they're, they're playing every Sunday and every Saturday.

[Paul Sweeney]

It's crazy. Everyone.

[Jonathan Goldstein]

Well, it's, you know, I think Americans have had a view of cricket overall, which is wrong.

[Nathan Naidu]

Right.

[Jonathan Goldstein]

It's an amazing sport. Even the five day variety is probably the most, the most enthralling sport you could ever watch.

[Paul Sweeney]

Yeah.

[Jonathan Goldstein]

And I think that, you know, I think that cricket is a growth area and that's why we put some money behind it.

[Paul Sweeney]

Our thanks to Jonathan Goldstein, co founder and CEO of Kane International.

[Scarlet Fu]

Coming up, railroads on the move, telecoms in orbit and gaming in the cloud as we look ahead to 2026.

[Paul Sweeney]

You're listening to Bloomberg Intelligence on Bloomberg Radio. Providing in depth research and data on 2000 companies and 130 industries.

[Scarlet Fu]

You can access Bloomberg Intelligence via bigo on the terminal. I'm Scarlet Fu.

[Paul Sweeney]

And I'm Paul Sweeney and this is Bloomberg. Stop struggling with complex, costly ERP systems. Introducing Intuit Enterprise Suite, the AI native ERP that adapts with your business. Get enterprise grade power made, intuitive, intelligent, adaptive and ready for what's next. It streamlines complex financial management, automates workflows and unifies all your entities. It's simple to access and quick to adopt, helping you get going in days, not months. Get the power you need without the complexity. Learn [e-mail] Enterprise Now.

[Jonathan Goldstein]

This is Tom Keene inviting you to join me for the Bloomberg Surveillance Podcast. It's about making you smarter each and every business day. We bring you a recap of what happened overnight in Europe and Asia, the day's economic data and complete coverage of the US Market open. We cover stocks, bonds, commodities, currencies, even crypto. All the information you need to excel. Bloomberg Surveillance also brings you the analysis behind the headlines. We do that with lengthy conversations with our expert guests, the smartest names in economics, finance, investment and international relations. We do all this live each and every weekday, then bring you the best analysis in our daily podcast. Search for Bloomberg surveillance on YouTube, Apple, Spotify or anywhere else you you listen on the east coast. Listen at lunch and on the west coast when you wake up. That's the Bloomberg Surveillance Podcast with me, Tom Keene, along with Paul Sweeney and Lisa Mateo. Subscribe today wherever you get your podcasts.

[Scarlet Fu]

This is Bloomberg Intelligence with Scarlet Fu and Paul Sweeney on Bloomberg Radio.

[Paul Sweeney]

We start on the rails. Heading into 2026, North American railroad companies are betting on precision technology and cost control as they navigate steadier demand.

[Scarlet Fu]

According to the latest Bloomberg Intelligence research, North American railroad's earnings growth look poised to pick up next year, but may fall short of double digits because of President Trump's tariffs.

[Paul Sweeney]

For more, guest host Christine Aquino and I are joined by Lee Klaskow, Bloomberg Intelligence Senior transport, Logistics and Shipping analyst.

[Lee Klaskow]

We are thinking that next year is going to be a better year, but it's not going to be a great year. So earnings for the rails, broadly speaking, increased mid single digits. We expect that to accelerate to high single digits. I think investors would really like to see it get it into the double digits and even mid teens. But I think we might be a ways out for that for a while and that's really being driven on the demand side. We're really expecting tepid demand across the board at low single digit growth. Some rails might do slightly better than others like csx which has easier comparisons versus this year and Canadian Pacific which is has a lot of synergy opportunities following its merger with Kansas City a couple of years ago. And they're still working through some new business opportunities following that merger. So those two rails will probably outperform when it comes to volume growth. And you could see flat growth from a rail like Norfolk Southern which is dealing with possibly some lost share on the intermodal side and some tougher comparisons when it comes to expectations. Export coal.

[Scarlet Fu]

Yeah, well, very interesting, Lee. Of course, still a challenging outlook it seems like for the rail sector next year. How do tariffs play into that outlook? Because we still don't have a lot of clarity on whether tariffs are going to stay. But if they do, how could that disrupt the outlook for rail in 2026?

[Lee Klaskow]

Yeah, so it's impacting rails differently. It's impacting the Canadian rails, Canadian national and Canadian Pacific. Kansas City or Kansas City Southern. They're impacting them, you know, kind of on, if you think about it, forest products or metals or autos that's being negatively impacted. And if you look at Union Pacific, you know, if you have inconsistency with imports coming into Southern California, that's impacting them. So you know, it's really creating a level of uncertainty among shippers and that's creating, you know, what I would say, not allowing the rails to operate as fluid as they possibly can because of that stop and go demand.

[Paul Sweeney]

Lee, one of the big topics in the railroad industry, and I think it'll be most of the year, is the proposed Union Pacific Norfolk Southern M and A transaction here creating the first east west coast to coast railroad in the United States. Is this going to get approved, do you think?

[Lee Klaskow]

We're, we're, we're kind of cautious on that. You know, I think we have like a 40, 45% probability that the deal gets done and we're well below consensus. We admit we might be a little naive thinking that you know, the SDB will remain, you know, neutral when they take a look at this deal because the parties have to prove that it's in the public interest and it's going to enhance competition. Some could argue that some of that enhanced competition is going on right now because you've seen Burlington Northern, which is a competitor in the west, teaming up with CSX to provide coast to coast services not through an acquisition but through more of a collaborative effort. And you are seeing, you know, CSX winning some share from Norfolk Southern based on that.

[Jonathan Goldstein]

Yeah.

[Scarlet Fu]

Well, if that does not clear the regulators, Lee, what do you think that will say about the future of potential consolidation or strategic partnerships across the rail industry? Is it kind of do you think people are going to see as a one off sort of situation or is it kind of a harbinger of challenges to come when it comes to M and A in this space?

[Lee Klaskow]

Well, the SDB raised the bar for large Class 1 railroads to merge back in 2001. And that was really driven on some service issues from past mergers. And so, you know, that's why the bar has been set so high. All the other railroads, obviously they're talking in their book, but you know, they think that they can create a better network through collaboration. You know, we think that it can happen through a merger or through collaboration. But you know, like I mentioned earlier, Union Pacific and Norfolk Southern still have to, you know, clear that high hurdle that enhances competition. And it's also in the public interest, which is again, it's really tough to prove. Also, you know, we expect that, you know, we probably get an answer about whether or not the STB or the Service Transportation Board will approve this deal in early 2027. So we'll be talking about it all year and I hope to talk to you guys about it all year.

[Paul Sweeney]

Our thanks to Lee Klaskow, Bloomberg Intelligence Senior Transport Logistics and Shipping Analyst. We move next to the telecom and satellite space. Bloomberg Intelligence recently put out its outlook for US telecoms and satellites in 2026.

[Scarlet Fu]

According to their research, slowing wireless service revenue gains and mounting cable competition are prompting a deeper push into as US Telecoms enter next year.

[Paul Sweeney]

For more guest host Alex Semenova and I were joined by John Butler, Bloomberg Intelligence Senior Telecom Analyst.

[John Butler]

So I think the big thing to keep in mind here, Paul, is as we roll into 2026, I think we're going to see price promotion take a modest step up. The bullets are really flying in wireless right now. I think part of it is AT&T and Verizon both have new CEOs, both CEOs are going to want to make their mark. I think the one to watch is Dan Schulman at Verizon. He is very focused on volume. He wants to get Verizon back to subscriber growth. And I think the only way to do it is going to be by promoting a little bit more aggressively than they have in the past.

[Scarlet Fu]

John, where do you see the strongest incremental demand coming from? Is it going to be mobile data? Is it going to be broadband?

[John Butler]

Two areas, Alex, one, as you touched on, is broadband. That's a real growth factor for the telecoms. If you look at fixed wireless access, which is delivering broadband over a wireless link into the home, that has proven to be exceptionally popular with people. So I think all three telcos are going to lean into broadband in order to supplement the slowdown in wireless growth. But the one area I'm watching as we move into next year is satellite. Starlink is partnered with T Mobile. The two of them are already offering limited texting service on a nationwide basis. It's sort of early stages. They are early innings, if you will, for them. Verizon and AT&T are partnered with AST Space Mobile, which is in the process of launching its constellation now. They actually have more better satellites than Starlink. And so the space race is on, as I like to say. It's going to be really interesting to see Once Verizon and AT&T are able to launch services early next year, how that market segment unfolds.

[Paul Sweeney]

So the wireless operators, the Verizon of the world, at&t, John, are they. They're partnering with some of these space satellite services?

[John Butler]

Yeah, I mean, I think the way to think about it, Paul, is it's almost like cell sites in space at this point. Yep. So the major carriers have partnered with Starlink and AST to provide that infrastructure and the transmission capability up in space to be able to provide coverage outside the range of terrestrial networks now. So essentially that concept of coverage everywhere is going to become a reality as we move through next year.

[Scarlet Fu]

I will say I was getting a new iPhone in T Mobile. I'm still grandfathered into my father's plan. Very lucky. Still paying for my cell phone. But they immediately offered me, not uncommon, by the way, to get WI FI.

[Christopher Chiolino]

With them with T Mobile.

[Scarlet Fu]

So it's really interesting. And a new offering from them, as.

[Paul Sweeney]

You mentioned, John, is there a 6G out there? Because we. I think I've grown up and we've had 3G, 4G, 5G. Is there a 6G out there?

[John Butler]

Not yet. I think 6G is going to move onto the horizon probably as we move through next year. It's a development process by the industry and so that standard, if you will, is getting developed now by industry committees. It will then move into test probably in 2028 and become a reality for us by 2030. Right now we're mid cycle with 5G. So if you think back to when 4G was originally launched, it much lower speed than it is today. So that standard those generations of mobile evolve over what are typically 10 year cycles. So we're mid cycle with 5G. Expect better speeds and better performance there as we move through the next five years and then ultimately 6G will appear probably again in the 2030 time frame.

[Paul Sweeney]

Our thanks to John Butler, Bloomberg Intelligence Senior Telecom Analyst. Now we move to the cloud gaming space. Bloomberg Intelligence has recently put out a deep dive into cloud streamed gaming and specifically how AI could accelerate game development with a shift toward cloud based games.

[Scarlet Fu]

This development could in theory make physical gaming consoles obsolete. For more we talked to Nathan Naidu, he is Bloomberg Intelligence Technology Research analyst.

[Nathan Naidu]

Consoles will decline gradually and that's what I mean and no kind of remaining over the long term as a niche device for loyal fans, the really hardcore gamers as advancement in cloud infrastructure structure. And we see what's happening with data centers as well as a wider spread of mobile gaming playing games on mobile devices, whether smartphones or tablets, as that gain wider spread and people become less interested in playing games at an unportable gaming hardware that's stuck at home or living room. If they can do so and have the same experience on a mobile device, why not? Right.

[Paul Sweeney]

So where are we in kind of that evolution in terms of really putting more and more of the content of the technology of the capabilities in the cloud. How is that changing the gaming experience, the gaming business?

[Nathan Naidu]

Yes. So the key pain point to cloud gaming is network latency because that literally depends on the distance between the user's hardware, whether a mobile device or a console to the nearest cell tower. And we know that 5G network coverage are improving not just in emerging markets, but also becoming better in even developed markets including China and the and so as that infrastructure and also cloud improve, because the proximity to data centers also is a factor in determining the experience of cloud. So far in emerging market there is a pain point but we're seeing really huge uptick in coverage footprint whether 5G or 4G LTE in markets like India and Middle east and Latin America. So that just support our conclusion that in the next 10 years that experience, that pain point would become better. And also let's not forget that mobile phones, mobile screens capture a lot of our attention economy. Actually there is a study according to Harmony Healthcare it that it captures more than five hours of our time averaged every day and about 20% of those time actually go to gaming among generation Alpha and Generation Z and they are the bulk of the gamers and also these gamers don't really care about playing games at home anymore if they came playing online play on mobile because what they care about is access and also being able to do things on their mobile devices. So I feel like with this generation coming up and entering into the workforce and they are the one who would see spending power increasing and I feel like there's a lot less inclination to actually play games on a console if 10 years down the line you can have the same experience playing games on a mobile device.

[Paul Sweeney]

Our thanks to Nathan Naidu, Bloomberg Intelligence Technology Research Analyst.

[Scarlet Fu]

Coming up, from factory floors to farm fields, how U.S. machinery makers are positioned for 2026.

[Paul Sweeney]

You're listening to Bloomberg Intelligence on Bloomberg Radio providing in depth research and data on 2000 companies and 130 industries.

[Scarlet Fu]

You can access Bloomberg Intelligence via bigo on the terminal. I'm Scarlet Fu.

[Paul Sweeney]

And I'm Paul Sweeney and this is Bloomberg. I'm Matt Miller.

[Scarlet Fu]

And I'm Hannah Elliott inviting you to join us for the Bloomberg Hot Pursuit podcast.

[Paul Sweeney]

Every week we bring you news and industry insight on everything cars and we.

[Scarlet Fu]

Do a whole lot more than just talk about cars, Matt. We actually get behind the wheel of basically every latest model, especially the luxury ones and the sports cars direct from the showroom floor.

[Paul Sweeney]

It really is remarkable how many cars we have access to. I feel a little bit guilty about it, but everything from $40,000 EVs to ex dollar supercars.

[Scarlet Fu]

We also speak with the insiders who shape the automotive industry, from the top CEOs and collectors to visionary designers and racing champions.

[Paul Sweeney]

Search for Bloomberg hot pursuit on YouTube, Apple, Spotify or wherever you get your podcasts.

[Scarlet Fu]

Maybe you listen while you're on your weekend drive. Maybe go into cars and coffee. Listen to us talk about what we are driving this week.

[Paul Sweeney]

That's Bloomberg Hot Pursuit. I'm Matt Miller in New York.

[Scarlet Fu]

And I'm Hannah Elliott in Los Angeles. List subscribe today wherever you get your podcasts. This is Bloomberg Intelligence with Scarlet Fu and Paul Sweeney on Bloomberg Radio.

[Paul Sweeney]

Let's turn now to US machinery heading into 2026. The outlook is defined by softer demand but steady investment in manufacturers focus on automation, replacement cycles and cost discipline.

[Scarlet Fu]

For more on this, Paul caught up with Christopher Chiolino, Bloomberg Intelligence senior U.S. machinery analyst.

[Christopher Chiolino]

We believe that the U.S. machinery earnings are likely approaching a inflection point in 2026, really after a multi year downturn. You know, despite lingering tariff headwinds, the prospect of lower interest rates, policy and regulatory clarity, normalizing inventories and better pricing have really provided a favorable setup for most machinery producers heading into 26. I would say the outlook outlooks do vary a little bit by end market. You know, we're most constructive on the outlook for construction equipment next year, particularly as non residential construction markets approach a trough. You also have favorable secular trends around power generation, infrastructure and mega projects as well as some of these reshoring investments. So we have really good visibility in terms of 26 and really even beyond. On the flip side of that, we're a little more cautious on the ag equipment outlook. And then I throw commercial vehicles somewhere in between there equipment companies.

[Paul Sweeney]

I think about Caterpillar for example, and that stock's up 54% year to date. So has the market already discounted the cyclical upturn or is there more to go?

[Christopher Chiolino]

Yeah, I think there's a lot of Runway here. There's been a lot of optimism around their power gen and exposure to the data center market. But I think we're still very early innings in this story playing out. They're going to double their large engine capacity here through the end of the decade. Gas turbines are going to be up two and a half times. You're just beginning to see some of these products come to the marketplace and really there's just insatiable demand for power generation. And I would say Caterpillar and Cummins are somewhat uniquely positioned within the machinery space to kind of capitalize on these, these longer term secular stories.

[Paul Sweeney]

Yeah, that is is a long term secular story. Power generation. So do they disclose backlog information or anything like that to get a sense of kind of how big this business could be for them?

[Christopher Chiolino]

Yeah, so Caterpillar's backlog for the enterprise is at a record level and it just continues to, you know, set new records with each passing quarter. In terms of their actual power generation business? No, they keep that pretty close to the vest. But it does extend multiple years. And the fact that they're making, you know, essentially more than doubling their large engine capacity through the end of the decade just I think lends support to. They have very good visibility for several years out. And same thing I would allude to that as Cummins as well. You know, they have very good backlog visibility in terms of their power generation business. And then you throw on, you know, the cyclical recovery that we show should see in these businesses. It's a pretty favorable setup not only for 26, but beyond.

[Paul Sweeney]

All right, you mentioned the other part of the business or a different part of the business, that one that focuses on the agricultural sector of the economy. We know the farmers in a really tough spot these days and when they face financial difficulties, they're not buying deer tractors and things like that. So what's the outlook there over 26?

[Christopher Chiolino]

Yeah, right now we anticipate that the large ag market here, normal North America, will be down another 10 to 15% in 2026. So this is going to mark the third year of a downturn. And really, to put things into perspective, assuming we're down another double digits in 26, we're going to be. Volumes are going to be at the lowest level in more than four decades as long as we've been tracking the industry. So I do think there's pretty high degree of confidence that this will mark the trough of the cycle. And we actually think that downside risk is probably limited here relative to a lot of the other sectors that we cover. The problem is, you know, farm fundamentals still remain quite weak. Crop prices are still low while the government still continues to, you know, hand out additional aid payments. Farmers historically don't use this to go out and spend on new machinery. But we think really the bigger overhang here is still the lingering export market uncertainty. You know, we did have a U S China trade agreement. I think farmers are really just going to take a wait and see approach. And until we get tangible progress on, you know, China executing on some of these purchase orders and commitments, I think farmers are just going to be hesitant to go out and spend on equipment. When we do see that come to fruition, hopefully then you, you'll start to see a rebound in crop prices and then maybe we could become a little bit more constrained on the equipment outlook there.

[Paul Sweeney]

So just to put a bow on that, Chris, we got about 30 seconds left. What is the export market for the US farmer generally, on average? And what is it today?

[Christopher Chiolino]

Yeah, so we export the vast majority, particularly our row crops, soybeans. China is still the largest buyer of our beans. We do send a lot of corn to Mexico and Japan as well. But those big row crops, crops, corn, soy, wheat, that's what really drives farmer profitability. It's more than half of US Crop cash receipts. And we need to start to see some kind of a rebound there before I think we become a little bit more positive on the outlook.

[Paul Sweeney]

Our thanks to Chris Ciolino, Bloomberg Intelligence senior U.S. machinery analyst. We shift gears now to the creative side of financial storytelling.

[Scarlet Fu]

Wall street has long been a backdrop for films exploring ambition, excess and high stakes drama. From the Wolf of Wall street to Margin Call and the Big Short.

[Paul Sweeney]

Now you can add another to your list. It's called Bull Run, a film based on the memoir entitled Discussion Tales of a Rookie Wall Street Investment Banker. For more, we caught up with the film's writer and producer, Bill Keenan.

[Bill Keenan]

So like all those movies, classics, right, they Bull Run has an outsider as a protagonist. So we kind of have that journey of someone entering this world, trying to figure out what to do and where they fit in. I think the difference is a lot of those films follow that story of kind of there's this crazy excess, there's ultimately this corruption that happens and then redemption. And the protagonist in Bull Run really retains this outsider's perspective, which is the way I experienced it. I kind of saw life through the eyes of a storyteller and tried to maintain this distance and I think we tried to do that in this film. So it's not so much about the corruption as it is about just. Just observing the absurdity that goes on in this world.

[Paul Sweeney]

So you were on Wall Street. Tell us what your, what you did in Wall street, how that might have influenced kind of this project.

[Jonathan Goldstein]

Yeah, what I did.

[Bill Keenan]

Well, my by title, I was an investment banking associate in the industrials group at Deutsche Bank. We parted ways after about two years. I think it was mutual. It wasn't for me and it wasn't. They weren't sad to see me go, but it was. I mean, the beauty of Wall street is that again, as a storyteller, it's such a combustible environment. So everything is so urgent and is life and death. But then it's like this is a specialty lubricants deal. And like it's not, it's not, it's okay if it doesn't go through, but. But it's fun to be a part of. And I knew the second that I started this would be so ripe with anecdotes and characters that it was, you know, I needed to stay long enough that I could get enough material to write about it.

[Scarlet Fu]

I kind of think of your book discussion materials as a 2020 version of Liar's Poker, except instead of bond traders, you're writing about investment Bankers. So when you were there, I mean, you kind of. It sounds like you decided early on that you're going to take notes and observe everything. What were you doing in meetings? Were you taking notes on what people were saying or were you kind of engaging in, you know, the lubricants deal?

[Bill Keenan]

Yeah, I mean, I mean, I think, you know, like this. I was always commended at the beginning by like the staffers and the senior bankers because they saw me with the notepads and every day was a new notepad. And. And of course, they didn't necessarily know that I wasn't taking notes on the content as much as, like, who was doing what and what would lend itself to a story. But it was, you know, it felt like it was a lot longer than two years, but I got enough out of those two years to create a story.

[Paul Sweeney]

They packed a lot in two years because you're working round the clock.

[Bill Keenan]

Weekends, you're working. Yeah. And you know, I like to kind of the way that I try to capture what the experience was like, the first day that I showed up, I didn't even know where my dad desk was. And I'm kind of going around this maze of cubicles and I get called over to the staffer and he says, here's an address and here's three names. And ultimately what I was tasked with doing that first day was taking around these three energy executives through midtown Manhattan. They were starting a new venture and they were looking to raise like a couple hundred million dollars from these private equity firms. And so I said to the staffer, you know, we just met, you know, I don't know what's going on. And his response was definitely, don't tell that to these guys. Like, as far as they know, you're a full timer and you've been here for a long time. And so, you know, being thrown in the deep end, then ultimately meeting these guys and feeling that responsibility, it was, you know, you feel accountable. Tuesday, I show up, I get staffed on a fertilizer deal. And I had two tasks that day. I do find my desk. I sit at my desk for 12 hours. And the first task is to chart the cow dung spot prices historically, over time. And the second thing is that the managing director in that sector, he had recently undergone gastric bypass surgery. He lost about 80 pounds. And so I had to change the photo of him in the team pages of all the decks. And I'm thinking, Monday, Tuesday, what's Wednesday going to bring? But like, this is, this is, like this is gold.

[Scarlet Fu]

It is Gold. But, you know, and this is why it's so great talking to you and the book is so fantastic. You also chronicle participating in these odd meetings with managing directors, updating Excel spreadsheets at 2 in the morning, reading reformatting the font in pitchbooks. I think about all this and how open air in 2025 is hiring former investment bankers to train its models and presumably replace the need to hire people like you to handle these mundane tasks. Is that a good thing?

[Bill Keenan]

I think all these things are going to need oversight, like we know. But I mean, the reality is we were sort of outsourcing and not to AI, but to all these other companies and in other countries. And they did a lot of my work. To be honest, I kind of took credit for most of it and changed the names and made sure all the. Everything appeared as though I had done the work. But anything that makes it more efficient and gets kind of people out of the way when they don't serve a purpose that's additive, I think is useful.

[Deb Akin]

Yeah.

[Paul Sweeney]

I've been telling Scarlett, you know, the first two or three years of my. I was an investment banking associate as well. After business school, I felt like most of what I did. Kid can be outsourced. AI Sorry to say, but I mean, do I need to be sitting at the printer at 2:00 in the morning on a Tuesday? I mean, can't AI do this for me?

[Bill Keenan]

But totally. The fact is though, to have that experience as a human, to pay your dues, there's huge value to that. And you hope that there's a way. I think the way humans are, they always find a way to. To go towards struggle.

[Paul Sweeney]

That's what I tell my kids are in the workforce now and the whole work from home versus I'm like, go to the office. All my memories are sitting at the printer. And the guys I sat at the printer with at 2 o'clock in the morning on a Tuesday night, they're still my best friends. The guys that I can call up and they will if I need anything.

[Bill Keenan]

Boom.

[Paul Sweeney]

Yeah, that's how it goes.

[Scarlet Fu]

Band of Brothers, really. So, Bill, when you adapted this into a film, what was that process like? Was that. I mean, I'm sure you could write a book about that process too.

[Bill Keenan]

Yeah, I mean, we, we. There were practical issues. We shot it during the pandemic. So this was an independent film shot in one location. So we're all over each other. We got the masks on. We had to shut down production, in fact, for a couple days. So there was that we got through it as far as the story, you know, so much of my experience was me versus Excel, me versus PowerPoint, me on the phone with somebody telling me the numbers didn't tie. I screwed this up. And so there's a lot of internal drama that's great for a book but does not lend itself to a visual medium. So the director did a great job of really retaining the spirit of the book and the humor and how I viewed that world, but then putting it in a visually compelling commercial sort of feel.

[Paul Sweeney]

Our thanks to Bill Keenan, writer and producer of the film Bull Run. That's this week's edition of Bloomberg Intelligence on Bloomberg Radio, providing in depth research and data on 2,000 companies and 130 industries.

[Scarlet Fu]

And remember, you can access Bloomberg Intelligence via BI. Go on the terminal. I'm Scarlet Fu.

[Paul Sweeney]

And I'm Paul Sweeney. Stay with us. Today's top stories and global business headlines are coming up right now.

[Bill Keenan]

Now.

[Scarlet Fu]

I'm June Grosso inviting you to join me for the Bloomberg Law Podcast. Every weekday, we help you make sense of the legal stories that shape the nation and the world. Listen for complete analysis of the biggest court cases, the latest actions from Congress and regulators, and the legal moves driving the markets. From corporate law to constitutional law, and from state court to the Supreme Court. At Bloomberg Law, we go beyond the day's headlines. We speak with top attorneys, judges, scholars, and policy experts to break down what the rulings really mean. We do this every weekday, then bring you the best conversations in our daily podcast search for Bloomberg Law on YouTube, Apple, Spotify or anywhere else you listen on the East Coast. Listen as you start your day and on the west coast, catch up in the evening. That's the Bloomberg Law Podcast with me, June Grosso. Subscribe today wherever you get your podcasts.