JPMorgan Investment-Banking Fees Drop on Underwriting Miss

Summary

Bloomberg Intelligence Podcast Summary

Episode: JPMorgan Investment-Banking Fees Drop on Underwriting Miss
Air Date: January 13, 2026
Hosts: Scarlet Fu & Alex Semenova
Guests: Herman Chan (Senior Banks Analyst), Anurag Rana (Technology Analyst), Travis Hessey (Commerce CEO), George Ferguson (Aerospace Analyst)

---

Episode Overview

This episode dives deep into analyst reactions to JP Morgan's latest earnings, focusing on drops in investment-banking fees and the broader implications of a proposed U.S. cap on credit card interest rates. The hosts also unpack major tech and retail shifts, including Apple's partnership with Google's Gemini AI, the transformation of shopping through AI-driven solutions, and Delta's latest earnings with an eye toward industry consolidation and future fleet strategy.

---

JP Morgan's Earnings and Credit Card Rate Cap

Segment: [01:56] – [08:17]
Guest: Herman Chan, Bloomberg Intelligence Senior Banks Analyst

Key Points & Insights

• Strong Overall Performance With Soft Investment Banking:

  • JP Morgan delivered strong trading and lending revenue; loan growth was robust.
  • Investment banking revenues disappointed, down 5% year-over-year, attributed largely to seasonal delays in dealmaking ([02:34], [06:38]).

• Expense Outlook Raised:

  • JP Morgan reiterated its surprise $9B increase in 2026 expenses, driven by growth, inflation, and healthcare costs ([02:34], [04:37]).

• Potential Impact of Proposed Credit Card Rate Cap:

  • President Trump has advocated for a 10% credit card rate cap.
  • JP Morgan is especially vulnerable due to its status as a leading credit card issuer and its acquisition of Apple’s card business from Goldman Sachs.
  • Herman Chan:

    "This would have drastic repercussions for JP Morgan, the banking industry, consumers and overall GDP growth... A large swath of [customers would] just not have credit card usage going forward under a 10% rate cap." ([03:18])

  • The cap could reduce credit availability, particularly hurting less advantaged consumers – the very group it's intended to help ([04:37]).

• Political and Regulatory Realities:

  • The President can't cap rates by executive order; it requires congressional action.
  • Herman Chan:

    "A lot of it seems to be posturing at this point...pushing himself to address broader affordability issues heading into the midterm elections." ([05:43])

  • Banks are waiting for concrete legislation before reacting.

Notable Quotes

• Herman Chan on credit card cap's reach:

  "This is not just the JP Morgan and banks issue. This is going to [have] big repercussions for economic activity in the United States..." ([04:37])

---

The Tech Battle: Apple Partners with Google’s Gemini AI

Segment: [10:02] – [14:41]
Guest: Anurag Rana, Bloomberg Intelligence Technology Analyst

Key Points & Insights

• Apple–Google AI Partnership:

  • Apple and Google are collaborating to bring Google’s Gemini AI model into the iPhone ecosystem, marking a major move in the "AI battleground."
  • Apple, lacking a competitive in-house foundational model, leverages Google’s tech to close that gap ([11:35]).
  • The integration is likely to be highlighted in Apple's next major Siri upgrade, anticipated for March/April.

• Regulatory Risks and Privacy:

  • Elon Musk publicly raised concerns about concentration of power with Google.
  • Anurag Rana:

    "He won't have a point if his model was being used at that point. ... Apple... won’t do it to an outside vendor where they don’t control the data... They'll use the foundational models from Google, but...run a lot of that either on the device or their own private cloud data centers." ([12:57])

  • Apple is committed to privacy-first integration.

• AI Talent and Strategy:

  • Following some exodus of AI talent from Apple, the Google deal allows Apple to focus on product integration rather than foundational AI research.
  • Anurag Rana:

    "I'm not in the business of model development. If I can use the best model out there in my product and pay some money—rumored $1 billion a year—which is nothing compared to what these companies spend developing their own." ([14:06])

---

The Future of Shopping: Google’s Universal Commerce Protocol & Generative AI

Segment: [17:23] – [23:29]
Guest: Travis Hessey, CEO of Commerce (NASDAQ:CMRC)

Key Points & Insights

• Universal Commerce Protocol:

  • Google's standard enables seamless e-commerce across its surfaces, contextualizing product recommendations in answer engines and AI chat services ([18:00]).
  • Shopping becomes more conversational and data-driven, with user behavior and brand context feeding real-time personalization.

• Trust, Brand Security & Data:

  • Brands are focused on maintaining control over brand presentation and customer data, especially when transactions move off-brand owned channels ([18:52]).
  • Personalization relies on the consumer’s willingness to share/login; otherwise they receive generic results.

• AI in Retail—Trends from the National Retail Federation Conference:

  • AI dominates retail innovation discussions, but large organizations seek pragmatic, secure, and frictionless solutions rather than hype ([21:27]).
  • Travis Hessey:

    "For larger organizations... trust, brand ethos and security are top of mind. So for them it's less about the sizzle, it's more about the steak and the foundational elements." ([21:27])

• What AI Won’t Change:

  • The basics of consumer behavior and concerns about trust and data sharing ([22:54]).

Memorable Moment

• Travis Hessey on AI’s NRF buzz:

  "AI has sucked all the, all the oxygen out of the room at Javits and it's a big room." ([22:49])

---

Delta Airlines Earnings and Industry Outlook

Segment: [25:46] – [32:56]
Guest: George Ferguson, Senior Aerospace/Defense/Airlines Analyst

Key Points & Insights

• Earnings Snapshot:

  • Delta shares fell 2.8% after issuing a full-year forecast below expectations.
  • Premium and loyalty revenues are strong; main cabin revenues fell by 7% in the quarter ([26:38]).
  • Robust competition in premium seating as other carriers pivot toward similar offerings.

• Risks & Consolidation:

  • CEO Ed Bastian flagged geopolitical and domestic risks, including the proposed credit card rate cap—which could threaten lucrative co-branded card loyalty programs ([28:26]).
  • Industry is seeing consolidation among smaller low-cost carriers, with Allegiant and Sun Country merging; Frontier may buy Spirit ([29:47]).
  • Large carrier consolidation is not anticipated.

• Fleet Renewal & Boeing-Endorsement:

  • Delta’s order of 30 Boeing 787 Dreamliners, to replace aging 767s, is an endorsement of Boeing’s platform and will drive efficiency when delivered starting 2030 ([31:05]).
  • Traditionally an Airbus customer, Delta's move helps keep manufacturers competitive.

Notable Quotes

• George Ferguson on fleet decisions:

  "Interesting to see them come in for the 787. That’s really, I think, been a category leader in that small, narrow body world. Boeing has over a thousand orders for that airplane." ([31:05])

• On risk:

  "I think there’s probably some concern in the marketplace that maybe premium gets crowded and pushes closer to that main cabin kind of fare rather than main cabin coming up." ([26:38])

---

Notable Quotes—At a Glance

• Herman Chan: "This is going to [have] big repercussions for economic activity in the United States and really will hurt some of the, you know, less advantaged consumers that I think really this, this rate cap would intend to help.” ([04:37])
• Anurag Rana: "If Google has the best search, I will outsource that technology into my products from them." ([14:06])
• Travis Hessey: "AI has sucked all the oxygen out of the room at Javits and it's a big room." ([22:49])
• George Ferguson: "The Boeing widebodies... interesting to see them come in for the 787. That's really, I think, been a category leader..." ([31:05])

---

Timestamps for Key Segments

• [01:56] JP Morgan earnings (Herman Chan)
• [03:18] Credit card rate cap impact
• [06:38] Investment banking revenues, deal pipeline
• [10:02] Apple–Google Gemini AI partnership (Anurag Rana)
• [12:57] Big tech AI strategy and privacy
• [14:41] Talent and rationale behind Apple’s partnership
• [18:00] Google’s Universal Commerce Protocol/AI shopping (Travis Hessey)
• [21:27] AI in retail—trends and challenges
• [25:46] Delta Airlines earnings and outlook (George Ferguson)
• [28:26] Geopolitical, domestic, and regulatory risks
• [29:47] Airline industry consolidation
• [31:05] Delta’s Boeing 787 order and its significance

---

Tone: The episode maintained an analytical, data-driven, conversational style, with hosts and analysts breaking down complex issues for a business audience.

---

For those who missed this episode:
This summary covers all major themes, from the regulatory crosswinds buffeting banks, to rapid shifts in the AI and tech landscape, the transformation of shopping by generative AI, and changing fortunes in aviation. Use the timestamps to dive deeper into segments of interest.

Transcript

[Advertisement Voice]

Ditch the complexity. Intuit Enterprise Suite delivers AI native ERP 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 As a contractor. I don't pay for materials I don't use so why would I pay for stuff I don't need in my mobile plan? That's why my biz plan from Verizon Business is so perfect. Now I can choose exactly what I want and I only pay for what.

[Verizon Business Representative]

I need right now with my biz plan.

[Podcast Host (Scarlet Fu or Alex Semenova)]

Get our best price as low as.

[Verizon Business Representative]

$25 a visit verizon.com business to get started today. New lines only. Price per month with five plus lines includes auto pay and paper free billing and promotional discounts, taxes fees, economic adjustment charge applicable. Add ons prices and terms apply. Guarantee applies to base monthly rate and stated discounts only. Add on prices. Additional offers in 3-31-2026 support for the.

[Advertisement Voice]

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.

[Podcast Host (Scarlet Fu or Alex Semenova)]

Bloomberg Audio Studios Podcasts Radio News. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube. Herman Chan has a CFA. He's also been monitoring the bank earnings and JP Morgan got us started today although the stock as John mention is off by two and a half percent and banks are the worst performing group in the S&P 500. So Herman big takeaway for JP Morgan's latest results.

[Herman Chan]

Yeah, takeaways is that the performance was strong. So we're talking about really strong markets trading revenue year over year. Investment banking was a little light and then the balance sheet lending growth was really good. So solid quarter all around. Guidance was in line with what they had expected heading into the quarter. But a couple lingering things. Higher expenses for 2026 as they continue to invest for growth. We're talking about $9 billion increase in expenses. And then the credit card cap is still lingering across J.P. morgan and the large banks.

[Podcast Host (Scarlet Fu or Alex Semenova)]

Herman, since everyone's been talking about the proposed cap by President Trump on credit card fees, what was the messaging from JP Morgan on the impact of that?

[Herman Chan]

Yeah, the messaging was that this would have drastic repercussions for JPMorgan, the banking industry, consumers and overall GDP growth. So you think of credit as being the lubricator for economic activity. And when you slash card rates, that really will reduce the credit availability for, for a lot of J.P. morgan's customers. So you can think of a large swath of them just not having credit card usage going forward under a 10% rate cap.

[Podcast Host (Scarlet Fu or Alex Semenova)]

And JP Morgan is obviously a lot more sensitive to a potential cap on credit card interest rates than some of the other big banks. I mean, this is a bank that just purchased the Apple credit card business or is taking on that Apple credit card business that Goldman Sachs gave up.

[Herman Chan]

That's right. So that's adding about 2 point. That's adding, you know, 20 billion imbalances, give or take. So that's something that will, will be helpful for them. But really J.P. morgan's one of the more active credit card issuers in our large cap bank coverage. Citi is the first, followed by JP Morgan and then bank of America Citi and, and US bank lag after that.

[Podcast Host (Scarlet Fu or Alex Semenova)]

What's the thing, Herman, that stood out most to you today from JP Morgan's results? Was there anything significant compared to prior quarters?

[Herman Chan]

Yeah, the really, really the takeaways were just how forceful they were on the credit card rate cap issue. Just reminding everybody that this is not just the JP Morgan and banks issue. This is going to big repercussions for, for economic activity in the United States and really will hurt some of the, you know, less advantaged consumers that I think really this, this rate cap would intend to help. And then the second one is really just they, they double down on the expense outlook, which surprised some folks when they unveiled that late last year. So $9 billion in higher expenses really driven by growth inflation Health care costs, E, etc.

[Podcast Host (Scarlet Fu or Alex Semenova)]

I want to go back to the President's effort to cap credit card interest rates because from what I understand, it's not something that he has the authority to do. This is something that Congress has to pass.

[Advertisement Voice]

Right.

[Podcast Host (Scarlet Fu or Alex Semenova)]

Yet he's talking about this January 20th deadline.

[Herman Chan]

Right.

[Podcast Host (Scarlet Fu or Alex Semenova)]

How does that work? I mean, he's calling for it, but calling for it doesn't mean that he can do it.

[Herman Chan]

Right. So a lot of it seems to be posturing at this point, just pushing himself to. To address some of the broader affordability issues heading into midterm elections, how I view it.

[Podcast Host (Scarlet Fu or Alex Semenova)]

So why don't the banks point that out or not. Not point that part out, but call them out on the fact that this would take an act of Congress to do anything about it.

[Herman Chan]

Right. Well, they're not. There was a question posed during the earnings call if somebody from the administration had reached out to JP Morgan and they said that as far as they know, nobody has. So a lot of it seems to be just tweeting by edicts at this point. So we'll see if that shakes out to be something else more definitive. But we would expect the banks to push back and really wait for any congressional legislation to come in to. To really cap the rates.

[Podcast Host (Scarlet Fu or Alex Semenova)]

Herman, this slowdown in investment banking revenue down 5% from a year earlier, do you expect that to pick up later this year, given the expectation for more dealmaking?

[Herman Chan]

Yeah, that's right. The fourth quarter seems to be more of a blip to us. Fourth investment making, usually a seasonally soft given the holiday season. Sounds like from their comments that a few deals were pushed out into the first quarter. So these deals didn't go away, they were just delayed. And looking ahead into 2026, we see robust activity. Investment banking. You can just think about the IPO calendar that's really firming up. And then for M and A activity, we think lower rates will help. This deregulation effort by the Admin is helping increase consolidation not only in banks, but in other industries as well. And then we've seen the sponsor activity of private equity players really jump back in. So those are really strong factors for improving investment banking activity next year.

[Podcast Host (Scarlet Fu or Alex Semenova)]

So, Herman, how does this set us up for the other big bank earnings which we'll be reporting over the next day or two? How are you seeing. How is this changing expectations for say, Citi bank of America, Goldman Sachs, Morgan Stanley?

[Herman Chan]

That's right. So JP Morgan really set a high bar for four markets in trading, so about 17% year over year. That's going to be tough for for others to meet. But that, that's, that's where the bogey is at this point. And in terms of investment banking, we probably expect some others to do a bit better than the year over year decline for J.P. morgan. So more to come on that front.

[Podcast Host (Scarlet Fu or Alex Semenova)]

Stay with us. More from Bloomberg Intelligence coming up after this. 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] EnterpriseNow support for the show comes from public.

[Advertisement Voice]

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 backtest 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 introducing.

[Podcast Host (Scarlet Fu or Alex Semenova)]

The all new Adobe Acrobat Studio now with AI powered PDF spaces. Do more with PDFs than you ever thought possible. Need AI to turn 100 pages of market research into 5 insights with with a click. Do that with Acrobat. Need templates for a sales proposal that'll close that deal. Do that with Acrobat. Need an AI specialist to tailor the tone of your market report to sound real smart in real time. Do that with the all new Adobe Acrobat Studio. Learn [e-mail] do that with Acrobat. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Android Auto with the Bloomberg business, Apple Listen on demand, wherever you get your podcasts or watch us live on YouTube, let's shift gears and talk about big tech because the news this week is that Apple is partnering up with Google Alphabet, the parent company, to power the iPhone's technology using Gemini. Gemini, of course, has become kind of the, you know, the software that everyone's looking at right now is a big winner in the whole AI battle. So let's bring in Anurag Rana, our Bloomberg intelligence technology analyst on this, and Anrak. You know, people are already crowning Google as a winner here in the AI battleground. And it definitely looks like Gemini is picking up momentum, picking up market share. What specific advantages does Google bring with Gemini to Apple?

[Anurag Rana]

So, you know, we'll give first of all credit to Mark Gurman from breaking this back in November when he said, you know, Google will work closely with Apple on this model. Now we go back to, in history, you know, Apple doesn't have that big of their own foundational model on which it's running or it's supposed to run some of these technologies. But Apple and Google go back a long way. They have a very, very good agreement on search, which pays Apple billions of dollars. So, you know, there was some legal issue around it. So we always knew that once that legal issue goes away, Apple may be working closely with Google to basically outsource a lot of their foundational models into the technology that have, they have. Now, it's possible that the next CD upgrade, which is most likely going to be the March April time frame, could be that one big moment that we are all looking for Apple to finally come out and say that, okay, you know, we are not a laggard in AI, that they also have a product that's pretty good.

[Podcast Host (Scarlet Fu or Alex Semenova)]

Anurag, I saw a tweet actually from the official Google account announcing this deal and Elon Musk replied. He said that this seems like an unreasonable concentration of power for Google. Obviously he has a vested interest given his participation in X AI, but does he have a point? What are the regulatory risks around this deal?

[Anurag Rana]

Yeah, I mean, he won't have a point if his model was being used at that point. So, I mean, everybody's trying to pitch Apple to use that model. But you know, at the end of the day, Apple actually, for the first time, if you go back a year and a half ago, they used OpenAI. I mean, you can still use OpenAI when you go to Syrian, ask a question and they can, we can take you out of there. But for Apple, it has to be integrated within the iOS within the software, but they won't do it to an outside vendor where they don't control the data. So what Apple's going to do here, they're going to use the foundational models from Google, but they're going to run a lot of that either on the device or their own private cloud data centers. Which means they will still protect the privacy of that question and not let it have access to other players as well.

[Podcast Host (Scarlet Fu or Alex Semenova)]

Yeah, the privacy angle is really big for Apple. It's kind of its mark of distinction here among the big tech players. Anurag, Apple has seen this exodus of talent, AI talent, going to other big tech companies in recent months. Does this multi year deal with Alphabet, with Google change any of that? Does that stanch the bleeding at all?

[Anurag Rana]

Yeah, for me it does, only because I am now buying the model outright from somebody who's doing all the hard work. So I'm not in the business of model development. If I can use the best model that's out there into my product and I pay them some money and you know, the rumored amount is about $1 billion a year, which is, to be honest, nothing compared to how many billions these companies are spending to come up with their own large language model. And that's what actually Apple said in the search case and says I'm not in the search business. If Google has the best search, I will outsource that technology into my products from them.

[Podcast Host (Scarlet Fu or Alex Semenova)]

Stay with us. More from Bloomberg Intelligence coming up after this.

[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 Red 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 introducing.

[Podcast Host (Scarlet Fu or Alex Semenova)]

The all new Adobe Acrobat Studio now with AI powered PDF spaces do more with PDFs than you ever thought possible. Need AI to turn 100 pages of market research into 5 insights with a click. Do that with Acrobat. Need templates for a sales proposal that'll close that deal. Do that with Acrobat. Need an AI specialist to tailor the tone of your market report to sound real smart in real time. Do that with the all new Adobe Acrobat Studio. Learn [e-mail] do that with Acrobat.

[Advertisement Voice]

As a contractor, I don't pay for materials I don't use, so why would I pay for stuff I don't need in my mobile plan? That's why my biz plan from Verizon Business is so perfect. Now I can choose exactly what I want and I only pay for what.

[Verizon Business Representative]

I need right now with my biz plan. Get our best price as low as $25 a line. Visit verizon.combusiness to get started today. New lines only. Price per month with five plus lines includes auto pay and paper free billing and promotional discounts, taxes fees, economic adjustment charge applicable. Add ons prices and terms apply. Guarantee applies to base monthly rate and stated discounts only. Add on prices. Additional offers in March 31, 2026.

[Podcast Host (Scarlet Fu or Alex Semenova)]

You're listening to the Bloomberg Intelligence podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube. Scarlet Fu and Alex Semenova in for Paul Sweeney. I'm kind of tired of shopping. I've done so much of it in the past month or so. So overwhelmed.

[Advertisement Voice]

I don't believe that for a second.

[Podcast Host (Scarlet Fu or Alex Semenova)]

What do you mean? I'm not into it. It's very hard to walk into a store these days. Yeah, price points are way too high. And then also I'm just tired of it because I did so much of it it in the last couple of weeks. But maybe technology will help me. Maybe it'll make it easier. It'll take some of the friction out. We want to bring in. Travis Hessey is CEO of Commerce, which is traded on the NASDAQ under the ticker cmrc. Travis, you're going to tell us how is changing shopping, but in particular this has to do with what Google has been doing with this thing called the Universal Commerce Protocol. Explain how that will make my shopping needs easier.

[Verizon Business Representative]

Well, given the extent to which Google Google plays in all of our lives and how people think of them. It's essentially setting the foundation and the standard for brands and retailers and other organizations to be able to scale agent E commerce across all of the surfaces that Google AI would hit. So think of the contextualized conversations everyone's having through answer engines today. Those conversations are then dynamically recommending not only experiences and facts, but certainly shopping and brands based on the enrichment of data against those services. And Google is enabling a standard by which consumers would be able to buy in a standardized, safe, secure way. As it serves up discovery, you'll be able to buy seamlessly across those services.

[Podcast Host (Scarlet Fu or Alex Semenova)]

Travis, can you walk us through how I will change the shopping experience? In practical terms, let's say I'm looking for a bag. How do I go about using your platform?

[Verizon Business Representative]

The consumer behavior has changed more than anything. So the amount of eyeballs and behavior going to the answer engines is probably the fastest adopting technology we've seen. So because the consumers are going there and they're having these conversations, brands and retailers are having to respond in kind. And they tend to have a fair amount of brand ethos. So they, they're very concerned about where they show up, how they show up, and who they show up next to. So trust is at the cornerstone of this. So a lot of the foundational stuff you're hearing about now is to set up that trust. So when you're shopping for that bag, it's giving you a response that you can objectively trust. It's not serving up who paid the most to be listed or injected in that conversation. The thesis behind this is based on your own behavior within those answer engines and of course other behavior within Google, whether that's through Chrome or through other Google products. They have a unique advantage there because of the amount of surfaces an individual might use to synthesize that in a hyper personalized way. So think of it as, I don't like shopping either, but think of it going into your favorite store and someone as you walk in can scan a code and immediately knows what you own, what you like, where you're going, what you're looking for. So they could curate something for you immediately where that, that friction is removed through the process. Think of that virtually in this particular capacity. That's the future state.

[Podcast Host (Scarlet Fu or Alex Semenova)]

So, so all the information that Google has on me, they are also selling, who are they selling it to?

[Verizon Business Representative]

That's not from, that's not for me to opine.

[Podcast Host (Scarlet Fu or Alex Semenova)]

I mean, the reason I ask is because it depends on me logging in to Google for them to give me those personalized recommendations. If I don't choose to log in, then I end up with the equivalent of a Google search on a public computer.

[Anurag Rana]

You do.

[Verizon Business Representative]

I think the models are changing. Certainly the old model was you're searching for terms and certainly organizations are optimizing through SEO to be listed organically at the top or they're through paid search. There you go. That still exists today, certainly. And there's behavior that drives that. But where this is evolving to is called geo. So generative optimization, which is really going to be a combination of structured data, which is like product catalog data, skew, color size, all those dynamics dimensions coupled with unstructured data, which are brand guidelines, call center transcripts, blogs, articles, you, all the things that would contextualize that brand and that product, if you will, that that's being enriched oftentimes by us on the feed dynamics side, which is part of our portfolio and then syndicated across these different services, be that Google or OpenAI or Microsoft or whomever. And it's going to continue to expand as the channels have expanded over the last several years.

[Podcast Host (Scarlet Fu or Alex Semenova)]

Travis we have the National Retail Federation conference underway. I believe today is the last day. What kind of AI trends and retail trends have you been monitoring out of it?

[Verizon Business Representative]

It's all about AI this year. That's the, that's what's hot. Exactly this, right? I think there's a lot, there's two sides of the spectrum. There's a lot of buzz which is exciting, but at the same time it's confusing a lot of people because everyone is doing everything and it's hard to kind of reconcile like what's meaningful to the business. I think for larger organizations that we work with, brand manufacturers and retailers, trust, brand ethos and security are top of mind. So for them it's less about the sizzle, it's more about the stake and the foundational elements. I think the important importance of the Google announcement is they are taking a very pragmatic approach to this, to lay the tracks so this can scale and scale properly with trust, with security, and most importantly with a frictionless experience for customers. Because the brands don't want to lose that customer data. They still want to maintain that experience even though they're not fully controlling the surface by which they're showing up against. It's not like they're showing up against their own website. So they're in a surface they don't completely control. They're controlling part of it through the data enrichment in syndication, but they're not controlling all of it. So they're very, very concerned that that experience is a positive one and a frictionless one. Otherwise it has ramifications. It drives cost up in call centers. It drives maybe negative customer experience.

[Podcast Host (Scarlet Fu or Alex Semenova)]

It drives returns.

[Verizon Business Representative]

Exactly. Returns bad things on the back end. So that that's the reconciliation people are trying to have. But yes, that EI has sucked all the, all the oxygen out of the room at Javits and it's a big room.

[Podcast Host (Scarlet Fu or Alex Semenova)]

What, what will I not change for shoppers?

[Verizon Business Representative]

What will it not change for shoppers? I think the behavior and the surfaces by which they're going to they're still going to go to right? I think new ones are showing up. I think the expectation personalization has been promised for a long time. I think there's some hesitancy there around the trust. So I think overcoming the trust aspect of this and having that reinforced through continued behavior, the shopping is very new. There was a big rush to do this in holiday and the experiences weren't great. So I think there's a little bit of hesitation. I think you'll see a much more robust offering this holiday season.

[Podcast Host (Scarlet Fu or Alex Semenova)]

Stay with us. More from Bloomberg Intelligence coming up after this.

[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 introducing.

[Podcast Host (Scarlet Fu or Alex Semenova)]

The all new Adobe Acrobat Studio now with AI powered PDF spaces. Do more with PDFs than you ever thought possible. Need AI to turn 100 pages of market research into 5 insights with a click. Do that with Acrobat. Need templates for a sales proposal that'll close that deal. Do that with Acrobat. Need an AI specialist to tailor the tone of your market report to sound real smart in real time. Do that with the all new Adobe Acrobat Studio. Learn [e-mail] do that with Acrobat.

[Advertisement Voice]

As a contractor, I don't pay for materials I don't use so why would I pay for stuff I don't need in my mobile plan? That's why my biz plan from Verizon Business is so perfect. Now I can choose exactly what I want and I only pay for what.

[Verizon Business Representative]

I need right now with my biz plan. Get our best price as low as 25 a line. Visit verizon.combusiness to get started today. New lines only. Price per month with five plus includes auto pay and paper free billing and promotional discounts, taxes, fees, economic adjustment charge applicable. Add ons prices and terms apply. Guarantee applies to base monthly rate and stated discounts only. Add on prices. Additional offers in 3-31-2026.

[Podcast Host (Scarlet Fu or Alex Semenova)]

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube. Delta is the first airline to report earnings as well. And according to the stock market reaction, investors not to impress the shares of Delta are down about 2.8% after its full year. Forecast came a little bit lighter than anticipated. Let's bring in George Ferguson right now. He is our senior aerospace, defense and airlines analyst joining us from Princeton, New Jersey. George, you know, at the start of 2025, Delta sounded very optimistic about demand, about what pricing looked like. And the forecast that he gave today kind of stands in contrast to that.

[George Ferguson]

Yeah, I mean Ed Bastian I think was a little reticent to get too deep into what he sees happening in 2026. He said, you know, there'll be surprises much like they received in 2025. And you know, I just think as, as people look at the results, you know, really what we saw here from Delta was a continuation of the, you know, the premium and the loyalty revenue are rolling in strongly rolling in I think sort of 5 to 7% if I recall correctly, you know, above sort of GDP growth rates. But the, the back of the airplane, you know, the, they call it the main cabin or basic economy. That's there was that revenue was down 7% in a quarter where Delta was growing a couple percent. And so, so we still see this premium trend and I think we're going to see a lot of growth in premium seats this year. We've got Southwest converting to some, you know, to more of a full service carrier premium. Delta plans to grow premium. United plans to go Premium. Alaska, JetBlue, everyone wants to go premium. So I think there's probably some concern in the marketplace that maybe premium gets crowded and pushes closer to that main cabin kind of kind of fare rather than main cabin coming up.

[Podcast Host (Scarlet Fu or Alex Semenova)]

Maybe too much supply. We'll see. By the way, Bastien, the CEO of Delta Airlines, will be joining Bloomberg Television Surveillance on Wednesday. That is tomorrow, of course, at 8:15am Eastern Time for a live interview from Delta's headquarters in Atlanta. And something that stood out to me, Scarlet, was that Delta said they're bracing for risk to their forecast, noting the geopolitical environment, whether it's international or domestic policy. George, is this unusual for them to issue this kind of warning?

[George Ferguson]

I mean, again, I think we're at the beginning of the year and management teams like to caveat things. Right. And so I guess what I would say is we had plenty of geopolitical challenges in 2025. You know, we were watching transatlantic demand closely because you've got a war raging in Ukraine. It's been doing that for a bunch of years now. Didn't seem to slow down that demand. That demand seemed to do okay. Some days I wonder if there maybe there's more risk domestically. Right. One of the other things we're watching is the president wants to cap interest rates for the credit card companies at 10% loyalty through the Amex program brings a lot of money in for Delta, definitely a source of their competitive advantage. And I think if you're capping interest rates, I think some of those credit card programs have to change and that would hurt some of those loyalty programs. So there's I mean, there's risk all over the place all the time. Again, the geopolitical didn't seem to hurt demand as much as we would expect it in 2025.

[Podcast Host (Scarlet Fu or Alex Semenova)]

Right. It kind of always threatens to hurt demand, but in the end, people still prioritize traveling and paying for traveling. George I'm looking at some headlines coming out on Delta at the start of this hour, and one of the comments from Delta was that the airline industry could see consolidation in 2026. Where which players would that most likely involve?

[George Ferguson]

Yeah, so we're already starting to see some of that. Right. We had an announcement the other day that Allegiant and Sun country are going to put themselves together. They're two smaller, low cost Airlines, some of them pretty quickly growing. They are quickly growing. So they'll consolidate. You know, we've heard discussion about Frontier potentially buying Spirit Airlines. We still have to see the ultimate outcome for Spirit. They're in chapter 11. We're trying to figure out what the restructuring looks like the second time they've been there. So you can see on the edges, especially where in that low cost marketplace you can see consolidation beginning. It takes a long time and that's the challenge. But you could see some of that consolidation already beginning and we don't see the big players getting consolidated. You're not going to put together, I think you're not going to see sort of a United, a Delta, an American, a Southwest. They're not going to, we're not going to put any of those together. I think that's too much. But I think a lot of other stuff is potentially in play.

[Podcast Host (Scarlet Fu or Alex Semenova)]

George, we also got news that Delta is ordering 30 Boeing 787 Dreamliner jets, aiming to boost the company. How much do you expect this purchase to impact its bottom line?

[George Ferguson]

Yeah, so they're not going to see these airplanes until, until 2030. So it's a bit of a ways away. They're replacing 767s, which are old airplanes. We have an average age of them about 27 years right now. You know, the 78 is going to be a lot more efficient. Delta gave some numbers, 15ish plus percent more efficient. So I think that that really helps the bottom line also very interesting to us is that Delta is traditionally more of an Airbus shop. They buy a lot of Airbus product. The recent widebodies they've bought are Airbus A350 and Airbus A330. Again, the Boeing wide bodies. I just told you, 28ish years old. Interesting to see them come in for the 787. That's really, I think been a category leader in that small, narrow body world. Boeing has over a thousand orders for that airplane. We see rates continue to rise, which will improve profitability at Boeing as they put more throughput in that 7 8. I thought it was a bit of an endorsement for 7 8. Even though Delta is not going to say that. Probably.

[Podcast Host (Scarlet Fu or Alex Semenova)]

Yeah. George, you mentioned that Delta is traditionally an Airbus carrier. Do you think we'll see more of that, these airlines kind of splitting the difference between Boeing and Airbus?

[George Ferguson]

You know, I think every airline has to be a little bit that way in order in order to keep the manufacturers competitive. Right. If they, if the manufacturer knows, you just got to come in for their product, all the time. I do think that hurts you. But a lot of times that we see a lot of airlines have a preponderance of a certain type of product. It keeps cost down. Right. Because you you train your pilots for one type of wide body, one type of narrow body and helps you keep your cost down. So there's and your maintenance push is easier.

[Podcast Host (Scarlet Fu or Alex Semenova)]

Yeah.

[George Ferguson]

Spare parts needs are lighter.

[Podcast Host (Scarlet Fu or Alex Semenova)]

This is the Bloomberg Intelligence Podcast, available on Apple, Spotify and anywhere else you get. Your podcasts listen live each weekday 10am to noon Eastern on Bloomberg.com, the iHeartRadio app, tune in and the Bloomberg Business app. You can also watch us live Every weekday on YouTube and always on the Bloomberg terminal.

[George Ferguson]

These days it seems like AI agents.

[Advertisement Voice]

Are just about everywhere you turn, every field and every function. But without identity, you can't trust they'll serve your business instead of jeopardizing it. Fortunately, Okta helps you get identity right by securing your AI agents identities, giving you a single layer of control, a single standard of trust. So whether an AI agent supports a single user or your entire enterprise, with Okta you'll turn risk into opportunity. Secure every agent.

[Podcast Host (Scarlet Fu or Alex Semenova)]

Secure any agent.

[George Ferguson]

Okta secures AI when you stay in.

[Podcast Host (Scarlet Fu or Alex Semenova)]

Your home, what you love gets to stay too. From the gardens that grow wild to the grandkids that run wilder, from the Friday night baseball games to the Sunday morning brunches, even the deli crosswords and weekly book clubs, there's room for it all with help from Home Instead, the largest in home Senior Care network. With over 30 years of trusted experience delivering the peace of mind you deserve, visit home instead online for a better what's next? You can get the news whenever you want it with Bloomberg News Now. I'm Amy Morris. And I'm Karen Moschio here to tell you about our new on demand news for report delivered right to your podcast feed. Bloomberg News now is a short 5 minute audio report on the day's top stories. Episodes are published throughout the day with the latest information and data to keep you informed. Yes, there are other products like this from a variety of news organizations, but they usually rerun their radio newscasts throughout the day. That's not what we do. We create customized episodes that can only be heard on Bloomberg News now. And we don't wait an hour to publish breaking news. When news breaks, we'll have an episode up in your podcast feed within minutes, so you're always getting the latest stories and developments. Get the reporting and the context from Bloomberg's 3,000 journalists and analysts. We're all over the world. Listen to the latest from Bloomberg News now on Apple, Spotify or anywhere you listen.