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Luke Vargas (0:33)
Jitters in private credit markets prompt comparisons to the run up to the financial crisis. Plus we'll look at how Europe is leading investigations related to Jeffrey Epstein.
Matthew Dalton (0:43)
European officials and prosecutors tend to be more independent than their counterparts in the US and so they may have more latitude to bring investigations against high profile people who have ties to the government.
Luke Vargas (0:58)
And President Trump orders the release of Government files on UFOs after Obama says that aliens exist It's Friday, February 20th. I'm Luke Vargas for the Wall Street Journal and here is the AM edition of what's news, the top headlines and business stories moving your world. Private credit markets are flashing warning signs after the industry's poster child, Blue Owl Capital, blocked everyday investors from withdrawing their money from one of its funds. The move got the attention of Democratic Senator Elizabeth Warren, who's calling for more oversight. Meanwhile, nervous investors sent shares in other private credit firms lower, reviving comparisons to the stress we saw in credit markets in 2007, just before the global financial crisis. Journal finance editor Alex Franko says we don't yet know whether this is a canary in the coal mine, but that investors are increasingly worried.
Alex Franko (1:52)
Blue Owl is an asset manager. They go out and raise money from investors and invest in making loans to junk rated companies that pay really high interest. And the idea is if you're an investor, you're going to get a really high return. And that was a really hot thing for a while, but then in the last few months it's really not very hot, partly because a lot of the loans were going to software companies and now people are worried about AI affecting the prospects for those companies. So a lot of the investors are asking for their money back. And what Blue Owl did was instead of letting you cash out your shares in these funds, we're going to pay you back your principal, but it's going to take time.
Luke Vargas (2:30)
Alex added that the turmoil in credit markets isn't impacting wider stock markets, which remain at record highs. We are exclusively reporting that the White House wants to ban investors with more than 100 single family homes from purchasing additional homes. That's according to a memo sent to House and Senate Committee leaders, with the Trump administration hoping to add the ban as an amendment to either of the landmark housing pact packages moving through Congress. The proposal affects more investors than initially thought, with hundreds of investment firms set to lose their ability to buy single family homes. And speaking of housing, we've got a special bonus episode coming later today. In the latest what's news in earnings, we'll look at what some of the country's biggest home builders tell us about the health of the US Housing market. Look out for that in your podcast feed at midday. S&P 500 companies are back to appointing fewer women and minority board directors, according to a journal analysis of corporate board data. Diversity is now back to levels seen 10 years ago when institutional investors started pressuring companies to add diversity, equity and inclusion policies. Since then, the political winds have changed and nearly three quarters of last year's newly appointed directors at S&P 500 companies were men and roughly four in five new appointments were white, according to data from People Return. Just a quarter of S&P 500 firms last year had a diversity policy, down from about half the year prior. And a batch of economic data is set to be released today, including an advanced look at fourth quarter US GDP and the Federal Reserve's preferred inflation gauge. And here with a look at what investors will be watching for in those releases, I'm joined by friend of the podcast Journal deputy finance editor Quintin Webb. Quintin, let's start on inflation. We saw in the Fed minutes earlier this week officials are setting a pretty high bar for more rate cuts this year and yet market are still expecting cuts. Which brings us to this release of the PCE price index for December, a delayed release because of the shutdown. What should we be watching for?