vonnie: let's get a quick check on where we stand. it's a lot of turnaround, actually seeing nvidia move against the markets today. not what we anticipated. it's not often you see that, or at least we've been seeing that this year. the s&p 500 up three-quarters of a percent on economic data.

nasdaq 100 up 1.1%, even though nvidia is down 3% or so for the session. we have about one in five stocks lower in the nasdaq 100. that will tell you where we stand today. 1 1/2 trading days left in august. volume is lower, but we are continuing to see some buying and selling. gold really reaching back to its record. we're putting back the .7% that we took off yesterday. so that is the reaction, we have too see. let's get to some of the midday movers. retailers really taking it today. abigail doolittle has more. >> a big focus today for earnings, and you look at best buy. this is the best day going back to 2017. they beat earnings by more than 13%. they're talking about renewed demand from customers wanting to

upgrade technology they bought during the pandemic. and a desire for new requirements. perhaps the idea of a turnaround, there's also a decent shortage on the stocks. as for the shares of gap, i'm going to be interested to see what they are doing. they're up 2.3%. earlier the stock was halted. this is really interesting, because they were supposed to report after the bell, but around 9:30 or 9:15, their release was released early. shares were halted, but they put up a great quarter, beat earnings. sales comps coming in better. you would the gap itself doing well, and investors liking the results, up 2.4%. the stock up a lot this year into this quarter, so in the time of high-bar expectations, they met, not so much for our last retailer earner, and that is dollar general. shares are plunging, down 29% at

session lows, the worst day on record going back to 2009 since they started trading as a publicly traded company. they missed earnings and sales in a massive way. they slashed the outlook. they're talking about their core consumer not being there to support them, in part because it seems as though there may be some economic weak news, but also because of competition from the likes of wal-mart. again, vonnie, they're down 29%, the worst day ever. vonnie: abigail, thank you. we're going to dig into that later. when it comes to the consumer and the economy, earlier today wells fargo says he sees some weakness in the labor market. >> the trend is very clear here, in payrolls, in the unemployment rate, even in the survey data. look at the last report. more consumers reporting that jobs are scarce, fewer consumers

reporting that jobs are plentiful. and when i look at the totality of the data there, i think that's very reliable, even if week to week claims or month to month you get this noise from a whole bunch of factors. vonnie: playing into markets this morning, we saw key economic indicators, including initial jobless claims, pending home sales, and a revision to g.d.p. for more on all of this data, let's bring in our economist. the economic data does still matter. what did you make of the idea that perhaps there's nothing to see here in terms of labor market weakness? >> i think this has been the key theme. as the labor market renormalizes, it is really an incremental slowdown that should not be mistaken for weakness. we need to really closely watch the unemployment rate, because the move higher is on everybody's radar.

it's too early to pull the alarm bell, because the reality is we are looking more sustainable. slower isn't always bad if we're moving to something that is possible to sustain over a longer period of time. vonnie: that's what we got out of initial jobless claims, but we can't forget the market reaction to revisions earlier this month. what if the same thing happens again? how concerned should we be about potential future revisions lower? >> to me when i look at the revisions, i see that the labor market really started to renormalize by earlier. when i look at the monthly payroll gains, anything above 100,000 to me. i'm not trying to sugarcoat everything, because the rise of the unemployment rate is troubling. it moved up much faster in the july data. so i think that is what is now very critical going forward.

really firing on all cylinders. i think that's still the story, and again, in knowing that today, if we really start to see an economy that's headed for the hard landing, the fed has the room to move quickly, but right now, there's really no need to do more than the quarter point we're expecting in september. vonnie: the fed chair did tell us we're getting a 25 basis point cut in september as clearly as he possibly could. what could it take for that to go to 50? we are still pricing in, and there are only three fomc meetings. >> yeah, we are really sniffing around between 50 basis point cut at a meeting versus a 25. to me it's really a question about unemployment rate. if it moves up again significantly, the fed drew a line in the sand.

they don't want to see any further weakness in the labor market data. if we get that, i think that's when we start talking about a 50 basis point cut. this is where we need to differentiate between the s&p 500 and the economy. i think if the fed ends up moving less aggressively because the economic data is good, ironically, maybe bad news for markets, and maybe higher interest rates, and yet it would be good news for the resiliency of the broader u.s. economy. it's a much bigger economy than just these 500 publicly traded companies. vonnie: right now, economists are looking for a 4.2% unemployment rate when we get the number next week. what would that have to be for it to be concerning? would it have to tick up by two, three, four ticks? >> if we even move up to -- yeah, i think .2%, if we move up

to 4.5, we start talking about a 50 basis point cut. again, the benefit of where the fed funds rate is today, the fed has room to move fast. that's a luxury they vanity had in almost 20 years. today is not the base case, but the good news, we have good insurance against a hard landing in case we need it. vonnie: what then do you make of the likes of dollar general earnings and the fact that pending home sales were lower today and that there does seem to be some pockets of weakness among particularly less wealthy consumers? >> there's definitely, it feels like a two-speed economy today. and we know that things like inflation hits, you know, the lower income cohort must be harder. we've seen credit card delinquencies. it's hard to not paint the entire economy with just a rose-colored glass, because the

reality is we are seeing, i think some pockets of weakness. the difference between a slower economy and a recession is a really important difference. i do expect a slower economy. i do expect the consumption to slow down. but i think a more sustainable pace of growth, and it looks more like 2% this quarter, one and three-quarters percent in the fourth quarter, and is consistent with the fed surgery cally cutting rates, not the wholesale large emergency cuts. vonnie: we should get a little more detail this evening with the kamala harris interview on her economic policies and what potentially she wants to see for a presidency should she be elected. is the market, and are you starting to game out two different economies depending on who is elected in november? >> you know, i think it's too early for that. i am probably more focused on the inflationary impact of either candidate's policy.

because today, pro-growth policy, especially those that involve increased government spending, are likely, more likely than not to be inflationary, and i think that's something that i'm really keeping my eye on for 2025. vonnie: thank you so much for joining us today. the final week in august, lara. coming up, we're following up with scott kelly, who almost a year ago to the day warned that commercial real estate was a threat to regional banks. has his outlook changed? we'll find out. ♪ ♪♪ something amazing is happening here. ai is helping organizations find new ideas and bring them to life. from development to launch cdw is modernizing product innovation with ibm watsonx.

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vonnie: now turning to regional banks and commercial real estate risks. prices dropping more severely in cities compared to outlying areas. we spoke to one industry leader a year ago who sounded alarm on the risk that commercial real estate holds to regional banks. we're bringing him back for a followup. the c.e.o., scott kelly is with us, along with abigail doolittle. scott, you had this call that you were very concerned about real estate and its impact on regional banks. we have seen the index come right back up to where it was, basically its highest in a year. are you still concerned? >> yes, look, i think the issues are profound, they're identifiable. they're real, they're not going away. it goes region by region, sector by sector.

but i think importantly that the regulators have taken it very easy on the banks at this point in time. you don't see, we've looked at previous real estate crisis you, if you look back to the r.p.c. days, the government liquidated the savings and loan industry. if you look at the financial crisis, the risk was concentrated with lehman bear, so when it came, it came in a big way. i think now much of the real estate risk is spread across not so much the money-centered banks, but across a bunch of the regional and community banks. the inevitability of default is there, but it's going to be a regulatory matter in terms of when that figure is polled, and i think the consensus is it's not going to be polled till after the elections, that the regulators are going take in an election year, take it very easy on banks from a discipline

perspective. abigail: do you think 2025 could turn into the wave of selling that everybody has been talking about? last year in 2023, there were a couple of notable office buildings that did default, and everybody is waiting for this crash. we really haven't had it. seems like everything is logjammed. is that because of extended pretend at those banks, and the regulators are no longer looking the other way, could it get ugly? >> yes, and again, i think it's going to take a long time to work out. again, the r.t.c. happened like that. the global financial crisis, everybody had toe happen very quickly. because the debt here is dispersed amongst so many different banks, and it's not concentrated, interestingly, in the big money center banks. it's more in the regional and community banks. it's going to take a while to work out, but i think it's going to be an excellent investment opportunity for people with capital once the repricing happens.

vonnie: is it all commercial real estate, or are there pockets of it, and are those pockets particular banks? is this very stock-specific stories? >> yeah, obviously the troubled asset classes are office and retail. you have seen some very big discounts in office buildings, particularly in places like san francisco, the greater san francisco area, new york city. there are deep discounts, just because the secular changes in those asset categories are profound. you talk about new york office for a long time, but there are going to be haves and have nots. obviously there are other sectors of real estate and regions which are going to be fine. that's great, because you've got, in essence, interest rate risk associated with those assets. the underlying performance is

good. that's why we're focused on things in a growth market of the southeast as opposed to trying to buy deeply discounted third avenue office buildings. abigail: and some of those third avenue office buildings we've been told by the others that they could go as cheap as 10 cents on the dollar or less. i want to return to those regional banks, because silicon valley really put it on everyone's radar. if next year and the years after the regulators get their act together and actually look at what's going on and say you've got to get rid of some of this junk, it sounds like we're not going to have just a wipeout of these banks, but could we see, say, a dozen or three dozen go under? could it be that bad? last year you were making a call where you thought there could be a regional banking crisis. >> yeah, i think it's going to take a while to play out, and that's just a regulatory matter. the fundamentals of the problem

have not changed. but the regulator environment has been a lot more lax than i think a lot of us anticipated. and as long as that continues to be the case, the banks can continue to muddle along. but i think after the election, no matter who wins, that environment is going to change. vonnie: give us more detail on why exactly you think is lax about the regulatory regime right now. we did have the big shakeup, and there was big drops last march, 12 months, and i would have thought that the regulator would have stepped in a bit further. >> i would have thought that too. but no, if you just run the math that people that financed with assets, with the assumption that the rephoning rate was going to be three or four, that rate is now seven or eight. the math just doesn't work. and inevitably that's going to cause this debt to have to be

liquidated or not served. vonnie: does the fed rate cut help at all? >> 50 basis points doesn't move the needle. we're talking about epic increases. yes, that helps. but it only really works in an environment of drastic rate cuts for a long period of time. and i don't think anybody see that is happening. vonnie: we have to leave it there, but thank you so much for the update. we will definitely keep our eye on commercial real estate and its impact on the regionals in particular. that is the c.e.o. and founder of atos capital. coming up, on the heels nvidia's earnings and outlook, we're looking at its blue chip and development. this is bloomberg. ♪ it will take billions of solar panels to power the world today. aes is making scale like that closer to a reality. introducing maximo, our new ai-enabled solar robot,

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vonnie: this is "bloomberg markets." u.s. stocks higher today, even though nvidia is lower by more than 3%. that's not a sentence i anticipated saying. the company disappointing some sky-high expectations for earnings. the c.e.o. sat down with bloomberg's ed ludlow for an exclusive interview right after the earnings call. let's have a listen. >> we made a mass change to improve the yield. functionality of blackwell is wonderful. we're sampling blackwell all over the world today. we show people, giving tours to people of the blackwell systems that we have up and running. you can find pictures of blackwell systems all over the web. we have started volume production. volume production will shift in q4. q4 we will have billions of dollars of revenues, and we will ramp from there. we will ramp from there.

far exceeds the demand. but we're going to have lots and lots of supply, we will be able to ramp. ed: what is the demand for accelerated computing? hyper scalers represent about 45% of our total data center business. we're relatively diversified today. we have hyper scalers. we have internet service providers. we have sovereign a.i.'s. we have industries. so it's fairly diversified. outside of hyper scalers, as the other 55%.

the application use across all of that data center starts with accelerated computing. accelerated computing does everything, of course, from, well, the models, the things that we know about, which is generative a.i., and that gets most of the attention, but at the core we also do database processing, pre post processing of data before you use it for generative a.i. trans coding, scientific simulations, computer graphics, of course, image processing of course. there's tons of applications that people use our accelerated computing for, and one of them is generative a.i. vonnie: let's bring in ed ludlow live, who conduct the exclusive interview. he's in san francisco. ed, jensen seems a little perplexed with the after-market

reaction in the stock. given how well nvidia has been performing. and then we got some target upgrades today. what do you think is going on with this market digesting this news? ed: yeah, it was really interesting in the moment, because what happened literally was the analyst call ended and the stock continued to slide after hours. and when i poised the first question of the interview, which is we just want to know more about blackwell, he took a sip of his drink and just stopped, just paused, and would go on to saw, you know, i thought i'd explained it so well in the analyst call, which is what just tripped me up in this interview. and that was kind of the case. the top line is that blackwell is next generation a.i. accelerator, for all intents and purposes on track. the lack of granularity on the dollar value of sales made this year, who it's going to, kind of gave the street some pause. but i think we're more sang win this morning than we were last night. vonnie: for sure. we have to put this in perspective. there's been a massive runup,

even since the stock split, and we're only down about 3.5% today, and it is light trading volume and so on. what are margins? we're still above 50%. presumably, well, i don't know, can they keep the margin at 50 or above for the foreseeable future? ed: it's funny you point out margins. broadly speaking, nvidia has had adjusted gross margins around 75% for quite a while now. but actually this is a company in growth mode, kind of like a private company scaling your offering before you scale revenue is the main priority long before you think about profit. but nvidia is just this machine. and i actually went on to ask jensen, would you ever think about being a cloud computing provider to take on the hyper scale, and his answer was no. that is a much lower margin business than what i'm already doing. i'm very good at a specific thing, which is systems vendor, systems top train a.i. models

and the imprint side of a.i., and i think they'll sit with that. vonnie: it was a very full and compelling interview. ed ludlow, thank you so much. bloomberg technology co-host, and once again, nvidia down 3.5% today. stocks are higher. we'll break those down further next. this is bloomberg. ♪

vonnie: welcome to "bloomberg markets." u.s. economic data putting a jolt in the market, despite lackluster reaction to nvidia's earnings report. we are higher. it is a lower volume day. just about a few hours plus one day left in august trading, we are seeing the s&p 500 up almost 1%, and the nasdaq 100, interestingly enough, four out of five stocks there are higher. you can see the index itself is

up 1.3%. we're not seeing too much movement in yields, 388 on the two-year yield. of course, gold is retaining some of the strength, we're very close to our record once again there. u.s. economic data driving most of today's moves in the market. earlier today, b.m.o.'s earl davis talked about the trade in treasuries. >> could be volatility everywhere, but this is where i love being an active manager. this is why it's perfect time to be in the shoes we're in. we have our expectations, as i said, we do expect yields to go lower. but the market we also expect to go higher. that allows us opportunity to get long. this is the difference between massive and active. vonnie: u.s. treasury yields climbed after solid economic growth prompted traders to trim their expectations for the scope of federal reserve easing this year. for more on this, we're joined

by liz mccormick. thanks so much for joining us am we did get movement, but still haven't priced out t fourth rate cut. how much room is there for yields to move between now and the next fed meeting? >> yeah, i think you just highlighted earl davis saying there's a lot of investors who think yields are going down, but they're saying there might be some backup. weave had a great four-month run with yields falling, and i think the data, like you said, is key. second quarter, we're a little stronger than people expected. and jobless claims showed the labor market is definitely not falling off a cliff. so people are really focused on tomorrow's inflation, and next week, very key, the end of the week, the next jobs report for august. so i think people, to kind of decide whether chairman powell basically in jackson hole said they were going to start the cutting in september. he couldn't make it more clear. but 25 or 50, the market still

giving about a 25% chance the super cut is supersized, but mostly sees it as coming through. but i think the jobs data is going to be crucial to kind of, let's say, decide that ahead of time for the market. vonnie: for sure. you're saying unemployment rate, if it ticked off a tenth or two, might be enough. 50 basis cut does seem rather large. did the fed retain optionality? could it go, and which would be the most likely one if it were to? >> the fed always, they never say never to anything. so for sure they retained optionality. they no way box themselves in. if they don't do it at the first meeting, if the data turns, they can do whatever they've done, and on cutting cycles they've been aggressive. even on the last, the recent tightening cycle, they were much more aggressive than many of us thought with the 75 basis point increases. so chairman powell made clear, they don't want the labor market to really weaken more.

inflation they feel is on the track to 2%. i really think they would love to pull off the soft landing. they're walking a tightrope here, and what does he usually say? unexpectedly, overly weaken, they can do more. totally they have optionality. vonnie: liz, we are seeing stronger or not weaker economic data. but then there are some signals, like, for example, some of the earnings reports, the dollar general earnings report, and some data on credit card delinquencies, and even the atlanta fed gives us a little pause for concern. are you seeing pockets of weakness that could expand? >> yeah, and i think many people are pointing out just the things you said. i know talking to economists, more than not see a recession come, just for all the separate data. we had the big revisions to the jobs data, so some people are

even downplaying certain data that's coming out, like regular nonfarm payroll. they're saying next week if it's strong, maybe it's not so strong after the revision. i think, when you do listen to those company earnings, and you can hear anecdotallally like i do among fellow friends and whatnot, it's just not as strong as it was, or people being a little more cautious, saying maybe i want to buy the new thing, but i'm going to hold off. i do think, like someone says yesterday, the soft landings, they don't last forever usually, and maybe in 2025 is when we see the recession. so i think there's enough data building that people feel like the fed, like i said, it's a tightrope, and they may not do it. then if we see a clear sign of recession, then i think they pick up the pace of cuts for sure. vonnie: liz, thank you so much. much appreciated. speaking of the data, we'll continue this conversation now with bloomberg economics,

stuart, is there anything liz said you disagree with? is there nation concerned you out there? >> i think the odds of 50 basis points cut in september are higher than what liz was suggesting. i think that we've seen enough cooling in the labor market that it's not just the august payrolls that are going to decide it. i think that might be what the market is waiting for. in fact, it looks like what the market is waiting on, if we were to look in the terminal, r.i.p. go. but when we see continuing claims rise, as we did today, when we see multiple surveys showing in august that employment and demand for labor is weakening, i think we see sufficient cooling in the labor market that would warrant the 50 basis point cut, and i think that odds are that the fed is going to believe the same thing come september. vonnie: it's interesting, because we had mary daly on a couple of days ago, and famously the san francisco fed is the labor fed. well, they all are, but butt

she's been speaking at companies that might be looking at head count, maybe preparing to lock in the account, but not trimming. >> some might not be trimming. some might be just reducing the number of hours that workers are showing up to the office. that's going to slow personal income growth, and we'll get some personal income data tomorrow. in fact, we expect that the labor component, the employee compensation component, is going to show no growth in the july report that we're going to get tomorrow. in addition to cutting back on hours, if you see demand cooling, you still have folks entering the labor force and pushing the unemployment rate up, even if there aren't en masse layoffs. you still see cooling in the labor market. you still see the balance of supply and demand. vonnie: some trend did more than 100,000 job created per month and continuing claims that are not going anywhere. they're rolling nicely. since when did that constitute concerning cooling? >> when we saw an influx of an

immigrant population that helped to boost up the pace of hiring that would be consistent with a steady unemployment rate. i don't entirely think it was my eyes deceiving me last month when the unemployment rate jumped up, and even again, that's with 100,000 jobs add, but that's because 100,000 jobs added is not enough to keep a, to meet labor supply where it's moving and where it's going. and i think that that's going to continue to be the case. i think that we're going to continue to see supply of workers outstripping demand or exceeding demand, and we're going to see upward pressure on the unemployment rate. vonnie: there you have it, exactly where you and liz are arguing that's where the market has its difficulties. our thanks to stuart pull for joining us there. coming up, it's been a rowdy day for retail earnings after best buy smashes expectations with its latest report. while gas catches investors off guard.

more details next. this is bloomberg. this is bloomberg. ♪

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vonnie: this is "bloomberg markets." off the back of more retail earnings, foot locker upgraded to equal weight at barclays following its second quarter results. one analyst says the retailer is stepping in the right direction due to positive same-store sales and an inflexion in merchandise march indians. he also has an overweight rating on the gap, which surprised veterans today by reporting its second quarter results this morning. results were originally set to come out after the closing bell. gap is up about 2% right now,

but it was halted for more than an hour and a half and is our stock of the hour. joining us for more is the analyst from barclays covering e-commerce and brand retailer. i have to start with gap. it was phenomenal what happened today. we got some numbers we weren't quite sure what happened or if we could even trust them. the stock halted. what happened? >> i think it was just one of those kind of fat finger kind of days. we clearly, and the company had actually said on the last quarterly call to expect that press release after the market. they're always an after the market reporter. so as we were listening to the burlington call, as could the tape comes from gap's numbers. now, the good news is they were phenomenal numbers. gross margins were up year on year. they beat the street meaningfully. i think they beat by 13 cents.

it was really driven the old navy division, which is the vast majority of earnings for the company. luckily, it was a very, very pleasant surprise. vonnie: yeah, it was. the stock was up 9% at the open, and then it dropped precipitously and now is up 2.5%. do you think gas had anything to do with moves, or is this about the reaction you would anticipate? >> you know, i think what it did is it took away a little bit of the thunder of the upside. so i think people weren't distracted doing other things, and clearly in the premarket, the stock was up 8%, 9%, and it was down right before it got halted, because everybody was like, to your point, do we trust these numbers? i think what's happening right now is you're starting to digest what's actually going on. and the gap, the stock is a consolidated entity, is really being driven by one division, and that is old navy. gap division, which was a positive surprise last quarter, it actually missed the comp, and you see banana and athleta.

you're putting more weight on old navy to continue to do better, and probably the gap brand, i should say, has faded from where we thought the business was last quarter. vonnie: american eagle as well, its stock is down about 3.5%. are these stories about how well inventory is being managed, or has the consumer got something to say about this? is the consumer's pocketbook involved here? >> the latter. so there's no question that what we've heard, those retailers that have gone before us, so whether it's wal-mart or target or t.j., t.j.x., ross, and then burlington, the ones that are creating value and dipping into the pocket books, they are taking market share on. it's at the expense of those retailers that are trying to

hold selling. so it is very clear that since last quarter, and even as we went through may, june, july was really, really soft, and we're starting to see a little bit of a pickup, but for back to school, but for the seasonal up tick of back to school. people are still playing it very close to the vest, because they don't know if this august month is going to continue. so what i would say is that you kind of have a bifurcation between those who are providing value at the lower end price point, by creating that value, and value as we define it is price paid for quality received. there is the silhouette shift, which continues to keep us in the lane of gap, old navy. we do like buying it on, and even on urban outfitters. vonnie: and then i have to talk to you about your call on foot locker. now you're one of only four analysts saying buy this stock,

and it hasn't reached the price target. your new target is $34. like i say, there's three other analysts with prices higher than that. why? >> we like to look at where these companies are. if you think about the curve, these are cyclicals. so to the extent that if you're at the bottom of the cycle, the very first thing we look for is did you clean up your inventory. for the third consecutive quarter, where sales are actually very faster than inventory, kind of supply-demand, it props up the pricing, out the door pricing. and then i think the clincher here for us was the positive comps. they put up a 2.6% comp. street was looking for .9%. it is the first positive corporate in 14 consecutive quarters. that creates leverage, combined with recapture of the merchandise margin. and we just like the stock pulled back, because they're going to move their headquarters and nobody likes a head quarter

move. but what we know is the fundamentals today are sound, and we like the dislocation where people get worried about something that might happen in the future, but what we know is that the numbers are getting better. vonnie: thank you so much, what a busy son for you. and then we'll hear what happens when we hear more from the gap. that is adrienne. let's stay on retail, because best buy also reported sales, computer and tablets were strong. shoppers dashed out money for electronics. the company raised its earnings guidance for the year. joining us now for more on these retailers is the bloomberg intelligence consumer hard lines analyst. what did best buy get so right this quarter, lindsey? >> i think they did have a solid quarter, and they did raise the guide on the bottom line. but i think what is really driving the positive sentiment here is that we're seeing signs of a recovery in demand and growth on the horizon. and this is after three years of

best buy really battling sort of soft demand and coming off of pandemic-driven highs when everybody was buying a ton of electronics and goods for their homes. vonnie: cost discipline paying off. it's still not trading at multiples to its peers. is that a path to to that? >> yeah, we see profitability showing a lot of strength in the first half. the comps are going to get a little harder in the second half. but best buy has done a really good job controlling those costs. they also have done a really good job being selective with promotions. we do expect to sort of continue into the holiday. as adrienne mentioned before me, the consumer is very value-focused. so thinking about holiday, best buy is really going to focus on those key sales events and promote items that drive store traffic and get people into the store for those events. and then they might try to be a little more selective on other items, where they can maintain a

good margin there. vonnie: just briefly, what will be the items that best buy will be really stocking up on for the holidays? >> i think the category that i'm most excited for when i think about the fourth quarter is tv's and entertainment. that category has been relatively challenged over the past four quarters or so. but there does seem to be some new products coming out there, and as we saw with the laptops and computers in the second quarter, that newness is a real key driver. so we think if there's some newness in tv's, we might be able to see some uplift in that category. vonnie: thank you so much for joining us. just want to mention the session high of 1%. coming up, private equity's latest pay might surprise you. we're going to have the details next. this is bloomberg. this is bloomberg. ♪ [spenseful music]

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vonnie: this is "bloomberg markets." a story getting some attention is a new art from bloomberg business week. it involves breathe equity, making a march for another demographic, youth sports. for more, we're joined by the reporter who wrote the article. it's a fascinating article. take us through some of the geographic locations and what we're talking about here, the private equity, and specifically a couple of people within private equity are getting into. >> the main characters are david and josh, who have started a company called unrivaled. they're well known in the private equity world. they also own the commanders, the 76ers, the devils, it's a long list. and they more recently have started getting into youth sports. so the company that i focus on that their portfolio began with is called cooperstown all-star

village. it's an annual baseball tournament outside of cooperstown, where week after week, 12-year-olds come up and play baseball. and it's $12.95 a head. vibe almost $1,300 per player? >> yeah, i became aware of it, because my 12-year-old son plays youth sports, and he was doing the other rival cooperstown tournament, just down the road, and i had seen what harris and blitzer were doing, and i became curious about it. it's a $50 billion industry right now. vonnie: exactly, and growing presumably, because it's a fairly immature market, pun intended. they are making improvements. it's not like you're just buying this up in order to carve out revenue. what are they doing for these young players and these camps? >> basically they're injecting money and head count and talent, and they just are trying to expand the operations that they

bought. so in many cases they're keeping the name and they're keeping a lot of the staff. in the case of cooperstown all-star village, they bought an additional 66 acres to the 70 they already have, and they're going to double the thing as they go. and they think there's a lot of unmet demand for youth sports, and that they can just broaden the base of participation. vonnie: it's not just putting little heads on the field or the baseball, whatever they're call, diamonds i guess. it's also about the parents, because of course, we're talking about cooperstown and 250 miles south is new york. so what are they doing for the parents to give them a better experience? the other sort of concern here, does this really make it impossible for less wealthy parents to participate? >> yeah, so youth sports have had sort of a growing problem where it's less about play and all the social and emotional development and more about sort of competing to make it to the next level, where you're trying

to get a college scholarship, and it's become very specialized and expensive. that's the fear for what private equity and what these investors might do, just keep pushing it in that direction. what unrivaled says is no, this is really about access and improving the experience for parents. so they are doing things like, you know, adding restaurant space and improving the uniforms and improving all the little things that parents know well, where it's the scheduling apps and payment systems are really not that well coordinated and reliable when you're dealing with small mom and pops that have typically run the youth sports industry. they're trying to professionalize it, raise standards, and expand it, and along the way sell parents lots of little add-ons, whether that's beers watching their kids play or photos of their kids playing or what have you. vonnie: the experience economy getting more buy-in from private equity, and i would recommend everybody read this story. do want to bring you breaking news real fast.

the united states has been affirmed by fitch with a stable outlook. that coming out in the last few moments. that does it for "bloomberg markets." we have a full afternoon of coverage. here's a picture of how markets look right now. this is bloomberg. ♪ ryan t. writes, "moving is stressful. can you help me take one thing off of my to do list?” ugh, moving's the worst. with xfinity, you can transfer your internet in just a few taps. just a few easy moves. did somebody say “easy moves”? ♪ ♪ oh no. no, i was talking about moving your internet. this will move the internet. ♪ ♪ ooh, ooh. -let's keep it professional. professional dancers! -ok! stay connected during your move with the best in home wifi. easily transfer your services in the xfinity app.

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announcer: from the world of politics to the world of business, this is "balance of power." ♪ live from washington, d.c. ♪ kailey: welcome to the balance of power on the back. the do. i'm kailey leinz in washington with georgia on my mind. as vice president kamala harris and tim walz wrap up their two-day bus tour of the cree state and getting ready to sit down for their first interview with cnn later today, we will have more with andrew gillis before and were university, and our political panel with rick davis and kristen hawn, plus details on jake sullivan's trip to beijing. and more on what is happening with israel's operations in the west bank, with our from the global situation room.