♪ jon: welcome to bloomberg markets. matt: let's get a quick check on the markets at this hour. it was more interesting a couple of hours ago. there is some movement on stocks with the s&p 500 down about 0.6%. we've gone 100 days in -- and change without going down 1.5%. if we finished today, it will be 101 and that will be the longest

streak in many years. the u.s. 10 year yield is rising but it had been the higher, 43566. it went that hyatt some point in that the highest level since 2007. it has come back a little but it's still rising. the bloomberg u.s. dollar index has been's however -- has been hovering around that range for weeks. nymex crude was around $93 per barrel and still positive but 9184 right now. jon: investors have to assess what higher oil means amid energy stocks. i'm watching stories tied to outlooks because within the dow jones industrial average, disney has been the worst performer down 3% after the test they disclose big spending plans for the theme parks over the next deep debt -- decade upwards of $60 billion in some saw the

spending where there is a lot of cost-cutting. citibank suggested it's a bit over blown. the outlook for starbucks in china's getting attention because there was a note suggesting the outlook for that market might be more challenged than some analysts and investors think and they are pointing to the competitive environment in china as a factor that could weigh on their performance in that particular market. matt: interesting moods and we will keep our item all of the individual movers there. i want to get to one of the biggest names on wall street or really two of them. mike mayo from wells fargo, one of the most acclaimed banking analysts out there and goldman sachs. mayo says the ceo of goldman sachs is not in danger of losing his job. he says the ceo will stay in his role for at least the medium term based on comments that goldman stacks made and they

remain strong. he is the equity analyst from wells fargo and he joins us here on set. great to have you in the studio. you met with someone who is very important to david solomon to draw these conclusions, tell us about that. >> it's one thing to hear david solomon say everything is fine but who is overseeing the overseers? i thought it would be important to talk to the board in this case i met with the lead director of goldman sachs yesterday to find out what's going on with these media stories and what's happening internally and what's happening with david solomon. will he stay for a while? the conclusion from the lead director was why are you asking the question? the results have been good and they've had the best book value growth over the last five years, the execution has been good with best in class market share gains and they are on pace after the

pivots they've done. he said what are you talking about? he said there's a disconnect between the media stories and the date he has based on the internal activities. matt: i wonder if he didn't acknowledge a little bit of a disappointment with solomon in terms of reducing the consumer lending business, divesting balance sheet investments and moving faster in terms of third-party fundraising, losing some partners that the bank wanted to keep. there are issues. this isn't just out of the blue. >> absolutely in those four issues you just identified, not only disappointed with the management meant team but also disappointment with the board. those are issues i brought up on your show in the past but

frankly, they are now addressing those issues. they are downsizing the consumer and looking to downsize their green sky acquisition and they are expanding their growth of alternative third-party investments. they are moving in the right direction but then based on the cold hard facts, he's done a good job but what about the soft facts, things we read about, what about the reputation to that, he said the clients have gained 300 basis points of market share. the employees he said, the turnover of partners is no different than it's been in the past. in the general reputation in terms of pipeline of talent, goldman sachs last year had over one million applications by people seeking jobs at goldman sachs. i don't think the reputation is hurting their talent, the pipeline, the employees or the client based on what he had to say. the way i interpret his view is

that david solomon is safe for the next several years as long as they keep their plan to generate mid teens return and bring out the returns of asset wealth management. as long as they are on that path, sounds like david solomon is there to stay for quite some time. jon: what would be some of the things you would be watching on the execution front that would potentially help goldman to meet those goals over the next few years? >> every buddy try to protect the capital market cycle and several ceos including goldman sachs solomon himself saying things are picking up and we are starting to see more ipo's and they beget ipo's. the sentiment is turning around and tomorrow is fed day and if and when the fed is done raising rates, that could be a sign for more capital markets activity.

the second would be the regulatory action taken by the fed and others, the basel three endgame. these proposed rules pass as is or will they be more market friendly? then there is the issue about efficiency. i asked the lead director of goldman sachs about their priorities at the board level and they said execution. the top three is ai, artificial intelligence and using that to become much more efficient. i will be monitoring the ability of goldman sachs to meet their efficiency target which they have missed, to continue to gain market share especially when as markets improve and always keep risk management mistakes to a minimum. that's top of the list for goldman sachs and the board. jon: what about those picking between financial plays on wall street whether they want to

believe in the story of jp morgan and jamie dimon were they like what they are seeing at morgan stanley, how does the action and other financial players in the ultimate stock performs their play into this story about measuring the success of goldman? >> ever since silicon valley bank failed, our theme has been goliath is winning, the largest bank scaled from the multi product, multi-distribution, multi-geographic platforms and the likes of goldman and morgan stanley and jp morgan have that in spades. that's one of the unintended consequences of regulation that came out of the global financial crisis. goldman sachs has the raw materials to play in the short-term and the long-term. that's a real competitive advantage. matt: do you think the bank is undervalued?

price earnings price-to-book and solomon took over and the pe is a little higher but it's still just at 14. price-to-book is a little lower than when he took over. maybe i'm splitting hairs. >> goldman sachs is grown in value by 50% over the last five years and they still trade close to tangible book value and we think they will grow another 40% over the next five years. implicit in that says investors have concerns about goldman sachs. i think that's an opportunity. i don't model their targets over the next two or three years but i don't think that matters as long as they improve the returns of 10 or 11% by 200 basis points, that would be enough to take the valuation higher. the stock prices outperformed under david solomon versus the other banks. i think they are poised to do better.

they might need some help from the capital markets. matt: thank you so much for coming in and we appreciate your time to day. the earth shot event is underway at the plaza hotel near our world headquarters. it's about the climate crisis and emily chang is there speaking with bill gates about the race against time to watch more on live go on the terminal, this is bloomberg. ♪ >> we want to take our technology to the next level but what's really interesting with both entities is they have an extensive portfolio but also

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jon: this is bloomberg markets.

time for our stock of the hour. we've been talking about instacart after their big ipo in that deal was priced at $30 per share and we've seen an intraday pop. the stock got up to $43 shortly after trading began before 1:00 p.m. eastern time. as we reported, there is plenty of demand in the ipo was said to be more than 23 times oversubscribed. matt: absolutely and i think it's fascinating because we haven't seen very many ipo's this year. they are all down rounds what we have seen so far. let's talk about this. she is the head of market insight at equities in which is a marketplace that gives individual investors access to pre-ipo equity. i was talking to a colleague of

yours yesterday about the slow down or the drop-off we've seen in the ipo market. i wonder if it's partially because of the success of platforms like yours that lessen the pressure on executives from employees to generate some liquidity. on the other hand, you probably need ipo's to help boost the asset prices a little bit and get the animal spirits flowing. >> absolutely, the whole system has to work together for us to have a functioning secondary market. platforms like equities and enable shareholders to sell their shares prior to an ipo and enable investors to invest in these companies. there is no broad scale axis until there is an ipo or exit so this is something that investors in the public markets have been waiting for along with shareholders in the private markets who have been eager for

that large scale liquidity event. with exits down 70% year-over-year, there is more demand for more activity and hopefully arm in instacart and the other successful ipos will spur more activity. jon: in the case of instacart specifically, does the fact that you've got somewhat similar business like doordash, are there enough comparables that investors felt they were armed and ready for this ipo compared to other companies going public? >> the fact that instacart has doordash as a public, helps evaluation where you see instacart trading now at probably a $13 billion valuation or so, it's at a higher multiple than where doordash is trading. advertising accounts for 29% of their business and it's

something that these other companies don't have and it's the driver of profitability for instacart. it is different but i would say having those public comps helps. matt: i feel like we've only had three ipo's this year. ken yu, arm and instacart but there have been a few more. what's wrong with 2023? why is it so bad for coming to market? >> it's certainly been the quietest market for ipo's since 2009 and a lot of the macro uncertainty this year led companies to pause their plans. there was the svb collapse in uncertainties around inflation and what rate hikes would look like and geopolitical risk and while some of those risks are still in the market, there is more certainty. the vix is trading at levels it hasn't been a since 2021. for companies that have their ducks in a roanne maybe they are profitable and growing at 30%+

and have key hires in place to successfully ipo, this market is probably a good time for them but you need to check all those boxes to enter the market now. jon: before we let you go, now that we have the arm and instacart offerings, it's still early days but there is this theory that that would potentially open the door to others going public. do you feel the market is strong enough or other names, particularly intact? >> i think it will and especially the fact that instacart is entering the market accepting a down round and seeing where it goes from here, that will encourage other companies to do the same and it makes it less taboo. when you think about the public markets, things trade up and down constantly and that's accepted but that's not the case in the private markets. it's expected you go up and to the right indefinitely.

i think this will be encouragement for companies who may accept that i have good fundamentals and i may have a down round of fight raise capital but that's ok because public investors may be in this for the long run. matt: thank you for joining us. she has a platform that allows people to trade pre-ipo shares it was a fascinating story there. let's get back to the earth shot event at the plaza hotel down the road from here. prince william is speaking right now. i believe he's speaking right now. there he is. fantastic haircut. you can check out more from prince william and the earth shot event on live go on the terminal. this is bloomberg. >> 2014 was the last time i was here in new york and i've been trying to come back for a couple of years but with covid and my

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jon: ahead of tomorrow's fed decision, there are challenges in central banks fighting conflation. the index rose for the second straight month in some of that was higher gas prices which may not phase the bank of canada which recently held rates steady but let's get more perspective from rbc. the market today seems to be absorbing -- observing higher old prices and maybe the inflationary environment in canada asks if we need to be hot ready for a higher interest rates for longer? >> the inflation data for august this morning obviously was a step away from the bank of

canada 2% inflation target and maintain the inflation. it's not really the one report this morning more so than the fact that core inflation gets us a better understanding of the price pressure in canada. they've -- they've been stuck in a range since last year and that's more concerning. some of the core measures actually accelerated. we are averaging around that and there are super core measures. they have been at 4.3% on a three-month basis so it's the persistent inflation pressure we are more worried about these days area interest rates might have to go higher but that's not our forecast. does it change our forecast for the bank to pause in october?

it doesn't but it adds risk and uncertainty to that scenario that the bank of canada will have to go again. jon: the messaging is as important these days. the bank of canada says higher rates are having an impact but they are prepared to hike further than necessary. you wonder if you will see similar bloomberg.com messaging from jay powell and the fed tomorrow. >> that's interesting because to me personally, the position of the bank of canada versus the bed are similar these days. the inflation rate is not actually superhigh, around three or 4% not back to target but what they do is they allow the central banks to take a step back and look at a fuller picture of not inflation but other data which includes labor market data.

we saw the unemployment rate increased by half a percent early this summer. some of the other measures as well in consumer spending are starting to show the aggregate demand is losing steam. in canada, we have inflation starting to pick up but a broader macro backup is deteriorating to put those two pieces together and that allows the bank of canada to say hold on, let's pause and wait for more weakening and macro economic data to come through let's see if that can ultimately slow inflation back to target as well. that's a good segue to the fed because it's a similar decision-making process or thinking process. there inflation is looking really good but at the same time, consumer spending is incredibly strong with some very strong retail spending data into q3. they are wondering if the low inflation ratings are sustainable. it's kind of interesting of the

same decision-making process allowed them despite contrary circumstances to be making the same decision at this point. matt: don't ever underestimate the u.s. consumer ability to spend beyond our means. thank you for joining us. we will be talking about our fight against inflation with the fed tomorrow. a widely expected hawkish pause and looking at the dots in the summary of economic projections. jon: absolutely and as we watch the oil price moving into the red but elevating prices with inflationary considerations with the s&p 500 down about 0.1%. this is bloomberg. ♪

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romaine: bonds getting sold, oil getting bought and the hottest ticket in equity markets is a grocery delivery company. i am romaine bostick. katie: i am katie greifeld tick you off to the closing bell in the u.s. two hours ago. s&p 500 down 3/10 of a percent and big tech down 3/10 of a percent. on light volume as we await the fed decision to