♪ >> welcome to "bloomberg markets." sonali: big-time earnings roll in as we count down to the u.s. election and the big fed decision. we talk to three c.e.o.'s this hour about their earnings, but first let's see where the markets stand as we hit noon. wall street time. check on the markets here. the s&p 500 has been going south a little bit today. you have a 1.5% decline in the index and that's the worst day since you've seen since early september. same for the nasdaq 100.

down now about 2.3%. for the s&p 500, we will be ending october as the worst month since april. so tough month that we have seen. we're also seeing the two-year camping out around 416 and the 10-year at 429. it's a stunning place to be, standing ahead of a jobs day tomorrow and of course after p.c.e. today, a lot of noise before that fed meeting next week. midday movers here on the equity side, bloomberg's app gale doolittle for that -- abigail doolittle for that. >> >> microsoft down 5.5%. the growth for their cloud product, the outlook, disappointing. down sequentially to 31% to 32% from 34% and 35% a quart blor. the investors not liking that. meta platform down. they beat ajusted earnings in a big way but a.i. demand being

shaky, plus costs, spending expected to rise. amazon after the quarter, after the bell, i should say today, microsoft and meta not really setting a nice platform for them. and then nvidia going along for the ride. they don't report until toward the end of november. so big tech really taking a pause as you mentioned. the worst day since the beginning of september. we'll find out more after the bell with both amazon and apple. looking at one stock that is certainly working to the upside in the opposite direction, this would be carvana. shares absolutely soaring, up 22%. the used car sales for this company have just really soared. they've also provided a bullish outlook. this is the best day since may and on the year, the stock up the better part of 400%. so they of course had liquidity and growing concerns not so long ago. investors bought that up and are doing quite well at that. then finally, row cue, another one to the down side. tumbling, down 21.4%. this after the stock, the worst day since february of 2024.

they're going to stop reporting their quarterly numbers of households using their product. similar to netflix. investors, though, clearly not liking that decision at all. sonali: absolutely. fascinating day, of course. you're seeing megamoves here in markets. on the heels of earnings. amazing to ein either direction. you have seen significant double-digit gains or losses. also i want to point out another story here. comcast said it's considering spinning off its cable networks into a new company as it grapples with continuing industry-wide declines in subscribers and you are seeing a jump in comcast shares today, particularly off the news. back at bloomberg screen time event on october 10, comcast c.e.o. was asked about the spinoff reports. he commented on the state of the cable business. >> there could be more decline, it could level off. youtube tv, hulu live -- >> is it going to hurt your soul a little bit if youtube tv surpasses you as the biggest

cable operator? >> not if they're watching nbc. we will have transitioned our company pretty carefully, we're going to, you know, be pretty happy with the comcast-nbc universal we got. sonali: and want to also pull up a little bit more on what comcast is doing here because as i said, it is a fascinating move. because you are seeing just spinoffs take over the m.n.a. landscape here. and companies reacting really well to the idea of it. investors really like the idea. it's up about 3%. and this is a stock also that has otherwise been down on the year by just a little over 1%. so it's pretty fascinating to see the moves, particularly in the media industry as well. remember, comcast is not the only one that is looking to change up its business. we are still looking at a lot of media companies reporting in the coming days as well. now, we are going to turn to the

u.s. economy. remember, we had p.c.e. outside today. aligned with expectations. we are going to talk about that a lot more after the break because the changing rate environment has been a big part what have has been underpinning this market. rates have stayed higher for longer. the market not reacting very well to earnings. and of course we will talk more about that next. this is bloomberg. ♪

♪ sonali: this is bloomberg markets. let's get a check on the markets. it's been a pretty brutal day out there. s&p 500 now down about 1.5%. that nasdaq 100, remember, people pretty disappointed with those big tech earnings out

overnight, after we've seen some of those ma g-7 stocks just fly to fresh heights but we are seeing people take some chips off the table and also going to of course talk about different sectors, though. not every stock is in the red today. we're going to go to one in particular. we're going to talk about carvana. it had reported results after hours yesterday. results had showed resilient demand for used cars. carvana earnings beat analysts' estimates on adjusted revenue and earnings per share. and we are going to be joined now by carvana c.e.o., ernie garcia. and, you know, it's interesting. we were starting to see people really come back. they are trying to buy used cars in particular. what does the pipeline really look like and consumer appetite look like going into the end of the year? >> thanks for having us. we're happy to be here. i think carvana's been doing a lot of work over the last couple of years to try to get ourselves

to a great spot. i think the last two years, seven quarters or so, we've had incredible results. the team's been doing a great job. we're extremely proud of those results. i think a lot of what you're seeing right now has more to do with us making sure we're delivering to customers simple experiences they love, that are a great deal for them and that enable us to do a great job fmy as well -- financially as well. i think this is a lot more about carvana in particular than the industry in general but the industry in general is chugging along and looks pretty stable as well. that's a great industry for us. matt: hey, ernie. i'm here too, matt miller. a couple of years ago you bought a wholesaler, odessa, and i think at the time it was a couple of billion dollars for the acquisition. people were worried that the associated borrowing was going to be a drag. it turns out to have been i think a brilliant move because it's helped you really grow your network to prep cars for sale. how much of a piece of that --

of your success is that odessa acquisition? >> first of all, thanks for the characterization, it's brilliant. we'll take that all day long. undoubtedly it's a big part of our machine. we're extremely excited about it. i think building something different for customers where you have a chance for a rel win-win where it's different for them and for us economically as well is hard. it takes a unit of work and ambition. takes a long time. and oftentimes the road there is a little bit bumpy and i think that was certainly the case for us. but it was something we had conviction in at the time. i think it's something that's showing up now to really be playing out well. it's great for the odessa business and customers, it's great for our business. we're excited with he still have a -- excited. we still have a ton of work to do to get the full benefits out of that acquisition but we're well on our way and it's an exciting time. matt: how do you differentiate yourself in this business, not a lot of people buy multiple cars per year. so they don't have the experience you would have with shopping for a lower-priced

ticket item. how do you differentiate yourself from other used car businesses when it's often a decision people only make once every four or five years or 10? >> sure. i think the most important thing is make the experience very simple and meaningfully different. i think we've built our machine where we're totally vertically integrated so all the decisions around financing, around the price of the car, around trade-in value, it's all made by us. all the systems are our own. so customers can buy a car in minutes instead of hours. the experience is very simple. they have a huge selection. they go through the whole process with complete transparency so they walk out of it confident. and i think that that leaves an indelible mark in their mind that they remember for longer. there's no question that there are advantages to businesses where transactions happen with higher frequency. but there's also an advantage to being able to create a truly differentiated experience that customers remember. so our job is to give them great experiences and they tell their friends and then that leads to the kind of results we've seen over the last couple of years.

sonali: the other question i have is around not your stock price, which is up more than 380% this year, but about the other side of the equation here and the debt picture for carvana. you're looking at, according to bloomberg's ddis page, $5.3 billion of total debt outstanding. termed to out to 2031. how do you expect to pay some of that down next year? now that operations seem to be improving so much, where does that go? >> i think we're going to keep turning the wheel. the most important thing we can do is keep performing well as a business. which is driven by all the simple fundamental things. give customers a great transaction, keep making the business more efficient so it makes it better for them and more efficient for us economically. we were lucky enough to have very significant net income this quarter. $140 million. so we're generating a lot of cash. that allows us to pay down the debt over time. we do plan to delever. but we're in a great spot and i

think that's not a central part of our consideration right now. what we're really focused on is continuing to turn the wheel and get a little better every day and i think that's been paying big dividends over the last couple of years. sonali: we thank you so much for joining us today. carvana c.e.o. ernie garcia. we're going to turn now to the u.s. economy. because the fed's favorite gauge of inflation was out today in line with expectations. and it's a big day tomorrow because we have, of course, the jobs report. we're going to go live now to the white house where we are joined by the chair of the council of economic advisors. and first perhaps, speak to where you see inflation right now. because of course it did come in right in line with expectations. but there were some critical components that mattered the most to americans as well like food where you saw bigger jumps than others. >> first of all, sticking with the top line, p.c. inflation, 2.1%. that's just about back to the fed's target. and it's consistent with a trend

in easing inflation. as you've mentioned, some different components are going in different directions. we're always going to get that. but when it comes to grocery prices, with he know that grocery prices -- we know that grocery prices were growing at double-digit inflation a year and a half ago. they've come down to about 1% year over year. now, the important thing there is to recognize how this strong job market, strong g.d.p. growth, and easing inflation has raised real paychecks, raised real disposable income. that was in today's report as well. and of course consumer spending, strong consumer spending reflects those gains. so when you actually look at how much families have to work to buy a bag of grocery, it's about the same now as it was before the pandemic. we have a lot more work to do to bring costs down, but it's important to look at both sides of the leger. the price movements, as well as the wage and income movements.

sonali: i'm curious, i know you can't comment directly on the federal reserve as well, but after that first 50 basis point rate cut, do you think that there's really the ability to declare more victory and further see room for interest rate cuts, given where we are right now? because you also see the biggest monthly gain since april when you look at core numbers here. >> first of all, let me speak from to my or our perspective at the white house which is no declarations of victory. no victory laps. yes, we're really happy to see the positive data know we've seen. and particularly to achieve all this disinflation in the context of solid, strong growth and a tight labor market. as you well know, many news outlets and economists said we weren't going to be able to get here without a recession and certainly that's not been the case. when it comes to the federal reserve, i think a very important observation is the one you made at the beginning of the

segment. the numbers came in at expectations. that's very important for them. it means they understand where things are going and that would strike me as consistent with their plans. but that's all that i'll say about fed policy. so again, as long as real pay is up and the economy underneath it remains solid, that's a positive trend for consumers and households. doesn't mean anything about our cost-cutting agenda. we have to continue to work to lower the cost of housing, of childcare, of prescription drugs, of health care coverage, we're actively doing so. and we'll continue to do so. and we'll continue to fight those who would repeal those advances leading to higher costs. sonali: you mentioned jobs a few times and i'm glad you did because of course there's another payroll report out tomorrow. how concerned are you about the potential down side surprise to payrolls given any consequences of hurricanes helene and milton? >> we've been very clear here at the white house, i spoke from the podium on this yesterday,

that this is a report that has the potential -- we don't know yet, we haven't seen it -- this has the potential to be, you know, significantly disser to thed by some ings -- distorted by some things that happened in october. one thick we know that's going to be in the report on the payroll side would be about 41,000 fewer jobs due to ongoing strikes in the reference week. the bureau of labor statistics has that number. they publish it. it's well understood by analysts. so that's a negative. the uncertain part comes from the hurricanes. in the past, hurricanes have had not that much impact on payrolls, in some cases, and in other cases a great deal of impact on payrolls. so we'll just have to wait and see. but i think the important thing to remember is this is a month where you want to recognize that the signal is very possibly distorted. the noise is very possibly elevated. so we're going to want to look at longer term trends and at

least thus far through the september number, we see a solid labor market still very much in play. sonali: i also want to talk about the data we've already gotten. you've seen job openings declining in the most recent report out. but with the labor market seemingly cooling as well, do you worry about lower wage growth at a time when inflation is still above the fed's target? >> i think the key thing there is to think about real wage growth. ok? are waging beating prices? -- wages beating prices? we got the employment cost index this morning and if i recall, numbers there, we saw wage growth in the e.c.i. nominal wage growth, year over year. some were around 3.5%, i believe a little bit north of that. we know inflation came in at around 2%. that's real wage gains. we've seen the same thing in the -- today's consumer price report, of course. that also had consumer spending

and real after-tax income. disposable income, after-tax income, is up in real terms about $4,000 since president biden took office and numerous months in a row in terms of real disposable income, that is beating prices. so buying power is definitely up. and the key thing there is to maintain the strength of the job market while inflation continues to ease and with the caveat that tomorrow's data are going to be potentially distorted, the longer term trend in the labor market has been quite positive. sonali: these are very critical data points moving into the election. both inflation today and jobs tomorrow. as we think about the election and look to turn the page, what would you give in terms of a grade? if this were a report card, on this administration, for where they have taken the economy and are leading it in the hands of the next generation now?

>> i think recuse myself from that very good question because i'd be grading myself and our team and i don't want to do that. i will say the following. we have a g.d.p. growth rate over this president on an annualized basis north of 3%. i think that's something like the 10th highest rated of any administration. certainly the highest in the 21st century. we have an unemployment rate that's averaged at a 50-year low. 16 million jobs, manufacturing jobs coming back in a really strong fashion, and now we have deep domestic investments in production here on american soil of clean energy goods, of semiconductors, and of course batteries, e.v.'s, all of that is under this administration. now, when you talk about a soft landing, when you talk about achieving these goals without seeing the kind of recessionary

predictions that were made, i think that would yield to a high grade, but i'm going leave that to others. sonali: thank you so much for your time. that is the chair of the council of economic advisors. and over in the u.k., u.k. chancellor just presented heifer budget. we're going to go there -- presented her budget. we're going to go there now. reporter: indeed, thank you. and we did have that first labor budget in over 14 years yesterday. the market reaction has been something to behold. chancellor, thank you so much for joining me. i feel like i'm kind of here for a reason. because we've seen such a ferocious guilt selloff. are you worried that we're heading for a situation? >> the number one commitment of this government is economic and fiscal stability. which is why we put in place yesterday in the budget robust fiscal rules that we will meet two years early. there's a significant fiscal

consolidation during the course of this parliament that takes debtors' share of our economy at 4.5% which is what we hint herritied to 2.1% of g.d.p. and we have a framework of spend regular view. that will require difficult decisions but they're ones that this government are prepared to make because we know the importance of economic and fiscal stability. reporter: your margin for error for meeting your main fiscal rule is near historic lows. if there's even a minor hit to growth, you'd have to hike taxes more to hit your fiscal rule. that's not very stable for the bond vigilantes, is it? >> we have morehead room than the previous government left us and that is important to guard against those sorts of shocks. but we in the budget yesterday were open and honest about the scale of the challenge left to us by the previous government. but we have now put our public finances on a stable and a solid trajectory. including through difficult

decisions on increasing taxes. we did increase taxes yesterday. by 40 billion pounds. that was necessary, alongside with the changes made on spending and welfare, to put our public finances on a firm trajectory and that's what we did in the budget yesterday. reporter: how can investors believe this is a one-off hit when you repeatedly said before the election you weren't going to raise taxes beyond your manifesto commitments, now you've raised them 20 billion pounds more than the fiscal hole the tories left behind? >> we were left with a terrible situation by the previous government. a big black hole in the public finances. a number of commitments around infected blood and the post office scandal that weren't properly funded. we've now put all of that out in the open. and we've raised taxes in a way that now put our public finances on a stable trajectory. indeed, the office of budget responsibility confirmed that we meet both our stability and our investment rule two years early. that should give confidence, alongside what the international monetary fund said yesterday,

that these were the right decisions for our public finances and indeed for growth. but we're making the decisions to get our public finances on a firm trajectory and also to boost the growth potential of our economy. reporter: the i.m.f. endorsement is almost out of date given the market reaction. a lot of people are going to be asking what the point of all these tax rises was when the economy growing more slowly under this parliament, under your plans, that if ritchie sue sunak had stayed prime minister. >> the forecast in march would have been materially different if they knew then what they know now about the previous government spending plans. so those comparisons aren't fair ones to make. the o.b.r. say growth will be around the same in this parliament as what they said previously. but of course those projections were based on spending projections which weren't real. the growth forecast, though, aren't the summit of my ambition which is why we are doing planning reform, pensions reform, skills reform, to get our country growing again.

and we're determined to do that. but the o.b.r. also say that over the longer term, our plans will boost g.d.p. by 1.4%. that's significant. when our economy has barely grown the last five years, it is a significant boost to growth. but it shows that this government -- it shows that this government -- this is 1.4% in addition to the growth we're already experiencing. just to be clear about that. and that would be a big uplift on the growth that we've experienced the last few years but we're doing more to boost growth. we're getting britain building again with planning reforms. we're unlocking long-term patient capital to help small businesses and start-up and scale-up businesses to grow. all of that could have a big impact on growth, as could the 63.5 billion pounds investment that this government unlocked at our international investment summit just two weeks ago. reporter: and yet chancellor, for all the revenue raising, there's still going to be real-term cuts for some

government departments. if that's not the definition of austerity, what is? >> that's not correct. the numbers we put out yesterday that shows real terms increases to government spending of 1.5% during the course of this parliament, 1.7% if you take into account capital spending as well -- reporter: many expected 2%. >> that would be even higher than the growth rates being forecast. austerity is when you're cutting public spending. we're not doing that but it will require difficult decisions and we've set out the envelope for spending in the parliament ahead at the budget yesterday. we are determined to live within our means, we are conducting a zero base review to drive efficiency and productivity across government because better public services are not just about money. it's about running those public services better and that is what we're going to do. reporter: indeed, things like the resolution foundation are saying inevitably employers are going to pass on this national insurance rise to workers, that this is going to be the worst term for living standards under

any labor government. yes, you're not technically raising taxes on working people, but if you're honest, it's going to feel like it, won't it? >> the last parliament saw living standards stagnate. it was the worst parliament for living standards ever recorded. the office of budget responsibility forecast yesterday that real household disposable income will increase on average by .5% in real terms per year. so that is a world away from the stagnating living standards that we saw in the last parliament. but do we want to do more? absolutely. that's why we're introducing planning reform, the pensions reform, the skills reform, to get britain building, to get our economy growing again. bringing in private sector investment, for example, through the national wealth fund and through the international investment summit, that unlocked 63.5 billion pounds of private investment in the u.k. showing the confidence that business and investors have in this government and our strategy. reporter: chancellor, you keep emphasizing the long-term here. do you worry that you're not

going to get two terms in government to realize your ambitions, to get to the summit of your ambitions because it's going to take a desked national renewal for people to feel better off? i'm thinking about george bush sr. saying, read my lips, no new taxes, and he was out after one term. >> it was a significant budget yesterday. but that budget wipes the slate clean. so that we never have to do a budget like this again. we are cleaning up the mess left by the previous government. but we are meeting our fiscal rules two years early. we've set the spending path for public services for the course of this parliament. we'll do a zero-based review to make sure we're getting value for money for that spending. we've had to make tax increases but that is to get our public finances on a sustainable footing, economic and fiscal stability are the number one priorities of this government, and we will meet them. reporter: can i take that confirmation, no tax rises for the rest of this parliament? >> no chancellor is going to be able to tie their hands in that way. but there is a significant budget yesterday because we had to wipe the slate clean after

the economic mismanagement, the chaos and instability from the previous government. no government should have found themselves in the position that we did, having to clear up that mess. we've now done that and we can move on. reporter: chancellor, thank you so much. >> thank you. reporter: back to you. sonali: thank you. we're going to get a check on the markets here as well because we've been talking about these moves are pretty drastic. they're the worst we've seen in weeks since the beginning of september. you're seeing the s&p 500 down 1.5%. you're watching the nasdaq 100 also down another 1.2% after those big tech earnings overnight. and you're expecting, of course, more tonight with amazon and apple. you're watching the two-year yield just standing around, 416, move about two basis points. you're seeing some movement in the 10-year as well, and that's all ahead of a hefty jobs print tomorrow morning. 10-year still below 4.30 but at 4.28. so levels that really make you

question what that next rate cut less than a week from now will look like. we are going to look at some midday movers on the equity side. i'm going to look at those here myself. let's pull up a board here and see what's moving under the market. we're taking a look here at cosmetic collapsing here. we're looking at estee lauder. down more than 20%. not as bad as you saw earlier in the day. we're seeing of we are seeing a of course a change in management there but we are not seeing the moves that you would have otherwise. it really has been a tough day for this stock, you are seeing it down more than you have seen ever. we are going to go to money under cover, our weekly segment where we cover unique challenges and opportunities facing the world of alternative investments , shift away from the market moves, and bring in lisa

abramowicz. lisa: i'm very excited for this guest. sarah samuels, partner at a consulting firm that advises endowments, foundations, retirement plans, and more which managed 1.7 trillion dollars. basically she is the one that takes the money and matches it with the investments and really understands where the opportunities are at. thank you for being with us. i want to start with a narrative dominating the discussion in markets which is the election, causing people to remain on the sidelines are you seeing the same kind of hesitancy in private markets as well? sarah: we certainly have seen some disruption in private market commitments. when we think about the three major things that i would like to impart today, one is that there is a lack of liquidity. that is a challenge in private markets. two, public markets alone will not get you where you need to be as a public institution.

three, a chief investment officer mindset is required in today's markets. to your point about the election, markets the uncertainty. this is not uncommon. lisa: institutions you talk to you, are they assuming that going forward they are not going to get big returns from public stock markets? is that the assumption and that we are looking at single-digit, 6, 7 percent return for a long time? sarah: yes, this is where the chief investment officer mindset comes into play. we want to look across the entire liquidity spectrum. in public markets, whether in credit or equities, over the next 10 years, we expect returns in the mid single digits. that will not get institutions where they need to be for the long-term. most have a return target between seven and 8% to support their missions. but we still believe the private market will have a premium on two public markets and we expect double-digit returns provided you can partner with the strongest gp's.

the spread of distribution of returns and private market is incredibly wide, upwards of 50% from the best manager to the worst. we have been able to deliver returns between 4% and 7% higher than public markets in our private program. lisa: how much are you seeing the dispersion in size, that smaller managers are getting an edge or bigger managers getting in and one way or another? sarah: there is more to it than size. we are going to look at things like is it possible that they are able to add returns without needing to rely on leverage for example, and we look at buyouts. happy to pay for multiple expansion, the leverage will not work the way it used to, especially with the cost of financing twice as expensive as a few years ago. lisa: i was speaking to someone

in the market recently, talking about the lack of ipos, exits from these private equity funds. this individual said, anyone who says the market is closed is crazy. what you are really looking at is a bunch of lps who don't like to valuations but they can ipo. the market is open. are we going to knew to see a reset before the market becomes the main attractor of cash the way it used to be? sarah: we have seen a partial reset in valuations across buyouts, credit, cross venture capital, but we have not seen enough. some deals are getting done. venture capital, we have seen some activity, mostly venture funds sold for a third last year. now when you get to sell companies. the last round of financing is valuation. these companies will not reset their pricing until they have a

new round. we are seeing valuations held at the 2021-22 peaks. for the dollars on the ground venture, we expect pain to come. buyers and sellers need to come together in the middle. same thing is happening not in the valuation methodology side but buyers and sellers are struggling to meet, highest quality assets are being sold, and when a buyer is showing up in an auction it is a much thinner market. lisa: is this the tech startups that you are talking about that i'll plan to ipo and now cannot? sarah: not necessarily. ipo is not the lion's share of exit opportunities in most cases. m&a or sponsor to sponsor. lisa: much of this is an issue of valuation, how much is a question around lack of ability, regulation? some potential hang up on that front? sarah: sometimes they are antitrust issues, sometimes issues getting it done.

for the most part i believe it is valuations. we are at a bit of an impasse. lisa: a note of caution and everyone is seeking haven in private credit. money keeps on flooding in, people talk about the golden era of credit. it is all funneling toward ai-related investments and anything that has that in the name. does that concern you? sarah: ai valuations are lofty, multiples above valuations of other sectors. anything in the ai space needs capitalization and investment, a theme that we believe in, but it's important to partner with the best gps out there. separating the signals from the noise is everything. not all ai companies will be winners. lisa: how optimistic are the investors that you speak with now? do they want to take risk and go into these areas or are they feeling nervous? sarah: public markets portfolios continue to be strong even with today's selloff.

that is keeping investment programs overall pretty healthy. liquidity is a challenge. we are seeing some institutions that we work with for the first time ever having zero distributions from their private markets program in the last quarter. if that continues, that could cause problems, but right now institutions are not in dire straits. the private markets market value stays elevated which means we don't need to commit as much to get to our target private market allocation because it is not coming out of the portfolio. we are seeing commitment from limited partners and institutions, so private markets are down about 20% year over year but they are still committing. lisa: before you go, is private dead? part of the allure is you get a stream of income, especially in a time in the biot world and venture capital world you are not getting those distributions because you are not getting the exits. aside from just park your money

for a certain amount of time and then get it back later. sarah: liquidity and in distribution's are in the eye of the beholder. if you are a private wealth investor, you may not want private debt because that they impact how you are taxed. if you are a different type investor, it's nice to have that income. the other thing from a cio perspective, private debt funds have a different cadence, shorter duration, so it's a nice way to fill out a portfolio paired with venture. you really need to be careful that you are partnering with the gps who know what they are doing, they have done this before. lisa: sarah samuels, thank you so much. i will hand it back to you, sonali. sonali: thank you. breaking news now. you are seeing openai bringing search features to chatgpt, challenging google. it will be called chatgpt search.

you have alphabet shares down near session lows now on the day. this stock was not only higher earlier today, also yesterday, as well, on the heels of earnings. we will bring you more. coming up, we will look at blue owl. ceo marc lipschultz joining us after this morning's earnings report, and his own plan to take over, as well as his interest in a stake of the tampa bay lightning. this is bloomberg. ♪

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private credit. blue owl capital reporting earnings this morning matching estimates. we are joined by the co-ceo mark marc lipschultz. he was also recently announced as a co-owner of the tampa bay lightning. sport is a big asset class. first, private credit also a very big deal. 14 quarters in a row of growth you have had. you are sitting at records when it comes to fee-related earnings, all borne forward by that private credit move. what does this look like moving forward? when you talk to investors, there's a lot of question about how things change under a new interest-rate scenario. marc: thanks for having me today. it's been a good chapter for blue owl, 14 consecutive quarters since we went public we have grown our fee-related revenues at 35%. we have grown our fee-related earnings at 32%. dividend close to 30% rate.

we are quite excited about the next chapter. you are right, our origins lie in the direct lending business which continues to grow and evolve. it's next phase lies in asset backed lending, new areas are our real estate business like data centers, so the future is exciting from where we sit. we offer something different from many. we don't offer all products to all people, but we offer what we believe are the best market leaders in a set of products that are about downside protection, durability and creditability. sonali: when it comes to products or sells, you have expanded meaningfully through acquisition. you have made a number of acquisitions this year. when people look to the future, the question is are you going to spend time integrating those assets, or are you still looking to buy more? marc: integration starts day one and before we close. businesses bid that we have

already acquired, we have full integration and ready to roll as a team. the thing about our acquisitions has been and will continue to be marked by the following. you can build a product where we have a unique, distinctive capability that doesn't exist in the world. triple net lease, our real estate strategy in europe. we are already the leader in that business. where there are other areas of opportunity that fit that dna of income oriented products, we want to say, do you buy or build? i think we have landed in the spot that is a hybrid between the two. we work with and join forces with an incredible team, like in the case of atalaya. we are not buying their business, we are combining with the business, and together we are making that a better opportunity for the investors in the funds and to our shareholders. sonali: you are a large private credit firm, private assets, but

you are publicly traded. when you look at others in the industry, apollo for example, there is this pitch that public and private will converge, private credit could be easily treated. they are even building a trading desk to make that possible. do you think that that is true, that all of a sudden you will look up and you cannot tell the difference between public and private? is it possible to make these markets be more liquid? marc: a couple observations. public and private, i might say they are increasingly adjacent, areas that are bringing them closer. we have this whole family of continuously offered products designed for individual access. but the same investment experience and is institutions. there is definitely increasing adjacency. on the other hand, private markets are private for a reason. our proposition to the user is you are going to pay us a

premium, you are going to sign up for a much more restrictive loan document, we will do our due diligence, but we are giving you a long-term partnership. i don't want to disable the long term of private solutions, it is part of what makes them a private solution. the other observation i would share is, private solutions, if you want them in liquid form, it already exists. we started this 10 years ago. we have a public bdc orcc, and if you want to be a participant in fully liquid form, you can buy that. i'm not sure i know what problem we are trying to solve by creating trading in a underlying asset, but certainly true they are getting more adjacent. sonali: fascinating to talk about because you think about the largest trading desks on wall street, j.p. morgan trying to make this happen, goldman sachs. especially if you are saying these markets -- you say they

are private for a reason -- does that mean that the banks will not have the supply because firms like you will not offer it? marc: we land and hold the capital. as you said, areas and other follow similar strategies. it is not our mission to seek liquidity. our mission is to make long-term loan decisions or commitments to gps in the case of our gp sticks business, or to amazon if we are going to be their partner in developing a warehouse. i don't think that we are seeking liquidity. our job is to be their durable partner. our investors have a premium for that. we are quite happy with the structure of the market. sonali: another place he went into, we are in the middle of big tech earnings, lots of conversation about capex spending. you just bought a business to finance data centers. how big is the pipeline? marc: really great place to start.

the demand for data center capacity, physical digital infrastructure is measured in trillions. you were just commenting on google, one of the large tech companies. they are all on this quest for the digital future. that digital future is for sure a high-growth one and requires a lot of computer power. a data center is not a data center is a data center. the reason we acquired api, ipi has been doing hyper scale data centers focusing on funds and investing for nearly 10 years now, long before hyper scale data centers cross the mind of many people. it is a trendy topic. my guess is every person that talks this corner will talk about data centers. but you have to be able to earn the trust about long-term private partnership with these important hyper scale developers. that for ipi is truly distinctive. we have an 800-person group and

able to do the power management, development, condition. that is what the microsoft's and amazon's and googles are looking for and that mary's with our trip police business where today we are a go to partner of choice for holding a real estate assets of investment grade. sonali: we have to leave it there. we didn't even get to ask you about tampa bay. blue owl capital ceo marc lipschultz. we are going to stock of the hour, taking a trip out to the open seas. shares of norwegian cruise line's are soaring after third quarter sales and profits beat wall street expectations. the cruise operator also raised its adjusted eps forecast for the year and investors are hoping they will capitalize off of strong travel demand. perfect person to talk about this is the norwegian cruise line ceo harry sommer. a lot of talk about the strong consumer. what does the pipeline look like going into the end of the year?

what do you expect in terms of people traveling on cruises? harry: thank you for having me on. we are really, really pleased with the american consumer right now. we are seeing an incredibly strong demand especially for our product, more so than in the good old days of 2018, 2019. the american consumer values experiences over goods. we think cruises in general provide a tremendous value and experience for our guests, and it is showing in our numbers. sonali: if you think about potential weaknesses, it's interesting. you see the strength in the u.s. consumer. what worries you, if anything, about the direction of travel? harry: really nothing. the cruise industry is a relatively small part of the travel industry, so we have a ways to go in terms of growth. the future looks incredibly bright. we have advanced visibility into

2025, even early 26 sales. things look exactly on track of where we need them to be to have meaningful price and ebit and eps increases into 2025. sonali: if you think about 2025, given the strength you have had already, what are your plans for even further expansion? wondering how far we can take this appetite for people to get back out there. harry: the fortunate and unfortunate part of the cruise industry, it takes a long time to build a ship. we just cut steel on a ship that is set to be delivered at the end of 2026, so not much we can do in the short term to build capacity. we can grow about five or 6% on the year depending on the year but it is also a blessing. nobody is going to flood the industry with unexpected supply. we are not going to see more than this four or 5% growth on a

year in year out basis. while it makes it more difficult to be more opportunistic short term, it's absolutely healthy for the industry long-term. sonali: what is the future for margin expansion, what to cost look like going forward, thinking about how to spend to get people on board, or whether there is room to cut? harry: we have been super passionate since i took over as ceo a year and a half ago to take a much more holistic view toward cost. we call that a balance between roi, typical return on investment, and rox, return on experience. we want to invest in things that just as value. that is a change from how the previous ceo looked at the company. we have been able to emphasize things that are important to guests, but deemphasize things that are less important, and that shows up in our margin. our margin expansion will be something like 500 basis points

this year, our largest growth in margin from one year to the next since we have gone public. strong focus on cost control, absent an adjustment for dry dog days, essentially flat versus 2023, in spite of the challenges with inflation in the early part of the year. we look to continue with this into 25 and 26 as well. sonali: thanks for joining us, harry sommer, ceo of norwegian cruise line. tune into the clothes this afternoon for an alternative view on the cruise industry. we will have glenn vogel later on today. people getting back on trains, planes, automobiles. we are turning now to celine zhao of optiver. you are seeing single stop names surging. when you look out on the horizon, where are you finding buying opportunities?

is it does stand out that you see so much excitement around today or are you taking in some of the high flyers that are dipping today? celine: thanks for having me. actually, optiver is a market maker that provides liquidity for all major asset classes where we mostly focus on option and derivative space. i do think there is a lot of color ahead of the big tech earnings, can be shared, could potentially answer your question. i of big tech earnings week, we actually did not see any market panic or investor desire to position in the options market at all. until today where we saw a bit of a negative -- positive correlated negative move, i think there was no desire to

sell some of these high flyers ahead of the meta and microsoft results. in terms of which name in particular, i think we still have to wait and see a little bit until after apple and amazon. currently, the options market is still implying pretty in-line to historical average of a market implied move, so i don't think we are fully there just yet. sonali: we are up against the clock, just a little bit of time in the show. we have to leave it there. thank you for your analysis. hefty moves underneath the surface of this market. yes, today is a down day but we only have a couple days left until the election. the last day of october, of course, a down month. maybe november will bring us something new. jobs report tomorrow, yields a little bit higher on the

10-year. we will see where tomorrow is heading. that does it for bloomberg markets. i'm sonali basak. stick with us through the close. this is bloomberg. ♪ it's our son, he is always up in our business. it's the verizon 5g home internet i got us. oh... he used to be a competitive gamer but with the higher lag, he can't keep up with his squad. so now we're his “squad”. what are kevin's plans for the fall? he's going to college. out of state, yeah. -yeah in the fall. change of plans, i've decided to stay local. oh excellent! oh that's great! why would i ever leave this? -aw! we will do anything to get him gaming again. you and kevin need to fix this internet situation. heard my name! i swear to god, kevin! -we told you to wait in the car. everyone in my old squad has xfinity. less lag, better gaming! i'm gonna need to charge you for three people.

>> from the world of politics to the world of business, this is "balance of power."

live from washington, d.c. joe: presidential candidates have for the sunbelt. welcome to the fastest show in politics with only five days until election day and a campaign narrative that continues to surround the word "garbage." i am joe mathieu alongside kailey leinz in washington. thank you for joining us on "balance of power" here on bloomberg tv and radio. happy halloween. you don't have your reflective vest on. kailey: donald trump did yesterday, literally taking a ride into a garbage truck as he leaned into the calf made by president biden this week when he referred to trump supporters as garbage, or may be one singular supporter, if the white house is to be believed. nonetheless, that is a distraction for the harris campaign d