TheChek News Flow

That didn’t take long. Within a day of Donald Trump’s election as president, TV executives were signaling optimism that the new administration would make life easier for them by allowing the industry to consolidate. Warner Bros. Discovery CEO David Zaslav made the most articulate case on Thursday, presenting mergers as a way of helping out poor consumers who can’t figure out how to navigate the crowded world of streaming apps.

“Consumers put on a TV set and they see 16 apps. And each of those are doing different pricing. And you’re sitting there with your phone and Googling where a show is or where a sport is.…It’s just not a good consumer experience,” Zaslav argued. Not only is he right, but this framing is more likely to appeal to antitrust authorities than arguing that mergers would help TV companies cope with shrinking cable revenues by helping them cut costs.

Still, the idea that a veteran TV executive is worried about the consumer experience is a little ironic, given that TV executives gave us the world of high-priced cable TV, offering hundreds of channels people didn’t watch. And those they did watch were jammed with so many ad breaks you might think the programs interrupted the commercials rather than the other way around.

To be fair to Zaslav, he appears to have learned his lesson on advertising, noting on Thursday, “We have seen on cable that too much advertising really presents consumer challenges.”

What’s worrying, though, is that Zaslav (like other TV executives) is a big advocate for creating bundles of streaming services—basically cable TV–like packages where you pay one price and get several services. Already, WBD has created a bundle with Disney that offers WBD’s Max with Disney’s Disney+ and Hulu for $29.99 a month, all without ads. That’s a big discount on the $51.97 you’d pay to get the ad-free versions of those separately.

But if you think that discounted price will last, then I’ve got a bridge to sell you.

All the big TV companies have been jacking up prices on streaming regularly, to the point where most have erased the streaming losses that were straining their finances. But their streaming profits are still small, while the much more substantial profits from their cable channels are diminishing, as we saw in the third-quarter results today from Paramount Global and those from WBD on Thursday. That guarantees that prices of the new bundles will rise once people get used to them.

And if consolidation happens, there’s a risk that bigger bundles will come, costing more money and resembling cable packages with a mix of some programs you watch—and some you don’t. Zaslav may not be thinking along those lines, to be sure. But there’s a danger that allowing mergers will take us back to the worst of the cable world. That might be good for the companies, at least in the short term, but consumers are not likely to welcome it.

Cover:

-Donald Trump has won the election with a majority of the popular vote, putting an end to the questioning about his democratic legitimacy. The economy has seen significant changes since his departure in 2021, but inflation may not be fully eradicated and consumers are anxious about the future. As the president considers his strategy and personnel choices, he should consult with economic advisers to maintain the boom and avoid reigniting inflation. Consumer sentiment is still in recession territory, and deportation raids and measures restricting the labor force could drive up inflation. The Federal Reserve is bringing down interest rates, but Chair Jerome Powell may reverse course if conditions change. Trump should be wary of interfering with the Federal Reserve, as Powell believes it is illegal to fire him. He will have a chance to replace him as Fed chair in May 2026, and should choose a neutral Fed leadership.

Interview:

-Meb Faber, a value-oriented money manager in a market dominated by growth stocks, believes there are many winning stocks beyond highfliers like the Magnificent Seven. His $1.2B Cambria Shareholder Yield (SYLD) fund, which targets dividend-paying companies, has returned 12% annually over the past decade, beating its mid-cap benchmark. Faber also runs Cambria, oversees over a dozen ETFs, and is an author and economic commentator. He hosts a podcast, the Meb Faber Show, which has welcomed investment luminaries. Barron's interviewed Faber about the market's tech rally, finding value today, and his contrarian investing idea.

Tech Trader:

-Donald Trump's victory has significant policy and geopolitical implications for the tech sector, with tech investors anticipating uncertainty. Big Tech is not expected to see significant changes compared to the status quo, as the government's antitrust cases against Alphabet and Meta Platforms began under the first Trump administration. Trump's administration will likely make significant differences in AI and chip policy, particularly in terms of regulation. He has vowed to cut burdensome rules and red tape, benefiting smaller AI start-ups. Additionally, energy deregulation could benefit AI innovation, as the US is constructing AI data centers, with constraints such as chip supply and electricity access. A Trump administration may prioritize the importance of nuclear energy and AI infrastructure, making it easier to build reactors and connect to data centers.

The Trader:

-Fears of nightmare scenarios, such as a long wait for final results or a legal battle contesting the outcome, were all raged as voters went to the polls. Donald Trump's presidential victory was evident by Tuesday night, and stocks surged to new all-time highs. The S&P 500 index gained over 4% this past week, while the NASDAQ Composite rose nearly 6%. The Dow Jones Industrial Average climbed 4% after experiencing its largest post-Election Day gain since 1896. The Cboe Volatility Index declined 32%, its largest weekly drop since December 2021. However, the sequel might not go as well as the first, as inflation was lower in 2017 and the federal deficit was less than half that. Trump's policies, such as cutting the corporate tax rate, imposing tariffs, and dialing back regulations, may have a different impact.

-Trump's victory over Kamala Harris has led to a surge in financial stocks, with Goldman Sachs Group, Morgan Stanley, JPMorgan Chase, Wells Fargo, and Bank of New York Mellon hitting record highs. Lower short-term interest rates and a relaxed antitrust regime could benefit financials, making lending more profitable for smaller banks. The SPDR S&P Regional Banking exchange-traded fund soared over 10% on Wednesday. The iShares S&P Value ETF has an overweight position in financial stocks, while the iShares S&P Growth ETF has a P/E of 27. The market expects stronger economic growth and better earnings, with insurance, construction, and steel stocks all experiencing surges. Small-cap stocks may benefit from protectionist trade policies, such as tariffs against China and economic allies like Europe, Japan, Canada, and Mexico. The Russell 2000 and S&P Small Cap 600 indexes both surged more than 5% on Wednesday.

Features:

-Tesla stock has seen a significant rally since the election on Wednesday, with Wall Street becoming more optimistic about Elon Musk's electric vehicle maker. Tesla stock rose 8.2% on Friday to close at $321.22, a rise of 8.2% since September 2022. The stock hasn't closed above $300 since September 2022 and $321.22 since April 2022. The recent gains have sent Tesla's market value back above $1T based on 3.21B shares outstanding. The gains followed a 15% jump in Tesla stock following Donald Trump's presidential election win over Kamala Harris. The shares have gained 29% this week alone, adding almost $45 a share, or $145B in market capitalization, for Tesla. Tesla CEO Elon Musk endorsed Trump's bid to recapture the White House after a failed assassination attempt in July. Aligning with Trump has turned out to be an incredible hedge for Tesla. EV stocks also experienced a down day, with Lucid Group stock falling 5.3%, Polestar Automotive Holding shares falling 8.2%, and Rivian Automotive dropping 8.3%.

-Rivian, an electric-vehicle start-up, reported a wider-than-expected third-quarter loss, with a per-share loss of $1.08 from sales of $874M. The company delivered 10,018 vehicles in the third quarter, down from 13,790 in the second quarter. Wall Street estimated gross profit margins of negative 30%, an improvement from negative 38% in the second quarter of 2024. Profit margins came in at negative 45%, although absolute spending dropped from $1.6B in the second quarter to $1.3B in the third quarter. Rivian management still expects to produce a positive gross profit in the fourth quarter. Rivian also left its full-year sales and production guidance unchanged, aiming to make about 48,000 vehicles and deliver about 51,000 vehicles. Canaccord analyst George Gianarikas called the quarter "messy," but added that "it wasn't all bad." Rivian stock closed up 5.4% at $10.59, while the S&P 500 rose 0.4% and the Dow Jones Industrial Average gained 0.6%.

Europe:

-Volkswagen, Europe's top auto maker, is facing significant challenges due to structural problems and the closure of three domestic factories. CEO Oliver Blume demands 10% pay cuts and the closure of factories, which has led to a 65% upside in VW's stock. European equity strategist Michael Field sees a V-shaped recovery if factory closures are signed off, and is also buying into VW's competitors, Mercedes-Benz Group, BMW, and Stellantis. However, not everyone is so bullish, as the current backdrop has already led to the collapse of a business model based on profit margins in China. Local competition has reduced Europeans' share of the Chinese luxury car market to 40%, and the market is shrinking due to China's property-driven issues. Chinese upstarts like BYD have raced ahead in affordable electric vehicles, pushing the European Union to impose import tariffs of up to 35%.

Emerging Markets:

-No update

Commodities:

-As Donald Trump prepares to return to the White House, a potential trade war with China could impact American farmers, potentially leading to a shift in the global supply structure of agricultural products like soybeans and corn. Trump has long advocated for tariffs on foreign goods to appeal to working-class voters who feel the loss of income and job opportunities due to global free trade and overseas factories. If re-elected, Trump has pledged to impose at least 10% tariffs against foreign goods, with levies for certain imports from China potentially reaching up to 60%. This could potentially lead to retaliatory tariffs from Beijing on American goods, a move seen six years ago when Trump imposed tariffs on over $300 billion of Chinese imports.

Streetwise:

-Trump Media & Technology Group (DJT) experienced a post-election surge, trading 35% higher at one point but closing up less than 6%, similar to the Russell 2000 index of small companies. DJT's recent stock market value was just under $8B, similar to Walgreens Boots Alliance, but its revenue last quarter was around $1 million, making it the purest of Trump trades in the short term. The election results were favorable for Trump's trades, as President-elect Donald Trump had a red wave, with Republicans flipping the Senate and likely keeping the House of Representatives. This victory is a clear mandate for four years of Plan Trump, as the first Republican popular vote win in two decades. DJT's short-term success makes it the purest of Trump trades.

The performance lifestyle brand was started by Joe Kudla in 2015.

Don’t tell Vuori the athleisure market is softening.

The Encinitas, Calif.-based brand on Friday said it has received an $825 million investment led by General Atlantic and Stripes, two global growth investors, along with a collection of other investors that now values the company at $5.5 billion.

The investment, structured as a secondary tender offer, is more than twice the $400 million Vuori received in 2021 from institutional investor SoftBank Vision Fund 2, which had skyrocketed the company’s valuation to $4 billion. Former Neiman Marcus chief Jim Gold was among the early proponents of the company.

“As we continue to drive momentum, growth and market share gains, we are grateful to have the additional partnership of these leading organizations,” said Joe Kudla, founder and chief executive officer of Vuori. “Alongside our existing major investors, Softbank, Norwest, and ABP Capital, General Atlantic and Stripes will be key strategic partners and supporters in our ongoing mission and growth journey. They bring industry expertise and track records in helping emerging category leaders accelerate their expansion efforts while sustainably scaling globally. We are excited to partner with our new and existing investors to continue pursuing Vuori’s mission to make quality products that empower deeper connections with consumers everywhere.”

Kudla was not available for further comment on Friday.

Kudla, an entrepreneur and one-time model, took up yoga after he developed chronic back pain from years of playing football and lacrosse. He loved the discipline but not the apparel options offered by the big brands, so he launched Vuori in 2015 as a men’s activewear brand to fill that void.

Since then, the company has experienced explosive growth, expanding its offerings beyond strict activewear to lifestyle pieces, adding womenswear, and moving outside the U.S. borders. Vuori is now available in 18 countries.

It has also moved from strictly an online player and has been aggressively opening stores with a goal to exceed 100 units in 2026 in the U.S., Europe and Asia. It currently operates 79 stores in the U.S., two in London, two in Shanghai and one in Korea. Last month, it opened its first international flagship on London’s Regent Street, a two-story, 4,000-square-foot store. That followed a smaller unit in Covent Garden that opened in 2022. A third London unit is slated for King’s Road in the spring.

“We have followed Vuori for many years, as Joe and the team have thoughtfully built an enduring, generational, and category-defining brand,” said Andrew Ferrer, managing director of General Atlantic, who will join the Vuori board of directors as part of the transaction. “Vuori’s immense consumer loyalty and incredible product reflect the brand’s relentless focus on quality and innovation, customer experience, and cultivating its team and community. Vuori has significant white space to expand globally, supported by long-term tailwinds in athleisure and a large addressable market across women’s and men’s activewear apparel. We look forward to partnering and leveraging our global footprint to support these efforts for years to come.”

Chris Carey, partner at Stripes, said Vuori “encapsulates everything we look for in a Stripes investment — the products are amazing and beloved by the consumer, the team is fanatical about quality and innovation, and the market for athleisure is global with durable tailwinds.”

The capsule was aimed at the brand's local customers as an addition to its core lineup.

DUBAI — It was a family affair in Dubai as Brunello Cucinelli and his daughter Carolina staged a presentation and dinner to showcase a special capsule collection of abayas.

This marks the brand’s first show in the Middle East, but Brunello Cucinelli said the region has long been a source of inspiration.

“I have always been very passionate about Arab culture, landscape and architecture,” he told WWD. “Just look around us now, the setting here is sublime. When you look at the colors of the house, of our brand, they fit perfectly here in the desert.”

The abayas, created in a range of fabrics from crepe silk to summer-weight wool, blended the brand’s classic tailoring with elegant, softly flowing looks. Each was styled with a shayla, or veil, to cover the hair. The collection seamlessly integrated with the brand’s overall spring 2025 collection, offering up an expanded, culturally relevant offering.

Carolina Cucinelli, who serves as vice president and co-creative director of the brand with her sister Camilla, said they worked closely with a stylist from the Middle East to ensure the collection honors the traditions of the region, with attention to cuts and wearability. “This is an important market for us, and we wanted to create a more profound connection with our clients here,” she said.

She described the design process as very collaborative. “My sister and I work together, like all our collections, and there is a final review from Brunello to ensure it aligns with the overall vision.”

Carolina Cucinelli, who wore a long ivory-color abaya jacket from the collection, appreciated the versatility of the abaya. “Our brand DNA is very dedicated to the tailoring and so we have these sartorial pieces that we hope can be worn anywhere in the world,” she explained.

She also expressed a strong personal connection to the region, drawing parallels between Italian and Arab culture. “From a cultural point of view, we are very close,” she said. “We share a passion for family, for honoring tradition and for truly celebrating life’s moments, which we are doing tonight.”

Bankers are cheering the prospects for a lighter regulatory touch, but guardrails do benefit their industry

It’s been a giddy week on Wall Street. Donald Trump’s thumping victory in the US presidential race has bankers and private equity titans dreaming that he will loosen the regulatory reins while driving up demand for dealmaking and financing of many sorts.

More immediately, the results have all but doomed the Biden administration’s efforts to impose higher bank capital requirements as well as looming new rules on everything from climate disclosure to outsourcing.

You can almost hear “ding-dong the witch is dead” playing in the background as executives enthuse about saying goodbye to Gary Gensler as chair of the Securities and Exchange Commission and Michael Barr as head of supervision at the Federal Reserve.

Private equity firms and traditional money managers are not only welcoming the end of Gensler’s multiyear regulatory blitz but also hoping that a friendly SEC will give the green light to new financial products more readily. Alternative assets, including crypto, unlisted credit and private equity, could soon be finding their way into individual accounts.

Bank executives, meanwhile, have dreams of watering down the Fed’s annual stress tests, a key limit on how much risk they can take. Investors are also betting that industry mergers such as the that between Capital One and Discover will have a better chance of getting done.

Optimists say that clearing away unnecessary strictures will stimulate growth by making it easier for banks to lend and for investment firms to channel savings into badly needed infrastructure and innovation. They also point out that regulation tends to be cumulative, and a mild pruning may be warranted to keep overall costs and red tape in check.

“Banks are back” was the way one insider described the prevailing mood. “Trump wants to ‘build, baby, build’ and that requires a lot of financing.”

Pessimists worry that the anti-regulatory tone set by Trump and his new efficiency guru Elon Musk will send competent government employees running for the exits. That could prevent the rapid regulatory approvals that the industry is hoping for, and also leave the watchdogs dangerously short of the skills needed to spot and deal with emerging problems.

“A lot of the enthusiasm is based on a false premise,” a veteran executive told me. “We now risk heading into whatever the next bubble is. Sure as hell it’s coming.”

Even if the rosy view prevails initially, longtime Wall Street veterans caution that the industry needs to be wary of pressing its advantage too far. “If you take off too much regulation, more banks fail”, and that will set the pendulum swinging back the other way, another long-timer warned this week.

The first Trump administration’s 2018 decision to ease regulations on midsized regional banks is a case in point. While most banks in that light-touch category went about their business and prospered, a few took risks that later proved fatal. Their collapse sparked the 2023 regional banking crisis. The resulting upheaval became a justification for Barr’s “Basel III endgame” proposal to boost capital requirements that the industry has just spent more than a year fending off.

The US federal system also carries built-in risks for industries that seek to completely defang their overseers. An overly conciliatory federal watchdog can create a vacuum that ambitious state-level regulators will seek to fill. Here, the history of the 2002 research analyst scandal is instructive.

When then president George W Bush named industry lawyer Harvey Pitt to head the SEC in 2001, it was an open secret on Wall Street that investment banks were wooing initial public offering clients by promising favourable analyst coverage, even to companies that had no hope of being profitable. Pitt, who promised a “kinder, gentler” style, scrubbed a planned report and convened a private meeting with the big banks where he urged them to address the conflicts of interest.

Before any reforms could be agreed, then-New York attorney-general Eliot Spitzer went public with his own investigation, sharing colourful emails that embarrassed the industry and enraged investors who were losing money in the dotcom bust. Ten banks ended up paying a record $1.4bn and agreeing to expensive structural reforms. The triumph emboldened Spitzer and other pro-regulation state AGs to bring more cases, and they remain active.

This may all feel like ancient history to the financiers who popped champagne corks over Trump’s victory this week. But they would do well to remember that finance remains a highly cyclical industry, and customers get very angry if they feel they have been cheated. Clear guardrails can serve as a shield as well as a constraint.