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U.S. consumer spending has remained robust despite downbeat readings in major consumer sentiment and confidence surveys.

The Commerce Department reported that personal spending rose 0.9% in August, and second-quarter GDP growth was revised upward to 2.2%.

Economists suggest the disconnect may stem from rising household wealth, differing survey methods, or a general decline in societal confidence.

When the going gets glum, the glum go shopping.

That seems to be the way of many Americans these days. Leading surveys of their moods show them to be down in the dumps about either the economy or their own financial conditions. But that hasn’t stopped them from spending—far from it, in fact.

For months, the releases on the University of Michigan’s consumer sentiment survey and the Conference Board’s polling on consumer confidence have been drearily similar. The September UMich survey found the second-lowest reading in the polling’s history, going back to 1952. The Conference Board’s data, released this past Tuesday, was also downbeat, even lower than during the pandemic in 2020 and the worst since 2014.

Yet other news this past week showed that Americans’ spending has remained robust despite their sour mood. Personal spending was much stronger than expected in August, the Commerce Department reported, vaulting some 0.9%.

The final release of second-quarter gross domestic product showed an upward revision to a 2.2% inflation-adjusted annual rate of growth, up from 1.5% previously reported. That mainly reflected a revised gain in personal spending, to 3.8% from 3.2%. Overall GDP growth was held down by spending for imports and a drawdown in inventories. Stripping away those factors, domestic final sales grew at a robust real 3.9% annualized, a substantial acceleration from the preceding two quarters’ 2.4% and 0.5%, respectively.

The easy answer to the disconnect between downbeat sentiment and robust spending is the so-called K-shaped economy. The vast disparity among Americans’ incomes and wealth ought to end the dopey statements by TV talking heads about “the consumer” (but probably won’t). A widely cited study last year by Moody’s Analytics found that the highest-earning 10% of households accounted for nearly 50% of total spending.

Those wealthy cohorts also have the most assets, such as stocks and residential real estate, the appreciation of which has further supported their ability to spend. The top 10% of U.S. households gained $38.2 trillion in wealth in the year ended on June 30, according to recently released Federal Reserve data, as the S&P 500 index rose 21% over that span.

But that doesn’t fully explain growth in spending. A report by Bank of America economists Shruti Mishra and Aditya Bhave released this past week found increased breadth in consumption, with a narrowing in “K-shaped spending dynamics” combined with a pickup in spending among less well-off households. That’s based on the bank’s aggregated credit-and debit-card numbers. They estimate the third quarter’s spending grew at close to a 3.5% real pace, nearly matching the previous quarter’s showing.

The BofA economists found that surging equity wealth pushed household assets to more than 10 times their liabilities, which they said provided a “continued tailwind for spending.” Those gains weren’t just in rich folk’s stock portfolios. Liquid assets (such as bank deposits and money-market funds), which are probably more evenly distribution across the population, also are elevated versus liabilities. The economists warned, however, that a shakeout in artificial-intelligence stocks, higher long-term interest rates, or a more significant oil-price shock could pose a potential risk to spending.

While stock market wealth has ballooned in recent years, investors’ tendency to spend that largess has diminished. Based on the experience of 2012-19 following the financial crisis of 2008-09, the tendency to spend out of wealth declined, according to a Federal Reserve paper published in 2025. If investors were more circumspect in cashing in their big stock profits during a bull run, might they also keep their spending on a relatively even keel even if the market takes back some of their gains? That’s plausible but of course remains to be seen.

So, what really explains the evident split between the consumers’ moods and their spending? Part of the answer may lie in the survey methods. Piper Sandler’s economics team, led by Nancy Lazar, contends that its proprietary survey, which polls 500 different people nightly, versus 3,000 per month by the Conference Board and UMich’s 1,000 per month, tracks historical spending better than those surveys. Recently, the Piper Sandler polling has shown people to be more upbeat and in sync with their spending than in the other surveys.

More broadly, the big economic sentiment indicators may have become unmoored from the actual economy. After all, they’ve been falling even with low unemployment, solid growth, and a record stock market. According to a recent report by Goldman Sachs economist Joseph Briggs and Sarah Dong, people’s happiness deteriorated sharply in 2020 and hasn’t recovered in tandem with the economy and the stock market. And that extends across all cohorts and political partisans, and among homeowners and renters alike.

Citing a paper from University of Chicago economist Sam Peltzman, the Goldman report said people have become more downbeat on the state of the world for reasons unrelated to the economy. That paper found that a decline in confidence in nearly all societal and government institutions since 2016 more than offset an improvement in finances. The sentiment surveys may reflect that general decline more than shifting views about the economy. Reps for the Conference Board and UMich surveys couldn’t be reached.

That we’re less happy than we used to be probably qualifies as a “No s—, Sherlock” observation. But these consumer surveys still are followed as indicators of future spending. Indeed, average consumer expectations for business conditions are one of the components of the Conference Board’s Leading Economic Index, along with redoubtable measures such as new orders, building permits, and financial conditions. The problem is, feelings don’t matter much anymore, at least not as indicators of the economy.

Veeva Systems stock can rally by 30% over the next year.

Artificial intelligence is rewriting the rules of medicine, promising to accelerate drug development, optimize clinical trials, and bring lifesaving therapies to market faster.

Veeva Systems is making that transformation happen. The Pleasanton, Calif.–based company develops software for biotechnology and pharmaceutical customers to manage everything from research and development and regulatory submissions to day-to-day commercial operations. Its software was originally built atop Salesforce but has since expanded to stand-alone applications.

“There is a huge opportunity for industry-specific AI to help life sciences get the right medicines to more patients,” Paul Shawah, executive vice president of strategy at Veeva, says in a statement to Barron’s.

As AI plays a bigger role in this workflow, Veeva stock looks like a solid bet into 2027. We see shares with a clear path to reclaim and surpass their record high of $344 set in 2021. Veeva shares, currently trading around $285, offer more than 30% upside over the next 12 months.

There are several reasons to like the stock. Veeva controls more than 80% of market share in biopharma customer-relationship management, or CRM, software. The company has been profitable for more than a decade, expanding sales tenfold since 2015.

Mawer Investment Management, a Canadian fund manager, began buying shares earlier this year. Analyst Renaud Paquin says the bullish case is centered around Veeva’s dominant competitive positioning. Healthcare’s compliance technicalities, in particular, make it difficult for competitors to create alternatives. Veeva’s out-of-the-box features—such as tracking prescription drug samples and reporting adverse drug side effects under strict regulatory guidelines—are particularly hard to replicate.

With pharmaceutical companies, the contract research organizations tasked with running clinical trials, and healthcare providers all interacting through the same platform, the business keeps customers on board. “All the proprietary data ultimately makes Veeva an AI winner,” Paquin says.

That advantage on the front line of evolving workflows is exactly what Veeva aims to monetize next. A major strategic shift for Veeva since 2024 has been its push to migrate its core customer base off Salesforce onto its native Veeva Vault CRM.

The multiyear process aimed at breaking free from that dependency is well under way. It allows Veeva to both capture higher margins and gain full control of the underlying architecture and user experience, independent of Salesforce’s infrastructure.

The migration has proceeded smoother than envisioned, with 14 of the 20 largest global biopharmas already committed to Vault CRM. In the process, Veeva has become the entry point for AI in the industry, with virtual-assistant-type features that boost productivity.

The vision with agentic AI is to go a step further, handling increasingly complex, multistep workflows with far less human involvement. The company’s new Falcon platform targets processes that are otherwise time-consuming and employee-intensive.

The goal, Shawah says, is straightforward: “increasing speed and lowering costs.” One early example is medical, legal, and regulatory, or MLR review of promotional materials. Falcon MLR is available now, with additional agents for clinical, regulatory, and safety work planned for later this year and into 2027. Veeva estimates its tools could eliminate up to 70% of certain manual administrative tasks and potentially accelerate drug timelines by 30% to 90%.

Global spending on task-specific agents is projected to more than double each year through 2029, at a 119% compound annual rate, to more than $750 billion, according to Gartner. In many ways, biopharma is a natural fit for the technology, allowing companies to remove operational headaches and focus on what really matters—therapeutic breakthroughs.

For Veeva, rolling out agentic AI opens up new markets, enticing customers with improved efficiency integrated into the processes they already use. More important, the opportunity in agentic AI is incremental to an already strong growth story.

In its fiscal second quarter, Veeva delivered revenue of $928 million, up 18% year over year, and adjusted earnings per share of $2.35, also up 18%. Strength in the core Vault CRM offering helped the company raise full-year revenue guidance to nearly $3.7 billion and adjusted EPS to about $9.21, the third upward revision this year, representing a 14% increase from last year.

Management continues to target a $6 billion annual revenue run rate by 2030, implying average annual growth of 17.5% over the next three years. At the Sept. 9 Wells Fargo Healthcare Conference, Veeva management said this long-term goal originally announced in 2023 was built on expected market share gains in core products. The addition of Veeva Falcon can help it exceed those projections.

Wells Fargo analyst Stan Berenshteyn is on board. Acknowledging that full monetization of agentic labor will unfold through next year, the adoption potential is high and could gain traction quickly. Berenshteyn rated shares as Overweight, or Buy equivalent, with a price target of $330, citing new CRM wins migrating to Vault and accelerating traction within data cloud as coming catalysts to watch.

The stock currently trades around 27 times forward earnings—more expensive than the broader market and even Salesforce at 14 times, yet discounted to the company’s historical average earnings multiple of 35 times earnings over the past five years. Veeva stock justifies a premium given the company’s regulatory moat and high-quality fundamentals, including a balance sheet with zero debt.

Notably, adding up Veeva’s operating margin—which consistently runs above 45%—alongside top-line growth around 15%, the company scores well above the “Rule of 40,” a long-held value-creation benchmark in software. At a time when AI disrupters are struggling to generate consistent free cash flow, Veeva stands out with an AI potential that still appears underappreciated.

It’s a compelling outlook, but risks remain. The continuing transition off Salesforce onto Vault CRM introduces short-term execution variables that could impact near term growth. Additionally, sentiment toward biotech, and AI in general, can shift quickly, adding volatility to Veeva’s share price.

For now, Veeva offers investors a rare blend of defensive market dominance and aggressive growth upside. At the intersection of healthcare and technology, Veeva is a winner.

Ben Shuleva, consumer-sector leader at Fidelity Investments, sees tough times for the industry but opportunities in some food, beverage, and retailing names.

The S&P 500 Consumer Staples stock index has returned more than 7% year to date, well ahead of its 1.6% gain for all of 2025. But the recovery has been wildly uneven.

Target shares have surged 60% this year, and Coca-Cola has gained 23%. Meanwhile, Cheerios maker General Mills and Campbell’s, known for its canned soup, have fallen 31% and 29%, respectively.

The divergence creates opportunities for stockpickers like Ben Shuleva, consumer-sector leader at Fidelity Investments and co-manager of the Fidelity Select Consumer Discretionary Portfolio and Fidelity Select Consumer Staples Portfolio, with combined assets of about $2 billion. Shuleva has managed the Consumer Staples fund since 2020. It returned 14.5% in the first eight months of 2026, outperforming the 9.9% gain in its sector benchmark, the MSCI US IMI Consumer Staples 25/50 Index.

Barron’s spoke with Shuleva on Sept. 25 about how consumer spending trends, GLP-1 drugs, commodity inflation, and artificial intelligence are affecting staples stocks, and which names he finds most attractive. An edited version of the conversation follows.

Barron’s: Consumer-staples companies and stocks have been struggling. What could brighten this picture?

Ben Shuleva: The backdrop for staples is challenging. Unlike discretionary categories that can rely on the top 10% of consumers to spend and drive the business, the top 10% and bottom 10% of consumers generally use the same amount of toilet paper. So, the staples companies really need broad consumer health, and that isn’t something we have today. But this doesn’t mean there aren’t opportunities in the sector.

We should think of staples as a seat belt: The best relative environment for staples is always a terrible environment elsewhere. Today’s broader market is unusual in how narrow it is—both in market cap and what is driving the economic growth. So much is dependent on artificial intelligence and the associated investments in physical infrastructure. If any of the fears we have for the AI trade turn into real, concrete challenges, you would expect a flight to safety, and staples would benefit.

How will staples companies deal with elevated energy costs and commodity inflation?

Staples companies buy commodities and sell brands to capture the spread in between. Given persistent inflation, the cost side of the equation has gotten much worse, and companies will have to raise prices to manage margins. But consumers have been eating higher inflation for five to six years and volumes are already weak, so it’s going to be challenging.

The industry will need more sophisticated price-pack architecture to manage demand elasticity, which means keeping the same price points but offering smaller pack size. Many companies are already doing it. If oil stays at this level, many companies will have to make harder decisions over the next 12 to 18 months—decisions like rationalizing production capacity and closing plants—to improve productivity.

How is AI disrupting consumer companies, and how should they adapt?

On the one hand, barriers to entry are coming down. AI can help new entrants go to market faster, with smarter and better content, so it enables more competition. On the other hand, we are seeing leading companies use AI to bring innovation faster, and save money.

We need to approach the question of AI’s impact with humility and acknowledge that the outcome we predict today is highly uncertain since the space is moving so fast. Twelve months ago, OpenAI launched instant checkout for ChatGPT and announced partnerships with retailers such as Walmart and Shopify. At the time, this was expected to catalyze AI disruption of retail. Just six months later, OpenAI said it would allow merchants to use their own checkout.

The risk I see is a change in how consumers discover products. When you shop on a retailer’s website, you’re shown sponsored products, recommendations, and advertisements throughout the purchasing process. Retailers monetize that activity at every stage.

When that product discovery occurs off-site or via an AI agent, the retailer doesn’t engage directly with consumers and generate first-party data. Instead, it acts primarily as a fulfillment mechanism, and the funnel—be it ChatGPT, Claude, or the recently launched Muse—is more in control of the higher-value piece of that transaction.

Without advertising, the e-commerce model doesn’t really work. Even at Amazon.com, with all the scale it has, the majority of its retail operating profit comes from advertising.

Could the widespread use of GLP-1 weight-loss treatments hurt food-and-beverage demand in the longer term?

I have described the potential disruption from GLP-1s as both big and small. The percentage of GLP-1 users is staggering. It is about 10% of the U.S. adult population, and it’s growing as lower-priced options have become available. But the actual impact on food-and-beverage companies is probably less than we think. If we assume another 25 million Americans start taking GLP-1 drugs over the next five years and each reduces calorie consumption by 20%, that would translate into roughly a 30-basis-point annual drag on total U.S. calorie consumption. [A basis point is a hundredth of a percentage point.] And the persistence of the drugs isn’t guaranteed.

Certainly, health and wellness is a durable trend, and products and brands either need to adjust or face declines. But certain categories are more negatively impacted than others. Beverage companies, for example, might be better insulated since they have been offering low-sugar and no-sugar variants for years, and those products are showing strong growth.

You have been fairly bullish on the beverage industry. Does the industry have a structural advantage over other staples markets?

Consumer brands are living in an age of disruption. The barrier to entry has come down significantly. The new form of advertising allows brands to target a hyperspecific segment of consumers with high conversion rates and direct feedback, while e-commerce eliminated the space constraints of bricks-and-mortar retail that favored large incumbents.

New entrants can directly speak to, sell to, and deliver the goods to consumers. This has been fueling the growth of many emerging brands. But there is a spectrum of disruption for different industries. E-commerce works well for lightweight products at a high price point. It’s hard to make the model work for things that are bulky and heavy.

It’s relatively easy to manufacture and distribute packaged food, so a smaller brand that has done good marketing can scale spectacularly. Beverages are harder to manufacture, and distribution is a significant barrier to entry. It’s much easier to get a snack on shelves at Walmart than it is to have a cold beverage in a fridge at every 7-Eleven across the country. There are really only three major national soft-drink distribution systems in the U.S.: Coca-Cola, PepsiCo, and Keurig Dr Pepper.

Coca-Cola and Keurig Dr Pepper are both top holdings in your fund. What makes them attractive?

Coke is still robust. It’s one of the highest-quality consumer companies in the world. It’s winning in durable ways in a very advantaged category. The distribution advantage of Coke is even greater internationally. Just as an example, I climbed Mount Everest in 2022. On the hike up to base camp, you pass these local tea houses, and every tea house sold Coke and Sprite. The stock is up [Coca-Cola shares rose more than 30% in the past year], but it still trades at a pretty big discount to some of the other best-in-class consumer companies such as Walmart, Costco Wholesale, and Marriott International. [Coke trades for 25 times the next 12 months’ expected earnings.]

Keurig Dr Pepper is a more complex story. The company completed its acquisition of JDE Peet’s in April, and is using that purchase to create a beefed-up coffee business that will be spun out in early 2027. There is a lot of deal-related complexity with that pending transaction, which makes it hard for investors to understand the business and price the stock. But that means opportunity. The stock has an attractive valuation, and there is an identifiable catalyst on the horizon. [Keurig Dr Pepper is trading for about 13 times forward earnings.]

Constellation Brands and Diageo have suffered from a decline in alcohol sales. What is the investment outlook now?

This year has been another disappointing year for alcohol sales. Expectations were high going into the year because poor weather and weak demand from lower-income and Hispanic consumers had hurt sales in 2025, setting a relatively easy bar for year-over-year growth. We also had two huge events this year—the World Cup and America’s 250th birthday. The hope was that those factors would drive an inflection in alcohol volumes, but that hasn’t happened.

Some of the structural headwinds are here to stay, and alcohol companies need to adapt to the new reality. Diageo just hired a new CEO, and recently announced steps to cut costs and get lean. It’s using the savings to reinvest in both the brands and price points. I think that is directionally the right strategy that the industry needs to take in a lower-growth environment.

Constellation has continued to gain market share in U.S. beer despite the broader industry’s weakness. It also has a new CEO, and I’m eager to see how he approaches this new reality in alcohol.

You have cited the structural challenges facing the packaged-food industry. Yet, Mondelez International is one of the top holdings in your fund. What separates it from peers?

Mondelez competes in more-indulgence-based categories such as chocolates and cookies, where brands and taste matter more to consumers and the barriers of entry are higher. When people want a chocolate cookie with cream inside, they buy Oreos. That’s why private labels are far less penetrated in these categories than they are in the rest of packaged food.

A lot of packaged-food companies are mostly U.S.-focused, while Mondelez has a lot of emerging markets exposure. It isn’t exposed only to slowing U.S. population growth and shrinking per person calorie intake. The company has a huge business in India, the rest of Asia, and Latin America—all faster-growing markets than the U.S.

As one of the largest chocolate companies in the world, Mondelez has a lot of exposure to cocoa prices, which nearly quintupled from their 2022 lows to an early-2025 peak. That squeezed the company’s margins and hurt its volumes. But high prices have been destroying demand and incentivizing supply, and cocoa prices are already down. Naturally, that will benefit the cost equation for Mondelez.

Target is another of your top holdings. Is the retailer’s turnaround working, and how far along is it in the process?

Retail sales growth has become increasingly concentrated among a handful of major players, including Walmart, Costco, and Amazon. But there is still plenty of room to carve out a niche in retail if you know what sets you apart and execute well.

Target made several mistakes in the past three years, both commercially and operationally, and drifted away from what it did best. Recently, the company made some material changes to its management team. Target refocused its strategy, and there are early signs of success.

Same-store sales have inflected in key categories such as hard lines. The company’s toy business is growing by double digits. Target is pushing hard into beauty. The retailer is crushing it in niche categories like trading cards and has set up partnerships with viral brands such as Roller Rabbit and Pokémon.

The path to success for Target isn’t as broad as the likes of Walmart, Costco, and Amazon, but there is a path, and the company is starting to find its magic. The stock has moved up in the past year, but the company is only two quarters into the turnaround, and sales and margins are still depressed relative to history.

Z Squared began trading on Nasdaq in April, part of a plan to get investors out of a private-equity fund.

Two days after Z Squared began trading on Nasdaq in April, its executives rang the closing bell, joined by trader and television commentator Jon Najarian. A month later, the new stock got tapped for the FTSE Russell 2000 index.

That April debut was part of a plan to get unhappy investors out of a private-equity fund called Broadstreet and, in so doing, refute fraud charges that the Securities and Exchange Commission is pressing against Broadstreet’s leaders. In Miami’s federal court, the SEC accuses Broadstreet’s top three executives of raising $1.2 billion from more than 1,000 investors in a “Ponzi-like” scheme that promised annual returns as high as 28% from things like real estate development, small-business lending, and Dogecoin mining.

While fighting the SEC fraud charges, which they “categorically deny,” the Broadstreet executives redeemed more than 1,300 investors by giving them most of Z Squared’s stock before it started trading. Broadstreet is now trying to redeem its remaining investors with shares in Soulpower Acquisition, a New York Stock Exchange–listed blind-pool special purpose acquisition company run by a self-improvement author.

In July, Broadstreet told the Miami federal court that these shares in the two public companies were worth $3.6 billion and that investors had suffered no losses.

Yet since their April redemption, the Broadstreet holders have seen their Z Squared shares crash more than 75%. The two stocks’ combined market value is less than $600 million. Investors tell the SEC that they went into Broadstreet expecting quarterly distributions of cash income. Those payouts halted last year for many investors.

“I did not want speculative stock,” said 64-year old Broadstreet investor Nikhil Patel, in a federal court declaration filed in August, after Broadstreet sued him and other investors who asked for cash instead of stock.

“I am retired and disabled,” Patel told the court. “[M]y Broadstreet investments represented a substantial portion of my retirement savings.”

Broadstreet says its investors signed releases, agreeing to everything the private-equity firm has done.

“This is a case about ultrarich investors who have now enlisted the government’s help to try to have them get their money back in an investment where they self-described themselves as wealthy risk takers,” Lorne Berkeley, a lawyer who represents Broadstreet and its executives, told Barron’s. “Broadstreet is proud of the two public company exits presented to its investors who overwhelmingly approved the exits.”

Two brothers, Joseph and Steven Baldassarra, created the Broadstreet private-equity fund in Greenville, S.C., in 2020.

In 2022, they brought in attorney David J. Feingold as Broadstreet’s CEO. In 2011, he and two co-defendants paid $18.8 million to settle—without admitting—charges by the Federal Trade Commission that the First Universal mortgage modification business deceived indebted homeowners by charging thousands of dollars in upfront fees while doing little to relieve the customers’ debts.

Apart from his SEC case, Feingold is fighting the Internal Revenue Service in a Greenville federal court, after it assessed fraud penalties and alleged that he dodged taxes on millions he got from Broadstreet affiliates.

Neither Feingold nor the Baldassarras responded to Barron’s’ questions beyond their lawyer’s statement.

Working out of a Greenville building owned by Feingold, Broadstreet salespeople recruited investors with the help of outside stockbrokers. Most of the investors’ declarations in the Miami federal court docket said they had learned of the firm through friends and family.

The firm told investors they were putting their money in any of 14 separate strategies, from home-building to crypto mining.

In a first-quarter 2024 report to investors, Broadstreet boasted that its Dogecoin mining operation was on track to double that year. “The Manager has targeted a 28% annual return,” it told investors.

The SEC started investigating Broadstreet in 2022, and in January 2025 the agency filed a sealed complaint alleging that the Broadstreet bosses used new investors’ money to pay inflated returns to those in strategies that were actually unprofitable. Two days after the SEC filed suit, a federal judge ordered Broadstreet to stop soliciting new money.

Feingold denied the charges and asked the federal judge to let Broadstreet keep raising money. He told the court in February 2025 that he ran the 14 businesses, while the Baldassarras ran the funds. Broadstreet’s real estate ventures provided thousands of jobs in the Carolinas, said Feingold, and it ran 16,000 Dogecoin mining computers in five data centers and had five more centers coming on-line.

“We have nearly $225 million worth of machines that consume 100 Megawatts of power or enough energy to power nearly 120,000 homes,” Feingold told the court. “It is a massive business.”

Dallas-based Kinjalkumar Patel, who invested in the crypto mining offering in May 2023, later told the court that Broadstreet cash payments on his investment came to a halt in March 2025. He said he and his wife had put all of their savings into Broadstreet.

That’s when Feingold and the Baldassarras began telling investors that Broadstreet would let them exit their investments for cash, or for shares in a couple of public companies.

Investors in the Dogecoin business learned the next month that they would get shares in a money-losing biotech company called Coeptis Therapeutics Holdings, as a swap for 9,800 of Broadstreet’s crypto mining computers.

SEC filings by Coeptis in June 2025 said that accounting firm CohnReznick’s partners Anthony Doughty and Jake Wright appraised the mining systems in March 2025 at a value of $660 million, or $67,378 per unit. The filings said the valuation had assumed the machines were all Antminer L9 systems when, in fact, 84% of the fleet were L7s—an older, less-powerful system.

The $660 million CohnReznick valuation led to Broadstreet investors getting 85% of the merged company’s shares when the deal went effective in April 2026. A pro forma balance sheet in the merger proxy filing showed that the Broadstreet business had carried the mining systems at only $35.3 million.

The CohnReznick partners didn’t respond to Barron’s queries about their valuation.

Nearly 700 Broadstreet investors had elected to take cash, the SEC later told a court. Broadstreet said it would distribute the cash and stock this year. When the time came in May 2026, Broadstreet took the cash option off the table, telling every investor that the fund could force them to take stock.

When it was tapped for the Russell 2000 in May, Z Squared had yet to report any financial statements. FTSE Russell told Barron’s that the information available at the time satisfied Russell’s eligibility and investibility criteria.

Z Squared’s June-quarter financial statements did appear on Aug. 13. The balance sheet carried the crypto mining fleet at $12.4 million, or $1,269 per unit.

That was less than 1/50th the value ascribed in the merger, two months before.

Z Squared CEO David Halabu told Barron’s that CohnReznick estimated the fair market value of the company’s crypto mining operations, not the cost or resale value of the machines.

A large market value is hard to see in Z Square’s only public financials. In the June period, it lost money on its Doge mining activities.

“Altcoin mining economics have deteriorated sharply with underlying token prices falling precipitously,” Halabu said. “Some miners have shut down operations entirely.”

As a new initiative, Z Squared hopes to develop data centers for artificial-intelligence computing. The crypto mining fleet isn’t suited for AI modeling, says Halabu.

Z Squared shares have plummeted to $4.54 from $18.80 since their April debut, even though company filings say it gave slugs of stock to Najarian and others, under contracts to promote the stock at the NYSE, in broadcasts, and online. Inquiries to Najarian’s investor relations business weren’t answered.

Broadstreet, meanwhile, has been working to redeem most of its remaining investors by giving them stock in Soulpower, a SPAC that said in November of last year it will merge with a business that would contribute a British Virgin Islands banking license, land and mines in places like Mexico and South Africa, and 23 properties in the Carolinas from Contender Development, a company that Feingold told the court he partly owns. Drawing on another CohnReznick appraisal, Soulpower said the resulting company would be worth over $8 billion.

“SOUL will be the most loved bank on earth,” said Soulpower CEO Justin Lafazan in that November deal announcement. He declined to discuss the Broadstreet exchange deal with Barron’s.

At the same time, Broadstreet is suing five investors who continued demanding cash instead of Soulpower stock. The firm seeks a court ruling that it can redeem them with stock. It is also suing an investor for defamation over comments she posted on X.

As Broadstreet executes its plans to rid itself of outside investors, the SEC has renewed its request for the judge to appoint a receiver who would take control of the private-equity investments. If not stopped, the agency told the court on Sept. 10, the investors will end up with locked-up shares of Z Squared and Soulpower, while Feingold, the Baldassarra brothers, and other Broadstreet insiders end up with the remaining cash and assets.

“The manager does not have the power to redeem investors with anything it wants, like bags of rocks,” said the SEC in its September court filing. “All of this is the natural result of a fund that promised and paid returns it could not afford to pay.”

Yes, the market is being led by a handful of highfliers. But that isn’t a bad thing.

A yawning gap has opened up inside the stock market that to some looks like an abyss. We see an opportunity.

On the surface, the stock market is doing just fine. The S&P 500 index ended September with a loss of just 0.5%, and is less than 1% below the record high it set in August. That’s certainly better than might be expected, given that the Federal Reserve has started raising interest rates, the 10-year Treasury yield just hit its highest level since 2002, and the Iran war continues with no end in sight, giving a boost to energy prices. Meanwhile, there are still lingering questions about the artificial-intelligence trade, from the fundamental—how will Anthropic and OpenAI turn a profit?—to the existential—will artificial intelligence mean the end of humankind?

A glimpse beneath the surface reveals that these concerns are affecting stocks—just not at the index level. While the market-cap-weighted S&P 500 fell 0.5% in September, an equal-weighted version dropped 5% and is on pace for its seventh straight weekly loss, a losing streak previously seen only in 2002 and 2022.

It gets worse. Not since 2000 have more S&P 500 stocks made 52-week lows than 52-week highs when the overall index was within 2% of an all-time high, according to BTIG Chief Market Technician Jonathan Krinsky, an ominous sign for a market that has drawn more than a few comparisons to the dot-com bubble.

The divide in the market is wide and getting wider. Out of the 11 S&P 500 sectors, only information technology and communication services rose in September. Chips, though still down from their record high, contributed, too, with the PHLX Semiconductor Index surging 9.5% in September, while the Roundhill Magnificent Seven exchange-traded fund rose 4.3%. And it’s impossible to overstate the impact of Meta Platforms

META, whose 27% September Muse-inspired rally added 0.6% to the S&P 500’s monthly performance.

Some worry that this strange dynamic presages a broader decline for the S&P 500. Krinsky acknowledges that beaten-down sectors could bounce, but says the most likely scenario is that “the leaders succumb and major indexes catch down to what the majority of stocks have been doing.” Famed bond investor Jeffrey Gundlach describes the problem in arboreal terms, telling David Rosenberg that, like a particular century-old silver maple in his yard, the market has hollowed out after rotting from the inside and is now “on the edge of complete failure.”

The market’s bad breadth, however, looks quite different from other episodes of narrow markets. Investors aren’t simply bidding up a small set of winners into nosebleed territory. Nvidia, the world’s biggest stock, has seen its price/earnings ratio fall below the overall market’s even as it has rallied 24% this year. Meta’s valuation has fallen this year, as well, despite its September surge. That’s in contrast to the dot-com bubble, when the valuations of heavyweights like Microsoft and Cisco Systems surged.

The poor breadth also looks more rational this time around. Rather than the bifurcation between the “old” and “new” economies seen during the dot-com bubble, investors are trying to gauge the winners and losers of AI in real time. Take the Meta rally. As that stock soared, shares of companies like Planet Fitness and New York Times stumbled, hit by fears that the new personal AI agent, Muse, will help paying customers cancel subscriptions to services that they no longer use. Charles Schwab and Bank of America, meanwhile, dropped over concerns that the technology would flush investor cash out of ultralow-yielding accounts. Investors aren’t gripped by some speculative frenzy; they’re articulating a holistic and reasonable thesis about the winners and losers in an AI-driven economy.

A similar dynamic is playing out elsewhere in the market. The surge in the price of diesel has benefited refiners like Valero Energy and Phillips 66, which hit fresh all-time highs last month, while air carriers like JetBlue Airways and American Airlines Group have been struggling. And while rising rates are generally negative for equities, a higher-yield environment is certainly harder on companies that have large amounts of floating-rate debt, or whose potential cash flows are many years away.

“Maybe the real theme,” says John Marshall of Carrick Lane, “is that the trends that are most prominent in the market now all have winners and losers.”

Perhaps the focus on market breadth, then, is missing the point. Owen Lamont, portfolio manager and researcher at Acadian Asset Management, says it’s “crazy” to argue that the stock market is risky just because it’s highly concentrated. “If you took the Magnificent Seven, and broke each into seven smaller firms so it was the Magnificent 49, why would that be any better?”

The historical record suggests that breadth isn’t the bad omen that you might think it is. “It’s always preferable to see a market rally on broad participation rather than a small group of stocks, and the durability of narrow rallies is more dependent on that narrow group of stocks,” writes Bespoke Investment Group. “Contrary to popular wisdom, though, weak breadth alone hasn’t been a reliable bearish short-term signal. In prior periods when breadth deteriorated but price held up relatively well, forward returns saw little in the way of a negative impact.”

After all, indexes, unlike silver maples, are recomposable. As failing companies lose value, they are replaced within the index by up-and-coming names—not because the index masters are betting that these incoming companies will outperform the outgoing ones, but simply because they’re striving to maintain an index that continually gives the most accurate read on the segment of the market in question, such as large-cap U.S. stocks in the case of the S&P 500. Out of the 500 companies originally included in the S&P 500 in 1957, only about 50 remain. Like Theseus’ ship, the market keeps sailing on.

And the weather might soon get more temperate. Like Krinsky, Morgan Stanley Chief U.S. Equity Strategist Mike Wilson believes that “the divergence between the index and breadth must be reconciled,” and he says the most likely scenario is that the overall market will slip in the weeks ahead. But he remains fundamentally bullish. “If bond volatility doesn’t calm down, we see breadth and price meeting in the middle in the next month followed by a strong finish to the year,” Wilson writes. “If bond volatility subsides sooner, breadth is likely to catch up to index price, driving both higher in the near term.”

One thing that could calm the bond market is a resolution to the conflict in Iran. “I’m in the camp that we’re going to find a solution in Iran,” says KKM Financial CEO Jeff Kilburg. “I think we get out this month, and then we see crude oil crack, and we see rates crack,” with the 10-year yield falling back below 5%.

Another catalyst: the start of earnings season. It’s a truism on Wall Street that investors seem to worry about all of the macro headwinds during the months between earnings seasons, only to be reminded just how good they have it when the next crop of reports comes around. And third-quarter earnings season should be better than good. Analysts collectively estimate that S&P 500 companies will report year-over-year earnings growth of 29% for the quarter, which would mark the third-straight quarter of earnings growth about 25%, according to FactSet.

A cooling-off in oil prices and rates, “in conjunction with earnings season showing us yet more 25%-plus profit growth, is the catalyst for a run-up to 8000 in the S&P,” Kilburg says, referring to a level 4.4% above Thursday’s close.

Finally, the overhang of the midterm elections will pass after Nov. 3. “Historically, U.S. equity volatility has tended to rise in the months leading into the midterm elections,” writes Dubravko Lakos-Bujas, head of global markets strategy at J.P. Morgan. Given that implied volatility has remained remarkably low, he does think there’s room for the Cboe Volatility Index, or VIX, to rise from here. But he adds that the elections “should serve as an important market-clearing event. Historical performance in the months following the midterms tends to be positive.”

The great hope is that all of the major drivers of macro uncertainty will recede, while companies continue to report boffo earnings. That may be a bit too much to expect. But we do know that overall stock market valuations have fallen meaningfully this year, and have continued to decline during the past eight weeks of market churn.

Far from being complacent, investors are acutely aware of the pressures caused by rising rates, which is why the average stock has performed so poorly. In fact, according to Goldman Sachs, overall U.S. equity sentiment has fallen sharply into the negative, and is now as low as it was in March. As long as the AI narrative holds together, and earnings aren’t terribly disappointing, the market is setting up for strong close to 2026.

Even if the rising tide doesn’t lift every stock.

Volodymyr Zelenskyy asked Donald Trump to block Russia and China’s Starlink rival

Ukraine’s president says he requested his US counterpart to impose sanctions on companies involved in developing ‘Rassvet’

Volodymyr Zelenskyy has asked Donald Trump to impose sanctions on Russian and Chinese companies that the Ukrainian president says are involved in developing a rival satellite network to Elon Musk’s Starlink.

Musk earlier this year blocked access to the Kremlin’s forces after they began using SpaceX’s Starlink satellite system to guide drones hitting Ukraine. This has prompted Moscow to accelerate plans to develop its own satellite network, Rassvet, with China’s help, Zelenskyy said.

He told the FT China was working with Russia on the technology and that Rassvet could become operational by “the end of the year, beginning next year”.

“We know that China works on satellites, works on the possibility of helping Russia with a similar Starlink,” Zelenskyy said.

He warned the capability would allow the Kremlin to improve air-strike precision, as Vladimir Putin escalates his aerial campaign against Ukraine in an effort to pummel it into submission this winter.

Zelenskyy said he asked Trump “several times” for his administration to impose sanctions on the entities involved, including in New York last month when he met the US president on the sidelines of the UN General Assembly.

China’s foreign ministry, the Kremlin and the White House did not respond to requests for comment. Beijing has previously denied Zelenskyy’s allegation that it supports Russia’s army with weapons.

Rob Lee, a Kyiv-based military expert for the Foreign Policy Research Institute, said “Rassvet won’t be as effective as Starlink but Russia could begin to use it to stream [aerial drone] footage to command posts” as a better alternative to WiFi bridges.

He said the satellite network could be used for ground, sea and mid-range strike drones.

Before being blocked, Russian forces used Starlink on their Molniya and Italmas BM-35 aerial drones, which they used to strike high-value targets in Ukraine, Lee said.

Russian brigades still use Starlink inside occupied regions of Ukraine to stream the footage from Mavics — small drones often used for reconnaissance — to command posts, but they lack enough whitelisted terminals to place them on drones, Lee said.

Rassvet could also give a significant boost to Russia’s sabotage campaign against Ukraine’s European allies, according to Lee.

“Drones could be piloted from Moscow using Rassvet in other countries,” he said. The Kremlin’s forces could mirror Ukraine’s own Spiderweb operation that used dozens of small first-person view attack drones against Russian air bases.

German Chancellor Friedrich Merz on Thursday said Europe was preparing for “severe” Russian hybrid attacks, as Putin threatened that his conflict with the west could reach a “fatal point of no return”.

Zelenskyy has also lobbied Trump to allow his forces to launch Starlink-equipped drones up to 200km inside Russia against ballistic missile launchers and drone launch sites. Ukraine’s military is currently restricted to using the system within the country’s borders.

Zelenskyy said Trump told him Musk needed to make the call, while Ukraine’s former defence minister, Mykhailo Fedorov, has said Musk had already agreed and that it was up to the US president to decide.

“President Trump told me that he supports it,” Zelenskyy said on Thursday, and that the US leader added: “Ask Elon.”

SpaceX and Musk did not respond to requests for comment.

Trump in recent weeks has pressed Zelenskyy to halt drone strikes on Russian refineries, which the US president has blamed for driving up American diesel prices, even though the Iran war has been a more significant factor in the increase.

Still, Zelenskyy insisted Starlink-guided drone attacks in Russia could lead to “real de-escalation” and even peace because they would force Putin back to the negotiating table. If the Trump administration or Musk developed concerns, he noted, the system could be easily “switched off”.

Any Budget increase could undermine the government’s aim to boost UK investment

Chief executives of the UK’s largest investment sites have warned against increasing capital gains tax in the upcoming Budget. They say it could deter savers from investing in the stock market, creating a conflict with one of the government’s stated aims.

CGT is charged on profits from selling assets such as shares, businesses and second homes. The main higher rate was increased in the 2024 Budget from 20 per cent to 24 per cent. The annual allowance — the amount exempt from CGT — was also cut in half to £3,000.

Concerns that CGT could rise further have intensified in recent weeks, as it sits outside the Labour government’s commitment not to increase taxes on working people.

But wealth management bosses urged the Treasury against making the tax more punitive, noting that it could undermine the government’s attempts to encourage more people to invest and back the UK’s equity market.

Matt Benchener, chief executive of Hargreaves Lansdown, told the FT: “The government wants to get more Britons investing, but raising capital gains tax would work directly against that goal. 

“By some estimates, more than £600bn sits in excess cash, its value being eroded by inflation. Taxing investment returns more heavily would be another deterrent for cautious savers who need to be encouraged to take the next step and invest.”

“They say they are trying to foster a retail investing culture, but their policies are doing the opposite,” said Michael Summersgill, chief executive of AJ Bell. “The chancellor should be looking to encourage long-term investing by simplifying tax rules instead of continually layering on complexity and cost.”

Richard Wilson, chief executive at Interactive Investor, said: “You cannot build a nation of investors while increasing the tax on investing. Higher capital gains tax reduces the incentive to take risk, back businesses and build long-term wealth. 

“At a time when the government says it wants growth, raising CGT would send entirely the wrong signal to millions of savers and investors whose capital helps power the economy.”

Investment sites tend to charge dealing fees when investors make trades — such as selling their shares.

Other wealth managers point out that increasing CGT will not necessarily generate more revenue for the government.

Steven Levin, chief executive of Quilter, noted that investors could end up deferring the sale of assets as a result. “Any changes to CGT therefore need to be assessed not only through a fiscal lens, but also through their impact on investment activity, entrepreneurship and the UK’s attractiveness as a destination for capital.”

Higher CGT could also lead more people to invest in gilts, which do not incur CGT, instead of shares. Peter Hargreaves, co-founder of Hargreaves Lansdown, said: “If there is less advantage in investing for growth, [people] will change, they will look at low-coupon gilts, which are CGT free.”

 

**Context: A proposed federal loan could help Vistra finance upgrades that increase output at its existing nuclear plants, rather than fund new reactors. Vistra has already agreed to sell Meta power from planned upgrades at Perry, Davis-Besse and Beaver Valley; the distinction is that a loan offer is not yet completed financing.

- Public-comment period for that Perry review runs through October 15, 2026.

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