Ari Levi of CNBC reports Google leads monster week for tech, pushing megacaps to combined $21 trillion in market cap:

From the courtroom to the boardroom, it was a big week for tech investors.

The resolution of Google’s antitrust case led to sharp rallies for Alphabet and Apple. Broadcom  hareholders cheered a new $10 billion customer. And Tesla’s stock was buoyed by a freshly proposed pay  package for CEO Elon Musk.

Add it up, and the U.S. tech industry’s eight trillion-dollar companies gained a combined $420 billion in market cap this week, lifting their total value to $21 trillion, despite a slide in Nvidia shares.

Those companies now account for roughly 36% of the S&P 500, a proportion so great by historical standards that Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, told CNBC by email, “there are no comparisons.” 

There was a certain irony to this week’s gains.

Alphabet’s 9% jump on Wednesday was directly tied to the U.S. government effort to diminish the search giant’s market control, which was part of a years-long campaign to break up Big Tech. Since 2020, Google, Apple, Amazon and Meta have all been hit with antitrust allegations by the Department of Justice or Federal Trade Commission.

A year ago, Google lost to the DOJ, a result viewed by many as the most-significant antitrust decision for the tech industry since the case against Microsoft more than two decades earlier. But in the remedies ruling this week, U.S. District Judge Amit Mehta said Google won’t be forced to sell its Chrome browser despite its loss in court and instead handed down a more limited punishment, including a requirement to share search data with competitors.

The decision lifted Apple along with Alphabet, because the companies can stick with an arrangement that involves Google paying Apple billions of dollars per year to be the default search engine on iPhones. Alphabet rose more than 10% for the week and Apple added 3.2%, helping boost the Nasdaq 1.1%.

Analysts at Wedbush Securities wrote in a note after the decision that the ruling “removed a huge overhang” on Google’s stock and a “black cloud worry” that hung over Apple. Further, they said it clears the path for the companies to pursue a bigger artificial intelligence deal involving Gemini, Google’s AI models.

“This now lays the groundwork for Apple to continue its deal and ultimately likely double down on more AI related partnerships with Google Gemini down the road,” the analysts wrote.

Mehta explained that a major factor in his decision was the emergence of generative AI, which has become a much more competitive market than traditional search and has dramatically changed the market dynamics.

New players like OpenAI, Anthropic and Perplexity have altered Google’s dominance, Mehta said, noting that generative AI technologies “may yet prove to be game changers.”

On Friday, Alphabet investors shrugged off a separate antitrust matter out of Europe. The company was hit with a 2.95-billion-euro ($3.45 billion) fine from European Union regulators for anti-competitive practices in its advertising technology business.

While OpenAI was an indirect catalyst for Google and Apple this week, it was more directly tied to the huge rally in Broadcom’s stock.

Following Broadcom’s better-than-expected earnings report on Thursday, CEO Hock Tan told analysts that his chipmaker had secured a $10 billion contract with a new customer, which would be the company’s fourth large AI client.

Several analysts said the new customer is OpenAI, and the Financial Times reported on a partnership between the two companies.

Broadcom is the newest entrant into the trillion-dollar club, thanks to the company’s custom chips for AI, already used by Google, Meta and TikTok parent ByteDance. With Its 13% jump this week, the stock is now up 120% in the past year, lifting Broadcom’s market cap to around $1.6 trillion.

“The company is firing on all cylinders with clear line of sight for growth supported by significant backlog,” analysts at Barclays wrote in a note, maintaining their buy recommendation and lifting their price target on the stock.

For the other giant AI chipmaker, the past week wasn’t so good.

Nvidia shares fell more than 4% in the holiday-shortened week, the worst performance among the megacaps. There was no apparent negative news for Nvidia, but the stock has now dropped for four consecutive weeks.

Still, Nvidia remains the largest company by market cap, valued at over $4 trillion, with its stock up 56% in the past 12 months.

Microsoft also fell this week and is on an extended slide, dropping for five straight weeks. Shares are still up 21% over the last 12 months.

On the flipside, Tesla has been the laggard in the group. Shares of the electric vehicle maker are down 13% this year due to a multi-quarter sales slump that reflects rising competition from lower-cost Chinese manufacturers and an aging lineup of EVs.

But Tesla shares climbed 5% this week, sparked mostly by gains on Friday after the company said it wants investors to approve a pay plan for Musk that could be worth up to almost $1 trillion.

The payouts, split into 12 tranches, would require Tesla to see significant value appreciation, starting with the first award that won’t kick in until the company almost doubles its market cap to $2 trillion.

Tesla Chairwoman Robyn Denholm told CNBC’s Andrew Ross Sorkin the plan was designed to keep Musk, the world’s richest person, “motivated and focused on delivering for the company.”

Jennifer Schonberger of Yahoo Finance also reports the jobs slowdown seals Fed rate cut as White House criticizes Powell for not acting sooner:

A weak jobs report released Friday likely sealed an interest rate cut at the Federal Reserve's next policy meeting later this month, as the Trump administration once again stepped up its criticisms of central bank chair Jerome Powell for not acting sooner.

"Jerome Powell needs to do his job and cut those interest rates now," Labor Secretary Lori Chavez-DeRemer said in an interview with Yahoo Finance.

"What is he waiting for?"

President Trump added in a separate Truth Social post that "Jerome 'Too Late' Powell should have lowered rates long ago."

Friday's report was the last major reading on the job market before the Fed meets on Sept. 16 and 17.

Ahead of Friday's jobs report, Powell opened the door to lowering rates at the end of August in a speech in Jackson Hole, Wyo., noting that the balance of risks appears to be shifting and that "may warrant adjusting our policy stance."

A new labor report on Friday backed up that view. The economy added 22,000 jobs in August, weaker than the 75,000 economists expected, with the unemployment rate rising to 4.3% from 4.2%.

Job growth for June was revised into negative territory to -13,000 jobs, while July showed below-trend growth compared with the past year, marking three months of slowing job growth.

Several Fed watchers said the numbers lock in a cut this month. Investors agreed, sending the odds of a cut at this month's meeting to 99%.

"The question of a cut is no question. There is going to be a cut," Leslie Falconio, UBS Global Wealth Management's head of taxable fixed income strategy, told Yahoo Finance.

The question, she said, is whether it's a "dovish cut or a hawkish cut" and how Powell talks about the next several months.

EY chief economist Greg Daco said he is sticking with his view of a small cut this month, but the real question is "what it does after that" for the remaining two meetings of 2025 and then 2026.

The White House has been hammering Powell and the Fed for months now to ease monetary policy.

"While I'm not the economist, I can tell you this: If he doesn't cut rates, the American people will continue to suffer," Chavez-DeRemer added Friday.

"Companies are investing trillions of dollars into the economy, into their workforce, and into their businesses ... and we need that help because cheaper dollars for American business to invest in their workforce is not happening."

Speaking about Powell, she said: "Why he's waiting boggles my mind. He knows the data, he knows how important this is, and if it's a political move, it's nonsense. He needs to go ahead and move forward and cut those rates."

Fed governor Chris Waller has argued for a 25-basis-point rate cut at the September policy meeting, saying downside risks to the labor market have increased further since he last called for a rate cut in July.

Speaking on Aug. 28 ahead of Friday's jobs report, Waller was hopeful that cutting rates at the September policy meeting could keep the job market from deteriorating and that the Fed still wasn't behind the curve as it was looking at a 25-basis-point rate cut.

Capital Economics economist Bradley Saunders said he does not expect a larger 50-basis-point cut this month, even after the weak jobs numbers.

"While the weak 22,000 gain in non-farm payrolls in August confirms what already looked a nailed-on rate cut at this month's FOMC meeting, the limited rise in the unemployment rate to 4.3% will curb calls for a larger 50bp move," Saunders said.

Job growth in August at 22,000 is now below what some economists would cite as the so-called break-even rate — the level of job growth needed to meet population growth, given lower levels of immigration and fewer jobs that need to be created as a result.

St. Louis Fed president Alberto Musalem said earlier this week that he believes the economy needs to create only 30,000 to 80,000 jobs per month, compared with estimates above 100,000 in prior years, to meet population growth.

Alright, it's Friday, time to analyze these markets and let me begin with monetary policy.

I'll repeat what I've said over my last two Friday market comments, Fed Chair Powell was very clear at Jackson Hole, the labour market is slowing putting the Fed's dual mandate back into play.

Translation? The Fed isn't just worried about inflation but also slowing growth and that just means they will cut rates by 25 basis points on September 17th and that's it, that's all for this year unless we see a financial crisis.

I'm expecting more of a hawkish cut where the Fed will clearly state underlying inflation pressures are not abating and depending on the US CPI and PPI reports next week, they might be picking up.

So, my base case is one and done for this year in terms of Fed rate cuts.

But let there be no doubt the US labour market is slowing and in Canada, it's a disaster as the economy bled 66,000 jobs in August and the unemployment rate hit its highest since 'pandemic days'.

My base case is the Bank of Canada will cut twice this year, a total of 50 or 75 basis points.

Macro headwinds are picking up and inflation pressures remain a concern.

Interestingly, some feel the US bond market may be too sanguine about underlying fiscal, inflation risks:

Some investors see potential cracks in the U.S. bond market and red flags from recent whipsawing moves, saying the market is underpricing long-term fiscal risks and the danger posed by White House pressure on the central bank to cut interest rates.

U.S. bond markets sold off earlier this week as concerns about global fiscal health escalated, although the pain was quickly reversed and bonds rallied on weak economic data. The rebound continued on Friday, as a sharp slowdown in U.S. job growth raised the prospect that the Federal Reserve would embrace a faster pace of monetary easing than anticipated.

Investors, however, say they remain concerned about the health of the market.

"My concern is that we're in a bit of a boiling-the-frog moment," said Bill Campbell, portfolio manager for global bond strategy at bond firm DoubleLine, referring to the risks of institutional strength erosion, particularly recent pressure from the White House on the Fed to cut interest rates, as well as other factors such as a worsening U.S. fiscal trajectory.

Some measures of risk in the bond market show investors are accounting for the potential of an overly dovish Fed that could lead to higher inflation further down the line.

The U.S. Treasury term premium, a component of Treasury yields and a measure of the compensation investors demand for the risk of holding long-term U.S. debt, rose to 84 basis points on Tuesday, its highest level in more than three months, according to the latest available New York Fed data.

Expectations for inflation over the next decade, as measured by Treasury Inflation-Protected Securities (TIPS), hit 2.435% on August 27, the highest level in more than a month. They have since declined and were last at 2.36% on Friday.

"I'm wondering if what we're seeing with the continuation of the widening in term premium, the bit of steepening in the curve that we're seeing, is just more like cracks in the dam, and it just might happen one day that you get a bit more of a disorderly move," Campbell said.

Yet market participants say it is hard to isolate the drivers behind the moves, citing a list of issues including pressure on the Fed to lower rates, the inflationary impact of President Donald Trump's tariffs, as well as concerns over the U.S. debt trajectory and rising global debt levels.

All those factors back trades that bet on a steeper yield curve, where long-term debt becomes less attractive than short-dated securities. A steepening curve typically signals that investors anticipate higher interest rates in the future because of stronger economic activity and higher inflation.

The curve also steepens when short-term Treasury yields decline on stronger expectations of an imminent easing in monetary policy, and longer-dated yields rise - or decline by a smaller amount than shorter-dated debt - on concerns that rate cuts could boost higher long-term inflation.

"I think the market has been relatively sanguine in terms of the pricing of those risks," said Jonathan Cohn, head of U.S. rates desk strategy at Nomura. "There has certainly been some push into positioning steepeners or otherwise that would benefit in the event that these risks are realized, but the actual pricing is difficult to disentangle from the multitude of other risks that are kind of the same way," he said.

'EARLY PHASES'?

Trump has relentlessly criticized the Fed Chair Jerome Powell and the U.S. central bank's Board of Governors for not lowering rates, which has raised investor concerns about political pressure influencing monetary policy. While the president has been demanding immediate and aggressive reductions in borrowing costs, he also has said the Fed could raise rates again if inflation rose.

White House spokesperson Kush Desai said Trump believes it's time to cut rates to support employment and economic growth as inflation has been tamed. The push for a bigger rate cut at the Fed's September 16-17 meeting was bolstered on Friday by data that showed a sharp slowdown in job growth in August.

DoubleLine's Campbell warned that the administration's pressure to lower rates could backfire by pushing up long-term yields. Those yields, which are determined by market conditions, influence key borrowing costs for consumers, such as mortgages and interest rates on credit cards and loans.

"This administration needs to be careful in their attempts to ease financial conditions and monetary conditions; overdoing it or pushing it to an extreme will have the opposite effect, and our biggest concern is that the back end of the curve more and more will reflect concerns about inflation expectations and the fiscal outlook," he said, adding that DoubleLine is betting on a steeper yield curve.

Trump will soon get a chance to nominate a replacement for Powell, whose term as Fed chief expires next May.

The president last month nominated White House economic adviser Stephen Miran to the U.S. central bank's seven-member board and then attempted to remove Fed Governor Lisa Cook from her post over mortgage fraud allegations, prompting her to file a lawsuit challenging Trump's effort to oust her. Her ousting would open up a new seat on the Fed board.

Lawrence Gillum, chief fixed income strategist for LPL Financial, said the potential ouster of Cook and the possibility that the executive branch may get excessive influence over interest rate decisions will likely lead to higher term premiums and even steeper yield curves.

"I think we're in the early phases of the bond market kind of trying to figure out what this is going to look like," he said. "I think it's really too early to make any sort of proclamation just yet."

Unfortunately, long bond yields are rising all over the developed world, not just in the US, and that should also concern us as the risks of a sovereign debt crisis grow.

What Does All This Mean For The Stock Market?

In terms of the stock market, while mega cap tech shares continue to garner all the attention for a third year in a row, some feel a leadership change is coming.

In a conference call this week entitled, Goodbye Momentum:A Massive Change in Leadership Ahead, Francois Trahan of The Macro Institute made a persuasive case that core inflation pressures (wage inflation) are going to pick up and this will put the Fed in a pickle.   

Francois sees monetary and fiscal stimulus as lending support to the overall economy but inflation pressures will pick up. 

Here is his executive summary: 

 He goes over 80 pages of charts and bullet points, admitted it was a bit too much (it was) but he wanted to express his points clearly and provides a lot of great information going over inflation gauges, demographics and more.

Below, one of the charts that caught my attention:

In his weekly comment, After the Rate Cuts, Martin Roberge of Canaccord Genuity notes this:

Our focus this week is on sector-rotation trends, which are reviving 2000 vibes. As our Chart of the Week shows, since the 2020 pandemic, the outperformance of technology giants is such that defensives (H/C, CS, UTS) and hard cyclicals (ENE, MAT, IND) are as oversold vs. soft cyclicals (IT, FIN, RE, CD) as they were near the peak of the 2000 dot-com bubble. Also, as we highlighted in our September 2025 strategy report, the capex-to-sales ratio for US tech stocks has surpassed 2000 dot-com mania levels. Moreover, the concentration risk looks similar to tech stocks, accounting for 37% of the total US market cap, and much below the tech earnings weight in the index (28%). Last, tech margins have expanded to new record highs and could come under pressure should overcapacity issues foster more competition. A broad perception is that the resumption of the Fed easing cycle may further fuel growth and high-beta stocks. We disagree and believe that rate cuts provide a backstop for less predictable and/or more cyclical assets, such as small caps and hard cyclicals, ahead of the 2026 global growth re-acceleration. Also, interest rate cuts and lower bond yields should boost the allure of defensive yielders. Thus, the right strategy going into the final months of the year could be a barbell of defensives and hard cyclicals.

Martin and Francois are saying similar things here, leadership change might lie ahead where growth stocks take a back seat but this isn't exactly the best week to state this.

Or maybe it is, Broadcom was up 15% at the open today and closed up 9%. Maybe investors are selling the good news but trend followers and quants remain long because the charts remain bullish.

Still, there is no doubt that if inflation pressures pick up materially over the next six months, growth stocks and other risk assets will feel the heat as bonds sell off.

This is the biggest risk for the Fed and other central banks and for global asset allocators.

Alright, let me wrap this up with some data.

Below, the best and worst performing US large cap stocks of the week (full list here):

 

And the best and worst performing mid cap stocks this week (full list here):

 

Below, CNBC's Rick Santelli joins 'Squawk Box' to break down the August jobs report.

Also, former Federal Reserve Vice Chairman Roger Ferguson joins 'Squawk Box' to discuss the August jobs report, impact on the Fed's rate path outlook, and more.

Third, Jan Hatzius, Goldman Sachs chief economist, joins CNBC's 'Squawk on the Street' to discuss the most recent jobs report, macro outlooks, and his response to criticism by President Trump.

Fourth, Mohamed El-Erian, Allianz chief economic advisor, joins 'Power Lunch' to discuss if the Fed's getting it wrong on rate cuts, if the Federal Reserve now matters too much and much more.

Fifth, former Rebecca Patterson, Bridgewater Associates chief investment strategist, joins 'Power Lunch' to discuss how Patterson would grade the economy, if the economy can grow with low job growth and much more.

Sixth, Ross Mayfield, Baird Investment Strategist, joins 'Closing Bell Overtime' to talk the day's market action.

Laslty, The 'Fast Money' traders talk the split happening in semiconductor stocks.

Below, EPI senior economist Elise Gould offers her insights on the jobs report released this morning, which showed 22,000 jobs added in August. 

The labor market continues to soften, according to the latest #JobsReport out this morning from the BLS. Payroll employment grew only 22,000 in August and revisions now show employment losses for June (-13,000). Over the last three months, job growth has slowed to just 29,000 on average.
#EconSky

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— Elise Gould (@elisegould.bsky.social) Sep 5, 2025 at 7:41 AM

Job losses were particularly acute in professional/business services, the federal govt, and wholesale trade, but there have also been sustained losses over recent months in manufacturing, construction, and mining, an indication that Trump’s blue-collar renaissance is clearly not happening.
#EconSky

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— Elise Gould (@elisegould.bsky.social) Sep 5, 2025 at 7:59 AM

Federal cuts continue to cost jobs as federal employment fell another 15k in August. Federal employment is now down 97k since January. The full extent of the federal job losses won’t be seen until we get data for October after thousands more leave federal payrolls on September 30.
#EconSky

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— Elise Gould (@elisegould.bsky.social) Sep 5, 2025 at 8:11 AM

Lest anyone tells you otherwise, the monthly revisions that led to a fall in employment for June are part of the normal #JobsDay process as BLS receives additional reports from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.

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— Elise Gould (@elisegould.bsky.social) Sep 5, 2025 at 8:24 AM

The household survey also provides useful information about labor market health. The unemployment rate ticked up to 4.3%, it’s highest since 2021. While a more volatile series, the data show sustained increases in Black unemployment over the last three months, hitting 7.5% in August.
#EconSky

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— Elise Gould (@elisegould.bsky.social) Sep 5, 2025 at 8:46 AM

The unemployment rate for young workers (16-24) also continued to increase with the latest data. Again, it’s a notably volatile series because of small sample sizes, but it’s now up just over a percentage point since March. A weak hires rate can make it harder for new entrants to find jobs.
#EconSky

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— Elise Gould (@elisegould.bsky.social) Sep 5, 2025 at 8:55 AM

Jay Kwan, Managing Director and Head of Europe at QuadReal Property Group, joined  Matthew Watts on the People Property Place Podcast this week:

We cover Jay’s global journey from humble beginnings in LA, to Lehman Brothers, to leading international investment teams at Soros and TPG, and now spearheading QuadReal’s growth across Europe. Jay shares hard-won lessons on capital cycles, navigating workouts, and building trust-based partnerships across multiple markets. 

He breaks down the thinking behind QuadReal’s platform strategy, sector convictions, and how they deploy long-term capital flexibly across the risk curve. If you're interested in global real estate investing, institutional capital, platform-building, or market timing, this episode is worth your time. 

 Key Topics Covered in This Episode: 

• Breaking into real estate through Lehman Brothers and surviving the “Squid Game” analyst culling 
• Gaining an edge through international experience across Asia, Europe, the US and Russia 
• Learning through workouts, restructurings and JV fallouts that shaped his investment approach 
• Building QuadReal in Europe from scratch. First hires, first deals, and their conviction-led strategy
• Why cultural and ethical alignment matter more than strategy
• Want to partner with QuadReal? Jay shares what they look for in an operating partner
• Navigating market uncertainty and geopolitical risk while staying agile
• The myth of permanence and how sectors can shift faster than expected
• Why you shouldn’t chase a pay cheque, instead focus on stacking skills, take international chances, and look for asymmetric opportunities. 

And finally... With £500m to invest, which People, what Property, and which Place would he choose? 

This is a fantastic interview which I will recommend every student who aspires to enter finance and to seasoned professionals.

Jay Kwan is obviously a very intelligent real estate investor but what impressed me most is his poise, humility and communication skills relaying a lot of great information and explaining in detail his job experiences and how he decided to join QuadReal right after it was set up, leaving a great job at TPG (around minute 24) .

As he states, he's very proud of the team they built and what QuadReal represents in Europe. 

At 38, he took a risk leaving TPG to join QuadReal but the attractiveness of setting up his own team and deploying hundreds of millions in capital in an integrated platform attracted him.

He also had a good chat with Dennis Lopez, QuadReal's CEO, and that sealed the deal.

Anyway, very strong background and he's not the only one at QuadReal with experience at Lehman Brothers. Peter Kim, Managing Director, International Real Estate, Asia also also spent 11 years in the investment banking and fixed income divisions at Lehman Brothers where he built and led the bank’s real estate investment banking team in Asia.

[Note: Lehman had the best real estate and fixed income team back then but the firm was levered to the gilt on CDOs which led to its downfall as it wasn't saved during the GFC.] 

All of QuadReal's senior leadership team has very impressive backgrounds and experience, and that in itself speaks volumes about Dennis Lopez for being able to attract them there.

Dennis himself has a very impressive background:

A seasoned real estate professional, Dennis has an extensive track record of global investments and brings deep relationships with real estate industry leaders and major institutional investors to QuadReal.

Dennis has been actively involved in real estate for over 30 years and has worked in the Americas, Asia and Europe. He has significant experience in real estate M&A, acquisitions, lending, developments and capital fundraising in both the public and private markets. Prior to joining QuadReal, Dennis was CIO of AXA IM – Real Assets, the fifth largest global real estate investment manager, based in Paris. In his combined roles at QuadReal and AXA, he has approved over $100 billion of acquisitions and loans. Previously, he served as the CEO of SUN Real Estate Group, a private equity firm based in Delhi and Moscow. Dennis spent his earlier career as the Global Head of Real Estate at Cambridge Place, a London-based hedge fund, and as Managing Director and European Head of Real Estate Investment Banking at JP Morgan in London.

Anyway, back to Jay Kwan's interview, he explains how they hired their team early on when they were relatively unknown, and as they started getting traction on the investment front, they started getting more quality resumes and he slowly built up his team.

Around minute 29, he explains how the strategy at QuadReal evolved over time from joint ventures with local partners and now they have annual strategy reviews on where they want to be and who they want to work with. The regional heads then translate that into making money.

He also gives a nice example where they like residential but regulations are onerous in most of continental Europe so they refer sticking to the UK where regulations are a lot less onerous there. 

Their job is to understand the strategy, then find the partners to help them execute on that strategy creating joint ventures. "Today we have nine joint ventures, eight in equity, one is in credit, and the majority of the AUM is in industrial and residential and the balance is in some legacy funds and also in office buildings."

He goes on to state: "The way we think about partnerships, first of all, there needs to be moral, cultural and ethical alignment, there's a lot of ways to make money, just a question of how you want to make money. " 

The how is important given who their clients are and while they are flexible around partnerships, it really comes down to the people and the team with a solid track record.

Finally, co-investments are important, they want to see meaningful investments from their partners in the ventures they invest in.

He also explains how they need to differentiate themselves as a capital group, finding things that they can do that others can't to attract top partners. 

As far as sector allocation, they don't have set weights, they find value where great opportunities lie but are cognizant of over-concentration. Still, they like industrial, residential, student housing, data centers, storage and credit.

In terms of indicators, he explains long-term intrinsic value of an asset relative to short-term price swings and they do think about where they are in the cycle in terms of GDP, inflation, etc.

They are also focused on having the majority of their AUM managed internally or wholly owned vehicles so they have more control and retain the fees and profits for their clients.

"It's a $94 billion business with 1900 people, we have the scale and infrastructure to then extend marginally into different sectors and regions to internalize management."

Lastly, he explains why in this uncertain environment, they're looking for sectors that are less exposed to cyclical swings or to macro and geopolitical tensions and gives the UK BTR (build-to-rent) sector as one they like right now. 

He states that they're a little more cautious on industrial right now because it has more tie to macro, trade and geopolitical risks.

Student housing is another one where you have more certainty because despite what's going on in the world, students need safe, secure housing with amenities. 

Again, he explains why your entry point is equally as important as what you want to buy.

Anyway, take the time to watch the entire interview, this guy is a star in every respect and if I was hiring a a head of real estate for a large fund, I'd definitely put him on my short list (he is likely on the short list to succeed Dennis Lopez).

I highly recommend all students, associates and seasoned professionals take the time to listen to this interview, one of the best you'll ever come across in finance. 

The U.S. labor market continued to expand in 2024, but at a slower pace than the prior two years. Job growth remained fast enough to largely keep pace with population growth and wages rose faster than inflation. Upcoming Census Bureau data for 2024—set to be released on Tuesday—will reflect how these factors and others impacted annual earnings, income, poverty, and health insurance for workers, families, and children across the country.  

It’s worth emphasizing that the upcoming Census data do not reflect any economic developments in 2025. Some policymakers will attempt to claim any good news from the data as validation of the current U.S. policy path, but this would be completely misleading given the radical policy shifts in 2025 under the Trump administration. In this piece, we argue:

• Data for 2024 will likely reflect continued labor market strength. Inflation decelerated rapidly in 2024, which should boost last year’s income growth. 
• Even the likely strong 2024 income and poverty data will still show an economy that has left many workers, families, and children in an economically precarious position. Racial disparities in income, for example, leave people of color much more vulnerable to economic insecurity and poverty.
• Trump administration policies—including chaotic and historically high tariffs, mass deportations, and attacks on the federal workforce—have already led to a softening labor market and more inflationary pressures in the economy. Given this, income and poverty measures are likely to worsen when these data are released next year for 2025.  
• In 2026 and beyond, cuts to food assistance and Medicaid that were part of the Republican-passed spending bill will increase food insecurity and the number of people without health insurance, particularly for families of color.
• The Census data are incredibly valuable and provide transparent and non-politicized data that allow Americans to make informed decisions about what policies are delivering economic security for working people. The Trump administration has begun attempting to politicize and erode trust in federal statistical agencies and to manipulate the reporting of anything that seems like bad news for the economy. This is deeply undemocratic.

The labor market mostly held strong in 2024 

Between 2021 and 2023, the labor market rebounded dramatically from the pandemic recession as large-scale policy interventions—like expanded unemployment insurance—helped families stay afloat and drove a recovery several times faster than the Great Recession. In 2024, the labor market remained relatively strong, growing by 2 million jobs over the year. The unemployment rate rose slightly but maintained a 4.0% average over the year. 

The prime-age employment-to-population ratio—the share of workers between the ages of 25 and 54 with a job—held steady at a high level of 80.7% in 2024. Prime-age Hispanic workers saw their employment rise, as prime-age Hispanic men increased their employment rates by 0.7 percentage points. Employment also rose slightly for prime-age Black and white women by 0.2 and 0.3 percentage points, respectively. At the same time, Black and white men experienced mild declines in their employment rates. 

Real (inflation-adjusted) wages continued to increase in 2024. Figure A shows that inflation fell sharply from 3.9% to 2.6% over the course of the year. At the same time, the strong labor market allowed workers to maintain a solid pace of nominal wage growth: nominal hourly wages and weekly earnings growth decelerated by much smaller amounts than price growth for goods and services. This combination of inflation falling faster than nominal wage growth is exactly the macroeconomic “soft landing” from the COVID-19 inflation shock that so many thought would be impossible to achieve. Together, this translated into a 1.4% increase in average real hourly wages over the year. Average real weekly earnings—perhaps a better signal for the annual income data out next week—rose by 0.9%. 

While these are meaningful averages, we also know that real wage growth was particularly strong for lower–wage workers and workers with lower levels of educational attainment. Along with steady employment, these advances bode well for improvements to income and poverty rates in next week’s report.

Figure A Persistent economic disparities leave families of color disproportionately vulnerable

The upcoming Census release will continue to show persistent racial inequities that can only be corrected through years of sustained progress. In 2023, typical Black and Hispanic households were paid just 63 cents and 74 cents, respectively, for every dollar paid to the median non-Hispanic white household. These disparities are especially harmful to low-income families of color who live in a constant state of economic insecurity. In a new report, we find that Black and Hispanic families with children make up more than half (61.1%) of economically vulnerable families, defined as those with incomes below 200% of the federal poverty line. Even within the group of economically vulnerable families, Black and Hispanic workers are also more likely to have incomes below the poverty line (see Figure B below). Narrowing these racial disparities will demand stronger and more persistent income gains for these families in the years to come.  

Figure B Policy changes are weakening the economy in 2025

There are several reasons to suspect that 2025 will be a worse year for incomes and poverty. For one, labor market indicators have weakened: unemployment inched up to 4.2% by July 2025, and job growth slowed to 85,000 per month compared with 168,000 in 2024. The last three months saw average job growth of just 35,000 per month. While layoffs have not yet surged, both employers and workers appear to be sitting tight in anticipation of a weaker economy going forward. Federal employment has fallen by 84,000 since January, which doesn’t include the many workers who will leave federal payrolls on September 30 at the end of the fiscal year. According to Trump official Scott Kupor, 2025 will end with 300,000 fewer federal workers.

The Trump administration’s damaging and chaotic tariff policy also threatens economic security, with nearly universal tariffs set at the highest level in a century or more. This is causing severe business uncertainty and already leading to higher prices for households because tariffs are taxes on both imported and domestically produced goods. Since lower-income families spend a higher share of their income on goods consumption, these tariffs will disproportionately harm their real incomes.

In addition, the administration’s mass deportation agenda will substantially harm the labor market. The damage will not just be felt by immigrant workers and their families—they will spill over and hurt U.S.-born workers as well. If the Trump administration successfully follows through on its goals of deporting 1 million people each year during their term, there will be 3.3 million fewer employed immigrants and 2.6 million fewer employed U.S.-born workers by 2029.

Health insurance coverage and access to food assistance will fall over the next several years

Health insurance, Supplemental Nutrition Assistance Program (SNAP) coverage, and Supplemental Poverty Measure (SPM) rates in 2024 will likely represent high-water marks over the next few years. That’s because the Republican spending bill passed in July cuts Medicaid spending by $793 billion and SNAP benefits by $186 billion over the next decade—all to pay for tax cuts for the richest Americans.

The share of the population without health insurance was 8.0% in 2023, or about 26.5 million people. This ranked near historic lows in the United States—driven by a strong labor market, enhanced Affordable Care Act (ACA) subsidies, and pandemic-era coverage protections (particularly in Medicaid). 2024 saw a slight rollback in some of the pandemic-era coverage protections, but the strong labor market and ACA subsidies likely kept uninsurance rates relatively low. However, we can expect uninsurance rates to climb in 2025 and beyond because the Republican spending bill both cut Medicaid and allowed the enhanced ACA subsides to lapse. This will lead to more than 14 million people losing health insurance coverage by 2035, increasing the number of uninsured people by more than 40%.1

The Republican budget will also lower incomes and increase food insecurity by cutting SNAP. Benefit reductions and more stringent eligibility requirements will reduce SNAP participation by an average of 2.4 million in the next decade. A weakening labor market will exacerbate this problem by making it more difficult to satisfy new SNAP work requirements as people work fewer hours due to shrinking job opportunities.

Black and Hispanic households will likely represent a disproportionate share of those losing health insurance coverage and access to SNAP benefits. Figure C below shows that people of color are more likely to rely on Medicaid and SNAP benefits. In 2023, SNAP lifted more than 3 million people out of poverty—over half of those were Black or Hispanic, and nearly 40% were children. Cuts to Medicaid, SNAP, and other government support programs mean that the 2024 rate of poverty as measured by the Supplemental Poverty Measure will also likely be the lowest for many years to come.

Figure C Timely and accurate data are essential but under threat

Next week’s release will also mark the last year in which data from federal statistical agencies could be reliably assumed to be completely free of politicization or manipulation. Staffing cuts and politically motivated firings at government agencies threaten the credibility of future data releases. On August 1,, Trump fired the Bureau of Labor Statistics Commissioner because he did not like the jobs numbers they released. High-quality public data inform how well the economy is delivering for the majority of working people—whether job opportunities exist, how families make ends meet, and whether families have access to vital services such as nutrition and health care. There is simply no substitute for the government data infrastructure, and pressure from the executive branch to alter data to fit political aims will damage a valuable public good that is critical for business decisions, policymaking, and planning by all stakeholders in the economy.

It is possible that the extreme competence and professionalism of federal workers who staff the statistical agencies will shield most of the data they release from manipulation or quality-erosion. But this will take near-heroic measures and is too much to ask of our civil service—they work hard enough collecting and analyzing this data in professional and non-politicized ways, they should not also have to be activists safeguarding its integrity.

Note

1. CBO projected that 32.4 out of 363.3 million people would be uninsured in 2034. Adding 10 million uninsured due to Medicaid cuts brings the uninsurance rate to 11.7%, compared with the actual 2023 uninsurance rate of 8.0%.

It seems likely that the Trump administration will use Friday’s jobs report to continue to argue that their immigration policies are creating job market opportunities for U.S.-born workers, but this claim is false and based on a misreading of data from the household survey. If anything, the job market for U.S.-born workers is worse so far in 2025 than it was in preceding years. Analysts following demographic trends from the household survey should concentrate on unemployment rates and employment ratios, rather than levels.

The unemployment rate for the U.S.-born population is higher in 2025 than previous years (see Figure A). The July rate of 4.7% has not been this high since 2021. Similarly, the prime-age employment-to-population ratio for U.S.-born workers may be moving downwards and is certainly not consistent with booming employment (see Figure B).

Figure A Figure B

Although the monthly jobs reports estimate population or employment levels by U.S.-born or foreign-born status from the household Current Population Survey (CPS), using these estimates of levels to compare changes over time can be misleading, especially since the beginning of 2025. This is because CPS population levels and growth rates are adjusted once per year each January in order to reflect the best available population projections. Normally this adjustment has relatively minor effects, but the combination of a large January 2025 CPS population adjustment and Trump’s immigration policies are causing the size of the U.S.-born population to be mismeasured. Many economists have pointed out this concern, but it is worth reviewing in light of false claims that U.S.-born employment is surging.

Every year in January, the CPS adjusts population estimates by race and ethnicity, age, and sex. The adjustment causes level changes in the January 2025 population estimates for these groups and also predetermines population growth rates for the entire calendar year. In January 2025, these adjustments resulted in a large, measured population jump between December 2024 and January 2025 due to better information about immigration flows in previous years.

At the same time, because of Trump’s immigration policies, the measured share of the immigrant population is rapidly falling: immigrants are leaving the U.S. or entering at lower rates, and the climate of fear due to increased arrests, detentions, and deportations is making survey responses less reliable. For example, immigrants may be reporting that they are actually U.S.-born, or they may fail to respond to the survey at all. All of this has led to the measured immigrant share of the population falling in recent months.

But given that the total estimated CPS population size is predetermined each January, a measured decrease in share of the immigrant population will automatically result in higher U.S.-born population levels. The resulting spurious increase in estimated U.S.-born population levels then drives an increase in measured U.S.-born employment levels. This happens even as employment-to-population ratios, as shown before, show no corresponding increase. In essence, to claim credit for the rise in measured employment levels for U.S.-born workers in the face of a falling employment-to-population ratio, the Trump administration would have to prove their immigration policies were increasing the total U.S.-born population over a course of a few months—a clearly preposterous claim.

Indeed, another way to see that the measured U.S.-born employment increase is misleading is to observe that the number of U.S.-born nonworkers is increasing. Figure C shows that the number of U.S.-born people who are unemployed or not in the labor force increased sharply in 2025 and still increased in July, when the usual seasonal pattern shows a decrease in nonworkers. If Trump administration policies are leading to a boom in opportunity for U.S.-born workers, why are so many more U.S.-born workers not working in 2025? The answer, again, is that the measured CPS levels are highly misleading given pre-existing population counts. 

Figure C

These level changes are not to be relied upon for any serious analysis. Instead, analysts seeking to actually understand the current state of the labor market from the CPS should focus on unemployment rates and employment-to-population ratios. When properly focusing on these more accurate measures, it is clear that U.S.-born workers are facing a worse labor market in 2025.

Recent evidence from the Federal Reserve’s Survey of Household Economics and Decisionmaking (SHED) shows that disparities in income variability, hardship, and savings are deepening Black and Hispanic individuals’ vulnerability to economic insecurity. The Fed Board has conducted this survey annually since 2013, with a focus on capturing how households identify and assess the U.S. economy, their own economic wellbeing, and the potential risks that may impact their finances. The findings published earlier this year reflect the results of questions fielded in the last quarter of 2024, before the economic chaos wrought by the Trump-Vance administration increased fears of a recession.

An economic slowdown in 2025 is no longer just a potentiality. The economic mismanagement of the current administration—characterized by an erratic trade policy, mass federal layoffs and deportations, and an absolute lack of policy predictability—slowed the pace at which the economy and job market grew in the first half of the year. The large downward revision in payroll employment for May and June, for example, serves as a clear signal of a dimming labor market. With mounting evidence of a slowdown, workers of color and their families stand to yet again see their economic disadvantages compound. This is evident when we examine data pointing to Black and Hispanic families’ diminishing capacity to absorb a job loss or a broader economic downturn. 

Lack of dependable income leaves Black and Hispanic adults less financially secure and more exposed to hardship

Less than two in three Black (64.9%) and Hispanic (63.2%) adults reported “doing okay financially or living comfortably” near the end of last year (see Figure A). The financial standing of Black and Hispanic adults has moved in different directions since 2021. In 2021, both groups reported higher levels of financial well-being than in the preceding years. As is well-known, this was largely attributed to the economic relief measures that followed the pandemic with income, unemployment, and housing support. As these support systems quickly expired, Black adults managed to maintain some of their financial gains, largely as a result of the strong labor market recovery from the pandemic recession. But Hispanics didn’t report faring as well. In 2021, for example, the share of Hispanic adults who had reported “doing okay financially or living comfortably” was more than 7 percentage points higher than last year.

Figure A

Despite varying trends between Black and Hispanic adults, disparities between these groups and their non-Hispanic white peers have not narrowed since 2019. In 2024, for example, more than three in four (77%) white adults reported being in good financial standing. White adults also reported having less income variability than their Black and Hispanic peers. More than a third of Black (33.81%) and Hispanic (36%) adults reported having income that varies at least occasionally from month to month, compared with about one in four (26.45%) of their white peers. These disparate outcomes also follow broader disparities we observe in the labor market, as Black and Hispanic workers remained more likely than their white peers to be employed part time for economic reasons in 2024.

Black and Hispanic adults who report inconsistent monthly income at least occasionally are also significantly more likely than their peers to struggle to pay their bills. In 2024, more than two in five Black (43.27%) and Hispanic (46.30%) adults reported having difficulties paying their bills due to monthly fluctuations in income, compared with less than one in three (31.48%) of their white peers. These racial disparities have existed since before the shock of the pandemic. The disproportionate exposure of Black and Hispanic adults to financial hardship given short-term income fluctuations in the face of a strong economy means that these individuals and their families are vulnerable to even more hardship as economic growth and employment wane in 2025.

Economic insecurity leaves Black and Hispanic adults without enough savings to absorb the shock of an economic downturn or life emergency

The Federal Reserve’s SHED typically asks survey respondents about their access to a “rainy day” fund consisting of sufficient savings to cover three months of living expenses in the event of a job loss or an emergency. This question is typically used to assess the financial resilience and economic security of respondents. In 2024, only slightly more than two in five Black (41.43%) and Hispanic (44.14%) adults reported having enough savings to absorb the shock of a job loss (see Figure B). In contrast, three in five non-Hispanic white adults reported having sufficient savings to cover three months of expenses. The financial resilience of Black and Hispanic adults has not changed dramatically since 2019.

Figure B

The disproportionate fragility that Black and Hispanic adults face in the event of an emergency is even more severe than the access to a rainy day fund may suggest. This is evident when we consider the ability of these individuals to cover an unexpected $400 expense with cash, savings, or a credit card that they are able to pay back in full by the next statement. While 71% of non-Hispanic white adults were able to cover a $400 emergency with cash or its equivalent last year, less than half of their Black and Hispanic peers reported having this financial cushion (see Figure C). While the share of Black and Hispanic adults who could cover a $400 emergency “with cash or its equivalent” has fallen since 2021, their relative disadvantage has endured since 2019. Despite a growing economy last year with low unemployment and rising wages, these individuals and their families stood one unplanned expense away from deepening economic uncertainty and pain.  

Figure C A weakening labor market will hurt all, but communities of color will once again bear the brunt of the impact    

Recessions have historically been especially harmful to communities of color. In each business cycle downturn over the course of the last four decades, Black and Hispanic workers have experienced a significantly larger fall in employment than their white peers. When the employment situation of these workers of color deteriorates as a result of a contraction, it also takes them longer to recover than their white peers. This can lead to painful scarring effects that disadvantage workers already more likely to suffer joblessness than their white peers even when the economy is growing and inflation is tamed.

Frances Schwartzkopff of Bloomberg reports BlackRock loses $17 billion mandate at Dutch pension fund:

BlackRock Inc. has lost a mandate worth €14.5 billion ($17 billion) with one of the largest pension funds in the Netherlands, amid concerns the world’s biggest money manager isn’t acting in the best interests of clients when it comes to climate risk.

PFZW, which oversees about €250 billion ($290 billion), will instead rely on Robeco, Man Numeric, Acadian, Lazard, Schroders, M&G, UBS and PGGM to oversee an equity portfolio worth some €50 billion, a spokesperson for the pensions manager told Bloomberg on Wednesday.

A BlackRock representative said the asset manager “noted PFZW’s redemption in the first half of 2025,” adding that it continues to help clients, including those in the Netherlands, meet their sustainable investing goals. PFZW has “always voted their portfolio with BlackRock themselves,” and BlackRock offers “eligible clients” the option to “participate in the stewardship of their assets,” the representative said.

PFZW is the latest asset owner to voice discontent with US money managers that have retreated from climate alliances amid an all-out assault on net zero policies by the White House. PME, another Dutch pensions manager, told Bloomberg earlier this year it’s reviewing its mandate with BlackRock, valued at some €5 billion.

“PFZW has been developing a new investment strategy where financial performance, risk and sustainability are weighed equally within the framework of a total portfolio approach,” the fund said in an emailed comment.

Its mandate with BlackRock was valued at €14.5 billion as of the end of March, which is the latest period for which PFZW was able to provide a figure, the spokesperson said. PFZW said it continues to invest in BlackRock money market funds. PGGM, which handles investments for Dutch pension funds, said PFZW was also pulling a €15 billion mandate it had had with Legal & General. A spokesperson for L&G declined to comment.

Dutch pension funds have been under pressure from a local nonprofit, Fossil Free Netherlands, to end their ties with BlackRock. The Break with BlackRock initiative asked savers to urge their pension funds to act, and thousands have done so, according to the nonprofit’s website.

PMT, another Dutch pension fund, said BlackRock manages a passive equity portfolio that’s built around a benchmark that the fund has created and which determines “where to invest,” according to a spokesperson. ABP, the largest pension fund in the Netherlands, said it requires external managers to follow its responsible investment policy.

The role asset managers play in addressing climate change remains a topic of debate. Firms including BlackRock argue that clients have different investment goals that it’s obliged to respect. Still, the Institutional Investors Group on Climate Change recommends that asset owners engage with managers on “the need for net zero aligned policy advocacy and wider industry stewardship.” IIGCC also recommends against leaving voting to asset managers.

Dutch media outlet NRC Handelsblad reported earlier that PFZW was making changes to its approach to asset management that included dropping BlackRock.

PME plans to decide on its BlackRock mandate before the end of the year, a spokesperson said on Wednesday, noting that the firm has had “several” exchanges with the US asset manager over the past year.

Back in May, PME’s senior strategist for responsible investing, Daan Spaargaren, told Bloomberg the €57 billion pension manager’s concern was that BlackRock wasn’t doing enough to distance itself from the anti-climate rhetoric of the administration of US President Donald Trump.

BlackRock and other US asset managers “aren’t condemning what Trump is doing and how he is operating and how he is handling issues like climate change and demolishing the judiciary,” Spaargaren said at the time. “We are worried about that.”

So what's this all about? Well, to me reading this, it's obvious Dutch pension funds are caving to political pressure and distancing themselves from BlackRock.

Why do I say this? From the article above:

Dutch pension funds have been under pressure from a local nonprofit, Fossil Free Netherlands, to end their ties with BlackRock. The Break with BlackRock initiative asked savers to urge their pension funds to act, and thousands have done so, according to the nonprofit’s website. 

That right there tells me the governance model at these Dutch pension funds is all wrong, they basically bow to pressure form their members, sponsors and interest groups even if it's not in the best interest of their plan over the long run.

BlackRock is an easy target, it epitomizes Wall Street, it's the world's largest asset manager and invests everywhere including traditional energy companies.

Now, to be fair, PFZW was careful in calibrating its response:

“PFZW has been developing a new investment strategy where financial performance, risk and sustainability are weighed equally within the framework of a total portfolio approach,” the fund said in an emailed comment. 

Still, this sounds to me like they rejigged their investment strategy to justify exiting from BlackRock.

As far as BlackRock is concerned, it's fed up of climate politics -- from the Left and Right -- and has been attacked within the United States from Democrats and Republicans for either being anti-DEI/ pro fossil fuel or pro-DEI/ anti fossil fuel.

At the beginning of the year, BlackRock announced it is leaving the Net Zero Asset Managers Initiative, joining other Wall Street firms that depart the environmentally focused investor group under pressure from Republican politicians. 

That prompted a swift response from the Canadian Climate Institute which stated BlackRock should listen to its CEO from 2020, climate risk is still investment risk:

Global leadership from financial institutions like BlackRock is important in closing this gap, which is why their retreat from the global climate coalition is noteworthy. In 2020, the company’s CEO, Larry Fink, turned heads in the global financial community when he wrote that the risks of climate change were “compelling investors to reassess core assumptions about modern finance” and had become a “defining factor in companies’ long-term prospects”. The recent reversal weakens the signal for BlackRock’s clients, shareholders, and other financial institutions that watch the asset manager closely. 

The most concerning part of the fracturing coalition, however, is its impact on influencing government policy.

Policies like carbon pricing, tax credits, climate investment taxonomies, and disclosure will determine whether financial institutions can achieve their climate targets. No longer having the world’s largest asset manager at the table may lessen the coalition’s impact and therefore slow the scale and speed of the transition, particularly if populist backlash against climate policy grows in North America.

To modify Larry Fink’s original 2020 clarion call, climate risk is still investment risk no matter what it’s called or who’s working to address it. But BlackRock’s departure sends an unfortunate signal at a critical time. This is something that could affect the long-term returns for all investors.

Everyone has an opinion on BlackRock and its climate advocacy but Larry Fink is running a business and he will never please all asset managers, that's for sure.

In June, Texas removed BlackRock from a blacklist after its climate policy rollback but others are harping on it, divesting their assets.

Interestingly, a BlackRock representative stated this in the Bloomberg article above:

PFZW has “always voted their portfolio with BlackRock themselves,” and BlackRock offers “eligible clients” the option to “participate in the stewardship of their assets,” the representative said.

That too makes you wonder what the fuss is all about since BlackRock allows clients to participate in the stewardship of their assets.

In Canada, where pension funds are governed independently, there is a strong commitment to sustainable investing despite Trump 2.0 but BlackRock remains an important asset manager with big mandates from all of Canada's large pension funds.

There is no divestment going on, not from BlackRock, not from fossil fuel (except for La Caisse) and the focus remains squarely on garnering high risk-adjusted returns to make sure there are more than enough assets to meet future liabilities.  

The only thing I do know is there is a reorganization of BlackRock going on in Canada with leadership changes pending and that I recently applied for the position Director, Institutional - Canada and was promptly rejected (makes you wonder which idiots are screening these applications there).

Whatever, I've applied to hundreds of positions over the last 15 years  that I'm eminently qualified for but keep getting rejected (I know why but will be diplomatic and not share details).

Truth is I shouldn't be a Director at BlackRock, with the knowledge and experience I have, I should be a Senior Managing Director at a Canadian pension fund pulling in millions every year but alas, I'm not, life goes on and the only person I answer to is the man in the mirror, and my wife and child, of course. 

Below, Larry Fink, chairman and CEO of Blackrock, talks on stage at the 2025 Forbes Iconoclast Summit about the decisions that helped grow the firm into a multibillion dollar company.

Also, seven months ago, BlackRock CEO Larry Fink joined 'Squawk Box' to discuss the latest market trends, state of the economy, the company's decision to leave a net-zero group, investing on behalf of clients, and more.

Bryan McGovern of Benefits Canada reports Canadian institutional investors navigating cloudy climate transition strategies from investee companies:

Some of Canada’s largest institutional investors are looking for comprehensive and realistic climate transition plans from investees as part of an extensive due diligence process.

However, Jennifer Coulson, global head of environmental, social and governance at the British Columbia Investment Management Corp. says these plans aren’t yet the norm, adding investors are working directly with investee companies to align strategies.

“Energy transition plans are something that we want to see from carbon-intensive companies because they provide us with a kind of strategic roadmap.” 

When the BCI conducts its due diligence, she adds, it looks for the company’s high-level commitments, its short term targets and the overall strategy.

The Office of the Superintendent of Financial Institutions’ B-15 guideline pushed investors to look more seriously at the importance of climate risk management. This push has been further supported by the issuance of international sustainability standards from the International Financial Reporting Standards Foundation, which have now been translated into Canada through the Canadian Sustainability Standards Board.

“There’s been a growing realization that [climate change] is very important and to us the it’s important because it’s an essential part of our fiduciary responsibility,” says Bertrand Millot, head of sustainability at the Caisse de dépôt et placement du Québec. 

The Caisse started its climate policy journey following the Paris Agreement in 2015, he adds, gradually installing action through an earnest internal plan, including investment management. When engaging with companies, it used to ask for the firm’s carbon accounting but now he stresses the need for an entire business plan that takes climate change into account.

The considerations around climate change are here to stay, he adds. “To us, opportunities and risk are central to fiduciary responsibility. We want companies that are well aligned for the future and are aware of their vulnerabilities and potentially [know how to] mitigate them, if there are any.”

The BCI employs ESG considerations as part of its investment decisions and serves as an active owner engaging directly with portfolio companies to develop these critical plans, Coulson says.

“When it comes to integration, for any active investment decision that we’re making, we look at how exposed a company is to climate change — evaluating transition as well as physical risks and opportunities.”

Both organizations depend on communication with investee companies to engage. The BCI wants to be a resource and offer constructive responses to plans but it also has to operate within its own targets, Coulson notes.

“If a company has made a high-level, net-zero commitment by 2050, having a robust transition plan helps to ground that aspiration in reality and gives us a better sense of how they plan to navigate the various risks that we see playing out over the next decades.”

The review process includes an evaluation of the approach’s depth to reduce emissions within the context of a specific industry, Millot says.

“Our role here is to push companies to be ambitious. . . . We’re not asking them to do some things that will make them unprofitable, that is not the plan at all. The plan is to be prepared for the future.” 

Excellent interview with BCI's Jennifer Coulson and La Caisse's Bertrand Millot.

We don't hear much about ESG since Trump was elected but as you can read, Canada's large pension funds remain committed to ESG and they haven't missed a beat.

To be honest, ESG is so embedded in their investment processes across public and private markets that it's part of their due diligence and they don't think twice about it.

If a company isn't serious about their transition plan, they will unlikely get capital from Canada's large pension funds. 

Climate risks are important because they figure prominently in building a resilient long-term portfolio. 

In short, no investor wants a company, an asset that carries significant sustainability risk. 

Perfect example is in real estate where the schism between class A buildings with high sustainability scores and lower tier buildings with low sustainability has risen exponentially since the pandemic broke out. The former still commands high valuations whereas the latter has fallen by the wayside.

Read more about BCI's approach to sustainability here.

Read the latest Sustainable Investing Report from La Caisse here.

Not much more to add except that Canada's large pension funds remain committed to sustainable investing no matter who is in charge of the White House. 

Below,In this special bonus episode of WSJ’s Take On the Week, guest host Miriam Gottfried is joined by Rachel Robasciotti, founder and Co-CEO of investment firm Adasina Social Capital. Adasina runs an exchange-traded fund dedicated to it called “social justice investing” that holds Nvidia, Visa, Mastercard and Eli Lily, among many other companies. Robasciotti says the companies in the fund must check the box on more than 80 metrics the firm has assembled related to racial, gender, economic and climate justice.

Robasciotti shares her views on the financial advantages of social conscious investing and how Adasina measures a company’s social impact to provide investors’ portfolios with more transparency. Plus, she shares the importance of DEI principles in light of the Trump administration's policy changes to DEI.

Also, in this episode, Integrity365 Founding Financial Adviser, Debbie Packer, is joined by LGT Wealth Management Senior Portfolio Manager, Ben Palmer, to discuss key market themes across sustainable investments, particularly in light of the shifting political landscape in the US and what this could mean moving forward (this episode of the Integrity Financial Insights Podcast was recorded on 25th Feb 2025 and all information is relevant as of this date).

Since Inauguration Day, the Trump administration has taken a flurry of actions that have put our federal agencies, economy, and democracy at risk. One alarming line of attack that directly threatens workers’ economic security has been on labor unions and workers’ right to engage in collective action. 

For decades, large corporations and unscrupulous employers have undermined workers’ right to collective bargaining. But throughout this period, the federal government has largely recognized the existence of these rights and respected the independent bodies that enforce our labor laws. No more. Trump has tossed aside the rule of law and advanced a strategy to not only weaken but effectively eliminate many workers’ ability to engage fully in collective action and bargaining. Below are some of Trump’s most egregious actions so far.  

Union-busting the federal workforce. In March, Trump issued an executive order that stripped union protections from more than 1 million federal workers across dozens of federal agencies. And in advance of Labor Day, Trump issued another executive order expanding these actions to additional agencies. Despite ongoing litigation, some agencies have unilaterally canceled collective bargaining agreements with the unions that represent its employees. For example, the Department of Veterans Affairs announced in early August that union contracts for 400,000 employees were terminated, eliminating crucial protections for federal workers. 

As the federal workforce continues to be under attack, unions are crucial to protecting these workers’ jobs and ensuring a fair transition and compensation in the event of large-scale downsizing at agencies. Trump’s action represents the single largest retaliatory action against unions and workers and sends an alarming signal to employers across the country. Trump cited thinly veiled national security reasons to pursue these blatantly retaliatory actions against unions that were fighting back against Trump’s attack on the federal workforce. The federal government should be modeling high-road employer practices. Instead, Trump has implemented the most egregious union-busting tactics and normalized illegal actions for private-sector employers across the country. 

Stacking the National Labor Relations Board (NLRB) in his favor. In January, Trump fired NLRB Chair Gwynne Wilcox and severely jeopardized the independence of the agency. When Trump fired Wilcox, he cited that her opinions on the Board had “unduly disfavored” employers—an implicit warning about how any future Board members should rule if they want to keep their jobs. 

With only two members remaining on the Board—and therefore unable to meet quorum—the NLRB cannot hear cases on unfair labor practices or union representation, nor can it issue decisions. While Wilcox continues to fight her firing in court, Trump has nominated Scott Mayer and James Murphy to be Board members. If confirmed, the NLRB would have enough members to establish a quorum and a Republican majority. If Mayer and Murphy are confirmed, workers and unions are likely to find their cases ultimately before a Board that is heavily influenced, if not controlled by, Trump and the interests of bosses over workers.

Undercutting efforts to foster and support labor-management mediation. In March, Trump directed the Federal Mediation and Conciliation Service (FMCS) to eliminate “non-statutory components” and to “reduce the performance of their statutory functions and associated personnel to the minimum presence and function required by law.” Since 1947, the FCMS has helped resolve difficult labor disputes, especially those that have resulted in strikes. There is a clear interest for the federal government to encourage parties to continue engaging in the collective bargaining process: workers who go on strike can experience economic hardship and broader economic impacts may be felt. Trump’s directive to undermine the FMCS, however, signals to employers and labor the exact opposite. At a time when employer power usually far outweighs worker power—and unions struggle to secure first-time contracts—Trump’s actions may have a significant chilling effect on workers’ ability to get employers to engage in good faith at the bargaining table. 

In the coming months, we will no doubt continue to see more attacks undermining workers’ right to organize and collectively bargain. You can find a comprehensive catalogue of all policies relevant to working people and the economy at Federal Policy Watch, an EPI online tool documenting actions by the Trump administration, Congress, federal agencies, and the courts.