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.

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. 

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).