Schwab’s Trading Volume Swells at End of Strong Year for Markets

0:00Scarlet Fu:Small businesses are the pulse of every community. They bring people together, create opportunities, and drive growth. Chase for Business helps business owners like you with personalized guidance and convenient digital tools all in one place. With that guidance and your determination, you can take your business farther and help build a brighter future for your community. Learn more at chase.com slash business. Chase for Business. Make more of what's yours. The Chase mobile app is available for select mobile devices. Message and data rates may apply. JPMorgan Chase Bank, NA. Member FDIC. Copyright 2026.

0:34Scarlet Fu:JPMorgan Chase and Company. So there's a lot of noise about AI, but time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now, a global workforce of 300 ,000 can use AI to fill their HR questions, resolving 94 % of common questions. Not noise. Proof of how we can help companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business, IBM. From coast to coast, unlock adventure at Red Lion Hotels by Sinesta, where restful sleep, friendly service, and trusted local knowledge are part of every stay.

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1:44Scarlet Fu:Bloomberg Audio Studios. Podcasts. Radio. News. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube. Lots of news flow out today. We want to get back to some earnings. Our good friends at Charles Schwab, they put up some pretty good numbers taking in more assets. It just blows me away here. Let's get some of the details on Charles Schwab, a big financial company reporting their results. Stock trading higher here today.

2:20Neil Sipes joins us. He covers the financials for Bloomberg Intelligence. Neil, talk to us about Charles Schwab, what's going on there. Yeah, I think we're seeing a lot of franchise traction here. I mean, you look at Schwab, right? We think about a massive retail broker, 46 million touch points across the U.S. So this is the mass affluent all the way up to smaller buckets in higher net worth individuals. And what we're seeing is the fourth quarter was excellent, right, in terms of retail engagement. Markets were near all-time highs. We're still kind of floating around there despite some choppiness.

2:52Margin balances, these are obviously very lucrative lending opportunities for a name like Schwab, Robinhood, etc. Margin balances were at a record. So we're seeing that sort of exuberance in the markets. And all of that is positive to the fundamentals that someone like Schwab, where people continually, you know, it's a cyclical name. But you tend to add more assets into your account when markets are performing well. You tend to trade a little bit more. Engagement sentiment is higher. All that sort of feeds the franchise.

3:25Scarlet Fu:Does that exuberance extend to speculative fervor, meaning is Charles Traub going to lean into prediction markets or crypto? Yeah, so I guess two different answers there. Crypto, yes. I think the more favorable outlook, at least for crypto regulation and enforcement, has sort of allowed them to move forward in rolling out spot crypto trading, which we expect in the first half of 2026. They've talked about how a lot of their customers are trading the Bitcoin ETFs and alike and sort of, you know, moving into the spot trading that you've seen for a longer period of time at crypto native firms, as well as names like Robinhood.

4:04So expanding into that business that should provide yet another additive product, not necessarily becoming a crypto powerhouse like some of the other names like a Coinbase or Robinhood that we know of. prediction markets on the other hand, they've been slower and more measured in the plans there, staying away from the sports. They've talked about if those financial type contracts that are tied to economic outcomes or stock outcomes, those eventually could make their way onto the platform. No plans yet, but for now, sports gambling is not on the table. Stay with us. More from Bloomberg Intelligence coming up after this.

4:42So there's a lot of noise about AI, but time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now, a global workforce of 300 ,000 can use AI to fill their HR questions, resolving 94 % of common questions. Not noise. Proof of how we can help companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business. IBM. For many men, mental health challenges aren't recognized until they've already taken a toll. Work pressure, financial stress, changing relationships, and traditional expectations around masculinity can quietly wear men down, often without clear warning signs.

5:26In Season 3 of The Visibility Gap, Dr. Guy Winch and his guests explore how these pressures show up, how to spot them earlier, and how men can access meaningful support. Listen to the new season of The Visibility Gap, a podcast presented by Cigna Healthcare.

5:42Scarlet Fu:You need to make a huge presentation in an hour. Adobe Acrobat uses AI to take all your documents and generate a presentation with a single click. Build slides quickly and streamline the process. Need a last-minute pitch deck? Do that with Acrobat. Need to level up your presentation design? Do that with Acrobat. You have 30 plus documents that need to be simplified into a proposal. Do that. Do that. Do that with Acrobat. Learn more at adobe.com slash do that with Acrobat. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App.

6:26Scarlet Fu:Listen on demand wherever you get your podcasts or watch us live on YouTube. We want to turn to David Gurra here from Bloomberg News. He joins us here in our studio. David, that was a long rambling speech from the president in Davos. Had some tough words, as I guess should be expected for some of those in attendance from the world leaders there. Any takeaways for you there? It was striking. I was in this very same seat yesterday, listening to the president as he went to the White House, that press briefing. And a lot of what we heard that seemed scripted was what we heard the president say yesterday.

6:57So he talked about the domestic economy, talked about the last year and all he sees himself as achieving over the last year, the first year of his second term. But almost as an aside, he said to the audience, you want me to talk about Greenland? And lo, he did. And as Scarlett pointed out, he referred to it as a piece of ice, cold and poorly located, that can play a vital role in world peace and world protection. And he, over the course of maybe 15 or 20 minutes, made the case for the U.S. acquiring that territory. Didn't say explicitly how he would go about doing that, as Scarlett pointed out, said that the goal here for the U.S.

7:28is not to use force to do so, but said that he needs it for strategic international security. That's our territory, the president said. And he dovetailed that, Paul, with commentary on NATO and criticism of NATO in a way that I think would shock a lot of people in the room, people from Europe especially, who likely blanched when he said that if something were to happen, if the U.S. were to be attacked and the U.S. were to call NATO, he's not sure that those allies would come to the defense of the U.S. And I just have to point out here, the one time that Article 5 of the North Atlantic Treaty has been triggered, invoked, was after September 11th.

8:01That's when NATO got involved. So we talk about his sandwiches often as sandwiches. You've got to focus on what's in the middle. I think that was the case during that speech as well. Again, a lot of boilerplate that we've heard before about, again, his achievements in the state of the economy, but really it was the middle. It was the substance that was the most interested to people there in the room. And I'm frankly not sure that what the president said there is going to do anything to kind of placate or pacify or turn down the temperature in the room of those European leaders who have been so gravely concerned by what the president has said about Greenland.

8:30Scarlet Fu:But it didn't seem to alarm investors because we see equities higher right now. The S &P 500 up seven-tenths of one percent. You're also seeing yields lower, too, with the 10-year yield marginally lower, but notably it's a negative sign in front of the movement there. So for investors, it wasn't alarming to the point where anyone needs to do anything. It wasn't. And, you know, this is a game that we play over and over again as the president introduces something, expounds upon it more, maybe walks things back. And investors are trying to process all of this in real time. So I think while this speech was important to hear from the president directly on Greenland more than we've heard from his posts on social media, I think attention now turns to what these European leaders say next.

9:10We were talking on surveillance about how there is no unanimity among European leaders yet. I think there's an effort underway by a lot of these leaders to kind of get everybody on board with the coordinated response with the U.S. is proposing here. That's what I think we investors are going to be paying attention to in the days to come.

9:25Scarlet Fu:But that's a structural weakness with Europe, right, that they can't get together and come up with a decision quickly. It is a structural weakness. And one I think that these leaders acknowledge and certainly President Trump acknowledged in that speech as well in the run up to it. I think that he sees Europe as being weak because they can't come to a coordinated response on issues like this. And he kind of extended that further in those remarks to talk about a potential military response to some sort of attack. So I think that he has and continues to see Europe as being weak by the way that it's structured here.

9:52And that's sort of seen manifest in this speech as well. So, again, I think that's the more salient, important point for me is sort of the way that Europe talks about this and acts here in the coming days. Mark Carney from Canada, some strong words today. How does that relationship, do you think, work between Canada and the European Union broadly defined? because obviously there are some close ties there. But Mr. Carney had some pretty sharp rhetoric. Yeah, he delivered a very forceful speech in which he said we're in the midst of a rupture, not a transition. So he is not minimizing what's going on here.

10:25And I think you've seen him go back and forth to Europe a number of times since he started in the job as prime minister. He clearly has good relationships with many of these European leaders, both through his work in this job and certainly the job that he had before that when he was at the Bank of England. He knows a lot of these principles. And I think he's worked hard to better fortify that relationship between Canada and these European nations. And so the substance of that speech, yes, it was this criticism of the liberal order. He basically said that many countries have been misled by allying themselves with the United States.

10:54But if you look at how that has kind of turned into an economic policy platform, he's very much making the case for mid-sized countries. I think this is fascinating and something to chart going forward here. There's been so much focus on the primacy of the United States, the role of the alliance that you would have with the United States. He's saying, look, Canada is a good middle-sized country in its own right. There is room here for more coordination and collaboration among countries like that. And so I think that's part and parcel of what we've seen here, him extending this arm to Europe to try to develop that kind of relationship going forward.

11:22Right.

11:23Scarlet Fu:And it's not just to Europe as well, because Canada has now looked to China as a partner increasingly in this new world order. Right. I mean, he's embraced China in a way that would probably have surprised Justin Trudeau just a year or two ago. They've come to an agreement here opening the door to electric vehicles from China, auto investment from China. I mean, he's in a way being forced to remake Canada's economy. Absolutely. And Davos was the last stop on a very significant trip for the prime minister. He's going back to Canada. We'll have a cabinet meeting over the next couple of days. But he said in that speech, we actively take on the world as it is, not wait around for a world we wish to be.

12:02So he went to Beijing. There was a lot of groundwork laid for that visit. There was a new trade agreements that were negotiated and signed while he was there. Went to the Middle East, similar sort of setting there for deals. So we have seen the prime minister, as you say, Scarlett, taking on the world in a very different way than his predecessor, Justin Trudeau. But again, I think there is a thick level of realism there that the prime minister is very confident and content to talk about wherever he goes. Stay with us. More from Bloomberg Intelligence coming up after this. The thing about AI for business, it may not automatically fit the way your business works.

12:40At IBM, we've seen this firsthand. But by embedding AI across HR, IT, and procurement processes, we've reduced costs by millions, slash repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business, IBM. For many men, mental health challenges aren't recognized until they've already taken a toll. Work pressure, financial stress, changing relationships, and traditional expectations around masculinity can quietly wear men down, often without clear warning signs.

13:19In Season 3 of The Visibility Gap, Dr. Guy Winch and his guests explore how these pressures show up, how to spot them earlier, and how men can access meaningful support. Listen to the new season of The Visibility Gap, a podcast presented by Cigna Healthcare.

13:35Scarlet Fu:You need to make a huge presentation in an hour. Adobe Acrobat uses AI to take all your documents and generate a presentation with a single click. Build slides quickly and streamline the process. Need a last-minute pitch deck? Do that with Acrobat. Need to level up your presentation design? Do that with Acrobat. You have 30-plus documents that need to be simplified into a proposal. Do that. Do that. Do that with Acrobat. Learn more at adobe.com slash do that with Acrobat. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App.

14:18Scarlet Fu:Listen on demand wherever you get your podcasts or watch us live on YouTube. Well, the U.S. Supreme Court will weigh whether President Donald Trump can fire Fed Governor Lisa Cook over mortgage fraud allegations that she denies. The case concerns whether President Trump can oust Cook temporarily while her challenge continues. But the legal issues may have a broader effect on the Fed's independence. Get some more color on that. We welcome our next guest, Nikki Lanier, CEO of Harper Slade and a former St. Louis Federal Reserve senior vice president. Joining us from the lovely Lexington, Kentucky, via that Zoom thing.

14:52Nikki, what do you make of this case here with Lisa Cook here, I guess, on its face and then maybe even broader implications for Fed independence? Oh, my gosh, the significance of the implications on Fed independence should not be lost on anyone at this point. Anyone drawing breath on this planet, the Federal Reserve's independence, as we all know, is the bedrock of American economic credibility. And so efforts to politically target or remove a sitting governor, especially as this case reaches the Supreme Court, this risks politicizing monetary policy, destabilizing global trust in U.S. markets.

15:31there's just there there's no upside to this and they the intentions of this president in unseating an extraordinarily beautifully qualified Federal Reserve governor is not only unprecedented but reckless.

15:49Scarlet Fu:So Nikki the fact that three conservative justices have expressed skepticism about the U.S. government's arguments so far Amy Coney Barrett has asked about the potential for risks to markets if Lisa Cook is removed. Does that give you some measure of confidence that she's getting a fair hearing? I mean, hopefully so. Hopefully so. I think, you know, politics aside, which is hard to kind of set aside in this context, there is, I think, an understanding among our nation's leaders that the importance of the Federal Reserve remaining independent and not corrupted by political whims or personal gain is is so core to the American economy, really the global economy.

16:35And I think that that's not lost on several of our Supreme Court justices. And I hope that that will be the case as this case ensues, that that will be the actual result of this, that the president will not have any authority to remove this sitting governor. So, I mean, this is a Fed that's like pretty much all Feds in memory said that they are driven by the data here. Is that potentially at risk? I mean, could we get to a point where this Fed does become too politicized and maybe the data isn't what's driving the decision making? Absolutely. Absolutely. And then it's game over. I mean, honestly, game over.

17:11That's that's core to the Fed's independence is really relying on the data. These are stalwart and studied and highly pedigreed decision makers who are opining and deliberating painstakingly. I've seen it in these FOMC meetings over whether to raise interest rates and how to think about monetary policy for the interest of the whole. And they are extraordinarily data driven, not just empirical data. But my job when I worked for the Fed was part of my role was to solicit the anecdotal data that rounded out the story, giving rise from the empirical data. And so they rely on that very heavily. And it is an extraordinarily painstaking process that the lay citizens like you and I and your listeners really have come to rely on.

17:57Scarlet Fu:So, Nikki, I'm sure after years of doing just that, kind of sifting through the data, considering all the anecdotal out there and assessing the economy, you don't just stop because you're no longer working at the Fed. What is your take of where the economy sits right now? What is the biggest challenge here for Fed officials as they consider what to do on January 28th? Listen, the biggest challenge right now is the independence. And the Federal Reserve is under direct threat, direct threat. by the president of the United States. And so this idea of a president being able, possibly being sanctioned in a permissive way to require the Federal Reserve to bend monetary policy to political interests and personal grievances, it is an extraordinarily dangerous precedent.

18:45And if intimidation works, if intimidation is able to prevail, then monetary policy leadership, the infrastructure giving rise to the Federal Reserve dual mandate, how we've come to know and understand and rely on how the Fed assigns rigor to the process of determining policy is entirely upended. So I'm not even I can't even fathom what that would look like in a world where the Federal Reserve is entirely relenting to and acquiescing to the political whims of any president and especially this president. And Nikki, we have Fed Chairman Jerome Powell actually in attendance at the Supreme Court proceedings today.

19:23Hey, what does that tell you? What kind of message does that send? Big daggone deal. That's a big deal. Chair Powell's decision to personally attend to personally attend these arguments. It's it underscores the gravity of the moment. It Fed chairs don't usually appear in court casually. And so his presence signals the independence of the central bank itself, not simply the fate of one governor. This is far from just a personnel kind of pedestrian personnel decision. This is a significant decision now before the judiciary, really deciding whether the Fed will remain independent and be able to do its job with the extraordinary rigor and discipline that it has been, or if it must cave to the whims and the wants of the president and his political desires.

20:12Scarlet Fu:Nikki, have you had a chance to speak with any sitting Fed governors or even Lisa Cook herself? I'm just curious what you've heard on your end. I've not had an opportunity to speak with either of them. But but what I will tell you, just from my perspective, if I might be so bold, I worry about this this moment and the crisis that it presents, the compounding crisis, the calcified crisis in many ways that it presents for what's happening in the labor market and specifically the labor market regarding black women. This is, you know, this is not sitting inside of a vacuum. This is in a larger context.

20:51This president and his administration has very much racialized his political policies. They are core to who he is and core to how he's planning to administer his priorities in his administration. So what I really worry about is what this signals in terms of codifying continued attacks on professional black women.

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