What a Growing U.S. Multiracial Population Could Mean for the Election
13:06 Share

MFS Investment Management. For 100 years, MFS has been committed to helping investors, investment professionals, and institutions build secure futures. Find strategies and insights based on a century of active investing experience at MFS.com. Disney is beginning to plan its post-Bob Iger future.

and why weaker businesses are engaging in risky borrowing. Plus, how more multiracial Americans make for a trickier political environment. Factors like geography, where someone lives, their socioeconomic background, where they went to school, and their religious affiliation are actually going to start to play a bigger role. It's Monday, October 21st.

I'm Tracy Hunt for The Wall Street Journal. This is the p.m. edition of What's News, the top headlines and business stories that move the world today.

Disney said today it would name a replacement for chief executive Bob Iger in early 2026 and replace its board chairman. The announcement marks the first time the company had formally given a time frame for when it aims to name Iger's successor, a decision that will shape the entertainment giant's next chapter. It's also a sign to investors that the company is taking a fresh approach to succession after past turbulence.

During Iger's first stint as CEO, he positioned at least three executives to succeed him, only to repeatedly extend his own contract. Bob Chapek, his eventual successor, became CEO in early 2020, but was ousted two years later after clashing with Iger.

Disney also said that former Morgan Stanley CEO James Gorman, chair of its succession committee, would become board chairman on January 2nd, succeeding former Nike CEO Mark Parker, who plans to resign.

Gorman's elevation to chair is a sign to some observers that Disney wants to give more authority to an outsider with a strong record in high-stakes succession planning. Disney's board has been criticized in the past for succession planning failures.

In U.S. markets, all eyes are on earnings this week, as, according to FactSet, more than 110 S&P 500 companies are scheduled to report quarterly results. In today's trading, the S&P 500 fell 0.2 percent and the Dow lost 0.8 percent, while the Nasdaq Composite eked out a slim gain of 0.3 percent.

According to data from PitchBook LCD, in September alone, companies such as U.S. Foods and Royal Caribbean Cruises borrowed nearly $110 billion in junk-rated bonds and loans. That is the third largest monthly total in records going back to 2005.

It's also a sign that investors have few concerns that the economy is on the verge of a slowdown that would spark bankruptcies and defaults among lower-rated companies. But what's behind all of this risky borrowing? Sam Goldfarb is a markets reporter for The Wall Street Journal, and he joins us now.

So Sam, one of your sources told you credit is a confidence game, and right now investors are exhibiting a lot of confidence. Why is there so much confidence right now? The economy is pretty good. Growth has been stronger than expected for a while now. We've gotten two months of pretty solid to quite good labor market data. The economic growth data is good. Consumers seem to be spending, and so investors are willing to lend money to these businesses with lower credit ratings.

What are the risks involved with this kind of borrowing? The risk is that you won't get all of your money back, that the company will default on it instead. And that's higher than it will be for higher rated businesses, investment grade businesses.

But there is a whole range of companies in this category of speculative grade or junk rated companies. And the majority of companies in this category are still doing pretty well. So the risk of default for them is still fairly low. But there's a group of companies in this category that are really struggling, that have too much debt. Is this level of borrowing sustainable? A lot of this borrowing is actually not...

not adding to the debt load of these businesses. It's just borrowing to pay back older debt. And so it's necessary borrowing. And so kind of pushing off those debt maturities and therefore giving a lot more of a runway to these businesses so that they don't have a big debt payment coming next year. Then there is a pretty big category recently of using especially loaners

to raise money to pay dividends to private equity owners. In this case, they really are adding debt and they're not even using that money from that debt to invest in some business

part of their business. That's typically something that investors are somewhat hesitant to do. But if the market is hot, if people are confident about the economy, they'll do that. And they have been doing that a lot. Sam Goldfarb is a markets reporter for The Wall Street Journal. Coming up, as more Americans identify as multiracial, what does that mean for the upcoming election? That's after the break.

MFS Investment Management. For 100 years, MFS has been committed to helping investors, investment professionals, and institutions build secure futures. Find strategies and insights based on a century of active investing experience at mfs.com.

In the final weeks before election day, the candidates have targeted particular racial and ethnic groups. Just last week, Vice President Kamala Harris rolled out a, quote, opportunity agenda for Black men, and Donald Trump courted Latino voters at a Univision town hall. ♪♪

The categories familiar to recent generations, white, black, Asian, Native American, Native Hawaiian, and Hispanic, are dissolving rapidly, yielding to more fluid and complex identities that researchers and politicians are struggling to understand.

According to the U.S. Census Bureau, by one definition, the multiracial population surged from 9 million to almost 34 million between 2010 and 2020, or from about 3 percent to more than 10 percent of the population.

Joining us now to discuss how this evolving definition of racial identity might affect the upcoming election is WSJ reporter Oyen Adedoyen. Oyen, in a few words, can you explain some of the factors that have led to the growth of this multiracial identity?

It's really a confluence of things. So we're seeing changes in the way that the census asks the race question. In the future, it's going to fold in the Hispanic Latino category into the general race and ethnicity category. So we're going to see that as an additional option for people.

We're also going to see options for people who are of North African and Middle Eastern descent. At the same time, the census has also added additional space for people to write in their own kind of racial categories. Maybe if they are Native American, they might add in a tribe and write that in. And so along with that, we're seeing over the last decade or so, genealogy testing companies like 23andMe and Ancestry.com really boom in popularity.

And we're also seeing moves on social media and more visibility of interracial marriage and immigration as well. And so all of these different factors coming together are really shaping the way that Americans look at themselves, look at their family backgrounds, their family history, and they are beginning to identify differently.

How does having a mixed identity play into how people vote? Factors like geography, where someone lives, their socioeconomic background, where they went to school and their religious affiliation are actually going to start to play a bigger role because these are people who maybe won't identify as solely Asian or solely black or solely white. And so how they grew up and what...

Political affiliations their parents belong to, for instance, are really going to start to play a factor. And researchers and political scientists are just now starting to really look at this group more because there's also not a lot of data on this group. So does that mean that campaigns are going to have to adapt the way they group and target particular voters?

It's still too soon to see how presidential candidates are going to adapt to this, but we're already seeing signs of friction in this current presidential race. There have been multiple instances where Donald Trump has questioned Kamala Harris's multiracial identity. She identifies as both Black American and South Asian American publicly. And just last week, he was on a podcast where he was still saying that people were just recently realizing that

Kamala Harris was Black. And so it's interesting that we're seeing this dichotomy of things. On one hand, society is really embracing this multiracial identification. But on the other hand, we're still seeing kind of a refusal to accept that this is something that's happening. And so it's going to be interesting to see how that plays out in future elections as identity becomes even more complex. Oyin Ededoyin is a reporter for The Wall Street Journal.

According to an analysis of BankruptcyData.com records, restaurant chains and operators this year are on track to declare the most bankruptcies in decades outside of 2020, when the global pandemic upended the industry's operations. The firm tracked Chapter 11 filings of restaurants that are publicly traded, along with companies holding more than $10 million in liabilities. Joining us now is Heather Haddon, a reporter for The Wall Street Journal. Heather.

Heather, it's been nearly five years since the pandemic. Why are some restaurants still struggling? Yeah, so a lot of things have started to catch up with these restaurants that were bubbling under the surface for a long time. And now it's just been really difficult for them. So on one hand, you have consumers who have pulled back on eating out at restaurants because the inflation has

just made eating out so expensive. On the cost side, a lot of these restaurants have had increased costs, particularly in labor, where minimum wages have gone up quite a bit. And some of these restaurants just ran out of

capital or their financing just didn't work anymore, whether they expanded into too many different markets and were stretched too thin or because interest rates have been so high. And so now they've really hit the skids and filed for bankruptcy. So what are investors doing? Have they been stepping in trying to turn some of these restaurants around? Yeah, absolutely. There have been investors who kind of

specialize in these turnaround situations who have bought up some of the ones they think they can save. Like a Red Lobster has gotten bought by a consortium of its lenders to try to turn it around. And part of what they do in this process is close a lot of underperforming restaurants. Red Lobster has closed

more than 100 restaurants in this process to try to get in a better position. You know, they look for ways to become more efficient, to maybe update the brand, to make it more appealing. So it's not just one thing that these firms do. It takes a lot of hard work to try to turn around one of these brands. Heather Haddon covers restaurants for The Wall Street Journal. Thank you so much, Heather. Thanks so much.

And that's what's news for this Monday afternoon. Today's show was produced by Anthony Bansi and Pierre Bien-Aimé with supervising producer Michael Cosmitas. I'm Tracy Hunt for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening. ♪

MFS Investment Management. For 100 years, MFS has been committed to helping investors, investment professionals, and institutions build secure futures. Find strategies and insights based on a century of active investing experience at mfs.com.