WSJ What’s News - Government Shutdown Poised to Become Longest in U.S. History

Episode Date: November 4, 2025

P.M. Edition for Nov. 4. WSJ’s Congress reporter Katy Stech Ferek talks about the latest in negotiations as lawmakers search for a deal to end the shutdown. Spencer Jakab, who writes WSJ’s Markets A.M. newsletter, explains why a famous method of valuing stocks suggests rough years ahead. And it’s Election Day in the U.S. Head to WSJ’s live blog for more coverage of key races in New York City, New Jersey and Virginia. Sabrina Siddiqui hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

This podcast is brought to you by Dinotrace, the leader in AI-powered observability, with analytics, automation, and next-level intelligence on one unified platform. DynaTrace delivers the visibility and real-time insights you need to deliver better, more secure software, successful AI initiatives, and innovation at the speed of business. Turn data into decisions that drive your business forward with AI-powered observability where it counts. Learn more at dinatrace.com slash WSJ. That's www.d-d-D-Y-N-T-R-A-C-E dot com slash WSJ. The government shutdown nears a record as the longest in U.S. history.

Plus, what an ominous milestone for a famous method of valuing stocks tells us about what's next for markets. It's proven to be an extremely reliable indicator of what to expect in the several years ahead of us. And former Vice President Dick Cheney, an architect of the U.S. War on Terror, has died at 84. It's Tuesday, November 4th. I'm Sabrina Siddiqui for the Wall Street Journal, sitting in for Alex Oslo. This is the PM edition of What's News, the top headlines, and business stories that move the world today. The Trump administration is negotiating with Eli Lilly and Novo Nortis to offer their blockbuster weight loss drugs at lower prices, as low as $149 for a month's supply,

through a Trump-branded government website for buying medications. People familiar with the matter say the proposed agreements would also mean Medicare and Medicaid coverage of expensive obesity drugs like Wagovi and Zepound. Medicare drug benefit plans today can cover the weight loss drugs just not only for losing weight. For example, they're available for reducing risk of heart attacks or sleep apnea. And few states offer Medicaid coverage for the drugs for weight loss. And that's not the only news today about the weight. lost drug market. There is a new twist in the high-stakes bidding war for the obesity drug developer

Metzara, as Novo Nordisk and Pfizer have both raised their offers for the company. Metzara said today that Novo Nordisk's proposal values the company at approximately $10 billion, up from its previous bid of $9 billion. Pfizer, which had struck a deal to buy Metzara for up to $7.3 billion in September, is now offering about $8.1 billion. dollars. Novo Nordisk's effort to buy Metzara has touched off a legal battle with Pfizer. The fight over the three-year-old company, which has no approved drugs, highlights how valuable the weight loss drug business has become.

A famous measure for valuing U.S. stocks has crossed a big milestone that points to some trouble ahead. That measure is a calculation of stocks' price-to-earnings ratio by Nobel prize-winning economist Robert Schiller. It takes a decade's worth of corporate earnings and adjust them for inflation, and it topped 40 last month for the second time ever. The only other time it reached this level was in 1999, the peak of the tech stock bubble. Spencer Jacob, who writes the Wall Street Journal's Markets AM newsletter, joins us now to discuss. Spencer, explain this measure to us. Why is it important to investors? So there are dozens of ways to slice and dice the market and to value it, but this is really the gold standard. It was first

proposed actually way before Robert Schiller made it popular by Benjamin Graham, who's the mentor of Warren Buffett, who said, you know, I think you should just look back and you should look through an entire business cycle and adjust for inflation, because that will really fairly tell you what companies have earned, and then it tells you where you are. Whereas what you commonly hear is the market's P-U ratio is X, which is just looking at what analysts are forecasting for the next year, which A is frequently too optimistic, and B, is just a. It's just, just looking at a single year. You know, profit margins rise and fall. Recessions happen, inflation happens. And so this normalizes for all that. And it's proven to be an extremely

reliable indicator of what to expect in the several years ahead of us. You're right. This is only the second time it broke above 40. How significant is that? One of the criticisms of this measure is that people will look back at the entire history of it. We have a history going back to 1881 and say, okay, yeah, the long-run average of this measure is 17. We're at 40. Oh, my God. And you have to recognize that that's not fair because in 1881, the U.S. was like an emerging market. Now, go back to 1990. You had CNBC. You had computers. And the average is a much higher at 27. We're way above that. There's definitely a very, very clear relationship between how high the Schiller P.E. is and how low your expected returns are. And the market is

extremely expensive. It's about the one or two percent range of being most expensive in history as far back as we have numbers. You mentioned a model from index developer research affiliates that suggests some types of companies could have better returns based on these cyclically adjusted PE ratios. What are they predicting? What it's telling you is that you really would benefit from diversifying away from the things that have done very, very well, which are these large U.S. companies like Nvidia and Microsoft, you know, the Mac 7 and other tech companies in their orbit that really have produced a lion's share of returns in the last 10 years. That was the Wall Street Journal, Spencer Jacob. Spencer, thank you.

Thank you. And a note of caution is creeping into markets after a month's long run higher. Finance executives at a summit in Hong Kong today warned that the winning streak has made stocks vulnerable to a pullback. The NASDAQ led declines, dropping 2%. The S&P fell more than 1% while the Dow was off by about half a percent. One company that bucked the trend was Yom Brands. The restaurant chain owner's shares gained 7.3% after it said it was considering selling its Pizza Hut business. Coming up, the government shutdown is poised to break the record for the longest funding lapse in U.S. history tonight. But could the end be near? That's after

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with races for governor in New Jersey and Virginia, a mayoral election in New York City, and a ballot measure in California that would redraw the state's congressional maps to benefit Democrats. The outcomes could offer insight on how Americans feel about President Trump's second administration and whether Democrats can capitalize on voter dissatisfaction. To follow the races and hear from voters, go to our live blog coverage at WSJ.com. The government shutdown is on track to break the record tonight for the longest funding freeze in U.S. history, but a breakthrough might be on the horizon. Lawmakers in Washington said they're increasingly optimistic that they can reach a

bipartisan deal to end the shutdown that began on October 1st. Hundreds of thousands of federal workers have been furloughed because of the funding lapse, while air traffic controllers and other government employees are working without pay. The shutdown has also disrupted SNAP food aid for tens of millions of Americans. Katie Stetch Farrag covers Congress for the Wall Street Journal and has the latest. Katie, we are on day 35 of the shutdown. There's been a lot of focus on the lapse in food aid and delays at airports. Do you think we've reached a tipping point?

Where do negotiation stand? Yeah, for all the pressures that you just described, We're seeing that way on lawmakers heavily here on Capitol Hill. We're also seeing optimism that we haven't seen before. Last week, we saw discussions here and there between senators talking about different dates, different scenarios by which the government could set a new deadline for government funding and come together with a vote that would incorporate some of the demands from Democrats we have on health care-related funding. I hate to use the term cautiously optimistic, but that's where we are right now.

The optimism you talk about seems to mostly be coming from the Senate. What about House Republicans? Any deal that is struck on the Senate side will also need approval from the House. We did hear Hakeem Jeffrey say earlier today that, of course, they're watching any Senate side developments and open to seeing any bipartisan deal. But that does not take into account Speaker Johnson's position. He's in a tough spot because some Republicans in his conference are supportive of these subsidies that Democrats have made a condition of reopening the government. But he also has a very strong conservative anti-spending flank that would oppose any sort of extension. On the Senate side, we are seeing some moderate Democrats say, hey, I trust my Republican colleagues.

But when it comes to Johnson, I'm just not sure I trust him and I don't know what he would do with it. And President Trump is putting more pressure on Republicans to bypass Democrats and end the impasse without their votes. Where is he in all this? You've seen twice in the last week now, President Trump take to social media and pressure Republican colleagues to bypass Democrats and the filibuster to restart the federal government. We've been talking to Republican senators for the last couple of days now, some of whom remain very uncomfortable with that scenario. But we do expect Trump to ramp up that pressure, especially if he doesn't see any progress in the next couple of days. That was the Wall Street Journal's Katie Stetch Farik. Thank you, Katie. Thanks for having me.

And finally, we did exactly what needed to be done in order to catch those who were guilty on 9-11 and to prevent a further attack. And we were successful on both parts. That was former Vice President Dick Cheney. He was defending the George W. Bush administration's approach to the war on terror after 9-11 on Fox News in 2014. Cheney, one of the most powerful vice presidents in U.S. history, died yesterday of complications of pneumonia and cardiac and vascular disease. He was 84. Cheney was a national security hawk who served four Republican presidents. He advocated for the U.S. invasion of Iraq in 2003 and defended it long after he left office, even as many Americans came to view the war as a strategic and humanitarian disaster.

After he left office, he was a leading conservative critic of the Obama administration and then became a critic of Donald Trump, endorsing Democrat Kamala Harris for president in 2024. And that's what's news for this Tuesday afternoon. In case you missed it, heads up that we dropped a new episode of what's news and earnings earlier today. We're looking at Big Pharma, the competition over weight loss treatments, and how drug makers are dealing with the Trump administration on drug prices and tariffs. That's in the feed now. As for today's show, it was produced by Pierre Biennamee and Zoe Culkin, with supervising producer Tali Arbell. I'm Sabrina Siddiqui for the Wall Street Journal.

We'll be back with the new show tomorrow morning. Thanks for listening. Thank you. I'm sorry. You know,