WEBVTT - Apple, Infrastructure, and Amer Sports IPO 0:00:00.840 --> 0:00:04.000 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 0:00:04.040 --> 0:00:05.240 my co host Matt Miller. 0:00:05.640 --> 0:00:09.600 Every business day we bring you interviews from CEOs, market pros, 0:00:09.720 --> 0:00:13.600 and Bloomberg experts, along with essential market moven news. 0:00:14.160 --> 0:00:17.279 Find the Bloomberg Markets Podcast on Apple Podcasts or wherever 0:00:17.400 --> 0:00:20.480 you listen to podcasts, and at Bloomberg dot com Slash podcast. 0:00:20.800 --> 0:00:22.320 Let's go right through our next guest, because we want 0:00:22.360 --> 0:00:25.160 to talk Apple. The stock is up about just about 0:00:25.200 --> 0:00:27.560 one percent today. It had tumbled over the last couple 0:00:27.560 --> 0:00:30.440 of days, costing a couple hundred billion dollars in lost 0:00:30.760 --> 0:00:34.080 market caps. Since there are some concerns over iPhones and 0:00:34.159 --> 0:00:35.360 China and all that kind of stuff, so we're going 0:00:35.440 --> 0:00:37.159 to dig right into it with Dan Ives. He's a 0:00:37.200 --> 0:00:41.360 managing director senior equity analyst at Wedbush Securities, joining us 0:00:41.440 --> 0:00:44.400 via the Zoom thing. Hey, Dan, you know there is 0:00:44.440 --> 0:00:47.040 some concern here about Apple and the use of Apple 0:00:47.120 --> 0:00:50.000 products apple phones in China. Can you summarize kind of 0:00:50.000 --> 0:00:52.800 what the issue is and how material of risk is 0:00:52.840 --> 0:00:53.760 it at all to you? 0:00:55.360 --> 0:00:57.920 I mean, Paul, in my opinion, Bar's lot worse than bite. 0:00:57.960 --> 0:01:01.000 I mean, there's essentially been a pseudo ban of government 0:01:01.040 --> 0:01:05.080 employees for Apple in terms of iPhones the last two years. Now, 0:01:05.120 --> 0:01:07.400 maybe there was a little more restrictions here, but we're 0:01:07.400 --> 0:01:11.080 still talking about what we believe five hundred thousand iPhones max. 0:01:11.720 --> 0:01:13.600 Relative to what we believe is gonna be forty five 0:01:13.680 --> 0:01:18.520 million sold in China in the next year. So look, 0:01:18.560 --> 0:01:21.760 I mean, these black Swan types of fears of Apple 0:01:21.880 --> 0:01:25.400 and China just continue to be the issue year of 0:01:25.520 --> 0:01:28.320 the year. But I just believe here, especially when you're 0:01:28.440 --> 0:01:32.640 in Huawei Phone two generations behind, there's no Chinese consumer 0:01:33.319 --> 0:01:37.280 that in my opinion, that unless they're forced, are buying 0:01:37.800 --> 0:01:38.959 that over an iPhone. 0:01:39.640 --> 0:01:42.919 Still, you know, we saw a huge drop in Apple 0:01:42.959 --> 0:01:46.960 shares at the beginning of August on iPhone sales slow 0:01:47.040 --> 0:01:50.040 down concerns. We kind of ticked back up there, but 0:01:50.080 --> 0:01:53.680 we're back down near the near the near the lows 0:01:53.680 --> 0:01:54.080 of the year. 0:01:54.160 --> 0:01:55.000 Not quite there yet. 0:01:56.120 --> 0:01:59.040 They have a chance to rectify that next week when 0:01:59.080 --> 0:02:01.080 they come out with new product. Is it gonna knock 0:02:01.080 --> 0:02:03.120 our socks off? Is Paul Sweeney gonna go out and 0:02:03.120 --> 0:02:03.920 buy a new iPhone? 0:02:05.640 --> 0:02:09.080 I think Paul Sweeney does by buyers new iPhone. In 0:02:09.080 --> 0:02:12.920 my opinion, because look, it keeps coming down to if 0:02:13.000 --> 0:02:15.760 you look at the chip, you look at the camera 0:02:15.840 --> 0:02:19.320 technology combined with the types of promotions we're going to 0:02:19.400 --> 0:02:22.800 see from carriers, especially in the US, and then you 0:02:22.800 --> 0:02:24.920 look at twenty five percent of the install bases not 0:02:25.000 --> 0:02:27.919 upgrade their iPhone of four plus years. I believe it 0:02:27.960 --> 0:02:30.240 relates into something where you're going to see actually an 0:02:30.320 --> 0:02:35.239 uptick in units over iPhone fourteen. And that's why we're 0:02:35.280 --> 0:02:41.040 buyers at the stock here despite haters continuing to heat pricing. 0:02:41.080 --> 0:02:44.400 I mean, I'm probably like a lot of other folks 0:02:44.480 --> 0:02:46.760 and I haven't bought an iPhone or upgrade my iPhone 0:02:46.760 --> 0:02:48.239 in you know, several years. 0:02:49.000 --> 0:02:49.600 Talk about the. 0:02:49.520 --> 0:02:51.360 Price of the eleven, right, Yeah, I have the eleven, 0:02:51.480 --> 0:02:53.120 so that's they're coming out with the fifteen. 0:02:53.280 --> 0:02:55.280 So that kind of kind of tells you where it's at. 0:02:55.400 --> 0:02:57.160 So what kind of pricing power does Apple have in 0:02:57.200 --> 0:02:59.200 this market, which, at least here in the US, is 0:02:59.520 --> 0:03:00.960 I guess to fully penetrate it. 0:03:02.400 --> 0:03:04.359 Yeah, I mean, look, we expect for the first time 0:03:04.400 --> 0:03:06.840 in years, the base prices will be up about one 0:03:06.919 --> 0:03:10.600 hundred dollars. When you look at iPhone pro as well 0:03:10.600 --> 0:03:14.440 as on the Promax, and this is something where we 0:03:14.560 --> 0:03:17.880 expect minimal churn because it just keeps coming down to 0:03:18.760 --> 0:03:22.200 it is the gold standard phone across the world, which 0:03:22.240 --> 0:03:24.800 is why I believe, I know you talk about Luberg 0:03:24.880 --> 0:03:27.800 that I believe at the end of this year, the 0:03:27.880 --> 0:03:31.520 smartphone leader globally will be Apple. I think they continue 0:03:31.560 --> 0:03:34.800 to gain more and more share in China, and despite 0:03:34.840 --> 0:03:37.720 a lot of the noise with Huawei and obviously Cotton's 0:03:37.760 --> 0:03:41.000 cold tech war, it also comes down to it's just 0:03:41.000 --> 0:03:43.240 the best phone out there, and I think they're years ahead. 0:03:44.600 --> 0:03:47.440 It annoys me when somebody in my group chat has 0:03:47.520 --> 0:03:50.240 an Android phone. Oh I know, it's the worst, Yeah, 0:03:50.400 --> 0:03:52.880 green bubble, and then if they like a comment, it 0:03:53.040 --> 0:03:54.200 ends like a new text. 0:03:54.360 --> 0:03:56.840 And Yeah, my son, my oldest son is one of 0:03:56.880 --> 0:03:58.880 those people, and he won't go to iPhone, so of 0:03:58.880 --> 0:04:01.119 course he's excluded from all one of our little. 0:04:00.880 --> 0:04:01.960 Existing my dad. 0:04:02.280 --> 0:04:04.480 My dad won't go to iPhone, so we knock him 0:04:04.480 --> 0:04:05.480 out of the family chest. 0:04:05.560 --> 0:04:07.200 Yeah exactly, all right. 0:04:07.240 --> 0:04:10.760 So, Dan, Apple, I guess you're you think is a 0:04:10.800 --> 0:04:12.000 streaming buy at this level. 0:04:13.280 --> 0:04:16.160 I think it's a table pounder, especially what's happened over 0:04:16.200 --> 0:04:19.160 the last week and I get it. You know, bears 0:04:19.200 --> 0:04:21.880 come out of hibernation mood. You know, obviously missed a 0:04:21.960 --> 0:04:24.440 huge run here. This could be at the quote unquote 0:04:24.440 --> 0:04:27.120 black Swan moment. We just don't see it. I mean, 0:04:27.200 --> 0:04:30.560 coming from what we see from a unit perspective in 0:04:30.680 --> 0:04:33.360 terms of our trips to Asia over the last called 0:04:33.480 --> 0:04:36.000 six to nine months. So we're buyers here and I 0:04:36.040 --> 0:04:38.599 continue to things. You know, as we've talked about, the 0:04:38.720 --> 0:04:42.080 new tech bull market is here and I think tech 0:04:42.160 --> 0:04:43.160 rips into your end. 0:04:43.760 --> 0:04:46.760 Hey, Dan, what is you know? 0:04:46.760 --> 0:04:49.200 I know Tim Cook was recently over in trying to 0:04:49.240 --> 0:04:51.800 trying to work his diplomatic magic here. 0:04:52.760 --> 0:04:53.960 What is I mean? China? 0:04:54.160 --> 0:04:57.400 Apple can't escape China both as a supply chain provider 0:04:57.440 --> 0:05:00.520 as well as a huge end market. What do you 0:05:00.560 --> 0:05:02.560 hear from Cupertino as to kind of their longer term 0:05:02.600 --> 0:05:04.760 strategy about China here? How concerned are they? 0:05:05.920 --> 0:05:06.120 Yeah? 0:05:06.120 --> 0:05:10.000 It's twenty percent politician, eighty percent CEO right in terms 0:05:10.040 --> 0:05:13.080 of Cook, and he's been able to navigate China basically 0:05:13.080 --> 0:05:15.080 as well as anyone out the obvious along with Musk 0:05:15.480 --> 0:05:19.000 in terms of US star warts. Look there, when you 0:05:19.000 --> 0:05:21.640 look at fox Con the supply chain, I mean They're 0:05:21.720 --> 0:05:25.679 essentially the number one employer in China from a private 0:05:25.720 --> 0:05:28.800 perspective in all of the country, right, so they are 0:05:29.000 --> 0:05:32.440 so important from a production perspective, but it is it's 0:05:32.480 --> 0:05:35.040 a game of high stakes poker. They know that they 0:05:35.040 --> 0:05:37.640 can move things to Vietnamin and India. Obviously that will 0:05:37.680 --> 0:05:41.200 be painful to do. China obviously is trying to play 0:05:41.200 --> 0:05:43.800 a poker game as well. But it comes down to 0:05:43.839 --> 0:05:46.719 the hearts and lungs of the growth story in Cup 0:05:46.720 --> 0:05:49.599 Patino are in China. That's where the sharegions have been. 0:05:49.760 --> 0:05:52.159 And that's why there's so much nervousness over the last 0:05:52.200 --> 0:05:56.920 week because this kind of dusts off what's always been 0:05:57.000 --> 0:05:59.560 that sort of ghost that you're battling when it comes 0:05:59.560 --> 0:06:00.559 to Apple in China. 0:06:00.960 --> 0:06:05.320 I mean, navigating China's pretty easy. You go over there, 0:06:05.839 --> 0:06:09.040 you kiss the ring, you never say anything bad about China, 0:06:09.360 --> 0:06:12.400 and you put factories there and employee tens of thousands 0:06:12.400 --> 0:06:12.800 of people. 0:06:13.080 --> 0:06:14.000 That's the strategy. 0:06:14.960 --> 0:06:16.120 I could do it too. 0:06:17.360 --> 0:06:20.080 The problem is you have to kind of cowtow to 0:06:20.480 --> 0:06:24.200 she does that bite them in the butt at all. 0:06:24.279 --> 0:06:26.719 I mean, it doesn't seem to have hurt their image 0:06:26.880 --> 0:06:29.039 in the US. 0:06:29.600 --> 0:06:33.359 Because it comes down to you're talking about the biggest 0:06:33.400 --> 0:06:37.320 technology and consumer brand in the world, and if you 0:06:37.480 --> 0:06:41.359 like three thousand dollar iPhones, then we should start producing 0:06:41.360 --> 0:06:44.159 them in New Jersey. Yeah, But if you like thousand 0:06:44.240 --> 0:06:47.120 dollar iPhones, they're going to continue being China and look, 0:06:47.400 --> 0:06:50.480 and it just comes down to like that, right now, 0:06:50.640 --> 0:06:53.320 that web in terms of the supply chain, that's been 0:06:53.360 --> 0:06:56.320 a huge part of Apple success. But it goes back to, 0:06:56.400 --> 0:06:59.760 like from the trillion to three trillion, many of just 0:07:00.400 --> 0:07:03.000 that China was going to continue to be the risk 0:07:03.279 --> 0:07:06.680 for Apple, but ultimately it's actually been the trophy case, 0:07:06.720 --> 0:07:09.560 both from a demand perspective as well as it comes 0:07:09.560 --> 0:07:13.000 to production. And that's why, like Cooper Tino continues to 0:07:13.040 --> 0:07:15.640 play Chush, others play checkers, and this is no different. 0:07:15.960 --> 0:07:18.960 They see these chess moves and I think we'll navigate 0:07:19.000 --> 0:07:23.000 it very contained. Despite many yell fire in a crowd theater. 0:07:23.600 --> 0:07:26.080 Hey Dan, thirty seconds left. What's your other than Apple? 0:07:26.080 --> 0:07:27.080 What's your top pick? 0:07:29.040 --> 0:07:31.560 I mean to me, it's Microsoft here because of what 0:07:31.600 --> 0:07:35.040 I've used, just the overall cloud and AI opportunity. I 0:07:35.080 --> 0:07:38.440 think we are now starting to actually see numbers over 0:07:38.480 --> 0:07:40.920 the next six to nine months this AI tidal wave 0:07:40.920 --> 0:07:43.760 of playing out and of course tasslo on evs that 0:07:43.840 --> 0:07:46.080 continues to be the play there. And so I look, 0:07:46.120 --> 0:07:49.160 this is, in my opinion, suppourth industrial revolution playing out 0:07:49.760 --> 0:07:52.120 in the weft lane of technology innovation. 0:07:52.640 --> 0:07:54.840 All right, Dan, thanks so much for joining us. Appreciate it. 0:07:55.120 --> 0:07:57.440 Good luck to this Penn state Nili Lances. They played 0:07:57.480 --> 0:08:00.760 the mighty Blue Hens of Delaware. 0:08:00.320 --> 0:08:01.400 So it's going to be tough. 0:08:01.600 --> 0:08:01.800 Dan. 0:08:01.840 --> 0:08:05.600 I's managing director, senior equity analysts for Webush Securities. 0:08:05.640 --> 0:08:09.720 There you're listening to the team Ken's are live program 0:08:09.840 --> 0:08:13.800 Bloomberg Markets weekdays at ten am Eastern on Bloomberg dot com, 0:08:13.880 --> 0:08:17.040 the iHeartRadio app and the Bloomberg Business app, or listen 0:08:17.080 --> 0:08:19.200 on demand wherever you get your podcasts. 0:08:21.040 --> 0:08:22.760 Will Ryan, he's a chief executive officer. 0:08:22.800 --> 0:08:25.320 He's also talking about Aston Martins too, so I'm kind 0:08:25.320 --> 0:08:27.440 of stuck in the middle between these two knuckleheads. 0:08:27.800 --> 0:08:30.080 He's a chief executive officer. Granted chairs advisors. 0:08:30.120 --> 0:08:32.559 We like to talk to Will about ETFs and kind 0:08:32.559 --> 0:08:36.440 of where is he seeing demand for ETFs? And Will 0:08:36.440 --> 0:08:38.400 thanks for joining us here. Appreciate you coming into our 0:08:38.400 --> 0:08:42.839 Bloomberg Interactive Broker studio Single stock ETFs. What are you 0:08:42.840 --> 0:08:44.640 guys doing with single stock ETFs? 0:08:45.000 --> 0:08:47.600 Yeah, this has really been the big growth area for 0:08:47.720 --> 0:08:50.080 US as a business, but I think a new category 0:08:50.160 --> 0:08:52.440 for the market over the last year. So we've just 0:08:52.480 --> 0:08:56.920 gone through a year of the first single stock ETFs 0:08:57.679 --> 0:09:01.360 and very simply they provide leverage tip although if you're 0:09:01.600 --> 0:09:05.280 an inverse one it's not necessarily leveraged. But they provide 0:09:05.320 --> 0:09:08.839 exposure to single companies, so very popular companies such as 0:09:08.880 --> 0:09:14.320 Tesla or Nvidia, and provide people prepackaged leverage to those companies. 0:09:14.520 --> 0:09:17.880 So an example would be granted shares one point five 0:09:18.280 --> 0:09:21.240 x short TSL daily ETF. 0:09:21.440 --> 0:09:22.040 What does that do? 0:09:22.520 --> 0:09:26.400 Yeah, so that provides one and a half times short exposure, 0:09:26.440 --> 0:09:29.319 so leverage short exposure to the daily price of Tesla 0:09:29.840 --> 0:09:33.240 and then TSLR, which is the sort of corresponding one. 0:09:33.520 --> 0:09:37.280 That's the highest leveraged ETF you can get on Tesla. 0:09:37.360 --> 0:09:40.439 So one point seventy five times levered to Tesla. 0:09:41.200 --> 0:09:41.560 Wow. 0:09:41.920 --> 0:09:43.440 I mean that that's a way to play it. So 0:09:43.440 --> 0:09:45.920 what's the risk to you guys to offering that leverage. 0:09:46.800 --> 0:09:48.920 It's not so much a risk to us. I mean 0:09:48.960 --> 0:09:53.000 the risk in terms of managing it is really that 0:09:53.480 --> 0:09:56.520 you get outsize moves clearly because you have leverage. So 0:09:56.559 --> 0:09:59.600 if the if the stock price falls, our assets under 0:09:59.640 --> 0:10:03.040 management and full and clearly were levered to the market. 0:10:03.160 --> 0:10:05.360 So all things been equal, you know we lose, we 0:10:05.520 --> 0:10:09.200 lose more money. But the idea is that, you know, 0:10:09.240 --> 0:10:12.400 these are very popular trading vehicles. We have nv d L, 0:10:12.520 --> 0:10:14.679 which has been probably the star of the show this year, 0:10:14.720 --> 0:10:17.200 which is the one point five times leverage in VideA, 0:10:17.720 --> 0:10:19.880 and so you can imagine since the beginning of the year, 0:10:20.000 --> 0:10:24.559 people have gone crazy for anything AI, anything in video, 0:10:25.200 --> 0:10:29.199 and the nvd L ETF has just been a rock 0:10:29.240 --> 0:10:32.080 star for us this year. So I think it's it's 0:10:32.120 --> 0:10:34.559 really just a category that's growing and there's a lot 0:10:34.559 --> 0:10:36.600 of demand for both the long and the short side 0:10:36.600 --> 0:10:37.960 with some of these popular names. 0:10:38.160 --> 0:10:43.079 How do you so, I that's up only three and 0:10:43.120 --> 0:10:44.400 ninety two exactly. 0:10:44.720 --> 0:10:49.240 I on Mondays, I have an et ETF show, so 0:10:49.280 --> 0:10:51.080 I'm looking at ETFs all the time, and. 0:10:51.200 --> 0:10:53.280 She gets to leave this show early to go prepare for. 0:10:53.320 --> 0:10:56.880 Yeah, I have to, so, but you know, expens ytios 0:10:56.880 --> 0:10:59.760 are something I look at quite often and typically one 0:10:59.800 --> 0:11:02.760 point one percent, which is what you charge on the 0:11:03.679 --> 0:11:06.920 short short amd. 0:11:07.920 --> 0:11:10.160 ETF or the NVDL is. 0:11:10.240 --> 0:11:13.360 Typically that's a relatively high expense ratio, but if you're 0:11:13.400 --> 0:11:17.200 going short, it seems low. How can you afford to 0:11:17.320 --> 0:11:19.280 charge that? When you do, you need to get the 0:11:19.280 --> 0:11:21.960 borrow or how do you get how do you structure 0:11:21.960 --> 0:11:22.640 the trades? 0:11:22.760 --> 0:11:25.560 Yeah, so that's that's in the price. But these are 0:11:25.600 --> 0:11:28.320 designed to be held for short periods of time, so 0:11:28.360 --> 0:11:30.920 they're actually super cheap when you think about it. We 0:11:31.120 --> 0:11:34.600 have to display an expense ratio just like everybody else 0:11:34.640 --> 0:11:37.160 on an annual basis. So the actual fee we charge 0:11:37.200 --> 0:11:40.200 is ninety nine basis points typically, but that's for if 0:11:40.240 --> 0:11:42.760 you held it for three hundred and sixty five days. Now, 0:11:42.800 --> 0:11:45.319 the average person is probably held holding these for just 0:11:45.360 --> 0:11:48.560 a couple of days or at least, you know, a 0:11:48.600 --> 0:11:51.520 short period of time, so the fee on a pro 0:11:51.679 --> 0:11:55.120 rated basis that they pay is minuscule. And indeed, if 0:11:55.120 --> 0:11:56.760 people are trading, which you get a lot of these 0:11:56.800 --> 0:12:00.640 algorithmic traders quant shops, you know on this they are 0:12:00.679 --> 0:12:04.760 probably intra day they pay nothing, just the spread. So 0:12:04.800 --> 0:12:07.120 it's an incredibly efficient vehicle if you want to trade. 0:12:07.120 --> 0:12:10.120 And to your point, Matt I mean when you look 0:12:10.160 --> 0:12:12.880 at the shorts, I mean, this is incredibly attractive for 0:12:12.920 --> 0:12:14.959 people because one of the biggest things is majority of 0:12:15.000 --> 0:12:18.319 people can't go short number one, but number two they 0:12:18.360 --> 0:12:21.240 can't find the borrow, and they do find the borrow. 0:12:21.360 --> 0:12:23.360 The borow fees for some of these stops got to 0:12:23.360 --> 0:12:24.800 be incredibly high, exactly. 0:12:24.800 --> 0:12:27.840 I'd imagine for Tesla, it's not cheap because highly a 0:12:27.840 --> 0:12:29.119 popular stock. 0:12:28.880 --> 0:12:31.679 To short exactly, so they can be huge expensive. 0:12:32.400 --> 0:12:34.760 I mean you seem to like the thing I like 0:12:34.800 --> 0:12:36.360 about it? Where you guys, do you seem to find 0:12:36.600 --> 0:12:40.480 the hot story like nvidio slash ai. How quickly can 0:12:40.480 --> 0:12:44.719 you get an ETF from inception to in the market. 0:12:45.200 --> 0:12:49.839 It very much depends so providing it's following the kind 0:12:49.880 --> 0:12:53.640 of basic rule set which is set by the SEC. 0:12:54.400 --> 0:12:57.600 It's seventy five days from when you file the registration 0:12:57.679 --> 0:13:00.960 statement to getting it out. That's the the latest, if 0:13:01.000 --> 0:13:03.160 you will, I guess they could have, you know, technically 0:13:04.040 --> 0:13:07.800 grant you effectiveness sooner than that. Where you have an 0:13:07.800 --> 0:13:10.840 issue is when you step outside of that standardized rule set. 0:13:10.920 --> 0:13:13.960 So for example, the crypto ETFs or the bitcoin ETFs 0:13:13.960 --> 0:13:17.000 that everybody talks about, you know, when you're outside of 0:13:17.000 --> 0:13:20.000 that standardized rule set, then you could be looking at 0:13:20.120 --> 0:13:21.640 years to get approval. 0:13:21.679 --> 0:13:23.960 Well, do they make it more difficult for leveraged dtfs 0:13:23.960 --> 0:13:26.760 for single stock ETF, for short ETF because those are 0:13:26.800 --> 0:13:30.800 also you know that some people might criticize them, especially 0:13:31.000 --> 0:13:32.360 regulatory watchdogs. 0:13:32.640 --> 0:13:35.640 Yeah, no, it's not more difficult because they're in the 0:13:35.679 --> 0:13:38.400 standardized rule set. And remember, leverage dtfs have been around 0:13:38.480 --> 0:13:41.640 for well over a decade and so you get leverage 0:13:41.679 --> 0:13:45.880 dtfs on broad equity indices, on broad fixed inco indices, 0:13:45.920 --> 0:13:50.000 on commodity indices, and individual commodities. So single stocks is 0:13:50.040 --> 0:13:53.760 really just a continuation of an already big and successful category. 0:13:54.600 --> 0:13:57.880 What's next for you guys in terms of new ETFs coming. 0:13:57.920 --> 0:14:01.319 Yeah, for us, I think more single stock products is 0:14:01.640 --> 0:14:04.439 where we're seeing the growth. We're seeing the action in 0:14:04.480 --> 0:14:06.360 the market. You know, this is this is almost like 0:14:06.360 --> 0:14:10.160 a perfect market environment for these products because it's very volatile. 0:14:10.679 --> 0:14:15.080 People really don't know how to trade this market. In 0:14:15.080 --> 0:14:17.880 other words, don't have high conviction that the market's going 0:14:18.480 --> 0:14:21.080 massively up in one direction or massively down in the direction. 0:14:21.520 --> 0:14:23.880 So you see a lot of volatility in these names, 0:14:23.920 --> 0:14:27.480 and that's what you know, traders active investors really like 0:14:27.520 --> 0:14:29.880 and that's why they love these leverage single stocks. 0:14:30.520 --> 0:14:35.600 Does the rising rate environment affect your day to day 0:14:36.200 --> 0:14:36.920 work at all. 0:14:38.120 --> 0:14:41.400 For these products, I would have to say it's almost 0:14:41.440 --> 0:14:45.080 a benefit because people want to try and make more 0:14:45.120 --> 0:14:49.920 money in a world where the returns by definition you know, 0:14:50.000 --> 0:14:53.240 are less because of the high rates. So it works well. 0:14:53.280 --> 0:14:54.880 But for some of our other products, you know, we 0:14:54.920 --> 0:14:59.200 have income products clear that were even though our product hips, 0:14:59.240 --> 0:15:02.600 for example, about ten percent per annum. That was awesome 0:15:02.880 --> 0:15:06.040 when yields were zero, but now yields are a lot higher. 0:15:06.240 --> 0:15:09.640 It's sort of cutting half. It's still attractive product. It's 0:15:09.760 --> 0:15:12.960 just you know, that's harder environment for those income products. 0:15:13.000 --> 0:15:15.680 But it doesn't change like the data day mechanics of 0:15:15.720 --> 0:15:16.800 creation and redemption. 0:15:17.000 --> 0:15:19.160 No, No. Interesting. 0:15:19.200 --> 0:15:22.760 I always find that kind of that kind of detail 0:15:22.920 --> 0:15:25.560 really fascinating because it's something that you don't have to 0:15:25.600 --> 0:15:27.880 understand to trade ETFs, and most people don't. 0:15:28.080 --> 0:15:29.440 Well what it does do Matt, I mean, this is 0:15:29.440 --> 0:15:32.560 probably a bit of inside baseball, but I do think 0:15:32.600 --> 0:15:35.520 that the environment for getting seed capital for bringing ETFs 0:15:35.560 --> 0:15:38.680 to launch has gotten harder because seed capital is typically 0:15:38.720 --> 0:15:41.400 given to you by a third party firm, typically a 0:15:41.440 --> 0:15:44.680 market maker or a broker, so their financing costs have 0:15:44.720 --> 0:15:47.360 gone up for the cost of them providing that seed 0:15:47.360 --> 0:15:49.400 capital that you has gone up, so that makes it 0:15:49.440 --> 0:15:50.160 more challenging. 0:15:50.480 --> 0:15:52.520 How long will you I mean, if you bring a 0:15:52.520 --> 0:15:56.920 new product to market, it takes a while to get 0:15:56.960 --> 0:16:01.520 inflows assets under management. Well, how long will you go 0:16:01.600 --> 0:16:03.400 before you say, Okay, this is a hit or this 0:16:03.440 --> 0:16:04.720 is a miss, and we're going to shut it down. 0:16:05.240 --> 0:16:08.240 I think nowadays we're much more ruthless about that than 0:16:08.280 --> 0:16:10.520 perhaps we were a few years ago, and I think 0:16:10.560 --> 0:16:13.360 the taboo around shutting products has really gone. 0:16:13.120 --> 0:16:16.560 Away, and so that large totally no one cares so exactly. 0:16:16.640 --> 0:16:19.680 So I think a year maximum will probably go before 0:16:19.760 --> 0:16:22.600 making a call if something's taken or not. And this market, 0:16:22.640 --> 0:16:25.440 I think is a good market to do that, because 0:16:25.480 --> 0:16:28.480 people have gotten so used to ETFs that I think 0:16:28.520 --> 0:16:30.720 you can tell fairly quickly if something's going to take 0:16:30.840 --> 0:16:31.000 or not. 0:16:31.160 --> 0:16:33.680 Yep, hey, well thanks so much for joining us. 0:16:33.680 --> 0:16:33.920 Again. 0:16:33.960 --> 0:16:36.000 Has always loved check it in with you, will Ryan. 0:16:36.040 --> 0:16:39.680 He's the chief executive officer at Granted Chairs Advisors, LLC. 0:16:39.880 --> 0:16:42.640 Talking ETF, you're listening to the tape. 0:16:42.840 --> 0:16:46.160 Catch a live program Bloomberg Markets weekdays at ten am 0:16:46.200 --> 0:16:50.200 Eastern on Bloomberg Radio, the tune in app, Bloomberg dot Com, and. 0:16:50.160 --> 0:16:51.480 The Bloomberg Business App. 0:16:51.520 --> 0:16:54.320 You can also listen live on Amazon Alexa from our 0:16:54.360 --> 0:16:58.760 flagship New York station, Just say Alexa Play Bloomberg eleven thirty. 0:17:00.040 --> 0:17:00.920 Have some M and A news. 0:17:00.920 --> 0:17:04.159 Today, Kroger and Albertson's agreed to sell four hundred and 0:17:04.200 --> 0:17:09.440 thirteen stores to CNS wholesale Grocers in a divestiture designed 0:17:09.440 --> 0:17:13.040 to help win antitrust approval for their twenty four point 0:17:13.200 --> 0:17:15.199 six billion dollar merger. Let's break that down with a 0:17:15.200 --> 0:17:18.960 couple real pros here, Jenri and Jen bartashis to both 0:17:19.000 --> 0:17:22.520 the Bloomberg Intelligence Generally, she covers all the antitrust stuff. 0:17:22.560 --> 0:17:26.880 For Bloomberg Intelligence generally is our retail anels covering the supermarkets. 0:17:26.880 --> 0:17:29.359 And they join us here, Jenri, Let's start with you 0:17:29.520 --> 0:17:32.520 here in our Bloomberg Interactive Broker studio. Is this enough 0:17:32.760 --> 0:17:33.600 for the regulators? 0:17:34.000 --> 0:17:36.360 You know, I'm not so sure. I'll say, I think this. 0:17:36.320 --> 0:17:38.480 Will exactly take a tough views I. 0:17:38.400 --> 0:17:40.480 Do, you know, I'm just skeptical. Look at what the 0:17:40.560 --> 0:17:42.520 ftc has been doing for the last couple of years. 0:17:42.520 --> 0:17:44.480 And the line they drew in the sand. You know, 0:17:44.520 --> 0:17:46.639 when this administration came in, they said, you know what, 0:17:46.680 --> 0:17:49.520 we're not going to settle deals that have problems anymore 0:17:49.560 --> 0:17:51.879 because we've been doing that for forty years and it 0:17:51.920 --> 0:17:54.680 hasn't worked. It's left us with markets that are too concentrated. 0:17:54.720 --> 0:17:56.800 So we have to take a different approach. And they've 0:17:56.840 --> 0:17:59.520 done that. They've taken a different approach even where companies 0:17:59.560 --> 0:18:02.400 offer up what I think is a pretty fulsome agreement 0:18:03.400 --> 0:18:06.440 to settle this matter. But here's the thing, they've been 0:18:06.480 --> 0:18:09.320 losing in court because the judges look at these divestiture 0:18:09.359 --> 0:18:12.359 agreements and the commitments that the companies are willing to make, 0:18:12.359 --> 0:18:14.879 and they say, look, FDC, this is good enough to 0:18:15.600 --> 0:18:18.200 fix these problems that you've outlined. And I think that's 0:18:18.240 --> 0:18:20.720 what's going to happen here. I think even if the 0:18:20.840 --> 0:18:24.240 FTC doesn't like this matter, they think theyre groceries. It's 0:18:24.240 --> 0:18:27.760 food prices, it's sensitive to consumers. We have a problem 0:18:27.800 --> 0:18:31.240 with this. The chair Lenacon has written extensively about having 0:18:31.280 --> 0:18:34.720 issues with grocery mergers and thinking they're problematic. But I 0:18:34.720 --> 0:18:37.760 think when these two companies exactly get that and go 0:18:37.800 --> 0:18:40.159 into court with this agreement, they have a really good 0:18:40.200 --> 0:18:41.320 shot at winning in court. 0:18:41.520 --> 0:18:45.280 Jen Bartasha's jump in here and tell us what investors 0:18:45.400 --> 0:18:47.439 view of this deal is. 0:18:48.600 --> 0:18:51.879 Well, you know, obviously tailing off of what Jen just said, 0:18:52.400 --> 0:18:54.600 you know, I think ultimately this deal will go through. 0:18:55.480 --> 0:18:58.199 You know, there are a lot of things that can happen, 0:18:58.320 --> 0:19:02.280 you know, with a combined Kroger and Albertson's entity that 0:19:02.280 --> 0:19:05.320 that ultimately could be good for the industry. But one 0:19:05.400 --> 0:19:08.000 of the things I think is interesting about CNS as 0:19:08.040 --> 0:19:10.840 a as a buyer in the situation is that their 0:19:10.840 --> 0:19:13.800 primary businesses as a wholesaler. It's not as a retailer. 0:19:14.560 --> 0:19:17.679 They do own Grand a couple of Grand Union stores, 0:19:17.720 --> 0:19:21.040 and they own Pigley Wiggly Midwest, but those are larger, 0:19:22.520 --> 0:19:26.160 but those are largely franchised operations. And when you look 0:19:26.160 --> 0:19:30.840 at the track record of wholesalers that also operate retail 0:19:31.000 --> 0:19:34.560 operate retail stores, there's not the greatest track record there. 0:19:34.840 --> 0:19:36.800 So to me, that could be one area where the 0:19:36.880 --> 0:19:39.960 FTC might push back on CNS as a as a buyer, 0:19:40.520 --> 0:19:42.800 only in that you know, Super Value was a was 0:19:42.840 --> 0:19:45.960 a distributor. They sold off the Shoppers chain that they 0:19:45.960 --> 0:19:48.680