Speaker 1: This is Bloomberg business Week inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus
Speaker 1: global business, finance and tech news. The Bloomberg Business Week
Speaker 1: Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.
Speaker 2: Well, our and best founder, CEO and CIO, Kathy Wood
Speaker 2: joined our etfiq team to discuss the race for a
Speaker 2: spot bitcoin ETF. Here's just a little bit of what
Speaker 2: she had to say.
Speaker 3: In June when Blackrock announced its filing, or when it
Speaker 3: was announced that Blackrock had filed for Bitcoin ETF, the
Speaker 3: bitcoin price did shoot up, but has been fairly stable
Speaker 3: since then, so I do think it's.
Speaker 4: Had an impact.
Speaker 3: A bigger impact this year was the regional bank crisis.
Speaker 3: It was very interesting to watch bitcoin go from nineteen
Speaker 3: thousand to thirty thousand right in the middle of that
Speaker 3: banking crisis as a regional banks were going bankrupt.
Speaker 4: So it was a flight to safety.
Speaker 3: So I thought that move was just as interesting.
Speaker 5: And a flight to safety is buying bitcoin somehow a
Speaker 5: flight to safety, Isn't it a little too volatile for that?
Speaker 3: Well, if you think about it, bitcoin serves as two
Speaker 3: kinds of hedges. One is a hedge against inflation and
Speaker 3: outright confiscation of wealth. The other is against counterparty risk.
Speaker 3: And you know, when the regional banks started going down
Speaker 3: this fear sort of you know memory, our memories are fresh.
Speaker 3: With eighth nine, the counterparty risk became real and so
Speaker 3: there was this flight into Bitcoin, a completely decentralized, transparent
Speaker 3: network which is not subject to counterparty risk.
Speaker 5: Kathy, So you are in this race. Let's talk about
Speaker 5: the race a little bit. The first important deadline coming
Speaker 5: up is August thirteenth, where the ARC filing. The SEC's
Speaker 5: either going to delay it, which we think they'll probably
Speaker 5: delay it, and then Blackrock is later. You filed before Blackrock,
Speaker 5: but Blackrock came in with the surveillance sharing agreement with
Speaker 5: coinbase that was novel. Right now, we're looking in the future.
Speaker 5: There's talk of a common clock where the SEC could
Speaker 5: approve a bunch of ETFs at once, putting you on
Speaker 5: a level playing field with Blackrock and others. What's your
Speaker 5: take on how this will play out? Given you filed earlier.
Speaker 3: I think you're probably right that August thirteenth will come
Speaker 3: and go, and I think I think the SEC, if
Speaker 3: it's going to approve a bitcoin ETF will approve more
Speaker 3: than one at once, so then again because most of
Speaker 3: these essentially will be the same, and it will come
Speaker 3: down to marketing communicating the message. You know, we've been
Speaker 3: putting out our bitcoin monthly for the last year. We
Speaker 3: are now starting a bitcoin brainstorming session. Our first one
Speaker 3: we launched last Thursday. So we're trying to get the
Speaker 3: word out there that you know, our research is deep
Speaker 3: and we've been doing it since twenty fifteen when we
Speaker 3: gained our first exposure to GBTC. We were the first
Speaker 3: public asset manager to gain exposure to bitcoin at all
Speaker 3: in twenty fifteen.
Speaker 6: That's exactly where I want to go. The Grayscale Bitcoin Trust,
Speaker 6: known by its ticker GBTC. If you look at ARCW
Speaker 6: for example, your ARC next Generation Internet ETF. Right now,
Speaker 6: I see GBTC as the third largest holding. If we
Speaker 6: are in a situation where the SEC does give its
Speaker 6: blessing for a spot bitcoin ETF, would you plan to
Speaker 6: sell out of GBTC and buy one of these physically backfunts.
Speaker 3: I cannot talk about what we would and would not do,
Speaker 3: and in fact, our compliance team is giving us marching
Speaker 3: orders not to talk very much about this filing and
Speaker 3: it's aftermath at all. So just the fact that we
Speaker 3: filed with our partner twenty one shares is as far
Speaker 3: as as I can go.
Speaker 4: Fair sorry, Katie, fair.
Speaker 6: Enough, No, I was expecting something along those lines. I
Speaker 6: am curious to get your take on the regulatory temperature
Speaker 6: right now, because in addition to this rush of spot
Speaker 6: bitcoin ETF filings that we've seen, there's also been sort
Speaker 6: of a race that's unfolding for an ether futures ETF.
Speaker 6: There's been a ton of filings to that effect, and
Speaker 6: not specific to those funds. But do you sense that
Speaker 6: the moon music around the SEC and what their appetite
Speaker 6: to allow these products to launch has changed in the
Speaker 6: last several months.
Speaker 3: Well, I think that the two other branches of government,
Speaker 3: the judicial branch and the legislative branch, are giving the
Speaker 3: SEC pause because the SEC is losing cases in court
Speaker 3: having to do with its regulations around crypto, that's the
Speaker 3: first thing. And there are bills that are making their
Speaker 3: way through the House and are seeing some bipartisan support.
Speaker 2: All right, Well, there you have it. That was our
Speaker 2: coinvest founder CEO in Cio, Kathy. Would she spoke earlier
Speaker 2: with our ETF IQ team on Bloomberg Television. Now one
Speaker 2: such member of that team, Bloomberg Intelligence Senior ETF analyst
Speaker 2: Eric Beltchunas he joins us now to discuss his takeaways
Speaker 2: from their conversation. So we just got to hear Eric
Speaker 2: about four minutes of that interview with Kathy Wood talking
Speaker 2: about multiple bitcoin ETFs. There was some stuff she didn't
Speaker 2: touch on though in that clip. Give us big takeaways
Speaker 2: from here interview this afternoon.
Speaker 5: Yeah, I think the first block was on crypto couple takeaways.
Speaker 5: She kind of agreed that probably if the SEC is
Speaker 5: going to prove, it'll be a bunch at once, so
Speaker 5: you might have like three or four out the same day.
Speaker 5: That's weird because when they approve the future's ETF bidows first,
Speaker 5: and if you're out even by a day, you can
Speaker 5: get all the volume. It's called first mover advantage and
Speaker 5: it's big in the ETS base. So I don't think
Speaker 5: the SEC wants play kingmaker here. I think they'll probably
Speaker 5: put about a couple out at once, but ARC is
Speaker 5: in the main race, so it could be ARC, Black Rock, Fidelity,
Speaker 5: something like that. She also talked about how Grey scale
Speaker 5: is probably going to lose their case, I mean, win
Speaker 5: their case against the SEC. That's kind of another loss
Speaker 5: the SEC would take, and we think that's that would
Speaker 5: further put them into a politically untenable position where they
Speaker 5: have to approve it. So all this stuff was I
Speaker 5: think bullish. Also, she talked about Coinbase being the most
Speaker 5: compliant of the exchanges. That's also good for spot back
Speaker 5: coin ETF approval hopes because that's the exchange that all
Speaker 5: of them are connected to in the filings, and so
Speaker 5: I think the idea is if Coinbase can be seen
Speaker 5: by the SEC is willing to play ball a little
Speaker 5: bit share information, they'll feel more comfortable approving the spot ets.
Speaker 5: That's been the hanging up the whole time. But obviously
Speaker 5: we had other segments on single stocks and geography. I'm
Speaker 5: not sure if you want to get into those, but
Speaker 5: that's the crypto takeaway.
Speaker 7: What's the timetable for as far as when this could
Speaker 7: be approved for this spot b co on ETF.
Speaker 5: Yeah, so James and I have a sixty five percent
Speaker 5: chance of approval this year. We think that it won't
Speaker 5: it'll if you know, October, November, December, obviously, are there
Speaker 5: likely times the Greyscale suit, which we could get a
Speaker 5: ruling on in the next month. That could fast track
Speaker 5: the timetable. There's a lot of unknowns here, but I
Speaker 5: do know we give a higher percentage chance that they're
Speaker 5: going to approve ether futures. But they had originally said
Speaker 5: they're not doing that. There's been like five different attempts
Speaker 5: to get one of these and they always tell people
Speaker 5: to withdraw. Well, now they're not. We have good information
Speaker 5: that they're actually going to let ether futures comes out,
Speaker 5: So that's a policy shift there. So again, if they
Speaker 5: let the ether futures out, they come out October, so
Speaker 5: maybe we're looking November December. Again, we still have a
Speaker 5: thirty five percent chance it doesn't happen. So it was
Speaker 5: just like basically not a done deal at all. But
Speaker 5: I think the winds are shifting. You can feel that.
Speaker 5: There's a bunch of little details on why. But that's
Speaker 5: our take.
Speaker 2: Okay, single Stocks, what does she say?
Speaker 5: Yeah, we asked her about Tesla and the new CFO
Speaker 5: or the CFO leaving. She was okay with that.
Speaker 2: Yeah, Zach Kirkhorn has been there for thirteen years, so
Speaker 2: I want to say he's like a really young guy,
Speaker 2: because he's younger than I am. But he's been there
Speaker 2: for thirteen years, so I don't know how young I
Speaker 2: am anymore.
Speaker 5: That also seems like that's a long time for Tesla.
Speaker 5: How old is that company? Right?
Speaker 2: I mean I think it was like his job at
Speaker 2: a business school.
Speaker 5: Also, she was.
Speaker 7: Selling Roku recently too.
Speaker 5: Yeah, well, the Roku, it's weird. In Kathy's portfolio. She
Speaker 5: tries to maintain weights. So sometimes if a stock go's
Speaker 5: on a run, she will sell some to maintain the
Speaker 5: nine percent waiting or whatever, and it looks like she's
Speaker 5: selling one of her favorite names. But I try to
Speaker 5: look at the percentages, and Roku she's actually increased percentage
Speaker 5: over the past year, so I would say she's bullish
Speaker 5: Roku bullish coinbase. That percentage has gone up. So sometimes
Speaker 5: Kathy got to know, she's always trying to keep these
Speaker 5: weights in line, and so she can sell when it winners, right,
Speaker 5: and it looks like she's bearished, but she's just keeping
Speaker 5: the weight. We also asked her about more Tesla somehow
Speaker 5: the Elon Musk and Mark Zuckerberg fight came up.
Speaker 2: Somehow asked her who's her money On.
Speaker 5: I didn't see she kind of sidestepped that, but she
Speaker 5: said I she could. I think she could tell. She
Speaker 5: hopes Elon doesn't like hurt himself because he's got to
Speaker 5: run all these companies and so he got is a
Speaker 5: neck problem. And she's just like, I hope he takes
Speaker 5: care of himself.
Speaker 2: This has gotta not happen. This can't happen. This is ridiculous.
Speaker 5: So my theory is the whole thing is to do
Speaker 5: it on X or Twitter, and that's that's what he's
Speaker 5: really trying to do. This is all to get attention.
Speaker 2: And eyeballs threads think.
Speaker 5: Well, maybe if so, that would be fair. But if
Speaker 5: it's only on X, I would say Elon Musk won
Speaker 5: the real fight.
Speaker 7: Right well, Eric bel so great to meet you finally
Speaker 7: in person in the Bloomberg game.
Speaker 2: You guys didn't know each other. Bringing people together.
Speaker 7: Here right etf analysts at Bloomberg Intelligence. Such a pleasure
Speaker 7: meeting you in person when you do all things for Bloomberg.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 2: Jess, my question for you is have you heard of
Speaker 2: live shopping? I already asked you this.
Speaker 7: Well, so I hadn't before, and then I started looking
Speaker 7: things up and then I knew. I was like, I
Speaker 7: knew exactly what this is.
Speaker 2: I just didn't know all well, I was. What's crazy
Speaker 2: is Amazon has like added it to their app. Right,
Speaker 2: so if you if you there's this redesign of the
Speaker 2: Amazon app that happened at some point recently. So if
Speaker 2: you click on like this little ideas thing, it turns
Speaker 2: into this sort of like Instagram stories of shopping.
Speaker 7: It does friends that actually use that. And so now
Speaker 7: I'm hope we're still like do I need to jump
Speaker 7: on the spamwag?
Speaker 2: Okay, well we've got a great guest to talk all
Speaker 2: about this. Mary Garrimani is joining us. She's the CEO
Speaker 2: of Bamboozer. It is a company that creates a shoppable
Speaker 2: video and live shopping shows for retailers. You with us, Mary,
Speaker 2: how are you?
Speaker 4: I'm good, thank you, Happy to be here with you guys.
Speaker 2: Well, I really happy to have you here. As I
Speaker 2: was doing prep for this interview with you. I was
Speaker 2: looking for statistics about live shopping and it's pretty incredible
Speaker 2: to see. I mean I heard of it. I first
Speaker 2: heard of it through like stories about China because the
Speaker 2: way it blew up in China during the pandemic. According
Speaker 2: to Insider Intelligence, nearly twenty percent of retail e commerce
Speaker 2: in China will be livestream commerce, with total sales rising
Speaker 2: to more than eight hundred and forty billion in twenty
Speaker 2: twenty five. That's a huge number. And then clarnas what yeah,
Speaker 2: and Clarna says that only twenty percent of shoppers in
Speaker 2: the US have actually said they've done live commerce, but
Speaker 2: thirty four percent say they haven't, hadn't participated, but they've
Speaker 2: they've heard of it. What are you seeing on your platform?
Speaker 8: So, I mean we are lagging quite a lot, I
Speaker 8: would say, looking to China. So it took almost five years,
Speaker 8: you know, for this new channel to become really it
Speaker 8: has really transformed the retail industry in China and it
Speaker 8: establish itself as you know, a major sales channel.
Speaker 4: But it took them five years.
Speaker 8: And just to go back to that, I mean, China
Speaker 8: is the world's largest e commerce market by far, So
Speaker 8: I would say that we see somewhat similar adaption, you know,
Speaker 8: trend in the US and Europe, but with the lag
Speaker 8: what I would say approximately five years, right, So it's
Speaker 8: really early days for the Western world and live shopping
Speaker 8: or video commerce as we like to frame it. So,
Speaker 8: I mean it's a huge market, it's growing, but of
Speaker 8: course the adoption is not where it is in China.
Speaker 7: I have to call out the retailers and companies that
Speaker 7: you are working with, one of them being QBC, which
Speaker 7: my mom is shopped at for decades, so I should
Speaker 7: probably ask her she's probably using this type of technology too.
Speaker 2: That you raise a good point, Jess, like this is
Speaker 2: a new QVC, right, yes.
Speaker 7: Definitely, and so other companies like Bloomingdale's, Dick Sporting Goods, Adidas, Clinique.
Speaker 7: I'll talk to us about how this works.
Speaker 4: So I would say, you know it is.
Speaker 8: It is a very different experience too, if you would
Speaker 8: experience live shopping on team model in China. So I
Speaker 8: would say the Western approach to video commerce or live
Speaker 8: shopping is much more educational. It's much more driven by
Speaker 8: education and really you know, connecting with the end consumer
Speaker 8: to create a platform to you know, have a better
Speaker 8: discovery phase, increase conversion, you know, build a stronger customer
Speaker 8: relation and releace returns. If I look to China, it's
Speaker 8: very driven by promotions, right, It's very promotion driven and
Speaker 8: very heavy on just pushing the consumer to shop. So
Speaker 8: looking at our customer base, I mean we work with
Speaker 8: a lot of Fortune five hundred companies, a lot of
Speaker 8: them you mentioned, and they are much more so They've
Speaker 8: tapped into our platform and is using Bamboozo technology to really,
Speaker 8: you know, add something that is is more likely to
Speaker 8: look like something you would do on social or what
Speaker 8: you started talking about, rather than just adding a video
Speaker 8: to their website to just sell something. Right, So it's
Speaker 8: much more about adding a layer on top of the
Speaker 8: very static shopping experience rather than just pushing promotion and
Speaker 8: making you know, the end consumers buy something. So I
Speaker 8: always say, in the Western world, you give something to
Speaker 8: the consumer, You give something to them and then you
Speaker 8: ask them to buy. In China you just ask them
Speaker 8: to buy. If you understand that the comparison between really
Speaker 8: how it's working outside.
Speaker 2: Of China, well, I feel like you know the thing
Speaker 2: that in correct me if I'm wrong, Mary, And I'm
Speaker 2: interested to see what you see on the platform. But
Speaker 2: the way that at least I shop online is I
Speaker 2: know what I want and then I go and I
Speaker 2: search for it, I find it.
Speaker 7: I'm the same way.
Speaker 2: It's not like you go and browse, right.
Speaker 7: No, I usually go exactly, it'll compare it to different
Speaker 7: places by what's the cheapest one?
Speaker 2: Yeah, exactly, So you're shopping based on price, but you
Speaker 2: go into it knowing that this is what you want. Mary,
Speaker 2: how do you change that experience? So going online to
Speaker 2: shop is less about what Jess and I do and
Speaker 2: more about like you're walking down Fifth Avenue and you
Speaker 2: see something that catches your interest and then go in
Speaker 2: a store.
Speaker 4: I would say it's it's a combination.
Speaker 8: So I would say it's where a product, discovery and
Speaker 8: purchase happens in a single journey. That does make sense
Speaker 8: for you, guys. So what we do with adding a
Speaker 8: video layer on top of an e commerce experience is
Speaker 8: that we really help the brands to bridge the offline
Speaker 8: and the online experience.
Speaker 4: Right.
Speaker 8: So I can give you a great example. So LVMH
Speaker 8: is one of our customers. We work with many of
Speaker 8: the Maison's and we just added so there is using
Speaker 8: our one to one solution to do consultations. So instead
Speaker 8: of you guys going to sex Fifth Avenue and going
Speaker 8: to ther counter and buying something, you could actually book
Speaker 8: that experience through bambooser platform. It would be of course
Speaker 8: we're native platforms, you would never see Bamboosuri. It would
Speaker 8: be a dr you know, player, just like the conversation
Speaker 8: we're having now on Zoom right, So it would be
Speaker 8: a player where you have a lot of interactivity where
Speaker 8: you can compare products, you can help the customer to
Speaker 8: add to Kart, and then you will go to the
Speaker 8: checkout right. So it's really enriching the customer experience and
Speaker 8: helping them and then you know, we you know, one
Speaker 8: to one solution. For example, with your we actually have
Speaker 8: a virtual try on, so I could actually try on
Speaker 8: the lipstick I want to buy and see how that
Speaker 8: looks on me before I add it to cart. So
Speaker 8: it's really adding the journeys that you guys talked about,
Speaker 8: but combining them in one single journey.
Speaker 7: We only have about thirty seconds left. But based on
Speaker 7: what you're seeing, do you think the economy is headed
Speaker 7: for a recession? On those shopping trends you're viewing.
Speaker 8: Good question, I would say, I mean, we're seeing a
Speaker 8: slowdown in retail overall. It's you know, because of the
Speaker 8: macro and how the economy looks. I would say we're
Speaker 8: seeing that. You know, we're live in most countries and
Speaker 8: work across a lot of more sutiple markets. I would
Speaker 8: say what we see as trends is really you know,
Speaker 8: going more towards a sustainable way of shopping and really
Speaker 8: helping the consumers to make better purchase decisions by adding,
Speaker 8: you know, different type of technologies, ours being one of them.
Speaker 2: Mary Good, I have to leave it there. Thank you
Speaker 2: so much for joining us this afternoon. Mary Garrimani is
Speaker 2: CEO of the online shopping platform live shopping platform Bambooser,
Speaker 2: joining us this evening from Italy.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 2: Well, a lot of big professional moves come in today.
Speaker 2: Jeff Curry, the prominent commodities analyst known for making bold
Speaker 2: and often bullish pronouncements. Is leaving Golden Sachs Group after
Speaker 2: twenty seven years, and ubs We've happening the leadership of
Speaker 2: its investment banking division as lender presses ahead with its
Speaker 2: integration of former rival Credit Suisse. Joining us now to
Speaker 2: tell us about all these big people moves is Bloomberg
Speaker 2: senior finance reporter shrinad Rajen Shred. Good to see you,
Speaker 2: good to have you with us. I got to tell you.
Speaker 2: I go to your bio page on the Bloomberg terminal,
Speaker 2: and I see the Goldman Commodities Research chief Jeff Curry
Speaker 2: set to leave story. I see b of a wealth
Speaker 2: chief risk officer leaving story. I see Goldman's Lisa Opoku
Speaker 2: joining a recent spate of partner departures. I see Goldman
Speaker 2: Investment chief exits after change is Royal Key unit. Like
Speaker 2: Jess said, I'm starting to see a pattern here with
Speaker 2: Goldman Sachs and a lot of these stories. What's going on?
Speaker 9: Can I say? Covering Wall Street is all about people
Speaker 9: in capitol? Right?
Speaker 1: Yeah?
Speaker 5: Right?
Speaker 9: There you go, all the money, but all the people.
Speaker 2: But is the door revolving like this all the time?
Speaker 7: I would say that.
Speaker 9: You know, when we look at all the names that
Speaker 9: have been reported in the last couple of weeks, this
Speaker 9: is the sixth partner exit out of Goldman. Late July
Speaker 9: early August is not the time when we see a
Speaker 9: pickup in these names. So that has been a bit
Speaker 9: of a surprise.
Speaker 7: Do we know why? Like what the catalyst is, different reasons.
Speaker 9: You can't fit them all under one umbrella. There have
Speaker 9: been a number of people like Julian Salisbury. Those were
Speaker 9: people on the rise inside Goman. Those were handpicked by
Speaker 9: the CEO for better, bigger roles, and they suddenly leave.
Speaker 9: It's quite interesting. On the other hand, you have people
Speaker 9: like Jeff Curry, who's been there nearly thirty years, who's
Speaker 9: done all that you need to do in that space,
Speaker 9: who is the de facto celebrity in the world of
Speaker 9: commodity analysts, right that's the most recognizable name. He's the
Speaker 9: most recognizable brand out there. So you can't really tack
Speaker 9: him on to some of the other departures, but it
Speaker 9: is a serious brand name inside Goman, and his departure
Speaker 9: will have an impact on their franchise.
Speaker 7: And tell us about who's taking his place.
Speaker 9: You sometimes appreciate the value of a person when you
Speaker 9: realize that he's being replaced not by one person, but
Speaker 9: by three people.
Speaker 7: And that's what stuck out to me. There's three or
Speaker 7: four different names on there.
Speaker 9: It's also entirely possible Goldman just doesn't want a broad
Speaker 9: head of commodities research anymore, and that's why there's someone
Speaker 9: who runs there are oils research business, they're natural gas research,
Speaker 9: they're metals research. Now Goldman and Commodities. It's a storied franchise,
Speaker 9: it's a storied name. It's it's it's been a name
Speaker 9: everyone in the market looks that. Pre crisis, Goldman, Sachs
Speaker 9: and Morgan Stanley used to be known as the Wall
Speaker 9: Street refiners just because of sort of the physical and
Speaker 9: financial trailing they used to do. The structure in the
Speaker 9: shape of that business has changed a lot, but commodity
Speaker 9: is still a big engine, a big driver of the
Speaker 9: Goldman trading machine, which by the way, is pretty damn
Speaker 9: good on Wall Street and it is one of the
Speaker 9: best out there. So anytime you hear from the research
Speaker 9: folks at Goldman, they may not always be right, but
Speaker 9: people certainly want to pay attention.
Speaker 2: Where's he going?
Speaker 9: Do we know as of now, it looks like he doesn't.
Speaker 9: He's not taking on any other job immediately. He's spending
Speaker 9: some time with family, has two young kids. So you know,
Speaker 9: after almost thirty years in a high pressure job where
Speaker 9: everyone's paying attention to everything, you say, maybe it is
Speaker 9: well deserved rest for him.
Speaker 2: You're here, I have to agree with that.
Speaker 7: When I wanted to switch it over and just talk
Speaker 7: about the UVS revamp in leadership, because while Tim was away,
Speaker 7: we did have that shake up when it came to
Speaker 7: the regional banks, but then also heard about that. But
Speaker 7: then also not just the smaller banks, you did have
Speaker 7: this banking giant UBS that did buy it's troubled rival,
Speaker 7: Credit Sueeze. So when I'm seeing these leadership changes at ubs,
Speaker 7: how much of this is playing it into it and
Speaker 7: really impacted because of what had happened within Credit Sueeze.
Speaker 9: Oh, it's all about that right now, You've made this
Speaker 9: big decision Switzerland. The banking landscape in Switzerland has been
Speaker 9: altered and altered dramatically when you have this combination of
Speaker 9: UBS and Credit Squeeze. Now what's important is to make
Speaker 9: sure that the merger goes smoothly, make sure that they're
Speaker 9: able to execute on the indig because a lot hinges
Speaker 9: on that, and part of that, when you have this
Speaker 9: gigantic memo that names forty different people into various leadership positions,
Speaker 9: it obviously forces a lot of homework on people just
Speaker 9: to just to get their arms around what all the
Speaker 9: changes are. But in some ways, there's also ubs reiterating
Speaker 9: what their focus areas are, what their interest areas are,
Speaker 9: and you have about a dozen or so Credit Suitez
Speaker 9: investment bank is also getting roles, which is to say,
Speaker 9: not everyone who's in investment banking at Credit Suitez would
Speaker 9: be undesirable at ubs. They certainly want to keep the
Speaker 9: cream of the crop.
Speaker 7: Shre.
Speaker 2: I'm thinking back to the conversations that we've had with
Speaker 2: you over the last two or three years, and if
Speaker 2: we kind of think about them in terms of themes,
Speaker 2: we can think about the talent, the talent wars of
Speaker 2: twenty twenty and twenty twenty one. We can think about burnout,
Speaker 2: and we can think about over the last couple of
Speaker 2: years on Wall Street, people going to crypto firms or
Speaker 2: going to join private equity firms, in some cases joining
Speaker 2: tech firms. Where's the pole coming from today.
Speaker 9: Twenty twenty one, we're time to be alive. When all
Speaker 9: the analysts could go out there and say, hey, we
Speaker 9: might be the junior most people, but you better pay
Speaker 9: us a lot of money.
Speaker 2: Look at it, Look at the PowerPoint deck that we created.
Speaker 9: Exactly right now, it's all about police. Let us stay
Speaker 9: in our jobs.
Speaker 2: How the tables have turned.
Speaker 9: There are absolutely a lot of opportunities out there right today,
Speaker 9: but the difference being if previously two years ago, almost
Speaker 9: anyone could find a role because everyone was all on
Speaker 9: hands on deck. There were so many deals happening, so
Speaker 9: many transactions happening, you needed to put bodies to work.
Speaker 9: Now the opportunities are more geared towards the top performers,
Speaker 9: those who are doing really well, those who are absolutely desired.
Speaker 9: It is not that you just show up, put your
Speaker 9: arm up, hand up and say I want a job.
Speaker 9: You will get one. And I think that's the big difference.
Speaker 9: So you will probably still see headlines of talented names
Speaker 9: and brand names going elsewhere, but it's more about who
Speaker 9: they are than what seat they're taking on.
Speaker 7: I feel like this is the Hunger Games, right especially
Speaker 7: when you think about how competitive that type of environment
Speaker 7: is what anecdotally do you hear whenever you speak to
Speaker 7: your sources, especially if there's maybe people earlier in their
Speaker 7: careers that are trying to get to that point.
Speaker 9: You know, all of this goes through in a cycle.
Speaker 9: I still vividly remember about two years ago we spoke
Speaker 9: to the former CEO of Goldman Sacks, Lloyd Blankfind, and
Speaker 9: he was you know, he made a very pointed reference
Speaker 9: at that time. It because remember a lot of the
Speaker 9: junior banker agitation caught a lot of attention because of
Speaker 9: what happened inside Goldman Sachs, the PowerPoint deck that Tim
Speaker 9: was talking about, and blank Find was very clear back
Speaker 9: then that all these things go in a cycle, and
Speaker 9: you know, you might feel like you have the upper
Speaker 9: hand right now, but that will not always be the case.
Speaker 9: And he was right. The cycle has turned. It has
Speaker 9: become harder at a lot more people are sitting around
Speaker 9: twiddling their thumbs because deal activity has completely fallen off
Speaker 9: a cliff. Which is why I sort of like go
Speaker 9: back to the earlier point I made is now you
Speaker 9: really need to stand out. Just because you showed up
Speaker 9: and have a role does not mean you are immediately
Speaker 9: wanted in all corners, inside the bank, outside the bank,
Speaker 9: outside your firm. You really have to be able to
Speaker 9: stand out to be wanted.
Speaker 2: Now, what's the projection look like.
Speaker 9: We've been talking about green shoots out there, right We've
Speaker 9: been talking about a pickup in activity the first seven
Speaker 9: months of the year, investment, banking, the deal deal environment's sluggish.
Speaker 9: But the challenge with talking about green shoots right now
Speaker 9: is we're already in the second week of August. You're
Speaker 9: heading into the summer doldrums. So you're not going to
Speaker 9: see a ton of deals in the rest of August,
Speaker 9: September post Labor Day, you know, as New York gets
Speaker 9: off it's post US Open, tennis high you're hoping that
Speaker 9: there will be people out there willing to do deals again.
Speaker 2: You read my mind. My last question is about tennis.
Speaker 9: But let's point out one important thing though. You have
Speaker 9: that the possibility of government shutdown again. You know, there's
Speaker 9: sort of Washington Games being played again, and that deadline
Speaker 9: is October one. That could throw a spanner on the
Speaker 9: works for September. And if that's actually something that drags on,
Speaker 9: let's hope it does not. But if that becomes a
Speaker 9: bit of an issue, then you're again heading towards you're in. Unfortunately,
Speaker 9: twenty twenty three might be a wash, just like twenty
Speaker 9: twenty two.
Speaker 2: Okay, thirty seconds, we have to talk about what's gonna
Speaker 2: happen at the US Open this year. This is your
Speaker 2: favorite month because it's the beginning of the US Open
Speaker 2: and you spend a lot of time there. We'll be
Speaker 2: there for Bloomberg Radio. What do you think for the
Speaker 2: finals this year? For the on the men's side, in
Speaker 2: Alcoraz Djokovic final.
Speaker 9: Ah, that would be delightful, wouldn't it. You have you
Speaker 9: already saw what the two of them can bring into
Speaker 9: consecutive Grand Slams. Now, the French Open sadly curtailed a
Speaker 9: little bit because of injury, and definitely they epic at Wimbledon,
Speaker 9: and we saw the exploits of Alcaraz in New York.
Speaker 9: He certainly won a lot of fans in this city.
Speaker 9: So if this city can get an al Karaz Djokovic final,
Speaker 9: we'll take that, even if we've never gotten a Federal
Speaker 9: at all.
Speaker 2: I'd like to see Tiafo in there as well. He's
Speaker 2: such a crowd pleaserre on the women's side, Jessica Pagoula
Speaker 2: would be awesome too, you know, rooting for the American
Speaker 2: from Buffalo, That would be very cool, should we not?
Speaker 2: Oajin Good to have you with us.
Speaker 10: A Bromac.
Speaker 2: A journal.
Speaker 10: Now about you?
Speaker 7: Let me drive?
Speaker 2: Oh no, no, no, no, who's going?
Speaker 1: Honry? Please, I'll do the gravel.
Speaker 7: Wait, I want to drive.
Speaker 2: It's a good question that try.
Speaker 1: This is the drive to the clothes well by an
Speaker 1: on Bloomberg Radio.
Speaker 2: It's hard to believe it's about that time. We're just
Speaker 2: shy of eighteen minutes away from the clothes of equity
Speaker 2: trading here on this Monday afternoon. And what a Monday
Speaker 2: it is. The Dow Jones Industrial average higher by more
Speaker 2: than one percent, the SMB five hundred dire by close
Speaker 2: to eight tenths of one percent, of the Nasdaq moving
Speaker 2: higher by more than four tenths of one percent. For
Speaker 2: some commentary, not just on today's trade, but on the
Speaker 2: macroeconomic environ in and really how he's deploying clients money.
Speaker 2: Let's turn now to Dave Donabedian, chief investment officer at
Speaker 2: CIBC Private Wealth Management. Dave, good to have you back
Speaker 2: with us. How are you I'm good, tim are you. Yeah,
Speaker 2: we're doing pretty well. Thanks having a good summer. Thank you. Uh,
Speaker 2: the US equity market certainly having a good six months.
Speaker 2: How do things feel to you right now? Sentiment wise,
Speaker 2: It's interesting.
Speaker 10: I think the you know, the first five months of
Speaker 10: the year, obviously, we're tremendous in the sensitive you look
Speaker 10: at the you know five month returns on the SMP,
Speaker 10: you know, phenomenal start to the year. But as we know,
Speaker 10: it was driven by that handful of stocks that had moonshots,
Speaker 10: and had that environment continued, I would have been concerned about,
Speaker 10: you know, an outright bubble developing in the market because
Speaker 10: it was so unbalanced. I'm interested and I think pleased
Speaker 10: to see you. In the last two months, it's been different.
Speaker 10: A lot of those moonshot stocks have slowed down, some
Speaker 10: of them have corrected a little bit. And if you
Speaker 10: look over the last couple of months, the equal weighted
Speaker 10: S and P has actually done better than the market
Speaker 10: cap weighted version, indicative of more sort of balance in
Speaker 10: the market. So to me, the kind of the technicals
Speaker 10: feel better today than they did, say back in April
Speaker 10: or May.
Speaker 7: And you bring up the last two months, especially with
Speaker 7: the equal weighted index for the S and P five coundry,
Speaker 7: but also more cyclically oriented sectors in the market, like
Speaker 7: industrials materials picking up some speed here. What's your view
Speaker 7: as far as your second half outlook after we saw
Speaker 7: such outperformance in the first half by tech and growth stocks.
Speaker 10: Yeah, again, I think we'll see more balance in terms
Speaker 10: of relative performance. But the other thing I think we'll
Speaker 10: see is we'll see a market that, frankly is more
Speaker 10: is more challenged and halting and maybe even have a
Speaker 10: somewhat of a pullback and correct or correction here sometime
Speaker 10: in the next few months. And that's simply because while
Speaker 10: many have thrown overboard the idea that there's a risk
Speaker 10: of recession, I unfortunately think there still is and in
Speaker 10: the short term anyway, that'll be you know, a potential
Speaker 10: source of a stumble by the market, because of course,
Speaker 10: question right.
Speaker 2: Talk more about that, Dave. What what is giving you
Speaker 2: the notion that we're not out of the woods yet?
Speaker 10: Yeah, I mean a lot of the data that investors
Speaker 10: have taken comfort from lately, UH retail sales last quarters, GDP,
Speaker 10: employment and so forth, are absolutely solid. The problem is
Speaker 10: they're they're coincident indicators. They tell you what happened today
Speaker 10: or what happened in the recent past. They have no
Speaker 10: predictive value. They don't tell you anything about the future.
Speaker 10: And when we look at the things that are more
Speaker 10: leading indicators, most of them are kind of troubling. The
Speaker 10: most obvious is the you know, intensely and persistently inverted
Speaker 10: yield curve number one, the index of leading economic indicators,
Speaker 10: which can give off all all kinds of false positives,
Speaker 10: but not at extreme readings. And it's added extreme reading
Speaker 10: and just the general idea. We know that, you know,
Speaker 10: the FED has raised rates more than five hundred basis
Speaker 10: points in a call it a sixteen month period, We've
Speaker 10: not begun to feel even you know, the minimal effects
Speaker 10: of that that lies ahead, the sort of anti growth
Speaker 10: impact of tight money lies ahead. So the leading indicators
Speaker 10: say there's still something to be concerned about with the economy.
Speaker 2: In other words, the long and variable lag of higher
Speaker 2: interest rates has not been.
Speaker 9: Felt, only a little bit.
Speaker 10: There's more to come.
Speaker 2: Like what percentage have been felt in your estimation?
Speaker 10: Oh, I don't know, a quarter maybe, okay.
Speaker 7: Okay, So then how are you positioning? What are you
Speaker 7: buying What are you selling?
Speaker 10: Yeah, generally, you know, recently we've been i'd say we've
Speaker 10: been doing more sort of trimming and adding to portfolios.
Speaker 10: We've been trimming, you know, some of the high flyers
Speaker 10: that have done extraordinarily well earlier in the year and
Speaker 10: are now at higher evaluation level. And we've been adding
Speaker 10: to the things that you know, are unloved but inexpensive
Speaker 10: in the markets, things like healthcare, utilities, roots.
Speaker 7: Some more defensive corners of the market, somewhat.
Speaker 10: More defensive, but but but we think of them. We're
Speaker 10: more interested in the valuation than the defensive characteristics.
Speaker 1: If you will.
Speaker 7: So, then if we do see a pullback five ten,
Speaker 7: what are you.
Speaker 10: Buying, Well, it'll depend where the pullback is and and
Speaker 10: and where they are. It's you know, a lot of
Speaker 10: the names that that that soared in the first five
Speaker 10: months of the year. It's not that we don't like
Speaker 10: those names, in fact, we own some of them. It's
Speaker 10: it's the price you pay for them. If we have
Speaker 10: a correction that focuses on a lot of those higher
Speaker 10: growth names and they have meaningful pullbacks, we you know,
Speaker 10: we'll be buyers there of the higher quality names at
Speaker 10: a more appropriate price.
Speaker 2: If a client comes to you with a lot of
Speaker 2: new money, how are you deploying it.
Speaker 10: We're deploying it, you know, slowly. On the equity side,
Speaker 10: you know, it's important when you're allocating money not to
Speaker 10: make all or nothing bets. You know, don't say how
Speaker 10: we're not going to invest in anything because we know
Speaker 10: there's a correction around the corner. You can wait forever
Speaker 10: for that to happen. At the same time, you don't
Speaker 10: throw it all into the market. So we've been been
Speaker 10: counseling patients putting money to work slowly over the over
Speaker 10: the over the weeks and months, with an emphasis on
Speaker 10: on stocks that have dividend growth potential, high quality names.
Speaker 10: And there will be a place in a growth oriented
Speaker 10: investor's portfolio for growth oriented stocks, but only at the
Speaker 10: right price, and a lot of them aren't there right now.
Speaker 7: What's the top question you hear from clients.
Speaker 10: It's probably still about the FED. What are they going
Speaker 10: to do next? I would say that said that's been
Speaker 10: pretty much the case for the last year of our
Speaker 10: view there is that they're done raising rates. They're still
Speaker 10: going to talk as if they might, but we think
Speaker 10: they're done, and again that's consistent with our forecast that
Speaker 10: core inflation is going to come down quite a bit
Speaker 10: of the next six months and their risk of recessions, so.
Speaker 7: They're more optimistic about inflation.
Speaker 2: Yeah, I will, Dave real quick. We only have thirty
Speaker 2: seconds left. If they're done raising rates, how long do
Speaker 2: they hold them here?
Speaker 10: Well, the futures markets tell you they don't. They don't
Speaker 10: cut rates until March and then do it. You know,
Speaker 10: have an accelerated number of cuts later next year. Because
Speaker 10: of our economic outlook, I think that first cut will
Speaker 10: come before March.
Speaker 2: All right, first cut before March.
Speaker 10: All right.
Speaker 2: We're going to have you back on before then, see
Speaker 2: if you've updated your call at all. Really appreciate you
Speaker 2: joining us this afternoon. Dave Donabedian, Chief investment Officer at
Speaker 2: CIBC Private Wealth Management.
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