WEBVTT - Bloomberg Surveillance TV: May 13, 2024 0:00:02.440 --> 0:00:06.800 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.640 --> 0:00:15.440 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.480 --> 0:00:18.720 with Lisa Bromwitz and Amrie Hordern. Join us each day 0:00:18.720 --> 0:00:22.280 for insight from the best in markets, economics, and geopolitics 0:00:22.440 --> 0:00:24.920 from our global headquarters in New York City. We are 0:00:24.920 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.720 --> 0:00:31.240 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.320 --> 0:00:33.960 anywhere else you listen, and as always on the Bloomberg 0:00:34.040 --> 0:00:35.880 Terminal and the Bloomberg Business App. 0:00:36.400 --> 0:00:38.479 We begin with our top story, the S and P 0:00:38.520 --> 0:00:40.960 five hundred, looking to build on three weeks of gains 0:00:41.000 --> 0:00:43.920 as investors prepare for a busy week of data. Peter 0:00:43.960 --> 0:00:47.000 Sheer of Academy Securities writing this, I think we are 0:00:47.040 --> 0:00:50.120 near the end of the lower yields fed put rally. 0:00:50.159 --> 0:00:53.920 That is, health stocks creep higher on anemic volumes last week. 0:00:53.920 --> 0:00:57.040 We argue that the market might quote gap from no 0:00:57.200 --> 0:01:00.760 landing to some form of bumpy landing. I'm pleased to say, 0:01:00.920 --> 0:01:03.639 joins us right now, it seems like we're some sort 0:01:03.680 --> 0:01:04.880 of precipice. 0:01:04.360 --> 0:01:05.160 Of narrative shift. 0:01:05.240 --> 0:01:06.039 Is that kind of how you. 0:01:06.000 --> 0:01:08.720 See it, yeah, And I feel we kind of clung 0:01:08.800 --> 0:01:12.720 to this American exceptionalism too long. The data started turning 0:01:12.720 --> 0:01:14.320 a couple months ago. You've seen it in the City 0:01:14.360 --> 0:01:17.440 Economic Surprise Index, which you know encompasses a fair bit 0:01:17.480 --> 0:01:19.959 of data, and yet all you heard was American exceptionalism 0:01:19.959 --> 0:01:24.200 and American exceptionalism, American exceptionalism. I think that narrative has changed, 0:01:24.240 --> 0:01:26.280 and we're going to wake up one day and realize, whoa, whoa, 0:01:26.319 --> 0:01:28.080 things aren't as good as we thought they were. 0:01:28.319 --> 0:01:29.919 And I think that's where we're at right now. 0:01:30.040 --> 0:01:32.559 And Friday's consumer confidence was certainly a shock to anyone 0:01:32.600 --> 0:01:34.160 who thought everything's still rosy. 0:01:35.480 --> 0:01:37.400 Well, this is the reason why some people are looking 0:01:37.400 --> 0:01:41.040 at this idea of maybe not goldilocks, but a landing 0:01:41.240 --> 0:01:43.720 which will at least break the prospect of FED rate 0:01:43.800 --> 0:01:46.280 cuts back on the table. Why do you see it 0:01:46.360 --> 0:01:49.880 as something more pernicious than that, that this weakness is 0:01:49.920 --> 0:01:51.360 maybe more entrenched. 0:01:52.800 --> 0:01:54.920 One we've all been asking for the last year and 0:01:54.960 --> 0:01:56.720 a half. When does the consumer slow down? When does 0:01:56.760 --> 0:01:59.480 credit card debt all these things start, you know, intend, 0:02:00.200 --> 0:02:02.600 you know, stopping their spending. I think we're seeing some 0:02:02.680 --> 0:02:05.680 of that again. What I found really striking about consumer 0:02:05.720 --> 0:02:09.359 confidence on Friday is University of Michigan publishes both by 0:02:09.680 --> 0:02:13.520 Democrats and if those were affiliated with Republican Party, and 0:02:13.560 --> 0:02:16.560 the Democrat party side went down precipitously as well. It's 0:02:16.600 --> 0:02:18.880 down below ninety. So that struck me. It's, you know, 0:02:18.919 --> 0:02:21.280 there's this party as we're heading to the election. People 0:02:21.320 --> 0:02:23.959 seem very depressed. On both sides. They're worried. I think 0:02:24.000 --> 0:02:27.240 that's kind of accelerates. We'll get a lot of information 0:02:27.280 --> 0:02:29.880 about sales. And the big thing to me is equities 0:02:29.919 --> 0:02:31.960 have already had this fed put rally, so I think 0:02:31.960 --> 0:02:34.639 we've priced in a lot of bed put ye narrative. 0:02:34.840 --> 0:02:37.040 We're not going to get that many cuts, even if 0:02:37.080 --> 0:02:37.520 they cut. 0:02:38.639 --> 0:02:41.040 We were speaking to Cameron Dawson of New Edge earlier 0:02:41.120 --> 0:02:43.520 this morning and she said she's actually more interested in 0:02:43.560 --> 0:02:47.000 retail sales than the CPI print, maybe because of what 0:02:47.040 --> 0:02:48.120 you're just talking about. 0:02:48.280 --> 0:02:49.120 Would you agree with that? 0:02:49.240 --> 0:02:50.600 Is that sort of how you view things? 0:02:51.520 --> 0:02:53.560 Yeah, I think there's a decent chance CPI will come 0:02:53.560 --> 0:02:54.640 in lower than expected. 0:02:55.480 --> 0:02:57.320 Just all the way the calculations are done. 0:02:57.400 --> 0:02:59.880 We probably get a brief rally both on bonds and stocks, 0:03:00.480 --> 0:03:03.120 But it really comes down to what's going on with 0:03:03.200 --> 0:03:06.160 the retail, what's going on with consumption, what's going to happen. 0:03:06.160 --> 0:03:08.079 I think with trade tariffs, right, if we're going to 0:03:08.160 --> 0:03:10.720 put on more tariffs on China, how do they respond? 0:03:11.000 --> 0:03:13.079 And I think we have just started this trade war 0:03:13.560 --> 0:03:15.639 and it's accelerating, and what we're going to see as 0:03:15.720 --> 0:03:18.520 more and more margin pressure as Chinese brands try and 0:03:18.520 --> 0:03:21.600 compete both in China but also across the globe. Not 0:03:21.639 --> 0:03:23.679 necessarily in the US, but I think that's where there's 0:03:23.680 --> 0:03:25.520 going to be margin pressure. There's going to be competition 0:03:25.560 --> 0:03:28.120 with these Chinese brands that's not yet priced in at all, 0:03:28.160 --> 0:03:30.760 and I think tariffs, if we announced this week, will 0:03:30.800 --> 0:03:32.119 make that more clear to people. 0:03:32.240 --> 0:03:34.040 Hey, we've got to be aware of this, and it's. 0:03:33.960 --> 0:03:37.280 Changing how the world global economy is behaving. 0:03:38.560 --> 0:03:40.040 Well, I want to get to that one second. This 0:03:40.080 --> 0:03:42.200 has been your thesis for a long time that's been 0:03:42.480 --> 0:03:45.640 really prescient, which is basically, this is a glut of 0:03:45.720 --> 0:03:48.000 goods and the Chinese government is going to try to 0:03:48.040 --> 0:03:50.040 flood the rest of the world with stuff that they're 0:03:50.080 --> 0:03:53.360 overproducing because they structurally have to because their economy relies 0:03:53.400 --> 0:03:53.640 on it. 0:03:53.640 --> 0:03:54.440 It's sort of the new. 0:03:54.280 --> 0:03:58.320 Housing market is a new industrial overproduction. Before we get there, though, 0:03:58.600 --> 0:04:00.560 I want to just have you respond because you've see, 0:04:00.680 --> 0:04:04.120 in direct opposition to what ahspc's Max Kettner is saying, 0:04:04.120 --> 0:04:05.960 what he put out this morning, the dip in risk 0:04:06.000 --> 0:04:08.440 assets is increasingly in the rear view year as many 0:04:08.480 --> 0:04:11.720 major equity indices and reapproach their unit date highs. Talking 0:04:11.760 --> 0:04:14.960 again about goldilocks that essentially some of these pressures that 0:04:15.000 --> 0:04:18.279 you're talking about are going to keep the FED cutting 0:04:18.320 --> 0:04:20.919 on some sort of trajectory that will allow things to 0:04:21.000 --> 0:04:24.440 keep tugging along. Why do you think that is going 0:04:24.480 --> 0:04:26.240 to end? At a time where earnings have come in 0:04:26.320 --> 0:04:29.640 stronger than people expected, and companies are displaying a good 0:04:29.640 --> 0:04:32.360 deal of pricing power and been able to shrug off 0:04:32.400 --> 0:04:33.839 some of the geopolitical headwinds. 0:04:34.680 --> 0:04:37.080 Now, I think one big thing that's been helping the 0:04:37.080 --> 0:04:39.400 stock market is a huge record buyback. So we've seen 0:04:39.440 --> 0:04:42.200 record buybacks. That's only supporting stocks when you look at 0:04:42.240 --> 0:04:44.520 it right. In some of the past week, you saw 0:04:44.560 --> 0:04:46.400 a little bit of weakness and then it was overcome 0:04:46.480 --> 0:04:48.760 during the course of the day with what looked like 0:04:48.839 --> 0:04:51.240 a lot like just you know, corporate buying, So I 0:04:51.240 --> 0:04:53.720 think that's been supportive. I think the valuation questions are 0:04:53.720 --> 0:04:56.080 still real. How much is AI driven US? Where we 0:04:56.120 --> 0:04:58.599 headed on AI? You know, are we getting the benefit 0:04:59.000 --> 0:05:00.839 all those things will start my out right, we get 0:05:00.839 --> 0:05:03.760 in video earnings next week, so that'll be an important part. 0:05:03.839 --> 0:05:06.719 So I think the valuations are creeping back high, setting 0:05:06.760 --> 0:05:09.160 people up for another disappointment. And that's why I think 0:05:09.240 --> 0:05:11.560 we dropped this five to ten percent. We got down 0:05:11.600 --> 0:05:13.920 about six percent. We never got to that ten percent level. 0:05:14.080 --> 0:05:16.400 I think we get there, you know, in the next 0:05:16.600 --> 0:05:19.360 few weeks or months, as this realization sets in. There's 0:05:19.360 --> 0:05:20.760 still too much hopium out there. 0:05:21.760 --> 0:05:24.320 Well, this raises a prospect of what's the catalyst. Is 0:05:24.320 --> 0:05:26.440 it going to be economic data pointing to a more 0:05:26.440 --> 0:05:30.000 material slowdown in the consumer? Is the consumer maybe not 0:05:30.040 --> 0:05:32.680 as significant as people previously thought, which is something that 0:05:32.720 --> 0:05:35.279 we heard in an interview that Dandy Berger did earlier 0:05:35.279 --> 0:05:37.720 this morning. Or is this really going to come from 0:05:37.760 --> 0:05:42.360 the geopolitics at the moment of more tariffs, of widening pressures, 0:05:42.520 --> 0:05:45.599 of this question of whether companies can sell in China 0:05:45.839 --> 0:05:47.240 at a time where the gates are going up in 0:05:47.279 --> 0:05:48.040 the US. 0:05:48.720 --> 0:05:51.479 So my base case is that this economic weakness has 0:05:51.520 --> 0:05:54.240 been helping yields lower, that's been helping stocks. We're going 0:05:54.279 --> 0:05:55.920 to hit a point in the coming days or weeks 0:05:55.960 --> 0:05:58.760 where we see more economic weakness and people realize, wow, 0:05:58.800 --> 0:06:01.039 maybe this isn't so good for the future of the market, 0:06:01.200 --> 0:06:03.200 and that's when you start rolling over in stocks. And 0:06:03.200 --> 0:06:05.479 then you've got the geopolitical risk you've got made by 0:06:05.600 --> 0:06:08.160 China theory, You've got the tariffs. All of those things 0:06:08.200 --> 0:06:10.480 I think are almost quote unquote freebies if you're going 0:06:10.560 --> 0:06:13.159 to be short or underweight this market. I think any 0:06:13.200 --> 0:06:15.360 of those alone can knock this market down, and you 0:06:15.600 --> 0:06:18.599 potentially get multiple of those things occurring. So I think 0:06:18.600 --> 0:06:20.719 we're well set up if you want to be underweight 0:06:20.839 --> 0:06:21.680 to benefit from that. 0:06:21.880 --> 0:06:22.880 I still like yields. 0:06:23.080 --> 0:06:25.159 I think yields do go lower, but stocks are going 0:06:25.200 --> 0:06:27.840 to start giving up This whole narrative of lower yields 0:06:27.920 --> 0:06:30.040 is good for stocks, And say, yields are going lower 0:06:30.080 --> 0:06:32.839 because this economy is shaky and maybe even jobs aren't 0:06:32.839 --> 0:06:35.240 anywhere close to as good as the published data has been. 0:06:36.680 --> 0:06:39.159 How much do you see a potential rally and government 0:06:39.200 --> 0:06:42.560 debt given some of the hangovers with inflation, given the 0:06:42.600 --> 0:06:45.120 fact that we are seeing terriffs being put in place, 0:06:45.160 --> 0:06:47.119 and given the fact that the deficit, which some people 0:06:47.120 --> 0:06:50.640 worry about some people shrug off, is continuing to climb. 0:06:51.520 --> 0:06:53.360 Yeah, I think at the front end we should get 0:06:53.360 --> 0:06:55.560 to two cuts this year. Maybe you see price in 0:06:55.600 --> 0:06:57.200 three cuts. I don't think we can get any better 0:06:57.240 --> 0:06:59.120 than that. And on tens, I think we can go 0:06:59.160 --> 0:07:01.200 down to maybe four thirty. So I kind of have 0:07:01.279 --> 0:07:03.360 this four thirty to four to fifty range. But as 0:07:03.400 --> 0:07:05.160 you say, you've got all these other issues, and I've 0:07:05.160 --> 0:07:06.880 got to admit, over the past couple of weeks, I'm 0:07:06.880 --> 0:07:10.280 increasing looking at the commodity market and getting more and 0:07:10.320 --> 0:07:12.720 more nervous that inflation is actually going to creep up 0:07:12.760 --> 0:07:13.880 through the commodity market. 0:07:13.960 --> 0:07:14.760 And that was off my. 0:07:14.800 --> 0:07:17.360 Radar, I would say, two three weeks ago. And as 0:07:17.360 --> 0:07:19.400 you look through the data you go back through look 0:07:19.520 --> 0:07:21.200 a lot of the ISM, a lot of the PMI, 0:07:21.680 --> 0:07:24.280 all prices paid were much higher. Well, the rest of 0:07:24.280 --> 0:07:26.480 the data was weaker. So you know, I don't want 0:07:26.520 --> 0:07:29.760 to say stat inflation. I don't think that's a realistic situation, 0:07:30.360 --> 0:07:32.720 but I can't dismiss it as easily now as I 0:07:32.760 --> 0:07:33.720 put a month ago. 0:07:34.600 --> 0:07:37.320 Just real quick, which commodity, because oil prices haven't been 0:07:37.400 --> 0:07:38.320 really shooting higher. 0:07:38.360 --> 0:07:38.960 What are you watching? 0:07:39.040 --> 0:07:42.680 So Copper's up quite significantly. You've seen Goal, you know, 0:07:42.720 --> 0:07:45.640 the precious metals up, nickels up, a lot of the 0:07:45.680 --> 0:07:49.120 industrial metals are actually up. Oil has been fairly stable. 0:07:49.120 --> 0:07:50.920 Oil had a lot of priced in and it's kind 0:07:50.920 --> 0:07:53.880 of been calm again. It hasn't really retreated even as 0:07:53.880 --> 0:07:55.600 you've seen kind of the status co emerge in the 0:07:55.600 --> 0:07:56.080 Middle East. 0:07:56.120 --> 0:07:58.480 So I think that's still susceptible for a shock. 0:07:59.480 --> 0:08:01.480 But really, Copper's been one of the big keys that 0:08:01.480 --> 0:08:02.240 I've been looking at. 0:08:03.320 --> 0:08:06.280 And with a five to ten percent decline in equities. 0:08:05.800 --> 0:08:07.080 Peter, are you a buyer? 0:08:07.240 --> 0:08:10.000 Is this a by the JIT moment? Yeah? I think so. 0:08:10.040 --> 0:08:12.160 I think it'll be a good opportunity again right now. 0:08:12.200 --> 0:08:14.080 I like Warren stocks better than U S Stox, so 0:08:14.080 --> 0:08:16.280 I'm not completely burish on the global economy. I like 0:08:16.360 --> 0:08:19.000 Chinese stocks, Indian stocks much better than I like, you know, 0:08:19.000 --> 0:08:21.760 the NASZAC one hundred, and I am wanting to buy 0:08:21.920 --> 0:08:24.120 banks and some of the things that have lagged behind. 0:08:24.320 --> 0:08:26.920 So some of these low valuation, high debt companies I 0:08:26.920 --> 0:08:28.760 think they can rebound as you start getting through this. 0:08:29.040 --> 0:08:30.680 And we even started seeing in the past week or 0:08:30.680 --> 0:08:32.800 two right where some of the you know, the rust 0:08:32.800 --> 0:08:34.400 of two thousands been doing a little bit better. So 0:08:34.440 --> 0:08:36.199 I think if we get that pullback, that's where I 0:08:36.200 --> 0:08:38.480 want to invest. I like the equal weighted indices better, 0:08:38.600 --> 0:08:40.720 but I am waiting for a pullback to get really committed. 0:08:41.800 --> 0:08:45.360 Peter's share of Academy Securities, thank you as always really 0:08:45.520 --> 0:08:58.480 wonderful insights. Meanwhile, the Financial Times reporting the New York 0:08:58.520 --> 0:09:02.439 Stock Exchange surveying mark participants on round the clock trading. 0:09:02.600 --> 0:09:05.280 The survey, coming as a startup backed by Stephen Cohen's 0:09:05.280 --> 0:09:08.640 Point seventy two Ventures Fund, is seeking SEC approval to 0:09:08.720 --> 0:09:11.800 launch the first round the clock exchange. Let's head to 0:09:11.800 --> 0:09:14.200 New York where Danny Berger is joined by the New 0:09:14.280 --> 0:09:17.360 York Sack Exchange President Lynn Martin to talk about why 0:09:17.400 --> 0:09:19.840 we all need twenty four to seven trading in our lives. 0:09:19.920 --> 0:09:22.880 Danny, Hi, Lisa, that's right, because you know, we want 0:09:22.880 --> 0:09:24.680 to be wrangling the kids and have the ability to 0:09:24.720 --> 0:09:27.240 trade while we do. Say Hyland, thank you so much 0:09:27.240 --> 0:09:29.640 for joining us, Thanks for having me. So some others 0:09:29.720 --> 0:09:32.280 might have opinions about this. But overall the survey that 0:09:32.280 --> 0:09:34.040 you've gotten so far from what you've heard, I know 0:09:34.120 --> 0:09:35.160 you're still in the middle of it. 0:09:35.400 --> 0:09:37.040 What have you heard so far? 0:09:37.280 --> 0:09:39.880 What we've heard is there are a lot of things 0:09:40.080 --> 0:09:43.160 to consider, mainly on the infrastructure side, which is not 0:09:43.360 --> 0:09:47.040 really a surprise. It's why we sought out to get 0:09:47.080 --> 0:09:52.280 feedback before something like this was introduced by the SRO community. 0:09:52.320 --> 0:09:54.360 We wanted to understand all of the pieces of the 0:09:54.480 --> 0:09:57.000 ecosystem that would need to fit together if we're going 0:09:57.040 --> 0:10:01.240 to introduce this responsibly. So the feedbacks so far hasn't 0:10:01.280 --> 0:10:04.000 really surprised us. There's a lot of parts of the 0:10:04.120 --> 0:10:05.360 value chain to consider. 0:10:05.480 --> 0:10:08.040 So realistically, if you did want to do something like this, 0:10:08.160 --> 0:10:10.040 how long would it take to actually set up that 0:10:10.040 --> 0:10:10.960 type of infrastructure. 0:10:11.040 --> 0:10:13.400 There's a variety of things that would need to be considered. 0:10:13.400 --> 0:10:15.960 Most importantly, we would need to talk to our regulators 0:10:16.480 --> 0:10:19.840 about it. Not just us, our clearinghouse DTC would also 0:10:19.920 --> 0:10:22.800 need to consider that with the regulators to the extent 0:10:22.840 --> 0:10:25.840 that they would remain open for that twenty four hour trading. 0:10:26.040 --> 0:10:28.199 It's interesting because if there does appear to be demand here. 0:10:28.240 --> 0:10:31.080 Lisa mentioned Steve Cohen's venture wants to do something like this. 0:10:31.120 --> 0:10:33.080 Do you have any sense of idea of where that 0:10:33.160 --> 0:10:35.680 demand is coming from the type of person that wants 0:10:35.679 --> 0:10:37.160 to be trading twenty four seven. 0:10:37.040 --> 0:10:40.199 So I don't know that it's really twenty four hours 0:10:40.240 --> 0:10:43.680 a day. I think what has started most of demand, 0:10:43.760 --> 0:10:45.920 what's really triggered most of the demand has been the 0:10:46.000 --> 0:10:48.840 rise of the ETFs. And if you look at the 0:10:48.920 --> 0:10:53.600 basket in some of the ETFs, particularly the international ETFs, 0:10:53.800 --> 0:10:57.439 they're not just securities that are listed on domestic exchange. 0:10:57.640 --> 0:11:01.000 So from a risk management standpoint, it would make sense 0:11:01.080 --> 0:11:04.000 that you would want to manage your risk in the 0:11:04.120 --> 0:11:07.839 underlying baskets when those domestic markets are open. 0:11:08.080 --> 0:11:10.720 Fair enough now, No, when it comes to IPOs, we 0:11:10.760 --> 0:11:13.280 started this year. You and many folks were excited for 0:11:13.440 --> 0:11:15.280 twenty twenty four that it would be a big year. 0:11:15.880 --> 0:11:18.160 So many people's hopes have been dashed. I think the 0:11:18.240 --> 0:11:21.680 volume is somewhere still near a decade's low when it 0:11:21.720 --> 0:11:24.240 comes to IPO volume, are you still hopeful for this year? 0:11:24.360 --> 0:11:28.640 I absolutely am, and actually I'm incredibly optimistic given the 0:11:28.640 --> 0:11:31.720 amount of proceeds that have been raised so far in 0:11:31.760 --> 0:11:35.000 the markets fourteen billion so far has been raised in 0:11:35.040 --> 0:11:39.640 the US markets. Through last Friday, we've had about twenty 0:11:39.640 --> 0:11:43.599 five operating company IPOs on the New York Stock Exchange. 0:11:43.760 --> 0:11:48.280 That's two times the amount of proceeds raised year to 0:11:48.360 --> 0:11:52.600 date versus last year, and three times versus twenty twenty two. 0:11:52.880 --> 0:11:56.120 So the markets are definitely opening up. And what I'm 0:11:56.160 --> 0:12:00.320 personally excited about is those companies we've welcome have not 0:12:00.800 --> 0:12:05.000 just gotten large deals done, many times, they have upsized 0:12:05.040 --> 0:12:08.240 their deals. They've priced either at the high end or 0:12:08.480 --> 0:12:12.200 above the range, and then they're seeing that pop, the 0:12:12.240 --> 0:12:15.800 twenty percent pop when their stock opens. So it's been 0:12:15.840 --> 0:12:21.320 a really exciting particularly Q two, really exciting time where 0:12:21.320 --> 0:12:24.800 we're seeing about two IPOs a week at NYSA. 0:12:25.040 --> 0:12:27.679 Well, Reddit is a great example of a company about IPO, 0:12:28.000 --> 0:12:30.360 a lot of fanfare around it, but a company like Reddit, 0:12:30.679 --> 0:12:34.000 it's a mature company, it's a quality company investors. 0:12:33.559 --> 0:12:34.160 Feel safe with. 0:12:34.240 --> 0:12:36.480 It is the room for anything outside of that. 0:12:36.920 --> 0:12:40.880 So you have seen some more growth oriented companies go. 0:12:41.520 --> 0:12:47.240 But importantly, as you mentioned, they've had a path to profitability. 0:12:47.559 --> 0:12:50.240 So I think that's really what is getting valued. It's 0:12:50.360 --> 0:12:54.760 why those companies that either are profitable or have a 0:12:54.800 --> 0:12:58.320 path to profitability are getting rewarded. You look at a 0:12:58.320 --> 0:13:01.280 company like Viking, which is a lot just IPO of 0:13:01.320 --> 0:13:03.800 the year, it's a household name. I had so many 0:13:03.800 --> 0:13:06.240 people say to me, I can't believe this company is 0:13:06.280 --> 0:13:10.240 in public already, given that many of us have enjoyed 0:13:10.240 --> 0:13:13.439 their cruises, whatever the case may be. But then you've 0:13:13.480 --> 0:13:18.920 also got great companies emerging companies around cyber like Rubric 0:13:19.080 --> 0:13:20.440 who just iPod on us. 0:13:20.440 --> 0:13:23.400 A couple of weeks ago, even with the uptick and demand, 0:13:23.520 --> 0:13:26.040 prequeent data came out that there's still three point trillion 0:13:26.120 --> 0:13:29.120 dollars of companies of money tied up in aging companies 0:13:29.120 --> 0:13:32.000 that haven't gone public. There still is this impetus to 0:13:32.040 --> 0:13:35.320 stay private for longer. Are you concerned with as companies 0:13:35.360 --> 0:13:38.440 stay private for longer that they found alternative paths to 0:13:38.480 --> 0:13:40.959 going public and just that norm that we used to sell, 0:13:41.200 --> 0:13:42.760 see it's not going to get back to that. 0:13:43.120 --> 0:13:45.880 I'm not really concerned because there is no match for 0:13:45.920 --> 0:13:49.480 the US capital markets in terms of an efficient form 0:13:49.800 --> 0:13:54.360 of capital and attaining that capital that you really need 0:13:54.400 --> 0:13:58.000 to scale your business. Not just from that perspective, but 0:13:58.160 --> 0:14:03.559 also rewarding employees democratizing investment and a M and A 0:14:03.720 --> 0:14:05.600 is a big reason that I hear some of these 0:14:05.640 --> 0:14:08.719 companies go and they believe that there's a different M 0:14:08.800 --> 0:14:12.319 and A currency that you get with becoming a public 0:14:12.360 --> 0:14:18.400 company versus staying private. So I continue to be incredibly optimistic. However, 0:14:19.000 --> 0:14:22.080 if people are going to be more thoughtful about when 0:14:22.320 --> 0:14:25.000 they go public, I don't think you're going to see 0:14:25.040 --> 0:14:27.760 a rush to the public markets like you saw in 0:14:27.800 --> 0:14:32.600 twenty twenty one for quite some time. But importantly, I 0:14:32.640 --> 0:14:35.320 think we're out of the twenty twenty two twenty twenty 0:14:35.360 --> 0:14:37.680 three closed IPO markets. 0:14:38.040 --> 0:14:39.760 Is there a chance we get back to that rush 0:14:40.080 --> 0:14:42.400 and what needs to be in place for that to happen. 0:14:42.280 --> 0:14:44.680 Well, it feels like, you know, we have the capacity 0:14:44.720 --> 0:14:47.360 to have a pretty normal year. If we've raised fourteen 0:14:47.840 --> 0:14:50.520 just over fourteen billion to date, in an average year 0:14:50.560 --> 0:14:54.000 you raise about forty five billion in the public markets, 0:14:54.120 --> 0:14:56.920 we're not too far off, and based on what we're 0:14:56.920 --> 0:15:00.400 seeing in our pipeline, I think this this could be 0:15:00.440 --> 0:15:02.040 a pretty close to normal year. 0:15:02.360 --> 0:15:04.520 How much of that depends on the FED cutting is 0:15:04.520 --> 0:15:05.160 not necessary. 0:15:05.240 --> 0:15:09.040 I don't think it's necessarily dependent on the FED cutting. 0:15:09.160 --> 0:15:12.280 I think people are getting used to this concept of 0:15:13.120 --> 0:15:15.960 there's a little bit of uncertainty in the markets. The 0:15:16.000 --> 0:15:18.360 big concern you had over the last two years was 0:15:18.400 --> 0:15:22.520 the hard landing versus soft landing. And I think people 0:15:22.520 --> 0:15:26.920 feel pretty good about our economy, so I don't know 0:15:27.000 --> 0:15:31.320 that it matters if the FED cuts once, not at all, 0:15:31.600 --> 0:15:34.480 whatever the case may be. But I do think you'll 0:15:34.480 --> 0:15:37.440 probably see a little bit of a closure of the 0:15:37.480 --> 0:15:40.040 IPO markets around election time like you have any other 0:15:40.080 --> 0:15:40.760 election year. 0:15:40.880 --> 0:15:43.120 Fair enough, And going back to some things you mentioned 0:15:43.320 --> 0:15:46.920 of why the American IPO market remains strong despite some 0:15:46.960 --> 0:15:49.520 of the wobbles, things like the liquidity, the investor base. 0:15:49.880 --> 0:15:51.960 It's made it a global destination. But there was this 0:15:52.000 --> 0:15:55.200 report that she in the Chinese fast fashion company wants 0:15:55.200 --> 0:15:58.320 to list in London instead of the US because of 0:15:58.360 --> 0:16:02.400 the regulatory environment. Is that global beacon that the US 0:16:02.520 --> 0:16:05.240 going to change with the US regulators that are more 0:16:05.240 --> 0:16:06.840 intent on cracking down in China. 0:16:07.400 --> 0:16:09.320 I don't know about that. I mean, I can't really 0:16:09.360 --> 0:16:13.240 speak to the conversations that a prospect like Asians has 0:16:13.280 --> 0:16:16.560 had with our regulators. I do hope that they're able 0:16:16.600 --> 0:16:19.320 to enter the US markets, but it will be up 0:16:19.360 --> 0:16:22.280 to our regulators to determine how Okay. 0:16:22.080 --> 0:16:23.760 Lynn, we're going to have to leave it there. Thank 0:16:23.800 --> 0:16:25.760 you so much for joining. Really great to see you. 0:16:26.080 --> 0:16:28.960 That is Lynn Martin of the Nice Sye Lisa. With that, 0:16:29.000 --> 0:16:29.920 I'll send it back to you. 0:16:39.240 --> 0:16:41.920 Right now. With us here in DC, we have tourist 0:16:41.960 --> 0:16:44.760 and Slock, chief economist for Apollo, who's here for the 0:16:44.800 --> 0:16:46.840 same event that I'm here for, so I'm very glad 0:16:46.920 --> 0:16:48.600 to see you. I want to start with a question 0:16:48.640 --> 0:16:50.400 we've been asking all morning, which is which is more 0:16:50.440 --> 0:16:53.480 important the inflation data or the retail sales data. 0:16:53.480 --> 0:16:55.800 Well, if if you're from the FEDS dual mandate, which 0:16:55.880 --> 0:16:59.320 is inflation at two percent and full employment, inflation is 0:16:59.320 --> 0:17:02.480 probably a little more important. And particularly it's important because 0:17:02.520 --> 0:17:05.800 for the last three months, we've seen the annualized change 0:17:05.840 --> 0:17:09.520 in supercoco up by eight percent. We've seen the annualized 0:17:09.600 --> 0:17:12.560 change and coin inflation go up by four percent. So 0:17:12.600 --> 0:17:14.800 the momentum in inflation in the last three four months 0:17:14.840 --> 0:17:15.720 has just been moving. 0:17:15.480 --> 0:17:16.320 In the wrong direction. 0:17:16.640 --> 0:17:19.280 So what's really important about Wednesday's number is whether that 0:17:19.480 --> 0:17:22.800 momentum continues or whether we're going to see Indeed, as 0:17:22.960 --> 0:17:25.879 Mike and Daniel was just talking about move low and inflation. 0:17:25.960 --> 0:17:27.920 Why do you think from the Fed's reaction function, they 0:17:27.920 --> 0:17:30.280 care more about that CPI print, which a lot of people, 0:17:30.320 --> 0:17:33.600 including Austin Coolsby, have set as a lagging indicator versus 0:17:33.920 --> 0:17:36.560 real weakening in the consumer in a sense that growth 0:17:36.640 --> 0:17:37.560 is being challenged. 0:17:37.760 --> 0:17:39.359 Well, I think the problem for them is that the 0:17:39.359 --> 0:17:41.679 momentum in inflation has just not been going down for 0:17:41.720 --> 0:17:44.080 the last several months, and if momentum has been building 0:17:44.080 --> 0:17:46.600 to the upside, we really need from a FED perspective, 0:17:46.600 --> 0:17:48.879 to see that momentum break and that's the risk with 0:17:48.920 --> 0:17:49.680 the numbers this week. 0:17:49.760 --> 0:17:50.080 Shelter. 0:17:50.480 --> 0:17:53.000 There's an argument about, well, on the one hand, maybe 0:17:53.240 --> 0:17:55.920 areas of occupancy rates are looking a bit better, which 0:17:55.920 --> 0:17:58.320 would argue for Shelter inflation to come down. On the 0:17:58.320 --> 0:18:01.240 other hand, case Shiller is now rising at six seven 0:18:01.280 --> 0:18:03.640 percent and the annual rates, so that means that we're 0:18:03.680 --> 0:18:07.280 seeing momentum actually building in home prices. So there's different 0:18:07.280 --> 0:18:09.080 parts of the scale here that are weighing on. We 0:18:09.200 --> 0:18:11.560 just don't quite know what the shel See inflation data 0:18:11.560 --> 0:18:13.000 will do, and it has been coming down a lot 0:18:13.080 --> 0:18:16.320 slower than what anyone expected and that might still combine 0:18:16.359 --> 0:18:19.040 with auto insurance and combined with everything that's going on, 0:18:19.119 --> 0:18:22.080 and the subcomponents still continue to put some upward pressure 0:18:22.119 --> 0:18:22.560 on inflation. 0:18:22.680 --> 0:18:24.360 So you still see no rate cuts this year. 0:18:24.440 --> 0:18:26.280 We still see no rate cuts, and of course noway 0:18:26.280 --> 0:18:28.080