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Speaker 1: Hello, and welcome to What Goes Up, a Bloomberg Weekly

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Speaker 1: Markets podcast. I'm Sarah Ponzec, a markets reporter on the

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Speaker 1: Cross Asset team, and I'm Mike Reagan, a senior editor

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Speaker 1: on the Markets team here at Bloomberg. This week on

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Speaker 1: the show, we're going to do something a little bit

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Speaker 1: different and split it up into two parts. First, of course,

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Speaker 1: we'll hit on the market rally that was so strong,

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Speaker 1: finally hit a snag as US China trade fears came

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Speaker 1: back to the four in force too. But also this

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Speaker 1: week Uber Eyed going public and what you could call

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Speaker 1: a pretty stormy stock market, right Sarah. Luckily we have

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Speaker 1: two very distinguished guests to talk us all through it. Uh.

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Speaker 1: First off, we have David Joy, who's the chief strategist

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Speaker 1: at amer Prize Financial. Sarah, he's kind of a rookie

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Speaker 1: in this line of work, though he's only a couple

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Speaker 1: of months, right, David. That's right, a couple of months

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Speaker 1: in forty two years, rookie rookie by And another Boston guy.

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Speaker 1: I feel like we have too many Boston people on

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Speaker 1: this show, I'm gonna say, but so don't bring up

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Speaker 1: the Celtics performance in the playoffs. Whatever you do. Yeah, please,

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Speaker 1: thank you very much for ignoring that and also joining us.

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Speaker 1: Are I p O guru at from Renaissance Capital Principle there?

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Speaker 1: Kathy Smith? Hi, Kathy, Please tell me you're not a

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Speaker 1: Celtics fan too. Oh not at all. I'm a New Yorker.

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Speaker 1: Oh good, good, we like that. As a Philadelphia seventy

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Speaker 1: Sexers fan, I cannot stand two Celtics fans at one time.

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Speaker 1: So this was gonna work out. Good. Well, David, let's

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Speaker 1: start with you. I think you had the best quote

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Speaker 1: I've seen this week in your commentary when you talk

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Speaker 1: about President Trump tweeting over the weekend about a new

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Speaker 1: round of of tariffs on China. You called it, quote,

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Speaker 1: a skunk in the garden party. How long do you

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Speaker 1: expect the skunk to linger around? Is this or trade tensions?

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Speaker 1: Are we gonna be watching these headlines all day every

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Speaker 1: day in the near future. What you're thinking on the

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Speaker 1: trade tensions now? Well, I do think it's an issue

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Speaker 1: that's going to be with us for a long long time,

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Speaker 1: and by that I mean months and maybe more likely years.

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Speaker 1: I don't think this is a an issue that lends

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Speaker 1: itself to relatively short term negotiations. Obviously, the issue for

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Speaker 1: markets in the immediate term is, uh, you know, can

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Speaker 1: we get beyond some of the threats to increase terrorists

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Speaker 1: and uh kind of poison the well of the negotiations,

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Speaker 1: which up until now we've been told have been progressing, uh,

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Speaker 1: you know, rather nicely, but all of a sudden that

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Speaker 1: was called into question with the President's tweets recently, and

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Speaker 1: so we'll see what happens with that in just the

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Speaker 1: hours ahead. But even if we get beyond uh, you know,

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Speaker 1: this immediate hurdle, this is an issue I think that's

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Speaker 1: going to be with us for a long long time,

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Speaker 1: because we have two very different economic systems, we have

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Speaker 1: competing interests, and this is not going to go away.

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Speaker 1: I'll break down some of the numbers. So when President

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Speaker 1: Trump tweeted on Sunday, he threatened that the tariff right

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Speaker 1: now ten percent would move to twenty five on the

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Speaker 1: two hundred billion dollars worth of goods. He also threatened

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Speaker 1: that potentially in the near future, we could see three

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Speaker 1: d and twenty five billion dollars more worth of inputs

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Speaker 1: see tariffs placed on top of them. Now, David, I

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Speaker 1: want to ask you because I've seen a lot of

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Speaker 1: economists come out in the past week saying, the likes

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Speaker 1: of JP Morgan that this would only shave off about

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Speaker 1: two tenths of a percentage point of GDP for the year.

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Speaker 1: Moodies did say would be closer to about eight tenths

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Speaker 1: of a percentage point. So if it's not just the

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Speaker 1: economy that is really becoming worrisome, if this is what happens,

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Speaker 1: where really is the worry for the stock market? Well,

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Speaker 1: I think we have to begin with the economy. And uh,

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Speaker 1: you know, I think everybody sort of has in the

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Speaker 1: back of their mind that we're doing really well. We

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Speaker 1: grew at three point two percent in the first quarter,

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Speaker 1: but that was partly attributable to things that are not

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Speaker 1: going to be repeated, including inventory building. Uh, the underlying

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Speaker 1: growth rate in the U. S economy is probably close

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Speaker 1: to some way to two percent, maybe two and a quarter,

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Speaker 1: And if we were to shave eight tenths of a

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Speaker 1: percent off of that, or in our own view, a

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Speaker 1: full year impact would be closer to six tenths, that

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Speaker 1: gets you to a fairly sluggish rate of growth. So

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Speaker 1: this is an important issue in economic terms. It's also

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Speaker 1: important for market sentiment. If you think about corporate management's

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Speaker 1: decision making process for strategy and investment, what happens with

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Speaker 1: trade has an immediate impact on their long term thinking.

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Speaker 1: And Uh, if we uh, you know, saddled with this

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Speaker 1: uncertainty and linkers for for as long as I think

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Speaker 1: it may, uh, those corporate capital investment decisions are going

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Speaker 1: to be postponed. In addition to that, there are costs

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Speaker 1: associated with trying to offset some of these terrorists by

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Speaker 1: changing supply lines and the like. It's really, in a way,

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Speaker 1: just a tremendous uncertainty in the business community. And then thirdly,

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Speaker 1: I would say market sentiment. If we don't resolve you know,

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Speaker 1: this current impasse and we don't resume at least a

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Speaker 1: cordial negotiation, UH, that's going to weigh on investor sentiment.

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Speaker 1: And my guess is it probably takes a little bit

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Speaker 1: of steam out of this market, which has been performing

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Speaker 1: pretty well up until now. So David Amerprise has what's

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Speaker 1: something like almost nine billion in client assets, so presumably

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Speaker 1: thousands of clients. I assume a week like this they

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Speaker 1: all call you at once. Is that which we're just

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Speaker 1: lighting up? Well, we like to think that Uh, you know,

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Speaker 1: we've we encourage our investors to think in the long

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Speaker 1: term and keep their mind on and focus on their

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Speaker 1: long term investment objectives. But yes, when you get it,

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Speaker 1: when you get a situation like this, they want to

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Speaker 1: know if that means something has changed, and uh is

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Speaker 1: it a meaningful change and it shouldn't have any implications

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Speaker 1: for how they deploy their assets. I would say, so far,

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Speaker 1: the answer for us to that question is no. Uh.

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Speaker 1: Going into this week, we had been recommending a relatively

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Speaker 1: neutral position relative to the you know, any individual's risk

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Speaker 1: tolerance in terms of the primary waitings between stocks and bonds.

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Speaker 1: And so we're not going into this with a a

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Speaker 1: position of of being overweighted in the in terms of equities,

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Speaker 1: and so the relative impact on a well diversified portfolio,

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Speaker 1: at least so far as fairly minimal. What about within

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Speaker 1: the world of equities when you look at the likes

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Speaker 1: of the United States versus China or other emerging market countries,

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Speaker 1: where can we really expect to see the most pains?

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Speaker 1: So this just continue to go on. Well, trade is

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Speaker 1: uh more important to China than it is to the US. Uh,

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Speaker 1: It's an important component of our own economy, but in

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Speaker 1: relative terms, relative to GDP, it's much more important to China. UH.

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Speaker 1: The I m F this week came out with an

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Speaker 1: estimate that full year of UH the maximum tariffs would

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Speaker 1: shave maybe up to one and a half percent off

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Speaker 1: of China's GDP an annual basis. So just in terms

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Speaker 1: of those two economies, China is clearly at a disadvantage.

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Speaker 1: But in addition to that, a number of emerging markets

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Speaker 1: would also come under pressure in our view, just in

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Speaker 1: the Pacific RIM for example, if you look at what

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Speaker 1: percent of exports from South Korea and UH Taiwan go

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Speaker 1: to China, it's up in the thirty percent range. So

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Speaker 1: UH if their economy slows UH, those economies are going

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Speaker 1: to take a hit. And then lastly, to the extent

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Speaker 1: that the Chinese economy loses some steam, that's going to

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Speaker 1: hit some of these UH commodity exporting economies, particularly in

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Speaker 1: Latin America for example, that UM, you know, export base

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Speaker 1: medals and things like that to China. So I would say,

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Speaker 1: in relative terms, the US is fairly well positioned to

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Speaker 1: UH engage in this battle. It will hit US, but

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Speaker 1: in relative terms, UH, the emerging economies of the world

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Speaker 1: will take it, take it more severely. And then lastly,

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Speaker 1: some of the economies in Europe, in particularly Germany, are

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Speaker 1: heavily dependent on exports to China, particularly audible bills, and

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Speaker 1: if they slow down in China, UH, that's going to

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Speaker 1: make it awfully difficult for UH Europe and Germany in

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Speaker 1: particularly gain some traction. And and they're growing pretty sluggishly

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Speaker 1: right now. So, David, people looking for a safe haven

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Speaker 1: at times like these, UM, obviously they're gonna look probably

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Speaker 1: first at the treasury market. But this week there was

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Speaker 1: an auction of tenure notes that was a little weak.

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Speaker 1: The bid to cover was was very low. There's been

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Speaker 1: a lot of speculation that maybe China boycotted this auction.

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Speaker 1: I don't think anyone knows for sure, but our treasury

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Speaker 1: is still a haven. Were Is there that sort of

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Speaker 1: lingering in the back of your mind risk that China

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Speaker 1: could could just say, you know what, we're not coming

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Speaker 1: to the auctions and we're gonna start selling down. UH.

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Speaker 1: Is there a risk of treasuries? Do you think? I

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Speaker 1: think that that that may be a potential risk. I

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Speaker 1: wouldn't ascribe too much weight to it, UM, but I

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Speaker 1: do think it's important to have a full complement of

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Speaker 1: fixed income investments. Recently, over the last several quarters, in

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Speaker 1: our own asset allocation meetings, we've been increasing our allocations

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Speaker 1: to the fixed income market, not so much in treasuries.

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Speaker 1: It's been more in the UH corporate investment grade universe.

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Speaker 1: And we still have some exposure to high yield as

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Speaker 1: long as the economy is good in default rates low.

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Speaker 1: So we prefer the credit markets to treasuries, But if

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Speaker 1: you lant them all together, it's important, I think, to

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Speaker 1: have a good diversification in bonds. And then as far

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Speaker 1: as equities go. Uh we have overweights in three sectors

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Speaker 1: right now only and they're typically considered to be somewhat

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Speaker 1: defensive because of their bond like characteristic and these would

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Speaker 1: be real estate and uh a more typically defensive category healthcare,

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Speaker 1: which has started off this court a pretty week, but

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Speaker 1: it's come back a little bit thankfully, some of that

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Speaker 1: political risk recedes. And then the third one is energy,

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Speaker 1: which is really under pressure right now. UH So we'll

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Speaker 1: see what happens with that. But if we get a

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Speaker 1: resolution to this most recent you know, bumping the trade negotiations,

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Speaker 1: I think that the market sentiment could improve fairly quickly,

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Speaker 1: and we might see the equity markets will perform and

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Speaker 1: go back to their previous highs that we saw at

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Speaker 1: the end of last week. I'm glad you mentioned the

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Speaker 1: credit markets. Um. I feel like for years people have

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Speaker 1: been bracing for this turn in the credit markets and

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Speaker 1: deterioration and credit quality. UM. You don't sound like you're

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Speaker 1: too worried about that. What what would make you worry

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Speaker 1: about that? Would an earnings recession for for example, without Uh? No,

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Speaker 1: I don't think so. Uh. And the reason is, I

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Speaker 1: think an earnings recession, to me has to be put

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Speaker 1: into context if we were to get it, and we're

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Speaker 1: not expecting one, by the way, but if we were

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Speaker 1: to get it, it would be in the context of

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Speaker 1: extraordinarily unique comparisons to last year because the impact of

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Speaker 1: the tax cuts. So, uh, we're not too worried about

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Speaker 1: the prospects for that. But I think what would be

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Speaker 1: more wary some would be if we saw credit availability

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Speaker 1: start to tighten. Uh. And that would give us a

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Speaker 1: little bit more of a belief that the credit cycle

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Speaker 1: was starting to come to an end. We're not there yet.

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Speaker 1: Credit is still quite available, and the price of it.

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Speaker 1: The cost of it is also you know, quite accommodative.

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Speaker 1: So and not until the credit cycle really starts to change,

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Speaker 1: uh entitened would and this speaks also to this economic expansion.

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Speaker 1: I think a number of people have said repeatedly, g

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Speaker 1: we must be in the seventh the rate enning. Well,

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Speaker 1: we don't know what inning we're in quite frankly, because

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Speaker 1: with an underlying growth rate of let's call it two percent,

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Speaker 1: and accommodative interest rates and un a FED that's on pause,

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Speaker 1: this psychle could be extended for a lot longer and

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Speaker 1: we might not have to worry about high yield credit

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Speaker 1: coming under pressure. We went a red SOX fan doesn't

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Speaker 1: know what in in you're you're in, but he's still

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Speaker 1: optimistic for now. I could go on for longer over time. Um,

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Speaker 1: but David, we'll have to leave it there for now,

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Speaker 1: but you'll be back on later in the show to

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Speaker 1: discuss Mike's favorite segment, which is it's the craziest thing

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Speaker 1: I ever saw in markets parentheses this week. Now we

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Speaker 1: want to switch it over to you, Cathy, because yes,

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Speaker 1: stock market was a little bit awry this week, you

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Speaker 1: could call it. But also, as everyone has been Eyeing

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Speaker 1: is the company Uber Uber Eyeing going public this week.

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Speaker 1: But you guys over were at Renaissance Capital do tons

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Speaker 1: of research on i p o s and we have

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Speaker 1: all heard how this year is going to be a

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Speaker 1: record for issue ents, But why don't you actually walk

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Speaker 1: us through the numbers? How does this year stack up

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Speaker 1: two years prior? Sure? And besides research, which is means

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Speaker 1: that we care about the buy side of the equation

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Speaker 1: with I p O s, we also manage i p

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Speaker 1: O e t s and their baskets of duly public companies,

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Speaker 1: So we really care that i p o s are

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Speaker 1: priced right and trade well when they enter into the market.

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Speaker 1: So we have seen very good performance of the I

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Speaker 1: p O market so far this year and because of that,

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Speaker 1: the I p O volumes we are very large. Now

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Speaker 1: we're getting some very large companies tapped the market, uh

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Speaker 1: notably Uber, Lift, Trade, Web, Pinterest, Zoom, and that is

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Speaker 1: going to continue and we project that given the size

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Speaker 1: of these and these and how mature they are that

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Speaker 1: are trying to tap the market now, we're estimating we

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Speaker 1: could get more dullar volume raised than we did during

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Speaker 1: the Internet bubble in two thousand when in those years,

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Speaker 1: two billion and nine billion were raised in each year, respectively.

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Speaker 1: So we're expecting a big I p O market in

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Speaker 1: terms of volume, as you mentioned, and the only way

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Speaker 1: that continues is the returns have to be good. And

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Speaker 1: the return so far as measured by our et F

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Speaker 1: which tracks an I p O r I p O index,

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Speaker 1: they're up about thirty two so far this year. So

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Speaker 1: investors are happy when they have good returns, and that

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Speaker 1: means the I p O engine will continue. Kathy, I'm

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Speaker 1: curious why they're all coming at once, Um, you know,

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Speaker 1: it sort of makes people nervous to see this much

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Speaker 1: supply of new stock coming into the market all at once.

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Speaker 1: Is it just basically a coincidence, um, that all these

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Speaker 1: companies are going public at once, or what you're thinking

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Speaker 1: on why such a big pipeline this year. Basically, if

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Speaker 1: you look at this uh class of companies trying to

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Speaker 1: tap the market and the private companies they are many

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Speaker 1: of them are ten years, have been funded for ten

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Speaker 1: years or more, and once you get to that time

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Speaker 1: frame where your private and your in adventure portfolio, you're

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Speaker 1: the limited partners of that portfolio, they want to retire

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Speaker 1: that that part partnership. It's been outstanding much longer than

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Speaker 1: would be normal. I mean, typically those partnerships would only

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Speaker 1: go five or seven years, so they've been incubating way

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Speaker 1: too long. Is number one, And then number two when

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Speaker 1: I believe many of these companies would have liked to

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Speaker 1: tap the market and didn't get a chance because when

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Speaker 1: we got to the latter half of the market just

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Speaker 1: pretty much closed for I p O s. So this

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Speaker 1: is about tapping the market when the market's good. Ip

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Speaker 1: The IPO market is not always open. As you just mentioned,

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Speaker 1: the I p O market is not always opened, and

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Speaker 1: you also described your renaissance. I p O e t

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Speaker 1: f up more than thirty this year. The rush that

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Speaker 1: we're seeing now. Is it more so that the market

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Speaker 1: is open, the market is right for public issue and

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Speaker 1: for newly public companies, or is it more so possibly

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Speaker 1: that companies want to get out before anything potentially goes

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Speaker 1: wrong in the next year, next two years, whatever it

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Speaker 1: may be. It's a combination. But I wouldn't say it's

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Speaker 1: oh gosh, they're bailing out that view. I would just

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Speaker 1: say that they need to provide to get into a

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Speaker 1: more liquid state. It's no one stays private or as

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Speaker 1: adventure funded company forever it just doesn't happen. And then

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Speaker 1: regarding the returns on the index, you know, the ip

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Speaker 1: OO market doesn't work unless investors make money. So the

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Speaker 1: the e t F is telling you that investors have

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Speaker 1: made money in the basket of the last of the

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Speaker 1: recent I p o s. That's what is in this

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Speaker 1: e t F, and so that means that investors are

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Speaker 1: more likely to be looking at a new one if

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Speaker 1: they're making money in the ones that have come out.

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Speaker 1: So that's the equation that we need. And you can

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Speaker 1: look at that e t F if you're a company

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Speaker 1: trying to raise capital and say, yeah, I mean investors

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Speaker 1: are making money. Must be a good time. When the

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Speaker 1: e t F is not performing well, the I p

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Speaker 1: O market starts to shut down because you need to

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Speaker 1: make money. It's all about performance, which really leads to

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Speaker 1: how you price these like major I p o s.

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Speaker 1: I mean, it's very important that the pricing of the

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Speaker 1: I p o s do not end up the way

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Speaker 1: lift ended up, and that is you want to price

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Speaker 1: your I p O so that it trades positively after

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Speaker 1: your first day of trading, so that there are returns

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Speaker 1: for investors I think a lot of people are assuming

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Speaker 1: that the lift pricing, you know, it is a little

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Speaker 1: rich um and most likely would affect the valuation of

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Speaker 1: of Uber. Is it having any other ripple effects? Is it, uh,

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Speaker 1: you know, going to cause some valuation problems with many

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Speaker 1: of the other companies going public or is it just

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Speaker 1: basically Uber that has to worry about the lift issues. Actually,

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Speaker 1: we look at events like the lift I p O

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Speaker 1: and the IPOs that don't trade well if they're not

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Speaker 1: so many of them, if it's fewer, fewer rather than many,

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Speaker 1: it provides a certain discipline in the I p O

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Speaker 1: market that's really favorable for returns for investors. You don't

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Speaker 1: want investors to think that that's you know, every I

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Speaker 1: p O will go up. You need to have a

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Speaker 1: little bit of market of fear in the market. That

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Speaker 1: makes investors a lot more disciplined about what they'll pay

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Speaker 1: for IPO. So it's not a bad thing to see

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Speaker 1: these kinds of failures. You just don't want to see

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Speaker 1: it the failure happening with every company and a big

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Speaker 1: market downturn. Yeah, that's always the question around here is

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Speaker 1: when an IPO, a big i PO hits how do

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Speaker 1: you gauge was it successfully priced? You know, is it

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Speaker 1: is a thirty share gain on the first day. Is

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Speaker 1: that considered a bad I p O or do you

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Speaker 1: like to see that type of return on the first day? Well, actually, um,

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Speaker 1: too many people celebrate, especially the ones on the cell side,

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Speaker 1: a very big first day pop. But it makes investors

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Speaker 1: who are trying to buy positions more cautious because it's

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Speaker 1: a lot more expensive if it has a really big

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Speaker 1: first day pop. So I'll try to put it into perspective.

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Speaker 1: You know, the average first day pop typically for I

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Speaker 1: p O s is about thirteen to fift So that

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Speaker 1: means that you know, investors, when they price an I

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Speaker 1: p O the valuation should be discounted by about thirteen

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Speaker 1: to fifteen percent to get that first day of trading

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Speaker 1: to be that way. In other words, you're offering a

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Speaker 1: discount for these early investors and then uh, it'll it

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Speaker 1: should be floated in the market at a reasonable price.

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Speaker 1: On certain companies that are high growth or whatever that

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Speaker 1: may have more upside, you know, you may see a

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Speaker 1: bigger discount and see that kind of early trading. But

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Speaker 1: I think the ideal is about thirteen to fifteen for

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Speaker 1: sent on average, you don't want it to be so

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Speaker 1: high that you can't make money afterward. So for example,

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Speaker 1: during the Internet bubble, which was the anomaly here, the

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Speaker 1: first day pop on in two thousand respectively was between

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Speaker 1: fifty and on average, just an unsustainable number. And that

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Speaker 1: you know, the market really um fell apart after that,

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Speaker 1: Like once these stocks could not they couldn't be valued

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Speaker 1: right people, It was a crazy time. But as I say,

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Speaker 1: beside that time, the average is the thirteen to fifteen

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Speaker 1: and if you have a really big one that has

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Speaker 1: a big one, it better have earnings in its back

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Speaker 1: pocket to provide those who come in later with some returns.

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Speaker 1: When it comes to Uber, I mean Uber talking about

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Speaker 1: coming out in the public markets this week, how reminiscent

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Speaker 1: can it be of Lift or how closely can you

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Speaker 1: tie the two into one another? Because I've heard many

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Speaker 1: analysts saying that investors are in waiting Emo. They don't

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Speaker 1: want to buy Lift because they want to buy shares

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Speaker 1: of Uber. Can the two be connected? And is there

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Speaker 1: potentially a lot of hype surrounding Uber right now? Well,

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Speaker 1: there definitely is a lot of hype surrounding Uber. I

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Speaker 1: mean I think there are more people that own the

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Speaker 1: stock already of Uber than those of us who are

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Speaker 1: on the other side of that equation UM and I

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Speaker 1: think that Uber and Left are definitely connected from a

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Speaker 1: valuation standpoint. Lifts valuation and it's multiples are going to

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Speaker 1: be translated into the multiples for Uber, even though we're

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Speaker 1: going to give Uber credit for other things. But remember,

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Speaker 1: you know, Uber's growth isn't the same as Left, so

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Speaker 1: there's some other things. You know, it's a little more

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Speaker 1: complex and the valuation, but the point is that the

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Speaker 1: multiple spurit lift are going to translate over into Uber.

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Speaker 1: The other thing about Uber that makes it a little

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Speaker 1: bit different is it is a much bigger IPO than Left,

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Speaker 1: and really large I p o s historically take a

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Speaker 1: little extra effort to get into the marketplace sort of elegantly,

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Speaker 1: shall I say so. You just have to look at

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Speaker 1: the really large ones that have been done in the past,

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Speaker 1: like Facebook or Google, and you'll see that sometimes it's

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Speaker 1: a little rocky their entrance into the market just because

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Speaker 1: they're so big. And remember Uber has so many already shareholders,

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Speaker 1: It's had so many rounds of financing, so many wealth

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Speaker 1: pools of money that have gone into it. They have

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Speaker 1: to find a whole new set of a bunch of

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Speaker 1: people that haven't don't own the shares to come in

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Speaker 1: here and and buy, you know, put in indications. So

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Speaker 1: it's a big job to get holders. And then, last

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Speaker 1: but not least, when we look at the losses that

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Speaker 1: Uber has, and we went back to our data to

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Speaker 1: look at you know, who are the what IPOs have

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Speaker 1: lost more money than in history at the time of

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Speaker 1: their IPO had larger losses. And if you look at

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Speaker 1: Uber's losses, they're the number one money loose ing I

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Speaker 1: p O And that list, ever, the number two companies lift,

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Speaker 1: the number four company is snapped groups in there. And

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Speaker 1: this list of companies, like the top ten that we

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Speaker 1: put together, if you look at where they're trading from

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Speaker 1: their I p O, they're trading poorly. The very large

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Speaker 1: money losing companies have a hard time. Investors have a

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Speaker 1: hard time valuing them. So once the hype wears off,

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Speaker 1: you know, you have to really figure out what's going

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Speaker 1: to happen between now and in the future when they

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Speaker 1: earn money. That's and so they're often problematic for investors

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Speaker 1: when there's that much money being lost, and we have

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Speaker 1: some history to show it, and especially with Uber, I mean,

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Speaker 1: it is a massive I p O, but they're really

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Speaker 1: only selling what about ten percent of the of the company. Um.

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Speaker 1: How nervous should investors be about the rest of those

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Speaker 1: private shareholders when they will want to dump their stakes? Um?

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Speaker 1: Is that a Is that a big concern with a

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Speaker 1: company that size going public? Of course investors are are concerned.

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Speaker 1: And another thing about Uber, uh, you know in the

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Speaker 1: overalltment option, this shares that would be delivered should they

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Speaker 1: exercise the overallotment option are coming from existing investors. So

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Speaker 1: to me, that's not a good look for Uber to

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Speaker 1: have their insiders selling, especially because Uber is losing a

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Speaker 1: lot of money and it should be raising money for itself.

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Speaker 1: The existing investors can wait or should wait. Well, Kathy,

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00:24:27,760 --> 00:24:30,399
Speaker 1: thank you so much. That's great insight on all the

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00:24:30,480 --> 00:24:33,119
Speaker 1: Unicorn I p O s coming this year. Cathy, I

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00:24:33,160 --> 00:24:36,440
Speaker 1: can't let you go until you participate in a tradition

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00:24:36,480 --> 00:24:40,760
Speaker 1: here on the podcast, and that is sharing the craziest

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00:24:40,800 --> 00:24:43,359
Speaker 1: thing you ever saw in markets this week? Have you

436
00:24:43,359 --> 00:24:45,159
Speaker 1: noticed have you seen anything crazy you can you can

437
00:24:45,160 --> 00:24:48,199
Speaker 1: tell us about I have? Uh, you know, there's a

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00:24:48,240 --> 00:24:52,040
Speaker 1: company that's on the agenda to go public called Luck

439
00:24:52,119 --> 00:24:57,840
Speaker 1: and Coffee, and it's the fastest growing coffee um network

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00:24:58,560 --> 00:25:01,639
Speaker 1: in China and it looks like will be it's the

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00:25:01,720 --> 00:25:03,959
Speaker 1: number two now looks like it will be bigger than Starbucks.

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00:25:04,680 --> 00:25:09,320
Speaker 1: And it's amazing to see, uh the information about that.

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00:25:09,400 --> 00:25:12,920
Speaker 1: I was amazed to see in their road show that

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00:25:13,119 --> 00:25:18,680
Speaker 1: the Chinese drink coffee on the per capita only one

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00:25:18,720 --> 00:25:23,520
Speaker 1: cup every two months, compared to Americans who drink one

446
00:25:23,560 --> 00:25:27,359
Speaker 1: cup of day. We're caffeine crazy, yes and yes, and

447
00:25:27,440 --> 00:25:30,800
Speaker 1: yet they're still going to be the biggest coffee. So

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00:25:31,160 --> 00:25:34,199
Speaker 1: I will say the total available market for Luck and

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00:25:34,280 --> 00:25:37,119
Speaker 1: Coffee is pretty darn big. If you think that as

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00:25:37,160 --> 00:25:40,200
Speaker 1: soon as the Chinese get a taste of that fresh

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00:25:40,240 --> 00:25:43,400
Speaker 1: brewed roasted coffee, they're not going to drink tea anymore.

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00:25:45,040 --> 00:25:47,240
Speaker 1: That's a good one. That's a good contender for this week.

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00:25:47,520 --> 00:25:49,720
Speaker 1: All right, David, the coffee company in China is going

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00:25:49,760 --> 00:25:52,000
Speaker 1: to be tough to beat. But I have faith in

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00:25:52,040 --> 00:25:54,560
Speaker 1: you that that you can win this. This week's craziest

456
00:25:54,600 --> 00:25:56,399
Speaker 1: thing I ever saw in markets this week? What do

457
00:25:56,400 --> 00:25:59,840
Speaker 1: you got? Well? I have to say that it happened

458
00:25:59,840 --> 00:26:01,960
Speaker 1: on Sunday. We've already talked about it, and it has

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00:26:02,000 --> 00:26:05,280
Speaker 1: to be the president's tweets. UH. Coming into the weekend,

460
00:26:06,200 --> 00:26:08,520
Speaker 1: the market was feeling pretty good about itself. It was

461
00:26:08,560 --> 00:26:11,919
Speaker 1: at a new high. The Fed was basically out of

462
00:26:11,920 --> 00:26:15,560
Speaker 1: the picture. UH. First quart of corporate earnings coming in

463
00:26:15,640 --> 00:26:20,040
Speaker 1: much better than expected. We got a great UH employment number.

464
00:26:20,440 --> 00:26:22,560
Speaker 1: Everything was looking great, and there was even a rumor

465
00:26:22,600 --> 00:26:23,960
Speaker 1: in the markets that we were going to get a

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00:26:24,000 --> 00:26:26,560
Speaker 1: trade deal by this Friday. UH. And then all of

467
00:26:26,600 --> 00:26:29,399
Speaker 1: a sudden, those tweets came out and it really changed

468
00:26:29,440 --> 00:26:31,680
Speaker 1: the entire landscape. The skunk of the Garden party, I

469
00:26:32,000 --> 00:26:34,919
Speaker 1: still like that one. That's the one, Sara. I'm going

470
00:26:34,960 --> 00:26:37,439
Speaker 1: to take a lead from David and talk about what

471
00:26:37,480 --> 00:26:39,840
Speaker 1: we saw Monday, because it was pretty amazing. I mean,

472
00:26:40,080 --> 00:26:43,399
Speaker 1: the SMP five hundred opened up down about one and

473
00:26:43,440 --> 00:26:45,240
Speaker 1: a half percent, more than one and a half percent.

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00:26:45,520 --> 00:26:47,800
Speaker 1: By the end of the day, we were basically flat.

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00:26:47,840 --> 00:26:51,200
Speaker 1: Everyone was saying, oh, yes, the President tweeted, but everything's

476
00:26:51,200 --> 00:26:53,600
Speaker 1: going to be fine, it won't actually happen. Well. Right

477
00:26:53,640 --> 00:26:56,360
Speaker 1: after the market closed, we had Lightheyser come out and

478
00:26:56,400 --> 00:26:58,639
Speaker 1: he said, no, it's official. And then we saw what

479
00:26:58,720 --> 00:27:01,040
Speaker 1: happened on Tuesday and the rest of sister. Yes, it

480
00:27:01,160 --> 00:27:03,840
Speaker 1: is all right, these are good crazy things. I'll give

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00:27:03,840 --> 00:27:08,120
Speaker 1: you mine. Mine's courtesy of Joe Wisenthal's Twitter feed, which

482
00:27:08,119 --> 00:27:11,440
Speaker 1: if good. Yeah, good place to find crazy things in markets,

483
00:27:11,480 --> 00:27:13,679
Speaker 1: you know, notes of future guests if you're looking, if

484
00:27:13,680 --> 00:27:17,040
Speaker 1: you're in the market for a crazy thing. So Joe noticed, um,

485
00:27:17,680 --> 00:27:22,040
Speaker 1: the story where forty one million dollars in bitcoin was

486
00:27:22,080 --> 00:27:26,000
Speaker 1: stolen from one of these bitcoin exchanges finance. It's called

487
00:27:26,359 --> 00:27:29,560
Speaker 1: I believe It's based in Taiwan. Yet another uh, you

488
00:27:29,600 --> 00:27:33,879
Speaker 1: know this super secure, safe, transparent currency, another giant placed

489
00:27:34,320 --> 00:27:36,560
Speaker 1: forty one million. But Joe found a guy who said,

490
00:27:37,160 --> 00:27:39,040
Speaker 1: we'll look on the bright side. He said, on on

491
00:27:39,080 --> 00:27:41,600
Speaker 1: the plus side, the fee for the transfer was only

492
00:27:41,640 --> 00:27:45,120
Speaker 1: sixty eight dollars. And that's a testament to bitcoin's utility

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00:27:45,160 --> 00:27:47,960
Speaker 1: as a value transfer mechanism. So I'm gonna I'm gonna

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00:27:48,000 --> 00:27:51,200
Speaker 1: leave with that's It really gives me a lot of faith.

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00:27:51,400 --> 00:27:54,440
Speaker 1: If you want to steal forty one million in bitcoin, David,

496
00:27:54,520 --> 00:27:56,760
Speaker 1: it's only gonna cost you sixty eight bucks. That's not bad. Yeah,

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00:27:56,800 --> 00:28:03,400
Speaker 1: it's very efficient capital Mark, David, Kathy, thank you both

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00:28:03,440 --> 00:28:08,800
Speaker 1: for joining us today. We really appreciate it. What Goes

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00:28:08,880 --> 00:28:11,520
Speaker 1: Up will be back next week. Until then, you can

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00:28:11,560 --> 00:28:14,600
Speaker 1: find us on the Bloomberg Terminal website and app, or

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00:28:14,920 --> 00:28:17,520
Speaker 1: wherever you get your podcasts. We'd love it if you

502
00:28:17,600 --> 00:28:19,639
Speaker 1: took the time to rate and review the show so

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00:28:19,800 --> 00:28:22,919
Speaker 1: more listeners can find us, and you can find us

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00:28:22,920 --> 00:28:26,840
Speaker 1: on Twitter. Follow me at at Sarah Ponzack, Mike is

505
00:28:27,080 --> 00:28:31,120
Speaker 1: at Reaganonymous. What Goes Up is produced by Tobrah Foreheads

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00:28:31,119 --> 00:28:34,480
Speaker 1: the head of Bloomberg podcast as Francesco Leavie. Thanks for listening,

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00:28:34,680 --> 00:29:04,720
Speaker 1: See you next time. Eno