WEBVTT - NYSE President Lynn Martin Talks Market Volatility

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Also joining us now on set is Lynn Martin. Of course,

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<v Speaker 2>she is the Nicey Group president the New York Stock Exchange.

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<v Speaker 2>You are so connected to the broader corporate community. What

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<v Speaker 2>was this morning like wake? I mean, frankly, you had

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<v Speaker 2>news will he won't hear? A lot of uncertainty up

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<v Speaker 2>to this moment. What is everyone saying? Yeah?

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<v Speaker 3>I mean we were watching it closely yesterday as you

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<v Speaker 3>saw the market sell off, particularly in the afternoon, as

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<v Speaker 3>it appeared that tarrifts were going to be imposed. But

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<v Speaker 3>you never know until something is implemented if the rumors

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<v Speaker 3>are true or if he would carry that out. I

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<v Speaker 3>think it comes down to looking at the overall state

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<v Speaker 3>of our US economy, and if you think of the

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<v Speaker 3>president's core three objectives their border security, resolving geopolitical conflicts,

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<v Speaker 3>and the the US economy, and I think what you're

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<v Speaker 3>starting to see is the confluence of those three objectives

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<v Speaker 3>start to come about in market.

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<v Speaker 4>Is that going to result in slower growth? I mean,

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<v Speaker 4>is we've been talking for weeks about part of the

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<v Speaker 4>plan to get inflation down is lower aggregate demand. Right,

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<v Speaker 4>you drive the economy into a recession, then you won't

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<v Speaker 4>have a price problem. It does look like the market

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<v Speaker 4>is worried about a growth scare.

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<v Speaker 3>Well, I think if you look at the key indicators,

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<v Speaker 3>so first just take two steps back. No one hipanic.

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<v Speaker 3>There is volatility in markets. Markets go up and markets

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<v Speaker 3>go down. And if you look at two of the

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<v Speaker 3>key economic indicators, you look at the Dow and the

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<v Speaker 3>S and P, those levels are still at above pre

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<v Speaker 3>election levels. If I look at where both of those

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<v Speaker 3>indices closed on election night, where they are today is

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<v Speaker 3>still above. So your recall that there was a post

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<v Speaker 3>election ephoria, if you will, and now years of the

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<v Speaker 3>market may be recalibrating. But as the day progresses, as

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<v Speaker 3>the weeks progress, there's no reason to assume that the

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<v Speaker 3>markets are only going to move downwards. They could absolutely

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<v Speaker 3>move upwards, particularly if we start to consider the revenue side.

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<v Speaker 4>Right, we should point out that the levels we saw

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<v Speaker 4>on the close of November fifth fifty seven eighty two

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<v Speaker 4>on the S and P five hundred, so we're still

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<v Speaker 4>above fifty eight hundred to your point, and the Nasdaq

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<v Speaker 4>closed it two hundred twenty seven, so we're still above

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<v Speaker 4>that as well. Well.

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<v Speaker 1>To put that in percentage terms the S and P

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<v Speaker 1>five hundred. It's still higher by about one point six

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<v Speaker 1>percent on a total return basis since election day, but

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<v Speaker 1>we know that it's come down mightily. There's a lot

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<v Speaker 1>of volatility in this market as we really center our

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<v Speaker 1>focus on tariffs. That is the topic for investors right now,

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<v Speaker 1>and we were expecting to see a more robust IPO landscape,

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<v Speaker 1>sort of marrying together the M and A landscape and

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<v Speaker 1>the IPO landscape, but we haven't quite seen that yet. Lynn,

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<v Speaker 1>during what the trickle down effect from tariffs, the volatility

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<v Speaker 1>in the markets to your IPO business looks like.

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<v Speaker 3>So I think it's important to consider that during this

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<v Speaker 3>time of year, many pre public companies, many private companies,

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<v Speaker 3>their financials go still, so they're in the process of

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<v Speaker 3>restating their financials. We're still gearing up for an active

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<v Speaker 3>Q two from an IPO perspective, which depending on how

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<v Speaker 3>those deals go, we think will inform the way that, yes,

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<v Speaker 3>the rest of the year will will progress. But we

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<v Speaker 3>still have a very active pipeline and we're still working

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<v Speaker 3>with a variety of companies to come out in the

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<v Speaker 3>next few months.

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<v Speaker 4>Are you seeing companies rush to market, do they want

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<v Speaker 4>to get there quickly before maybe this trade war develops further.

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<v Speaker 3>I think every company is considering where they are in

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<v Speaker 3>their own evolution. Are they profitable, do they have a

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<v Speaker 3>good story to tell? Have they used this time while

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<v Speaker 3>they've been raising money and the private markets to refer

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<v Speaker 3>the strategy to bring about a more deliberate P and

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<v Speaker 3>L one that's more focused on a few strategic areas.

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<v Speaker 3>So it's really down to a company to decide is

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<v Speaker 3>it the right time to go public. The markets have

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<v Speaker 3>been open for the last few years, which most people

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<v Speaker 3>don't want to talk about. And if I look at

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<v Speaker 3>the IPOs that occurred on the New York Stock Exchange

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<v Speaker 3>last year in the secondary market, they grew fifty eight percent.

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<v Speaker 3>So the market is there for companies to go when

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<v Speaker 3>they're ready to go, when they have a good story

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<v Speaker 3>to tell.

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<v Speaker 2>So what about the vis you know you look at

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<v Speaker 2>slowly starting to take hire. We're at a twenty three

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<v Speaker 2>handle just this morning. They are not alarming levels by

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<v Speaker 2>any means, but you can see there just you're to date,

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<v Speaker 2>we are a lot higher than where we started. Is

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<v Speaker 2>there a level in of the VIX that would start

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<v Speaker 2>to stifle that pipeline that you're talking about.

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<v Speaker 3>For Q it's generally around twenty, but recall that there

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<v Speaker 3>have been some large companies that have gone in the

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<v Speaker 3>last year two years where the VIX has been above twenty,

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<v Speaker 3>well above twenty for sustained periods of time. Again, don't

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<v Speaker 3>look at the data on just one day. Just take

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<v Speaker 3>a breath and look at the long term trends of

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<v Speaker 3>the market.

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<v Speaker 1>That's a really interesting point on the vis it seems

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<v Speaker 1>like the one year average is about sixteen, so we're

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<v Speaker 1>not quite there, but certainly seeing a lot of volatility.

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<v Speaker 1>This specific morning, I want to talk about somewhere where

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<v Speaker 1>we've seen a bit of a bright spot for US exchanges,

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<v Speaker 1>and that is companies switching their listings from abroad and

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<v Speaker 1>coming into the US market. It's been a popular sort

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<v Speaker 1>of trend that we've seen emerge over the past couple

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<v Speaker 1>of years. Talk to us about what you see in

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<v Speaker 1>that sort of pipeline, if you want to call it that.

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<v Speaker 3>Yeah, I mean, I think what has shown over the

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<v Speaker 3>last couple of years is the breath depth liquidity of

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<v Speaker 3>the US markets. The US markets are the Enva of

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<v Speaker 3>the world, and over the last few years they've really

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<v Speaker 3>shown why. Given the growth in the US markets, we've

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<v Speaker 3>welcomed a variety of companies who have transferred their listings

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<v Speaker 3>out of domestic markets in Europe and the UK, specifically

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<v Speaker 3>Flutter Croch, and they've seen a notable appreciation in their valuations.

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<v Speaker 1>Absolutely, yeah, better liquidity, higher multiples you can command over

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<v Speaker 1>in the US. Seems like a good deal. Lynn, We

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<v Speaker 1>have to leave it there. It's so great to kick

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<v Speaker 1>off our invest with you. That is Lynn martinstrab is

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<v Speaker 1>the president of the NISI Group.