WEBVTT - Markets, Twitter, And The Night Effect (Podcast) 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.520 --> 0:00:15.600 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.600 --> 0:00:18.439 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:22.520 at Bloomberg dot com slash podcast. We were talking about 0:00:22.520 --> 0:00:24.800 the two year you know, bonds, and this is your 0:00:24.840 --> 0:00:28.680 Bailey Wick Matt being a German resident for so many years, 0:00:28.680 --> 0:00:32.720 but again the two year German bond fort the buond, 0:00:32.840 --> 0:00:36.360 the boon forty two basis points down twenty five basis 0:00:36.400 --> 0:00:39.720 points today just brutal. So this is perfect timing for 0:00:39.760 --> 0:00:43.880 our next guest, Pooja kumera European rate strategist at t D. Pooja, 0:00:43.960 --> 0:00:47.720 do you look at the European you know, just the 0:00:47.760 --> 0:00:53.640 German bond market. What's it telling us today? Good money? Yes, 0:00:53.680 --> 0:00:57.440 it doesn't really think that ECB high fifty basics points yesterday. 0:00:57.600 --> 0:01:00.160 I think what markets are seeing right now is that 0:01:00.640 --> 0:01:04.280 Europe cannot escape procession, and that has been seen in 0:01:04.319 --> 0:01:07.360 the last couple of weeks because we are reading more 0:01:07.480 --> 0:01:11.360 into weaker data than instation strips, and even next week 0:01:11.400 --> 0:01:13.440 when we are going to get the next euro area 0:01:13.480 --> 0:01:16.559 of dash PM MICE, I doubt see itsel up that much, 0:01:16.720 --> 0:01:21.919 just because the move is all towards the growth data 0:01:22.040 --> 0:01:26.679 I've been instation data. I think I just want to 0:01:26.680 --> 0:01:30.240 point out that we saw this morning we had more 0:01:30.360 --> 0:01:33.720 ECB headlines. Kasimir came out and said the September rate 0:01:33.800 --> 0:01:39.399 hike could be UM fifty as well, obviously or fifty UM, 0:01:39.480 --> 0:01:42.360 so I think that's what moved markets there. But even 0:01:42.400 --> 0:01:46.560 here in the U s PUJA we've seen massive moves. 0:01:46.600 --> 0:01:48.640 I mean, UM Paul and I were just looking at 0:01:48.680 --> 0:01:51.960 the ten year We're down twenty seven basis points in 0:01:52.080 --> 0:01:58.040 two sessions. What's going on? It's it's it's been horrible. 0:01:58.120 --> 0:02:01.680 I think one thing to note yesterday priced action that 0:02:01.840 --> 0:02:04.600 we saw across rates for mostly driven by a very 0:02:04.640 --> 0:02:07.120 poor liquidity because we could see a lot of block 0:02:07.240 --> 0:02:10.080 trades having that cause to move, and today's move us 0:02:10.120 --> 0:02:13.160 primarily with one of the other. We've got reeper data 0:02:13.240 --> 0:02:16.639 from Europe MS to us p M, so I think 0:02:16.960 --> 0:02:20.280 right now any reaction is anyway is getting much more 0:02:20.320 --> 0:02:25.000 exaggerated because we are heading towards the summer liquidity season 0:02:25.360 --> 0:02:29.240 and also markets somehow now we know that we are 0:02:29.320 --> 0:02:33.600 sitting the end of the hiking cycles. They know that 0:02:33.680 --> 0:02:37.040 we could see maybe a couple of big moves from 0:02:37.040 --> 0:02:40.800 our central banks bankers, but they cannot continue. And that's 0:02:40.840 --> 0:02:42.679 the kind of message that we've got from Easy to 0:02:42.680 --> 0:02:45.799 be itself. They have to move forward rate guidance that 0:02:45.960 --> 0:02:48.000 we had before. They haven't said that they will be 0:02:48.080 --> 0:02:51.880 looking for bigger calibrations with respect to rate heights or 0:02:51.880 --> 0:02:55.000 September that we had before. So September could either be 0:02:55.080 --> 0:02:58.200 twenty five, fifty or seventy five. And I think if 0:02:58.360 --> 0:03:02.000 if data continues to decree, rate market will start even 0:03:02.040 --> 0:03:04.400 thinking about twenty five, markets will think that the ECB 0:03:04.520 --> 0:03:07.120 is actually done with gritis. So I think you are 0:03:07.720 --> 0:03:10.520 we will be extremely data dependent and we could see 0:03:10.760 --> 0:03:15.720 moving much more exacuated just because there's thin liquidity. So 0:03:15.760 --> 0:03:18.640 put you know, so much news coming out of Europe 0:03:19.080 --> 0:03:22.200 this week with the ECB and what's going on in Italy. 0:03:22.320 --> 0:03:24.320 Let's focus on just real quickly on Italy here as 0:03:24.320 --> 0:03:26.480 we have a little bit of the benefit of hindsight 0:03:26.600 --> 0:03:32.079 here with drug resignation, how's that viewed within the rates market, 0:03:32.120 --> 0:03:35.120 the European rates market. It can't be good. But how 0:03:35.160 --> 0:03:38.760 much of a concern is it? It is a concern. 0:03:38.800 --> 0:03:41.440 I think markets will get much more concerned when we 0:03:41.520 --> 0:03:45.080 hit closer to the election in September. Train ships. ECB 0:03:45.320 --> 0:03:49.320 has announced to tp I tool, but first of all, 0:03:49.400 --> 0:03:52.400 this tool needs to be activated by the member states 0:03:52.440 --> 0:03:55.240 and comes with a lot of fistical conditions, so I 0:03:55.240 --> 0:03:58.360 think no member state would actually be ready to actually 0:03:58.480 --> 0:04:01.600 use it. It seems more of namesake pool right now. 0:04:01.640 --> 0:04:04.520 So I think we did see I think today's move 0:04:04.640 --> 0:04:07.880 is more of a positioning let move, but it's talent 0:04:07.920 --> 0:04:11.960 politics will start actually getting more and more attention as 0:04:12.000 --> 0:04:14.200 we had closed it to this September day, so I 0:04:14.240 --> 0:04:18.600 would actually continue to stay with the moves with respect 0:04:18.600 --> 0:04:23.039 to wideners in btpsspots, I'm I'm a bit cautious about 0:04:23.080 --> 0:04:26.360 the rally that we have seen today. All right, Puja Kuma, 0:04:26.360 --> 0:04:29.320 thank you so much for joining us, Puja Kuma, Europeans 0:04:29.520 --> 0:04:37.440 Rates strategists for a t D. Looking at the markets here, 0:04:37.560 --> 0:04:39.920 just kind of churning here. But we've got the SMP down, 0:04:39.960 --> 0:04:41.960 you know, kind of more or less. We've got the 0:04:42.000 --> 0:04:45.000 fixed income down double digits wanted to look at the 0:04:45.040 --> 0:04:47.719 corporates or treasuries. I mean, that's sixty or forty portfolio 0:04:47.880 --> 0:04:51.080 just got crushed in the first half of the year. 0:04:51.480 --> 0:04:53.160 I don't know how these people do it for a living. 0:04:53.160 --> 0:04:55.040 Brent Shooty, he does it for a living. He's a 0:04:55.120 --> 0:04:59.240 chief investment strategist at Northwestern Mutual. Brent, how do you 0:04:59.279 --> 0:05:02.440 and your team? But wait, hang on a second, Brent, Paul, 0:05:02.600 --> 0:05:05.040 you did this for a living for three decades. Yes, 0:05:05.560 --> 0:05:09.279 I still don't get longer doing it. Probably, yes, exactly. 0:05:09.279 --> 0:05:11.800 That's why I'm on the radio now. Brent. How do 0:05:11.880 --> 0:05:15.440 you and your team's kind of reset after that brutal 0:05:15.480 --> 0:05:19.039 first half of two Yeah, I guess kind of commenting 0:05:19.080 --> 0:05:21.480 on the stocks and bonds both thing down and how 0:05:21.520 --> 0:05:23.800 that's kind of I think shell shocked many investors. They 0:05:23.800 --> 0:05:26.159 shouldn't expect that to happen again. And so if I 0:05:26.200 --> 0:05:28.880 take you back to ninety six and I look at 0:05:28.920 --> 0:05:32.279 stocks and bonds, there have been twenty five periods, twenty 0:05:32.320 --> 0:05:35.520 five annual time horizons in which stocks have been negative 0:05:35.560 --> 0:05:38.720 since ninety six and bonds were positive, and all but 0:05:38.880 --> 0:05:41.599 four of those, and so you have this weird period 0:05:41.600 --> 0:05:45.560 of time beginning of two. The other three time periods 0:05:45.640 --> 0:05:48.520 or four time periods, where nineteen thirty one, the Great Depression, 0:05:48.839 --> 0:05:53.719 ninety six, nineteen sixty nine, in nineteen seventy three, besides 0:05:53.760 --> 0:05:55.960 the Great Depression, the thing that occurred in each and 0:05:56.000 --> 0:05:58.840 every one of the other ones was high inflation. And 0:05:58.839 --> 0:06:01.120 this is where we recommend people own commodities because in 0:06:01.160 --> 0:06:03.560 those other three time periods that I mentioned, besides the 0:06:03.560 --> 0:06:06.400 Great Depression and now the beginning of two, um, you've 0:06:06.400 --> 0:06:09.320 seen commodity prices rise. And so I guess two takeaways 0:06:09.320 --> 0:06:11.440 from that one you need to own some commodities as 0:06:11.480 --> 0:06:14.880 part of your long allocation. And to don't expect this 0:06:14.960 --> 0:06:17.719 to happen back to back years because it hasn't happened. 0:06:17.720 --> 0:06:19.720 It doesn't mean it can't, but it hasn't happened in 0:06:19.720 --> 0:06:22.839 the ninety other years. So are you saying, then, Brent, 0:06:22.960 --> 0:06:26.720 A portfolio is not dead. It is not dead. I 0:06:26.720 --> 0:06:29.080 think it's been declared dead about twenty seven times in 0:06:29.080 --> 0:06:32.000 my twenty seven year career. Apparently the beginning part of 0:06:32.000 --> 0:06:34.560 this year was trying. But UM, I don't think that 0:06:34.600 --> 0:06:37.279 renders it dead for just because it hasn't worked for 0:06:37.279 --> 0:06:41.159 six or some months, and what about commodities? Retail investors 0:06:41.200 --> 0:06:44.640 should get that exposure. How do you think, um, actually, 0:06:45.040 --> 0:06:50.920 you know, um trading futures or buying ETFs or a fund. 0:06:50.960 --> 0:06:52.120 What do you think is the best way for a 0:06:52.160 --> 0:06:56.839 retail investor to get pork bellies exposure? Sure probably the 0:06:56.880 --> 0:06:59.160 easiest in the most efficient way for them to get it. 0:06:59.200 --> 0:07:00.520 I don't think you need to of it. You saw 0:07:00.560 --> 0:07:02.200 what actually happened the first part of the year. How 0:07:02.240 --> 0:07:04.320 a little can go a long way. Uh, And certainly 0:07:04.360 --> 0:07:06.120 over longer periods of time, it's not going to return 0:07:06.120 --> 0:07:08.720 as much as the stock market. Um, they should get 0:07:08.760 --> 0:07:12.400 that through a diversified exposure to commodities. Perhaps something called 0:07:12.440 --> 0:07:15.720 the Bloomberg Commodities Index is kind of a decent place 0:07:15.760 --> 0:07:18.880 to think about funds tied to that. Certainly it's not 0:07:18.960 --> 0:07:21.560 as tax efficient as money, but I think, as we've 0:07:21.600 --> 0:07:24.320 seen during recent time periods when inflation is rising, it 0:07:24.360 --> 0:07:27.040 certainly helps shelter you from some of the losses that 0:07:27.080 --> 0:07:29.440 are occurring in your other parts of the portfolio. You know, Brent, 0:07:29.600 --> 0:07:32.600 when pros like you say, boy in particularly the fixed 0:07:32.640 --> 0:07:36.720 income folks say we've never seen negative returns in the 0:07:36.760 --> 0:07:38.800 fixed income markets like we saw in the first half. 0:07:38.920 --> 0:07:40.400 When I hear stuff like that, I'm like, well, I'm 0:07:40.400 --> 0:07:42.840 gonna go out and buy that stuff. But it's not 0:07:42.960 --> 0:07:45.800 the same for equities, and we're down and equities I 0:07:45.840 --> 0:07:47.440 don't feel like I have to run out and buy 0:07:47.480 --> 0:07:51.600 equities here. Um, how are you guys thinking about kind 0:07:51.640 --> 0:07:55.080 of you know, just maybe valuation or can't get any 0:07:55.120 --> 0:07:58.840 worse than than the psychology of the markets. Yeah, I mean, 0:07:58.840 --> 0:08:00.680 you've seen horrible son, I'm and I know that this 0:08:00.720 --> 0:08:02.520 week we had the Bank of America survey that everybody's 0:08:02.560 --> 0:08:05.680 in referencing, but you've seen the American Association of Individual Investors. 0:08:05.720 --> 0:08:09.000 I believe we've had uh eight sub twenty readings, which 0:08:09.080 --> 0:08:12.360 doesn't occur very often going back to and most of 0:08:12.400 --> 0:08:17.400 those have given away to positive future year. By the way, Yeah, 0:08:17.520 --> 0:08:20.960 people's emotion kind of a contraining indicator. And so I'm 0:08:20.960 --> 0:08:23.520 not suggesting it can't get any worse. It certainly could, 0:08:23.520 --> 0:08:26.040 But I do think the worst isn't on the inflation side, 0:08:26.280 --> 0:08:29.320 which I do think will help alleviate those fears, which 0:08:29.360 --> 0:08:33.320 are essentially that the economy slows but inflation doesn't. And 0:08:33.360 --> 0:08:34.959 I think the reason why the markets handled. Some of 0:08:35.000 --> 0:08:37.720 the bad news on the economic side over the past 0:08:37.760 --> 0:08:41.320 few weeks that we've seen, including today, is because inflation 0:08:41.360 --> 0:08:43.800 is starting to push lower. I think people are catching 0:08:43.800 --> 0:08:47.439 on that inflation is being driven lower. You mentioned agriculture 0:08:47.440 --> 0:08:49.520 in the beginning. I mean I talked about commodities. The 0:08:49.559 --> 0:08:52.040 irony of commodities is now they're falling just a bit, 0:08:52.080 --> 0:08:54.080 which is actually good for your stock and bond portfolio. 0:08:54.679 --> 0:08:56.680 But I think it's also good for inflation pushing forward. 0:08:56.679 --> 0:08:58.920 And I think you're gonna see inflation fall, which will 0:08:58.920 --> 0:09:01.800 allow the market to guide. The Bloomberg Commodities Index UM 0:09:01.920 --> 0:09:04.960 started the year just under a hundred. It peaked in 0:09:05.080 --> 0:09:09.800 June at UM one thirty six seven, and now we're 0:09:09.800 --> 0:09:12.880 back down to one seventeen. And it's also been a 0:09:12.880 --> 0:09:15.240 pretty good month for stocks. I mean, we started the 0:09:15.320 --> 0:09:18.040 month off at thirty and change I think on the SMP, 0:09:18.200 --> 0:09:21.040 and now we're pushing four thousand. Okay, it's a down day, 0:09:21.080 --> 0:09:25.079 but it's been a good week. UM. When markets fall 0:09:25.400 --> 0:09:30.160 twenty some percent brent, for a retail investor who's got 0:09:30.200 --> 0:09:34.400 a longer time horizon, isn't it a decent idea to 0:09:34.440 --> 0:09:36.640 go ahead and at least dollar cost average in or 0:09:36.679 --> 0:09:39.240 am I dated in that thinking? No, you're not dated. 0:09:39.240 --> 0:09:41.040 All the all the old rules of investing still work. 0:09:41.120 --> 0:09:43.240 The first one that I've mentioned to people listening in 0:09:43.320 --> 0:09:45.800 is don't sell what others are um, even if you 0:09:45.840 --> 0:09:47.559 don't want to buy, don't sell what you have. But 0:09:47.679 --> 0:09:51.000 certainly adding to your exposure during downturns, it's historically proven 0:09:51.040 --> 0:09:52.079 to be a good thing, and I don't think this 0:09:52.160 --> 0:09:54.400 time will be any different. You certainly may have to 0:09:54.480 --> 0:09:57.520 go through some uh periods of doubt about what you 0:09:57.640 --> 0:10:00.520 just did. Um, but certainly, you know, I don't think 0:10:00.520 --> 0:10:02.280 it's going to be a bad idea if you do, 0:10:02.520 --> 0:10:04.120 you know, two, three, or four five years from now, 0:10:04.120 --> 0:10:07.400 which hopefully, if you're buying stocks, you have that horizon 0:10:07.520 --> 0:10:11.000 for those to actually kind of come to fruition. Alright, 0:10:11.040 --> 0:10:15.000 good stuff. Brent Shrudy joins his chief investment strategist for 0:10:15.040 --> 0:10:18.160 Northwestern Mutual. You know, he's in Milwaukee, so that it's 0:10:18.160 --> 0:10:20.199 summertime now, it's probably like a hundred degrees there and 0:10:20.240 --> 0:10:22.319 it'll be snow on the ground in two months. He's 0:10:22.440 --> 0:10:26.600 he's the Chicago guy though NBA from University Chicago. No, Yeah, 0:10:26.679 --> 0:10:29.680 NBA from those guys work hard, they're smart, they're all 0:10:29.720 --> 0:10:32.160 about the numbers. Um. I'm more of a big picture 0:10:32.240 --> 0:10:34.839 story guy. But you know, Chicago people, you've got to 0:10:34.840 --> 0:10:38.600 be into this, like those freshwater economics come down. Yeah, exactly. 0:10:38.840 --> 0:10:44.560 All right, good stuff. Bruce Levine joins the CEO of 0:10:44.720 --> 0:10:48.400 night Shares, and we're gonna talk first, Bruce about what 0:10:48.480 --> 0:10:51.240 that is. I know that UM for a long time 0:10:51.280 --> 0:10:53.959 in crypto, it's been a good strategy to buy at 0:10:53.960 --> 0:10:55.920 the close and sell at the open, or buy on 0:10:55.960 --> 0:10:58.640 Friday and sell on Monday. Is that a similar idea 0:10:58.679 --> 0:11:02.560 behind night Shares? What's night Years? Yeah, I think there's 0:11:02.600 --> 0:11:06.959 some similarity there night chairs. Is this really with the 0:11:07.040 --> 0:11:09.600 night effect? I should say? Is this really surprising phenomenon 0:11:09.880 --> 0:11:13.640 that a very large percentage of the returns of being 0:11:13.679 --> 0:11:16.680 buy and hol they're coming through the night session, and 0:11:16.720 --> 0:11:20.520 they're coming with substantially less volatility than the daytime session. 0:11:21.040 --> 0:11:23.600 So from the risk adjested basis, it makes a lot 0:11:23.640 --> 0:11:25.800 of sense to be playing in the night session as 0:11:25.840 --> 0:11:29.920 compared with the day session. All right, So what securities 0:11:29.920 --> 0:11:35.880 in particular have a meaningful night session? If you will, Yeah, 0:11:36.000 --> 0:11:38.480 it's interesting in the night effect we found is very 0:11:38.520 --> 0:11:42.080 broad in acrey markets. It exists around the world. So 0:11:42.160 --> 0:11:45.600 if you were a Japanese investor who would buy the 0:11:45.679 --> 0:11:48.880 Japanese clothes and sell the Japanese open you'd have good 0:11:49.000 --> 0:11:51.600 risk agested returns. If you're a German investor, same thing, 0:11:52.400 --> 0:11:54.640 And um we find it at the single stock level. 0:11:55.920 --> 0:11:59.320 But what we've decided to launch is to broad based 0:11:59.320 --> 0:12:02.840 indexes give you this night effect essentially in the large 0:12:02.840 --> 0:12:07.600 cap in the small cap space. So how many et 0:12:07.800 --> 0:12:09.600 s do you think you're inna launch and how long 0:12:09.679 --> 0:12:13.439 is it this going to take? Yeah, So just to 0:12:13.480 --> 0:12:15.320 give a sense of you know, kind of what I'm 0:12:15.320 --> 0:12:20.439 talking about and why we launched these, Uh, we were 0:12:20.480 --> 0:12:23.480 getting returned in the large cap space, let's say over time, 0:12:23.920 --> 0:12:27.480 you were getting maybe the return coming in the night session, 0:12:28.160 --> 0:12:33.600 and the volatility of that being uh maybe fifty of 0:12:33.679 --> 0:12:36.360 buy and hold. So again nice risk of just returns. 0:12:36.679 --> 0:12:41.400 We saw something really amazing and small caps where the 0:12:41.480 --> 0:12:44.199 daytime return on the Russell two South over a long 0:12:44.240 --> 0:12:46.920 period of times was either negative or just about flat. 0:12:47.000 --> 0:12:50.360 So all of the return was coming in the night session. 0:12:50.559 --> 0:12:53.280 So so the two that we launched so far are 0:12:53.400 --> 0:12:59.000 the end spy, So think of a night spy. Uh, 0:12:59.080 --> 0:13:01.800 and then that also playing on the ticker and the 0:13:02.440 --> 0:13:04.679 heavily traded russell to E T F I, w M 0:13:04.880 --> 0:13:07.199 D and w M. So those are the first two. 0:13:08.040 --> 0:13:10.920 We have four more in registration and we'll see what 0:13:11.000 --> 0:13:14.320 happens over time. But we think it's a really interesting 0:13:14.320 --> 0:13:16.880 concept that's never been done in ets before. So have 0:13:17.040 --> 0:13:19.760 these two E T s have you launched them? And 0:13:19.800 --> 0:13:23.199 if so, kind of what's the interest been. Yeah, so 0:13:23.280 --> 0:13:26.160 we launched them on JU and I'd say we're getting 0:13:26.160 --> 0:13:28.720 a really good reception. People are very interested in the concept. 0:13:29.200 --> 0:13:30.839 They're trying to figure out how to blend them into 0:13:30.880 --> 0:13:34.320 their portfolios. And you know, we're just out there telling 0:13:34.360 --> 0:13:36.439 our story in the down days of summer that we're 0:13:36.440 --> 0:13:39.600 getting a good responsible. But do you expect to focus 0:13:39.679 --> 0:13:42.360 on equities? I mean, I type E T F go right, 0:13:42.600 --> 0:13:45.559 and um, I can put in night shares if I 0:13:45.720 --> 0:13:48.600 leave it on equity. I see these, but then I'm 0:13:48.640 --> 0:13:51.360 reminded you could be doing bonds, you could be doing commodities, 0:13:51.400 --> 0:13:53.400 you could be Because of my experience in crypto, I 0:13:53.480 --> 0:13:57.199 see that it's worked across asset classes. Yeah, I know 0:13:57.280 --> 0:14:01.280 it is so now it's equities, and part of that 0:14:01.480 --> 0:14:04.800 is just the operational complexities of actually doing this. So 0:14:05.559 --> 0:14:08.800 you know, cryptos obviously there's no cryptos being traded in 0:14:08.880 --> 0:14:12.800 et F format period other than the futures um you 0:14:12.880 --> 0:14:16.240 know with UH commodities is a good example where we 0:14:16.360 --> 0:14:18.160 have looked at it. That's something you might look at 0:14:19.760 --> 0:14:22.280 on the bond side that you get some interesting results 0:14:23.560 --> 0:14:27.560 on the on the high yield side, it tends to 0:14:27.600 --> 0:14:29.960 look a little bit like equities that kind of returns. 0:14:30.120 --> 0:14:33.680 Yet and sometimes on treasuries you get the opposite of 0:14:33.720 --> 0:14:35.960 the night effect, which is when people are going out 0:14:36.000 --> 0:14:38.560 of the equities to get flat at the end of 0:14:38.600 --> 0:14:41.960 the day, um, they're going into treasuries. So so we're 0:14:42.000 --> 0:14:44.920 looking at all that. It's really interesting. Are you looking 0:14:44.960 --> 0:14:47.560 also at crypto Bruce, mean, do you have you know, 0:14:47.680 --> 0:14:51.000 like SEC news alerts on your phone just in case 0:14:51.120 --> 0:14:57.160 they do approve of crypto e t f UM Not yet, 0:14:57.320 --> 0:15:01.040 but you know, we're we're we're just doubt there on 0:15:01.120 --> 0:15:03.560 the equity side started we're starting down the path here, 0:15:03.600 --> 0:15:06.480 so we will make sure to put that crypto alert 0:15:06.520 --> 0:15:08.440 on our phone. It's it's interesting that in such a 0:15:09.080 --> 0:15:11.600 difficult year for I p O s, you know, no 0:15:11.760 --> 0:15:16.320 new issues and UM and for the market in general, 0:15:17.080 --> 0:15:22.320 E t F introductions have still been pretty strong this year, 0:15:22.480 --> 0:15:26.120 right ye have. But I think I heard a statum 0:15:26.120 --> 0:15:28.440 about two and the sifty new funds this year, you know. 0:15:28.480 --> 0:15:31.560 I think what you're seeing is two things. One is, 0:15:32.840 --> 0:15:35.440 most of the innovation and asset management in my opinion, 0:15:35.680 --> 0:15:38.760 comes through the et F structure these days. That seems 0:15:38.800 --> 0:15:41.560 to be the preferred vehicle for most investors. The second 0:15:41.600 --> 0:15:44.920 thing you're you're seeing is you've seen the mutual fund 0:15:44.960 --> 0:15:49.640 industry really um embrace the E t F vehicle, and 0:15:49.720 --> 0:15:51.720 so you've seen conversion. Then you've seen some of the 0:15:51.800 --> 0:15:54.360 traditional folks get into the industry for the first time. 0:15:54.400 --> 0:15:55.920 So it's driving a lot of product launch. It took 0:15:55.960 --> 0:15:59.880 them long enough. So Bruce, you're at I Shares, Black Rocks. 0:16:00.000 --> 0:16:01.920 Selection of e t F s give us a sense 0:16:01.960 --> 0:16:04.000 of just how the et F space it's kind of 0:16:04.120 --> 0:16:07.880 evolved over time, and is it a good attractive area 0:16:07.960 --> 0:16:10.080 to look at today. It's kind of a duopoly, right 0:16:10.120 --> 0:16:15.040 with I mean, I Shares and Vanguard are the two 0:16:15.200 --> 0:16:19.160 biggest shops on the street. They are and they take 0:16:19.240 --> 0:16:21.640 in you know, the lion's share of the money, and 0:16:21.720 --> 0:16:24.520 they do it in the more traditional et f that 0:16:24.560 --> 0:16:26.920 were launched twenty five years ago. You know, I launched 0:16:27.000 --> 0:16:31.080 actually a number of them, and you know that if 0:16:31.120 --> 0:16:33.600 you take some of the flows away from them, it's 0:16:33.640 --> 0:16:36.440 still pretty large numbers. It's still a growth industry and 0:16:36.680 --> 0:16:39.120 there's always room for innovation. You have seen some good 0:16:39.160 --> 0:16:43.000 things happening from some of the smaller firms, and you know, 0:16:43.040 --> 0:16:46.160 I expected to just continue to be the center of 0:16:46.200 --> 0:16:50.040 innovation and asset management. All right, So you have an 0:16:50.040 --> 0:16:52.200 affinity here. I'm just looking at kind of your CV. 0:16:52.280 --> 0:16:57.320 You have affinity for Charlottesville, Virginia, University of Virginia undergrad 0:16:57.760 --> 0:17:00.640 and then you get the NBA at the Darden School 0:17:00.720 --> 0:17:02.720 of Business, and I was considering going there. That was 0:17:02.800 --> 0:17:05.040 my choice between Duke and Virginia. But you know what, 0:17:05.200 --> 0:17:08.000 the people Bruce at Darden, they just worked too hard. 0:17:08.840 --> 0:17:13.680 You guys really worked hard at doing that case stuff, right, Yeah, 0:17:13.800 --> 0:17:17.000 we the series Lament. The type of the law school 0:17:17.000 --> 0:17:18.919 which was right across from us is really playing softball 0:17:18.960 --> 0:17:22.920 while we're working on our cases. But um, now I 0:17:23.040 --> 0:17:26.000 have a greater finishing Charlotte, Like you said, it's a 0:17:26.000 --> 0:17:28.200 great place. You know. I was down there Matt for 0:17:28.320 --> 0:17:30.680 my tour and they were just telling me how hard 0:17:30.760 --> 0:17:32.840 they worked. And I was literally getting off a stretch 0:17:32.880 --> 0:17:35.200 of like twenty seven days straight work, you know, as 0:17:35.240 --> 0:17:38.199 an investment banking analyst, scrub analyst. And the last thing 0:17:38.280 --> 0:17:41.160 I wanted to hear was we worked the hardest. Yeah. 0:17:41.200 --> 0:17:44.080 So I went to Duke and had a phenomenal two years. 0:17:44.200 --> 0:17:46.480 And so all right, Bruce, thanks so much for joining us. 0:17:47.000 --> 0:17:49.440 Bruce Levine, CEO of Night Shairs, I didn't know this 0:17:49.600 --> 0:17:52.560 night trading thing was a thing. Yeah, it's huge, and 0:17:53.240 --> 0:17:55.760 um it's amazing if you look at the charts, because 0:17:55.840 --> 0:17:58.399 you don't expect it to be as successful as it is, 0:17:58.960 --> 0:18:02.240 and then I guess it would be laborious. Um well, 0:18:02.440 --> 0:18:05.000 from my perspective, maybe the kids could write code for it, 0:18:05.119 --> 0:18:07.520 but obviously in E t F just makes it easier 0:18:07.760 --> 0:18:14.280 and keeps the cost down. Where you go to Man Deep, 0:18:14.400 --> 0:18:16.000 because we need to get smart here on the social 0:18:16.080 --> 0:18:22.199 media named snap down thirty, uh pinterest down twelve, Twitter 0:18:22.359 --> 0:18:24.720 also a down, So Man Deep seeing he covers technology 0:18:24.760 --> 0:18:27.520 for Bloomberg Intelligence. Man Deep, is this some of this 0:18:27.640 --> 0:18:30.320 week just we're seeing some of these smaller social media names. 0:18:30.400 --> 0:18:32.879 Is it just because they're not players and we need 0:18:32.920 --> 0:18:37.560 to really wait for the facebooks and the Google's next week? Yes, 0:18:37.720 --> 0:18:41.440 and uh, I think what it shows is that not 0:18:41.840 --> 0:18:44.720 everything in ad spending is going to be cut. So 0:18:45.160 --> 0:18:49.080 if companies are looking at their discretionary versus you know, 0:18:49.280 --> 0:18:55.000 essential ad spend, So in the discretionary bucket, probably snap Pinterest, 0:18:55.320 --> 0:18:59.440 the smaller social media platform sofall as opposed to the 0:18:59.560 --> 0:19:03.280 non stationary where you Google search spend is probably the 0:19:03.440 --> 0:19:06.399 last thing to be cut. So I think that's what 0:19:06.600 --> 0:19:09.119 the market is hinting at. But who knows, maybe Google 0:19:09.280 --> 0:19:13.080 disappoints as well. It's very unlikely. And you know, the 0:19:13.200 --> 0:19:17.840 valuation multiples have compressed a lot in anticipation, so I 0:19:18.240 --> 0:19:21.439 think even if the report an inline quarter, you are 0:19:21.480 --> 0:19:24.680 going to see the stock will be up. So uh yeah, 0:19:24.840 --> 0:19:27.119 I I think a lot has already priced in in 0:19:27.280 --> 0:19:32.200 terms of weakness. Man, deep, why does um Snapchat have 0:19:32.440 --> 0:19:35.120 the power to move the market. I mean, it's wiped out. 0:19:35.160 --> 0:19:39.480 I think eighty billion dollars in social media market cap, 0:19:39.600 --> 0:19:42.920 but it's not even worth eight billion dollars itself. And 0:19:44.040 --> 0:19:46.879 I didn't even really know people still used it. I 0:19:46.960 --> 0:19:49.400 remember back in the day the idea was college kids 0:19:49.480 --> 0:19:52.960 could text each other and it would disappear or something. 0:19:53.200 --> 0:19:57.320 But is it still like a big deal. Well, so 0:19:57.720 --> 0:20:01.280 they still have around three forty and daily active users. 0:20:01.400 --> 0:20:04.000 So when you start looking at you know a number 0:20:04.040 --> 0:20:07.040 of platforms that have got over two hundred million daily 0:20:07.080 --> 0:20:10.960 active users, you can it's probably you know, less intent 0:20:11.200 --> 0:20:14.359 at this point of time. So clearly they have that 0:20:14.680 --> 0:20:18.159 user base. Now their engagement seems to be falling, and 0:20:18.400 --> 0:20:21.359 part of that has to do with competition from TikTok. 0:20:21.920 --> 0:20:26.200 But at the same time, the advertisers are pulling back 0:20:26.960 --> 0:20:30.119 because they just don't seem to get the r Y 0:20:30.240 --> 0:20:33.200 they were getting before. And that is the big change. 0:20:33.240 --> 0:20:37.879 Because Apple's privacy changes has really heard the r o 0:20:38.080 --> 0:20:41.879 I on ad spending for some of these platforms, and uh, 0:20:42.400 --> 0:20:45.200 I think that is the big change. I mean, doesn't 0:20:45.200 --> 0:20:48.679 warrant eighty billion dollar route in terms of the market 0:20:48.760 --> 0:20:52.200 cap of all these companies, I don't think so. But 0:20:52.960 --> 0:20:56.280 clearly there's a lot of uncertainty around how much those 0:20:56.400 --> 0:20:59.800 changes would affect the large companies like Alphabet and Matter. 0:21:00.000 --> 0:21:02.200 All right, well, Snap has a market cap at of 0:21:02.320 --> 0:21:04.800 sixteen point eight billions, a little bit bigger than that, 0:21:04.960 --> 0:21:08.280 but nothing relative to the Facebook's and Google. So thirty seconds, 0:21:08.359 --> 0:21:10.000 Man Deep, what's the key thing we should look for 0:21:10.160 --> 0:21:15.040 from those big companies next week? Facebook and Google? Yeah, 0:21:15.119 --> 0:21:19.080 direct response adds because those are the ones directly hit 0:21:19.240 --> 0:21:23.200 by Apple's privacy changes. If Meta can show you know, 0:21:23.600 --> 0:21:26.520 even an inline quarter, the estimates have been devised the 0:21:26.520 --> 0:21:29.200 lower by ten percent if they report an inline quarter, 0:21:29.720 --> 0:21:32.480 I think I thinks those stabilized. All right, Man Deep, 0:21:32.520 --> 0:21:35.320 good stuff. As always appreciate your phone in it in 0:21:35.520 --> 0:21:37.680 from home. But I see him here. He's here all 0:21:37.680 --> 0:21:39.480 the time too, So he's one of those guys A feeling. 0:21:39.560 --> 0:21:41.760 He also works very hard from home. This is you 0:21:41.840 --> 0:21:45.280 know the debate, right, do people are they pretending to 0:21:45.359 --> 0:21:47.639 work from home? As Elon Musk says, or as we 0:21:47.760 --> 0:21:51.800