About this transcript: This is a full AI-generated transcript of Open Interest 10/19/2026 from Bloomberg Television, published October 20, 2026. The transcript contains 14,770 words with timestamps and was generated using Whisper AI.
"WHAT WAS THAT LAST WEEK? WE REBOUND TO START THE WEEK. IT IS ONLY 30 MINUTES UNTIL THE START OF YOUR CASH EQUITY TRADE. I'M DANNY BURGER. AND I'M EMILY GRAFFEO. BLOOMBERG OPEN INTEREST STARTS RIGHT NOW. COMING UP ON TODAY'S SHOW, MARKETS BRACE FOR VOLATILITY AS INFLATION FEARS RISE AND META..."
[00:00:00] Speaker 1: WHAT WAS THAT LAST WEEK? WE REBOUND TO START THE WEEK. IT IS ONLY 30 MINUTES UNTIL THE START OF YOUR CASH EQUITY TRADE. I'M DANNY BURGER. AND I'M EMILY GRAFFEO. BLOOMBERG OPEN INTEREST STARTS RIGHT NOW. COMING UP ON TODAY'S SHOW, MARKETS BRACE FOR VOLATILITY AS INFLATION FEARS RISE AND META HEADLINES A MASSIVE EARNINGS
[00:00:26] Speaker 2: INFLATION. THAT IS A LITTLE BIT.
[00:00:31] Speaker 1: IT IS A LITTLE BIT OF LAST WEEK. INVIDIA WANTS A $30 BILLION VALUATION BUT INVESTORS SAY IT MAY BE WORTH FAR LESS. THE RUPTURE DEEPENS.
[00:00:43] Speaker 2: TRUMP IS PRESSURING UKRAINE TO GIVE GROUND AS RELATIONS HIT A NEW LOW. EMILY, WHAT ARE YOU LOOKING AT? I'M LOOKING AT SOME RELIEF FOR THE AI TRADE THIS MORNING. AFTER LAST WEEK'S SHARP SELL-OFF, WE HAVE A LITTLE BIT OF A INVESTORS ARE DEEPING BACK INTO THOSE BEATEN DOWN CHIP NAMES.
[00:01:00] Speaker 1: FINALLY WE CAN BREATHE THIS MORNING. I'M ALSO LOOKING AT SPACEX THIS MORNING BECAUSE ELON MUSK SAYS HE PLANS TO GIVE EVERY CHILD IN AMERICA ONE OF HIS SHARES. HE HASN'T EXACTLY LAID OUT HOW THAT WOULD WORK. WE HAVE SPACEX EARNINGS THIS WEEK. THAT PLEDGE IS ALSO COMING AFTER ANTHROPIC SAID IT WOULD SET ASIDE A PORTION OF ITS SHARES FOR
[00:01:20] Speaker 2: THE PUBLIC BENEFIT. SET TO REPORT THIS WEEK. INVESTORS WILL HEAR FROM NETFLIX, TESLA, META AND IBM THIS WEEK. JOINING US NOW IS BLOOMBERG EQUITIES REPORTER CARMEN REINEKE TO TALK ABOUT ALL OF THIS EARNINGS VOLATILITY. CARMEN, GOOD TO SEE YOU THIS MORNING. TRADERS EXPECT MORE VOLATILITY.
[00:01:42] Speaker 3: TALK US THROUGH THE SETUP GOING INTO SOME OF THESE KEY EARNINGS. IT HAS BEEN PRETTY INCREDIBLE. I WAS READING THIS GREAT PIECE OVER THE WEEKEND. THERE WERE MORE THAN 50 INVESTORS. WE GOT TWO LAST WEEK. WEDNESDAY AND FRIDAY, MORE THAN 1% DROPS ON THE S&P 500. HUGE ROTATION IN THE AI NAMES. A LOT OF JITTERS IN THAT SPACE WHICH HAS BEEN HOLDING UP THE BROADER MARKET. GOING INTO THIS EARNINGS SEASON, WHAT I HAVE BEEN HEARING FROM INVESTORS AND PEOPLE THAT ARE WATCHING THESE EARNINGS IS THAT THEY ARE LOOKING AT CAPEX SPENDING, MAYBE MORE EVEN THAN ROI THIS TIME AROUND. WE NEED TO KNOW THAT THESE COMPANIES ARE EXPECTING TO CONTINUE TO SPEND TO PROP UP THE HUGE INFRASTRUCTURE BUILDOUT THAT IS GOING ON.
[00:02:26] Speaker 1: AND AGAIN, TWO HUGE SPENDERS BETWEEN SPACE X AND META. I WAS LOOKING AT DATA THAT SHOWED THAT 48% OF GLOBAL EARNINGS GROWTH THIS YEAR IS FROM TECHNOLOGY. THAT GROWS TO 68% NEXT YEAR. CAN YOU TALK ABOUT NOT ONLY HOW IMPORTANT THESE COMPANIES ARE FOR THE WIDER TECH LANDSCAPE BUT LITERALLY FOR THE AMERICAN EQUITY MARKET?
[00:02:45] Speaker 3: AS YOU JUST SAID, THEY ARE THE ENGINE, THE EARNINGS ENGINE THAT IS POWERING PRETTY MUCH EVERYTHING. IT IS WHERE ALL THE EARNINGS GROWTH IS HAPPENING AND THAT EVEN JUST SPILLS OVER INTO OTHER PARTS OF THE SPACE. THAT IS HOW WE ARE GETTING THE AI INFRASTRUCTURE BUILDOUT, OR THE INFRASTRUCTURE NAMES THAT HAVE DONE SO WELL. IT IS BECAUSE THESE BIG HYPERSCALERS ARE SPENDING IN THOSE COMPANIES. IT IS INCREDIBLY IMPORTANT. WE ARE GOING TO BE POISED TO SEE WHAT HAPPENS IF THIS SPENDING CONTINUES AND HOW INVESTORS REACT TO IT. WE HAVE SEEN A FEW EARNINGS SEASONS NOW WHERE INVESTORS ARE VERY -- THERE IS A HIGH BAR FOR THESE COMPANIES TO MEET. THEY CAN BE VERY PICKY.
[00:03:26] Speaker 1: IT IS GOING TO BE INTERESTING GOING INTO THE NEXT FEW WEEKS. THANK YOU VERY MUCH. WE ARE GOING TO STICK WITH AI BECAUSE NVIDIA IS FACING CHALLENGES AHEAD OF ITS IPO. THE COMPANY IS VALUATION OF $30 BILLION IS NOW BEING QUESTIONED. INVESTORS ARE SUGGESTING A RANGE BETWEEN $16 AND $19 BILLION INSTEAD. THE FIRM SAW MICROSOFT PULL OUT OF A DATA CENTER DEAL IN ESSEX. LET'S BRING IN BLOOMBERG TECH HOST ED LUDLOW. ED, HOW MUCH OF THIS IS ABOUT N-SCALE AND QUESTIONING OF THEIR BUSINESS VERSUS GENERAL MARKET SENTIMENT AROUND AI AND THE
[00:03:58] Ed Ludlow: NEO CLOUDS? I WANT TO TALK TO THEIR BUSINESS. I WANT TO TALK TO THEIR BUSINESS. THEIR BUSINESSES ARE STILL UNDER PRESSURE. I GET THIS MORNING IN THE MOMENT THERE IS A SMALL REPRIEVE. CORWEAVE IS PUSHING HIGHER ON AN UPGRADE. IT HAS BEEN A ROUGH FIVE DAYS PRIOR TO THAT. THERE IS A GROUP OF INVESTORS. IT IS NOT A UNIVERSITY HELD BELIEF THAT SOMEWHERE BETWEEN $16 AND $19 BILLION IS MUCH MORE REALISTIC IN PART BECAUSE AT THAT VALUATION, THAT GROUP OF INVESTORS THINK THEY WILL FIND BUYERS AT AN IPO. OUTSIDE OF THE BIGGER PICTURE OF THEIR FIELD, THIS IS A COMPANY THAT FILED PUBLICLY SEPTEMBER 18TH AND IS STILL GOING THROUGH COMMENTS WITH THE SEC. SO WE ARE NOT EVEN QUITE THERE YET ON THE FORMAL MARKETING OF THE IPO. IT IS TRICKY, IT SEEMS, FOR THEM TO MANAGE THE ENVIRONMENT THAT THEY ARE IN, BUT SETTING A LOWER BAR AND BEING MORE CONSERVATIVE IS WHAT THEY ARE BEING PUSHED TO DO.
[00:04:50] Speaker 2: YOU MENTIONED IPOs, WE DO HAVE THE ANTHROPIC IPO COMING UP, AND NOW THE COMPANY ANNOUNCING THIS TYPE OF PUBLIC BENEFIT FUND. WHAT DOES THIS REALLY MEAN? IS THIS JUST ANTHROPIC TRYING TO GET ON THE PUBLIC'S GOOD SIDE BEFORE THEY OFFER THEIR SHARES?
[00:05:04] Ed Ludlow: WHEN THE COMPANY WAS FOUNDED, THE FOUNDERS SAID THAT THEY WOULD GIVE AWAY 80% OF THEIR EQUITY ANYWAY. SO IT'S KIND OF BEEN A LONG-STANDING PRINCIPLE FOR THAT GROUP OF FOUNDERS OF THE COMPANY. IT'S INTERESTING BECAUSE THEY FORMED AN LLC TO BE THE ENTITY THAT OVERSEES THIS. SO YOU HAVE 5% OF SHARES THAT GO INTO THE FUND TO BE DISTRIBUTED DIRECTLY TO THOSE IMPACTED BY AI. SO, YOU KNOW, JOB DISPLACEMENT CASE STUDIES TO DO RESEARCH INTO AI'S IMPACT ON THE ECONOMY. AND THEN THE BOARD HAS DISCRETION TO TOP THAT UP 2% OF SHARES OUTSTANDING IF THEY HIT A 50% BOOST IN VALUATION FROM AN UNDISCLOSED BASELINE. SO WE DON'T REALLY KNOW WHERE THEY'RE GOING. BUT IF YOU JUST TAKE ANTHROPIC'S PRIVATE VALUATION FROM MAY, $965 BILLION, AT 5%, YOU'RE TALKING ABOUT A FUND WORTH ABOUT 48 BILLION, WHICH CAN ALSO BE DISTRIBUTED INTERNATIONALLY, WHICH IS INTERESTING. SO THERE ARE SOME MECHANICS THERE, BUT THEY SAY THEY'LL FILL THE GAPS. A CONCERN AN INVESTOR MIGHT HAVE, RIGHT, IS WHERE DO THESE SHARES COME FROM? THE 5% AND ANY TOP UP FROM THE BOARD, LIKE, IS THE EXPECTATION THAT THEY JUST CONSTANTLY ISSUE NEW EQUITY TO MEET THOSE PUBLIC BENEFIT OBLIGATIONS? OR IS THERE EXPECTATION THAT EXISTING SHAREHOLDERS WILL BE HAPPY TO SELL TO ACCOMMODATE FOR THE MECHANISM? BUT THERE IS SOME DETAIL THERE, AND IT'S INTERESTING. A LOT OF PEOPLE ARE READING ABOUT IT THIS MORNING.
[00:06:21] Speaker 1: IT IS, AND I HAVE TO SAY THERE FEELS TO BE THIS BIT OF IRONY, BECAUSE A LOT OF THESE LLM CEOS HAVE TRIED TO BACK TRACK ON THIS IDEA THAT IT WOULD BE HUGELY DISRUPTIVE TO THE JOBS MARKET ON ONE HAND, AND ON THE OTHER HAND SAYING, IF YOUR JOB IS GOING TO DISRUPT, WHICH WE ARE, WE'RE GOING TO GIVE YOU SOME SHARES AND HELP BENEFIT YOU. TO EMILY'S POINT, HOW MUCH OF THIS IS JUST AI HAS A PUBLIC IMAGE PROBLEM, AND THESE COMPANIES ARE THROWING WHATEVER AGAINST THE WALL, HOPING SOMETHING STICKS?
[00:06:46] Ed Ludlow: ANTHROPIC PUT LIKE $200 MILLION INTO RESEARCH AROUND THE IMPACT OF AI ON THE ECONOMY. SO A FUND WHICH AT LEAST IN PART IS USED TO HELP PEOPLE WHOSE JOBS HAVE BEEN LOST FROM AI, AND THAT FUND BEING $48 BILLION, YOU KNOW, ON PAPER IT REPRESENTS A PRETTY BIG STEP UP IN THE COMMITMENT TO ADDRESS THAT ISSUE. BUT AGAIN, YOU KNOW, THE INTERESTING LEGAL PART OF THIS IS THEY'VE SET UP AN LLC TO DO IT, A WHOLELY OWNED LLC, RATHER THAN IT BEING, YOU KNOW, A SORT OF CHARITABLE STATUS IN AND OF ITSELF. I THINK THAT THOSE FOUNDERS, AGAIN, WOULD ARGUE LOOK AT WHAT THEY DID WHEN THEY SET UP THE FIRM, THE COMPANY, AND NOW THEY WOULD SAY THEY'RE BEING CONSISTENT.
[00:07:23] Speaker 2: ALL RIGHT, OUR THANKS TO BLOOMBERG TECH HOST ED LUDLOW. NOW THIS MORNING, JAMIE DIMON CALLED WAR AND CYBERSECURITY THE BIGGEST RISKS FACING THE WESTERN WORLD. THAT'S AFTER J.P. MORGAN INVESTED $230 BILLION IN THE FIRST YEAR OF ITS $1.5 TRILLION PLEDGE TO SUPPORT INDUSTRIES CRITICAL TO U.S. ECONOMIC SECURITY. LET'S BRING IN BLOOMBERG INTELLIGENCE SENIOR BANK ANALYST HERMAN CHAN, GOOD TO SEE YOU. SO THIS IS SOMETHING JAMIE DIMON HAS TALKED ABOUT FOR A WHILE. SO WHY NOW DEPLOY THIS CAPITAL?
[00:07:55] Speaker 5: RIGHT. SO LAST YEAR THEY INVADED THE SECURITY AND RESILIENCY INITIATIVE, TALKING ABOUT $1.5 TRILLION IN ASSETS THAT WILL BE DEPLOYED OVER A MULTI-YEAR PERIOD. TODAY WE'VE SEEN SOME NUMBERS, SOME CORE NUMBERS ABOUT THE FIRST YEAR DEPLOYMENT, $230 BILLION. THAT'S GREAT. JAMIE DIMON HAS TALKED ABOUT IN ITS MOST RECENT ANNUAL SHAREHOLDERS LETTER ABOUT REALLY STRENGTHENING AND SUPPORTING AREAS LIKE ENERGY INDEPENDENCE AND THE MILITARY AND MANUFACTURING SUPPLY CHAINS. SO IT'S GOOD TO SEE THAT THE MONEY IS REALLY GOING TO THOSE AREAS IN THE FIRST YEAR. THIS IS ALSO J.P. MORGAN.
[00:08:35] Speaker 1: I'M STRUCK BY JAMIE DIMON'S COMMENTS TO THE WALL STREET JOURNAL THIS MORNING SAYING THAT J.P. MORGAN WANTS TO WORK WITH THE TRUMP ADMINISTRATION. THERE CLEARLY IS A BIG INVESTMENT CASE IN THIS AND J.P. MORGAN HAS MADE THAT CLEAR. BUT IS THERE JUST KIND OF THE ADDED BENEFIT OR A SECOND PURPOSE OF GETTING CLOSER TO THIS ADMINISTRATION?
[00:08:51] Speaker 5: I THINK THAT'S PROBABLY SOME OF IT. BUT THE COMPANY THEMSELVES HAS STRESSED THE IMPORTANCE OF HAVING THE STRENGTHENING ECONOMY GIVEN THE FACT THAT WE HAVE A LOT OF UNCERTAINTIES IN THE WORLD AND AREAS LIKE THE MIDDLE EAST AND THE CHALLENGE WITH CHINA AND WHAT'S GOING ON IN RUSSIA AND UKRAINE. I THINK HAVING THE SUPPORT FROM THE ADMINISTRATION IS HELPFUL. BUT IT'S CHERRY ON TOP OF THE ISSUE OF STRENGTHENING THE OVERALL COUNTRY.
[00:09:20] Speaker 1: MAYBE NOT THE PRIMARY PURPOSE BUT A NICE ADD ON. THANK YOU FOR JOINING US. TALKING ABOUT IT. LET'S GET A QUICK CHECK ON YOUR MARKETS THIS MORNING. IT HAS BEEN A LONG SUFFERING STRETCH IF YOU ARE INVESTED IN CHIP STOCKS. EIGHT CONSECUTIVE DAYS OF DECLINES. THAT'S THE WORST SINCE 2008. WE REBOUND THIS MORNING. WE ARE UP 1.3%. I GUESS THERE IS THIS QUESTION AS WE ALWAYS ASK WHEN WE HAVE WEEKS LIKE THIS, HOW MUCH OF THAT WAS FUNDAMENTAL?
[00:09:51] Speaker 2: WAS IT HIGHER BOND YIELDS OR ANOTHER SITUATIONAL AWARENESS HIGHER STOCKS? THAT IS AN OVERUSED TERM.
[00:09:59] Speaker 1: IS THIS THAT OR IS IT A SIGNAL OF SOME MORE MEANINGFUL STRENGTH TO COME? IF YOU LIKE CHIP STOCKS, YOU WOULD ESPECIALLY LIKE THEM AFTER LAST WEEK. LET'S LOOK AT SOME OF THE INDIVIDUAL NAMES THAT WE ARE WATCHING THIS MORNING. CLEVELAND CLIFFS SURGING AFTER SWINGING BACK TO A PROFIT AND TOPPING EXPECTATIONS. THE STEALMAKER ALSO GAVE AN UPBEAT OUTLOOK FOR 2027.
[00:10:21] Speaker 2: THE STEALMAKER ALSO GAVE AN UPBEAT OUTLOOK FOR 2027. SHARES UP MORE THAN 16%. CORWEAP GETTING A BOOST FROM GOLDMAN SAX, WHICH UPGRADED THE STOCK TO BUY AFTER LAST WEEK'S SHARP SELL-OFF. GOLDMAN SEES THE PULLBACK AS AN OPPORTUNITY, ARGUING DEMAND FOR AI COMPUTE REMAINS STRONG ENOUGH TO OUTWEIGH SOME OF THE
[00:10:33] Speaker 1: DEMAND. SILGAN IS TEAMING UP WITH AMERICAN INDUSTRIAL PARTNERS TO BUY TRIVIUM PACKAGING IN A DEAL WORTH ABOUT $3.4 BILLION. THAT DEAL COMBINES TWO MAJOR METAL PACKAGING BUSINESSES CREATING SILGAN METAL CONTAINERS AND CLOSURES. LATER THIS HOUR, WE WILL SPEAK WITH THE CEO OF SILGAN, ADAM GREENLEY. COMING UP FIRST ON THE SHOW, PRESIDENT ZELENSKYY ACCUSES TRUMP OF PUSHING UKRAINE TO GIVE INTO RUSSIA.
[00:11:01] Speaker ?: LET'S GET YOU SOME HIGH-INTEREST STORIES TO LOOK AT WHAT'S MAKING HEADLINES AROUND THE WORLD. FRANCE WILL IMPOSE PARTIAL CURFEWS IN SOME AREAS AFTER COST OF
[00:11:14] Speaker 1: LIVING PROTESTS DESCENDED INTO RIOTS OVER THE WEEKEND. OVER HALF A MILLION PEOPLE DEMONSTRATED NATIONWIDE WITH UNREST HITTING COURFEWS IN SOME AREAS AFTER COST OF LIVING PROTESTS DESCENDED INTO RIOTS OVER THE WEEKEND. OVER HALF A MILLION PEOPLE DEMONSTRATED NATIONWIDE WITH UNREST HITTING PARIS AND MARSEY. OFFICIALS SAY SOME 3,000 BUSINESSES WERE DAMAGED OR LOOTED AS PRESIDENT MACRON VOWS A HARD LINE AGAINST RIOTERS.
[00:11:39] Speaker 2: WE ARE REPORTING THAT RUSSIAN PRESIDENT VLADIMIR PUTIN IS PROPOSING A SUMMIT WITH PRESIDENT TRUMP AND CHINA'S XI XINPING NEXT MONTH TO DISCUSS ENDING THE WAR IN UKRAINE. THE KREMLIN CONFIRMS TALKS ARE UNDERWAY BUT TRUMP HAS NOT AGREED. UKRAINE ZELENSKYY WOULD BE NOT PART OF THE PROPOSED MEETING.
[00:11:57] Speaker 1: FINALLY, UKRAINE PRESIDENT VLADIMIR ZELENSKYY IS ACCUSING PRESIDENT TRUMP OF PRESSURING KYIV, NOT MOSCOW, TO MAKE CONCESSIONS TO END THE WORLD. ZELENSKYY IS OFFERING TO HALT STRIKES ON RUSSIAN REFINERIES IN
[00:12:13] Speaker 2: EXCHANGE FOR MORE U.S. PATRIOT MISSILES. ALOR, GOOD MORNING. JUST GIVE US THE LATEST ON EXACTLY WHAT ZELENSKYY HAS LAID OUT HERE AND WHAT IT MEANS FOR A POTENTIAL END TO THIS WAR.
[00:12:23] Speaker 6: WELL, EMILY, AT THIS POINT WE'RE REALLY JUST SEEING TENSIONS ESCALATE BETWEEN KYIV AND WASHINGTON AS THE UKRAINIAN PRESIDENT ZELENSKYY OUTLINED SOME NEW ALLEGATIONS IN AN EXCLUSIVE INTERVIEW WITH BLOOMBERG NEWS OVER THE WEEKEND. THAT INCLUDES ACCUSING THE U.S. OF DELIBERATELY SLOWING STARLINK INTERNET SPEEDS OVER THE COUNTRY, A CLAIM THAT THE U.S. DENIES. DENIES. IN FACT, WE HEARD FROM THE U.S. TREASURY SECRETARY SCOTT BESSENT IN AN INTERVIEW OVER THE WEEKEND CALLED ZELENSKYY'S CLAIM QUOTE VERY RECKLESS. BUT IT GOES TO SHOW ZELENSKYY'S MOUNTING FRUSTRATION WITH THE TRUMP ADMINISTRATION GOING SO FAR AS TO SAY THAT THE U.S. IS TRYING TO PRESSURE UKRAINE MORE SO THAN RUSSIA TO MAKE A DEAL. NOW, AS YOU MENTIONED, THE UKRAINIAN PRESIDENT DID SAY THAT ONE WAY THAT UKRAINE WOULD ABIDE BY THE ENERGY TRUCE THAT PRESIDENT TRUMP WOULD LIKE TO SEE DONE IS IF UKRAINE CAN HAVE MORE PATRIOT MISSILE DEFENSE SYSTEMS AMID ANOTHER ALLEGATION THAT THE U.S. IS SLOW ROLLING THE DELIVERIES OF THEM THAT ARE ALREADY PURCHASED, NOT GIVEN UNDER FOREIGN MILITARY ASSISTANCE. FOR SOME CONTEXT HERE, THE U.S. IS CURRENTLY SUPPLYING UKRAINE WITH 12 PATRIOT INTERCEPTER MISSILE A MONTH. THAT'S ABOUT A QUARTER OF THE PACE THAT WE SAW UNDER THE LAST ADMINISTRATION. EMILY, AT THIS POINT, PERHAPS THAT COULD BE ONE AREA WHERE WE COULD SEE MOVEMENT. BUT SO FAR, IT'S REALLY ONLY BEEN ESCALATION FROM HERE.
[00:13:41] Speaker 1: THERE'S THIS IDEA, TYLER, THAT PERHAPS THE REASON HE'S BEING MORE FRIENDLY TO RUSSIA IS AHEAD OF THE MIDTERMS IN ORDER TO GET SOME ENERGY RELIEF. THAT'S WHERE THE RUSSIAN SANCTIONS WAIVER COMES INTO PLAY. I WONDER BEYOND JUST UKRAINE, HOW MUCH BACKLASH THERE IS IN CONGRESS AMONG TRUMP'S OWN PARTY, ESPECIALLY FOLLOWING THE LINDSEY GRAHAM AND HIS PUSH AND HIS LEGISLATION IN CONGRESS? WELL, A TREMENDOUS AMOUNT AT THIS POINT, DANI.
[00:14:05] Speaker 6: WE'VE SEEN AT LEAST TEN REPUBLICAN SENATORS RAISE ALARMS ABOUT PRESIDENT TRUMP'S RECENT ACTIONS TOWARD RUSSIA, ESPECIALLY AS YOU MENTIONED, WE JUST SAW THIS SANCTIONS BILL PASS THAT LOOKED TO TIGHTEN THE PENALTIES, ESPECIALLY ON THOSE COUNTRIES THAT IMPORT RUSSIAN ENERGY SUPPLIES, NAMED FOR THE LATE SENATOR LINDSEY GRAHAM. NOW, THE WHITE HOUSE SAYS THAT THIS IS A BID TO GET MORE DIESEL TO MARKET TO LOWER PRICES, BUT MANY OF THESE LAWMAKERS ARE CITING ANALYSIS SIMILAR TO OUR OWN FROM BLOOMBERG INTELLIGENCE THAT SAYS THAT THE INITIAL VOLUMES RELEASED AREN'T REALLY GOING TO DO THAT MUCH TO IMPACT THE SUPPLY GAP, AND THAT'S WHY YOU'RE SEEING SOME OTHER SENATORS, INCLUDING TED CRUZ, A REPUBLICAN FROM TEXAS. HE'S NOT RUNNING, HE'S NOT UP FOR REELECTION, BUT HE DOES REPRESENT A STATE THAT HAS AN OPEN SENATE SEAT. HE CAME OUT THIS WEEKEND, HE CALLED THE PRESIDENT'S MOVES A "MISTAKE" AND INSTEAD URGED THE ADMINISTRATION TO TAKE OTHER ACTION LIKE IMPORTING MORE ENERGY SUPPLIES FROM CANADA AS WELL AS WAVING RENEWABLE FUEL REQUIREMENTS. THOUGH AT THIS POINT IT'S VERY DIFFICULT TO SEE WHAT POSSIBLY COULD GET DONE BETWEEN NOW AND ELECTION DAY AS EARLY VOTING HAS ALREADY STARTED. THOUGH, DANNY, WE SHOULD SAY PRESIDENT TRUMP REPEATEDLY HAS DEFENDED HIS MOVE BEHIND THIS RUSSIAN DIESEL DEAL. WE HEARD FROM THE U.S. ENERGY SECRETARY CHRIS WRIGHT OVER THE WEEKEND SAYING THAT THIS COULD SET THE STAGE AS A CARROT THAT RUSSIA COULD LOOK AT IF IT DOES HELP TO ULTIMATELY RECEED IN THE CONFLICT.
[00:15:27] Speaker 2: OKAY, AND TYLER, AGAINST THIS BACKDROP, WE ALSO HAVE THIS PUTIN-XI MEETING. TELL US WHAT WE KNOW SO FAR ABOUT WHAT TO EXPECT OUT OF THAT.
[00:15:36] Speaker 6: SO RUSSIAN PRESIDENT VLADIMIR PUTIN HAS PROPOSED A POTENTIAL TRILATERAL MEETING, ACCORDING TO THE WALL STREET JOURNAL, WITH CHINESE PRESIDENT XI JINPING AND PRESIDENT TRUMP WHEN HE IS THERE NEXT MONTH IN CHINA ON THE SIDELINES OF THE APEC SUMMIT. AND IT'S REALLY INTERESTING TO READ THROUGH THE REPORTING BECAUSE THE KREMLIN SPOKESPERSON DID CONFIRM TO THE JOURNAL THAT THERE ARE POTENTIAL DISCUSSIONS UNDERWAY, THOUGH DID NOT CONFIRM THAT A MEETING IS REALLY HAPPENING OR WHAT WOULD BE ON THE AGENDA OF THAT MEETING. SAME THING GOES FOR A U.S. OFFICIAL THAT SAID THAT THE PRESIDENT HAS NOT AGREED TO SUCH A MEETING BUT SEEMED TO INDICATE THAT HE COULD BE OPEN TO IT AS HE REPEATEDLY TRIES TO PUSH FOR SOME SORT OF RESOLUTION IN THE CONFLICT. THOUGH WE SHOULD SAY ANY MEETING WITHOUT UKRAINE, ABOUT UKRAINE, WOULD NO DOUBT RAISE ALARMS AMONG OUR EUROPEAN ALLIES AND ADD TO WHAT IS THE GROWING TENSION RIGHT NOW BETWEEN KEEP AND WASHINGTON.
[00:16:27] Speaker 2: THANKS TO BLOOMBERG'S TYLER KENDALL IN WASHINGTON. COMING UP, GEOPOLITICAL TENSIONS AND A HUGE WEEK FOR EARNINGS PUT MARKETS TO THE TEST. WE BEGIN THE TRADING DAY WITH CHRIS PUT MARKETS TO THE STATUS.
[00:16:45] Speaker 1: THIS IS BLOOMBERG OPEN INTEREST. ABOUT $10 TRILLION OF S&P 500 MARKET CAP REPORTS THIS WEEK. THAT DOES NOT EVEN INCLUDE SPACEX WHICH IS WORTH ANOTHER $2 TRILLION. THAT REPORTS TOMORROW BUT OF COURSE ISN'T IN THE INDEX YET. THANK YOU FOR JOINING US. THANK YOU FOR JOINING US NOW. A HUGE ROTATION OUT OF TECH AND INTO DEFENSIVE PLAYS LAST WEEK. TRADERS PILED INTO CONSUMER STAPLES AT THE FASTEST PACE IN TWO DECADES AS CONCERNS AROUND AI AND HIGHER BORROWING COSTS PUSH INVESTORS TOWARDS SAFER CORNERS OF THE MARKET. JOINING US NOW, STRATEGIST PARTNERS AND CHIEF MARKET STRATEGIST CHRIST VERON IS A BARRED COMPANY. CHRIS, GREAT TO SEE YOU. IT WAS PAINFUL LAST WEEK. IT WAS LONG. THE LONGEST LOSING STREAK SINCE 2008. IT KIND OF HAD THAT FEELING OF SITUATIONAL AWARENESS TO IT. I SAW A LOT OF CHATTER ONLINE AROUND THIS. DO YOU THINK LAST WEEK WAS A RETHINK BECAUSE OF HIGHER YIELD?
[00:17:47] Speaker 7: SOMETHING FUNDAMENTAL OR SOMEONE WAS LIQUIDATING? SOMETHING FUNDAMENTAL OR SOMETHING FUNDAMENTAL OPPORTUNITY ISSUED TO BE GIVEN A HOT CPI AND A HOT PPI. THE FACT THAT YOU GOT THE REACTION OF THE BOND MARKET THAT YOU DID, I THINK WAS CERTAINLY A CHANGE. PROBABLY SOME EVIDENCE THAT THIS 535 LEVEL HAS PROVED ITSELF TO BE A MAYBE SOME INTERIM TOP HERE ON YIELDS. WHAT I FOUND CURIOUS IS IF YOU TOLD ME THAT YIELDS WERE GOING TO RATE SENSITIVE CYCLICALS WOULD HAVE BEEN CATALYZED. BUT REALLY WHAT YOU SAW WERE DEFENSIVE RESPOND POSITIVELY TO THAT. YOU MENTIONED CONSUMER STAPLES. WE SAW IN OUR WORK SOMETHING LIKE 75% OF STAPLES MADE A 20-DAY HIGH IS THE BEST READING REALLY ALL YEAR. SO THERE HAS BEEN THIS MOVE TO THE MORE DEFENSIVE CORNERS OF THE MARKET. I THINK THE QUESTION IS, IS THAT THE MESSAGING THAT THAT IS LEADERSHIP THAT'S ON THE COME? I THINK IT'S A LITTLE EARLY TO MAKE THAT JUDGMENT. I STILL WANT TO GIVE SOME OF THESE RATE SENSITIVE CYCLICALS SOMETIME TO RESPOND.
[00:18:41] Speaker 2: THERE WAS CLEARLY A UNIQUE RESPONSE TO WHAT WAS OTHERWISE A VERY INTERESTING WEEK. WHERE DOES THAT LEAVE US FOR THE CHIP TRADE? EVEN HOW WE ARE LOOKING AT THE PREMARKET THIS MORNING, IS THIS A SIGN THAT INVESTORS ARE READY TO PUT MORE RISK ONTO THAT
[00:18:53] Speaker 7: TRADE FOR THE REST OF THE YEAR? I THINK WHEN YOU BREAK DOWN THE SEMIS AND PUT INTO THIS WHOLE IDEA, KOSPI AND HYNIX AND SAMSUNG, IF YOU ARE TRADING BELOW INVESTORS, YOU ARE PROBABLY DEAD MONEY HERE FOR A WHILE. YOU HAD ALL THOSE PARABOLIC SIGNS IN MAY AND JUNE. YOU HAD THE CRACK AND NOW YOU ARE UNDERCUTTING THOSE LOWS. I THINK IT WOULD BE HARD TO LOOK AT THOSE NAMES AND SAY, OKAY, THAT'S THE LEADERSHIP. THAT'S NOT THE LEADERSHIP. BUT THERE'S A WHOLE OTHER SET OF TECH THAT ACTED VERY WELL OVER THE LAST 4, 5, 6, 7, 8 WEEKS. AND I THINK ANY NAME IN THE TECH INDEX THAT HAS ALREADY GONE ON AND MADE NEW HIGHS SHOULD DEMAND OUR RESPECT. AMD IS ON THAT LIST. DELL HAS BEEN ON THAT LIST. FRANKLY, NVIDIA HAS ACTED OKAY HERE. SO I THINK MUCH LIKE THE BROADER MARKET IS INCREDIBLY SPLIT, TECH ITSELF IS INCREDIBLY SPLIT. PAINTING THE AI TRADE WITH A SINGLE BRUSH I THINK IS A MISTAKE. AND JUST LOOK AT LIKE WHEN COSPI PEAKED BACK IN JUNE, WHAT STARTED TO ACTUALLY HAPPEN? MAX 7 AND HYPERSCALERS ACTUALLY STARTED TO OUTPERFORM. SO WHAT WE'RE PEAKING WITH COSPI IS REALLY MEMORY PRICES. SO IF MEMORY PRICES ARE GOING LOWER, ARE WE SURE THAT'S BEARISH FOR EVERYTHING? SO IT'S A REALLY UNIQUE ENVIRONMENT HERE.
[00:20:04] Speaker 1: IT'S THAT CHECK WRITER VERSUS CHECK TAKER SORT OF TRADE. BUT I WONDER HOW ENDURING THESE VARIOUS CORRELATIONS ARE. DO YOU FORCEED THAT THOSE TWO PARTS OF CHIPS VERSUS HYPERSCALERS? WILL THEY ALWAYS HAVE MAYBE NOT THE STRONGEST, BUT A HINT OF NEGATIVE CORRELATION TO THEM?
[00:20:19] Speaker 7: WELL, I THINK WHAT'S CLEAR, AND IF YOU TALK ABOUT CORRELATIONS, WHAT WAS A MONOLYTH IN TECH FOR MANY YEARS IS NOT A MONOLYTH HERE. LET'S KIND OF ESTABLISH THAT. I THINK YOU COULD SAY THAT FOR THE BROADER MARKET. LAST WEEK, THEY HIT THE Q'S DOWN 5%, I THINK THE TRIPLE Q'S. YET 40% OF THE S&P MADE A ONE MONTH HIGH LAST WEEK. SO THIS IS MONEY THAT IS SLOSHING AROUND FROM GROUP TO GROUP. AND, YOU KNOW, LISTEN, BONDS GOT A BID LAST WEEK AS WELL. SO THERE'S CLEARLY, I THINK, MONEY GRAVITATING TO A 3% REAL YIELD AND SEEING REAL VALUE THERE. IT'S A UNIQUE ENVIRONMENT IN THAT RESPECT. I THINK THE BIG QUESTION, AS WE LOOK AHEAD AND MOVE FORWARD, IF OUR CALL IS GOING TO HAVE TO GET MORE DEFENSIVE, I WOULD SAY IT'S BECAUSE STUFF LIKE BANKS AND INDUSTRIALS ARE UNABLE TO RESPOND OUT OF THESE OVERSOLD CONDITIONS THAT HAVE DEVELOPED OVER THE LAST, YOU KNOW, THREE, FOUR WEEKS. I THOUGHT IT WAS, LET'S SAY, MILDLY CONSTRUCTIVE LAST WEEK, THAT BANKS REVERSED OFF THE INITIAL EARNINGS LOWS. I DO THINK, AGAIN, IT WAS CONSTRUCTIVE THAT YOU SAW RATES COME IN, BUT, AGAIN, I WANT LOWER RATES TO CATALYZE CYCLICALS,
[00:21:22] Speaker 1: NOT DEFENSES. ALL RIGHT, CHRIS, YOU'RE GOING TO STICK WITH US THROUGH THE OPENING BELL, THAT'S CHRIS BARRON. AS MARKETS REBOUND AHEAD, JUST A FEW MINUTES TO GO UNTIL YOUR OPENING BELL, THE NASDAQ REBOUNDS 1.3% AFTER A VERY TOUGH WEEK AND YIELDS ARE MOVING HIGHER TODAY. AS CHRIS WAS JUST DISCUSSING, THEY WERE MOVING LOWER FOR MUCH OF THE WEEK.
[00:21:43] Speaker ?: YOUR OPENING BELL, RIGHT AFTER THIS BREAK. ALL RIGHT, LET'S GET YOUR TRADING WEEK STARTED.
[00:21:53] Speaker 1: THIS IS BLOOMBERG OPEN INTEREST, I AM DANNY BURGER. WHAT A TOUGH WEEK LAST WEEK. WE SAW THE NASDAQ, THE PHILADELPHIA SEMICONDUCTOR INDEX FALL, THAT'S WHAT LET US LOWER. WE'VE HAD A LOT OF RELATIONSHIPS THIS MORNING, AHEAD OF SOME BIG EARNINGS. THE NASDAQ LEADS THE GAINS BECAUSE IT LED THE LOSSES UP 1.3%. RINGING THE OPENING BELL, A COOL ONE DOWN AT THE NEW YORK STOCK EXCHANGE, IT'S THE SUSAN G. KOMEN BREAST CANCER AWARENESS GROUP, BECAUSE IT IS BREAST CANCER AWARENESS MONTH, A GREAT CAUSE. DOWN AT THE NASDAQ, YOU HAVE LAMANT, IT MEANS THE MASTER, ACCORDING TO OUR FRENCH SPEAKING PRODUCER. THEY ARE A VASCULAR DEVICE COMPANY, THEY ARE DOWN THIS YEAR EVEN THOUGH THE OVERALL INDEX IS UP, AND THEY ARE CELEBRATING THEIR 20TH ANNIVERSARY, SO VERY COOL FOR THEM. EMILY, WHAT ARE YOU LOOKING AT? THAT WAS AN IMPRESSIVE PRONUNCIATION OF THAT FRENCH WORD.
[00:22:42] Speaker 2: DO YOU SPEAK FRENCH? I DO NOT, SO IT JUST WENT RIGHT PAST ME. CHECKING OUT SOME STOCKS TO WATCH AT THE OPEN HERE, WE DO HAVE SOME RELIEF FOR THE A.I. TRADE THIS MORNING. AFTER LAST WEEK'S SHARP SELL-OFF DUE TO QUESTIONS AROUND A.I. SPENDING AND RETURNS, TAKE A LOOK AT NVIDIA, INTEL, AND SANDESK, ALL HEAVILY IN THE GREEN. NVIDIA, JUST 1.5%, BUT INTEL AND SANDESK, BOTH UP ABOUT 5%,
[00:23:06] Speaker 1: DANNY. THIS MORNING AT THE OPEN, I AM LOOKING AT SPACEX. ELON MUSK SAYS HE PLANS TO GIVE EVERY CHILD IN AMERICA ONE OF HIS SHARES, BUT HE HASN'T LAID OUT HOW THAT WOULD WORK. THE PLEDGE COMES AFTER ANTHROPIC SAID IT WOULD SET ASIDE A PORTION OF ITS SHARES FOR THE PUBLIC BENEFIT. SPACEX NOTABLY REPORTING EARNINGS THIS WEEK, UP 1.4% ALONGSIDE META AND TESLA. LET'S BRING BACK STRATEGIST PARTNER AND CHIEF MARKET STRATEGIST CHRIS VARONE. AS WE START TO WORK THROUGH SOME OF THESE A.I. ADJACENT NAMES AND EARNINGS, HOW IMPORTANT ARE TO REBOUND OFF OF THE LOWS THAT WE SAW LAST WEEK.
[00:23:41] Speaker 7: WELL, I THINK IT'S CRITICALLY IMPORTANT. I MEAN, THESE ARE THE LARGEST STOCKS IN THE WORLD. YOU KNOW, ONE THING I WOULD CUE OFF OF IS WHEN YOU GO THROUGH
[00:23:47] Speaker ?: MAG-7.
[00:23:47] Speaker 7: I MEAN, MOST OF THE MAG-7 IS IN DECENT CONDITION HERE. LET'S NOT LOSE TRACK OF THAT. I THINK META HAS BEEN SUCH A GOOD EXAMPLE THIS YEAR OF HOW WHEN BEARISH CHARTS DON'T BREAK IT'S TYPICALLY PRETTY BULISH. META WAS HANGING BY A THREAD FOR MUCH OF THE YEAR THEN THIS SUMMER, KIND OF BEFORE WE REALLY EVEN UNDERSTOOD THE IMPLICATIONS OF MUSE, WHAT WE WERE JUST TALKING ABOUT. YOU SAW META BEGAN TO WORK. APPLE IS AT THE HIGHS. MICROSOFT, I THINK, HAS DEFIED EXPECTATIONS THIS YEAR. SO THERE'S A GOOD CHUNK OF MAG-7 IN DECENT CONDITION. WHAT I FIND MOST NOTABLE IS THAT IMPROVEMENT OF MAG-7 BEGAN AS THE COSPI BROKE. SO AS COSPI BROKE AS MEMORY PRICES CAME DOWN AND YOU KIND OF PICK APART WHAT HAS BEEN THE COST SIDE OF THE AI TRADE, IT'S MEMORY PRICES. THAT'S A COMMODITY. I THINK COSPI IS TRADING LIKE A COMMODITY. NO DIFFERENT THAN SILVER TRADED IN JANUARY. HERE IT IS TEN MONTHS LATER, STILL DEAD MONEY. I WOULD POINT YOUR ATTENTION RIGHT NOW. I THINK REFINERS ARE AN AREA WHERE YOU HAVE KIND OF THE COSPI SILVER-LIKE PARABOLIC RISK. IT'S KIND OF TRADED UNABATED FOR THE LAST NUMBER OF MONTHS. I THINK IT'S UP 150% YEAR-TO-DATE. THE REFINING INDEX LOOKS VULNERABLE TO US.
[00:24:52] Speaker 2: HOW DOES THAT LEAVE THE SETUP THEN FOR WHAT TO EXPECT OUT OF META EARNINGS BECAUSE THIS IS A COMPANY THAT'S SPENDING A LOT. THEY'RE BUILDING OUT DATA CENTERS. PRESUMINGLY THEY HAVE TO BUY A LOT OF THESE DIFFERENT MATERIALS TO PUT INSIDE THE DATA CENTERS. ARE WE GOING TO SEE AN EARNINGS REACTION WHERE THIS COMPANY COMES OUT, THEY UPDATE THEIR SPENDING FORECAST. THEY SIZE IT UP AND THEN TRADERS DON'T LIKE THAT.
[00:25:16] Speaker 7: I THINK THE MARKET'S ALREADY DECIDED HERE ON META. THE FACT THAT YOU'VE SEEN THE STOCK TURN SO POWERFULLY OVER THE LAST TWO OR THREE MONTHS. IT HAS BEEN A BUY FOR US. IT'S BEEN ON OUR RECOMMENDED LIST. THIS IS A REALLY GOOD CHART. I THINK THE HARDER QUESTION IS, WHERE IS THE BAR OF EXPECTATION SO INCREDIBLY HIGH? AND CAN WE GET THROUGH THIS EARNINGS SEASON AND MEET THOSE EXPECTATIONS? I THINK MAYBE IF THERE'S SOME GOOD NEWS OVER THE LAST COUPLE OF WEEKS, I DO THINK YOU'VE SEEN THE BAR OF EXPECTATIONS RECEDE HERE A LITTLE BIT. YOU'VE SEEN BIG OUTFLOWS FROM INDUSTRIALS. YOU'VE SEEN BIG OUTFLOWS FROM FINANCIALS. DOES THAT SET A LOWER BAR FOR THE REMAINER OF THE EARNING
[00:25:53] Speaker ?: SEASON?
[00:25:53] Speaker 1: JUST LISTENING TO YOU TALK, I'M STRUCK ABOUT HOW MANY DIFFERENT INDUSTRIES THAT HAVE BEEN STRETCHED AND SEE THIS REVERSAL. YOU WERE TALKING ABOUT REFINERS. WE'VE OBVIOUSLY SEEN IT WITH CHIP STOCKS. I WAS TALKING WITH OUR HEDGE FUND TEAM AND THEY POINTED OUT TO ME THAT THERE'S SOME ESTIMATES THAT THERE'S SOMETHING LIKE $40 TRILLION WORTH OF NOTIONAL GROSS EXPOSURE THAT'S ESTIMATED AMONG THE HEDGE FUNDS. I WONDER IF SOMETHING HAS CHANGED, MAYBE AMONG THESE MORE KIND OF MOMENTUM-TYPE HEDGE FUNDS THAT JUST MAKE MOMENTUM AS A FACTOR BEHAVE MORE VIOLENTLY THAN IN THE PAST.
[00:26:21] Speaker 7: PUT THE GROSS ASIDE FOR A MINUTE. I THINK ON THE NET SIDE, EXPOSURES HAVE COME DOWN VERY MEANINGFULLY OVER THE LAST THREE OR FOUR WEEKS. I DO THINK THAT'S AN IMPORTANT SETUP HERE INTO THE REMAINER OF EARNINGS. YOU HAVE VIX KIND OF BACK TO THE 20 NEIGHBORHOOD ALMOST INVERTED LAST WEEK, SO SPOT VIX TRADING BASICALLY THROUGH THE FORWARD CONTRACT. YOU SAW A LITTLE PICKUP RATIO. THERE IS SOME FEAR CREEPING BACK INTO WHAT WAS A VERY COMPLACENT ENVIRONMENT FOR MUCH OF THE LAST FOUR OR FIVE MONTHS. I WELCOME THAT FROM A POSITIONING AND SENTIMENT PERSPECTIVE. YOU'RE ABSOLUTELY RIGHT. THIS IS A MARKET THAT HAS PUNISHED POSITIONING EXTREMES EARLIER THIS YEAR. I THINK THE POSITIONING EXTREMES RIGHT NOW ARE SOME OF THE NAMES THAT ARE STILL PARABOLIC AND THE REFINERS ARE CASE A. THAT'S HEDGE FUNDS.
[00:27:06] Speaker 2: NOW WE'RE GOING TO GO INTO THE OPPOSITE END OF THE SPECTRUM, THE RETAIL, THE ETF BID. WE DID SEE SOME PRETTY DECENT FLOWS INTO THESE LEVER CHIP NAMES. IS THAT ENOUGH OF A KIND OF FLOOR FOR THAT TRADE IF WE DO SEE THE INSTITUTIONAL MONEY?
[00:27:21] Speaker 7: YOU WANT TO SEE THE OPPOSITE TO BE FRANK. YOU WOULD WANT TO SEE LIQUIDATION FROM RETAIL TO SUGGEST YOU'VE KIND OF REACHED PEAK FEAR. I THINK WE HAVE NOT SEEN THAT IN THAT CATEGORY. WHAT IS INTERESTING IS YOU HAVE SEEN BIG MONEY MOVE INTO BOND ETF. IS THERE A SHIFT IN SENTEMENT OUT THERE? WE REALLY NOTICED IT LAST WEEK. NASDAQ DOWN 5% LAST WEEK. MOST STOCKS WERE UP. HOW BEARISH DO WE REALLY WANT TO BE GIVEN THAT BACKDROP?
[00:27:49] Speaker 1: I KNOW YOU'RE NOT THE BIGGEST FAN OF CONSUMER-RELATED NAMES AT THE MOMENT. I WONDER WHAT YOU WOULD NEED TO SEE TO CHANGE THAT. IT'S A GOOD QUESTION.
[00:27:58] Speaker 7: I'VE ALWAYS SEEN IN MY CAREER WHEN I CAN'T FIND ANYTHING I WANT TO BUY IN A CERTAIN SECTOR I SHOULD PROBABLY DO SOME MORE WORK. I THINK CONSUMER DISCRETIONARY IS AN EXAMPLE OF WHERE ALL THE CHARTS ARE BAD. SHOULD WE SPEND A LITTLE BIT OF OUR DAY THINKING ABOUT WHAT COULD CHANGE? IF YOU LOOK AT CONSUMER ACROSS ANY TIMEFRAME, WHETHER IT'S THREE MONTHS, SIX MONTHS, ONE YEAR, THREE YEARS, FIVE YEARS, IT'S EXCESS RETURN VERSUS THE S&P IS LIKE IN THE FIFTH PERCENTILE HISTORICALLY. SO THIS IS THE CONDITION WHERE YOU WOULD EXPECT YOU'RE IN THE VICINITY OF SOMETHING CHANGING AND GOING RIGHT. WHAT COULD THAT BE? I MEAN, IT'S NOT A VERY FRIENDLY MACRO ENVIRONMENT FOR CONSUMER HERE. RATES ARE HIGH, OIL IS HIGH, BUT THINGS AREN'T PERMANENT IN THIS BUSINESS. SO IT'S HARD FOR ME TO KIND OF POUND THE TABLE AND SAY BUY CONSUMER HERE. BUT I'M NOT OPPOSED TO THINKING ABOUT WHAT COULD CHANGE. IT PROBABLY HAS TO BE PRECEDED WITH MACRO RELIEF THOUGH. THANK YOU SO MUCH FOR JOINING.
[00:28:48] Speaker 1: WONDERFUL TO START OUR WEEK WITH YOU. THANK YOU. LET'S GET A CHECK ON YOUR MARKET ABOUT FIVE TO TEN MINUTES INTO YOUR TRADING DAY. IT IS A REBOUND FOR A LOT OF THE BIG TECH NAMES. WE ARE UP JUST HALF OF 1%, THOUGH I SHOULD SAY. BREATH IS KIND OF SPLIT BETWEEN THE UPSIDE AND DOWNSIDE. A FEW MORE STOCKS DOWN THAN ARE UP. THAT IS THE NATURE OF THIS MARKET. CHRIS WAS TALKING ABOUT THAT. WE HAD OTHER STOCKS DO WELL LAST WEEK EVEN THOUGH IT WAS A BID. NVIDIA UP 4.8 POINTS. AMAZON 7 POINTS TO A MARKET THAT IS UP 44 POINTS. ON THE DOWNSIDE, META, JP MORGAN, PHILIP MORRIS INTERNATIONAL, SOME OF THESE SAFETY STOCKS THAT HAVE DONE REALLY WELL LAST WEEK ARE STARTING TO SUFFER. NETFLIX IN THE TOP FOUR LOSERS, THEY WILL BE REPORTING EARNINGS THIS WEEK. WHEN WE LOOK AT THE VARIOUS SECTORS, HOW THOSE ARE PERFORMING, TECH GETS THAT BID THIS MORNING FOR THE BEST PERFORMING SECTOR, UP ONE AND A THIRD OF A PERCENT. IT IS NOT A PERFORMING SECTOR. SOME OF THE BOND PROXY SAFER INDICES ARE DOWN THIS MORNING. EMILY:
[00:30:00] Speaker 2: COMING UP, SILGIN IS MAKING A MAJOR MOVE IN THE PACKAGING SPACE, ANNOUNCING A DEAL TO ACQUIRE TRIVIUM PACKAGING FOR OVER $3 BILLION. WE DISCUSS NEXT WITH C.E.O. ADAM GREENLEY. THIS IS BLOOMBERG OPEN INTEREST.
[00:30:15] Speaker ?: THANK YOU FOR JOINING US.
[00:30:27] Speaker 2: TIME NOW FOR OUR TOP CALLS. SOME OF THE ANALYST ACTION IN FOCUS THIS MORNING. FIRST UP, JP MORGAN UPGRADES INTEL TO NEUTRAL, SAYING THE COMPANY IS MAKING SOLID PROGRESS UNDER C.E.O. COMPANY. THE FIRM SAYS ENTERPRISE AI CONSUMPTION JUMPED AT LEAST 50% LAST QUARTER. FINALLY, EVERCORE UPGRADES MATCH GROUP TO OUTPERFORM,
[00:31:07] Speaker 1: SAYING TINDER'S USER RECOVERY IS ACCELERATING FASTER THAN EXPECTED. THE FIRM SAYS FUNDAMENTALS LOOK THE STRONGEST SINCE 2021. WE ARE TALKING ABOUT TRANSACTIONS. THE TRANSACTION WILL BE ABLE TO CHANGE TONE NOW. A MAJOR CONSOLIDATION IN THE PACKAGING INDUSTRY THIS MORNING. SILGAN IS TEAMING UP WITH AMERICAN INDUSTRIAL PARTNERS TO ACQUIRE TRIVIUM PACKAGING IN A TRANSACTION VALUED AT ABOUT $3.4 BILLION. THE TRANSACTION WILL CREATE SILGAN METAL CONTAINERS AND CLOSURES WITH SILGAN RETAINING A CONTROLLING STAKE IN THE BUSINESS. PLEASE TO SAY, JOINING US TO DISCUSS IS SILGAN PRESIDENT AND CEO, ADAM GREENLEY. CONGRATULATIONS ON THE DEAL. CONGRATULATIONS ON THE DEAL. THAT IS A PACKAGING COMPANY IN 2024. YOU TRIED EARLIER THIS YEAR TO BUY A GERMAN MEDICAL PACKAGER. THAT ENDED UP FALLING THROUGH. NOW THIS DEAL. WHY IS NOW THE RIGHT TIME TO BE AGGRESSIVE AND GROWING THE
[00:31:55] Speaker 8: COMPANY VIA ACQUISITIONS? THANK YOU SO MUCH. THE GREAT THING ABOUT TODAY'S TRANSACTION IS IT ALSO FITS RIGHT IN LINE WITH OUR CORE STRATEGY SINCE OUR COMPANY WAS FOUNDED 39 YEARS AGO. WE BELIEVE WE HAVE A CORE COMPETENCY IN M&A. WE'VE ACQUIRED 41 COMPANIES IN OUR 39 YEARS. THIS FITS RIGHT IN LINE WITH WHAT WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE.
[00:32:31] Speaker 2: WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE.
[00:32:46] Speaker 8: WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE.
[00:33:26] Speaker 1: WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. WE'VE ALWAYS DONE. DID YOU DECIDE BASICALLY THAT THIS WAS THE USE OF CAPITAL AND BUYBACKS ARE PUSHED TO THE SIDE NOW?
[00:33:52] Speaker 8: WELL, I THINK THERE'S SEVERAL THINGS. NUMBER ONE, WE'VE GOT A VERY DISCIPLINED APPROACH TO CAPITAL ALLOCATION AND CAPITAL DEPLOYMENT. IT IS RETURNS-BASED. ANYTHING WE DO WITH OUR SHAREHOLDERS' CASH HAS GOT TO BE LEVERED AGAINST THE IDEA OF REPURCHASING SHARES. SO THAT'S ALWAYS BEEN HOW SILGIN HAS THOUGHT ABOUT IT SINCE OUR FOUNDING. AND IT WILL CONTINUE TO BE THE CASE GOING FORWARD. WHAT'S INTERESTING IS, AGAIN, WE BELIEVE THERE'S A DISLOCATION IN THE STOCK PRICE TODAY AND THAT THE BUSINESS IS NOT BEING VALUED UPON THE MERITS OF THE BUSINESS AND THE PERFORMANCE THAT WE'VE HAD OVER THE LAST SEVERAL YEARS. SO THIS IS A UNIQUE OPPORTUNITY WHERE WE'RE BRINGING IN AIP AS A PARTNER IN THE TRANSACTION. AND THEY ARE PROVIDING $1 BILLION OF CASH. SO AN INTERESTING POINT FOR US IS THAT THIS IS LEVERAGED NEUTRAL TO SILGIN IN TOTAL. AND, IMPORTANTLY, OUR SHAREHOLDERS GET THE BENEFIT OF THE AT LEAST 15% ACCRETION THAT WE'VE TALKED ABOUT FROM AN EPS AND FROM A FREE CASH FLOW PERSPECTIVE WITHOUT DEPLOYING MEANINGFUL CAPITAL. SO BACK TO THE ORIGINAL STRATEGY THAT WE TALKED ABOUT AT THE BEGINNING OF THE CONVERSATION, IT ALLOWS US TO CONTINUE TO DO THE PORTFOLIO EVOLUTION THAT WE'VE BEEN WORKING TOWARDS ON OUR DISPENSING SOLUTIONS BUSINESS. AND IT ACTUALLY ACCELERATES IT BECAUSE WE'VE GOT ACCESS TO MORE CAPITAL AND A BALANCE SHEET THAT HAS BEEN REALLOCATED TO ALLOW FOR FURTHER CAPITAL DEPLOYMENT. AND, AS WE DEPLOY THAT CAPITAL, IT WILL BE THOSE SAME METRICS THAT WE USE, HOW THAT PERFORMS VERSUS THE SHARE REPURCHASES, ORGANIC INVESTMENTS IN OUR OWN BUSINESS OR M&A ACTIVITIES THAT ADD TO OUR BASKET OF PRODUCTS OR BRING IN DIFFERENTIATED TECHNOLOGIES AND ADD PRODUCTS FOR OUR CUSTOMERS AS WELL.
[00:35:28] Speaker 2: ADAM, I'D LOVE TO GET YOUR THOUGHTS AND JUST ZOOM OUT A BIT ON JUST THE HEALTH OF THE BROADER ECONOMY. FROM YOUR PERSPECTIVE, WHAT ARE YOU SEEING RIGHT NOW? ARE YOU SEEING A CONSUMER THAT'S INCREASINGLY STRAINED? ARE YOU SEEING RISING COSTS FOR MATERIALS KIND OF SLOW INTO YOUR BUSINESS?
[00:35:45] Speaker 8: SURE, THERE'S A COUPLE THINGS ABOUT SILGAN I THINK THAT ARE REALLY IMPORTANT TO UNDERSTAND. ONE, WE'VE GOT A VERY DIVERSE PORTFOLIO OF PRODUCTS THAT ARE ULTIMATELY USED BY CONSUMERS. SO WE ARE FOCUSED ON CONSUMER PACKAGING. AND WHAT WE DO IS WE HAVE PRODUCTS THAT RANGE FROM THE HIGH END OF KIND OF FRAGRANCE AND BEAUTY AND ALL THE WAY TO KIND OF LOW COST NUTRITION THROUGH FOOD CAN PRODUCTS THAT FEED THE WORLD'S POPULATION. AND IN DOING SO, WE SEE KIND OF BOTH ENDS OF THE ECONOMIC SCALE. AND, YOU KNOW, WE DO BELIEVE THIS K-SHAPED ECONOMY THAT WE'VE SEEN NOW FOR THE LAST COUPLE OF YEARS IS VERY REAL. WE SEE HIGH-END CONSUMERS DOING WELL AND CONTINUING TO SPEND IN A BEHAVIOR THAT IS CONSISTENT WITH THEIR PAST. ON THE LOWER END OF THE CONSUMER, WE ARE SEEING A MIGRATION TO ACTUALLY REALLY FOCUSING ON WHERE THOSE DOLLARS ARE SPENT AND HOW THOSE DOLLARS ARE SPENT AT THE RETAIL LEVEL.
[00:36:41] Speaker 1: AND, YOU KNOW, THE DOLLARS ARE SPENDING TO TELL THEM. IF I CAN JUMP IN, BECAUSE I APPRECIATE YOU HAVE A WIDE RANGE, BUT NESTLI, FOR EXAMPLE, THAT IS 14% OF YOUR REVENUE. THEY ARE YOUR BIGGEST CUSTOMER. THEY HAVE BEEN DISCUSSING ALL THESE ISSUES. THEY HAVE HAD PET CARE AND COFFEE HAVE SEEN STRUGGLES FOR COMPANY TO HAVE SEEN STRUGGLES. AND, YOU KNOW, THE DOLLARS THAT YOU MADE HAS HAD THIS HUGE PUSHBACK WITH A MORE HEALTH-CONSCIOUS AND GLP-1-TAKING POPULATION JUST THIS MORNING BEFORE YOU ANNOUNCED THE DEAL, WELLS FARGO ALSO CUT THEIR PRICE TARGET ON YOUR COMPANY, SAYING THAT THE MACRO-OPTIMISM IS FADING AS CONSUMERS PULL BACK AND COSTS RISE. SO HOW EXPOSED ARE YOU TO THE SENSITIVE CONSUMER? IS IT A PROBLEM?
[00:37:22] Speaker 8: AND, TO YOUR POINT, PERHAPS THE REASON WHY YOUR STOCK IS TRADING THE WAY IT IS? WE HAVE BEEN A STRATEGIC PARTNER SINCE OUR FOUNDING. THEY WERE ONE OF THE FIRST SELF-MANUFACTURE TAKE OUTS THAT THE COMPANY EXECUTED ON BACK IN 1987. AND, REALLY, THE VAST MAJORITY OF OUR BUSINESS WITH NESTLE IS IN PREMIUM WET PET FOOD. SO IT'S A PREMIUM SEGMENT THAT WE HAVE SEEN MID-SINGLE-DIGIT GROWTH SINCE THE ORIGINATION OF OUR PARTNERSHIP WITH THEM BACK IN 1987. SO IT'S A CONTINUALLY GROWING BUSINESS. IT IS ONE IN THE PET FOOD SEGMENT THAT CONTINUES TO PROVIDE GROWTH. AND WE FEEL VERY MUCH ALIGNED WITH OUR PARTNERS AND FEEL LIKE IT'S A VERY GOOD RUNWAY OF GROWTH JUST LIKE IT'S BEEN FOR ALMOST 40 YEARS FOR THE COMPANY.
[00:38:07] Speaker 2: SILVAN PRESIDENT AND CEO ADAM GREENLEY, WE THANK YOU. COMING UP, WARREN BUFFETT'S CHILDREN ARE WORKING ON A PLAN FOR HIS WEALTH WHEN HE PASSES. WE HAVE THE DETAILS ON THE TALKS NEXT. THIS IS BLOOMBERG OPEN INTEREST.
[00:38:32] Speaker 1: THANK YOU. ABOUT 20 MINUTES INTO TRADING DAY AND WE REBOUND AFTER A BRUTAL WEEK THAT WAS CONCENTRATED IN A CHIP MARKET SELL-OFF. THE PHILADELPHIA SEMICONDUCTOR INDEX FELL FOR EIGHT STRAIGHT TODAY. THE DOW JONES IS DOWN. YIELDS ARE HIGHER THIS MORNING EVEN THOUGH OIL IS LOWER. YIELDS HAD THEIR BEST WEEK MOVING LOWER SINCE 2025 THE SPRINGTIME. A LOT OF TECH IS BOUNCING BACK. INTEL BOUNCING BACK WITH OTHER CHIPMAKERS THIS MORNING. SPACEX WILL BE REPORTING EARNINGS THIS WEEK. HALFWAY IS DOWN TWO-TENDS OF ONE PERCENT.
[00:39:23] Speaker 2: EMILY? TODAY'S BIG TAKE LOOKS AT THE FATE OF ONE OF THE WORLD'S GREATEST FORTUNES. WARREN BUFFETT'S THREE CHILDREN ARE PREPARING TO TAKE CHARGE OF HIS WEALTH CURRENTLY VALUED AT $150 BILLION. BUT SUSIE HOWARD AND PETER BUFFETT SAY THEY STILL DON'T KNOW EXACTLY HOW THEY WILL DO IT. BLOOMBERG'S ALEX RAJBANDAHRI IS A COAUTHOR ON THE STORY. HE JOINS US NOW. GREAT REPORTING HERE. CONGRATS ON THE BIG TAKE. MY FIRST QUESTION READING THIS WAS LIKE DID THE CHILDREN NOT KNOW THAT THEY WERE GOING TO HAVE TO DO THIS? LIKE THEY KNOW WHO THEIR FATHER IS. THEY KNOW ABOUT THIS WEALTH.
[00:39:58] Speaker 9: THEY KNEW ABOUT THE WEALTH BUT THEY DIDN'T KNOW THEY WERE GOING TO HAVE TO BECOME PHILANTHROPISTS. IT KIND OF HAPPENED VERY LATE IN THEIR LIVES. IT WAS IN 1999 THAT THEIR PARENTS SET UP FOUNDATIONS FOR THEM. AND THEN THE BIG PLEDGE OF BUFFETT SAYING THAT HE'S GOING TO GIVE THE BULK, THE VAST MAJORITY OF HIS WEALTH TO CHARITY CAME IN 2006. MOST OF THE MONEY WAS GOING TO THE GATE FOUNDATION, WHICH IS NO LONGER THE CASE. NOW THEY ARE FIGURING OUT AT AN ADVANCED AGE. LATE 60s, EARLY 70s THAT THEY ARE GOING TO HAVE TO DO ALL THIS. THEY ARE GOING TO HAVE TO WORK ON THIS FOR THE REST OF THEIR LIVES
[00:40:34] Speaker ?: NOW.
[00:40:34] Speaker 1: I REALLY FIND THE PALACE INTRIGUES OF THESE KINDS OF THINGS SO INTERESTING BECAUSE WE ARE IN THIS SILVER TSUNAMI, THE GREAT WEALTH TRANSFER AND MOST PEOPLE ARE NOT DEALING WITH THIS SORT OF WEALTH TO DO. SO WHAT DO WE KNOW ABOUT THE THREE BUFFETT CHILDREN AND WHETHER THEY GET ALONG, WHETHER THEIR IDEAS ARE COHESIVE AND JUST HOW MUCH TENSION THERE MIGHT BE IN HOW TO SPEND THIS CHARITABLE MONEY?
[00:40:55] Speaker 9: THERE IS NO SIBLING RIVALRY. SO WE HAVE SPOKEN WITH THE THREE OF THEM. WE HAVE VISITED SOME OF THE PLACES WHERE THEY LIVE SO THAT WE COULD SEE THE IMPACT OF THEIR CHARITIES. THEY HAVE DIFFERENT ENTHUSIASMS, DIFFERENT INTERESTS IN THE PHILANTHROPIC CONDAIVORS. SUSIE IS THE ELDER'S DAUGHTER. SHE WILL FOCUS MOSTLY ON EARLY CHILDHOOD EDUCATION. HOWARD IS MORE INTO CONFLICT MITIGATION, FOOD SECURITY, AND PETER BUFFETT IS MORE INTO INDIGENOUS COMMUNITIES AND MARGINALIZED COMMUNITIES. SO THESE ARE VERY DIFFERENT INTERESTS OF GIVING. THEY DO EXCHANGE IDEAS. WE HAVE BEEN PICKING UP SOME -- THEY COULD TELL SOME SOMETIMES THAT THEY ARE TALKING AMONG EACH OTHER TO COME UP WITH IDEAS TO WHAT THEY ARE GOING TO DO WITH THAT MASSIVE AMOUNT OF MONEY THAT IS STILL GOING TO COME THEIR WAY. BUT THEY HAVEN'T FIGURED OUT HOW TO DO THAT YET.
[00:41:50] Speaker 2: WHAT IS THE CHILDREN? WHAT WOULD YOU SAY IS THE BIGGEST CHALLENGE FOR THE CHILDREN? IS IT FIGURING OUT EXACTLY WHERE TO SPEND THE MONEY? WHAT IS THE CHILDREN? WHAT IS THE CHILDREN?
[00:42:06] Speaker 1: WHAT IS THE CHILDREN?
[00:42:08] Speaker ?: WHAT IS THE CHILDREN?
[00:42:08] Speaker 9: WHAT IS THE CHILDREN? WHAT IS THE CHILDREN? WHAT IS THE CHILDREN? WHAT IS THE CHILDREN? WHAT IS THE CHILDREN? WHAT IS THE CHILDREN? WHAT IS THE CHILDREN? WHAT IS THE CHILDREN? WHAT IS THE CHILDREN? WHAT IS THE CHILDREN? WHAT IS THE CHILDREN? WHAT IS THE CHILDREN? WHAT IS THE CHILDREN? WHAT IS THE CHILDREN? WHAT IS THE CHILDREN? WHAT IS THE CHILDREN? WHAT IS THE CHILDREN? WHAT IS THE CHILDREN? WHAT IS THE CHILDREN? WHAT IS THE CHILDREN? WHAT IS THE CHILDREN? WHAT IS THE CHILDREN? WHAT IS THE CHILDREN? WHAT IS THE CHILDREN? WHAT IS THE CHILDREN? WHAT IS THE CHILDREN? WHAT IS THE CHILDREN? WHAT IS THE CHILDREN?
[00:42:44] Speaker 1: WHAT IS THE CHILDREN? WHAT IS THE CHILDREN? DOES HE HAVE ANY PHILANTHROPIES HE LIKES IN
[00:42:54] Speaker 9: PARTICULAR? HE IS NOT A FACTOR IN THIS. IT IS HIS MONEY BUT BESIDES THAT NOT INVOLVED? IT IS HIS MONEY BUT NOT INVOLVED. HE DOESN'T HAVE A SINGLE LOOK AT THEIR 990s. HE DOESN'T KNOW WHAT THEY ARE DOING. HE JUST TRUSTED THEM. HE HAS VISITED SOME OF THE FUNDATIONS, VENTURES AND FACILITIES SO HE CAN SEE WHAT IT IS ABOUT. HE DOESN'T HAVE A SAY IN THAT AND HE DOESN'T WANT TO HAVE ONE.
[00:43:13] Speaker 1: THANK YOU FOR BRINGING US THIS. THAT IS BLOOMBERG'S ALEX RAJBANDAR. COMING UP IN THE NEXT HOUR WITH EMILY AND MYSELF, WE ARE GOING TO TALK EARNINGS WITH SHAYNA SISEL FROM BANERIAN CAPITAL AND SETH BURROW JOINS US TO TALK M&A AND LESLIE VENGEMIRY ON THE U.S. PRESSURING UKRAINE AND THE UNREST IN FRANCE. ALL OF THAT IS TO COME. YOU ARE WATCHING OPEN INTEREST. THANK YOU FOR JOINING US. THANK YOU FOR JOINING US. WE REBOUND 30 MINUTES INTO THE TRADING DAY. WELCOME TO BLOOMBERG OPEN INTEREST. I'M DANNY BURGER ALONGSIDE EMILY GRAFFEO. COMING UP ON THE SHOW, EUROPE UNDER PRESSURE AS TENSIONS DEEPEN OVER UKRAINE AND THE COST OF LIVING PROTESTS ERUPTING INTO UNREST ACROSS FRANCE.
[00:44:07] Speaker 2: AND A $6.3 BILLION CYBER DEAL AS TOMA BRAVO-BACKED PROOF POINT BUYS VORONIS. WE WILL TALK TO TOMA BRAVO MANAGING PARTNER SETH BURROW IN JUST A FEW MINUTES.
[00:44:17] Speaker 1: AND AI ANXIETY IS BACK OR MAY BE SOLVED. META, TESLA, NETFLIX AND SPACEX, THEY ARE ALL GOING TO BE KICKING OFF A MEGA WEEK OF EARNINGS.
[00:44:24] Speaker 2: THOSE TECH EARNINGS START ROLLING IN TOMORROW WITH NETFLIX AND SPACEX. THEN WE WILL CONTINUE WEDNESDAY WITH TESLA, META AND IBM. JOINING US NOW IS BLOOMBERG INTELLIGENCE HEAD OF GLOBAL TECH RESEARCH MANDEEP SINGH TO TALK ABOUT THESE EARNINGS. WALK US THROUGH WHAT IS TOP OF MIND. THIS IS A WEEK WHERE WE ARE REBOUNDING A LITTLE BIT. BUT THAT COULD ALL CHANGE WITH THESE EARNINGS.
[00:44:45] Speaker 10: YEAH, IT COULD ALL CHANGE AND LOOK, I MEAN, I THINK THERE ARE A LOT OF CROSS-CURRENTS WHEN IT COMES TO WHAT TRANSPIRED LAST WEEK WITH CORVIV, THE WHOLE FINANCING ASPECT AND ALSO I WOULD STRESS THE STARTLING SITUATION. TO MY MIND, YOU KNOW, THEY AREN'T IN A PLEASANT SPOT RIGHT NOW WITH THE WHOLE THING. AND FOR SOMEONE LIKE SPACEX, WHICH IS REPORTING TOMORROW, IT'S A HUGE DEAL IN THE CONTEXT OF EXPECTATIONS THAT THEY HAVE SET, $100 BILLION IN ARR BY THE END OF THE YEAR. AND THAT'S CONTINUING ON THEIR CLOUD BUSINESS, WHICH WE KNOW CORVIV HAS BEEN GOING THROUGH A LOT OF VOLATILITY. IT'S THE EXACT SAME BUSINESS. SO FROM THAT PERSPECTIVE, I THINK SPACEX FOR ME WOULD BE QUITE INTERESTING AND OBVIOUSLY YOU CAN TALK ABOUT META AND MUSE BUT SPACEX FOR ME HAS BECOME QUITE INTERESTING.
[00:45:34] Speaker 1: THAT'S I MEAN, THAT IS WHERE I WANTED TO GO FOR META ON WEDNESDAY. HOW IMPORTANT IS IT GOING TO BE SEE THE UPTAKE OF MUSE AND THEIR ABILITY TO CONVERT THIS INTO SOME SORT OF RETURN IN REVENUE?
[00:45:44] Speaker 10: YEAH, LOOK, I THINK NOW THAT THEY HAVE A FRONTIER MODEL, IT'S GREAT THAT THEY SPENT ALL THIS MONEY AND THEY HAVE SOMETHING TO SHOW FOR IT. I STILL FEEL THAT META, THE BIG QUESTION IS AROUND MONETIZATION AND WHEN IT WILL IT WILL COME BECAUSE IF THEY ARE TALKING ABOUT $200 BILLION IN CAPEX FOR 2027, I MEAN, THEY ARE NOT RENTING THE CLOUD INFRASTRUCTURE LIKE GOOGLE OR MICROSOFT IS TO GENERATE REVENUE AND SHOW ROI. THEY HAVE TO SHOW THAT MUSE ACTUALLY MONETIZES AND THEY ARE ABLE TO TAKE A CUT OFF ALL THE REVENUE AND THE TRANSACTIONS THAT MUSE IS DOING. SO I MEAN, THEY ARE IN A BETTER SPOT THAN THEY WERE 90 DAYS BACK, BUT CLEARLY THE MONETIZATION QUESTION STILL LOOMS. INDEED, THANK YOU SO MUCH FOR JOINING US.
[00:46:27] Speaker 1: MANDEEP SINGH OF BLOOMBERG INTELLIGENCE AHEAD OF A BUSY WEEK. JOINING US IS SHAYNA SISL, BANRIAN CAPITAL MANAGEMENT FOUNDER AND CEO. SHAYNA, HOW ARE YOU THINKING ABOUT THE BIG TECH EARNINGS WITH META AND SPACEX, THESE VERY AI-TIED COMPANIES? THE SELL-OFF THAT WE HAVE SEEN, ARE THOSE REASONS TO JUMP IN OR ARE YOU WAITING TO HEAR SOMETHING SPECIFIC WHEN THEY REPORT EARNINGS THIS WEEK?
[00:46:49] Speaker 11: I THINK IT COULD BE REASON TO JUMP IN. OBVIOUSLY WHAT WE WANT TO SEE IS REASONABLE VALUATIONS MORE THAN ANYTHING ELSE. THE SELL-OFF HAS OFFERED US THAT BASED ON THE EARNINGS ESTIMATES THAT WE HAVE GOING FORWARD. WHAT I WANT TO SEE DEPENDS ON THE COMPANY. SO YOU MENTIONED META. WE WANT TO SEE THE ABILITY TO MONETIZE AI. THEY OBVIOUSLY LAUNCHED THE MUSE AI ASSISTANT, WHICH HAS BEEN VERY SUCCESSFUL. BUT THE INITIAL LAUNCH WAS THEIR FREE VERSION. AND WE WANT TO SEE THE FREE USERS CONVERT TO PAID USERS. I KNOW THAT I PERSONALLY HAVE NOT EVEN LOOKED AT MUSE. I USE CLODE. I USE COWORK AND CLODE TO DO A LOT OF PERSONAL ASSISTANCE WORK FOR ME. SO I HAVEN'T LOOKED AT IT. BUT I PAY FOR CLODE BECAUSE IT'S WORTH IT TO ME. SO I'D LIKE TO SEE THAT NEW USERS OF MUSE WOULD DO THE SAME KIND OF CONVERSION. THAT BEING SAID, SPACEX IS A DIFFERENT STORY, RIGHT? SO SPACEX IS A DIFFERENT KIND OF COMPANY. BUT ULTIMATELY, WHEN I LOOK AT THESE TECH COMPANIES, WHAT YOU WANT TO SEE, AND IT KIND OF MOVES DOWN THE FUNNEL, EVEN IF YOU START WITH NVIDIA, AND SOME OF THE CHIPS, YOU WANT TO SEE THE ABILITY TO MONETIZE AI SOLUTIONS AND AI APPLICATIONS MORE THAN ANYTHING BECAUSE THAT'S GOING TO DRIVE THE DEMAND FOR ALL THE INPUTS IF THERE'S THE ABILITY TO MONETIZE. THERE'S ONLY SO LONG CAPEX CAN BE SPENT ON AI BUILDOUT WITHOUT SEEING SOME PAYOFF FOR IT, OR AT LEAST SOME INDICATIONS THAT PAYOFFS ARE COMING.
[00:48:23] Speaker 2: RIGHT. SO IF WE SEE THESE COMPANIES REPORT EARNINGS AND UP THEIR CAPEX EXPECTATIONS, IS THAT GOING TO BE A RISK ON EVENT OR SOMETHING THAT WE'VE ACTUALLY SEEN IN A COUPLE PREVIOUS EARNINGS WHERE THE COMPANY ANNOUNCES THAT THEY'RE GOING TO BE SPENDING EVEN MORE AND THE STOCK SELLS OFF?
[00:48:41] Speaker 11: WELL, AGAIN, IT COMES DOWN TO WHY THEY'RE DOING THE SPENDING. IF THEIR SPENDING IS NOT SEEING A RETURN ON THE EARLIER CAPEX SPEND, THAT WOULD BE A REASON TO MOVE AWAY. YOU DON'T WANT A COMPANY SPENDING MORE AND MORE ON BUILDING OUT SOLUTIONS THAT THEY HAVE YET TO SHOW CAN BE MONETIZED. SO IT REALLY DEPENDS. AND THAT'S WHY YOU WANT TO LISTEN TO THE EARNINGS CALL AND GET THAT NUANCE BEFORE MAKING A DECISION ON WHETHER YOU WANT TO BUY INTO THE STOCK OR SELL YOUR POSITION.
[00:49:11] Speaker 1: I KNOW I'M ABOUT TO SAY SOMETHING THAT IS NOT GROUNDBREAKING OR ANYTHING NEW, BUT IT STILL SHOCKS ME EVERY TIME I LOOK AT THE STATISTICS ON JUST HOW MUCH OF THIS MARKET IS TECH AND HOW MUCH OF EARNINGS IS COMING FROM TECH. THIS YEAR, TECH ACCOUNTS FOR 48% OF GLOBAL GROWTH. NEXT YEAR, WHEN IT'S SET TO SLOW DOWN THE RATE, IT'S GOING TO ACCOUNT FOR 68% OF GLOBAL GROWTH. THAT WOULD BE SECOND ONLY TO THE 2002 ENERGY CRISIS IN AN EARNINGS YEAR WHERE EARNINGS WERE GOING UP. THE AVERAGE OF A TOP PERFORMING SECTOR IS 40%. IT IS SO OUTSIZED COMPARED TO HISTORY, SHAYNA. IS IT A REASON, THOUGH, TO BE CONCERNED? IT COULD BE A REASON TO BE CONCERNED.
[00:49:51] Speaker 11: AND THAT'S GOING TO TIE BACK IN -- I HATE SOUNDING LIKE A BROKEN RECORD, BUT, YOU KNOW, TECH IS ACCELERATING AND BECOMES SUCH A HUGE COMPONENT OF GROWTH GLOBALLY BECAUSE CAPEX SPEND ACROSS THE BOARD OF THOSE SECTORS IS BEING SPENT ON THESE TECH INITIATIVES INTERNALLY. WE WANT TO SEE THAT THESE AI INITIATIVES, WHETHER IT BE THROUGH A META OR A HEALTHCARE COMPANY OR A CONSUMER COMPANY, IS TURNING INTO A RETURN ON INVESTMENT THAT MONEY IS NOT JUST BEING SPENT TO SPEND. AND WHAT WE'VE SEEN IS THAT COMPANIES ARE SPENDING ON A.I. BECAUSE THEY FEEL LIKE IF THEY DON'T, THEY'LL BE LEFT BEHIND. BUT THEY HAVEN'T FOUND A WAY TO MONETIZE IT. SO THE TECH COMPANIES ARE BENEFITTING, BUT THE COMPANIES IN OTHER SECTORS THAT ARE DOING THIS SPEND ARE NOT BENEFITTING. AND, AGAIN, SO THAT GETS BACK TO MY ORIGINAL POINT, WHICH IS WE WANT TO SEE THAT THE CAPEX SPEND AND THE INITIATIVES BEING MADE IN NOT JUST TECHNOLOGY BUT IN OTHER SECTORS BECAUSE QUITE FRANKLY THAT'S THE USERS, THE USE CASE, RIGHT, FOR A.I., IT'S NOT FOR THE TECH COMPANIES. IT HAS TO TRICKLE INTO OTHER POTENTIAL SECTORS. AND SO WE WANT TO SEE THAT. TECH CAN CONTINUE TO HOLD ITS LEADERSHIP AND DOMINATE IN TERMS OF GLOBAL GROWTH AS LONG AS THE CAPEX AND OTHER SECTORS CONTINUES TO BE DIRECTED AT TECHNOLOGY. BUT SHOULD THAT CHANGE IN ANY WAY, SHAPE, OR FORM, THAT'S GOING TO BE PROBLEMATIC. AND THAT'S WHY YOU WANT TO PAY ATTENTION TO WHAT THESE COMPANIES ARE SPENDING MONEY ON, HOW IT'S AFFECTING THEIR EARNINGS, AND WHETHER OR NOT THE CONSUMER IS STARTING TO BE TIGHTER WITH THE PURSE STRINGS, IF YOU WILL, DUE TO THE INFLATION CONDITIONS, WHICH IS A COMPLETELY SEPARATE SUBJECT. BUT IT IS ALL RELATED TO HOW THE TECH SPEND HAS BEEN KIND OF DOMINATING EVERYTHING. AND IT IS CONCERNING THAT IT IS TOP HEAVY. WE WANT TO SEE THE EQUAL WEIGHTED INDEX START TO EITHER PERFORM IN LINE WITH OR OUTPERFORM THE CAP WEIGHTED INDEX. THAT'S USUALLY A GOOD SIGN THAT THERE IS ENOUGH BALANCE ACROSS SECTORS. BUT WE'RE JUST NOT SEEING THAT. IT'S REALLY JUST TWO SECTORS THAT HAVE DONE WELL, TECHNOLOGY AND ENERGY. AND PRETTY MUCH EVERYTHING ELSE HAS NOT DONE WELL. IT'S JUST THOSE TWO SECTORS ARE SUCH A HEAVY COMPONENT RIGHT NOW IN THE MARKET CAP INDICES THAT IT CAN KIND OF HIDE WHAT'S GOING ON UNDERNEATH.
[00:52:26] Speaker 2: RIGHT. SO I MEAN A LOT OF VOLATILITY, A LOT OF MOVING PARTS IN THE EQUITY MARKET. HOW DO YOU CONVINCE AN INVESTOR REALLY TO BE A BUYER ON SOME OF THIS WEAKNESS WHEN MAYBE THEY JUST WANT TO SIT OUT THE EQUITY VOL AND JUST CLIP COUPONS AND TREASURY BONDS AND TAKE SOME OF THESE JUICY YIELDS RIGHT NOW.
[00:52:44] Speaker 11: WELL, THERE'S NO INDICATION THAT THAT'S HAPPENING. IN FACT, I THINK IF THERE'S ANYTHING THAT COVID DID, IT'S THAT IT MADE AN ENTIRE GENERATION LOOK AT INVESTING IN THE STOCK MARKET AS KIND OF A GAME. THERE WAS THE GAMIFICATION OF INVESTING THAT HAPPENED. THROUGHOUT THIS PERIOD, THE UNUSUAL PART HAS BEEN THAT IT'S BEEN THE RETAIL INVESTOR, NOT THE INSTITUTIONAL INVESTOR, THAT'S BEEN DRIVING SENTIMENT AND ASSETS INTO EQUITIES. AND SO THAT'S HIGHLY UNUSUAL AND WE HAVEN'T SEEN THAT CHANGE. AND SO I DON'T KNOW THAT THERE NEEDS TO BE CONVINCING AT THIS POINT. WE'RE NOT REALLY SEEING FEAR IN THE RETAIL INVESTOR. IT'S MORE THE INSTITUTIONAL INVESTOR, WHICH I SHOULDN'T HAVE TO CONVINCE. THEY'RE FAIRLY SOPHISTICATED AND WELL INFORMED ON THE DYNAMICS OF THE MARKET.
[00:53:37] Speaker 1: SHANA, GREAT TO GET YOU ON TO START THE WEEK. SHANA SISL OF BANERY AND CAPITAL MANAGEMENT, THANK YOU SO MUCH. WE ARE ABOUT 40 MINUTES INTO YOUR TRADING DAY. AND SOME OF THE BIGGEST OF THE GAMES, AT LEAST IN INDIVIDUAL NAMES, EMILY AND I WILL BREAK THAT DOWN FOR YOU IN JUST A MOMENT, HAVE STARTED TO EBB. THE NASDAQ WHEN WE OPENED, EMILY, WAS UP 1.3%. IT'S ONLY UP ABOUT 1%. SO, YES, WE REBOUND. BUT, AGAIN, YOU GET THE SENSE AHEAD OF THE EARNINGS, AHEAD OF SPACEX AGAINST META. HOW POSITIVE CAN YOU BE THAT NOW IS THE TIME TO GO IN AND BUY THE DIT?
[00:54:05] Speaker 2: WE ARE IN AN ENVIRONMENT WHERE YIELDS ARE CONTINUING TO RISE, ESPECIALLY TODAY. IT WAS AN INTERESTING TRADE LAST WEEK AFTER THAT HOTTER THAN EXPECTED INFLATION REPORT. BUT, AT LEAST FOR THIS MORNING, IT'S YIELDS UP.
[00:54:18] Speaker 1: IT'S GOOD TO SEE NEGATIVE CORRELATION COME BACK BETWEEN THE TWO OF THEM. 60-40. CONGRATS, YOU GET A MOMENT IN THE SUN AGAIN. I MENTIONED SOME OF THE INDIVIDUAL STOCKS WE ARE LOOKING AT. LET'S GET INTO SOME OF THOSE BECAUSE WE ARE SEEING SOME RELIEF FOR THE AI TRADE AFTER LAST WEEK'S SELL-OFF DUE TO CONCERNS AROUND SPENDING AND RETURNS. THE PHILADELPHIA SEMICONDUCTOR INDEX IS SET TO SNAP, IS THE LONGEST LOSING STREAK IN ABOUT 18 YEARS.
[00:54:43] Speaker 2: AND SHARES OF CORRWEAVE ARE RISING AFTER AN UPGRADE FROM GOLDMAN SAX FOLLOWING LAST WEEK'S SELL-OFF RISING, BUT NOT BY MUCH. THE ANALYSTS SEEING A PULLBACK AS AN OPPORTUNITY, NOTING THAT THE COMPANY HAS KEY ADVANTAGES OVER COMPETITORS.
[00:54:55] Speaker 1: A SCARY AMOUNT OF YIELD ON THAT DEBT. ELON MUSK SAYS HE PLANS TO GIVE EVERY CHILD IN AMERICA ONE OF HIS SPACEX SHARES. THAT MAY BE A DILUTE EVENT, NOT IMPACTING SPACEX. IT'S UNCLEAR HOW IT'S ACTUALLY GOING TO WORK. THEY ARE GOING TO BE REPORTING EARNINGS TOMORROW. SHARES ARE UP 2% AHEAD OF THAT. ANTHROPIC ALSO SAID IT WOULD SET ASIDE A PORTION OF ITS SHARES FOR THE PUBLIC BENEFIT.
[00:55:17] Speaker 2: COMING UP, A NEW BLOOMBERG INTELLIGENCE SURVEY SHOWS THAT PRIVATE CREDIT DEMAND REMAINS STRONG. WE'LL DISCUSS THE RESULTS NEXT. THIS IS BLOOMBERG OPEN INTEREST.
[00:55:39] Speaker 1: LET'S GET YOU SOME HIGH INTEREST STORIES. A LOOK AT WHAT'S MAKING HEADLINES AROUND THE WORLD. BARONS IS REPORTING THAT TWO FINANCIAL ADVISOR TEAMS OVERSEEING NEARLY $19 BILLION ARE LEAVING J.P. MORGAN CHASE'S WEALTH MANAGEMENT UNIT TO LAUNCH THEIR OWN INDEPENDENT FIRM. THE 48-PERSON OPERATION IS SELF-FUNDED WITH OFFICES IN FLORIDA, WASHINGTON, BOSTON, DEMANDS IN FLORIDA, WHICH IS TALKING ABOUT INFLATION. IT IS A RECENT YEAR. GOLDMAN SAX AND EVERCORE ARE AMONG THE BANKS, PITCHING PRIVATE EQUITY FIRMS ON SO-CALLED FOREVER FUNDS. INFLATION SHOWS THAT PRIVATE CREDIT DEMAND REMAINS STRONG WITH MOST INVESTORS EXPECTING DEPLOYMENT AND FUNDRAISING TO RISE OVER THE NEXT YEAR. NEARLY 80% ARE SEEING RETURNS MATCHING OR BEATING HISTORICAL LEVELS, ALTHOUGH INVESTORS REMAIN CAUTIOUS MORE THAN FUND MANAGERS ON SPREADS, DEPLOYMENT, AND WEALTH FLOWS. I THINK THAT LAST PART IS KEY, THEY ARE STILL CAUTIOUS ON WEALTH FLOWS BECAUSE YES, THROUGHOUT THIS YOU AND I TALKED TO A LOT OF PRIVATE CREDIT PEOPLE INFLATION. INSTITUTIONS STILL WANT PRIVATE CREDIT BUT SO MANY OF THESE MEGA FIRMS HAVE PINNED THEIR NEXT LEG OF GROWTH ON WEALTH. SO WHAT HAPPENS IF THAT'S STILL LAGGING?
[00:56:53] Speaker 2: YOU HAVE TO WONDER, IF IT'S A WEALTH CHANNEL, HOW MUCH POWER DOES THE FINANCIAL ADVISOR HAVE TO JUST TELL THE CLIENT, LISTEN, I KNOW THERE'S HEADLINES, BUT DON'T WORRY, WE'RE GOING TO GO INTO THIS, VERSUS A RETAIL SELF-DIRECTED INVESTOR.
[00:57:08] Speaker 1: I THINK A LOT OF IT, AND A LOT OF PEOPLE HAVE SAID THIS, IT'S ABOUT EDUCATION, I WAS JUST A CASE LAST WEEK WITH A LOT OF THIS GOING ON, BUT WHAT ARE THE FIRMS TELLING THOSE ADVISORS? THE FT REPORTING THIS MORNING THAT THE BOE WAS LOOKING INTO BARCLAYS AND SCRUTINIZING JUST HOW LIQUID THEY ADVERTIZED THEIR ASSETS AS. SO YOU COULD MAYBE BLAME THE WEALTH ADVISORS, BUT YOU COULD ALSO SAY WAS IT A MISTAKE TO CALL THESE THINGS SEMI LIQUID? WERE THEY BEING AS TRANSPARENT AS THEY SHOULD HAVE BEEN IN THE PROFILE OF LIQUIDITY OF THESE FUNDS?
[00:57:37] Speaker 2: YEAH, I MEAN, WE'LL HAVE TO SEE HOW IT ALL KIND OF PLAYS OUT. IT IS INTERESTING IN THIS SURVEY THAT THE RESPONDENTS STILL EXPECT ABOUT 100 TO 200 BASIS POINT PREMIUM OVER PUBLIC CREDIT, WE COULD CALL IT, BSLs. SO I MEAN, EVEN DESPITE ALL OF THE VOLATILITY THAT WE'VE SEEN, YOU STILL GET A LITTLE PREMIUM FOR STICKING IT OUT AND GOING TO PRIVATE CREDIT.
[00:57:57] Speaker 1: YEAH, YOU CERTAINLY DO. AND MAYBE DEALMAKING WILL ALSO CONTINUE IN A BIG WAY, PRIVATE CREDIT, A BIG PART OF THAT. STILL AHEAD, EMILY AND I ARE GOING TO DISCUSS ABOUT A DEAL. TOMA BRAVO-BACKED PROOF POINT IS BUYING VERONIS FOR $6.3 BILLION AS TECH M&A REBOUNDS. WE'RE GOING TO DISCUSS WITH TOMA BRAVO MANAGING PARTNER, SETH BURROW, RIGHT AFTER THIS BREAK. TOMA BRAVO-BACKED PROOF POINT HAS AGREED TO BUY CYBER SECURITY COMPANY VERONIS FOR ABOUT $6.3 BILLION. THE TRANSACTION UNDERSCORES HOW PRIVATE EQUITY-RELATED DEALMAKING IN THE TECH SECTOR IS REBOUNDING AFTER AI CONCERNS DROVE A SOFTWARE SELL-OFF EARLIER THIS YEAR. PLEASE SAY WE CAN GET MORE ON THIS DEAL WITH TOMA BRAVO MANAGING PARTNER, SETH BURROW, WHO OVERSEES CYBER SECURITY AT THE FIRM. SETH, THANKS FOR JOINING US. CONGRATULATIONS ON THIS DEAL. LET'S START WITH THE BASICS. WHY VERONIS SPECIFICALLY? WHAT DOES IT ADD TO PROOF POINT THAT PROOF POINT EITHER DIDN'T HAVE OR MAYBE COULDN'T BUILD
[00:59:03] Speaker 12: ORGANICALLY? GOOD MORNING, DANNY. GREAT TO BE HERE AS ALWAYS. IT, YOU KNOW, PROOF POINT FOR US HAS BEEN AN INCREDIBLE INVESTMENT TO DATE. IT'S A LEADER IN COLLABORATION SECURITY, EMAIL SECURITY, AND DATA SECURITY. AND THE COMBINATION WITH VERONIS REALLY CREATES ONE OF THE LEADING CYBER PLATFORMS IN THE WORLD. IT COMBINES VERONIS'S INCREDIBLE DATA SECURITY PLATFORM. THEY'RE A FOUNDER IN THAT SECTOR, A HUGE INNOVATOR, WITH THE AMAZING, WITH THE AMAZING CYBER PLATFORM OF PROOF POINT AND THEIR EMAIL HISTORY AND THEIR DATA SECURITY HISTORY TO CREATE ONE OF THE LEADING CYBER PLATFORMS FOR THE ENTERPRISE IN THE WORLD TODAY.
[00:59:54] Speaker 1: IT IS A PRETTY PUNCHY PREMIUM. I SHOULD JUST POINT OUT 52% TO THE KIND OF PRERUMOR PRICE. I WONDER HOW YOU THINK ABOUT JUST GETTING COMFORTABLE WITH THAT BECAUSE OBVIOUSLY YOU SEE A REALLY BIG INVESTMENT CASE FOR BUYING THEM. SO HOW DID THAT KIND OF ANALYSIS WORK OUT TO SAY, OKAY, WE'RE HAPPY TO BUY THEM AND WE'RE HAPPY TO BUY THEM AT THESE
[01:00:15] Speaker 12: PUNCHY PRICES? WELL, WE FOCUS MUCH MORE ON FUNDAMENTAL VALUE AND WHAT WE'RE BUILDING ARE COMPANIES THAT ARE HIGH GROWTH THAT GENERATE A LOT OF FREE CASHFLOW. AND OBVIOUSLY, YOU KNOW, THE PUBLIC MARKET AT ANY POINT IN TIME WILL PRICE THE STOCK WHERE IT DOES. WE DON'T REALLY FOCUS ON THAT. AT THE END OF THE DAY, WE'RE TRYING TO GENERATE RETURNS FOR OUR INVESTORS. AND WE'RE MUCH MORE FOCUSED ON, YOU KNOW, THE BUSINESS THAT WE'RE BUILDING FOR THE LONG TERM AND A LOT LESS FOCUSED ON WHERE THE STOCK IS TRADING AT ANY GIVEN POINT WHEN WE
[01:00:46] Speaker 2: BUY IT. SO, SETH, WOULD THERE BE ANYTHING ELSE TO ADD TO PROOF POINT NOW? DO YOU SEE ANY MORE WHITE SPACE LEFT?
[01:00:55] Speaker 12: YOU KNOW, THESE PLATFORMS IN CYBER, YOU KNOW, ONE THING WE'RE HEARING QUITE A BIT FROM C-LEVEL EXECUTIVES OF COMPANIES IS THAT THEY WANT THEIR EXISTING STRATEGIC VENDORS TO PROVIDE MORE. AND SO, ABSOLUTELY, WE SEE THIS PLATFORM CONTINUING TO EXPAND. YOU KNOW, OUR FIRST STEP IS MAKING SURE THAT WHAT WE'RE BRINGING TOGETHER HERE REALLY DOES DELIVER VALUE FOR THE CUSTOMERS. BUT AFTER THAT, WE SEE A LOT OF OPPORTUNITY TO CONTINUE TO INNOVATE, BOTH ORGANICALLY AND INORGANICALLY, AND DELIVER MUCH MORE TO THE FORTUNE 1000, FORTUNE 2000 CUSTOMERS THAT THE COMPANY SELLS TO.
[01:01:35] Speaker 1: IT FEELS LIKE THERE'S THIS MASS MOMENT OF CONSOLIDATION IN CYBERSECURITY. SETH, CENTER HAS BEEN ON A BUYING SPREE. DATA SECURITY COMPANY, CYRA BOUGHT OASIS SECURITY. WE HAD ON THE SHOW, IONQ, THE QUANTUM COMPANY, THEY HAD ALSO BOUGHT A CYBERSECURITY OFFERING. OBVIOUSLY NO ONE KNOWS THE SPACE BETTER THAN YOU, SETH. WHAT'S GOING ON RIGHT NOW? WHY THE CONSOLIDATION?
[01:01:57] Speaker 12: THERE'S THOUSANDS OF PRIVATE SECURITY COMPANIES. THERE'S A LOT OF ACTIVITY OUT THERE. IT'S ALWAYS BEEN A VERY HEAVILY VENTURE-FUNDED SPACE. AND TO MY POINT EARLIER OF C-LEVEL EXECUTIVES WANTING MORE FROM THEIR EXISTING TRUSTED VENDORS, YOU KNOW, THINK ABOUT IT TODAY. IF YOU'RE A CISO OR A CIO, YOU HAVE SO MANY SMALLER COMPANIES TRYING TO GET YOUR ATTENTION. AND, LOOK, THOSE EXECUTIVES, THEY WANT TO WORK WITH THEIR TRUSTED PLATFORM PROVIDERS. IT'S WHY WE CONTINUE TO THINK THAT THERE'S GOING TO BE A VERY STRONG THIRD-PARTY CYBER PLATFORM. I THINK IT'S WHY YOU'RE SEEING THIS CONSOLIDATION TAKE PLACE.
[01:02:39] Speaker 1: JUST ON -- IF I COULD JUMP IN, JUST THINKING ABOUT TRUST AND WHO YOU'RE OKAY WITH, THIS IS KIND OF A TWO-PART QUESTION. BECAUSE WE'RE SEEING THE LLMS, THE BIG HYPER SCALERS GIVE THEIR OWN OFFERING TO ENTERPRISE RIGHT NOW. MUSE IS A GREAT EXAMPLE OF THIS, THAT META HAS MUSE FOR PERSONAL USE AND THEY'RE LAUNCHING A MUSE ENTERPRISE. JUST FROM A CYBER SECURITY STANDPOINT, SHOULD COMPANIES BE LESS TRUSTING? THERE'S A LITTLE BIT OF THE CYBER SECURITY. YOU'RE GOING TO BE IN THESE THIRD-PARTY AGENTS. SHOULD I BE TRUSTING? THAT'S THE SECOND PART, BECAUSE I STARTED TO USE MUSE. BASICALLY, IS TOM A BRAVO COMPANIES GOING TO SAVE US ALL AND YOU'RE GIVING ENOUGH
[01:03:21] Speaker 12: THE CYBER SECURITY FOR THE CYBER SECURITY. HOW DOES THESE AGENTIC OFFERINGS COME UP? LOOK, THIS AI BUILDOUT IS REALLY ONLY POSSIBLE WITH THIS FOUNDATIONAL CYBER LAYER. IT'S ONE OF THE FOUNDATIONS THAT'S CYBER SECURITY. WE'RE GOING TO GIVE TRUST TO USING THESE NEW, INCREDIBLE TECHNOLOGIES. IT'S ONE OF THE REASONS WE'RE SO EXCITED ABOUT CYBER. AND IT'S ONE OF THE MAIN REASONS THAT WE'RE BRINGING THESE TWO COMPANIES TOGETHER TO REALLY ENABLE THIS AGENTIC BUILDOUT. LOOK, I THINK, OBVIOUSLY, THERE'S BEEN A LOT IN THE PRESS ABOUT SOME OF THE ISSUES THAT HAVE COME OUT OF ROGUE AGENTS. WE DON'T SEE THAT SUBSIDING AS BUILDOUTS TAKE PLACE. AND AT THE CONSUMER LEVEL, OBVIOUSLY, IT'S DEFINITELY A TIME TO, I THINK, TREAD MORE SLOWLY THAN FAST. SO I SHOULDN'T GIVE IT MY CREDIT CARD INFORMATION, SETH?
[01:04:13] Speaker 1: IS THAT WHAT YOU'RE TELLING ME?
[01:04:14] Speaker 12: I MEAN, DAN, YOU CAN, BUT I WARNED YOU.
[01:04:18] Speaker 2: OKAY, SETH, WHAT DOES IT SAY JUST TO END ON JUST THE BROADER SOFTWARE M&A ENVIRONMENT? IS IT GENUINELY REOPENING, OR IS CYBERSECURITY REALLY THE EXCEPTION HERE, JUST GIVEN ALL OF THE CONCERNS AROUND AI GROWTH?
[01:04:33] Speaker 12: I THINK THAT, YOU KNOW, THE MARKET HAS PRESENTED SOME OPPORTUNITY. OBVIOUSLY, THIS IS ONE THAT PROOF POINT WAS EXCITED ABOUT. IT'S BEEN VERY LONG-TERM IN THE MAKING. THIS IS AN INCREDIBLY STRATEGIC MOVE FOR THE COMPANY AND FOR THE INDUSTRY. AND, LOOK, WE'RE, YOU KNOW, ALWAYS LOOKING FOR THAT NEXT OPPORTUNITY. WE'RE ALWAYS LOOKING TO CONTINUE TO CREATE VALUE AND DELIVER VALUE. AND IT'LL BE INTERESTING TO SEE. I THINK RIGHT NOW PEOPLE HAVE PROBABLY NEVER HAD A HARDER TIME MAKING A DECISION. THERE'S A LOT OF NOISE IN THE WORLD. AND, LOOK, WE TRY TO LOOK THROUGH THAT NOISE TO MAKE GOOD
[01:05:14] Speaker 1: DECISIONS. SETH, WELL, I PERSONALLY HAVE TAKEN AWAY A LOT FROM THIS INTERVIEW. I NEED TO DO SOME RETHINKING. THANK YOU SO MUCH FOR JOINING US. COMING UP, IT'S LESLIE BENJAMIRI OF THE CHICAGO COUNCIL ON GLOBAL AFFAIRS. THIS IS OPEN INTEREST. TENSIONS MOUNTING BETWEEN UKRAINE AND THE U.S. AS PRESIDENT ZELENSKYY ACCUSES PRESIDENT TRUMP OF PUSHING KYIV TO YIELD TO MOSCOW. THE UKRAINIAN PRESIDENT POSTING ON X QUOTE, I BELIEVE STEPS HAVE BEEN TAKEN TO CONVINCE UKRAINE TO CAPITULATE. I DON'T WANT TO THINK THAT OUR AMERICAN PARTNERS BELIEVE THE WAR AGAINST RUSSIA COULD BE ENDED SOONER AT UKRAINE'S EXPENSE. THAT'S HOW IT'S LOOKED. FOR MORE, LET'S BRING IN BLOOMBERG'S TYLER KENDALL IN WASHINGTON. TYLER, WHAT DO WE KNOW ABOUT THE EVOLVING RELATION BETWEEN UKRAINE AND AMERICA?
[01:06:09] Speaker 6: WELL, DANI, OVER THE WEEKEND, UKRAINIAN PRESIDENT ZELENSKYY OUTLINED A LIST OF ALLEGATIONS AGAINST THE U.S. HE SAYS -- ILLUSTRATES HOW THE U.S. IS TRYING TO MOUNT PRESSURE ON UKRAINE INSTEAD OF ON RUSSIA. WE SAW THIS RELATIONSHIP REALLY COME TO A BOILING POINT OVER THE PAST WEEK AFTER PRESIDENT TRUMP ANNOUNCED THAT DEAL TO GET MORE RUSSIAN DIESEL TO MARKET. THE UKRAINIAN PRESIDENT HAS SAID SINCE THEN THE U.S. HAS SLOWED STARLINK INTERNET SERVICE DELIBERATELY OVER THE COUNTRY AS WELL AS HAS SLOWED THE SHIPMENTS OF PATRIOT MISSILE DEFENSE SYSTEMS. NOW, WE SHOULD SAY THE U.S. DENIES THE ALLEGATIONS IN PARTICULAR AROUND THE STARLINK INTERNET ACCESS ALLEGATION. WE HEARD THE U.S. TREASURY SECRETARY SCOTT BESSEN SAY IN AN INTERVIEW OVER THE WEEKEND THAT THAT CLAIM IS QUOTE VERY RECKLESS. BUT IT DOES GO TO UNDERSCORE WHAT HAVE BEEN THESE MOUNTING TENSIONS. IN A POST ON TRUTH SOCIAL OVER THE WEEKEND, PRESIDENT TRUMP DEFENDED HIS DIESEL DEAL AND RAMPED UP HIS OWN RHETORIC AGAINST THE UKRAINIAN PRESIDENT. AS WE CONTINUE TO SEE THE CONFLICT CONTINUE, DANNY, OVERNIGHT, RUSSIAN STATE MEDIA REPORTED THAT THEY HAD ISSUED WHAT THEY ARE CALLING A MASSIVE STRIKE ON KYIV, UNDERSCORING ALL OF THESE KEY POINTS, INCLUDING GAPS IN UKRAINE'S AIR DEFENSE SYSTEMS, AS WELL AS THE FACT THAT THEY CONTINUE TO HAVE TROUBLE INTERCEPTING SOME OF THOSE MISSILES GETTING THROUGH.
[01:07:31] Speaker 2: TYLER, ARE WE SEEING ANY SIGNS THAT TRUMP HAS THE BACKING OF THE REPUBLICAN PARTY FOR ALL OF THIS, OR IS THIS CAUSING SOME KIND OF INTERPARTY TENSIONS AS WELL?
[01:07:43] Speaker 6: THERE'S DEFINITELY TENSIONS, EMILY, WHEN IT COMES TO THE GOP. AND WE SAW PRESIDENT TRUMP DEFEND AGAINST THIS CRITICISM FROM SOME IN HIS OWN PARTY, AFTER AT LEAST 10 REPUBLICAN SENATORS IN THE PAST WEEK HAVE RAISED ALARM OVER SOME OF PRESIDENT TRUMP'S ACTIONS TOWARD RUSSIA. IT'S PUTTING A LOT OF REPUBLICANS, REPUBLICAN CANDIDATES IN TRICKY POSITIONS IF THEY DON'T WANT TO GO AGAINST THE PRESIDENT, BUT ARE AGAINST WHAT SEEMS TO BE THESE WARMER RELATIONS BETWEEN THE WHITE HOUSE AND THE KREMLIN. ON ONE HAND, THE WHITE HOUSE HAS FRAMED MOST OF ITS ACTIONS AS A BID TO CURB COSTS FOR AMERICAN CONSUMERS. THAT'S SORT OF THE LINE THAT WE SEE A LOT OF THESE REPUBLICANS WALKING HERE, THAT THEY KNOW THE ADMINISTRATION WANTS TO BRING DOWN COSTS AT THE PUMP, FOR EXAMPLE. STILL, MANY OF THESE LAWMAKERS ARE POINTING TO ANALYSIS VERY SIMILAR TO OUR OWN AT BLOOMBERG INTELLIGENCE THAT SAYS WHEN IT COMES TO THAT RUSSIAN DIESEL DEAL, THE INITIAL VOLUMES RELEASED TO MARKET AREN'T GOING TO DO A LOT TO MAKE UP THAT SUPPLY GAP. WE'LL HAVE TO SEE WHERE IT GOES FROM HERE. BUT WE ARE SO CLOSE TO ELECTION DAY AT THIS POINT. EARLY VOTING IS ALREADY WELL UNDERWAY. AND THIS DOES APPEAR TO BE ANOTHER HEADWIND THAT REPUBLICANS ARE CONTENDING WITH.
[01:08:50] Speaker 1: TYLER, THANK YOU SO MUCH. THAT'S BLOOMBERG'S TYLER KENDALL IN WASHINGTON. JOINING US NOW TO CONTINUE THE CONVERSATION IS LESLIE VENJAMIRY, PRESIDENT AND CEO OF THE CHICAGO COUNCIL ON GLOBAL AFFAIRS. LESLIE, I WOULD LOVE TO GET YOUR TAKE ON THIS EVOLVING DYNAMIC, ONE IN WHICH THE GOP DOES SEEM TO BE PUSHING BACK TO BE PUSHING BACK. WE'VE GOT A LITTLE BIT OF SANCTIONS ON RUSSIA, GIVES A WAIVER JUST AFTER WE HAD THIS ACT FROM THE LATE SENATOR, LINDSAY GRAHAM.
[01:09:23] Speaker 13: ABSOLUTELY. I THINK ACROSS A NUMBER OF DIMENSIONS, WE CAN FEEL AND WE CAN SEE HINTS THAT MANY OF THE REPUBLICANS IN CONGRESS ARE WARY OF BEING TOO ALIGNED WITH PRESIDENT TRUMP. AND CERTAINLY WHEN IT COMES TO HIS PENTION AND IT'S SORT OF DOUBLING DOWN ON HIS RELATIONSHIP WITH VLADIMIR PUTIN TO THE EXPENSE AND THE COST NOT ONLY OF UKRAINE BUT ALSO OF EUROPE, THERE'S SORT OF MORE WILLINGNESS TO CALL THE PRESIDENT OUT. BUT IT'S STILL A VERY CAREFUL POLITICAL CALCULATION AS THE REPUBLICAN PARTY AND ALL OF CONGRESS ARE LOOKING TO THOSE MIDTERM ELECTIONS. BUT, YOU KNOW, I WAS IN SECURITY FORUM LAST WEEK AND I THINK THAT THE SORT OF HORROR AND SHOCK AT THE DIESEL DEAL CANNOT BE UNDERSTATED BY MANY PEOPLE. THE SENSE THAT PRESIDENT TRUMP IS JUST REALLY LEANING RIGHT INTO HIS RELATIONSHIP WITH VLADIMIR PUTIN. THERE ARE RUMORS NOW THAT PERHAPS THERE WILL BE TALKS BETWEEN THE CHINESE LEADER, THE AMERICAN LEADER AND THE RUSSIAN LEADER, YOU KNOW, WITH EUROPE SORT OF ON THE MARGINS. AND I THINK IT RAISES A REAL QUESTION FOR EUROPE, EUROPEAN LEADERS WHO ARE, YOU KNOW, UNDER PRESSURE FOR THEIR OWN REASONS AT HOME AS TO WHAT THEY'RE GOING TO DO AND WITH WHAT LEVEL OF URGENCY AND EXPEDIENCY. AND, YOU KNOW, WE'RE SEEING THE LIMITATIONS IN TERMS OF TIMELINE THAT EUROPE FACES. IT'S GOT TO GET THOSE SATELLITE COMMUNICATIONS CAPABILITIES IN ORDER TO REALLY BE A SINGULAR SOURCE OF SUPPORT FOR UKRAINE. SO THE TRADE-OFF BETWEEN WHAT THE URGENCY OF THE MOMENT AND THAT LONG-TERM INVESTMENT IS BEING REALLY HIGHLIGHTED BY PRESIDENT TRUMP'S QUITE STARK MOVES TO LEAN IN TOWARDS HIS RELATIONSHIP WITH VLADIMIR PUTIN.
[01:11:16] Speaker 2: LESLIE, IS IT FAIR TO SAY THAT TENSIONS BETWEEN UKRAINE AND THE U.S. HAVE REACHED A NEW LOW?
[01:11:24] Speaker 13: SURE. NO, THE TENSIONS HAVE REACHED A NEW HIGH. THE RELATIONSHIP, I'M SURE YOU MEANT, HAS REACHED A NEW LOW. AND ZELENSKYY IS -- YOU KNOW, HE'S NOT -- YOU KNOW, FOR SO MANY MONTHS, DIFFERENT POINTS IN TIME OVER THE PAST FEW YEARS, HE'S TRIED TO REALLY MANAGE PRESIDENT TRUMP. I THINK RIGHT NOW WE'RE JUST SEEING HE IS LEANING IN BECAUSE THINGS HAVE GOTTEN, YOU KNOW, CONSIDERABLY WORSE FOR UKRAINE. IT'S A VERY DIFFICULT MOMENT. HE MADE IT CLEAR MORE SO THAT, SURE, UKRAINE WOULD COMPLY WITH AN ENERGY CEASE-FIRE IF THERE WAS ONE TO BE HAD, BUT WITH NO SENSE THAT RUSSIA WOULD ACTUALLY DO THE SAME. SO, YOU KNOW, IT'S A TRICKY GAME. OBVIOUSLY RELATIONS THAT ARE AT ALL-TIME LOW FOR ZELENSKYY AND TRUMP. AND, YOU KNOW, THE STAKES COULDN'T BE HIGHER FOR THE PEOPLE IN UKRAINE. I THINK EUROPE'S LEADERS ARE VERY WELL AWARE OF WHAT THAT MEANS, CERTAINLY, ESPECIALLY AS YOU MOVE CLOSER TO THE EASTERN BORDERS OF NATO AND CLOSER TO UKRAINE.
[01:12:26] Speaker 1: THERE WAS THIS COMMENT FROM ZELENSKYY, LESLIE, WHERE HE ESSENTIALLY SAID THIS IS POSTURING AHEAD OF THE MIDTERM ELECTION AND POST MIDTERM ELECTION, WE CAN RETURN TO SOMETHING THAT LOOKS A BIT MORE CALM. DO YOU THINK THAT IS THE RIGHT READ ON WHAT THE AMERICAN PRESIDENT HAS BEEN DOING WHEN IT COMES TO SOME OF THE VOLATILITY IN THE RELATIONSHIPS AND WHAT APPEARS TO BE SOME RELAXING ON A RUSSIA STANCE?
[01:12:51] Speaker 13: I DO THINK THAT THE POSTURING IS TIME-LINKED TO THE IMMINENT U.S. MIDTERM ELECTIONS. BUT REMEMBER, IT'S NOT JUST POSTURING IN THE SENSE THAT PRESIDENT TRUMP, FOR AS LONG AS HE'S BEEN IN THE POLITICAL EYE, HAS ENVIED, ADMIRED, WANTED TO HAVE A RELATIONSHIP NOT ONLY WITH RUSSIA BUT WITH VLADIMIR PUTIN. SO THERE'S SOMETHING MORE ENDURING ABOUT THIS. BUT I THINK THE SECOND HALF OF WHAT YOU JUST READ OUT IS MUCH MORE DIFFICULT TO PREDICT. THAT IS WHAT HAPPENS AFTER THE MIDTERM ELECTIONS. I CAN IMAGINE A PRESIDENT WHO FEELS HUMILIATED BY A SIGNIFICANT LOSS, NOT ONLY IN THE HOUSE BUT POTENTIALLY IN THE SENATE, DESIRING TO DO SOMETHING ON THE GLOBAL STAGE THAT EARNS HIM SOME ACCOLADES. HE MIGHT SEE THAT AS LEANING IN TOWARDS ENDING THE WAR. FOR HIM THAT HE MIGHT SEEK TO DO THAT BY GETTING EVEN CLOSER TO VLADIMIR PUTIN WITHDRAWING EVEN MORE SUPPORT FROM UKRAINE. YOU KNOW, WE'VE SEEN THREATS THAT HE MIGHT NOT ALLOW EUROPEANS TO CONTINUE TO BUY AMERICAN CAPABILITIES, WHICH THEY'RE THEN FEEDING TO UKRAINE. YOU KNOW, EUROPEANS ARE THE DIRECT PROVIDERS OF UKRAINIAN ASSISTANCE NOW, BUT THEY'RE RELYING ON AMERICAN CAPABILITIES TO DO THAT. SO I THINK WHAT HAPPENS AFTER THE MIDTERMS IS OBVIOUSLY VERY DIFFICULT TO PREDICT BECAUSE PRESIDENT TRUMP IS VERY DIFFICULT TO PREDICT. AND HE'S GOING TO BE EVEN MORE DIFFICULT TO PREDICT WHEN HE SEES HIMSELF AS FACING THAT LAME DUCK LABEL, A LIMITED TIMELINE, POTENTIALLY HUMILIATION, BUT STILL WITH A LOT OF POWER WHEN IT COMES TO HIS ABILITY TO AFFECT MATTERS OF WAR AND PEACE AND TO DEPLOY AMERICA'S POWERS OR TO WITHHOLD THEM.
[01:14:43] Speaker 2: RIGHT, LESLIE, AND SPEAKING OF MATTERS OF WAR AND PEACE, I DO WANT TO GET YOUR THOUGHTS BEFORE WE LET YOU GO ABOUT THE IMPACTS OF THE IRAN WAR AND HOW THAT KIND OF SETS UP THE U.S. AHEAD OF MIDTERM ELECTIONS.
[01:14:55] Speaker 13: WELL, YOU KNOW, CLEARLY AMERICANS, YOU KNOW, THE CHICAGO COUNCIL, MY ORGANIZATION, HAS BEEN POLLING THE AMERICAN PEOPLE FOR MORE THAN 50 YEARS. THE POLLS SHOW THAT AMERICANS ARE PRIMARILY CONCERNED ABOUT THEIR POCKETBOOK, ABOUT AFFORDABILITY. BUT THEY ARE LINKING THIS TO THE IRAN WAR. THEY RECOGNIZE THAT THE PRICE OF GAS, PETROL, IS GOING UP BECAUSE OF THE WAR. THEY DON'T LIKE THE IRAN WAR. THEY'D LIKE TO SEE A RESOLUTION. PRESIDENT TRUMP IS CLEARLY RIGHT NOW IN A MOMENT WHERE HE'S TRYING TO DEMONSTRATE TO THE AMERICAN PEOPLE THAT HE'S GOT MORE HANDLE OF THAT, THAT HE CAN BRING THE PRICES DOWN. BUT IT'S NOT HAPPENING. IT'S NOT BEING DELIVERED. SO I THINK THAT WE HAVE A PRESIDENT RIGHT NOW WHO'S GRABBING AT STRAWS AND TRYING TO SIGNAL THAT HE IS IN CONTROL, THAT HE CAN MANAGE THE ECONOMY. AND RIGHT NOW THERE'S, YOU KNOW, THERE'S NO ACTUAL DEMONSTRATION THAT THAT'S TRUE. SO WE'RE IN A VERY DIFFICULT SPOT. AND ALL OF THESE THINGS ARE LINKED. THE DIESEL DEAL WAS CLEARLY, YOU KNOW, BETWEEN THE UNITED STATES AND RUSSIA AND UKRAINE WAS CLEARLY LINKED IN THE IN THE PRESIDENT'S MIND TO THE PRICE OF GAS, WHICH IS CLEARLY A PROJECT.
[01:16:08] Speaker 1: ON THAT, LESLIE, BECAUSE WHAT'S HAPPENING IN THE MIDDLE EAST, IF ANYTHING, FEELS LIKE ESCALATION WITH WHAT THE HOUTHIS ARE DOING AND TARGETING SAUDI ARABIA. AND JUST ON THAT, I WANT TO BRING YOU A HEADLINE THAT CROSSED JUST A FEW MINUTES AGO, THAT THE SAUDI'S HAVE SCRAPPED IN-PERSON ATTENDANCE FOR FII AFTER THE HOUTHIS ATTACK. WE SAW THEM GO AHEAD WITH THE ENERGY CONFERENCE. THEY ARE NOT HAVING IN PERSON. AND, LESLIE, I WONDER WHAT ALL OF THIS MEANS, WHETHER IT MEANS THAT THERE IS ESCALATION TO COME, BECAUSE THEY ARE REALLY GETTING AT THE SAUDI'S AND WHAT THE PROJECT THEY'VE BEEN TRYING TO DO, WHICH IS OPEN UP TO THE WORLD'S MARKET AND THE WORLD'S ECONOMY. IF THAT IS BEING ENCUMBERED, DOES IT MEAN THAT THEY ACT DIFFERENTLY OR YOU MIGHT EVEN SEE FURTHER INVOLVEMENT FROM THE UNITED STATES?
[01:16:52] Speaker 13: ABSOLUTELY. I MEAN, THAT ESCALATION, I THINK, IS ONE OF THE MOST PRECARIOUS AND DIFFICULT TO PREDICT, NOT ONLY FOR THE REGION, BUT GLOBALLY AND CERTAINLY HAS IMPLICATIONS FOR PRESIDENT TRUMP. BECAUSE YOU REMEMBER, AT SOME LEVEL, EVERYTHING THAT HAPPENS NOW IN THE GULF, ACROSS THE MIDDLE EAST, IS GOING TO BE BLAMED ON PRESIDENT TRUMP. HE WILL SEEK TO DEFLECT THAT. BUT THE POLITICAL CONSEQUENCES ARE VERY SIGNIFICANT. FOR SAUDI ARABIA, CLEARLY THE COSTS ARE VERY HIGH. YOU'RE RIGHT. VISION 2030, THE ATTEMPT TO HAVE MORE OF A CONVENING POWER TO REACH OUT ACROSS THE REGION. THE CREATION OF THE MEKA AGREEMENT. WE'VE SEEN ALL SORTS OF DEVELOPMENTS, AND SAUDI IS VERY MUCH AT THE CENTER. BUT THE INSTABILITY, THE RISK, THE ATTACKS, AND THE DESIRE BY THOSE IN THE REGION TO MANAGE THE ESCALATION AND DE-ESCALATE IS CONSIDERABLE. BUT THE U.S. IS NOT SEEN RIGHT NOW AS A CREDIBLE PARTNER IN HELPING THAT DE-ESCALATION. IN FACT, IT'S VERY MUCH THE REVERSE.
[01:18:03] Speaker 1: LESLIE, WE REALLY APPRECIATE YOUR TIME THIS MORNING. LESLIE VENJAMIRY OF THE CHICAGO COUNCIL ON GLOBAL AFFAIRS. LET'S GET A CHECK ON YOUR EQUITY MARKET OVER AN HOUR INTO TRADING DAY. WE STILL REBOUND WITH TECH OUTPERFORMING THE NASDAQ UP 1.5% AFTER FALLING EVERY DAY LAST WEEK. BUT YIELDS MOVE HIGHER WITH BONDS UNDER PRESSURE HIGHER BY FIVE BASIS POINTS AT 5:12.51. RENT CRUDE DOWN BY ONE AND A THIRD. SOME OF THE SINGLE STOCKS THAT EMILY AND I ARE LOOKING AT THIS MORNING. SHARES OF INTEL REBOUNDING AFTER AN UPGRADE FROM JP MORGAN. THE ANALYST NOTING THAT THE CHIPMAKER'S TURN AROUND MIGHT TAKE YEARS. BUT EXECUTION FROM MANAGEMENT HAS BEEN SOLID.
[01:18:38] Speaker 2: AND SILGIN IS TEAMING UP WITH AMERICAN INDUSTRIAL PARTNERS TO BUY TRIVIUM PACKAGING IN A DEAL VALUED AT ABOUT $3.4 BILLION. SILGIN CEO ADAM GREENLEY TOLD US A LITTLE BIT EARLIER THE AGREEMENT AIMS TO BRING A BROADER BASKET OF PRODUCTS TO THE MARKET.
[01:18:51] Speaker 1: AND CLEVELAND CLIFFS DELIVERING BETTER THAN EXPECTED THIRD QUARTER PROFIT AND BOOSTING ITS OUTLOOK FOR THE NEXT YEAR. RESULTS HELPED BY HIGHER STEEL PRICES AND TRUMP ADMINISTRATION TARIFFS. ALL RIGHT.
[01:19:02] Speaker 2: COMING UP THE WORLD'S RICHEST PERSON WANTS TO GIVE EVERY KID IN AMERICA A PIECE OF HIS COMPANY. THAT'S MORE ON ELON MUSK'S PLAN TO GIVE AWAY SPACEX SHARES NEXT. THIS IS BLOOMBERG.
[01:19:16] Speaker ?: THIS IS BLOOMBERG. THANK YOU.
[01:19:25] Speaker 2: ELON MUSK POSTING ON X EARLIER TODAY THAT HE WILL GIVE A SHARE OF SPACEX TO EVERY KID IN AMERICA. THIS COMES AS ANTHROPICS SAID. IT'S PLANNING TO PUT 5% OF ITS SHARES INTO A PUBLIC BENEFIT FUND THAT WOULD AIM TO MITIGATE AI'S IMPACT ON THE LABOR MARKET. THIS IS BLOOMBERG SENIOR EDITOR OF TECHNOLOGY MICHAEL SHEPHERD. MICHAEL, HOW WOULD THIS ACTUALLY WORK? THERE'S A LOT OF CHILDREN IN AMERICA. ARE THEY ALL READY TO ACCEPT SPACEX SHARES?
[01:19:51] Speaker 14: WELL, EMILY, THERE ARE A LOT OF QUESTIONS SURROUNDING THIS PROPOSAL FROM ELON MUSK, WHICH HE PUT ON HIS EX-SOCIAL MEDIA PLATFORM. AND THE FIRST IS, AS YOU SAID, HOW WOULD IT WORK? THERE ARE 72 MILLION CHILDREN ACROSS AMERICA. THIS WOULD RUN THE COMPANY IF YOU GO BY THE LATEST SHARE PRICE. ONE SHARE APIECE. ROUGHLY $11 BILLION FOR ELON MUSK AS THE WORLD'S WEALTHIEST PERSON ON PAPER, WITH A NET WORTH OF ROUGHLY $900 BILLION. THAT'S ALMOST CHUMP CHANGE. BUT HOW WOULD THE KIDS GET THIS MONEY? WOULD IT COME IN A CHECK? WOULD IT BE DEPOSITED INTO A TRUMP ACCOUNT? AGAIN, THESE ARE DETAILS THAT WE DON'T KNOW. AND ELON MUSK IS NOT EXACTLY A DETAILS PERSON. AND HE IS ALSO SOMEBODY WHO HAS FLOATED PROPOSALS AND NOT FOLLOWED THROUGH ON THEM. SO WE'LL WANT TO SEE HOW THIS DEVELOPS. HE IS PROMISING TO DO IT NEXT YEAR. SO WE HAVE A FEW MONTHS AT LEAST TO WAIT TO SEE HOW IT UNFOLDS. HE HAS ALSO BEEN PUTTING A LOT OF MONEY INTO REPUBLICAN CAMPAIGNS AS WELL. AND THIS IN A WAY ALSO ECHOES WHAT THE PRESIDENT HIMSELF HAS OFFERED TO U.S. ADULTS IF REPUBLICANS MANAGE TO KEEP CONTROL OF THE HOUSE. THAT IS A $5,000 CHECK FOR EVERY U.S. ADULT IN AMERICA. SO WE ARE SEEING A LITTLE BIT OF A NEXUS OF A LOT OF DIFFERENT THINGS. BUT MANY QUESTIONS IN PARTICULAR ABOUT HOW THIS ONE SHARE PER KID WOULD WORK.
[01:21:12] Speaker 1: AND SHEP, WE ALSO HAVE ANTHROPIC SAYING SOMETHING KIND OF SIMILAR. THAT THEY ARE GOING TO PUT SHARES INTO A NEW PUBLIC BENEFIT FUND TO ADDRESS THE PUBLIC GOOD AND MAYBE HELP THOSE WHO HAVE SEEN THEIR JOBS DISPLACED OR MIGHT SEE THEIR JOBS DISPLACED BY A.I. HOW MUCH OF THIS IS JUST ABOUT MESSAGING? A.I. IS GETTING A LOT OF PUSHBACK, BE IT DATA CENTERS OR OTHERWISE, THAT IS HAVING A REAL IMPACT ON THESE COMPANIES AND THEIR ATTEMPT TO BUILD OUT THE INFRASTRUCTURE, IS THIS JUST ALSO AN ATTEMPT AT MAKING INROADS IN THEIR IMAGE?
[01:21:44] Speaker 14: WELL, YOU KNOW, IT'S A GOOD QUESTION, DANNY. IS THIS JUST SOME VIRTUE SIGNALING ON THE EVE OF THIS IPO THAT WE'RE EXPECTING AS SOON AS NEXT MONTH? BUT REALLY WHEN YOU LOOK BACK AT THE HISTORY OF THE FOUNDING OF BOTH ANTHROPIC AND OPEN A.I. IN PARTICULAR, EACH COMPANY HAS MADE IT PART OF THEIR IDENTITY TO TRY TO SERVE THE PUBLIC GOOD IN SOME FORM. AND SO WE'VE EVEN SEEN PROPOSALS, FOR EXAMPLE, FROM SAM ALTMAN, ONE OF THE COFOUNDERS OF OPEN A.I. FOR SOME SORT OF PUBLIC BENEFIT FUND THAT COULD EVEN BE MANAGED BY THE U.S. GOVERNMENT. AND THAT WOULD SOUND SIMILAR TO THE PROPOSAL FROM SENATOR BERNIE SANDERS, WHO HAD THIS IDEA OF PUTTING AS MUCH AS 50% OF EQUITY FROM THOSE BIG A.I. DEVELOPERS INTO SOME GOVERNMENT FUND THAT WOULD REDISTRIBUTE BENEFITS TO THE PUBLIC. IT'S UNCLEAR EXACTLY HOW THESE BENEFITS WOULD GET REDISTRIBUTED FROM THE FUND THAT ANTHROPICA IS PROPOSING. IT WOULD BE 5% OF THEIR SHARES TO START, AND THEY WOULD ADD 2% INCREMENTS FOR EACH 50% GAIN IN VALUE IN THE COMPANY SHARE PRICE ONCE THEY START TRADING PUBLICLY. LET'S SEE HOW THIS DEVELOPS, DANNY, AND HOW THEY INTEND TO APPLY IT TO HELP SOME OF THOSE LABOR MARKET DISRUPTIONS. SHEP, THANK YOU VERY MUCH.
[01:22:57] Speaker 1: THAT'S BLOOMBERG'S MICHAEL SHEPHERD ON THE LATEST ON SPACEX AND ANTHROPIC. COMING UP, KATHY KRISKE OF INVESCO SAYS THAT COPPER FUNDAMENTALS REMAIN STRONG, DESPITE MARKET UNCERTAINTY, IT'S OUR METAL SPOTLIGHT NEXT. YOU'RE WATCHING OPEN INTEREST. IN TODAY'S METAL SPOTLIGHT, COPPER PRICES HAVE SURGED SINCE PRESIDENT TRUMP RETURNED TO OFFICE DUE TO THE RISK THAT HE'LL IMPOSE TARRIFFS ON THE METAL. BUT BOWLS ARE GROWING WEARY THAT PRICES COULD CRASH IF HE DOESN'T FOLLOW THROUGH. WITH AT LEAST ONE ANALYST SAYING THAT PRICES COULD FALL TOWARDS $10,000 A TON. LET'S GET THE VIEW FROM KATHY KRISKE IN BESCO HEAD OF ALTERNATIVE ETF STRATEGY. KATHY, GREAT TO HAVE YOU ON. I'M SO GLAD TO BE HERE WITH YOU GUYS. IT'S BEEN A WILD RIDE THAT COPPER HAS BEEN ON. I KNOW YOU'VE BEEN ON THE ROLLER COASTER THAT IS COPPER. SO, LME THREE MONTH COPPER SITTING AT JUST OVER 14,000. THAT'S UP FROM 12,000 AT THE START OF THE YEAR. HOW MUCH OF THAT IS SOMETHING SUSTAINABLE OR FUNDAMENTAL OR TO THE POINT OF OUR REPORTING FROM OUR COLLEAGUES IS SOMETHING TO BE CONCERNED ABOUT?
[01:24:05] Speaker 15: FIRST OF ALL, IT'S LME WEEK. I FEEL LIKE WE SHOULD CELEBRATE THAT IN LONDON. SO, A LOT OF PEOPLE WHO ARE IN THIS INDUSTRY OF INDUSTRIAL METALS ARE IN LONDON CELEBRATING. AND USUALLY, THEY COME OUT WITH A VERY BULLISH SENTIMENT. SO, WE'LL SEE WHAT HAPPENS THIS WEEK. BUT YOU'RE RIGHT, ABSOLUTELY. AND I WAS LOOKING BACK TO WHEN THE CURRENT ADMINISTRATION CAME INTO POWER. SO, FROM THAT DATE TO JANUARY 20, 2025, TO NOW, COPPER IS UP 57%. AND, AGAIN, A LOT OF THAT IS AROUND TARIFFS. LET'S GO BACK TO, LIKE, WE WERE JUST TALKING, EVERYTHING. COPPER IS IN EVERYTHING, RIGHT? AND THAT IS SO IMPORTANT FOR PEOPLE TO UNDERSTAND WHEN THEY'RE MAKING INVESTMENT DECISIONS, RIGHT? SO, IT'S NOT JUST IN THE WIRING AND THE LIGHTS AND THE CAMERAS AND THE CARS AND THE VESSELS. BUT IT'S ALSO IN ALL THESE DATA CENTERS THAT ARE BEING BUILT OUT. AND, RIGHT NOW, THE U.S. IS EXPERIENCING AN ELECTRICITY EXPLOSION, LIKE ELECTRICITY DEMAND EXPLOSION. AND SO, THAT IS A COPPER STORY. SO, AGAIN, IT IS DATA CENTERS. IT IS THE MILITARY BUILDUP. IT IS A LOT OF SOME OF THE MACRO STORY. BUT, RIGHT NOW, A LOT OF THE FOCUS IS ON THE SECTOR 232 TARIFFS.
[01:25:07] Speaker 2: OKAY. SO, SAFE TO ASSUME THAT COPPER IS JUST GOING TO KEEP GOING UP, BASICALLY?
[01:25:12] Speaker 15: I WISH. THAT WOULD BE AN AWESOME STORY, RIGHT? NO. SO, THE ISSUE RIGHT NOW IS THIS SECTOR 232. AND JUST TO DEFINE THAT, IT HAS TO DO WITH NATIONAL SECURITY. SO, IT'S NOT JUST REGULAR TARIFFS, RIGHT? IT HAS TO DO WITH NATIONAL SECURITY. SO, WE -- LIKE I SAID, WHEN THE CURRENT ADMINISTRATION CAME INTO POWER, LIKE, EVERYONE SAID, OH, WE'RE GOING TO HAVE TARIFFS. SO, PEOPLE STARTED BUYING IT. BUT WHAT HAPPENED REALLY WAS A LOT OF THE COPPER GOT MOVED TO THE U.S. SO, TWO-THIRDS OF THE WORLD'S COPPER IS NOW IN THE U.S. WE ARE ABSOLUTELY STOPPILING COPPER. BUT THERE'S BEEN A LAG. WE HAVE NO CLARITY ON THIS 232. SO, NOW, TRAITORS, AND THAT'S THE ISSUE, TRAITORS ARE THINKING, LIKE, WILL THIS EVEN HAPPEN? SO, IF THIS WERE NOT TO HAPPEN, SO, WE HAVE THE MIDTERMS COMING UP, I THINK, IN 15 DAYS, RIGHT? SO, IF SOMETHING HAPPENS, AND THE CURRENT ADMINISTRATION IS WORRIED ABOUT IMPOSING THESE TARIFFS, AND THAT'S WHAT TRAITORS ARE SAYING, LIKE, PRICES COULD COLLAPSE. AND THAT'S WHERE YOU SAW, LIKE, AGAIN, PRICES ARE OVER 14,000 RIGHT NOW. PEOPLE SAID WE COULD GO TO 10,000 IF THAT HAPPENS. OKAY. BUT THERE ARE A LOT OF CONCERNS AROUND THE COPPER MOVING OUT OF THIS COUNTRY, RIGHT, AND GOING INTO THE GLOBAL MARKET. SO, ACTUALLY, THERE IS A FUNCTION ON BLOOMBERG, CCRV. SO, I ENCOURAGE EVERYBODY WITH THE BLOOMBERG TERMINAL TO PULL UP CCRV. BUT, SO, COMEX COPPER, RIGHT, HAS -- IT'S IN CONTANGO. IT'S UPWARDLY SLOPING. SO, WHAT HAPPENS IS THAT -- OH, GREAT. THANKS, GUYS. SO, WHAT HAPPENS IS, LIKE, WHEN SOMEBODY -- TRADERS WILL OFTEN BUY THAT FRONT MONTH, THAT LOWER CONTRACT, AND STORE IT, AND THEN SELL IT FORWARD, BECAUSE IT'S UPWARD SLOPING. SO, THEY ARE GENERATING PROFITS JUST BY DOING THIS TRADE ALL DAY LONG. SO, THAT MAY BE ONE OF THE REASONS WHY PEOPLE KEEP THE COPPER IN THE U.S. BUT, AGAIN, IT CAN GO ANYWAY. REMEMBER, TOO, WE HAVE THESE MACRO FACTORS, SO WHEN THINGS ARE PUSHING THE STOCK MARKET DOWN, PEOPLE ARE WORRIED ABOUT INFLATION, RATE HIKES, THAT MACRO STORY IS BAD FOR COPPER. IT'S BECAUSE COPPER USED TO BE CALLED DR. COPPER BECAUSE IT TAKES THE TEMPERATURE OF THE ECONOMY. WE HAVE TO REMEMBER THAT. WHEN THE MACRO STORY IS BAD, IT DOES, YOU KNOW, HURT COPPER.
[01:27:10] Speaker 1: KATHY, WE'LL HAVE TO END IT THERE. SUCH A JOY TO HAVE YOU ON. THANK YOU FOR JOINING US. SO FUN. THAT'S KATHY CHRISKE OF INVESCO. COMING UP TOMORROW, I'M GOING TO BE AT THE CITADEL SECURITIES CONFERENCE, A VARIETY OF SIT DOWN INTERVIEWS. EMILY IS GOING TO BE DRIVING THE BUS HERE. WE'LL SEE YOU TOMORROW. THIS IS BLOOMBERG.