Treasuries Gain on Fed Rate-Hike Bets — The Close 7/2/2026

[00:00:00] Speaker 1: The countdown is on. Everything you need to get the edge at the end of the market day. This is the close. A silver lining in that curveball of a U.S. jobs report live from studio two here at Bloomberg headquarters in New York. I'm Romain Bostic. And I'm Bailey Lipschultz. We're kicking you off to the closing bells here in the U.S. a lot of right on the screen. S.P. 500 down about 26 points. Also want to call out the fact that the big driver for that sell-off today has been in the tech sector. NASDAQ 100 down almost 2 percent. Again digging a bit deeper below the surface really driven by the Philadelphia semiconductor index down more than 6 percent back to back days of steep declines. Fortune making stocks have made uncertainty around whether or not this A.I. build out will last forever. And I just want to call out the fact that crude oil sitting back around those pre-war lows Romain. A lot of red on the screen though starting us off here in July. Absolutely. And we started off the morning with that jobs report. And from an economic perspective it certainly [00:00:59] Speaker 2: was disappointing. A slowdown in hiring for June and that's after April and May were revised lower. But from a trader's perspective the bad news actually does lessen the interest rate risk at least to the extent that it gives the doves over at the Fed an argument to stave off rate hikes and maybe push closer to the center of the table an argument for rate cuts. Swaps today showing traders pricing in less than a 20 percent chance of an increase at the July meeting and that's down from about 40 percent after that mid-June meeting jolted expectations higher. [00:01:29] Speaker 3: I think this is a great report for Kevin Warsh. I think it's a good report for the bond market. I think it takes any pressure that there might have been within the committee around the peak of inflation and policy rates being too accommodative as a result. Kind of pushes that story back. It doesn't eliminate it but it gives him room. [00:01:51] Speaker 2: Now we should point out early in the session the jobs report did give a boost to cyclical stocks including materials and Bloomberg intelligence actually says that seasonality actually is on the side of those cyclicals. A distinct rotation they say forming out of momentum stocks and into some of those low beta cyclical names. Case in point of course the Philadelphia Semiconductor index has actually underperformed the broad market in almost every other sector underneath the surface for two straight weeks now. The first time that's happened in more than a year. And of course the jitters around the world beating basket of chip stocks also showing up in the debt markets while aggregate spreads on corporate debt remain at the tightest in 25 years. There's been a material widening on individual bonds like those issued by SpaceX and core weave reflecting a bit more caution about some of those lofty sales and earnings projections as [00:02:39] Speaker 1: well as that risk of any sort of meaningful duration mismatch. Bailey and we're looking at SpaceX and core. We want to talk about two companies that are expected to go public sometime soon. That's open AI and Anthropic just looking at some of their adoption rates. Again this is a big part of this entire AI bull thesis this bull market whether or not the chip build out is being over oversupplied. Just want to look at that adoption rate as you can see pretty much parabolic for Anthropic but seeing a bit of a pullback or at least a catch up I mean for open AI. So back and forth Romain as it relates these large language models but they really are helping pin up this market even if they're not publicly traded in part of it. Absolutely. Let's kick [00:03:17] Speaker 2: you off to the close on this Thursday afternoon with Jim Caron CIO of the portfolio solutions group at Morgan Stanley Investment Management. Jim great to see you. I do want to start off with stocks here and really just where the broad market right now is kind of feeling things heading into this second half. Do you remain overweight given the gains the outsized gains we had [00:03:37] Speaker 4: in the first. I do. I you know look I think that the progress in the market has been very very well underpinned by good fundamentals. I mean we've seen earnings that have come out really strong in the first quarter is an expectation for second quarter earnings to be really good. The other is that we're not seeing that this gain in equity prices is coming from multiples. It's coming from the earning side. In fact starting to contract a little bit. So in many ways what people thought were an overvalued market. We saw that earnings actually grew into this. We're also seeing as you were pointing out we're starting to see much more of a cyclical story. We're starting to see this broadening value has outperformed growth in the first half of the year by about 10 percentage points. This is not a market that feels frothy and has a narrative of it's just about the mag seven and semis and in tech. In fact semis and tech have actually had a more [00:04:26] Speaker 2: difficult time. I'm glad you brought that up because I was looking at this at the end of the month the end of the quarter I should say and even as of today the S&P equal weight index outperforming SPX for a second straight week. I was looking at the factors to watch and you make a good point. I mean I would think momentum and growth would have been right at the top but it was value and dividends and a lot of other things that had outperformed the broader market. Is the economic backdrop going to be supportive of that going forward. So I think it will. I think now that we have some of the [00:04:56] Speaker 4: headwinds of higher energy prices hopefully the U.S.-Iran conflict is on the is on the mend. We're going to start to get more clarity. One of the things that we're looking at is actually one of the laggards that's out there which is the consumer. Many people have been worried about it because higher energy prices higher gas prices. You know where are they going to get the money to spend. The consumers been relatively strong. But if you look at the valuations in the market many people are negative on the consumer. We see this as a second half of the year. That's still likely to grow a little above 2 percent. Look at the payroll number that came out today. Wagers are still good. Unemployment rates relatively low. We think the consumer is a lot stronger than what many in the markets are giving it credit for. So I'm going to say yeah look consumption is 70 percent of GDP. As long as GDP growth stays reasonably strong I think the consumer does well and I think the broader economy does. But if the consumers do well does that represent an opportunity to invest in some of these laggards. I'm just looking at a market again. [00:05:51] Speaker 1: Yes. Yes we are seeing chips kind of through the roof. But we're also seeing anything around industrials that has a small part to play in the AI thesis booming. Yeah. [00:06:00] Speaker 4: So look I mean I think the I think the AI trade is it's going to come in waves right. There's going to be volatility around this. I think the consumer overall is still going to remain relatively healthy. I just don't think that that it's an overvalued sector at this point. And I think that you know what we're likely to be surprised with is the retail data the consumption data that continues to come through. I think this broadening is real. So. So. So. Yeah. I do think that the AI trade is obviously taking a little bit of a breather right now and there's some volatility in bumps. I get it. But you know but but we're on the side that this is still a you know a very big market changing event economic changing secular story. And you know we just have to manage the volatility around it. You make an [00:06:46] Speaker 1: interesting point in terms of the secular nature because it just certainly is top of mind that when you look at the spending it's really obviously driven by mag seven. But it's capex from companies not necessarily consumers showing up and spending a lot. Yeah. Now that's a good point. [00:06:59] Speaker 4: Right. So. So when we think about the capex story right. So. So. So the narrative in the market is that there's a lot of capex. That's what's driving the markets. That's what's driving a lot of these you know big tech companies and the gains. But look you know you know the reality is is that right now the way people think about AI is as a cost cutting tool. And that's going to add to the bottom line. And that's going to you know drive profits and things like that. OK fine. In the initial part of the story that's correct. Ultimately what I think happens is that AI works its way into becoming a much more productive efficiency story in a cap in a creative destruction story where now companies see it as an enterprise solution where it not just drives profits by cutting costs but it drives profits by increased volumes increase sales increase production. And that's where I think you get the second leg up in the AI story and in the technology story that surrounds it. So you know still very positive. But I'm waiting for that. [00:07:53] Speaker 2: Is that kind of maybe what we're seeing kind of play out over the last few weeks in the market with kind of the sell off in chip stocks release a little less enthusiasm for the chip stocks and rotation and some of these other names that might actually be the [00:08:05] Speaker 4: beneficiaries. Yeah. Like so. So like compute like the shortages in compute the shortages in hardware right. So we've got the technology story out there. But now we need the machines to do this all. We need the infrastructure to you know to build this around. So broadly speaking I you know I still think that we are in a secular wave with this story that we are really just trying to understand right now in the markets. And like I said it would be a totally different story remain if if the valuations were sky high and we're looking at multiples that are really we're not. We're looking at multiples that have come down actually in the markets just broadly speaking in the sector. So I still think it's well valued relative to the earnings that are coming out. So you're [00:08:47] Speaker 2: pretty optimistic about the second half of this year for both equities and fixed income alike. I'd say more for equities and fixed income. [00:08:53] Speaker 4: I do think that rates will remain stable. So I think that you've got a clip your coupon in fixed income. I don't think you're going to get return from spread compression. I don't think you're going to get your return from a significant fall in rates. So whatever your coupon is I think that's what you get. I think default risk is going to stay relatively low. I don't think that the Fed is going to hike interest rates. So I don't think they're going to ruin the party in the bond market necessarily. So I'm OK with bonds. But I think that we are in a nominal growth world nominal growth first quarter data 6 percent 6.1 percent nominal growth. That's driving earnings. I still think we're in a nominal growth world which is going to be very supportive of equities going forward. So more so than bonds. But you still need bonds to diversify your portfolio. All right. Great stuff Jim. I have a wonderful 4th of [00:09:36] Speaker 2: July weekend. Jim Caron there CIO of the portfolio solutions group at Morgan Stanley investment management with a relatively bullish outlook. And we're going to catch up with Paul Krugman who's relatively bearish as well on the American economy. He's going to break down the jobs numbers that we got this morning and gave us his thoughts going forward on some of the structural changes taking place in the [00:09:56] Speaker 1: economy. And plus what this data means for the Fed and for rates and what that then means for the world of fixed income with Rebecca Venter senior fixed income client portfolio manager over at Vanguard. And with the 250th anniversary of the [00:10:10] Speaker 2: declaration of independence just ahead we're going to catch up with Med favor over at Cambria investments who talks about what in his view is a 250 year bull market that he sees going maybe another 250 more. All that more coming up here on the close right here on Bloomberg. [00:10:32] Speaker 1: Well the chip sector getting slammed again now down 13 percent in the last two days. The latest move coming after a report that anthropic is in talks with Samsung to be a manufacturing partner for a custom AI chip. That's according to people familiar with the plan reported by the information saying that the plans are at an early stage and anthropic is still determining what the processor will do for broader look at the chip sector. Right now we're bringing in Ian King from Bloomberg News. Ian I just want to start with move we're seeing today. Is this really a reaction to a report about anthropic's ambitions or is this still the market trying to assess whether or not we've gone too far too fast. [00:11:11] Speaker 5: I really couldn't comment on other people's reporting what I could tell you in terms of giving you context is there's been a lot of reporting and a lot of announcements about various companies whether it's the AI model makers whether it's the data center owners about their own efforts about types of all kinds of companies. So we're very much in this kind of goldish period where we nobody seems to know what the ideal solution is right now apart from obviously in video who really are just [00:11:41] Speaker 2: dominating that market. So when we talk about this idea of kind of where we're going I mean the idea that all of these companies I'm going to say all of them but quite a few companies are obviously looking for a little bit more singularity or a little bit more of less reliance on others. How further how much further can this actually go. It's not just like you can't you just can't create your own fabs. You just can't create your own production facilities overnight or even you know over a fortnight. [00:12:06] Speaker 5: How do they actually get this done. Yeah. No it's a very good question remain. And I think one of the ways to look at this is that you know we've seen this before. We've seen this with all of the big new trends that have come and gone whether it was PCs whether it was networking in the Internet. And you get a gold rush. You get lots and lots of companies who see this as a great idea. But in the end because of the brutal nature of the chip industry tends to be just a handful of best that managed to survive. So yes there's a lot of money. Yes. I mean I saw a report saying that there's a hundred and fifty companies targeting so-called AI chips right now. And how many of those will be around. How many of those are viable. How many of those are going to cause problems or be competitive for Nvidia or for Broadcom. Likely not very many. Yeah. And I guess kind of diving into that point. [00:12:57] Speaker 1: Is this an area that ultimately will be dominated by the companies that have the production capabilities and obviously the balance sheet if not kind of the ability to kind of navigate that. I mean product. You have to separate design and production. [00:13:10] Speaker 5: production is not for the faint of heart. This is not a hobby. You know these plants cost 30 billion dollars and they are basically all out of date within about five years. So you obviously have to get a pretty rapid return on your investment and have a lot of cash flow to be able to maintain that. Very very few companies can do that arguably only TSMC at any significant volume. Samsung is a distant second. Intel is trying to get in there. So those guys it's going to be a limited market going forward with unlikely we'll see any newcomers. The design field is way more open. But really again that's still a very expensive field that requires a lot of knowledge in house that you've accumulated over the years and experience. And therefore it tends to favor the big companies with big [00:13:58] Speaker 2: pockets like you said. Is this going to be primarily a non U.S. story in meaning that we are still going to be 10 years 20 years from now [00:14:06] Speaker 5: looking at Taiwan looking at Asia. Manufacturing wise the preponderance is still outside of this country. There are efforts to try and bring it back. But really Intel was the national champion of this country. And obviously that company is still trying to remake itself trying to get back to where it was. We don't know whether that will be the case or not yet. If it isn't able to do that then it's going to be TSMC. It's going to be Samsung and perhaps manufacturing here to satisfy certain geopolitical diversity requirements. [00:14:42] Speaker 2: Ian King our man there out there in San Francisco covering all things chips as we continue to count you down to the closing bell. We're going to focus in on Tesla a beat on second quarter deliveries. The stock though down on the day. We're going to break down just what we learned out of those latest delivery numbers. That's coming up next year on the close right here on Bloomberg. Time now for our top calls. The big movers on the back of analysts' recommendations. And we start off with Palantir. DA Davidson upgrading to buy noting the company's competitive advantages over other software companies in the AI era. Gil Lauria saying Anthropics feud with the U.S. government also removes the biggest perceived threat to Palantir. Those shares up for a fifth straight day. Next up let's take a look at Constellation Brands. Morgan Stanley lowering its price target on the wine and beer company to 158 from 183. The equal weight rating is maintained. The firm says that while it still sees the glass half full amid improved market share. Constellation still faces long term risk related to alcohol consumption. Those shares though up about three tenths of a percent on the day. And finally let's take a look at United Airlines. T.D. Cowan lifting its price target on the shares to 176 from 150. The analysts seeing improving revenue and easing fuel costs as major tailwinds. T.D. remaining broadly constructive on the sector overall assuming the industry hangs on to this year's price increases and demand remains robust. The shares of United Airlines though down for a second day down 2 percent here on this day. And those are some of our top calls. Meanwhile let's shift gears and take a look at Tesla. The shares moving lower despite the EV maker second quarter deliveries jumping 25 percent. That exceeded Wall Street estimates. The data coming just weeks after the public debut of Elon Musk's other company SpaceX. Craig Irwin joins us now senior research analyst over at Roth Capital Partners. He's got a buy rating on Tesla and a 505 price target. All right. The numbers themselves relatively good though we should point out obviously year over year coming from a low base. But when you look at how much it exceeded Wall Street expectations Craig is this a sign that maybe things have improved or is this just kind of a one off. [00:16:50] Speaker 6: So just a few months ago everybody was looking for a return to growth right. You know where are we going to see Tesla posting numbers higher delivery numbers year over year versus last year. They clearly did that right. The bogey was 5 percent and they beat it by more than 20 right. So 25 percent year over year growth more or less up almost almost 35 percent sequentially. So where did the growth come from. It came predominantly from Europe. There were multiple markets in Europe. They were up roughly 75 percent. Why the answer is oil oil prices have a big impact on on buying dynamics. And particularly in Europe where they pay a lot more for their their gasoline or for the petrol for for those of you still watching in Europe. You know that's going to come off right. Oil prices have come in. There's still a lot of volatility around the geopolitical events. Yeah. But the question now is did that come out of the third and fourth quarters or was that an organic addition into the buy. And you know we probably need to split that down the middle and say some of it probably did pull forward. But natural sales and some of it probably is incremental natural sales. So you know you do face a slightly lower EV deliveries outlook. But let's take this off the table. Most people buying Tesla today. Most people buying Tesla today do not care about the EVs the way they care about optimists. They care the way they care about AI. The way they care about Robo taxi. Right. These are the forward looking initiatives that most of the valuation is driven by. So you know the trading today. I view more as sort of a short term bond rumor selling news. Everybody knew oil prices are down. Yeah. You know. Come on. Let's move past. [00:18:38] Speaker 1: No. Well Craig I guess you went exactly on and asked the question in terms of forward looking models expectations. This is a company that's valued on what it's going to be in 2030 and 2035. What updates from Tesla actually can change the narrative and get it to punch back towards your price target which implies you know 35 percent return from these levels. [00:18:56] Speaker 6: Bingo. That is the question. So what I'm watching what I think is the most initiative at Tesla for muscle ecosystem actually frankly is the tariff out. Right. You know he's told people he's spending three billion. Hey let's be honest. You know there. It's not you know it's not a thousand way for starts a month. 300 million. You know a thousand. Right. It's 10,000. And he's talked about going to 100,000 or a million way for starts. You know 30 billion or 300 billion in spending at this facility over the next many years. So my understanding is the 30 billion dollar number is a two year investment horizon. That is one of the fastest stand ups ever for a semiconductor manufacturing facility. You know they have a lot of expertise. They have you know a very interesting partner with Intel. But that I think is one of the most important deltas for Tesla. And frankly the market given the implications for semiconductor pricing and all sorts of other things. So you know this what's going to determine the success of Tesla over the next couple of years. Yeah. When they get us to the semis out of the robots you know they cut the cash burn at the AI division. Right. All these things are going to be you know really exciting to watch. [00:20:13] Speaker 2: Are we still going to be watching Tesla as a standalone company long term. Obviously a lot of speculation that maybe this just gets absorbed into SpaceX. Yeah. [00:20:23] Speaker 6: You know I said I think about six months ago that I think I think Tesla actually gets combined with SpaceX. It would be a natural a natural combination. I thought it actually probably would have happened as a way to accelerate the come public of SpaceX. I wasn't I wasn't I wasn't aware at the time of the 20 million dollar cash sweep for the bridge loan they took over at SpaceX for their their chip commitments. You know reality is it would be a natural combination. There's tremendous synergies. Musk has a history of moving talent between his companies. You know you can think of them as natural partners today. The question on a combination will really just be a question of valuation because Tesla would be able to lean on them and they will be able to lean on Tesla for the next several years whether or not they combine. Yeah. [00:21:12] Speaker 1: Craig in just about 20 seconds here. Does it make more sense for Tesla to acquire SpaceX or the other way around just looking at their valuations [00:21:19] Speaker 6: how things are trading. Yeah. You know I think the bankers would probably say SpaceX requiring Tesla. But you know maybe maybe we should consider this a merger equals because Tesla's done a tremendous job. You know all the missionary work for the for the EV market. Wow. Right. EVs might not be in vogue right now. Yeah. That's a big success. Humanoids are front center. Robotics is front center because of Tesla. Yeah. You know AI. OK. They might not have been the front pioneer but they deserve tremendous credit. All right. [00:21:52] Speaker 2: Great. Got to leave it there. Craig Irwin our appreciation senior research analyst over at Roth capital partners taking a closer look at Tesla. Those shares are down about 8 percent though. They had actually rallied pretty hard into that delivery number print. We're looking at stocks at least for the Nasdaq right now right around session lows as we continue to see that sell off in the tech and the semiconductor space. As far as economic picture we did get that jobs report earlier this month. A mixed picture for the U.S. economy. We're going to catch up with Nobel laureate Paul Krugman and get his idea here of not only where the economy stands right now but more importantly where he thinks it's going. That's coming up next year on the close right here on Bloomberg. 3:30 p.m. in a 99 degrees New York City. This is the countdown to the close. I'm Romain Bostic. And I'm Bailey Lipschultz. I don't know if you're staying cool Bailey Lipschultz but we actually got a job support this morning that was a little cooler than what some folks had expected. We did see a slowdown in hiring in the month of June. A pullback that was led by the biggest decline in leisure and hospitality payroll since 2020. I had a chance to catch up with Paul Krugman the Nobel laureate about the current labor market data and how it actually might affect a Federal Reserve chaired by Kevin Warsh. Of course a Fed chair who wants to see maybe a a little bit more of a reimagining of the type of data that the Fed uses. Take a listen. [00:23:17] Speaker 7: What's happening in the labor market is itself a lagged response to what's happening in the economy. But I don't if I am actually a little disturbed by Warsh's point of view because if monetary policy depends upon what's no what's knowing what's happening this month as opposed to what's been happening over the past six months or the past year. That's a really bad thing because we should not policy should not be that responsive. I mean I would think that Warsh worship of all people with I assume that he has deep respect for Milton Friedman. Friedman had this famous analogy of the this the fool in the shower who overreacts to the water temperature and there for alternative ultimately squelts and freezes himself because you're reacting too much to the latest information. So I would [00:24:09] Speaker 2: not want the Fed to become even more current data focused. That is I am curious just a little bit more longer term your general views on artificial intelligence and the potential impact on the labor market. Should we be looking down the road for a material loss in employment or is that going to sort of balance itself out over time where jobs created in other sectors will make up for whatever is lost [00:24:34] Speaker 7: through AI directly. Of course the main answer is still we don't know. I mean it's worth it is worth pointing out not just that that chat GPT is only around four years old in the marketplace but that the most of the people who are really excited are using Claude and Claude. And that's that's an early 2025 introduction. So the idea that we would know less than a year and a half in what's actually happening here is seems a bit it's that's crazily optimistic in terms of our ability to make sense of it. The technology sounds like something that should be capital biased and biased against employment. But we don't have a good sense of how big a deal that is. Historically total employment has always found a way to grow whatever the technological change. Maybe this does tend to further reduce the labor share in national income which is not a good thing. But really we don't know. And there's a lot of. You see something happening out there which may be the result of macro events that have nothing to do with AI and people just seize on it and say oh that must be AI. And that's probably not. I mean most of what we see in the economy right now is about tariff shocks and the war in Iran and just the and to some extent maybe the actual spending on AI rather than the technologies application. I am curious before I let you go [00:26:04] Speaker 2: professor. I do just want to get your thoughts on a couple of the Supreme Court rulings that came out this week with regards to government agencies and the idea of whether it shifts at all the perception about the reliability or more importantly the independence and viability of those agencies. Of course you had the ruling with regards to Lisa Cook which to a certain extent was in her favor at least in the short term. But the bigger issue was of course the ruling with regards to the slaughter case and the idea that the president now does seem to have unilateral power to remove folks from those agencies as he sees fit. Yeah that's and that's [00:26:39] Speaker 7: you know Humphrey's executor apparently is now a dead letter which is you know that's about we live in a highly complex society and we have a society in which inevitably the government has a big role. And how do we how does Congress legislate in that environment. And the answer is it it creates agencies creates ground rules and sets a mission that sets a governance mechanism. It cannot you cannot have the law specify every detail of policy has to be able to set general direction. And what this decision is slaughter essentially says is no I can't do that. It's all of that is at the discretion of the president. And that is extremely destructive. I mean even even aside from partisanship and what you feel about Trump or or his successor. That is too much discretionary power in the hands of one person. The during the Obama years. I don't know if people remember but people used to constantly say oh we it's uncertainty. Business needs to know what's coming. But the uncertainty created by policy in the past was nothing compared with where we are now where every every decision. I mean just even you know the slaughter case was specifically about the FTC and a world in which companies really cannot judge whether a proposed merger is going to be approved or not. It's it's not going to be the merits of the case may not decided. The how how the president feels about it. And of course given what what we're learning about Trump's income how the president is personally rewarded by for making a decision becomes the defining factor. And that is just got to be really bad for business. You know to take just I'm sorry one more thing here. We've just been put on notice that we're not making USMCA. You know NAFTA 2.0. We're not making it permanent. That's going to be. And that's the whole story about NAFTA. It wasn't really about the tariffs which are already very low before before NAFTA went to effect. It was supposed to be about the certainty about businesses knowing that they had the ability to have supply chains that crossed borders within North America in perpetuity. Now we've had a clear signal. Well now actually that's you know it depends on on what the president is feeling like. And that's got to be. It's not it's not a catastrophe. It doesn't mean that we have a great depression. It's sort of I've been saying it's it's more termites than tornadoes. But it is definitely something that undermines one important principle for economic success. It's kind of interesting to [00:29:21] Speaker 2: professor all this coming right on the anniversary of our 250th anniversary of our declaration of independence. There's a lot of good in this nation I would think. I would hope you would see that as well. Do you have hope for the next 250 years. I do have hope. I mean it's I have to say though I'm old enough to [00:29:40] Speaker 7: remember the bicentennial when in a lot of ways America's worst shape that is now. You know crime was terrible. We just lost the Vietnam War was. And yet there was a sense of optimism a sense of sunniness about celebrations that we don't have now. I think that's that is telling you something. There's there's a grimness. But look at the end. Over the past couple of years. Lots of things have been really disappointing. A lot of institutions have been disappointing. But ordinary people have been the opposite. I think people are people are turned out that Americans as people are a lot more decent. A lot more forward looking and wanting to do the right thing than most people give them credit for. And that as long as that is true there's always hope. [00:30:28] Speaker 2: Nobel laureate Paul Krugman research professor of economics over at the CUNY Graduate Center right here on the close. When we come back we're going to turn back to the public markets and turn back to the newest publicly traded stock securitize securing major investor interests after the tokenization company began trading on the nice. That's coming up next here on Bloomberg. [00:30:57] Speaker 1: The second thing is. The second thing is. Securitize making its public day debut today after a SPAC merger. The firm counting Blackrock among its largest partners. Joining us live from the nice floor right now is Carlos Domingo. He is a Securitize co-founder and CEO. Carlos thanks for joining us. Just want to start with kind of this whole debate around why. Why make things tradable on the blockchain. Why take stocks and other assets and make that a business. [00:31:24] Speaker 8: Look thanks for having me. It's a bit loud here because we're in the floor of the New York Stock Exchange. But what I just want to say is that every industry gets digitized. Right. So there is no reason why finance doesn't get digitized as well. And when digitization happens new things that people kind of think about it. Right. So this is you have to think of this as digitizing capital markets to make sure they run on modern ledger technology and the things like you know 24/7 trading global distribution. I need to find ownership in a simple way. So that's possible. And that's the first step into like more innovations that will happen once everything is digitized. So Carlos give me a sense here. [00:32:01] Speaker 2: When we talk about the move towards tokenization. What is the adoption rate right now. And when do you think we'll start to see more of an acceleration of the use [00:32:11] Speaker 8: cases for it beyond some of the more obvious examples. So look we're still in the very early days of this industry in spite of like you know having been proposing this technology for a long time we are the end of the beginning. There's only 30 35 billion dollars in tokenized assets with Securitize being the leading platform with 4.5 billion. But we still have a long way until we get to the trillion dollar assets which is when this will become start becoming meaningful in the context of the rest of capital markets. But it's very exciting. There's already you know. Today we put our own stock on chain where it's tradable there alongside trading on traditional markets. [00:32:50] Speaker 1: So things are really happening already. And Carlos I covered specs for the better part of a decade. Deal was announced back in October. Bitcoin was about a lot higher than it is now. Things have changed quite drastically in the industry. What makes you confident now going public here in July 2026 relative to when this deal was first announced back in the fall. [00:33:13] Speaker 8: Well so we we did the merger combination with counter equity partners back in October when things were better as you said. And if you look at where our stock rates today versus the price that we agree at that time is like around 30 percent higher. So definitely I think the market recognizes that what we do as a company has nothing to do with where the Bitcoin prices. We are a financial services company trying to model nice capital markets and even though we use the same underlying technology you know what the price of crypto does or not is not something that is related to the company performance. [00:33:44] Speaker 2: When we start to talk about the adoption rate and more importantly is the tokenization push and I want to put this through the lens of what we see in the equity market. Is this going to be complementary to the current structure of the equity market or is it going to be competitive with it. [00:34:00] Speaker 8: No no it's going to become complementary and it's going to I believe in large you know the size of U.S. capital markets. If you think about the two biggest trends in the equity markets today are retail adoption and you know offshore demand for U.S. stocks right. So if you think about this technology allowing you for going for seven trading global access etc. What it's going to do is it's going to enlarge the amount of people consuming U.S. equities and not reduce it. [00:34:27] Speaker 2: All right Carlos. So congratulations on the listing. We'll catch up with you soon. I'm sure Carlos Domingo there securitized co-founder and CEO going public today via SPAC and Bailey. There's a great story on the Bloomberg terminal about all the work he had done over the years to try to sort of make this tokenization push. How it's been disrupted primarily because of some of the issues we saw in the crypto space and he's got the backing of BlackRock and quite a few other unnotable players. Notable players who are kind of staking their future partly on this [00:34:52] Speaker 1: becoming a reality and heavily investing. So as you mentioned a big win for him after the whole FDX debacle. [00:34:58] Speaker 2: I do wonder I mean I can I buy the stock securitized through a token or do I have to buy it directly. They're trading on the token. Yeah. Okay. All right. Avalanche and Solana I believe. Okay. All right. Cool. A little bit above my paper. All right. A little bit above it there. Nevertheless we are seeing the rest of the stocks under pressure today. In fact the majority of stocks actually in the green but the ones with the highest weightings dragging the growth total market down a full breakdown after with a break. Just about 10 minutes until we get to the closing bell. Romain Bostic alongside Bailey Lipschulz with the majority of stocks in the S&P 500 in the green yet red on the screen because some of the heaviest weightless names are in the red. Yeah. Big sell off as it relates to [00:35:43] Speaker 1: chip makers namely Nvidia Micron in the entire basket. As you can see Nasdaq 100 down sharply relative to an SP that is really treading water romaine. Semiconductors index on pace for its worst two day drop since April 2025. Yeah I'm looking at the eight [00:35:59] Speaker 2: biggest decliners by weight in the S&P 500 or the 10 biggest decliners I should say eight of them are chip stocks and the other two. Well I guess maybe people think our chip stocks and that actually is a meta and Tesla kind of throw them into that basket here. So a huge sell off there. But then it's kind of funny you're seeing software companies start to rebound a little bit with Microsoft up a couple percentage points on the say Apple which of course had been a big laggard of about five percentage points on the day. And then after that it's just kind of a hodgepodge of financial stocks and consumer [00:36:28] Speaker 1: discretionary stocks and a few consumer staples. It's just been such an interesting market. We see big moves to the upside for semis and then some news report or update from the other side of the world happens and all of a sudden it's a reason to sell off. So it'll be interesting again ahead of SK Hynix's listing here in the U.S. next week. Yeah. And one other name I just want to [00:36:45] Speaker 2: point out. Yeah it's all genuine auto parts now up about 14 percent heading into the close. A story crossing the Bloomberg wire a little bit earlier ago that it has attracted a cash bid for its auto parts business from O'Reilly automotive. That's according to people familiar with the situation that our Bloomberg reporters have spoken to. As we count you down to the closing bells let's bring in Dana Doria co-chief investment officer and group president over at Investnet. And Dana I do want to talk a little bit about the broadening of this rally and certainly not a rally on the day. But one interesting nugget with the S&P down on the day the Nasdaq down on the day the Philadelphia semiconductor index testing its 50 day moving average to the downside. The Dow Jones industrial average is up a percentage point at a record high. The S&P 500 equal weight index of six cents of a percent to a record high. What does that tell you about where investors right now seem to think this market might be going. I think it is. You said it right. I think it's absolutely [00:37:44] Speaker 9: part of the broadening trend that we've been seeing. I mean the Russell 2000 had a fantastic start to the air best in you know 35 years. So we're continuing to see that. I think what you're seeing and your comments you know that framed all this or right on. Right. It's the average stock is still doing well. The news the jobs report that sort of took a little bit of the heat out of this concern about a rate hike which of course rate hikes we know are not good for small cap stocks in general. You know that's still working in the market. But you have this fear and greed push pull going on with the AI trade. And you know and that's not surprising right because you're talking about a massive new technology that nobody can really price. So are we way over bid or are we way under where this you know is going to go. And then of course the timing aspect of it. So you've got the AI trade playing out you know kind of doing its push pull. But then underneath you do still have this broadening. You do still have you know what has been a fantastic year so far for small caps and equal weighted of course is you know puts the puts the dollars across everything equally. So yeah Joe's bait and tackle has the same you know waiting in that index as as in video. So yeah I mean you're seeing that you're seeing the good news today. The jobs report kind of you know let's the Fed just sit still for the summer not look at rate hikes. Well I'm [00:39:03] Speaker 2: curious though too. I mean speaking of the Fed given the report that the jobs report that we got this morning and even just not just looking at a one month basis but you know on a three month rolling average there's a lot of talk now about this idea that the Fed maybe doesn't have to be as laser focus on inflation particularly with oil prices back down. They can refocus on the labor market which by some people's calculations actually means we need to start talking about rate cuts once again this year. [00:39:28] Speaker 9: Is that possible. Yeah I don't think we get either one from it. I think we're in us. I never was kind of in the camp that we're gonna get rate hikes. I thought the market even prior to this report I thought the market was you know kind of overstating the likelihood of that. I think Warsh has come out and wants to come out strong right five new committees. I have a handle on things. I'm not going to be you know subject to the vagaries of the market and demands that I give you know an indication of what my intentions are. But I am going to reign in inflation. And I think that alone that sort of stance alone was really what he intended for the time being. I don't think it meant that he was this summer planning to hike rates. At the same time I think it I do think that if he does not want to come out and give inflation a chance to rear its head you're not going to see rate decrease. Now notwithstanding that labor report wasn't fantastic right. You had the unemployment rate ticked down a little bit. But this is largely happening because people are leaving the workforce. So that's not strength. You know what we saw here was certainly a labor report that says okay you know jobs market doing okay kind of treading water. But this is not fantastic. So it's not to say that if we saw it trending down as we move forward that rate decreases you know could be back on the table. But as things stand now I think worse is kind of in a good spot. The Fed is kind of in a good spot to just wait this out. Yeah I was going to say Dana though what could [00:40:58] Speaker 1: force his hand to either side in terms of hikes or cuts in the coming months. Yeah I mean he's on the record saying 2 percent. He wants inflation at 2 percent. [00:41:06] Speaker 9: Right. We're not near 2 percent. Now notwithstanding oil has plummeted. You know it's similar to inflation a couple of years ago. It went up very fast. And it came down. So if in it. And he's talking about that. Right. That some of the price pressure has come off. The energy pressure has come off. If that is maintained great on the inflation. And you know maybe he starts to pull that 4 percent. But 4 percent is not close to 2 percent. Right. So there's work to do there. So I think you know if you saw inflation heating up at all that would obviously force his hand in a way that I don't think he's in that position yet. And at the same time if you saw real you know labor market problems real cracks in the labor market then they would probably consider you know going back to the other side. But you've got that push and pull between these two you know dual mandate reports. And right now there's [00:41:56] Speaker 1: not one I think that sort of overpowers the other. Yeah. Dana just quickly here. Do you think that the line from President Trump though could [00:42:03] Speaker 9: encourage him to push for cuts. It's it's it's the right question. Right. I mean let's face it. He came into the whole hearings with you know a more dovish stance than you would expect out of him based on what he said in the past. So I think of course he's got that in his ear. But he's very much tried to take a stance for what it's worth coming out to say no we're independent. We're very much independent. We are staying independent. And I'm going to keep a handle on inflation. So let's hope we you know let's take him at his word and hope [00:42:30] Speaker 2: that that's the case. Dana we only have about 30 seconds left. But as you look to the second half what do you think is the biggest tailwind [00:42:36] Speaker 9: tailwind potentially for equities. Well certainly corporate profits. I mean at the end of the day you don't tend to have you know bad markets or certainly recessions when corporate profits are doing as well as they're doing. And there is a chance that we see productivity increases kind of continue to mount. And part of that is AI. So to the extent that the use of AI starts to permeate productivity increases and corporate profits remain strong that's a tailwind. That is the fundamental tailwind. Dana Doria have a wonderful 4th of July weekend. [00:43:08] Speaker 2: Co-Chief investment officer and group president over at invest net as we count you down to the closing bells here on the final trading day of the week. A full breakdown of all of the day's market action that starts right now. [00:43:20] Speaker 10: The closing bell Bloomberg's comprehensive cross platform coverage of the U.S. market close starts right now. [00:43:32] Speaker 2: And right now we are two minutes away from the end of the trading day. Romain Bostic here today with Bailey Lipschultz in for Katie Greifeld. We're taking you through to that closing bell with the global simulcast. Tim Senovic joins us in the radio booth. Nora Melinda in today for Carol Masser. Welcome to our audiences across all of our Bloomberg platforms. That's television. That's radio. And that is YouTube. A flat to higher open for the S&P. The Sox and the Nasdaq today. We bottomed out though. Tim Senovic right around 2:00 p.m. A big sell off and now seeing a bit of dip buying heading into the closing bell. Yeah. [00:44:04] Speaker 11: It's it's notable to see the S&P 500 could actually end in the green depending on what happens in the next couple of seconds. We should because Katie's gone just say that the Dow which is her favorite index is at a record. It is more than 1.1 percent. 580 points to the upside. And it's interesting. I love it when you put down points. Oh yeah. You know it's a you know it's a day. [00:44:26] Speaker 12: Only when Katie's away. Yeah. We'll give it to her today. Well I mean we've really been seeing this broader rotation. That's what you've been hearing from the guests that we've been speaking to here on Business Week. And we've continuing to see this rotation from tech into some of the more defensive sectors in the market. And it's just interesting as to whether or not we're going to continue to see this especially we think about the fact that the Philadelphia Semiconductor Index just saw its best quarter on record. But now we're seeing a pullback today. [00:44:52] Speaker 1: Well I really care about is if we see a bounce back on Monday for semis Romain. This has been a market that you see a sell off. We see some news overnight across Asia again. We have a short trading week this week long weekend. There could be some news coming out of South Korea that I think could spark some [00:45:08] Speaker 2: excitement and pessimism. Yeah. And speaking of the short trading week Carol gets a four day weekend. Is that how this works. [00:45:15] Speaker 11: Well she's actually she's actually at the wedding at Madison Square Garden. Oh. Yeah. I didn't know she was one of the bridesmaids. She's one of the 1,000 people reportedly invited. Congratulations. She couldn't tell me anything because she signed an NDA. All right. [00:45:29] Speaker 2: Well the Dow Jones Industrial Average rallying as Tim said about 592 points on the day up about 1.1 percent to a record high. You hear the cheering there on the floor of the stock exchange in the NYSE as you see several of the service members there in town here for the July 4th and more importantly the 250th celebration of our declaration of independence. The S&P 500 is going to close flat on the day. The Nasdaq down about eight tenths of a percent. The Russell 2000 also going to be down on the day by about six tenths of 1 percent. [00:46:00] Speaker 11: The chanting kind of sounding like what we heard at the game last night in Santa Clara California when the U.S. won a two nil nil against Bosnia Herzegovina. So check it out on Monday night. U.S. versus Belgium. Did you guys know I was such a big soccer [00:46:14] Speaker 1: fan. Tim you're a big sports ball guy. Every sport. You did call out though that it wasn't in San Francisco even though TV would try to tell you [00:46:21] Speaker 11: otherwise. I know. Come on. Everyone knows it's not really in San Francisco. Hey in the S&P 500 the vast majority of stocks moved higher. 357 higher. 146 fell today even though things finished pretty much flat. Yeah. And looking at this sector level Tim you wouldn't expect this to be a market that was flat. [00:46:39] Speaker 1: Health care up more than two and a half percent consumer staples up in a similar fashion alongside utilities and materials both at more than two percent. But the big drag info tech down one and a half percent. So a lot of green on that screen. But the one that matters deep in the red. [00:46:56] Speaker 2: Let's take a look at some stocks that move to the upside today. Well Tim I see you're you're kind of rattled with Carol not there. Yeah. [00:47:03] Speaker 11: Just kind of fills the vacuum. I hope she's watching. She's watching right now. Probably rooting for you. I hope so. All right. Well let's talk about what Apple did up more than 4.8 percent today. This after Nikkei reported that Apple has told its suppliers to produce about 10 million foldable phones this year up from an earlier forecast of seven to eight million units. It's part of plans to release at least five new models in the second half of this year in the first half of next year. This is the supposedly the long anticipated foldable phone. Mark German did report last month camera equipped AirPods are scheduled to launch in late 2027 and the company is also preparing a slew of new chips for future devices built on the next generation silicon manufacturing process. Apple shares higher by 4.8 percent. Also shares of Rivian moving to the upside today. This after the company raised its full year sales outlook. It begins deliveries of that lower cost SUV Rivian shares up by more than 8.4 percent today. The the company expects to deliver between 65,000 and 70,000 vehicles this year. It delivered 12,200 EVs in the second quarter. That new R2 SUV is seen as key for the company's ability to eventually reach profitability. Still the starting price around 58,000 dollars. And finally shares of hospital operators gained Thursday. Tenant health care was up today by more than six and a half percent. HCA was up by 4.4 percent. This after the Centers for Medicaid and Medicare services proposed revising payment policies for hospital outpatient departments and ambulatory surgical centers. That begins in 2027. It targeted drug cost reductions and site of care payment disparities. We also saw universal health services move to the upside as a result of this. Nora. Well let's talk about some of the [00:48:48] Speaker 12: stocks that ended in the red. We've been talking so much about chip stocks today. The worst performing stock in the S&P 500 actually belongs to SanDisk. So we did talk about the Philadelphia Semiconductor Index logging its best quarter ever just for the second quarter. But the past two days it's been in the red sinking more than five percent today as we end on this holiday shortened week. Now the information reported that Anthropic has begun early stage work on its own AI chip and it's also held talks with Samsung as a potential manufacturing partner. So you clearly saw that pressuring a lot of these semiconductor stocks micron SanDisk applied materials also in focus. And from there I want to pivot over to automakers Tesla ending down about seven and a half percent the worst performing stock within the mag seven today. We did talk to with Craig Trudeau. Of course he is the managing editor of global business Americas for the print site here at Bloomberg. Talk about the fact that we're surprised. Of course we did get some second quarter deliveries for Tesla that did top expectations. But it was still not high enough in terms of what we were expecting from the market. We did see the stock seeing its biggest drop in nearly a year. And lastly over in the consumer space retail looking at American Eagle down about four point nine percent four point eight percent on the day. Now this is a new CFO that is effective next month. We've been seeing some shifts within the company. We know that the stock has really been pressure this year generally speaking just from the macro economic landscape. Consumers pulling back on discretionary spending and some diverging brand performance that we've been seeing at the [00:50:27] Speaker 2: company and persistent margin pressures. All right. Let's check in on yields here. A mixed picture on the day. Remember the bond markets did close early at 2 p.m. ahead of the observance of the July 4th holiday tomorrow. Lower yields on your two year and your five year higher on the long end of the curve. Though we should point out on a weekly basis that entire curve did shift higher. I hate to be such a downer ahead of the [00:50:49] Speaker 11: holiday weekend. Oh. Did you know that we're not having as much fun in the U.S. anymore as we used to. OK. Here's something that's interesting. Double digit percentage drops in hours spent on arts and entertainment activities. Yeah. We attend fewer sports or recreational events. We attend fewer or when we host fewer social events. Ben Steverman writes for Bloomberg Business Week about America suffering from a fund shortage. And one of the metrics that he looks at Nora is golf courses bars and nightclubs that have closed. And also we just don't own as many boats. Yeah. He says that [00:51:23] Speaker 2: Americans now own 1.3 million fewer boats. Wow. I never owned a boat. But apparently that's the case broadly in the United States. Don't they say the best day of a boat. Yeah. I was about to say every boat owner I know all just complains about owning a boat. Right. I've always said you know the best way to own a boat is just have a friend who owns a boat. That is the only way. But I did this. It was an interesting story and it kind of talks about this idea. I don't know. It seems a little pessimistic. But then it kind of reminded me there was another story that the Wall Street Journal had out today how bowlers apparently aren't having as much fun. At least the serious bowlers because they're saying like all these bowling now is just turning into nightclubs. They talk about lucky strike which is obviously just trying to appeal to basically people who don't take bowling seriously. But look they're having fun. Look at the kids. I don't know what they're doing there. But if you actually have a real bowling league you're trying to keep score. Apparently it's not the best time. Yeah. It's not the best time. But the funny thing is Romain. I think these are companies that I don't know want to make money. [00:52:15] Speaker 1: And what generates revenue. Selling beer. Selling snacks. Inviting the kids and having them blow $35 on the arcade games. It is kind of interesting according to that. $35. Have you been to an arcade? I have not. But I did spend money. That's cute. That's like the first 10 minutes. Just so you know they don't even accept cash anymore. You buy a card ahead of time. I hate it. And you just swipe the card. [00:52:36] Speaker 11: You use Bitcoin when you do that though or you use. No. No. Wouldn't that be nice. Not one reference to the big Lebowski guys. Oh sorry guys. I'm talking about bowling. I'm just extremely disappointed. You were waiting for that. It really ties the room together. It's fine. I'll have a white Russian tonight though. There we go. Okay. That's good. I hope you guys get some bowling or at least do whatever you can to stay cool this week. And a very happy 4th of July to both of you. Same to you. Yeah. We'll see you again on Monday after this. [00:53:06] Speaker 2: This three-day weekend for our global simulcast. This is Bloomberg. And our coverage continues here on Bloomberg television. A look at the great wealth transfer up ahead. One of the biggest economic events of our generation. We're going to talk about that. We're going to talk about private credit when we come back after the break with Jacob Wall Howard CEO of Blueprint Capital Advisors. It's coming up next year on The Close right here on Bloomberg. [00:53:33] Speaker 10: The countdown is on. Everything you need to get the edge at the end of the market day. This is The Close. [00:53:43] Speaker 2: Welcome back to The Close. I'm Bailey Lipschultz. And I'm Romain Bostic wrapping up this shortened week here. Holiday shortened week in the U.S. with the S&P 500 closing out the day unchanged. But the real story is the outperformance that we continue to see with regards to some of those cyclical names. The equal weight S&P 500 outperforming the S&P for the seventh straight session in the past 10. And of course a big part of that is that rotation. We continue to see out of some of those high flying chip stocks into well just about everything else. The Philadelphia semiconductor index down about 5 percent on the day. Meanwhile you saw health care stocks get a bid once again for another straight day and more importantly Bailey for a second straight week. [00:54:23] Speaker 1: Yeah. Big gains for health care. But looking back at some of those names underperforming in some of the semiconductor space. Sandisk. Yes it is one of the world's best stocks this year. Down about 14 percent as that volatility continues to whip up in the chip space. Also want to call out Rivian beating expectations as it relates to deliveries. Up 8 percent. Still kind of a shell of its former self. And then Romain want to end on a bit of green though. The news was not too great. Blue Owl up 4.6 percent. Still down more than 50 percent. This does come after the latest updates as it relates to some of those redemption numbers as investors are racing to get out of some of those vehicles. Yeah. And that does bring us to our top story. [00:55:01] Speaker 2: And that is that redemption tension in private credit. The Q2 filings largely landed for most of the private credit funds. And they do show those requests actually intensifying from the start of the year. The 31 billion dollar Cliffwater corporate lending fund had to block about two thirds of redemption requests which rose to 17 percent of shares from 14 percent in Q1. The 79 billion dollar Blackstone private credit fund saw shareholders seeking to pull 10 percent. The Apollo debt solutions fund got requests for 17 percent. And Aries strategic income fund hit with ask of about 14 percent. And then you even have the North Haven private income fund run by Morgan Stanley which saw queries of about 12 percent. But there are some bright spots out there. Bloomberg intelligence says that the uptick in redemptions overall in Q2 may have actually been a function of some of those prorated rollovers from prior quarters. On top of that weaker capital formation may be supporting lending conditions by reducing competition for new investment. And Blue Owl the poster child for the BDC turmoil said its request ease to about 19 percent from 22. And public trading in BDC stocks as we just saw with the chart on the screen actually stabilized in June with the median BDC roughly flat and modestly actually outperforming the S&P. Our next guest. He offers account management and fund to fund services across private capital strategies and has a lifetime of experience in that space. Joining us here in studio to is Jacob Walt Howard Jr. CEO of Blueprint Capital Advisors. Great to see you Jacob. Great to see you Romain. I do want to absolutely I do want to talk about the state of the private credit market. There's been a lot of hand wringing over exactly what's going on behind the scenes. But from where you sit right now are things improving right now or are we still sort of in this sort of downtrend of worry. I think we're still in the downtrend. [00:56:45] Speaker 13: But I want to be very careful that we keep this all in perspective. This is not a global financial crisis in the making. I think this is asset class specific and I think it has a lot to do with the end buyer of private credit over the course of the last 10 years. I do not think this redemption pressure is coming from institutional investors insurance companies pension funds endowments foundations. It's coming from private wealth channels that probably sold product to an end user that does not understand liquidity provisions that are associated with those products. [00:57:24] Speaker 2: There are some people that would say when they see some of these BDCs enforce those 5 percent caps that that is actually a good thing. And we should point out this isn't so much gating. This is sort of the terms of what the original agreement was. But there was a lot of talk as to why limit. Why not just let folks get their money. Is there an argument to be made for holding the line on that 5 percent. [00:57:43] Speaker 13: Well I mean it prevents the proverbial run on the bank. Yeah. Right. And so by by capping redemptions you can have an orderly exit of investors from a particular vehicle. Now having said that I think the strategy and the vehicles end up with a black eye and I don't think investors will forgive for quite some time that it's going to take them months maybe even years to get their capital back when they thought originally that this was a somewhat liquid asset class. [00:58:10] Speaker 1: Well how does this impact those investors who maybe didn't necessarily understand what they were buying. How does that impact the industry going forward. If people who were sold these products are kind of racing for the exits and sitting on losses. Well I think you're still seeing an [00:58:24] Speaker 13: escalating an escalation in redemptions. Right. So I think it's maybe 20 billion dollars in the first quarter of 2026. I think it's 22 to 24 billion dollars in the second quarter of 2026. I think you're going to continue to see people asking for their money back from private credit managers. Unfortunately there's nothing they can do. Right. At the end of the day if they need liquidity they'll probably have to source it elsewhere. I think the fundamental problem here is that you have really a burgeoning secondary market but the secondary market can only absorb. But so much of this product and the asset class has grown so fast since the global financial crisis. There's really no end buyer for as much of this product as they would need to sell to give back as much as 40 percent of the capital in these vehicles. You reference a black eye. Is there any type of reputational damage for some of these funds. Absolutely. I think Romain was mentioning earlier Blue Owl as an organization. I think they've become the poster child to some extent Cliffwater has also become the poster child. I think Blackstone is so big that it's difficult to to sort of put them in that category. But I do think that the asset class itself as well as the major players in the asset class will suffer. And look this is their own doing. At the end of the day they took in capital too fast and had questionable opportunities in which to allocate that capital to which has now led to performance issues within the portfolios which has led to people wanting to exit the asset class. When you raise capital that fast you lose your valuation discipline. You lose your investment discipline. You worry more about putting the money to work than you do where it's actually going to work. And I think that's what's happening with the larger managers in the private credit space. Having said that you have smaller managers that are continuing to be more thoughtful and prudent about how much capital they take in. And they're sticking to those areas of the market where it's a much safer you know investment opportunity long term. [01:00:28] Speaker 2: I do want to broaden this out a little bit. And I am curious as to just what allocation looks like overall across the board across various asset classes right now. We're coming off the first half of the year where at least equities in the U.S. But more or less set record after record if you will a bit of a pullback over the last few weeks. Even in the fixed income space you didn't public fixed income space you made out pretty well credit spreads are tight and you're getting pretty decent yields in the government debt market right now. So. So how do people sort of balance things out for the rest of the year. Look I think the major question that people are [01:01:00] Speaker 13: dealing with from an asset allocation perspective is what to do about their equity portfolios. Right. And you started really in the beginning of May to see a divergence. You started to see performance leadership from smaller cap stocks. And so when you think about from May to now you've got roughly a 16 or 17 percent gap between what I'll call sort of the mag seven and the Russell 2000. And so that that that reallocation that's occurring. And to some extent we're seeing a real online and semiconductors right now as they're starting to accelerate that reallocation is probably the biggest decision that investors are making right now is the [01:01:42] Speaker 2: reallocation among the equity components of their portfolios. When you look at just the AI landscape overall do you still see value in some of these [01:01:51] Speaker 13: publicly traded names. You know I'm sticking to the strategy that we started with you know almost two years ago. And so there's names we like two years ago. The names we like today. If you look at a company like Micron Micron I think over the course of the last seven or eight years has had 10 days where the stock has traded off as much as 10 percent. And then you look out three months. It's up 15 to 25. Yeah. Percent. And so I think that investors just have to understand that there's good volatility and there's bad volatility. The volatility that we're experiencing today is leading to higher highs. Right. It's when it leads to lower lows that perhaps it's time to think about you [01:02:33] Speaker 1: know a rotation out. But is there any concern about the rotation or broadening in the fact that a corning is up 273 percent in the last 12 months. Caterpillar is up 142 percent. Like these are companies that are getting the AI bid because there's so much demand for real assets. Sure. But they're getting a valuation and expectation that this is something that's going to continue for five more years now. Look. I think that the AI [01:02:56] Speaker 13: revolution is probably one of the biggest technological revolutions we will experience in our lifetime. And so I don't think that this is a story that ends abruptly. Look in the process of getting to a set of winners there will be a lot of roadkill and a lot of capital will go up in smoke in venture capital as well as in the public markets. But I think we still have another five to ten years of runway in this particular trade. You just have to be prepared to stomach the volatility. And at a certain point it doesn't become about the hyperscalers or about semiconductors. It becomes about picking the winners within those categories. And then that becomes sort of the second phase of this particular trade in our [01:03:42] Speaker 2: perspective. Jacob right to have you on the conversation. Jacob well our CEO of blueprint capital advisers. When we come back we're going to continue talking about what's been happening in the debt markets with a special focus specifically on two big issues and some of the credit spreads that we've seen widening on them. We're talking about spacex near kassir joins us after the break right here on bloomer. [01:04:02] Speaker 1: As spacex gets set to join the nasdaq 100 next week mixed signals are emerging over the firm's credit quality near kassir a bloomberg opinion warning quote while spacex has the rating company stamp of quality the market grades its bunk its bonds closer to junk. The biggest most sophisticated investors in the world see a harder road to success than Musk touts near joins us right now. And near I think it was one interesting thing having covered the IPO and talking to investors who are in these meetings with Brett and Gwynn when they were saying you know we have investment grade quality we plan on tapping the bond market. Now we're seeing a bit of maybe question marks emerging around that kind of what's your view of spacex's ability to get IG ratings. And yet here we are just a few days after those bonds were sold and they're trading a lot like high yield might be. [01:04:57] Speaker 14: Yeah I mean I think thanks for having me. I think this is the story of spacex writ large. The first thing I should say is I'm a fan of what spacex does and I'm rooting for them and the work that they do and their ambitions. I think it's all great. There's a separate question though and there always has been about what spacex is like as an investment. And I think we've had that discussion a lot around its stock and now we're starting to have that discussion around the bonds because the bonds were given almost universally a credit rating that is the bottom rung of investment grade. Sorry the bottom rung I should say of investment grade. And since these bonds have floated in the secondary markets their yield has been trending in the direction of junk. So one notch lower. Now you know it's it's I don't want to overstate it. We're not talking about you know the worst of the worst. But but when you see the market move in that direction. What you're seeing is real questions. Once we get past the excitement of spacex coming to the market about what sustainability is like for the fundamentals of spacex as the company. Yeah. And what is specifically in this context. What is the appropriate probability of default for a company like spacex. And it's not that it's coming tomorrow. It's that the market is telling you that that probability is higher than probably what the ratings are implied. Well that's what I'm curious about too is about the divergence. [01:06:14] Speaker 2: And enthusiasm. And I know the equity markets always tends to lean more speculative the bond markets more concerned about just getting its cash back. But when you start to see as much of a divergence in sentiment if you will. Should we read anything into that or is this just kind of the normal sort of ebb and flow that we're typically going to get between the bond and equity markets. [01:06:37] Speaker 14: No I think you should because we're starting to see some agreement between the stock and the bond the bonds of spacex and how the stock is trading. I mean the stock is and I mean this descriptively not pejoratively that the stock as things stand is classic junk in the sense that you know it doesn't make any money. It's it's not highly levered but you know it's picking up debt. You know it's it's it's it's controlled by one person. It's an empire building project. I mean if there is some consensus about what a junk stock is spacex today is that now it might not you might not be that in a year from now. It might be usually profitable. It might outgrow all these early pains. You know all that stuff remains to be seen. But when you see the bond starting to move in the direction of junk as well used you're starting to see agreement. And what in my opinion what you're seeing is sobriety about the about the task ahead for spacex which is it won't have to just innovate and do amazing things like catch rockets. It will also have to do what markets want which ultimately is post profits and grow them year by year. [01:07:38] Speaker 2: All right near a fantastic column today. Once again here a more sobering look here at spacex through the lens of its debt near case are of Bloomberg opinion. And we talk of course about a stock it's above it 150 offering price but obviously well below that 212 or whatever it was intraday price that it hit on the first couple days of trading here. And it gets to this idea that you just have a disconnect right now between the bond investors and equity investors is where they see this going. [01:08:05] Speaker 1: And the interesting thing Romain we go back to something we put out a few weeks ago. This is a company that some folks on the sell side expect to spend 700 billion dollars in 2031. They're not making a profit. They're going to have to either tap equity or debt. And if you look at debt markets they're not saying we want more of this by any means. [01:08:21] Speaker 2: Absolutely. We're going to continue our conversations about the debt market. Broaden it back out with Rebecca Venter senior fixed income client portfolio manager over at Vanguard. Great to have you here Rebecca. Thanks for having me. I'm happy to be here. I do want to kind of get a sense of kind of where investors heads are at right now. I mean obviously we've seen a ton of money going into fixed income overall. But I am curious about the split if there is any at all between what we're seeing with regards to the appetite for corporate credit relative to what we're seeing for government debt. I think we're seeing broad based investor demand across the asset class [01:09:17] Speaker 15: which is not a surprise to us when you see yields at such attractive levels for very high quality asset class. Investors looking for stability in their portfolio. We're really seeing flows into the core core core plus credit sectors and government bonds. We're also continuing to see a lot of money flow into the cash and ultra short space. Well that's what I'm curious about too. [01:09:37] Speaker 2: I mean when we talk about the yield that you can get on and I'm talking particularly on some of the non corporate credit. It's relatively speaking historically it's very attractive. I am curious. The other is are you getting enough premium on the corporate side to say I'm willing to maybe take that bet rather than what's [01:09:54] Speaker 15: happening in U.S. government debt. It is something that we get asked about a lot by clients. I mean if you look at the corporate index it's 75 basis points and you compare that to history. That's a lot less spread above treasuries than you would have gotten. But on the other hand we think that it's pretty justified if you look at the fundamentals across corporate credit. Some people would say they're they're stronger than they've been in many many years. And so when we kind of put it together it's you're getting that spread in a very reliable asset class that's really backed up by strong fundamentals today. So we think it's still worth it. And our research shows that investors who incorporate credit over time they consistently and meaningfully outperform in you know government index or just the AG. So we think it's it's still attractive for investors to invest in credit. [01:10:38] Speaker 1: Well with a lot of questions around what the CapEx world looks like going forward for some of the biggest companies in the world. What areas are you focusing on recommending clients as it relates to corporate debt and how does that fit into kind of a portfolio [01:10:49] Speaker 15: approach. Yeah. So when we think about corporate credit overall being that spreads are tight that also kind of means that investors are not very well compensated to go down in quality. So in our active portfolios we're keeping a higher quality approach and our team is really looking for pockets of the market where they can get very stable carry. As we think about spreads we think they're likely to remain in this tight range probably can't tighten too much further from here especially with Fed hikes a possibility of growing possibility. So that means our team is looking at areas that are pretty stable health care banks with utilities areas with really strong fundamentals where you can kind of hang out earn really attractive carry and kind of go through [01:11:31] Speaker 1: this environment of tighter credit spreads. Just going a bit off script just because we were just talking about SpaceX. What's your view on how those bonds are trading in our investors going to be rewarded if they buy now. Yeah. [01:11:40] Speaker 15: SpaceX it's an interesting credit certainly you know it's one of the bigger deals that's come to market this year. And as a new credit it certainly comes with some risks just being new to the market. It is you know at differentiated credit in many ways. So we find that at these levels it does present probably an opportunity. It's trading at some attractive spreads. But yeah there's a lot to think about when you have a new issue or coming to the market like this especially with the you know probably more [01:12:06] Speaker 2: issuance in the future to come. I am curious if I could just about kind of a total allocation and given the run up that we've seen in equity prices. I mean which have been phenomenal. Certainly if you bet on chip stocks here and the idea that we've come to the end of the quarter and you have some folks that are going to be forced to rebalance one way or another to get their equity allocation back in line with what of their mandate is. Does that come at the benefit to the benefit of fixed income do you think. [01:12:31] Speaker 15: I certainly think so. I mean I'm a bond person. So that comes with the territory. But certainly when we think about how well the equity market is done and then the attractive yield you can get in credit and markets broadly and fixed fixed income space. I mean buying the ad you get a little less than 5 percent. If you go into broad credit you can get a 5.2 percent return yield in very high quality sectors. So we think that should be an easy trade for investors who are just looking to get a more balanced approach in their portfolios considering that equities have done quite [01:13:02] Speaker 2: well. What's your general outlook right now when it comes specifically to the high yield space. Because we have a lot of guests fixed income guests who come in here and they bang the drum on high quality. And that's been great. I've heard quite a few less bang that drum on high yield these days. Yeah. Yeah. [01:13:18] Speaker 15: And that makes sense right. Spreads are below 270 which again very tight relative to history in our portfolios. We are pretty selective when it comes to high yield. So you'll see the overall exposures are lower than they've been in you know periods where spreads have been wider. So we are keeping that a little more conservative. I guess what I'd say is we find that in this type of environment partnering with an active manager someone who can really sort through the credits where you are getting better compensated and you are in your risk really aligns with the compensation that you're getting. We think that's probably the right way to. That's a great way to approach the market in a time like this. [01:13:55] Speaker 2: All right Rebecca great to have you on. Have a wonderful weekend. Thank you. Rebecca Venter senior fixed income client portfolio manager over at Vanguard. All right Bailey let's take a look at how markets close on the day. We've been talking a lot about it today. Obviously a down day for most of the major indices except for two of the ones that I think to a certain extent actually might matter more. Believe it or not the Dow Jones [01:14:14] Speaker 1: Industrial Average. Remember that the big dog high. Well the thing that I find hilarious I mean is we call this a gain on the S&P 500 [01:14:21] Speaker 2: for one 100th of a point. Yeah I hate that. But no one is even better at the S&P equal weight index which tells a much bigger story eight tenths of a percent gain on the day which seems to reflect that rotation that we continue to see into more [01:14:33] Speaker 1: cyclical on economic names. Yeah our performance and obviously an ugly day if you're bought you've bought semiconductor stocks over the last 48 hours. Another five percent drop. We'll be back in a moment. This is Bloomberg. [01:14:44] Speaker 2: All right it was 250 years ago where our founding fathers declared the independence of what would become the United States of America. Our next guest is marking 250 years of market history. He's out with a new book called Investing in America the rise of a 250 year bull market. Meb Faber joins us right now founder and CIO of Cambria investment management to talk a little bit about this. I guess the main crux of it and I like one of the anecdotes you put in there. Now if I put one dollar into the market assuming it existed back way back in the day that turns into a gazillion dollars today. And then you put that same dollar into a non U.S. market. And well what does it give me that. [01:15:29] Speaker 16: Not as much. You know on the on the nominal basis it turns into 200 million and people love to gnash their teeth and go crazy about that and say well you couldn't have bought an index back then which is true. But this is meant to be a visual celebration. It's meant to be a beautiful book that you can flip through zoom in on various decades and take a step back. Zoom out on this long period of 250 years and this magic of compounding. If you get roughly over 50 some years you 100 X your money which is an astonishing statistic. And look most of us most people weren't investing in 1800. Everybody was farmers. Right. It's like one percent of people were investors. But this concept of being an owner the mentality the entrepreneurship the risk taking has been in the [01:16:14] Speaker 2: American DNA from day one. Well I want you to talk about that because I did think this was interesting. You talk about this idea that basically this country was kind of founded as an investment in that the early colonies were actually set up to a certain extent kind of like joint stock ventures joint stock companies if you will. I mean so this to a certain extent is kind of in our DNA as a country. 200 years before we voted for [01:16:37] Speaker 16: independence which by the way was on July 2nd not July 4th. The you go back to when the original settlers were coming to the U.S. We're talking about Jamestown. We're talking about Mayflower but also not just the Brits the Swedes and the Dutch. Most of these were funded by joint stock companies like the narrative I learned in elementary school was religious freedom. People coming to have a better life which is all true. But also these you know ships that were coming over to the U.S. one sinks. All right. You lose all your money. Pirates come and take all the booty right. The so the advent of this new idea this joint stock company you get to spread your risk. A very modern concept applied hundreds of years ago. So these set the stage for what later became modern corporations. They used to call them adventure merchants. Right. Venture capitalists sound kind of familiar. So already these risk takers these people that were coming over this for profit idea. We like to say America was partially funded. Yeah. I just want to look back you know. [01:17:41] Speaker 1: One hundred and twenty six years ago. Rail was the investment thesis of the decade and kind of really the number of decades. Looking at the AI evolution and kind of where we go from here. What's the sense that we can continue to see kind of more dramatic returns here in America versus places like China that are currently doing things a lot cheaper. Those are the hot tech stocks of the day. [01:18:04] Speaker 16: Right. They weren't talking about Nvidia and Apple. They were talking about railways and canals. You know talking about the 1870s. And then you fast forward in the 1920s and you got a whole different sort roaring 20s companies and then microprocessors and computers on and on. Right. And that's been a story of evolution and advancement. This free market capitalism has been this just magical formula. It's like Rumpelstiltskin's just turning wool into gold. Right. This compounding and innovation which isn't unique to the U.S. But it is vastly disproportionate here. The amount of shareholders in the U.S. order of magnitude higher than anywhere else in the world. And we want to get that to 100 percent. We want inclusive capitalism. People who want to start a business entrepreneurs. You do the surveys in the U.S. It's like 95 percent say it's a good idea. You ask people in Europe or Asia. It's a much lower amount. So there's something in this risk taking mentality. Now that there's some downsides that you have the natural ebb and flow bull markets bear markets recessions depressions. But that's a feature not a bug that cleans out all the nonsense a little bit which we're seeing today. Right. We've had this boom for 17 years. It feels like we're due in the U.S. for a little a little cleansing with the valuations we're at now. But over time particularly 20 years or more. [01:19:23] Speaker 1: It all washes out. And it's been a great investment. Well maybe we were just talking at the top of the hour about some of the risks around you know some of these private investments private credit just thinking through as you mentioned the entrepreneurial nature of America. What are the risks though that people are kind of quitting jobs and wanting to start opportunities that don't end up panning out especially in an era where there seemingly is an endless amount of headlines that AI is going to make a lot of what we do on a day to day [01:19:47] Speaker 16: to day basis irrelevant. Every entrepreneur has the naive optimism that they say I know most startups fail but not me. Right. We started my company Cambria 20 years ago. We often tell people the biggest compliment you can give them not just your portfolios investing in life entrepreneurs is just you survived. It's not that you did a 10 percent return instead of eight. It's just you made it to the finish line. And so part of investing the hard part are the downturns. Right. Part of being a founder an entrepreneur is simply making it through. So thinking in terms of how can you build a portfolio how can you structure it to just make it make it to the finish line is probably the most important thing rather than just the outperforming the market beating the market and trying to find a better way. [01:20:35] Speaker 2: You know with regards to those downturns. I mean one thing you mentioned in your book is how actually over long term long horizons that stocks are actually a little bit less volatile than bonds. Explain that to me. It's a crazy takeaway. [01:20:48] Speaker 16: You know everyone today. One of the reasons I wrote the book is back in covid. A lot of young folk were getting excited about markets. That's wonderful. There was nothing else to do. There was no sports on TV. The beaches were closed. But they kind of got let in through the casino. They wanted to trade mean stocks. And then now that zero day options. And now it's prediction markets on what the next next pick pitch in the Dodgers game will be. And you don't need any of that. The story is far better than that. Being able to invest and have a long time horizon. As you mentioned the kink kink happens in about 20 years. People are saying oh my God 20 years. I can't wait 20 minutes 20 hours 20 days. At 20 years stocks are less volatile than bonds. They have a better upside outcome. They have a better worst case outcome. The valuations tend to spread out. It doesn't matter. The hard part for most people is training that muscle. Right. How can I look out 10 20 30 years. Have empathy with myself in 30 years as opposed to hey I want to go spend my money today on happy hour and watch Portugal and watch a bunch of World Cup instead of putting it away. It's a hard trade off for most people. All right. Matt we've got to leave it here. But enjoy that Portugal [01:21:53] Speaker 1: Spain game and the holiday weekend. Thank you again to Matt Faber founder and CIO of Cambria investment management. Well still ahead. Nothing says the 4th of July like a good cookout. But how much will that cost. We're going to break it down with Stu Leonard's president and CEO Stu Leonard Jr. joining us next to share how shoppers can enjoy the holiday without breaking the bank. This is Bloomberg. Well the price for a 4th of July cookout just got a lot higher. According to a recent survey in Independence Day meal for 10 will cost an average of $73.82. This is a 4% increase from last year. Well Stu Leonard Jr., the president and CEO of Stu Leonard's grocery stores joining us now to discuss. Stu are we expecting people to show up and break out the plastic credit card to load up on beef and goods or what are we [01:22:50] Speaker 17: doing. Are we shifting and going vegan for 4th of July. You know it's not that bad. OK. I mean when you think about it. I saw your statistic $73 there. But for 10 people at 7 bucks ahead. You know that you can't go to a restaurant for that. But anyway. Here's here's really what what it boils down to. The superstar of 4th of July is this guy right here. Your cheeseburger. OK. Not a hamburger. Cheeseburger. Is that a Brioche bun Stu. It's a Brioche. And you know what. The bun price is the same as last year. The cheese that you see on it is the same as last year. You know what went from $2.50 to $2.75 is the meat in the middle. So meat is driving a lot of these costs up. And the reason is that you know I talked to our ranchers out in the Midwest. The bird size is at a 75 year low. OK. So there's less cattle and there's more demand because everybody wants protein. Everybody wants beef. So hey supply is low demand is high and prices go up. And this is really to me what's driving inflation. Tomatoes are down a little bit this year. Eggs are down this year. Strubberries popped up a little bit. We got really hot weather which is affecting our farmers. They're they're just hoping you know things will cool off a little bit. So it's not that bad. I'd say it's up a few percent. [01:24:23] Speaker 1: Well see what's going on with vegetables though. Every time I feel like I go and buy you know Brussels sprouts broccoli asparagus prices are higher. And even like the supplies in my local grocery store kind of lacking. [01:24:34] Speaker 17: Are people showing up there. What's. You know what Bailey that's that's what's happening is that the fruits and vegetables always change a lot depending on the weather. And you can see some of the tremendous weather systems that we've had every day. Look at the heat right now that's affecting all of all the growers. You got to. Can you get people out in the fields right now to even pick. All of the corn and blueberries and everything. So you know it. The fruits and vegetables. It's always. You know you don't know what you're going to happen the next day. Same thing with fish a lot of times. You know we're up in the Boston New York area. Montauk. And you know depending on the weather. The fishing boats don't go out. The lobstermen don't go out. And the price will fluctuate. You know not not on a major basis. But day to day it'll fluctuate depending on those factors. [01:25:34] Speaker 2: Well I am curious to just. I mean you've been doing this. I mean you've been leading this company for more than 30 years. Obviously the company predates. You see the gray hair. I see it Stu. You still look great by the way. But I am curious. I mean you've seen kind of these economic cycles before. And I am curious particularly around holidays whether it's July 4th or Thanksgiving. Do you find that people still even when times are tough they still are willing to spend around these holidays. [01:25:59] Speaker 17: Well you know what Romaine. You know what we're finding now is I just ordered some Chinese food last night and it was 40 bucks. And all I got was just some lo mein and sliced chicken. You know and you're talking seven bucks for a 4th of July cookout. So you know I think people are tending not to eat out as much and they want to eat in the store. They want to buy their own food and cook it. Now here's some ways you can save money. OK. This is this is we have people back there cutting chopping the chopping you know making guacamole right there. They're cutting all that. Peeling the avocados and everything. Yeah. All of that takes time. If you want to save money do it yourself. OK. Because you'll save a lot of money. You know I joke a little bit about the mashed potato. You know when the economy is really good people tend not to cut and make their own mashed potatoes. Instead they'll buy them store bought. Yeah. Most of that stuff is double the price. So Sue I guess the big question I have for you. What are you doing on July 4th. What's going to be on your grill. OK. First of all I have a good question. You know what's coming on my grill. You know what's coming out of Delaware right now. Everybody's corn watermelons. You know the salad potato mac and coleslaw. And then there's going to be a lot of 250 year celebration. I think this is just some. We took some strawberries blueberries and some whipped cream and made a red white and blue. Yeah. Type of thing. And you know what else. I mean this. This is like not even in the books. I never learned it at school or anything. But tick. Yeah. You won't believe the impact. You know what else. I don't know. I'll give you an example now. You see these. You see this. Yeah. Yes. It looks just like a. That's the cake right. Exactly. Yeah. It's like a cupcake in the in the container with dots on the top of it. Yeah. We're going to sell thousands and thousands and thousands of [01:28:28] Speaker 2: of these this weekend. It's like 15 million views on tick tock or something. Well now that you hold it up held it up to maybe you will become a tick tock star. You deserve it. Yeah. You are a treasure. So we have to leave it there. [01:28:42] Speaker 17: We have to leave it there. Up against the clock. I hope you have a wonderful fourth of July. Yeah. Hey can I just real. I know you're quick but this weekend is super dangerous for swimming. There's going to be more drowning the fourth of July weekend than any other time during the year. My wife and I unfortunately lost a little boy to a drowning years ago. [01:29:00] Speaker 2: years ago and we promote water safety. I just want to mention to your listeners out there. Keep your eyes on your kids around the water. Get rid of this thing. OK. Don't look at this when you're near the water. Watch your child and be safe. Still we appreciate that and everything you've done with your duck swim school and really just bringing a lot of awareness to this issue and teaching kids how to swim. Really appreciate it. STULE LENARD JR., THE PRESIDENT AND CEO OVER AT STULE LENARD'S. AS WE SET YOU UP FOR WHAT TO WATCH OVER THE NEXT WEEK, A FULL WEEK WITH ISM SERVICES ON MONDAY, THAT NATO SUMMIT BEGINNING ON [01:29:38] Speaker 1: TUESDAY, AND THEN A BIG MOVE FOR THE SPACEX STOCK. JOINING THE NASDAQ 100 AS WELL AS THE START OF THE SUN VALLEY [01:29:46] Speaker 2: CONFERENCE. AN INTERESTING TUESDAY AHEAD OF FED MEETING MINUTES ON WEDNESDAY. AHEAD OF CHINA, AND GUESS WHAT? EARNINGS WEEK. IT STARTS ONCE AGAIN HERE. WE'RE GOING TO EARNINGS FROM PEPSICO, PEPSICO ON THURSDAY, DELTA ON FRIDAY, AND THEN SK HYNIX'S BLOCKBUSTER U.S. STOCK LISTING IS EXPECTED TO START TRADING. THIS IS BLOOMBERG.