October 14, 2025 • 40 mins
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Investors spooked by the implosion of auto lender Tricolor Holdings and car-parts supplier First Brands Group got little reassurance Tuesday from the head of the biggest US bank.
“My antenna goes up when things like that happen,” Jamie Dimon, JPMorgan Chase & Co.’s chief executive officer, said on a call with analysts. “I probably shouldn’t say this, but when you see one cockroach, there are probably more. Everyone should be forewarned on this one.”
The pair of bankruptcies were a shock for the credit markets, where companies have been borrowing at a record pace while handing investors outsized returns. And Dimon, fresh off posting results that put his bank on track for another record year, said there could be more pain than usual when the economy takes a turn for the worse. In drawing attention to investors’ growing disillusionment with public vehicles that hold private-debt investments, Dimon touched on a niche corner of the market where investors are on the lookout for signs of widening cracks in debt markets.
Investors have been fleeing BDCs, seen as a proxy for the $1.7 trillion private-credit market, as they cut distributions available to shareholders. That has opened a widening gap between the broader equity market and private-credit BDC stocks. Last month, the $75 billion non-traded Blackstone Private Credit Fund, the largest in the industry, said it was reducing its shareholder payouts.
Today's show features:
- Bloomberg News Chief Wall Street Correspondent Sridhar Natarajan and Bloomberg Intelligence Senior Analyst for Global Investment Banks & Asset Managers Alison Williams on quarterly bank earnings from JPMorgan, Goldman Sachs, Citigroup and Wells Fargo
- Bloomberg News US Semiconductor Reporter Ian King on Oracle’s deal to deploy a large batch of AMD’s forthcoming MI450 chips next year
- Cathy Seifert, Vice President of CFRA Research, on BlackRock’s quarterly earnings and outlook
- Bloomberg News Global Economy Reporter Enda Curran US China on global trade shifts brought on by tariffs
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News. This is Bloomberg Business
Week Daily reporting from the magazine that helps global leaders
stay ahead with insight on the people, companies, and trends
shaping today's complex economy. Plus global business, finance and tech
(00:23):
news as it happens. The Bloomberg Business Week Daily Podcast
with Carol Masser and Tim Stenebeck on Bloomberg Radio.
Speaker 2 (00:32):
One group that has done really well today as a whole,
we're talking about big banks or banks over all the
KBW Bank Index folks up two point three percent. Two
of the twenty four names are higher. In today's session, We've.
Speaker 3 (00:45):
Two big ones lower. Two of the big ones are lower.
Speaker 4 (00:48):
Two of the biggest names on the entire index are lower.
Speaker 5 (00:51):
This is what's interesting, because JP Morgan, Goldman, Wells City
all reporting JP Morgan and Goldman selling off, right, Yeah,
those are the two names you're talking about, and Wells
and City Mettre.
Speaker 4 (01:03):
Are reelling in, I mean, and you get headlines like
JP Morgan beats expectations on every level, Goldman Sachs knocks
the cover off the ball. Analysts can't believe how well
they did, and yet the stocks sell off.
Speaker 2 (01:14):
But remember something like JP Morgan has had quite a
run this year, so, you know, expectations and reality. Perhaps
let's see what our experts have to say. Bloomberg News
Chief Wall Street correspondent Shriet ot Rajan's here in studio
along with Bloomberg Intelligence Senior Alice for Global Investment Banks
and Asset Managers, Allison Williams, as I said, both in studio,
A right, guys, let's start with JP Morgan, because I
(01:35):
feel like that's the bank that we want to always
hear from.
Speaker 6 (01:38):
Allison, let me start with you.
Speaker 2 (01:39):
What do we need to know about the numbers in
JP Morgan's business, because, as Matt said, sometimes the headlines
look darn.
Speaker 7 (01:44):
Good and the quarter was darn good. It's just that
I think there are some bullish investors out there that
wanted more, and if you did, you know so on
today they're underperforming. But if you look at your to date,
if you look at their valuation, if you look at
their year to returns, I'm sorry, you look at their profitability,
all very very good executing well think that you know,
(02:04):
maybe some people just wanted some more.
Speaker 8 (02:06):
There.
Speaker 7 (02:07):
Goldman Sachs also strong quarter. They did miss on equities trading,
so you know, these numbers are hard to predict, but
I think, you know, most people, including myself, you know,
if you had seen sort of that that upside would
give you sort of further confidence in the momentum going
into the next quarter. But the M and A advisory
business huge outperformance there. We think they probably outperformed most
(02:31):
people in the quarter. They're the lead in that revenue.
They announced this AI program. There's details, you know, we're
gonna have to wait till January for details, but that
signals that efficiency is going to get better.
Speaker 8 (02:43):
You know.
Speaker 7 (02:43):
Contrast, you know two companies that are really performing very
well to two companies that are I think have a
lot of runway.
Speaker 6 (02:51):
Ahead of them, and that's well as Fargo and Citygroup.
Speaker 4 (02:53):
Can I just ask before we get to Street, because
I've already asked him like ten times today, why do
the analysts consistently underestimate what these banks are doing? And
it can't just be to get on the good side
of management. Right when I see this morning, before any
earnings came out, I saw stories about which bank was
(03:14):
going to beat estimates. So when I see bank expected
to top estimates, I wonder why analysts don't add more
to the estimates. What is this game all about.
Speaker 7 (03:23):
Well, first of all, trading and when it's capital markets
revenue that really is the source of the upside. That
is very tough. And banks are not going to guide you, right,
you know, they don't really have an incentive to guidecause,
by the way, like the last couple of days of
the quarter could be horrible or you don't know what's
going to happen, And so I think banks are going
(03:45):
to tend to guide conservatively. Analysts are going to tend
to be conservative, right because that and by the way,
like that just is not something that people bake into
the run rate. So as I said, you know, we're
positive about the momentum and trading.
Speaker 6 (04:00):
Yeah, the asset levels, et cetera.
Speaker 7 (04:02):
But I think if you're you know, forming estimates, you
are going to tend to be conservative, and that's why
you can get upside, especially if the strength comes at
the end of the quarter. It's just hard for the
estimates to catch up.
Speaker 2 (04:14):
Yeah, totally get it, all right, So we care about
JP Morgan's results. We also obsess over everything that Jamie
Diamond has to say.
Speaker 6 (04:21):
He never disappoints to something.
Speaker 2 (04:22):
That is highly quotable in this case, it was when
he was talking about a cockroach.
Speaker 6 (04:26):
Check it out.
Speaker 8 (04:28):
You should assume that every something happens, we scour all process,
all procedures, all underrunning, all everything, and you know, we
think we're okay and other stuff. My my intenda goes
up with things like that happened, and ihould probably shouldn't
say this, but when you see one cockroach, you're probably more,
you know, and so we we should everyone should be
(04:49):
four more than this one, all right?
Speaker 2 (04:51):
That, of course, was Jamie Diamond earlier today on jpm's
Earning Earning called should we come on in on this
because you're reporting on the quarter and you know most
importantly what Jamie Diamond has to say about the Macro
so I.
Speaker 9 (05:05):
Again, Jamie Diamond has been running the biggest US bank,
which has a bigger market cap today than its three
closest rivals combined. He's been doing that for nearly twenty years.
And he didn't get that, and he didn't stay there
just on the back of sitting on his laurels. Right,
he's paid to look around the corners, and he is
right to point out that the underlying numbers might be great.
(05:25):
They might be marching toward another record revenue year. But
when you see some of these problems, you initially try
and dismiss some of them as idiosyncratic, but if enough
of them start popping up, that becomes a concern. So
that's why when Diamond says, my antenna goes up when
things like that happen, we pay attention, especially because in
the last few days we've been seeing some action in
(05:47):
certain corners of the credit market where it does appear
that there is some fear seeping into the markets. Diamonds
specifically flicked at the publicly traded BDCs that hold a
lot of these private credit invest and if you look
at the discount to the net asset value that they're
going at, it makes you worry about what's happening with
some of the other non traded vehicles. Will there be
(06:09):
master redemptions and will there be domino effects off of that?
And Diamond also points out that he feels like they're
feeling very good about everything that if you look at
their numbers, you will not see any cause for stress, dismay, concern.
But Diamond is right in saying, eventually the cycle turns,
and when it does, he thinks that I suspect when
(06:30):
there's a downturn, his words, you will see higher than
normal downturn type of credit losses in certain categories. And
that's an important one to keep in mind because what
he's saying is your recovery rates might not be as
great as you imagine, and that will impact the firms,
and that will impact the investors in those firms.
Speaker 4 (06:50):
I want to ask about Wells Fargo. I'm so thankful
that Bloomberg Radio has such a great program in the mornings.
Nathan Hager and Karen Moscow were talking to you, Allison
before I even got to work yet, and I get
here pretty early, and you were saying, this is really
going to be the news of the day, and it
has been the outperformer of the day.
Speaker 2 (07:09):
Because can I just say finally, well because long and
so what's.
Speaker 3 (07:14):
The story with Wells Fargo?
Speaker 4 (07:16):
They raised their return on tangible equity.
Speaker 7 (07:20):
So the key metric for banks return on tangible common
equity valuations. You know, price to book is how a
lot of investors value these banks. It's based on the
return on capital. And you know, Charlie Sharffitt said years ago,
we're going to put fifteen percent out there as a target.
We'll revisit it at some point. They're running at fifteen
(07:40):
percent year to date, they upped that target to seventeen
to eight eighteen percent. The asset cap is lifted. They
showed a lot of progress that they've made, but they
also showed some opportunity. And here's what I think is interesting.
So one of the biggest areas of opportunity is the
consumer It when we had Lori Beer from JP Morgan,
(08:05):
the CIO of JP Morgan, talk about where she sees
big opportunities. She actually talked about this out of JP
Morgan's investor day. Also the consumer unit also, like a
lot of the a lot of what she talked about
in terms of how technology was going to aid the
bank was in that it was productivity in the consumer unit.
So we're hearing that from Wells Fargo. So that really
(08:28):
gives me confidence that this is a numbork that they
can choot to. City Group, by the way, I think,
you know, they're also kind of showing the path right.
So City Group talking about the fact that they are
sort of two thirds the way there with their transformation
and we have Banamex coming. You know, it's pushed out
a little bit, but I think showing you the path
(08:49):
that you know, could that be City Group again talk
about an even longer time, but could could Could Jane
Frazier finally be the one to get it done?
Speaker 9 (08:58):
And I will point downe like with Wells Fogo now
up what eight point two percent for the date, it's
their best days since since selection nights, since Trump came
back to power. This could be Wells Fogo's best day
since then. So that is the power of putting a
target out there. And I point that out again only
because in a couple of weeks you will have Bank
of America with their investor Day, their first investor day
(09:19):
in fifteen years. It has also been the worst performing
big bank stock this air up only what fourteen percent?
Fourteen and change. It is important for Bank of America
to approach that investor day with a mindset of providing targets,
aspirational targets for the market, instead of wanting to go
out there or trying to explain to investors and analysts
(09:41):
what it is that they do. Because I think investors
will tell you they have a good understanding what they
want is better targets and what they want is them
achieving those targets, otherwise the stock will continue to languish.
Speaker 2 (09:51):
All right, I do want to mention a headline crossing
we are continuing to monitor President Trump there at the
White House. He is talking also about Russia and President
pu and saying President Putin does not want to end
the war, and then going on to say that the
Russian economy is going to collapse. So that is certainly
another one of the big geopolitical events and actions that
(10:12):
we've been keeping and something that the President has been
trying to bring it into and talked about that on
the campaign trail. But again, President Putin doesn't want to
end the war. That is the view from President Trump
at the White House. I knew you had one last
question you want to go.
Speaker 4 (10:23):
Yeah, I wanted to ask Alison about the best way
to value these companies. I was talking with Shri about
this on Bloomberg TV earlier and David George from Baird
also was saying, like, look, JP Morgan can be a
fantastic company, and it is, but the Sock is just
too expensive, which is why he doesn't have a by
rating on those shares. And then Sre and I were
looking through the price to book, what is the best
(10:44):
way how do the best bank investors look at valuations?
That makes the most sense for banks because I think
it's a little different than other equities.
Speaker 7 (10:53):
It is different because so if you think about banks, right,
versus other kind of companies, they use their balance sheet
to generate profits.
Speaker 6 (11:01):
And so that's why return on tangible.
Speaker 7 (11:06):
Common equity is a key metric, right, because the more
profitability that you can generate using your balance sheet, the
more you're willing to pay.
Speaker 6 (11:15):
So that's a little bit.
Speaker 7 (11:15):
Different than pe You all notice that price to book
is really favored in downturns. It's a place where people
look for, you know, in terms of you know, one
time's price to book is sort of if you if
you liquidate the bank, what can I get for this
versus the ongoing returns. And that's why you have companies
(11:36):
like City Group trading below tangible book or below book,
which obviously they've made a lot of progress since then,
but for a long time.
Speaker 3 (11:45):
You know, trading it like value well.
Speaker 7 (11:49):
Well, and the European banks right, because they're they're not
earning their colastic capital, so basically you're eroding value over
the time. So that's sort of the opposite, and so
I think, you know, those are kind of like two
different ways to think about it. By the way, JP
Morgan management also talking about they're not liking to buy
shares back at this level.
Speaker 6 (12:08):
I heard that.
Speaker 7 (12:09):
You know, they're pretty daring that they're willing to call
that out. But from an equity investors standpoint, that's not
really helpful either.
Speaker 2 (12:16):
Hey, twenty second three, what do we have b of
A and Morgan Stanley tomorrow? Just quickly what you're watching
out for, We'll.
Speaker 3 (12:22):
Be away Monngusigny tomorrow.
Speaker 9 (12:23):
Again, we have analyst expectations set out there, so we're
hoping they'll go and beat them. But which brings us
back full circle to Matt's original point, like, I don't
know what he wants an listed or should they apply
humility premium to when executives guide.
Speaker 4 (12:35):
Drive If I were if I were estimating someone's earnings,
I would try and get it right. And if I
got it, if I was low balling it for the
last nine out of ten quarters, I would just add twenty.
Speaker 3 (12:45):
Percent of doing it.
Speaker 6 (12:47):
Based on how the executives are guiding you, What do
you want to do right?
Speaker 7 (12:49):
Check a?
Speaker 2 (12:51):
Hey, kids, take this outside. Okay, all right, we're going
to continue this conversation. We will hear at Bloomberg as
we continue the bank earnings throughout the rest of this week.
Speaker 6 (12:59):
Stay with us. More from Bloomberg Business Week Daily coming
up after this.
Speaker 1 (13:08):
You're listening to the Bloomberg Business Week Daily Podcast. Catch
us live weekday afternoons from two to five e's during
Listen on Applecarplay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 2 (13:22):
All right, everybody, Yes, Indeed, Bloomberg Business Week Daily continuing
on this Tuesday, Carol Master, Tim is Off Isabelle Lee
in the house and one of the names that we've
been keeping a watch on. Today's AMD at its highs
today up as much as almost four percent, i should say,
finishing the day with a game of about eight tenths
of a percent. This after saying Oracle will deploy a
large batch of its forthcoming M fourteen fifty chips next year.
(13:46):
I hope I'm saying it right, but if not, I'm
going to check in with Ian King, who will set
the record straight. The news coming about one week after
AMD into chip deal with open Ai that triggered an
explosive rally in AMD shares a stock on October sixth
rallying ome almost forty percent in today that day, AMD,
by the way, up around eighty percent or so here today.
So let's get the latest on IS reporting and what
(14:08):
AMD and Oracle are up to. Bloomberg News US semiconductor
reporter Ian King with us from our.
Speaker 6 (14:13):
San Francisco News bureau.
Speaker 2 (14:16):
Ian, good to have you here with Isabelle and me.
Tell us about this deal. What exactly it's all about?
Speaker 10 (14:23):
Yeah, I mean, the first thing to point out is
that these chips don't actually exist yet. This is a
planned update of the product line m I four fifty
is what they're called, and these are going to be
coming out sort of this time next year from AMD.
So the way to look at this is it's an
affirmation that from Oracle to AMD that hey, you guys
(14:46):
have got a big role to play in our data
centers going forward. And this kind of adds on to
that open AI agreement that you've already spoken about. So
it's it's a future based thing, but it's a confirmation
that AMD is has a seat at the table here.
Speaker 11 (15:02):
So what factors make Oracle an attractive partner for AMD
And how does this, just this collaboration fit with a
broader trend of cloud providers securing their own AI infrastructure.
Speaker 10 (15:13):
Yeah, I mean, if you're going to ask me to
unravel the spaghetti of connections between them all, I'm afraid
you're talking to the wrong person. But let's just I mean,
I think the best way to look at that is
to say that Oracle is obviously being enormously aggressive, spending
very heavily, trying to push itself, trying again to get
(15:33):
a seat at the table here to be a cloud
service provider along with the scale that perhaps rivals somebody
like an Amazon or a Google. It's clearly not there yet,
but it sees a future in deploying this technology and
is making a big bet to sort of get there.
So naturally, if you're wanting to provide components into that market,
(15:54):
having some exposure to Oracle being one of their key
suppliers is a good move.
Speaker 2 (16:00):
That's what I was wondering. I always think about this,
you know, who gets more out of this deal? Is
it equal or is it I love what you said
about Oracle being very aggressive, and we've certainly seen Oracle
be very aggressive I feel like over the last couple
of months, but is this more a thing about AMD,
more about Oracle or both Ian?
Speaker 10 (16:17):
Yeah, I mean the recent story has I would say,
you know, obviously there are these big buyers of the chips,
and we have to see those chip orders made and
those purchases go ahead, and that turned into revenue. But really,
am D, you know, just for perspective, has less than
two percent of the market for accelerators. Guess who has
the rest in video obviously, right, So two percent is
(16:41):
better than anybody else though, and is still several billion dollars,
which is very good for AMD and has certainly boyd
its fortunes. But is two percent really, you know, a
sustainable market presence. The answer is probably not. AMD obviously
has to evolve from there, has to get more and
more confidence from these big buyers who frankly, you know
(17:06):
you're not going to get fired for buying an invidio
system right now if you're a purchase manager because everybody
else is, why should you take a risk on AMD?
So it's very much up to AMD to sort of
create a set of reasons for people to make those bets.
And it looks like that's happening.
Speaker 11 (17:21):
And we know that deployment is said to begin next
year expansion twenty twenty seven and beyond.
Speaker 6 (17:25):
Are we expecting any kind of.
Speaker 11 (17:27):
Challenges on the part of AMD to ensure maybe timely
delivery or managing the supply chain.
Speaker 10 (17:34):
Yeah, I mean chips are difficult, right, You put billions
of transistors on a very tiny piece of silicon and
something can and will go wrong. But it has to
be said in AMD's favor. They have said, hey, we'll
have a product ready and it's been ready on time.
Then we'll have another one ready and it'll be better,
and that's come on time. So this isn't the first
ever entree for them into this market. This is the
(17:56):
you know, third or fourth generation of their chips, and
they have all got better. They all have been delivered
on time, which is obviously gaining credibility for that company
in that company's presence. So, yes, a lot can go
wrong and does go wrong for chips, but not recently
for AMD. If you want to look at things going wrong, unfortunately,
that's been an Intel story, not an AMD story recently.
Speaker 2 (18:16):
Hey, one of the things Ian We were just talking
with Caiten matt Over on the TV side, And when
I mentioned AMD as kind of one of the gainers
and stocks I was looking at and that Oracle will
put fifty thousand of the semiconductors in data center computers
starting the third quarter of twenty twenty six, mass Like,
is that even a lot? And so I'm looking at
(18:36):
your story where you say in the second quarter, AMD
shipped about one hundred thousand AI processors. It seems like
fifty thousand is a lot, is it?
Speaker 6 (18:44):
Though?
Speaker 10 (18:46):
It really depends where we are at that particular point
in AMD's ideal world. It won't be a huge part
of their of their shipments, and again we don't know
exactly know how quickly those shipments will be made, but
it is significant. This is a major player, and that
is not a small number. It's not the kind of
(19:07):
millions or hundreds of thousands obviously in video ships, but
it is a significant amount.
Speaker 6 (19:12):
How does this affect in video?
Speaker 11 (19:14):
In video's current dominance in air processors, I think in videos? Still, King,
are you expecting this to take into the market share
or eat into the market share when it comes to
AMD taking to scale production?
Speaker 10 (19:27):
Yeah, I mean, if you believe in videer and if
you believe everybody else. We're on a rocket to the moon,
right that everything is going up. The market is growing
at an almost exponential rate, and there's a room for everybody. So,
you know, growth for AMD, even rapid growth for AMD,
doesn't necessarily take away from what in VideA is achieving.
(19:50):
But can we really believe that has there ever been
a market that's gone up like this forever? And the
answer is obviously not. And so at a certain point,
can A and D established a sustainable presence and create
what is, frankly at this point the only likely sort
(20:10):
of viable competitor to in video and then perhaps move
on from there and actually begin to take market share
away from it in a meaningful way. That is definitely
in the TVD character to agree right now, you know,
one point nine percent whatever market share they're at versus
you know, ninety eight close market share percent. That's that's
(20:30):
a long way to go before anybody needs to get worried.
Speaker 6 (20:33):
Yeah, it's a it's a huge gap. Hey.
Speaker 2 (20:36):
One of the things I wanted to ask you Ian
before we go, because I was thinking about yesterday that
open AI Broadcom deal and you know, it just sent
shares of Broadcom rocketing, But I also looked at the socks.
It made me look at you know, every name I
think was was hire yesterday or almost every one same
thing today. A lot of names we've seen Actually today
(20:59):
was a little bit of a different rate. But it
just made me look at the socks, which is up
thirty two percent year to date. It's up about seventy
five percent from mid April. I mean, does it make
sense that every name is higher considering the spend in
what is going on?
Speaker 10 (21:16):
Yes and no. I mean there's a lot goes into
a data center. There are a lot of analog chips,
a lot of power converters, a lot of the basic
components that are needed to support these, you know, one
hundreds of thousands of dollars worth of computers. I'm talking
about an individual computer. So yes and no. But ultimately
the real winners here are it's just a handful of
companies and we've been talking about them. Broadcom is in
(21:37):
that conversation in video, is the absolute beneficiary of this already.
And AMD is trying to get in there and is
showing the best potential to actually get in there and
be a presence.
Speaker 6 (21:51):
Well, yeah, and certainly when we were talking about in
a big rate today, Ian, thank you so much.
Speaker 2 (21:55):
Appreciate your reporting finding some time once again for us
Bloomberg News US semiconductive reporter and king out there on
the West Coast. Stay with us. More from Bloomberg Business
Week Daily coming up after this.
Speaker 1 (22:11):
You're listening to the Bloomberg Business Week Daily Podcast. Catch
us live weekday afternoons from two to five eas During
that listen on Applecarplay and Android Otto with the Bloomberg
Business app, or watch us live on YouTube.
Speaker 2 (22:25):
Well, even so, the world is kind of moving on
and we're seeing the new conto tours of global commerce
taking off amid these global tariffs. Let's see what Enda
Current has to say and what it means in terms
of the global macro environment. He's Bloomberg News Global Economy Reporter.
He joins us from our Bloomberg News Washington DC bureau
and a good to have you here. First off, we
(22:45):
do see these Wall Street swings on what's coming out
between US and China. Why is this still just remind everybody,
why is this still the most important global economic relationship
in the world or is it starting to kind of
change a little bit?
Speaker 12 (22:58):
Well, they are the two worlds biggest economies. They are
of course completely interlocked with each other. China is the
world's biggest manufacturer, but of course America is their biggest customer.
It's the biggest consumer market in the world. So obviously
the trade tensions between them do spill over to everybody
kind of cut in the middle of that in terms
(23:18):
of supply chains, and that's what we're kind of seeing
some reaction or some response down to the rest of
the world. And even if your starting point is that, yes,
we'll always have to do business with America because the
consumer are so powerful there, trading partners are kicking tires
and hang on a sec who else can I do
business with? How else can I diversify my markets? China
is looking around, say buying more agricultural producce from South America,
(23:42):
as we know, but also its exports are going gangbusters
through parts of the world other than America, And then
those other countries in the middle are saying, you know,
who else can we start doing more trade deals with.
They're accelerating trade negotiations, they're accelerating ways of doing business
with each other, looking for new markets. So it's very
early stages but that US China trade war is starting
to poke film change the global trades.
Speaker 7 (24:04):
You know.
Speaker 4 (24:04):
I mean, I think the question is the question that
JD Vance probably doesn't have an answer to. Can China
be cut off from US trade longer than we can
stay solvent because the rare earth minerals that they have
we cannot get in size from anywhere else, and we're
not going to be able to process them here to
(24:27):
refine them here anytime soon. So, you know, Meredith Whitney,
in a note on Sunday said, aside from the massive
dependence on the US industrial complex complex for these rare
earth metals and magnets, the US military is one hundred
percent dependent on them and nearly depleted of its reserves.
Speaker 3 (24:47):
So I mean, don't we need them more than they
need us right now?
Speaker 8 (24:52):
Yeah?
Speaker 12 (24:52):
I think we're all at a point now where we
are fully aware that if there is a vulnerability in
the hulkish trade sounds that the US take on China,
it's unware earth supplies. China is the one digging out
of the ground. China is the one that's taking on
the refining risk there, environmental risk and the cost associated
with it at a scale that no other country is doing.
(25:14):
And that's why American and everybody else is so relined
on China and getting those minerals out here. And that's
why China. Of course it's well aware of its leverage.
It's floated those export controls that it did last week
or the week before that. Of course, the cent shock
waves not just through the US but the rest of
the world too, and China is making clear that it's
in control of these Now. This is a policy error
though if you go back maybe fifteen years ago, there
(25:36):
was a big there was a discussion around rare earth supply.
At that time, there were other options on the table.
It's not just China that has these minerals. Other countries
could have put money into the ground and put the
money into the resources and the facilities needed to extract
these or are some companies in the US that are
talking about or trying to get off the ground at
the moment in doing this. But the point is where
at the stage where China has a grip and a
(25:57):
lock on the system to the point where everybody else
is years behind. It will take a long time.
Speaker 3 (26:01):
Well, it's not just getting them out of the ground.
Speaker 4 (26:03):
And I mean I talked to industrial CEOs who do
business globally and have told me, look, we've seen the
refining process in China and it is horrific. It is
the kind of environmental risk that American voters just would
not be willing to take. So no one else can
(26:25):
refine them at these levels, at least with today's methods,
without sacrificing like a portion of humanity.
Speaker 3 (26:33):
So we're not going to do that, are.
Speaker 12 (26:34):
We, well, and that's entirely right. Environmental risk is a
big part of the equation. But there are some companies,
by the way, there are, including some of the US,
who are looking for cleaner ways to do this. So
but obviously nothing like on the scale that China currently offers.
But other countries as well are coming to the table. Pakistan,
for example, it's floating itself as a potential partner for
these minerals for the US. They can be sourced from
(26:57):
other countries too. That's why Argentina is in the mix
at the moment. When we talk about the support that
the US Treasury is offering Argentina, one of the reasons
is because of the minerals that Argentina has. So but yes,
the point is that no one's doing it on the
scale that China is right now, and until that changes,
China has leverage over the rest of the global trading system.
Speaker 2 (27:16):
Hey, I want to go into your story that looks
at global trade flows and you look at what ship
shipping companies are seeing in some of the changes. But
there's a quote in the story and associate professor of
economics at the University of California at Davis, Ina Simonoviska,
and it's this individual saying, it's very clear that we are.
Speaker 6 (27:34):
Redrawing the map of international trade.
Speaker 2 (27:36):
We're going to see a lot more bilateral trade agreements
between countries and subgroups of countries. She predicts, this, what
does that mean for economic growth for individual countries and
for the global economy overall?
Speaker 6 (27:47):
Do we know anything in it? Is it good? Is
it bad?
Speaker 12 (27:51):
Well, it's early stages, but we're getting we are seeing
signs now that countries are looking at accelerating trade negotiations
with each other and signing deals with each other.
Speaker 4 (28:01):
Now.
Speaker 12 (28:01):
The European Union is one example. They've finally gotten that
deal signed with Indonesia. They are getting that big trade
in negotiation with South American recursor off the ground trying
to get that ratified. Other countries are also looking at
doing business more with each other. New Zealand and Switzerland
and the UAE are among a group who've gotten together
and it's kind of a loose trading agreement that they've
(28:24):
pulled together over recent months. And the point of all
of this is is, as I said at the start,
it's nobody suggesting the US is not the world's biggest
consumer market and that they don't want to do business here.
That's not the point. But they're seeing the tariffs going
up at the fastest pace since World War Two. It's
more complicated, more costly for some of the businesses who
want to do trade with the US, and they're asking
(28:44):
what else can they do to diversify and mix up
their supply lands and their their markets. And we're seeing
it in Peruvian fruit farmers. They're looking for new all
alternative markets. In Lisoto, they're looking for alternative textile markets,
maybe in Europe and in Asia. So you know, as
I say it to tireful when it's gone open. On
(29:05):
the US side, it's not about countries not wanting to
do business here, but they are certainly kicking tires on
where else they can diversify, and that's what these trading
gotations are getting. A shot in the arms of one
of the professors that quoting the articles said.
Speaker 2 (29:17):
To us, all right, we're talking with the end of
current Global economy reporter at Bloomberg News in our DC bureau.
At the same time, we are monitoring the White House,
the Cabinet room. President Trump is there with President Malay
of Argentina. They are having a bilateral lunch and obviously meeting.
We're monitoring any headlines that come out of that meeting.
(29:38):
In the meantime, you know, and you talk about in
this story, these bilateral relationships, or at least folks that
you talk to are talking about a lot more bilateral
trade agreements. Who wins those big countries, small countries, middle
sized countries. Is there clear winners and losers on that metric.
Speaker 12 (29:57):
Well, probably the biggest countries as well will be the
ones who come out of is in better order. Because
you know, the system up until now, whether one agrees
with it or not, but the broad system, up until
a few years ago, had been rules of the road
set by the World Trade Organization. This is where countries
big and small could come together and have their disagreement
and argue out their case for whatever their grievance was.
(30:18):
In the trade world, but you know, we've moved past
that now. We're kind of moving to this bilateral sort
of approach to doing trade deal. So when you have
a big country, they are able to set the terms
on the table, and the smaller country, of course, has.
Speaker 4 (30:33):
To work around that.
Speaker 12 (30:34):
And that's where we are. It's not just it's not
just the US, of course, China is the other big
player in the global trading system. They, as we just
spoke about, hold the cards in so many areas now
when it comes to not just rare earths, but they're
the world's you know, a factory, so they also will
set terms and countries. They're worried about China's volume of
exports and trying to compete against China too, given the
(30:56):
scale and competitiveness in which they can produce products versus
our countries. So my big picture is better for bigger
countries for smaller countries.
Speaker 2 (31:04):
All right, end to current, Thank you so much on
today's news and his story Global Economy reporter at Bloomberg News.
You can read the entirety of it. It's on the
Bloomberg and at Bloomberg dot Com. Stay with us more
from Bloomberg Business Week Daily coming up after this.
Speaker 1 (31:22):
You're listening to the Bloomberg Business Week Daily Podcast. Catch
us live weekday afternoons from two to five East during
Listen on Applecarplay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 6 (31:37):
Mcle.
Speaker 4 (31:38):
How about you let me drive?
Speaker 3 (31:39):
Oh no, no, no no, this is not a toy, honey, Please,
I'll do the gravels. Excuse me, I want to drive.
Speaker 6 (31:48):
It's a good question, good time. This is the Drive
to the Clothes on Bloomberg Radio.
Speaker 2 (32:01):
All right, folks, let's get to it. We've got about
eighteen minutes to go until we wrap up the trade
on this Tuesday. Carol Master along with Isabelle Lee Tim
is off this week, and we've got a market that's
just rolling over its best levels of the session.
Speaker 6 (32:13):
So what does that mean.
Speaker 2 (32:14):
We're down about twelve points on the S and P
five hundred, and we've got the Nasdaq one hundred, which
has been under more pressure today. It's not about two
thirds of one percent, it's down about one hundred and
sixty one points. I look at the S and p
five hundred, though Isabelle still most names in the index
are higher today.
Speaker 6 (32:29):
Can I talk about crypto, You can talk about crypto.
Speaker 11 (32:32):
Bitcoind is down by more than three percent, and Ether
is the one leading the broader down turn. Actually it's
the largest all point. It's down by almost five percent,
wiping out really billions since the biggest one day industry
drop on Friday.
Speaker 6 (32:44):
We've seen crypto under pressure as of late, right.
Speaker 11 (32:47):
A lot of pressure, and that really raises a question
of we thought this was the haven, but then it's
behaving like a risk acid.
Speaker 2 (32:53):
It's really funny because I feel like, yeah, we see
it exactly exactly, we see it kind of following the
markets really closely. Hey, let's get to some of the
earnings that we saw today. We've talked about the big
banks so far that we're out early this morning. Another
one that came out is Blackrock stocks up about three
and a half percent in today's session. Rolling is the
(33:13):
world's largest fund manager, pulled in two hundred and five
billion of client money in the third quarter and expanded
its footprint in private credit and all assets. As we
drive to the close, Kathy Seaffort is with us. She's
vice president of CFA Research, she covers Blackrock. She joins
us from New Jersey. Kathy, good to have you here
with Isabelle and me. Blackrock investors like what they got
(33:35):
from the company. Tell me about it. This company massive
sees so much they continue to grow. Do you like
what you heard from the company?
Speaker 13 (33:46):
Yes, I do, and I have a buy recommendation on Blackrock,
and I was encouraged by what I heard on the
call and also in the numbers they reported. And basically
Blackrock laid outstretch of basically having three pillars of growth
strong ETF, a strong ETF offering and strong ETF inflows,
(34:09):
an increased exposure to alternative assets, and an enhanced suite
of offerings in its technology services business trademarked Aladdin. And
in the quarter we saw basically it hitting on all
of those cylinders. You know, the market has been decent
this quarter, and I think a lot of asset managers
(34:32):
are going to see their assets under management grow because
of decent market performance. But it's important to see who's
bringing in or who's you know, who's producing organic growth,
who's bringing assets in the door and in that you know,
on that score, black Rock really hit it out of
the park this quarter.
Speaker 11 (34:49):
So you detailed the three pillars driving the growth, but
what caught my eye is that private markets and tech
services revenue now exceed those from ETFs and fixed income.
And I'm an ETF reporter, so this really my antenna.
Was that outcome anticipated or were you expecting that?
Speaker 13 (35:05):
Well, that growth that we saw in the quarter is
basically there's some year to year bumps because of the
inclusion of some acquisitions.
Speaker 14 (35:13):
That's not likely to be a run rate.
Speaker 13 (35:15):
But nevertheless, one of the strategies at Blackrock is to
increase revenue contributions from both their technology business and their
private market business. And you know, if you'll recall, they've
spent the last couple of years pretty aggressively acquiring really
(35:36):
pipelines in the private market and alternative assets space through
which they can grow product. I mean, I think they
did it very intelligently, and I think what we saw
this quarter was the fruits of their labor, which is
a positive.
Speaker 11 (35:52):
Speaking of private markets, we saw that fees there have
grown around one hundred and thirty six percent year over
year through third quarter of twenty twenty five. How sustainable
is that growth, especially as we enter this really challenging
macro and economic macro and rate environment.
Speaker 14 (36:08):
Well, I mean that.
Speaker 13 (36:09):
Growth is not a run rate, and it reflects a
contribution from acquisitions.
Speaker 14 (36:13):
But I do think that they can produce on a.
Speaker 13 (36:16):
Firm wide basis mid teen revenue growth, which is significantly
gright than many of their peers. And if you look
at the asset management space on one end of the spectrum,
you have kind of the traditional long only asset managers,
many of homer bleeding assets, and you have the private
equity firms that have had really good performance but recently
(36:38):
have struggled a little bit because there's some issues with
realizations and whatnot. Sort Of in the middle of that
is black Rock, which is sort of a hybrid of
both models. So I think the private or the alternative
asset revenue contribution will enhance overall revenue growth. But the
(36:59):
ETF business, which is very deep and very broad and
also has made a number of innovations.
Speaker 14 (37:06):
You were talking about crypto before.
Speaker 13 (37:08):
Blackrock brought in more crypto assets than some of its
competitors brought in firm wide in this quarter, so you
know their suite of ETFs is really unmatched. And you
have the combination of those two things really widens the
competitive edge or the competitive moat around Blackrock.
Speaker 2 (37:29):
When you look at ALTS, crypto and then traditional assets,
is it just a moment of time or just before
we start to see alts and crypto on par with
traditional assets.
Speaker 6 (37:42):
In what way do you mean on it in terms
of making.
Speaker 2 (37:45):
Up their overall asset composition in terms of assets under management?
So I'm just saying, as we see the growth, we
know we hear from Larry Fink and from Blackrock overall
about the importance of private markets, private credit. So I'm
just curious if you see a moment in time or
are we ready there? Also what six hundred and sixty
three billion of client assets, So I guess we're kind
(38:07):
of there or close to it, right.
Speaker 13 (38:10):
We're close to it, But I don't, I mean, I
don't necessarilyly know if Blackrock is for is necessarily you know,
wanting that mix to shift that much. I mean, there
is there is a positive to having alternative assets. They
tend to not be as correlated to the broader markets
(38:31):
as you.
Speaker 14 (38:31):
Know equities and fixed incomes are.
Speaker 13 (38:34):
But you know, for Blackrock it was important because the
ETF business was becoming increasingly commoditized. Fee structures were pretty
rapidly decelerating. Shifting into alts and private credit. You know,
achieved several goals. It enhances their competitive position, but it
also enhances their revenue growth, which is important.
Speaker 2 (38:57):
Is there any question that wasn't answered for you just
got about twenty five seconds.
Speaker 13 (39:02):
No, I think the one, you know, the one issue
at Blackrock is a succession issue. I don't think Glary
Fink is leaving any time soon, but that's always, you know,
that's kind of always an issue, and sort of what
executive changes they're going to make to sort of bolster
their operations amid this asset mix shift.
Speaker 6 (39:22):
All right, Going to leave it on that note, Kathy,
great to get some time with you. Kathy Seafert.
Speaker 2 (39:25):
She's vice president CFA Research covering Blackrock. As she mentioned
at the top, she does have a by rating on
the stock Blackrock shares up three point six percent. Do
you want to share on a competing network Blackrocks to
E Larry Fink said AI is not a bubble, but
there will be failures. And he said on AI in
terms of I guess their own spending, this is capital that.
Speaker 6 (39:46):
Is mostly well spent. I know, right, Yeah, time will tell.
Speaker 1 (39:51):
This is the Bloomberg Business Week Daily podcast, available on Apple, Spotify,
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(40:11):
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(00:23):
news as it happens. The Bloomberg Business Week Daily Podcast
with Carol Masser and Tim Stenebeck on Bloomberg Radio.
Speaker 2 (00:32):
One group that has done really well today as a whole,
we're talking about big banks or banks over all the
KBW Bank Index folks up two point three percent. Two
of the twenty four names are higher. In today's session, We've.
Speaker 3 (00:45):
Two big ones lower. Two of the big ones are lower.
Speaker 4 (00:48):
Two of the biggest names on the entire index are lower.
Speaker 5 (00:51):
This is what's interesting, because JP Morgan, Goldman, Wells City
all reporting JP Morgan and Goldman selling off, right, Yeah,
those are the two names you're talking about, and Wells
and City Mettre.
Speaker 4 (01:03):
Are reelling in, I mean, and you get headlines like
JP Morgan beats expectations on every level, Goldman Sachs knocks
the cover off the ball. Analysts can't believe how well
they did, and yet the stocks sell off.
Speaker 2 (01:14):
But remember something like JP Morgan has had quite a
run this year, so, you know, expectations and reality. Perhaps
let's see what our experts have to say. Bloomberg News
Chief Wall Street correspondent Shriet ot Rajan's here in studio
along with Bloomberg Intelligence Senior Alice for Global Investment Banks
and Asset Managers, Allison Williams, as I said, both in studio,
A right, guys, let's start with JP Morgan, because I
(01:35):
feel like that's the bank that we want to always
hear from.
Speaker 6 (01:38):
Allison, let me start with you.
Speaker 2 (01:39):
What do we need to know about the numbers in
JP Morgan's business, because, as Matt said, sometimes the headlines
look darn.
Speaker 7 (01:44):
Good and the quarter was darn good. It's just that
I think there are some bullish investors out there that
wanted more, and if you did, you know so on
today they're underperforming. But if you look at your to date,
if you look at their valuation, if you look at
their year to returns, I'm sorry, you look at their profitability,
all very very good executing well think that you know,
(02:04):
maybe some people just wanted some more.
Speaker 8 (02:06):
There.
Speaker 7 (02:07):
Goldman Sachs also strong quarter. They did miss on equities trading,
so you know, these numbers are hard to predict, but
I think, you know, most people, including myself, you know,
if you had seen sort of that that upside would
give you sort of further confidence in the momentum going
into the next quarter. But the M and A advisory
business huge outperformance there. We think they probably outperformed most
(02:31):
people in the quarter. They're the lead in that revenue.
They announced this AI program. There's details, you know, we're
gonna have to wait till January for details, but that
signals that efficiency is going to get better.
Speaker 8 (02:43):
You know.
Speaker 7 (02:43):
Contrast, you know two companies that are really performing very
well to two companies that are I think have a
lot of runway.
Speaker 6 (02:51):
Ahead of them, and that's well as Fargo and Citygroup.
Speaker 4 (02:53):
Can I just ask before we get to Street, because
I've already asked him like ten times today, why do
the analysts consistently underestimate what these banks are doing? And
it can't just be to get on the good side
of management. Right when I see this morning, before any
earnings came out, I saw stories about which bank was
(03:14):
going to beat estimates. So when I see bank expected
to top estimates, I wonder why analysts don't add more
to the estimates. What is this game all about.
Speaker 7 (03:23):
Well, first of all, trading and when it's capital markets
revenue that really is the source of the upside. That
is very tough. And banks are not going to guide you, right,
you know, they don't really have an incentive to guidecause,
by the way, like the last couple of days of
the quarter could be horrible or you don't know what's
going to happen, And so I think banks are going
(03:45):
to tend to guide conservatively. Analysts are going to tend
to be conservative, right because that and by the way,
like that just is not something that people bake into
the run rate. So as I said, you know, we're
positive about the momentum and trading.
Speaker 6 (04:00):
Yeah, the asset levels, et cetera.
Speaker 7 (04:02):
But I think if you're you know, forming estimates, you
are going to tend to be conservative, and that's why
you can get upside, especially if the strength comes at
the end of the quarter. It's just hard for the
estimates to catch up.
Speaker 2 (04:14):
Yeah, totally get it, all right, So we care about
JP Morgan's results. We also obsess over everything that Jamie
Diamond has to say.
Speaker 6 (04:21):
He never disappoints to something.
Speaker 2 (04:22):
That is highly quotable in this case, it was when
he was talking about a cockroach.
Speaker 6 (04:26):
Check it out.
Speaker 8 (04:28):
You should assume that every something happens, we scour all process,
all procedures, all underrunning, all everything, and you know, we
think we're okay and other stuff. My my intenda goes
up with things like that happened, and ihould probably shouldn't
say this, but when you see one cockroach, you're probably more,
you know, and so we we should everyone should be
(04:49):
four more than this one, all right?
Speaker 2 (04:51):
That, of course, was Jamie Diamond earlier today on jpm's
Earning Earning called should we come on in on this
because you're reporting on the quarter and you know most
importantly what Jamie Diamond has to say about the Macro
so I.
Speaker 9 (05:05):
Again, Jamie Diamond has been running the biggest US bank,
which has a bigger market cap today than its three
closest rivals combined. He's been doing that for nearly twenty years.
And he didn't get that, and he didn't stay there
just on the back of sitting on his laurels. Right,
he's paid to look around the corners, and he is
right to point out that the underlying numbers might be great.
(05:25):
They might be marching toward another record revenue year. But
when you see some of these problems, you initially try
and dismiss some of them as idiosyncratic, but if enough
of them start popping up, that becomes a concern. So
that's why when Diamond says, my antenna goes up when
things like that happen, we pay attention, especially because in
the last few days we've been seeing some action in
(05:47):
certain corners of the credit market where it does appear
that there is some fear seeping into the markets. Diamonds
specifically flicked at the publicly traded BDCs that hold a
lot of these private credit invest and if you look
at the discount to the net asset value that they're
going at, it makes you worry about what's happening with
some of the other non traded vehicles. Will there be
(06:09):
master redemptions and will there be domino effects off of that?
And Diamond also points out that he feels like they're
feeling very good about everything that if you look at
their numbers, you will not see any cause for stress, dismay, concern.
But Diamond is right in saying, eventually the cycle turns,
and when it does, he thinks that I suspect when
(06:30):
there's a downturn, his words, you will see higher than
normal downturn type of credit losses in certain categories. And
that's an important one to keep in mind because what
he's saying is your recovery rates might not be as
great as you imagine, and that will impact the firms,
and that will impact the investors in those firms.
Speaker 4 (06:50):
I want to ask about Wells Fargo. I'm so thankful
that Bloomberg Radio has such a great program in the mornings.
Nathan Hager and Karen Moscow were talking to you, Allison
before I even got to work yet, and I get
here pretty early, and you were saying, this is really
going to be the news of the day, and it
has been the outperformer of the day.
Speaker 2 (07:09):
Because can I just say finally, well because long and
so what's.
Speaker 3 (07:14):
The story with Wells Fargo?
Speaker 4 (07:16):
They raised their return on tangible equity.
Speaker 7 (07:20):
So the key metric for banks return on tangible common
equity valuations. You know, price to book is how a
lot of investors value these banks. It's based on the
return on capital. And you know, Charlie Sharffitt said years ago,
we're going to put fifteen percent out there as a target.
We'll revisit it at some point. They're running at fifteen
(07:40):
percent year to date, they upped that target to seventeen
to eight eighteen percent. The asset cap is lifted. They
showed a lot of progress that they've made, but they
also showed some opportunity. And here's what I think is interesting.
So one of the biggest areas of opportunity is the
consumer It when we had Lori Beer from JP Morgan,
(08:05):
the CIO of JP Morgan, talk about where she sees
big opportunities. She actually talked about this out of JP
Morgan's investor day. Also the consumer unit also, like a
lot of the a lot of what she talked about
in terms of how technology was going to aid the
bank was in that it was productivity in the consumer unit.
So we're hearing that from Wells Fargo. So that really
(08:28):
gives me confidence that this is a numbork that they
can choot to. City Group, by the way, I think,
you know, they're also kind of showing the path right.
So City Group talking about the fact that they are
sort of two thirds the way there with their transformation
and we have Banamex coming. You know, it's pushed out
a little bit, but I think showing you the path
(08:49):
that you know, could that be City Group again talk
about an even longer time, but could could Could Jane
Frazier finally be the one to get it done?
Speaker 9 (08:58):
And I will point downe like with Wells Fogo now
up what eight point two percent for the date, it's
their best days since since selection nights, since Trump came
back to power. This could be Wells Fogo's best day
since then. So that is the power of putting a
target out there. And I point that out again only
because in a couple of weeks you will have Bank
of America with their investor Day, their first investor day
(09:19):
in fifteen years. It has also been the worst performing
big bank stock this air up only what fourteen percent?
Fourteen and change. It is important for Bank of America
to approach that investor day with a mindset of providing targets,
aspirational targets for the market, instead of wanting to go
out there or trying to explain to investors and analysts
(09:41):
what it is that they do. Because I think investors
will tell you they have a good understanding what they
want is better targets and what they want is them
achieving those targets, otherwise the stock will continue to languish.
Speaker 2 (09:51):
All right, I do want to mention a headline crossing
we are continuing to monitor President Trump there at the
White House. He is talking also about Russia and President
pu and saying President Putin does not want to end
the war, and then going on to say that the
Russian economy is going to collapse. So that is certainly
another one of the big geopolitical events and actions that
(10:12):
we've been keeping and something that the President has been
trying to bring it into and talked about that on
the campaign trail. But again, President Putin doesn't want to
end the war. That is the view from President Trump
at the White House. I knew you had one last
question you want to go.
Speaker 4 (10:23):
Yeah, I wanted to ask Alison about the best way
to value these companies. I was talking with Shri about
this on Bloomberg TV earlier and David George from Baird
also was saying, like, look, JP Morgan can be a
fantastic company, and it is, but the Sock is just
too expensive, which is why he doesn't have a by
rating on those shares. And then Sre and I were
looking through the price to book, what is the best
(10:44):
way how do the best bank investors look at valuations?
That makes the most sense for banks because I think
it's a little different than other equities.
Speaker 7 (10:53):
It is different because so if you think about banks, right,
versus other kind of companies, they use their balance sheet
to generate profits.
Speaker 6 (11:01):
And so that's why return on tangible.
Speaker 7 (11:06):
Common equity is a key metric, right, because the more
profitability that you can generate using your balance sheet, the
more you're willing to pay.
Speaker 6 (11:15):
So that's a little bit.
Speaker 7 (11:15):
Different than pe You all notice that price to book
is really favored in downturns. It's a place where people
look for, you know, in terms of you know, one
time's price to book is sort of if you if
you liquidate the bank, what can I get for this
versus the ongoing returns. And that's why you have companies
(11:36):
like City Group trading below tangible book or below book,
which obviously they've made a lot of progress since then,
but for a long time.
Speaker 3 (11:45):
You know, trading it like value well.
Speaker 7 (11:49):
Well, and the European banks right, because they're they're not
earning their colastic capital, so basically you're eroding value over
the time. So that's sort of the opposite, and so
I think, you know, those are kind of like two
different ways to think about it. By the way, JP
Morgan management also talking about they're not liking to buy
shares back at this level.
Speaker 6 (12:08):
I heard that.
Speaker 7 (12:09):
You know, they're pretty daring that they're willing to call
that out. But from an equity investors standpoint, that's not
really helpful either.
Speaker 2 (12:16):
Hey, twenty second three, what do we have b of
A and Morgan Stanley tomorrow? Just quickly what you're watching
out for, We'll.
Speaker 3 (12:22):
Be away Monngusigny tomorrow.
Speaker 9 (12:23):
Again, we have analyst expectations set out there, so we're
hoping they'll go and beat them. But which brings us
back full circle to Matt's original point, like, I don't
know what he wants an listed or should they apply
humility premium to when executives guide.
Speaker 4 (12:35):
Drive If I were if I were estimating someone's earnings,
I would try and get it right. And if I
got it, if I was low balling it for the
last nine out of ten quarters, I would just add twenty.
Speaker 3 (12:45):
Percent of doing it.
Speaker 6 (12:47):
Based on how the executives are guiding you, What do
you want to do right?
Speaker 7 (12:49):
Check a?
Speaker 2 (12:51):
Hey, kids, take this outside. Okay, all right, we're going
to continue this conversation. We will hear at Bloomberg as
we continue the bank earnings throughout the rest of this week.
Speaker 6 (12:59):
Stay with us. More from Bloomberg Business Week Daily coming
up after this.
Speaker 1 (13:08):
You're listening to the Bloomberg Business Week Daily Podcast. Catch
us live weekday afternoons from two to five e's during
Listen on Applecarplay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 2 (13:22):
All right, everybody, Yes, Indeed, Bloomberg Business Week Daily continuing
on this Tuesday, Carol Master, Tim is Off Isabelle Lee
in the house and one of the names that we've
been keeping a watch on. Today's AMD at its highs
today up as much as almost four percent, i should say,
finishing the day with a game of about eight tenths
of a percent. This after saying Oracle will deploy a
large batch of its forthcoming M fourteen fifty chips next year.
(13:46):
I hope I'm saying it right, but if not, I'm
going to check in with Ian King, who will set
the record straight. The news coming about one week after
AMD into chip deal with open Ai that triggered an
explosive rally in AMD shares a stock on October sixth
rallying ome almost forty percent in today that day, AMD,
by the way, up around eighty percent or so here today.
So let's get the latest on IS reporting and what
(14:08):
AMD and Oracle are up to. Bloomberg News US semiconductor
reporter Ian King with us from our.
Speaker 6 (14:13):
San Francisco News bureau.
Speaker 2 (14:16):
Ian, good to have you here with Isabelle and me.
Tell us about this deal. What exactly it's all about?
Speaker 10 (14:23):
Yeah, I mean, the first thing to point out is
that these chips don't actually exist yet. This is a
planned update of the product line m I four fifty
is what they're called, and these are going to be
coming out sort of this time next year from AMD.
So the way to look at this is it's an
affirmation that from Oracle to AMD that hey, you guys
(14:46):
have got a big role to play in our data
centers going forward. And this kind of adds on to
that open AI agreement that you've already spoken about. So
it's it's a future based thing, but it's a confirmation
that AMD is has a seat at the table here.
Speaker 11 (15:02):
So what factors make Oracle an attractive partner for AMD
And how does this, just this collaboration fit with a
broader trend of cloud providers securing their own AI infrastructure.
Speaker 10 (15:13):
Yeah, I mean, if you're going to ask me to
unravel the spaghetti of connections between them all, I'm afraid
you're talking to the wrong person. But let's just I mean,
I think the best way to look at that is
to say that Oracle is obviously being enormously aggressive, spending
very heavily, trying to push itself, trying again to get
(15:33):
a seat at the table here to be a cloud
service provider along with the scale that perhaps rivals somebody
like an Amazon or a Google. It's clearly not there yet,
but it sees a future in deploying this technology and
is making a big bet to sort of get there.
So naturally, if you're wanting to provide components into that market,
(15:54):
having some exposure to Oracle being one of their key
suppliers is a good move.
Speaker 2 (16:00):
That's what I was wondering. I always think about this,
you know, who gets more out of this deal? Is
it equal or is it I love what you said
about Oracle being very aggressive, and we've certainly seen Oracle
be very aggressive I feel like over the last couple
of months, but is this more a thing about AMD,
more about Oracle or both Ian?
Speaker 10 (16:17):
Yeah, I mean the recent story has I would say,
you know, obviously there are these big buyers of the chips,
and we have to see those chip orders made and
those purchases go ahead, and that turned into revenue. But really,
am D, you know, just for perspective, has less than
two percent of the market for accelerators. Guess who has
the rest in video obviously, right, So two percent is
(16:41):
better than anybody else though, and is still several billion dollars,
which is very good for AMD and has certainly boyd
its fortunes. But is two percent really, you know, a
sustainable market presence. The answer is probably not. AMD obviously
has to evolve from there, has to get more and
more confidence from these big buyers who frankly, you know
(17:06):
you're not going to get fired for buying an invidio
system right now if you're a purchase manager because everybody
else is, why should you take a risk on AMD?
So it's very much up to AMD to sort of
create a set of reasons for people to make those bets.
And it looks like that's happening.
Speaker 11 (17:21):
And we know that deployment is said to begin next
year expansion twenty twenty seven and beyond.
Speaker 6 (17:25):
Are we expecting any kind of.
Speaker 11 (17:27):
Challenges on the part of AMD to ensure maybe timely
delivery or managing the supply chain.
Speaker 10 (17:34):
Yeah, I mean chips are difficult, right, You put billions
of transistors on a very tiny piece of silicon and
something can and will go wrong. But it has to
be said in AMD's favor. They have said, hey, we'll
have a product ready and it's been ready on time.
Then we'll have another one ready and it'll be better,
and that's come on time. So this isn't the first
ever entree for them into this market. This is the
(17:56):
you know, third or fourth generation of their chips, and
they have all got better. They all have been delivered
on time, which is obviously gaining credibility for that company
in that company's presence. So, yes, a lot can go
wrong and does go wrong for chips, but not recently
for AMD. If you want to look at things going wrong, unfortunately,
that's been an Intel story, not an AMD story recently.
Speaker 2 (18:16):
Hey, one of the things Ian We were just talking
with Caiten matt Over on the TV side, And when
I mentioned AMD as kind of one of the gainers
and stocks I was looking at and that Oracle will
put fifty thousand of the semiconductors in data center computers
starting the third quarter of twenty twenty six, mass Like,
is that even a lot? And so I'm looking at
(18:36):
your story where you say in the second quarter, AMD
shipped about one hundred thousand AI processors. It seems like
fifty thousand is a lot, is it?
Speaker 6 (18:44):
Though?
Speaker 10 (18:46):
It really depends where we are at that particular point
in AMD's ideal world. It won't be a huge part
of their of their shipments, and again we don't know
exactly know how quickly those shipments will be made, but
it is significant. This is a major player, and that
is not a small number. It's not the kind of
(19:07):
millions or hundreds of thousands obviously in video ships, but
it is a significant amount.
Speaker 6 (19:12):
How does this affect in video?
Speaker 11 (19:14):
In video's current dominance in air processors, I think in videos? Still, King,
are you expecting this to take into the market share
or eat into the market share when it comes to
AMD taking to scale production?
Speaker 10 (19:27):
Yeah, I mean, if you believe in videer and if
you believe everybody else. We're on a rocket to the moon,
right that everything is going up. The market is growing
at an almost exponential rate, and there's a room for everybody. So,
you know, growth for AMD, even rapid growth for AMD,
doesn't necessarily take away from what in VideA is achieving.
(19:50):
But can we really believe that has there ever been
a market that's gone up like this forever? And the
answer is obviously not. And so at a certain point,
can A and D established a sustainable presence and create
what is, frankly at this point the only likely sort
(20:10):
of viable competitor to in video and then perhaps move
on from there and actually begin to take market share
away from it in a meaningful way. That is definitely
in the TVD character to agree right now, you know,
one point nine percent whatever market share they're at versus
you know, ninety eight close market share percent. That's that's
(20:30):
a long way to go before anybody needs to get worried.
Speaker 6 (20:33):
Yeah, it's a it's a huge gap. Hey.
Speaker 2 (20:36):
One of the things I wanted to ask you Ian
before we go, because I was thinking about yesterday that
open AI Broadcom deal and you know, it just sent
shares of Broadcom rocketing, But I also looked at the socks.
It made me look at you know, every name I
think was was hire yesterday or almost every one same
thing today. A lot of names we've seen Actually today
(20:59):
was a little bit of a different rate. But it
just made me look at the socks, which is up
thirty two percent year to date. It's up about seventy
five percent from mid April. I mean, does it make
sense that every name is higher considering the spend in
what is going on?
Speaker 10 (21:16):
Yes and no. I mean there's a lot goes into
a data center. There are a lot of analog chips,
a lot of power converters, a lot of the basic
components that are needed to support these, you know, one
hundreds of thousands of dollars worth of computers. I'm talking
about an individual computer. So yes and no. But ultimately
the real winners here are it's just a handful of
companies and we've been talking about them. Broadcom is in
(21:37):
that conversation in video, is the absolute beneficiary of this already.
And AMD is trying to get in there and is
showing the best potential to actually get in there and
be a presence.
Speaker 6 (21:51):
Well, yeah, and certainly when we were talking about in
a big rate today, Ian, thank you so much.
Speaker 2 (21:55):
Appreciate your reporting finding some time once again for us
Bloomberg News US semiconductive reporter and king out there on
the West Coast. Stay with us. More from Bloomberg Business
Week Daily coming up after this.
Speaker 1 (22:11):
You're listening to the Bloomberg Business Week Daily Podcast. Catch
us live weekday afternoons from two to five eas During
that listen on Applecarplay and Android Otto with the Bloomberg
Business app, or watch us live on YouTube.
Speaker 2 (22:25):
Well, even so, the world is kind of moving on
and we're seeing the new conto tours of global commerce
taking off amid these global tariffs. Let's see what Enda
Current has to say and what it means in terms
of the global macro environment. He's Bloomberg News Global Economy Reporter.
He joins us from our Bloomberg News Washington DC bureau
and a good to have you here. First off, we
(22:45):
do see these Wall Street swings on what's coming out
between US and China. Why is this still just remind everybody,
why is this still the most important global economic relationship
in the world or is it starting to kind of
change a little bit?
Speaker 12 (22:58):
Well, they are the two worlds biggest economies. They are
of course completely interlocked with each other. China is the
world's biggest manufacturer, but of course America is their biggest customer.
It's the biggest consumer market in the world. So obviously
the trade tensions between them do spill over to everybody
kind of cut in the middle of that in terms
(23:18):
of supply chains, and that's what we're kind of seeing
some reaction or some response down to the rest of
the world. And even if your starting point is that, yes,
we'll always have to do business with America because the
consumer are so powerful there, trading partners are kicking tires
and hang on a sec who else can I do
business with? How else can I diversify my markets? China
is looking around, say buying more agricultural producce from South America,
(23:42):
as we know, but also its exports are going gangbusters
through parts of the world other than America, And then
those other countries in the middle are saying, you know,
who else can we start doing more trade deals with.
They're accelerating trade negotiations, they're accelerating ways of doing business
with each other, looking for new markets. So it's very
early stages but that US China trade war is starting
to poke film change the global trades.
Speaker 7 (24:04):
You know.
Speaker 4 (24:04):
I mean, I think the question is the question that
JD Vance probably doesn't have an answer to. Can China
be cut off from US trade longer than we can
stay solvent because the rare earth minerals that they have
we cannot get in size from anywhere else, and we're
not going to be able to process them here to
(24:27):
refine them here anytime soon. So, you know, Meredith Whitney,
in a note on Sunday said, aside from the massive
dependence on the US industrial complex complex for these rare
earth metals and magnets, the US military is one hundred
percent dependent on them and nearly depleted of its reserves.
Speaker 3 (24:47):
So I mean, don't we need them more than they
need us right now?
Speaker 8 (24:52):
Yeah?
Speaker 12 (24:52):
I think we're all at a point now where we
are fully aware that if there is a vulnerability in
the hulkish trade sounds that the US take on China,
it's unware earth supplies. China is the one digging out
of the ground. China is the one that's taking on
the refining risk there, environmental risk and the cost associated
with it at a scale that no other country is doing.
(25:14):
And that's why American and everybody else is so relined
on China and getting those minerals out here. And that's
why China. Of course it's well aware of its leverage.
It's floated those export controls that it did last week
or the week before that. Of course, the cent shock
waves not just through the US but the rest of
the world too, and China is making clear that it's
in control of these Now. This is a policy error
though if you go back maybe fifteen years ago, there
(25:36):
was a big there was a discussion around rare earth supply.
At that time, there were other options on the table.
It's not just China that has these minerals. Other countries
could have put money into the ground and put the
money into the resources and the facilities needed to extract
these or are some companies in the US that are
talking about or trying to get off the ground at
the moment in doing this. But the point is where
at the stage where China has a grip and a
(25:57):
lock on the system to the point where everybody else
is years behind. It will take a long time.
Speaker 3 (26:01):
Well, it's not just getting them out of the ground.
Speaker 4 (26:03):
And I mean I talked to industrial CEOs who do
business globally and have told me, look, we've seen the
refining process in China and it is horrific. It is
the kind of environmental risk that American voters just would
not be willing to take. So no one else can
(26:25):
refine them at these levels, at least with today's methods,
without sacrificing like a portion of humanity.
Speaker 3 (26:33):
So we're not going to do that, are.
Speaker 12 (26:34):
We, well, and that's entirely right. Environmental risk is a
big part of the equation. But there are some companies,
by the way, there are, including some of the US,
who are looking for cleaner ways to do this. So
but obviously nothing like on the scale that China currently offers.
But other countries as well are coming to the table. Pakistan,
for example, it's floating itself as a potential partner for
these minerals for the US. They can be sourced from
(26:57):
other countries too. That's why Argentina is in the mix
at the moment. When we talk about the support that
the US Treasury is offering Argentina, one of the reasons
is because of the minerals that Argentina has. So but yes,
the point is that no one's doing it on the
scale that China is right now, and until that changes,
China has leverage over the rest of the global trading system.
Speaker 2 (27:16):
Hey, I want to go into your story that looks
at global trade flows and you look at what ship
shipping companies are seeing in some of the changes. But
there's a quote in the story and associate professor of
economics at the University of California at Davis, Ina Simonoviska,
and it's this individual saying, it's very clear that we are.
Speaker 6 (27:34):
Redrawing the map of international trade.
Speaker 2 (27:36):
We're going to see a lot more bilateral trade agreements
between countries and subgroups of countries. She predicts, this, what
does that mean for economic growth for individual countries and
for the global economy overall?
Speaker 6 (27:47):
Do we know anything in it? Is it good? Is
it bad?
Speaker 12 (27:51):
Well, it's early stages, but we're getting we are seeing
signs now that countries are looking at accelerating trade negotiations
with each other and signing deals with each other.
Speaker 4 (28:01):
Now.
Speaker 12 (28:01):
The European Union is one example. They've finally gotten that
deal signed with Indonesia. They are getting that big trade
in negotiation with South American recursor off the ground trying
to get that ratified. Other countries are also looking at
doing business more with each other. New Zealand and Switzerland
and the UAE are among a group who've gotten together
and it's kind of a loose trading agreement that they've
(28:24):
pulled together over recent months. And the point of all
of this is is, as I said at the start,
it's nobody suggesting the US is not the world's biggest
consumer market and that they don't want to do business here.
That's not the point. But they're seeing the tariffs going
up at the fastest pace since World War Two. It's
more complicated, more costly for some of the businesses who
want to do trade with the US, and they're asking
(28:44):
what else can they do to diversify and mix up
their supply lands and their their markets. And we're seeing
it in Peruvian fruit farmers. They're looking for new all
alternative markets. In Lisoto, they're looking for alternative textile markets,
maybe in Europe and in Asia. So you know, as
I say it to tireful when it's gone open. On
(29:05):
the US side, it's not about countries not wanting to
do business here, but they are certainly kicking tires on
where else they can diversify, and that's what these trading
gotations are getting. A shot in the arms of one
of the professors that quoting the articles said.
Speaker 2 (29:17):
To us, all right, we're talking with the end of
current Global economy reporter at Bloomberg News in our DC bureau.
At the same time, we are monitoring the White House,
the Cabinet room. President Trump is there with President Malay
of Argentina. They are having a bilateral lunch and obviously meeting.
We're monitoring any headlines that come out of that meeting.
(29:38):
In the meantime, you know, and you talk about in
this story, these bilateral relationships, or at least folks that
you talk to are talking about a lot more bilateral
trade agreements. Who wins those big countries, small countries, middle
sized countries. Is there clear winners and losers on that metric.
Speaker 12 (29:57):
Well, probably the biggest countries as well will be the
ones who come out of is in better order. Because
you know, the system up until now, whether one agrees
with it or not, but the broad system, up until
a few years ago, had been rules of the road
set by the World Trade Organization. This is where countries
big and small could come together and have their disagreement
and argue out their case for whatever their grievance was.
(30:18):
In the trade world, but you know, we've moved past
that now. We're kind of moving to this bilateral sort
of approach to doing trade deal. So when you have
a big country, they are able to set the terms
on the table, and the smaller country, of course, has.
Speaker 4 (30:33):
To work around that.
Speaker 12 (30:34):
And that's where we are. It's not just it's not
just the US, of course, China is the other big
player in the global trading system. They, as we just
spoke about, hold the cards in so many areas now
when it comes to not just rare earths, but they're
the world's you know, a factory, so they also will
set terms and countries. They're worried about China's volume of
exports and trying to compete against China too, given the
(30:56):
scale and competitiveness in which they can produce products versus
our countries. So my big picture is better for bigger
countries for smaller countries.
Speaker 2 (31:04):
All right, end to current, Thank you so much on
today's news and his story Global Economy reporter at Bloomberg News.
You can read the entirety of it. It's on the
Bloomberg and at Bloomberg dot Com. Stay with us more
from Bloomberg Business Week Daily coming up after this.
Speaker 1 (31:22):
You're listening to the Bloomberg Business Week Daily Podcast. Catch
us live weekday afternoons from two to five East during
Listen on Applecarplay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 6 (31:37):
Mcle.
Speaker 4 (31:38):
How about you let me drive?
Speaker 3 (31:39):
Oh no, no, no no, this is not a toy, honey, Please,
I'll do the gravels. Excuse me, I want to drive.
Speaker 6 (31:48):
It's a good question, good time. This is the Drive
to the Clothes on Bloomberg Radio.
Speaker 2 (32:01):
All right, folks, let's get to it. We've got about
eighteen minutes to go until we wrap up the trade
on this Tuesday. Carol Master along with Isabelle Lee Tim
is off this week, and we've got a market that's
just rolling over its best levels of the session.
Speaker 6 (32:13):
So what does that mean.
Speaker 2 (32:14):
We're down about twelve points on the S and P
five hundred, and we've got the Nasdaq one hundred, which
has been under more pressure today. It's not about two
thirds of one percent, it's down about one hundred and
sixty one points. I look at the S and p
five hundred, though Isabelle still most names in the index
are higher today.
Speaker 6 (32:29):
Can I talk about crypto, You can talk about crypto.
Speaker 11 (32:32):
Bitcoind is down by more than three percent, and Ether
is the one leading the broader down turn. Actually it's
the largest all point. It's down by almost five percent,
wiping out really billions since the biggest one day industry
drop on Friday.
Speaker 6 (32:44):
We've seen crypto under pressure as of late, right.
Speaker 11 (32:47):
A lot of pressure, and that really raises a question
of we thought this was the haven, but then it's
behaving like a risk acid.
Speaker 2 (32:53):
It's really funny because I feel like, yeah, we see
it exactly exactly, we see it kind of following the
markets really closely. Hey, let's get to some of the
earnings that we saw today. We've talked about the big
banks so far that we're out early this morning. Another
one that came out is Blackrock stocks up about three
and a half percent in today's session. Rolling is the
(33:13):
world's largest fund manager, pulled in two hundred and five
billion of client money in the third quarter and expanded
its footprint in private credit and all assets. As we
drive to the close, Kathy Seaffort is with us. She's
vice president of CFA Research, she covers Blackrock. She joins
us from New Jersey. Kathy, good to have you here
with Isabelle and me. Blackrock investors like what they got
(33:35):
from the company. Tell me about it. This company massive
sees so much they continue to grow. Do you like
what you heard from the company?
Speaker 13 (33:46):
Yes, I do, and I have a buy recommendation on Blackrock,
and I was encouraged by what I heard on the
call and also in the numbers they reported. And basically
Blackrock laid outstretch of basically having three pillars of growth
strong ETF, a strong ETF offering and strong ETF inflows,
(34:09):
an increased exposure to alternative assets, and an enhanced suite
of offerings in its technology services business trademarked Aladdin. And
in the quarter we saw basically it hitting on all
of those cylinders. You know, the market has been decent
this quarter, and I think a lot of asset managers
(34:32):
are going to see their assets under management grow because
of decent market performance. But it's important to see who's
bringing in or who's you know, who's producing organic growth,
who's bringing assets in the door and in that you know,
on that score, black Rock really hit it out of
the park this quarter.
Speaker 11 (34:49):
So you detailed the three pillars driving the growth, but
what caught my eye is that private markets and tech
services revenue now exceed those from ETFs and fixed income.
And I'm an ETF reporter, so this really my antenna.
Was that outcome anticipated or were you expecting that?
Speaker 13 (35:05):
Well, that growth that we saw in the quarter is
basically there's some year to year bumps because of the
inclusion of some acquisitions.
Speaker 14 (35:13):
That's not likely to be a run rate.
Speaker 13 (35:15):
But nevertheless, one of the strategies at Blackrock is to
increase revenue contributions from both their technology business and their
private market business. And you know, if you'll recall, they've
spent the last couple of years pretty aggressively acquiring really
(35:36):
pipelines in the private market and alternative assets space through
which they can grow product. I mean, I think they
did it very intelligently, and I think what we saw
this quarter was the fruits of their labor, which is
a positive.
Speaker 11 (35:52):
Speaking of private markets, we saw that fees there have
grown around one hundred and thirty six percent year over
year through third quarter of twenty twenty five. How sustainable
is that growth, especially as we enter this really challenging
macro and economic macro and rate environment.
Speaker 14 (36:08):
Well, I mean that.
Speaker 13 (36:09):
Growth is not a run rate, and it reflects a
contribution from acquisitions.
Speaker 14 (36:13):
But I do think that they can produce on a.
Speaker 13 (36:16):
Firm wide basis mid teen revenue growth, which is significantly
gright than many of their peers. And if you look
at the asset management space on one end of the spectrum,
you have kind of the traditional long only asset managers,
many of homer bleeding assets, and you have the private
equity firms that have had really good performance but recently
(36:38):
have struggled a little bit because there's some issues with
realizations and whatnot. Sort Of in the middle of that
is black Rock, which is sort of a hybrid of
both models. So I think the private or the alternative
asset revenue contribution will enhance overall revenue growth. But the
(36:59):
ETF business, which is very deep and very broad and
also has made a number of innovations.
Speaker 14 (37:06):
You were talking about crypto before.
Speaker 13 (37:08):
Blackrock brought in more crypto assets than some of its
competitors brought in firm wide in this quarter, so you
know their suite of ETFs is really unmatched. And you
have the combination of those two things really widens the
competitive edge or the competitive moat around Blackrock.
Speaker 2 (37:29):
When you look at ALTS, crypto and then traditional assets,
is it just a moment of time or just before
we start to see alts and crypto on par with
traditional assets.
Speaker 6 (37:42):
In what way do you mean on it in terms
of making.
Speaker 2 (37:45):
Up their overall asset composition in terms of assets under management?
So I'm just saying, as we see the growth, we
know we hear from Larry Fink and from Blackrock overall
about the importance of private markets, private credit. So I'm
just curious if you see a moment in time or
are we ready there? Also what six hundred and sixty
three billion of client assets, So I guess we're kind
(38:07):
of there or close to it, right.
Speaker 13 (38:10):
We're close to it, But I don't, I mean, I
don't necessarilyly know if Blackrock is for is necessarily you know,
wanting that mix to shift that much. I mean, there
is there is a positive to having alternative assets. They
tend to not be as correlated to the broader markets
(38:31):
as you.
Speaker 14 (38:31):
Know equities and fixed incomes are.
Speaker 13 (38:34):
But you know, for Blackrock it was important because the
ETF business was becoming increasingly commoditized. Fee structures were pretty
rapidly decelerating. Shifting into alts and private credit. You know,
achieved several goals. It enhances their competitive position, but it
also enhances their revenue growth, which is important.
Speaker 2 (38:57):
Is there any question that wasn't answered for you just
got about twenty five seconds.
Speaker 13 (39:02):
No, I think the one, you know, the one issue
at Blackrock is a succession issue. I don't think Glary
Fink is leaving any time soon, but that's always, you know,
that's kind of always an issue, and sort of what
executive changes they're going to make to sort of bolster
their operations amid this asset mix shift.
Speaker 6 (39:22):
All right, Going to leave it on that note, Kathy,
great to get some time with you. Kathy Seafert.
Speaker 2 (39:25):
She's vice president CFA Research covering Blackrock. As she mentioned
at the top, she does have a by rating on
the stock Blackrock shares up three point six percent. Do
you want to share on a competing network Blackrocks to
E Larry Fink said AI is not a bubble, but
there will be failures. And he said on AI in
terms of I guess their own spending, this is capital that.
Speaker 6 (39:46):
Is mostly well spent. I know, right, Yeah, time will tell.
Speaker 1 (39:51):
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