Transcripts For BLOOMBERG Bloomberg 20240703

I am Katie Greifeld in new york. Welcome to bloomberg markets. We are charging to the finish line this friday. The s p 500 is higher by. 9 . Matching my shirt. If you look at the nasdaq 100, big tech is up 1. 4 . We got some earnings last night, and they were pretty good. Look at the bond market. It is interesting. You have the 10 year yield lower rate by six basis points, even though the core pce price index, the feds preferred gauge of underlying u. S. Inflation, was rising at the quickest pace in quite a while and actually beating expectations. Bloombergs mike mckee joins us to break it down. Walk me through this Market Reaction. Michael the Market Reaction is interesting. We are at status quo after the pce numbers on wednesday. We just got some interesting information from the university of michigans survey that shows people think that inflation is still going up on a oneyear basis, up to 3. 2 from 3. 1 . The fed is not going to like that. No change in the five to 10 year inflation at 3 . Consumer sentiment is down more than anticipated. 79 for current conditions. Expectations, 76. All of those are lower than the preliminary numbers and the numbers last month. Something is bugging people out there. Inflation might be it. Looking at what we got from the pce today, it was unchanged basically from the forecast. 3 for the core. 3 for the headline did have an effect on the overall yearoveryear numbers. The question was, did we see a big jump in margin . We did not come which makes people happier. Incomes come in higher than anticipated. Spending, higher than anticipated. Put it together and you have a situation where the economy is strong and inflation is still sticky. Katie wrap it together. What does this mean when you think about the fed meeting next weekend beyond . Michael not much for the fed meeting except it will shape what jay powell says in his News Conference as he tries to give the markets a picture of what they may do. It will basically be on hold at this point. We do know that the markets have now priced november back in. Why . I dont know, but november is now seen as the first month for rate cuts. Yesterday it went to december. The aspect of the thing is the political aspect. This is 2024, president ial election year. If people arent feeling good about the economy, what is it mean for the election . That is a question we will be asking for some time. The white is democrats and the yellow is republicans. That just flips no matter whether republicans are in or democrats are in. If you like the party you will think the economy is good. The blue line is what matters, independents. How do they see the economy Going Forward . That is something we can keep an eye on with the michigan survey. Katie im sure we will be talking about it with you a lot leading up to november. Mike mckee, thank you so much. Lets check on big tech earnings. Microsoft posting Strong Demand for ai with a similar story driving alphabet higher. Ai fueling cloud growth. Mandeep singh joins us now. Big gains reviving this benchmark. It seems like the Common Thread in addition to ai was the cloud. Mandeep it was. I think that cloud clearly for alphabet was heading in the right direction, given that we have seen somewhat of a muted cloud growth for aws and google in the past two quarters. This quarter was reassuring for alphabet. The real surprise to me was on the search side. Everyone thought that traditional search was getting disrupted. To the contrary, it is helping to drive engagement. The margins went up. A lot of the concerns were around the cost of search going up. That was the surprise. The fact that the core search margins expanded 500 basis points. Everyone is talking about how traditional search is getting disrupted and the cost is going up. I think that is why you see this kind of reaction. Katie you are also seeing a boost because may be expectations were pretty sour after what we saw from meta with shares following 11 yesterday. They are currently unchanged. Increased spending. Then there was the forecast that may be some people who bowled over. A few days out, can we call that an overreaction . Mandeep in the case of meta, they didnt lay out how they will use the capex. In the case of amazon and google, you can see how the ads to cloud growth. You can build a Waterfall Model where you can see the revenue proportional to the gpus that these companies bought. From that perspective, in the case of meta it is internal consumption of gpus for their social media apps, which is great. They are deploying ai. In terms of tangible revenue, you can only see it in the cloud hyper scalars. That is where i think that the market is curing the capex raised by microsoft and katie we appreciate your time. That was Mandeep Singh a bloomberg intelligence. The broader markets, joining us we have the principal Asset Management chief global strategist. I have to say that i was looking at some of the weekly stats for the s p 500 and was surprised to see we are up 2. 7 on the s p 500. Even more so if you look at the big tech benchmark. The nasdaq higher by 3. 7 . It feels like the sentiment that we have been hearing this past week has not matched the performance in stocks . That is interesting. It has been a challenging week in terms of the macro narrative with Inflation Numbers coming in so much stronger than expected. We are anticipating the market to refocus on the fundamental backdrop. You are seeing that come through. That should power equities forward. As we start to go through the rest of this year. Katie it sounds like you are saying this is not necessarily the time to be cautious . Seema there are levels to be cautious. This is the time you want to be diversifying because may be of the inflation risk. If youre really focused on the growth outlook, and like us you are not seeing clear signs of economic slowdown more of a soft landing perspective you should be risk on. It is about picking out the parts of the market that fit the narrative you strongly believe in. Katie it is interesting. We have been having this debate for a while if it is the macro, the rates side of things driving equity markets, or corporate fundamentals. Looking at this week, given how much we have seen yields climb over the past couple of days, it feels like you could make a solid case that it is earnings driving stocks. Seema i think it is. When i think it comes to tech it is almost like it is macro agnostic. That might get up to a certain level. If you see yields continuing to rise, 10 years hitting 5 . It is yields, as long as it is backed up by the macro backdrop, we can make gains, but there will be a level when maybe that starts to change. Katie what level would you think that would be . 10 year yields, 4. 6 percent. Does that story become more real at 5 . How should we be thinking about it . Seema it is difficult to specifically specify that level, but 5 would be a challenge. Particularly if it is driven because of continued concerns about inflation. It will start to get really dicey. At that point we would be focusing very strongly on those companies which have the pricing power, cash flow, strong Balance Sheet, able to outcompete the others in their subsector. Which actually takes you back to tech. Whichever way you slice and dice it, we continue to like that mega cap tech space. Katie it feels increasingly that tech fits in all boxes. You can slice it and dice it anyway that you want. I want to go back to macro agnostic. I like that because it feels like what we are seeing in that sector. Maybe you can give more detail on why it is that way. What is it about these Big Tech Companies that give them the luxury of being macro agnostic . Seema it is interesting. Typically with Growth Stocks you would expect when we have high rates they would not be performing but that is clearly not the case. One reason we think is it is not across the entire tech space, you have to be selective, but there are companies that dont have as much debt. They are not as interestrate sensitive. Ultimately, these are specific stories. Have a strong cycle of growth, which overwhelms everything else. As long as you believe in ai, the potential it has not just this year but Going Forward, you are looking beyond the cyclical indicators that would typically be dictating where you are investing. Katie who is left out . It is interesting. We have big tech earnings and the likes of microsoft and alphabet rallying this morning. Then you look at the oil majors. Exxon, chevron not doing as hot. How are you thinking about that dichotomy . Seema we like the Energy Companies typically given the backdrop we have in mind for the macro early solid. Cyclicals should do well. There are pockets where companies will be focused on, how is the china market, the china slowdown affecting demand in some of their sectors . You think about tesla. That has been one of the key concerns. I think it is thinking through the Balance Sheet fundamentals. Overall, we are looking at cyclicals. Until this point we had expected small caps would do fairly well. That was based on the idea that you would get rate cuts this year. As we are starting to see that debate raged on and get a little more as rate cuts are being pushed out, i think we are getting nervous about the smallcap expectation. Katie hold tight for a couple of minutes. We will look at what is moving under the markets right now with the bloombergs isabel lee. We were talking about the big energy majors. Isabel exxon and chevron are not doing well because they reported disappointing earnings. Exxon 13 cents below estimates. Chevron was below because it popped when it opened. They fell short of revenue forecast but surpassed the Oil Production expectation. The results come at a time when Investor Sentiment is moving in favor of Oil Production growth. As we know, there is geopolitical tensions and this boosts oil prices. For now, both stocks are down. Katie returning to the dichotomy we were talking about, that is the oilenergy story, then snapchat. Tell me what the youth is doing on that app. Isabel the company jumpeds biggest intraday gain since february 2020 two. On one hand oil is down but tech is really gaining like nothings stopping tech. Snap posted earnings that surpassed expectations. Outlook was also stronger. This is a sign that all of its downsizing headcount, eliminating projects that did not boost user growth or revenue, is working. They tweaked their ad business to become more targeted and it is a sign that that is working. Katie it seems to be paying off. A lot of people would be surprised at the start of the week that it would actually be snap outperforming and meta having a bad week, but that shows how quickly things can change. Tell me what is going on with american airlines. Isabel this is weighing on its outlook. The outlook was we are going to have a great summer because there will be a busy travel season but investors were focusing on that miss after a series of bad weather and delays. American airlines was like, it is going to be a good quarter. Last quarter we saw a loss but this quarter it will be 1. 15, one dollar 40 five cents, in line with estimates. For now it isnt looking good for american airlines. Katie shares currently down 3 . Isabel lee, thank you so much. More on the markets ahead. This is bloomberg. Katie we are back with seema shah. You were talking about small caps and maybe some of your concerns. I would like to get into that more. It seems like the s p 500 level, that it is easy for risk assets to brushoff what we are seeing with rates and fed expectations, but more painful when you talk about Smaller Companies . Seema exactly. Coming into this year we had an expectation, not as bullish as what the market was expecting from the fed, but we were anticipating rate cuts for the second half of the year. For that reason we expected small caps to outperform. Historically, small caps outperformed when you have a soft landing and it coincides with rate cuts. That is the best environment for them. As we see the market push out rate cut expectations, it is starting to put question marks around the smallcap space. Typically they meet the level of easing coming in, partially because a lot of debt a lot of their debt is coming up for refinancing. Those are the key concerns that we have with the smallcap space now. Katie lets talk about the debt profile of small caps. I think that they have shorter maturity debt, but maybe you can tell me whether or not that is fair to say . Seema i think it is. They typically do. We are seeing that. Between small and large cap, the greatest hurdles are focused on the smallcap space which is why they have the assumption that you will get rate cuts for small caps to outperform. That is a key reason why you have some any question marks on the possibility of a smallcap rally that can be sustained. Katie when it comes to what area of the market needs rate cuts, it is of course the Smaller Companies with refinancings coming up. Iwant to talk about cash. I think that it is interesting. I talked to Money Managers of all stripes, from cnb us to straight cnbs to straight up bond managers. You look at 6 trillion in assets, it doesnt seem like money is coming out of the cash anytime soon. Why bother with risk assets right now when i have about 5 guaranteed in cash . Seema such a good question. It is a key question that we get from clients at this stage. Why bother with taking on risk when you know that you are guaranteed from money market funds and deposits . That is shortterm. From our perspective even though we wont get rate cuts as soon as we initially expected, we are anticipating it for the end of this year or, at the latest, beginning of next year. From our perspective there are a lot of products within the fixed income space where you are getting yield and you can maintain it for a while. On the equity side, if you believe that growth is solid, you are likely to have stronger returns on that side. Even if you think about real assets and have concerns about inflation and where that will go forward, you need to get the inflation mitigation. I get the cash discussion at this point, but i think that this is the time when you have an opportunity to start deploying assets to the other Asset Classes out there that will perform better the second half of the year. Katie in this environment with cash yields as high as they are, are you holding a larger than normal allocation to cash . Not even from a haven bid cautious standpoint, but because yields are so high . Seema we have been fully risk on since the beginning of this year. Really deploying it into the risky assets. Overweight equities and overweight credit. Some of it is funded by having underweight in cash. We strongly believe this will be a strong environment for those risky assets. I understand for some allocations it makes sense to have some in cash, but time is going to run out. As soon as you get those fed cuts materializing money no longer looks attractive and you have to make sure you arent too late to the game where equities have moved significantly further if you have lost the time to enter the market. Katie fair points. I want to end with a straight up fed question. It has been a heavy macro week. You look where the first fully priced fed cut is, its december. Do you think that the fed cuts this year . Seema we still do. We have a forecast of september december, but it is incredibly complicated. Going into the election, the fed needs to be completely sure of the economic environment before cutting rates. I think december is the more likely date. If you were to get a couple other inflation surprises we are unfortunately looking at 2025. Katie have a great weekend. Our thanks to seema shah. We look at the Companies Making the most social buzz today in our social climber segment next. This is bloomberg. [female narrator] they line up by the thousands. Each one suffering with a story that breaks your heart. Like ravette, who needed help, because every step brought her pain. Their only hope is a ship unlike any other. Mercy ships. The largest floating civilian hospital in the world to bring free surgeries and care for people who have no other hope. Only 62 cents a day, 19 a month, will help provide urgently needed surgery for the worlds forgotten poor. If you have ever wondered how can i, just one person, make a difference . This is your answer. So many are still suffering. So dont wait. Call the number on your screen. Or donate now at mercyships. Org. Thats the number on your screen. Katie time for social climbers, a look at the stocks making waves on social media this morning. Whirlpool is trying to whip up a new kind of buzz. The large appliance makers hoping that coffee aficionados will pay big bucks for its highend espresso maker. The Company Launched its kitchenaid espresso makers that cost up to 2000, which is a highstakes gamble for whirlpool in the weakening highend discretionary category. Good luck with that one. Sketchers is sprinting ahead as the Athletic Shoe maker boosts its forecasts beating analysts expectations. Raising to 72 after the results. We have roku warning a push by streaming rivals to more adsupported offerings will likely weigh on growth. The news is taking the shine off of its otherwise strong quarterly results. You can follow the latest buzz on your bloomberg go, tren. You can see the s p 500 extending its rally, now up by more than 1 . We have good earnings out of alphabet and microsoft, and you can see that in the nasdaq 100 higher by 1. 5 . Looking at the week that was, it will be a big rally for both big benchmarks. Even love extending to the bond market with 10 year yields down by almost six basis points even though we got hotter than expected pce data, which we are going to talk about. The feds preferred gauge of inflation rose in march more than expected. We will speak to elias, the Compass Diversified holdings ceo and cofounder, about the data, next. This is bloomberg. Katie the Federal Reserves preferred gauge of inflation rises in march. Core personal consumption expenditures rose 2. 8 , signaling that the fed will be in no rush to cut rates. For more on inflation, we are joined by elias sabo, Compass Diversified ceo, partner, and cofounder. It is great to speak to you again. Not only did we get inflation but personal spending figures that were a little stronger than expected. Take us into the middle market. How is the consumer faring . Elias thank you for having me on this morning. We are seeing the consumer hold up remarkably well. We have been saying this over the last year and a half that there has been a lot of fear with inflation rising, the Federal Reserve having tighter monetary policy, that it was going to cause consumption to decline. The job market has been incredibly strong, as we know. Wages have been rising as inflation has come down and real wages are growing. It underpins Consumer Spending and we are seeing across the board in our companies now. That said, in the First Quarter, it felt like there was a little softening that came from last year. I think it is starting to ease a little bit. We are seeing that in the headline gdp numbers that came out yesterday. All in all, the consumer is holding up remarkably well. Katie it is interesting you mentioned that we do have wages rising. The job market is still very strong, but you look at what we heard from the university of michigan numbers this morning showing the Inflation Expectations rising. You have been around since 2006, what do past cycles tell you about how this dynamic can hold up . The fact that you have people expecting more inflation. It seems like sentiment is still pretty negative, but they are still spending, for now. Elias it is an interesting phenomenon. I would say that if i gave a hot off the presses we had all 10 of our Subsidiary Companies over the last two weeks for our First Quarter board meetings, and i think that there are broadly Inflation Expectations that are elevated out of the consumer and expected. But what we are seeing is for the first time we started to hear our companies talk more about fending off price declines from their customers, or price requests for decline from customers. We are seeing the labor market feel more in balance today than it was three to six months ago. Openings that we have right now for jobs are being managed a little more by us to increase productivity. I would say if you have looked at where wage growth was, we are averaging 50 to 100 basis points higher than normal. That is down from 200 to 300 basis points higher than normal, and we are able to offset that with productivity. From where i stand, it feels, for the first time, like inflation is starting to pivot lower. Notwithstanding the upward surprise that we saw in q1, which is more of a lagging indicator, it feels on the ground like some of the inflation forward indicators may be coming down. Katie lets talk about your portfolio companies, where you are in the market. You are in the middle market which i find interesting. One of the narratives is, the highend affluent segment will do ok. On the other end you have discount and low income tiers of businesses, that is probably going to do ok. The middle market falls out. I wonder what you think of that narrative . Elias we have been seeing this from the consumer for a while. There has been a linear type of correlation between the affluent see of the consumer and ability to spend. You would anticipate that given where inflation was. The benefits of inflation through higher stock market prices or real asset prices are more towards the affluent, so you would think that their Balance Sheet would support spending, and it has. Now that you have seen some of the inflation come down and real wages rise, that is supportive, at the lower end consumer as well. Within our portfolio we index towards the more affluent customer. We are in the top quartile the top decile of purchasing power. We have seen no slow down. You are right and it has been a trend that has been going on for many years, that middle income consumer continues to get pushed either upwards, which is where we would as an economy whole people have more purchasing power, or unfortunately downwards. It is rooting out the middle income consumer. Katie really interesting perspective. I want to talk about your portfolio as it stands now. You have completed 58 acquisitions since the 2006 ipo. How do you feel about the size of your portfolio . 58 is probably a good number . Or in this environment are you looking to add or subtract . Elias along with the acquisitions we do, we do divest as part of our strategy of businesses. Today we own 10 Subsidiary Companies. We think that that is a good number. We have the capacity to own more. The m a market today, especially in the middle market, is weak. This has been going on for the last 24 months. Our competitors, traditional private equity firms, are struggling to find access to financing, especially debt capital financing. As a result, it puts us in a great position to acquire, because prices have come down given that supply and demand dynamic. We generally have a bullish outlook as far as being out the risk curve and equities. There is all ofthis talk about ai. I think it is real and we are at the beginning of that. If ai can unleash productivity benefits that we expect to come into the economy, thats going to be great for all assets. We are a net buyer and looking to grow the size of our portfolio. Katie a net buyer . We will have to keep in touch on that point. I want to zoom out and talk about the notion of bringing, sort of, private companies to the public market. If we think about what you do, you are a stock. People can buy your stock. You have a portfolio of middle market businesses. Typically, you are competing with private equity. I wonder who your audience is . We think about close end funds to provide Retail Investors access to private markets. They tend to be Tech Companies they are focusing on. I wonder who you appeal to . Elias originally, it was gaining access. What our pitch is, is types of companies that we are acquiring, we broadly dont have access to as a private investor and public investor. We do as private investors who can acquire the entire company. Take a 30 Million Company when we bought the business. It is very disruptive in its industries and its industry is growing three times to four times its core Industry Growth rate. It has massive patent protection around its intellectual property. It is a great business, but that is a business that would never be large enough to be a Public Company when we acquired it. Public investors would largely lack access to that type of company. You can deliver on these businesses that are middlemarket companies that are innovative, disruptive, taking market share. Our pitch to investors is, if you want access to Companies Like that, you really have to do them either through private equity vehicles that are truly private, or, if you wanted to have public liquidity, you can do that through us. Katie really enjoyed this conversation, great perspective on this friday. Thanks to elias sabo of Compass Diversified holdings. For more from the csuite, tune in on monday when we will be joined by the lamborghini ceo at 10 30 a. M. Eastern. Lets get a check on these markets with abigail doolittle. Abigail we are looking at gains today on the back of some great earnings reports and outlooks for alphabet and microsoft. On the week, the best week of the year. The s p 500 up 2. 7 . Yields doing nothing, at least the twoyear yields. At this point, just about flat. The dollar, not a lot of movement on the week. Crude oil, the big story this week is all about stocks. That is typically not the case you will have bigger cross asset moves. The weekly chart of the s p 500, one question could be because of the up week does that mean that stocks are going higher . I would argue not. You can see the week chart of the s p 500 the uptrend, the dip in october, the uptrend out of that tober low to the trendline is never to show the trend. You can see when the trend reverses. We have a reversal over the last four weeks. It usually means volatility is ahead, uncertainty. You have two heavy candles here. When you put this together, that is heading down for the s p 500 not on this chart, it seems likely that we will see the s p 500 consolidate further. Perhaps towards the 200 week moving average or 50 week moving average as happen for the russell 2000. It will be interesting what comes out of the fed meeting. The week and the day is all technology. Alphabet up 9. 4 . They put up a great quarter. Also, their Cloud Business grew 28 . A dividend, a buyback. Microsoft up 2. 4 . These stocks are high but off of the highs of a little moderation of gains. Azure the cloud product for microsoft of 32 . Ai creating demand. Intel, down 11. 3 , the worst day since april 2020. They arent able to get in on the ai craze like some other companies. Certainly not nvidia. The outlook is disappointing and that company is down sharply. Katie lets look at the tech 100 fund. We were talking about funds that provide access for retail traders to get to some of those private Tech Companies. Look at what it is doing now. It is down over 20 today. The stock is trading near 18 per share. It was just below 100 earlier this month. We have the yen that got weaker, 157 against the u. S. Dollar. We heard from the bank of japan that they kept their rates unchanged. As a result you can see the yen flirting with 30 plus year lows against the dollar. We will follow that a speculation about intervention heats up. Fillin up the seats and the coffers at Carnegie Hall. Our interview with the Carnegie Hall executive and artistic director. That is next. This is bloomberg. traffic noises the road to opportunity. Is often the road overlooked. at enterprise mobility, we guide companies to unique solutions, from our team of mobility experts. Because we believe the more ways we all have to move forward. The further well all go. Abigail you are looking at a live shot of the principal room. Coming up. This is bloomberg. Katie it is time for our wall street week conversation. We are looking at the business of fine arts. The Carnegie Hall executive and artistic director spoke with wall street weeks david westin about the iconic and yous postpandemic recovery. One of the most moving things is when we open again after covid, the emotion in the hall was astounding. Robert smith, our chairman, thought that we should speak to the audience on opening night. I literally said the first two words, welcome back, and the place exploded. Welcome back that emotion has carried through. Firstly, the whole thing of live music and the impact of live music, is in the greatest possible shape. People love it, care about it, and even today that emotion is there in how they value it in a way when you only value something when it is taken away from you. Are you, Carnegie Hall, fully back from the pandemic . Yes. The first year we had a reduced number of concerts. This year we are back to the normal number of presentations and audiences are averaging 93 . We are having a fantastic response to what we are doing and there is a feeling of engagement with the music in a powerful way. The success of a great Arts Center Like Carnegie Hall or the metropolitan museum requires a balance between high culture that appeals to changing audiences and running a very Large Business with all of the challenges of managing costs and attracting revenue that any ceo of a big complex company would understand. One thing that strikes me is your title, executive and artistic director. It reminds me of the division between publisher and editor in a newspaper. You are responsible for the business and the artistry. How do you get the right balance between the business side and the art side . It is a really interesting question. Most organizations separate the two. The reason i would never do a job which was half of what i do is because i feel, if you are involved in the artistic you want to be as expensive, as imaginative, take risks, and travel extraordinary journeys with the music. If you are responsible for the money you will be cautious and say, im not sure we can do this or that. The good thing about doing the two together is, if i want to dream i can be part of making sure that can happen as a business. In a way, it enables you to take greater risks because you are responsible for both. You have been known through your career for taking risks. You were a professional cello player. That was someone elses risk having me as a cello player. [laughter] you stepped up to take on a struggling organization from the beginning. You stepped up at Carnegie Hall. Taking a risk and not falling off of the high wire . The thing about all risk is how you manage risk. You cannot live without risk. So, there is a famous saying. If you are not living near the edge, you are taking up too much space. Money follows vision. You always go for the vision. Go for something irresistible that has to happen, and then there is a chance to sell it to someone else. If it is good and the world can live without it it is very nice for it to happen, if it is only that, it is hard to sell to someone else. It has to be irresistible. The key role as donor is one way that arts centers are different from any forprofit corporation. They need to Pay Attention to their appeal not just to customers, but also to those making charitable contributions each year. The reasons for those donations can vary as much as the particular interest of each person writing a check. How and who gives money and is is never decided by us, it is decided by the donor. You have to decide what you believe in. If someone doesnt believe in the same things they wont give you money. The donors have changed enormously. What we do has changed enormously. The wonderful thing about the board, about the donors is that they are passionate about what we do because they dont need to give money. They only give it if they care and if they are excited about what we do. Touch on the costs. Half costs changed over time. How are you falling prey to inflation the way that much of the country and the world is . I remember a businessman saying in london that people think that the arts is a luxury. The way that you have to run your business is tougher than i run my business. You have no margin for error. Big businesses that are purely commercial businesses have more margin for error if they make a bit of a loss here they can balance it out. In the arts you have no room. You have to always be on top of it financially. It is hugely demanding in terms of the business. It has to be, because if you cannot make it work as a business you will fail artistically. Yo you knowu you know, it is one of those things that people assume the arts are not about a business but in fact they have to be rigorous businesses to be great art institutions. Katie of course, wall street week host david westin. We will hear from tony james from the metropolitan museum of art and wes edens of bright line. This is bloomberg. Katie the investment traders of philadelphia conference is underway. Eric balchunas is the senior etf analyst for bloomberg intelligence. I am pretty sure that Atlantic City is in new jersey, but we dont have to go into that. Im pretty sure that you wrapped up a cool panel. Tell me about it. It is a pretty small gathering, but highcaliber. They went ahead to try to track people from new york. People like to come here and gamble a little bit. Ac has the beach, although it is very cold. We talked a lot about the bitcoin etfs and the behindthescenes of who is buying them. Indications are that there are more advisor and institutional interest than we see because 13fs are barely out so far. We have another six weeks of those. That is interesting but everyone is loving it. We talked about the etf share class. Thats a bigdeal. If mutual funds have an etf share class it open so much highway flows to come in. There was some talk that if you have classes, clones, and conversions, all of these different ways for mutual funds to come over, at what point are etfs too big . We are far from that, but those are the big topics. Generally speaking when you talk to i will call them regular people. Nonetf nerds. People are interested if mutual funds are dead. We talked about that. They will be around for a while but people are voting with their feet towards etf. Katie are mutual funds dead . Why are they not dead if they are not . Eric the stock market keeps going up. Their assets have gone up 6 trillion. Even though theyve lost customers they are bigger than ever making more money than ever. If we have a bear market they will be in trouble, so a lot of those assets are not really customers or flows. They are more because the market went up. Certainly, they will be around for a long time. Some time in 10 years etf will be the majority investment vehicle. Now they are 25 and i think over 50 in 10 years. Katie enjoy the view. I i know that its cold outside but it still pretty in Atlantic City. Tune into etf iq with me, eric balchunas, and scarlet fu. Coming up, we have the intel ceo joining Bloomberg Technology next. That does it for bloomberg markets. Im Katie Greifeld and this is bloomberg. Food isnt just fuel to live. Its fuel to grow. My family relied on public assistance to help provide meals for us. These meals fueled my involvement in theater and the arts as a child, which fostered my love for acting. The feeding America Network of food banks helps millions of people put food on the table. When people are fed, futures are nourished. Join the movement to end hunger and together we can open Endless Possibilities for people to thrive. Visit feedingamerica. Org actnow from the heart of where innovation, money, and power collide in Silicon Valley and beyond, this is Bloomberg Technology with Caroline Hyde and ed ludlow. Im Caroline Hyde. Im ed ludlow in san francisco. This is Bloomberg Technology. Caroline intel slides amid tepid forecasts. We will discuss all of that with the ceo. Ed