Stocks Slide as Hot Inflation & AI Credit Fears Hit Markets

Author: Bloomberg Television · Watch on YouTube

Video authored by the channel shown, not by IANIA; all rights belong to the creator. Transcript and summary generated automatically; the original-language content is preserved.

Original language: English

Original video: Stocks Slide as Hot Inflation & AI Credit Fears Hit Markets · Channel: Bloomberg Television · 1:32:44 · Watch on YouTube

Topics: AI infrastructure and hardware, Markets and economy

Summary

U.S. stocks fell sharply as stubborn inflation, higher borrowing costs, and concerns about the scale and financing of AI investment weighed on markets. Guests discussed the outlook for Federal Reserve rate hikes, the renewed appeal of fixed income, and the risks and opportunities in private markets. The program also covered bank earnings, Janus Henderson’s move to private ownership, AI infrastructure constraints, Anthropic’s expected IPO, and Loop Capital’s expansion into athlete wealth management. The closing segment examined Huel’s growth and its acquisition by the company behind Evian.

Key points

Major U.S. equity indexes recorded a broad decline, with the Nasdaq and Russell 2000 particularly weak.
The CPI report showed persistent, broadening inflation, prompting discussion of further Federal Reserve rate increases.
Higher yields and heavy issuance raised questions about how much debt markets can absorb to fund AI infrastructure.
Vanguard’s Greg Davis said fixed income has become more attractive and described a persistent negative stock-bond correlation.
Guests emphasized that private-market investments offer access to different companies but come with reduced liquidity and potential redemption gates.
Bank earnings faced scrutiny amid concerns about interest rates, trading revenue, expenses, and the durability of investment-banking growth.
AI data-center development faces practical constraints, including power availability, grid capacity, land, water, and local opposition.
Anthropic was preparing to brief selected investors ahead of a potential public offering, with updated business figures expected.
Loop Capital’s acquisition of Lifeline Capital assets expands its work advising athletes and entertainers on investing and wealth management.
Huel’s CEO said the company aims to grow internationally and expand retail distribution while maintaining its culture and operating independently.

Chapters

Start	Chapter	Summary
00:01	Inflation, stocks, and AI financing concerns	The show opens with a market selloff linked to stubborn inflation, higher capital costs, and questions about funding the AI boom.
03:49	Vanguard on rates and bond markets	Greg Davis discusses the CPI report, the possibility of rate hikes, and the changing relationship between stocks and bonds.
08:06	Treasury issuance and demand for bonds	Davis addresses investor flows into fixed income, Treasury issuance choices, and demand across the yield curve.
10:46	Private assets and Vanguard’s investment approach	The conversation turns to private-market access, liquidity risks, Vanguard’s active strategies, and its criteria for new products.
16:45	Analyst calls and bank earnings	The program reviews stock ratings and discusses Morgan Stanley and Bank of America results with UBS analyst Erika Najarian.
22:55	Janus Henderson’s post-privatization plans	Janus Henderson’s CEO describes investment in the business, acquisitions, product development, and the firm’s use of AI.
38:27	Closing bell and market performance	As U.S. markets close, the panel reviews the equity decline, sector performance, and the day’s move in Treasury yields.
54:55	AI credit risks and portfolio positioning	The discussion examines distressed AI-related credit, projected earnings, bond yields, and the case for higher-quality fixed income.
1:05:25	AI safety and data-center constraints	A forum report covers AI security concerns and the power, land, grid, and community challenges facing data-center construction.
1:11:27	Loop Capital and athlete wealth management	Founder Jim Reynolds explains how Loop Capital helps athletes build wealth through investments, ownership, and financial education.
1:22:33	Anthropic’s pre-IPO investor meeting	A Bloomberg reporter discusses Anthropic’s planned investor briefing, expected business updates, and potential IPO timing.
1:24:51	Huel’s acquisition and U.S. growth	Huel’s CEO discusses the acquisition, retail expansion, product strategy, and the brand’s approach to nutrition and marketing.
1:32:07	Market events to watch	The program previews upcoming earnings, U.S. retail sales, producer prices, and a possible Tesla Roadster filing.

Quotes

It is one data point, right? — 03:49

It’s a great story for fixed income investors. — 07:32

The gates put up or, in essence, to protect investors with long-term orientation. — 13:27

I would not say at this point that you can point to that we are delivering better performance. — 35:48

Today if you make that same call they will tell you seven years maybe. — 1:07:40

Concepts and entities

CPI, Federal Reserve, Vanguard, Greg Davis, CoreWeave, Anthropic, mercados privados, data centers, Loop Capital, Huel

Full transcript (original language)

00:01 >> The countdown is on. EVERYTHING YOU NEED TO GET THE EDGE AT THE END OF THE MARKET DAY. ROM AINE: KICKING YOU OFF TO THE CLOSE ON A WEDNESDAY AFTERNOON WITH STOCKS UNDER PRESSURE ALL DAY. INFLATION STILL STUBBORN, RUNNING HOT.

00:34 IF MOVING TO BROADER CONCERNS ABOUT CREDIT MARKETS AND THE AI TRADE, THE S&P 500 AND MOST MAJOR INDICES HEADING FOR THEIR WORST ONE-DAY LOSS SINCE LATE JULY WITH PRESSURES ACROSS THE ENTIRE SPECTRUM FROM CONSUMERS TO CORPORATE’S TO THE GOVERNMENT. THE DOLLAR SPOT INDEX ON THIS DAY AT THE HIGHEST SINCE 2020 FIVE. AS FAR AS YIELDS GO, WE WILL GET TO THAT IN A SECOND. BUT FOR STOCKS, WE WILL TALK ABOUT THAT AND THE KNOCK ON EFFECTS OF INFLATION AND THE

01:08 HIGHER COST OF CAPITAL FUNDING THE PARTY FOR THE BULLS. CREDIT MARKETS FOR WEEKS HAD BEEN CHALLENGING THE IDEA THAT AI SPENDING IS IMMUNE TO HIGHER RATES. AI LINKS CAPITAL RAISES HAVE BEEN DELAYED, CANCELED. DATA CENTER BOND SPREADS WIDEN. BONDS OF A COMPANY IN POLITE CORE WEAVES TRADING IN DISTRESSED TERRITORY AND JP DIMON ALLUDED TO HIS BANK TIGHTENING ITS SPENDING BOOK A LITTLE BIT. THERE IS AN ELEPHANT IN THE ROOM WHEN IT COMES TO TECH, OR AT LEAST ABOUT TO ENTER THE ROOM. ANTHROPIC.

01:43 IN PREP FOR WHAT WOULD BE THE LARGEST IPO EVER. BUT AGAINST AN ECOSYSTEM OF ABOUT $101 TRILLION TO SUSTAIN SPENDING, THE MASS IS GETTING HARDER TO, WELL, MATH OUT. WHATEVER WE KNOW ABOUT THE ANTHROPIC REVENUE RUN RATE TODAY OR TOMORROW WILL BE THE HEADLINE AND IT WILL MOVE THE ENTIRE MARKET BECAUSE THE ENTIRE COST OF CAPITAL IS FINE, ONLY – A HIGHER COST OF CAPITAL IS FINE ONLY IF IT IS A

02:14 COMPANY WITH A HIGHER RATE OF RETURN. THAT BRINGS US BACK TO THIS MORNING’S CPI REPORT, SHOWING INFLATION PRESSURES AT STUBBORN AND BROADENING BEYOND ENERGY SUGGESTING THE LAST MILE TO THE FEDS 2% TARGET GOT LARGER GROUP. TWO YEAR TREASURY YIELDS SURGED AFTER RETRACING MOST OF THAT BECAUSE OF BROADER CONCERNS IN THE EQUITY MARKETS CREATING A BIT OF A SAFETY BID, BREAKING BRIEFLY THE UNCOMFORTABLE NEGATIVE CORRELATION WE HAVE BEEN DEALING WITH BETWEEN BONDS

02:45 AND STOCK PRICES. THERE IS LITTLE CHANGE IN THE STRUCTURAL SET UP WHEN YOU LOOK AT MARKET PRICING WHICH, FOR THE TREASURY MARKET REMAINS EXTENDED SHORT. >> I DISLIKE BONDS LESS TODAY THAN I DID SIX MONTHS AGO, GIVEN WHERE WE HAVE STARTED. FOR SOME PEOPLE IT MAY MAKE SENSE TO HAVE A BALANCE IN PORTFOLIOS. WHAT HELD ME BACK FROM GETTING EXCITED ABOUT USING MORE DURATION IN PORTFOLIOS WAS THE REACTION OF BONDS TO THE U.S. WAR WITH IRAN.

03:15 IN THESE MASSIVE RISK OFF MOMENTS YOU ARE NOT GETTING AN UNCORRELATED ASSET MOVE. IT IS REALLY, REALLY IMPORTANT, FRANKLY, THAT WE THINK ABOUT PORTFOLIO CONSTRUCTION AND REALIZE PAST PORTFOLIO CONSTRUCTION AND ASSET RELATIONSHIPS MIGHT NOT BE THE FUTURE. ROMAINE: WHAT ALL OF US HAVE BEEN THINKING ABOUT AS WE KICK OFF TO THE CLOTHES THIS AFTERNOON. GREG DAVIS IS THE PRESIDENT AND CIO OF VANGUARD. HE JOINS US IN NEW YORK. GREAT TO HAVE YOU COMING OFF

03:49 THE CPI REPORT AND VOLATILITY WE HAVE SEEN IN THE BOND MARKET, BOND MARKET THAT IS NOT TYPICALLY SUPPOSED TO BE THIS VOLATILE. WHAT DO YOU MAKE OF THE CPI REPORT THIS MORNING AND AT IS A LONGER-TERM TREND THAT SEEMS TO BE WHATEVER THE 2% TARGET IS, WE ARE STILL AWAY FROM IT? GREG: IT IS ONE DATA POINT, RIGHT? THE MARKET WILL LOOK AT MULTIPLE DATA POINTS OVER TIME. IT IS ONE PIECE OF NEW INFORMATION THE MARKET IS TRYING TO DIGEST. THE FED HAS WORK TO DO.

04:20 THEY WILL HAVE TO START RAISING RATES AGAIN. THE MARKET REPRICED THE RISK IN SAYING THEY WILL HAVE TO RAISE RATES TWO TIMES IN THE COURSE OF THE NEXT MONTH AND WE WILL SEE HOW THAT PROGRESSES. ROMAINE: THE LAST THING WE SAW THE MARKETS TAKE AWAY WAS THE FED WOULD BE VERY AGGRESSIVE. WHEN YOU LISTEN TO THE FED SPEAKERS OVER THE PAST TWO WEEKS IT SEEMS LIKE THIS WILL BE INCREMENTAL, MAY BE SLOWER PACED.

04:51 WHERE ARE YOU AND YOUR TEAM AT VANGUARD WITH REGARD TO THE PACE OF RATE HIKES? GREG: WE BELIEVE THE FED WILL RAISE RATES ONE TO TWO TIMES OVER THE COURSE OF THE NEXT MONTH. IF YOU LOOK AT TODAY’S NUMBERS AND THE FACT THAT IT CPI, BROAD-BASED, WAS ELEVATED, WE WOULD SAY THEY ARE LEANING MORE TOWARDS THE 2-3 CAMP. BUT WE TRY TO TRADE AND LOOK AT THE LONG-TERM TREND. ROMAINE: I WANT TO GET TO SOMETHING KATE

05:23 MOORE WAS ALLUDING TO ON BLOOMBERG TELEVISION. IT IS ABOUT THE RELATIONSHIP BETWEEN RATES AND STOCKS AND THE CORRELATION BETWEEN BONDS AND STOCKS. IT GIVES ME A SENSE AS WHETHER YOU SEE THAT CORRELATION LONGER-LASTING. IF SO, HOW DOES THAT CHANGE YOUR APPROACH TO PORTFOLIO CONSTRUCTION? GREG: RATES WERE DEPRESSED FOR A LONG TIME. THE FED WAS PINNED AT ZERO INTEREST RATES. WE ARE IN A PLACE NOW WHERE RATES ARE NORMALIZED. INVESTORS ARE LOOKING AT THE FIXED INCOME MARKET AFTER

05:58 INFLATION. WE THINK IT IS A MUCH MORE ATTRACTIVE ASSET CLASS FOR INVESTORS. THAT NEGATIVE CORRELATION BETWEEN BONDS AND STOCKS WILL BE PERSISTENT GOING FORWARD. ROMAINE: WHAT IS BEHIND THE MOVE HIGHER IN RATES? I CAN UNDERSTAND LOOKING AT YIELDS. THIS IS A ONCE IN A LIFETIME, FOR SOME OF US, OPPORTUNITY TO GRAB COUPON. ARE WE CONFIDENT THAT WHAT IS MOVING YIELDS HIGHER WILL OVERALL BE CONSTRUCTIVE OR,

06:28 POTENTIALLY, IT ATTRACTIVE? GREG: INTERESTING QUESTION. A NUMBER OF FACTORS CONTRIBUTE. INFLATION RUNNING HOT IS A KEY FACTOR BECAUSE FOLKS INVESTING IN 30 YEAR BONDS WANT TO BE COMPENSATED FOR THE LONG-TERM RISK. WHEN YOU ARE RUNNING INFLATION ABOVE TARGET, THEY HAVE TO FACTOR THAT IN AND WE HAVE SEEN IT IN TERMS OF THE TERM PREMIUM REVERSING COMPARED TO WHERE WE WERE THE LAST SEVERAL YEARS. ECONOMIC GROWTH HAS BEEN STRONG. THE EXPECTATIONS ARE WE WILL CONTINUE TO SEE STRONG EARNINGS GROWTH AND THE THIRD FACTOR IS

07:01 AROUND THE FACT THERE HAS BEEN TREMENDOUS CORPORATE ISSUANCE BY HYPER SCALARS CONTRIBUTING TO THE FACT THAT A LOT OF BONDS NEED TO BE DIGESTED IN THE MARKETPLACE, CAUSING SOME PRIVATE MOVEMENT. ROMAINE: DO YOU SEE ISSUANCE FROM HYPER SCALARS AND OTHER AR COMPANIES AS MATERIAL COMPETITION FOR TREASURIES – AI COMPANIES AS MATERIAL COMPETITION FOR TREASURIES AND CAN THEY COEXIST? >> THEY CAN COEXIST, BUT IN AN OPPORTUNITY WHERE RATES ARE HIGHER. THAT IS SOMETHING WE HAVE TO GET USED TO.

07:32 IT’S A GREAT STORY FOR FIXED INCOME INVESTORS. THE ASSET CLASSES COME BACK. WE WERE IN A PERIOD OF TIME FOR A DECADE WHERE RATES WERE AT ZERO AND PEOPLE WERE NOT COMPENSATED FOR INVESTING IN BONDS. NOW WHEN YOU ARE THINKING ABOUT THE 10 YEAR BEING NORTH OF 5% AND BOND YIELDS, TALKING ABOUT A HIGHLY DIVERSIFIED BOND FUND, AT 5%, IT’S AN ATTRACTIVE ASSET CLASS AGAIN. >> ARE YOU COMFORTABLE WITH THE LONGER END OF THE CURVE OR ARE YOU, LIKE MOST PEOPLE, A LITTLE SHORTER? >> WITH OUR ACTIVE TEAM WE ARE BIASED TOWARDS THE INTERMEDIATE PART OF THE CURVE. THERE ARE RISKS AT THE LONGER

08:06 PART OF THE CURVE AROUND INFLATION, ISSUANCE. ROMAINE: WITH REGARDS TO WHAT CLIENTS ARE ASKING FOR, ARE YOU SEEING MORE INTEREST ON THE FIXED INCOME SIDE? WHERE YOU SING THE INTEREST WITH REGARDS TO DURATION? >> WHEN WE LOOK AT CASH FLOW IN THE INDUSTRY YEAR TO DATE THROUGH AUGUST, THE MAJORITY OF THE CASH FLOW, 60% GO TO FIXED INCOME. A COMBINATION OF ASSETS AS WELL AS ACTIVE FIXED INCOME, A GREAT STORY FOR AN ASSET CLASS THAT HAS BEEN MUTED THE LAST SEVERAL YEARS. INVESTORS HAVE BEEN FOCUSED

08:39 MORE ON THE CORE PART, 10 YEARS AND IN VERSES ALL THE WAY OUT OF THE LONG INTO THE CURVE. ROMAINE: ARE YOU COMFORTABLE WITH THE POLICY DECISIONS THE TREASURY HAS MADE WITH REGARDS TO ISSUANCE, NOT JUST LEVEL, BUT DURATION? THERE IS A LOT OF TALK ABOUT WHETHER THAT GETS SHORTER. GREG: THE TREASURY’S MAIN GOAL IS TO ISSUE IN A MANNER THAT IS PREDICTABLE AT THE MOST FAVORABLE COST OF THE TAXPAYER AND THAT IS THEIR GOAL AND RESPONSIBILITY. AT THE END OF THE DAY YOU WANT

09:10 TO MAKE SURE THEY CONTINUE ON THAT PATH. THEY WANT TO MEET THE MARKET WHERE IT IS IN TERMS OF WHERE THE DEMAND IS. A LOT OF WORK HAS HAPPENED OVER TIME IN TERMS OF WHERE YOU SHOULD BE ISSUING. THERE IS A LOT OF INTEREST AND FAVORABILITY AT THE INTERMEDIATE AND SHORT INTO THE CURVE. THERE IS A QUESTION ABOUT HOW MUCH YOU WANT TO ISSUE IN THE TREASURY SPACE AND WHEN THAT BECOMES AN ISSUE OVER TIME. ROMAINE: IS THERE AN ARGUMENT TO BE MADE ABOUT THE LONGER DURATION BONDS? PEOPLE TALK ABOUT PUTTING THE 20 YEAR OUT OF ITS MISERY OR SAY THAT THE 30 YEAR SHOULD

09:43 HAVE NEVER CAME BACK ALTOGETHER. GREG: THERE ARE CERTAIN SEGMENTS. THERE IS A PART OF THE YIELD CURVE THERE IS AN INVESTOR BASE FOR. YOU HAVE TO MAKE SURE THE AMOUNT OF ISSUANCE AT THAT PART OF THE CURVE IS REPRESENTATIVE OF INTEREST IN THE MARKETPLACE. ROMAINE: WE ARE IN CONVERSATION WITH GREG DAVIS, THE PRESIDENT AND CIO AT VANGUARD STICKING WITH US. WE NEED TO TAKE A QUICK BREAK. WE HAVE A LOT PACKED INTO THE SHOW TODAY. WE WILL COME BACK WITH GREG

10:14 DAVIS IN A MOMENT AND HEAR FROM JANICE HENDERSON’S CEO THREE MONTHS AFTER TAKING HIS COMPANY PRIVATE AND THE CAPITAL CEO JIM REYNOLDS EXPANDING HIS WEALTH PLATFORM DEEPER INTO THE WORLD OF ENTERTAINMENT AND SPORTS. DON’T GO ANYWHERE. THIS IS “THE CLOSE” ON BLOOMBERG. ROMAINE: WE ARE HERE IN STUDIO TWO WITH GREG DAVIS, THE PRESIDENT AND CIO AT VANGUARD.

10:46 EARLIER THIS YEAR VANGUARD WELLINGTON BLACKSTONE MELDED FORCES FOR A PRIVATE SOLUTION. THIS GOES BACK TO WHAT YOUR CLIENTS ARE ASKING FOR AND THE PUSH WE HAVE SEEN TO PROVIDE INDIVIDUAL INVESTORS WITH ACCESS TO PRIVATE ASSETS. GREG: A BIG PART OF IT AS BROADENING OUT ACCESS. WHEN YOU LOOK AT THE MARKETS, 8% OF THE TOTAL MARKET CAP IS IN PRIVATE MARKETS TODAY. COMPANIES WITH OVER $100

11:16 MILLION OF REVENUE PER YEAR, 8 – 86% OF THOSE COMPANIES ARE PRIVATE. WE WANT TO MAKE SURE THAT INVESTORS THAT USED TO THINK ABOUT IF I OWNED SMALL CAP LARGE-CAP, MID-CAP, I OWNED THE MARKET, THAT’S NOT THE CASE ANYMORE UNLESS YOU HAVE PRIVATE EXPOSURE. WE HAVE BEEN WORKING WITH WELLINGTON BLACKSTONE. WELLINGTON IS BASICALLY THE CIO THERE. WE THINK IT IS IMPORTANT FOR INVESTORS WHO HAVE A LONG-TERM ORIENTATION TO HAVE EXPOSURE TO THAT SEGMENT OF THE MARKET,

11:48 BECAUSE THEY WOULD OTHERWISE MISS OUT ON THE POTENTIAL RETURN THAT COMES WITH IT. ROMAINE: THERE ARE TWO CONCERNS. ONE IS WHETHER THE PRODUCTS ARE OFFERING TRUE DIVERSIFICATION IN THE SECOND IS THE BIG LIQUIDITY DEBATE, OR THE LACK OF LIQUIDITY ITSELF. WHEN YOU LOOK AT DIVERSIFICATION, HOW MUCH OVERLAP IS THERE WITH PUBLIC ASSETS OR EVEN FIXED INCOME ASSETS? GREG: WE DO SEE IT AS A DIFFERENCE OF FIRE. IT IS DIFFERENT SEGMENTS OF THE MARKET, PART OF THE CAPITAL SPECTRUM IN MANY CASES PEOPLE DON’T HAVE ACCESS TO TODAY.

12:20 IN MANY CASES AS WELL, THESE ARE HYPER-GROWING COMPANIES. INVESTORS, WHEN YOU THINK ABOUT THE MOST RECENT UNIVEST – UNICORNS THAT HAVE COME TO THE MARKETPLACE, THEY CAME TO THE MARKETPLACE WITH GARGANTUAN EVALUATIONS. THESE THINGS AND IN THE PAST WOULD START OUT AS A LARGE-CAP – SMALL-CAP STOP THEN GRADUATE TO MAKE CAP AND IT LARGE-CAP. NOW THEY ARE SKIPPING THOSE STEPS AND GOING TO THE LARGE-CAP PHASE. WE THINK ABOUT DOING IT IN MODERATION. YOU NEED TO MANAGERS. YOU NEED TO CONTROL YOUR COST IN A WAY THAT MAKES SENSE FOR

12:54 RISK APPETITE. THESE SEGMENTS OF THE MARKET ARE LESS LIQUID. THAT IS WHERE THE LIQUIDITY PREMIUM COMES FROM. THERE ARE LESS LIQUID INVESTMENTS SO PEOPLE HAVE TO MAKE SURE THEY ARE COMFORTABLE WITH NOT HAVING THE SAME TYPE OF LIQUIDITY YOU WOULD HAVE IN THE PUBLIC MARKETS. ROMAINE: WITH THE FREAK OUT OVER THE REDEMPTIONS AND GATING, WHO WAS RESPONSIBLE FOR THAT? WAS IT BECAUSE INVESTORS NEVER HAD THAT EXPLAINED TO THEM IN THE PROPER MANNER? WHERE THE PRODUCTS NOT BEING SOLD PROPERLY? GREG:

13:27 IT’S HARD TO TELL THE CULPRIT. BUT IF YOU ARE INVESTING IN A PRIVATE MARKET ASSET IT WILL NOT HAVE THE SAME LIQUIDITY AS THE PUBLIC MARKETS. THE GATES PUT UP OR, IN ESSENCE, TO PROTECT INVESTORS WITH LONG-TERM ORIENTATION. THE LAST THING YOU WANT TO DO IN THAT TYPE OF FUND IS BA.4’S CELLAR AND TAKE DEPRESSED PRICING IF YOU HAVE TO GO OUT TO THE MARKETPLACE AND TRY TO GET A BID ON SOMETHING AND TRY TO GET REDEMPTIONS BUT HAVING THE GATES UP, ULTIMATELY, HELP PROTECT INVESTORS WITH LONG-TERM ORIENTATION. ROMAINE: I WANT TO TALK ABOUT THE EVOLUTION OF VANGUARD.

13:59 IT SEEMS LIKE THERE’S BEEN A BIG PHILOSOPHICAL SHIFT. MAYBE IT IS A STRUCTURAL SHIFT. YOU HAVE $2 TRILLION IN ACTIVE STRATEGY NOW. MAYBE MORE THAN THAT, BASED ON THE LAST PUBLIC NUMBERS I SAW. ISN’T THIS WALKING – IS THIS WALKING AWAY FROM INDEXING AND THE TRADITIONAL CORE OF WHAT WE THINK VANGUARD TO BE? GREG: KNOW, THE CORE IS WHAT WE HAVE ALWAYS DONE, TO LOWER THE COST FOR CLIENTS AND IT STARTED WITH THE WELLINGTON FUND AND

14:29 INDEXING. WE HAVE TRIED TO BUILD ON THE VANGUARD EVENT IN ACTIVE FIXED INCOME. OUR GOAL IS, OVER TIME, WITH AS INVOLVED MORE HEAVILY, WE WILL BE ABLE TO PRODUCE THIS EFFECT IN OPEN MARKETS LIKE PRIVATE OVERTIME. ROMAINE: IS IT EASY IN THIS ENVIRONMENT TO EXECUTE A STRATEGY, RELATIVE TO FIVE YEARS AGO? GREG: IT DEPENDS ON WHAT PART OF THE MARKET YOU ARE TALKING ABOUT. WHEN WE TALK ABOUT ACTIVE STRATEGY, WHEN IT COMES TO

15:01 FUNDAMENTAL EQUITY, LIKE LARGE-CAP, IT’S REALLY, REALLY HARD. IT IS AN EFFICIENT MARKET. WHEN IT COMES TO FIXED INCOME, IN THE MUNICIPAL BOND SPACE, OUR TEAM HAS BEEN ABLE TO ADD VALUE ON A VERY CONSISTENT BASIS RELATIVE TO BENCHMARKS. WHEN IT COMES TO ACTIVE FIXED INCOME, WE HAVE BEEN ABLE TO DO THE SAME BECAUSE WE HAVE SKILL AND EXPERTISE IN EMERGING MARKETS, HIGH-YIELD, INVESTMENT-GRADE, AS WELL AS RATES. THERE ARE AREAS WHERE WE CAN CONSISTENTLY ADD VALUE IN A HIGHLY RISK CONTROLLED WAY. ROMAINE: HOW DO YOU CONTINUE TO BUILD THIS WITH ALL THESE NEW PRODUCTS, NEW STRATEGIES, AND

15:37 NOT RUN INTO BECOMING A SUPERMARKET THAT IS SELLING A LOT OF EVERYTHING, BUT NOTHING WELL? GREG: GREAT QUESTION. A LOT OF THAT IS HOW WE THINK ABOUT PRODUCT DEVELOPMENT. THAT GOES TO OUR PHILOSOPHY. ONE THING, FIRST, THERE HAS TO BE ENDURING INVESTMENT MERIT. TWO THERE HAS TO BE CLIENT DEMAND. THREE, WE HAVE TO BE ABLE TO DO IT WELL. IF IT MEETS ALL THREE CONDITIONS , WE WILL CONSIDER LAUNCHING A PRODUCT IN THAT SPACE. THERE IS A REAL REASON INVESTORS WANT TO GO INTO THAT ASSET CLASS AND GET VALUE FROM IT OVERTIME. WE HAVE NEVER BEEN THE TYPE OF

16:13 FIRM THAT CREATES PRODUCTS FOR THEM TO JUST FLY OFF THE SHELF BECAUSE THEY ARE SPECULATIVE IN NATURE. THERE IS PLENTY OF THAT IN THE MARKET TODAY BUT IT’S NOT VANGUARD’S APPROACH. IT IS HAVING ACCESS TO THE CORE CLASSES THAT ARE CATALYST TO SAVE FOR RETIREMENT, FUND YOUR KIDS COLLEGE EDUCATION, OR BUY A HOME. ROMAINE: GREG DAVIS, THE PRESIDENT AND CIO AT VANGUARD. WHEN WE COME BACK, BANK EARNINGS, INCLUDING FROM MORGAN STANLEY AND BANK OF AMERICA. ERIKA

16:45 NAJARIAN JOINED US AFTER ON “THE CLOSE” ON BLOOMBERG. ♪ POP TIME – ROMAINE: TIME FOR THE TOP CALLS. GX, ONE OF THE LARGEST CONTRACT LOGISTICS COMPANIES UPGRADED BY GOLDMAN FROM BUY TO NEUTRAL CALLING DATA CENTER DEMAND A TAILWIND, AND WELL-POSITIONED TO TAKE ADVANTAGE OF INDUSTRY TRENDS AND EXPAND ITS U.S. BUSINESS. SHARES CAUGHT UP IN THE DOWNDRAFT TODAY, DOWN A SECOND

17:15 STRAIGHT DAY. GOLDMAN DOWNGRADED TO EQUAL WEIGHT ON THE BACK OF THE STOCKS SIGNIFICANT RALLY, THE FIRM CUTTING ITS PRICE TARGET OF 574, ARGUING VALUATIONS HAVE RUN AND WE DO NOT SEE A MEANINGFUL AI INFECTION YET. THOSE SHARES ARE HAVING THEIR WORST DAY SINCE APRIL OF 2025, DOWN ABOUT 11.5%. LET’S LOOK AT BRINKER. UPGRADING THE PARENT COMPANY OF CHILIS, THANKS TO ITS TRANSITION INTO A DURABLE COMPOUNDING STORY. THE PRICE TARGET GOES UP TO 255. AT BRINKER’S VALUE CREATION

17:50 OPPORTUNITY IS STILL UNDER APPRECIATED. INVESTORS APPRECIATE IT. THE SHARES ARE UP A FIFTH STRAIGHT DAY. SOME OF OUR TOP CALLS. MORGAN STANLEY AND BANK OF AMERICA, THE LAST OF THE BIG BANKS TO REPORT EARNINGS. THE ENTIRE BANKING SECTOR HAS BEEN UNDER PRESSURE BASED ON A WIDE VARIETY OF CROSSED CURRENT – CROSSCURRENTS. ERIKA NAJARIAN JOINS US FROM UBS. LET’S START WITH MORGAN STANLEY. ON THE SURFACE, THE NUMBERS DID

18:22 NOT LOOK BAD BUT THERE ARE STILL CONCERNS ABOUT THE DURABILITY OF GROWTH AND WHATEVER IT CIRCLING NOW WHEN IT COMES TO DEALMAKING AND MANAGEMENT. WHAT IS YOUR MAIN TAKE AWAY FROM EARNINGS? ERIKA: THE THING THAT IS CIRCLING AROUND IS THE BOND MARKET. I WILL ANSWER ON MORGAN STANLEY RESULTS IN A SECOND BUT WHAT GROUP TO THE MARKET OVER THE LAST TWO DAYS, AND CPI DID NOT HELP, IS THE PROSPECT OF HIRE FOR LONGER.

18:58 THAT LOGIC PATTERN IS, INVESTMENT BANKS AND BIG BANKS HAVE MADE A LOT OF MONEY ON THE CAPITAL MARKET LARGESS. OR THE RIGHT MARKET COULD HAVE A CHILLING EFFECT. PERHAPS THE FED HAS TO GO FASTER , AND ALSO, HIGHER IN NORMALIZING RATES TO COMBAT INFLATION. THERE IS AN INCREASE IN INTEREST RATES BECAUSE OF HIGHER PRODUCTIVITY AND GROWTH. IT’S GREAT. AND HIGHER INTEREST RATES FIRM INFLATION. WHAT IS SORT OF RUINING THE BANK PARTY, SO TO SPEAK, IS

19:32 SPECIFICALLY FOR MORGAN STANLEY TOO, GOLDMAN RESULTS YESTERDAY WERE SO STAND OUT IN TERMS OF THE BEAT THAT I THINK THE COMPARISON WAS A LITTLE TOUGH FOR THEM. ROMAINE: ANNA MORGAN STANLEY AND BOND MARKET AND THAT AI TRADE, THEY ARE DOUBLE OVERWEIGHT ON THAT AI BUILD OUT LONG TERM, AND THAT MAKES SENSE. SHORT-TERM DOES THAT BECOME A LIABILITY? ERIKA: WHEN YOU CATCH UP WITH THEM,

20:03 THEY TALK ABOUT A PRETTY BROAD PIPELINE. KEEP IN MIND, I’M NOT JUST TALKING ABOUT COMPANIES. I’M TALKING ABOUT PUBLIC-SECTOR GOVERNMENTS THAT NEED CAPITAL. UNFORTUNATELY, FOR ALL HER CHILDREN. ADDITIONALLY, MORGAN STANLEY HAS A LEVER THAT A LOT OF ITS COMPETITORS DON’T HAVE, THE FOLLOW THROUGH TO THE WEALTH BUSINESS. IT HAD NET NEW ASSETS OF OVER $200 BILLION ON THE BACK OF SOME IDEAS WHICH HAVE ALREADY HAPPENED. IF THE MARKET REMAINS

20:41 RECEPTIVE, TO YOUR PREVIOUS GUEST, IF SOME OF THESE IPOS COME DOWN THE PIPE, MORGAN STANLEY WILL SEE IT BOTH WAYS. THEY ARE DOUBLE LEVERED IN THEIR BANKING BUSINESS AND WEALTH BUSINESS. ROMAINE: I WANT YOUR THOUGHTS ON BANK OF AMERICA. SOME OF THE SAME STORY EVEN IF YOU DISCOUNT TO THE $1.2 BILLION SELLOFF HERE. WE SAW CONCERNS WITH TRADE AND REVENUE. IS THIS A ONE-OFF, ONE QUARTER OF CONCERN, OR DOES IT FEED INTO THE NEXT COUPLE QUARTERS?

21:14 ERIKA: BANK OF AMERICA IS A BIT OF A TOUGHER STORY. I THINK THAT THE STOCK WOULD NOT BE DOWN 5% JUST ON EARNINGS AND THE PENALTY, WHICH IS, IN THEORY, BACKWARDS LOOKING. AND IF YOU BELIEVE THE COMPANY, WHICH I DO, ON THIS POINT, THE EXPENSES RELATING TO FIXING SOME OF THESE ISSUES SHOULD BE IN THE RUN RATE. BUT REALLY, WHAT IS HAPPENING WITH BANK OF AMERICA’S IT HAS BEEN SORT OF UP AND DOWN DELIVERING WHAT IT HAS

21:45 PROMISED, PARTICULARLY WHEN IT COMES TO OPERATING LEVERAGE, OBVIOUSLY JUST A MIX OF REVENUE GROWTH AND EXPENSE GROWTH. I THINK THAT WHAT IS HAPPENING HERE MIGHT BE THAT BMA GOT CAUGHT ALL SIDES IN TERMS OF EXPENSES NEEDED TO FUND THE UPTICK IN WEALTH MANAGEMENT, REVENUES, AND ALSO INVESTMENT BANKING AND TRADING. THEY HAD A NOT SO GREAT QUARTER IN TERMS OF TRADING THIS QUARTER. RESETTING THEMSELVES, STICKING TO THE MESSAGE, AND DELIVERING WHAT THEY SAY THEY CAN.

22:21 ROMAINE: WE WILL LEAVE IT THERE. WHEN WE COME BACK, WE WILL SET DOWN WITH THE CEO OF JANICE HENDERSON, HERE ON BLOOMBERG. ♪ ROMAINE: A 92 EUROS GLOBAL INVESTMENT FIRM IN PRIVATE IN JUNE IN A TRANSACTION WITH A CATALYST. SINCE THAT THE OUTCOME OF THE

22:55 FIRM HAS MADE A COUPLE OF ACQUISITIONS WITH ONE MORE COMPLETING LATER THIS YEAR. AS IT LOOKS TO EXPAND ITS FOOTPRINT. JOINING US IS THE CEO. GREAT TO SEE YOU. YOU HAVE HAD THREE MONTHS TO DIGEST THIS. HOW IS IT GOING? >> IS GOING GREAT. WE ARE REALLY ENERGIZED ABOUT THE SITUATION WE ARE IN. WE DID WELL AS A PUBLIC COMPANY. WE DOUBLED OUR BUSINESS. WE FELT PRETTY GOOD ABOUT IT. WE WERE GETTING TO THE POINT WHERE TO TRULY DELIVER ON WHAT

23:28 OUR CLIENTS NEEDED FROM US WE HAD TO INVEST BACK IN THE BUSINESS. WE NEEDED TO INVEST IN OUR PEOPLE. WE FEEL LIKE WE ARE A 92-YEAR-OLD START RIGHT NOW.

23:59 WE ARE DELIVERING FOR OUR PLAN CLIENTS. ROMAINE: OBVIOUSLY THE PREDECESSOR COMPANY IS OVER THE UNITED KINGDOM. NOW THIS CURRENT MASHUP. THE MARKET IS A LOT DIFFERENT THAN IT WAS DECADES AGO. IT GETS TO THIS IDEA. MAYBE THAT IS A GOOD POINT TO START ON. A LOT OF TIMES THE BEST

24:34 OPPORTUNITIES COME WHEN WE ARE SEEING BIG MARKET DISRUPTIONS. TALK TO ME ABOUT WHAT YOU’RE TRYING TO BUILD LONG TERM. >> WE HAD A SINGLE CLIENT. WE THINK ACTUALLY THE MISS THAT. THAT IS WHEN WE STARTED HERE.

25:12 WE HAD THIS LONGEVITY OF INVESTING. BEING THE RIGHT INVESTORS FOR WHATEVER CLIENT IS OUT THERE. WE HAVE 75 NEW CLIENTS. INDIVIDUAL PEOPLE. WHAT HAS BEEN VERY CONSTANT IN ALL OF THIS IS WE HAVE THESE INVESTORS TODAY WHO PICK GOOD FROM BAD. A GOOD COMPANY FROM A BAD COMPANY. A GOOD MANAGEMENT TEAM FROM A BAD MANAGEMENT TEAM.

25:44 THAT IS WHAT WE DO. THAT HAS NEVER CHANGED. IN THIS ENVIRONMENT IN PARTICULAR. WE ARE INVESTING IN AI AND THE NEXT GENERATION.

26:15 OUR PRODUCT PORTFOLIO HAS DRAMATICALLY CHANGED. ROMAINE: LET’S TALK ABOUT ONE OF THOSE PRODUCTS. IT IS A STANDALONE ETS. THE MOST SUCCESSFUL COMING OUT OF THE GATE. YOU STARTED IN 2020. WHY TAKE ONE OF THESE? WAS SOMEONE ASKING FOR THAT OR DID YOU SIMPLY DECIDE WE WILL RELEASE THIS TO THE WORLD.

26:52 >> WE HAVE SIX ETS NOW. WE HAVE CHANGED THE WAY WE OPERATE. I THINK THE ASSET MANAGEMENT COMPANIES ARE IN THE WORLD HAVE TO THINK THIS WAY. WE DON’T SIT IN A LAB IN AND COME UP WITH A CONCOCTION AND SAY THIS IS THE NEXT BIG THING. THAT’S ON WHAT WE DO. THAT’S NOT HOW IT PLAYED OUT. WE HAD A LOT OF EXPERTISE. SELLING TO INSTITUTIONAL PLAYERS. THE RETAIL PLAYER SAID WAIT A SECOND, I WOULD LOVE TO GET EXPOSURE TO THIS. THE SHORT END OF THE CURVE WITH

27:27 REALLY GOOD SAFETY. SO WE FORMED THIS ETF. THEY STARTED TO PICK THIS UP. TO GET EXPOSURE TO SAFE THINGS. A LITTLE BIT MORE RISKY DNA. SOME HIGHER RETURNS. WE HAD A VANILLA FRANCHISE. ALL OF THESE THINGS PEOPLE WANT TO GET EXPOSURE TO. AS WE GREW THE BUSINESS, THE

28:01 INSTITUTIONAL PLAYERS CAME BACK. YOU ALSO GAVE ME LIQUIDITY. SO WE ARE NOT SITTING IN A LAB DOING THIS. THIS IS A SKILL SET THAT WE BROUGHT ON BOARD. THAT IS HOW WE MODEL EVERYTHING. ROMAINE: I ASSUME THERE WAS A LOT OF EXPOSURE.

28:47 WE HAVE SEEN THAT. NOTHING CHANGED. IT IS SHORT DURATION. PRETTY GOOD YIELD TO IT. AS RATES COME DOWN, THE SPREAD OFFERED TO YOU IS IN THE SAME DURATION. MAY BE MORE IMPORTANT FOR CLIENTS. THE OTHER ANSWER IS WE HAVE

29:18 EXPANDED SIGNIFICANTLY. OUR FIXED INCOME OFFERINGS TO FOLKS. ACROSS THE BOARD. THAT IS ALL IN THE PUBLIC MARKETS. WE ALSO HAVE THE PRIVATE MARKET ELEMENT TO IT. WHICH WE THINK IS INCREASINGLY IMPORTANT. IT IS ONE OF THE BEST. THAT IS AN OPPORTUNITY WE HAVE.

30:02 ROMAINE: YOU CLOSED ON THAT EARLIER THIS MONTH. THERE ARE A COUPLE OF OTHERS WE ARE PROBABLY FORGETTING. ARE YOU STILL LOOKING FOR OTHER DEALS? WILL THAT BE STRUCTURED AROUND ACQUISITIONS? >> I THINK IT IS BOTH. WE HAVE A CHANCE TO DO THAT. THAT SAME CONCEPT.

30:47 OUR LIFE SCIENCES BUSINESS HAS DONE REALLY WELL. WE HAVE GATE – GREAT TECH FRANCHISES. IT HAS BROADENED OUT THE SUCCESS OF AI. WHAT IS THE GOAL? WILL THIS BE SET UP LIKE A COLLECTION OF BEAUTY FRANCHISES? >> WE DON’T HAVE A BOUTIQUE MODEL. CLIENTS ARE DEMANDING TO WORK WITH US.

31:22 WE HAVE THE INGREDIENTS TO BUILD. IT PAYS TO HAVE A BROADER LANDSCAPE. NOT HAVING SMALLER BOUTIQUES. ROMAINE: YOU TOOK ON SOME DEBT TO DO THIS DEAL. YOU ARE COMFORTABLE WITH THAT? DID THAT GO HAND-IN-HAND WITH THE IDEA OF GOING PRIVATE?

31:53 >> WE WERE MASSIVELY ON THEIR LEVERAGE. I THINK THAT WAS HELPFUL. OUR LEVEL OF DEBT IS EXTRAORDINARILY LOW. IT IS SIGNIFICANTLY LOWER THAN MOST OF THE LARGE PUBLIC COMPANIES OUT THERE. SO WE ARE IN A VERY GOOD POSITION. THAT IS WHY WE ARE READY TO MAKE ACQUISITIONS. FOR FOLKS WHO WANT TO JOIN US AND OUR BROUGHT DISTRIBUTION TO THE CLIENTS. ROMAINE:

32:27 I THINK ABOUT YOUR CAREER PRIOR TO WHAT YOU’RE DOING NOW. YOUR INTERACTION WITH A VERY ACTIVIST INVESTOR. I KNOW YOU WERE VERY INVOLVED WITH THAT. HOW MUCH OF THAT ETHOS IS BAKED IN RIGHT TO THIS NEW COMPANY GIVEN THAT HE IS ON THE BOARD. AND HE HELPS TO TAKE IT PRIVATE?

33:00 >> HE HAS BEEN INVOLVED FOR A VERY LONG TIME. HE WANTS TO DO RIGHT BY CLIENTS AND SHAREHOLDERS. A LOT OF THE CHANGES ARE BECAUSE OF THAT. IT IS AN ETHOS OF CONFIDENCE. WE HAVE VERY GREAT AMBITIONS FOR OUR FIRM. TO HAVE BETTER RETIREMENTS AND BETTER LIVES. THAT IS WHAT WE WANT TO DO. WE WANT TO CONTINUE THAT ON THE BIGGER STAGE. WE WENT PRIVATE TO ALLOW US TO DO THOSE THINGS ORGANICALLY.

33:34 ROMAINE: ASIDE FROM THE ACQUISITIONS, ARE YOU HIRING RIGHT NOW? >> WE ARE. ABSOLUTELY BUILDING OUT ORGANICALLY IN THAT WAY. THIS IS A GROWTH STORY, NOT A COST-CUTTING STORY IN ANY WAY. MOST PEOPLE TALK ABOUT AI IS A COST-SAVING PLAN. THAT IS NOT THE WAY WE THINK ABOUT IT. IT IS TO HELP US DELIVER WHAT OUR CLIENTS WANT. THEY WANT US DELIVER BETTER INVESTMENT PERFORMANCE.

34:05 WE ARE ONE OF THE BEST IN TERMS OF ASSETS UNDER MANAGEMENT. BUT WE CAN ALWAYS DO BETTER. NUMBER TWO IS CLIENT SERVICE. THAT IS WHAT WE ARE INVESTING IN. CLIENTS DON’T NEVER COME TO MY OFFICE AND SAY WHAT ARE YOUR MARGINS? I DON’T TALK ABOUT THAT BECAUSE WE DON’T GET ASKED ABOUT THAT. ROMAINE: I’M CURIOUS ABOUT YOUR USE OF AI.

34:36 GIVE ME A SENSE AS TO HOW THAT HAS IMPROVED INVESTMENT RETURNS OR YOUR OVERALL PERFORMANCE INTERNALLY. AND HOW FAR CAN THAT GO? IS THIS UNIQUE OR DOES EVERY SHOP IN TOWN NOW HAVE THIS? THAT IS A GREAT QUESTION. WE HAVE BEEN FORTUNATE WITH THAT. TO PARTNER WITH COMPANIES LIKE ANTHROPIC. WE FIND OVER AND OVER THAT WE ARE AHEAD OF THE CURVE.

35:10 THAT DOESN’T MEAN MUCH TO ME. BECAUSE THE CURVE IS MOVING QUICKLY. WE HAVE TO CONTINUE TO MOVE QUICKLY. I WILL GIVE YOU AN EXAMPLE. OUR SYSTEM TO MAKE SURE WE ARE DELIVERING THE RIGHT CONTENT AND THE RIGHT MANNER TO THE RIGHT CLIENTS OF THE RIGHT TIME. THAT HAS TAKEN AWAY SO MUCH WORK FROM OUR SALESPEOPLE. THEY SPEND MORE TIME WITH THE CLIENT. ONLY GOOD THINGS CAN COME FROM THAT. THEY CAN TALK ABOUT HOW THEY CAN SOLVE THEIR PROBLEMS. THAT IS A REALLY IMPORTANT THING.

35:48 WE DO THAT WITH ALL OF OUR PORTFOLIOS. TRYING TO ANALYZE INFORMATION FASTER. I WOULD NOT SAY AT THIS POINT THAT YOU CAN POINT TO THAT WE ARE DELIVERING BETTER PERFORMANCE. IT IS VERY GOOD. IT TAKES TIME TO REALLY TELL IF IT IS DRIVING THAT. ROMAINE: I AM CURIOUS, YOUR LAST PUBLIC RELEASE, I KNOW YOU’RE NOT GOING TO RELEASE NUMBERS THAT IS A PRIVATE COMPANY.

36:22 IS THAT A FUNCTION OF SOME OF THE MARKET VOLATILITY THAT WE HAVE OUT THERE OR SOME OF THE CHANGES YOU’D ACTUALLY BEEN MAKING OF THE COMPANY? >> I THINK IT WAS JUST SHORT-TERM MARKET VOLATILITY. RIGHT NOW I CAN SAY THAT OUR LONG-TERM AND SHORT-TERM PERFORMANCE IS PRETTY MUCH THE SAME. THAT IS SIGNIFICANT. ROMAINE: GIVE ME A SENSE OF WHAT CLIENTS ARE ASKING FOR. WHAT ARE THEY LOOKING FOR?

36:54 >> THE CONVERSATIONS ARE EXCITING FOR US BECAUSE THEY ARE SAYING THE WORLD IS NUTTY RIGHT NOW. THERE’S A LOT OF VOLATILITY AND MOVING PARTS. WE NEED HELP. WE CANNOT JUST RELY ON THE MARKETS GOING UP ANYMORE. THAT IS YESTERDAY’S NEWS. GOING FORWARD WE NEED INVESTORS WHO CAN PARTNER WITH US AND FIGURE OUT WHAT A GOOD COMPANY IS FROM A BAD COMPANY. WHAT THE OPPORTUNITIES ARE IN THE MIDDLE EAST OR ASIA. THE MORE SOPHISTICATED THE QUESTIONS ARE, THE BETTER WE

37:25 RESPOND BECAUSE THAT IS WHO WE ARE. WE ARE INVESTORS. WE MAKE TOUGH DECISIONS ABOUT INVESTING. IN DIFFERENT COMPANIES FOR DIFFERENT REASONS. THEY ASK US WHAT OPPORTUNITIES DO YOU HAVE? WE TALK ABOUT THOSE THINGS. SMALL BUSINESSES. GETTING INTO THE PRIVATE EQUITY SPACE. WE HAVE A SMALL PLATFORM THAT IS DELIVERED GOOD RETURNS FOR

37:56 CLIENTS IN THE PRIVATE EQUITY WORK BECAUSE IT USES THE SAME RESEARCH THAT WE HAVE. ROMAINE: WE ARE OUT OF TIME. I COULD CONTINUE GOING ON AND ON. GREAT CONVERSATION. CONGRATULATIONS ON THE DEAL AND WILL CATCH UP AGAIN SOON. WHEN WE COME BACK WE WILL TAKE YOU TO THE CLOSING BELL. FOCUSING ON WHAT HAS BEEN HAPPENING IN THE FIXED INCOME SPACE. THAT IS COMING UP NEXT.

38:27 >> WE HAVE GONE TO A PLACE NOW WHERE RATES HAVE NORMALIZED. INVESTORS ARE LOOKING AT WHAT THEY ARE GETTING IN THE FIXED-INCOME MARKET. WE THINK IT IS A MUCH MORE ATTRACTIVE ASSET CLASS FOR INVESTORS. THAT NORMAL CORRELATION YOU WOULD SEE WILL BE PERSISTING GOING FORWARD. ROMAINE: THE PRESIDENT AND CIO TOOK OVER KICKING US OFF TO THE CLOSE. WITH A BIG FOCUS ON STOCKS HAVING ONE OF THE WORST DAYS.

38:58 WE CANNOT TALK ABOUT STOCKS WITH THE BIG FOCUS RIGHT NOW WHAT IS GOING ON IN THE FIXED-INCOME SPACE. WE ARE LOOKING AT TREASURY YIELDS LOWER. BUT THAT IS A BIG CHANGE FROM WHAT WE SAW EARLIER THIS MORNING WHEN WE GET THE CPI REPORT. THAT RETRACED THE TWO-YEAR YIELD. ONLY UP ABOUT BASIS POINT RIGHT NOW. CLOSING IN ON THE CLOSING BELL. THE TREASURY MARKET IS ABOUT THE SAME.

39:34 STILL HEADING FOR ITS HIGHEST CLOSE IN MORE THAN A YEAR. AS WE MOVE CLOSER TO THE CLOSING BELL, LET’S BRING IN THE GLOBAL HEAD OF STRATEGY. TYPICALLY HEADING INTO THE CLOSE OF EQUITY MARKETS WE WANT TO TALK TO SOMEONE IN EQUITIES BUT I FEEL LIKE THIS STORY FOR A GOOD PART OF THIS YEAR HAS REALLY BEEN ABOUT THE INTERPLAY RIGHT NOW. AND WHAT WE ARE SEEING THE FIXED-INCOME SPACE AND WHAT WE ARE SEEING IN EQUITIES. WE HAVE TO START WITH COREWEAVE.

40:05 THE STOCK PLUNGING TODAY. THIS IS KIND OF A ONE-OFF STORY? OR IS THERE SOMETHING BROADER HERE THAT WE SHOULD BE PAYING ATTENTION TO? >> I THINK THIS IS A GREAT QUESTION. IS PROBABLY A LITTLE BIT OF BOTH. YOU HAVE SPECIFIC SINGLE NAME CHALLENGES THAT WE ARE TRYING TO WORK THROUGH AND UNDERSTAND.

40:40 AMID A BROADER CYCLE OF COMPANIES THAT ARE INTEREST-RATE SENSITIVE. THE AMOUNT OF ISSUANCE THAT HAS HAD TO CLEAR OUTSIDE THE U.S. HAS BEEN ABSOLUTELY STAGGERING. REALLY QUITE CHALLENGING TO A LOT OF PORTFOLIO MANAGERS. ROMAINE: I’M CURIOUS ABOUT WHAT THE MARKET CAN ABSORB. I HAVE SEEN NUMBERS THAT SHOW THE PUBLIC THAT MARKETS CAN ABSORB A COUPLE OF TRILLION DOLLARS.

41:14 WHICH RAISES THE QUESTION, WHAT DOES THE REST OF THAT MONEY ACTUALLY COME FROM? YOU HAVE SEEN SOME CREATIVE WAYS OF FINANCING OFF BALANCE SHEET STUFF. >> I THINK THE DIFFERENTIATION ACROSS DIFFERENT REGIONS, WE ARE SEEING PRIVATE CREDIT DEALS IN TERMS OF THIS. INFRASTRUCTURE TYPE STAFF. I WILL NEVER UNDERESTIMATE BANKERS CAPACITY TO FIGURE OUT

41:46 SOLUTIONS. THE BETTER OFF THEY WILL BE. AT SOME POINT THE PUBLIC CREDIT MARKETS WILL SAY WE SEE ALL OF THESE OTHER THINGS IN PLAY. THAT MAKES US A LITTLE BIT NERVOUS. THEY DON’T WANT TO BE LOCKED OUT OF THOSE MARKETS. THEY HAVE TO TREAD CAREFULLY. ROMAINE: AT WHAT PRICE? THEY ARE DOING A GOOD JOB. I FEEL LIKE THE MONEY WILL BE

42:18 THERE. THE CAPACITY WILL BE THERE. AT WHAT PRICE ARE YOU COMFORTABLE? THERE IS THIS ISSUE OF REVENUE. TRILLIONS OF DOLLARS ON THE BACK OF ESTIMATES. THAT IS A HUGE GAP. >> I THINK SOME OF THAT HAS MAYBE BEEN RETHOUGHT A LITTLE

42:53 BIT. WITH THE BOND ISSUANCE NOT BEING AS ROBUST AS PEOPLE EXPECTED. PEOPLE GETTING PUSHED OFF THE REVENUE NUMBERS. NOT BEING QUITE AS SUBSTANTIVE AS PEOPLE WANTED. I THINK IT WILL MOVE HIGHER AND HIGHER. ROMAINE: IT RAISES A QUESTION ABOUT IS THERE ANY REAL CREDIT RISK? THAT YOU ARE SEEING AT THIS STAGE? BASED ON SOME OF THE STRUCTURES OF THE DEALS THAT HAVE BEEN OFFERED.

43:29 DOES ANY OF THAT WORRY YOU? >> THE THINGS THAT WERE ANYMORE ARE THE MORE LEGACY DEALS. THOSE ARE THE ONES WE NEED TO BE FOCUSED ON. THERE NEEDS TO BE SOME KIND OF SOLUTION. THAT IS WHY INVESTORS HAVE TO BE LOOKING.

44:06 ROMAINE: NO ONE IS REALLY DOUBTING THE HYPERSCALERS. BUT WE ARE SEEING A LOT OF CIRCULARITY. >> I THINK IT SPEAKS TO A BROADER SHIFT.

44:41 NOW THEY ARE PUTTING SOME LEVERAGE ON BALANCE SHEETS. THEY ARE GETTING INTO MORE ASSET INTENSIVE BUSINESSES. AND THE RELATED HIGH-YIELD BONDS. IT IS A MUCH MORE CUMBERSOME BECAUSE SYSTEM THAT A LOT OF THESE COMPANIES HAVE BEEN OPERATING IN. ROMAINE: REALLY GREAT TO HAVE YOU. WE DID JUST GET SOME BREAKING NEWS ON APPLE. SAID TO BE PREPARING TO DEBUT

45:12 ITS FIRST AI FEATURES IN CHINA THIS DECEMBER. WHAT DO WE KNOW? >> THIS IS A PRETTY BIG DEVELOPMENT FOR APPLE. MAINLAND CHINA IS ONE OF ITS BIGGEST AND MOST IMPORTANT MARKETS. THE AI TECHNOLOGY THERE IS EXTREMELY COMPETITIVE. THE FIRST TIME APPLE WILL BE ABLE ROLL OUT ITS INITIAL SET OF INTELLIGENCE FEATURES. THESE WERE INTRODUCED TO A COUPLE OF YEARS AGO. IT NOT INCLUDE SIRI AI. THIS WILL ROLL OUT IN CHINA.

45:47 ALSO WITH DAMAGE APPLE EXECUTIVES HAVE A LITTLE OPTIMISM. I BELIEVE THE NEW AI FEATURES IN THE U.S. LIKE EXPANDING IMAGES WILL COME TO THAT MARKET AS WELL. ROMAINE: THE LATEST HEADLINE ON APPLE. ONE OF THE FEW PIECES OF GREEN ON THE SCREEN AS WE HAD CLOSER TO THE CLOSING BELL.

46:23 >> BLOOMBERG’S CONFERENCE OF CROSS-PLATFORM COVERAGE OF THE U.S. MARKET CLOSE STARTS RIGHT NOW. ROMAINE: WE ARE A COUPLE OF MINUTES AWAY FROM THE END OF THE TRADING DAY. TAKING YOU THROUGH TO THE CLOSING BELL. IT IS A GLOBAL SIMULCAST. WELCOME TO OUR AUDIENCES ACROSS ALL OF OUR PLATFORMS. ON A DAY WHEN INVESTORS HAVE BEEN RATTLED. FOR A WIDE VARIETY OF REASONS. >> A BIT OF SCOTTRADE.

47:01 THAT. >> NOT SO MUCH FOR THE NASDAQ 100. THIS IS THE WORST DAY FOR THE NASDAQ 100. DOWN MORE THAN 2% GOING INTO JUNE OF THIS YEAR. ROMAINE: THE RUSSELL 2000 DOWN 2%. FIRMLY IN CORRECTION TERRITORY.

47:39 >> YOU HAVE SEEN RALLIES AND PULLBACKS. OVERALL NOT DOING WELL. >> THIS STARTED LONG BEFORE THIS EARNINGS SEASONS. A LOT OF PRESSURE. CONCERNS ABOUT CREDIT. IT STARTED TO SHOW UP IN THE EARNINGS STATEMENTS. AND IN SOME THE COMMENTARY WE HEARD AT A JAMIE DIMON AND JANE FRASER AND EVERYBODY ELSE IN BETWEEN. >> ABSOLUTELY. YOU’RE SEEING IT PLAY OUT WITH THAT GROUP. ROMAINE: WE ARE GETTING THE CLOSING

48:10 BELLS HERE IN NEW YORK. THE THIRD STRAIGHT DAY OF SOFTNESS. HERE ON THIS WEDNESDAY AFTERNOON. THE LEAST DIRTY SHIRT IN THE DRAWER RIGHT NOW IS THE DOW. IT IS DOWN ABOUT A 10TH OF A PERCENT. LET’S GO TO THE BIG DECLINERS. THE TECH SPACE REALLY TAKING IT ON THE CHIN.

48:42 THE NASDAQ COMPOSITE AND THE 100 DOWN ABOUT 2% ON THE DAY. THE RUSSELL 2000 AND, VERY RATE SENSITIVE. SMALL CAPS HAVE BEEN UNDER PRESSURE FOR WEEKS. >> THAT SOUNDS AND FEELS SIGNIFICANT. LET ME GO BACK TO THE S&P 500. KIND OF AN EVEN SPLIT. 42 NAMES GAINING GROUND. 260 DECLINING.

49:15 ROMAINE: YOU TAKE A LOOK AT THE SECTORS ON THE SCREEN HERE. I WANT TO FOCUS ON THE GREEN. THIS IS WHERE ALL ACTIVITY WAS. ENERGY GOT IN ON THE ACTION. I KNOW YOU SAY HALF THE STOCKS WERE IN GREEN. A LOT OF HEALTH CARE NAMES. READ INTO THAT WHAT YOU WELL.

49:51 >> IT IS KIND OF TELLING. IT WAS UP 55% TODAY. THAT INVESTMENT DATA MORE CAPITAL. ROMAINE: I WAS ALWAYS TOLD NOT TO TRY TO BEND THE SPOON. YOU JUST FOCUS ON THE TRUTH.

50:22 >> THIS IS A MATRIX REFERENCE? ROMAINE: IT IS. HOW MUCH DID THEY INVEST IN THIS? THEY DID MILLIONS. THEY PREVIOUSLY INVESTED 600 MILLION. >> BUT THIS IS PEANUTS FOR BERKSHIRE. BUT THEY ARE INTERESTED. I’M GLAD YOU AGREE.

50:56 YOU MENTIONED HEALTH CARE. I SAW THESE ARE PERFORMING TODAY. I WILL CALL YOUR ATTENTION TO SOME OF THEM. MERCK IS SET UP 3.8%. THIS WAS TOP IN SOME OF THE MAJOR INDICES. THE CEO TELLING CNBC THAT THEY EXPECT THE BREAK SHIP CANCER VACCINE TO GET FASTER OVER TIME. THEY SAID IT IS A COMPLEX SYSTEM.

51:27 KEEP IN MIND INVESTORS ARE VERY EXCITED ABOUT THE PROSPECT FOR CANCER VACCINES. IT COULD ALSO BE A SAFE PLAY. WHEN YOU LOOK AT THE REST OF THE HEALTH CARE SECTOR. A LOT OF THEM ARE HIGHER. TOUGH GOING FOR THE BIG BANKS. WE SAW JP MORGAN YESTERDAY.

52:04 THOSE ARE MY GAINERS. >> BANK OF AMERICA DOWN 4.8% TODAY. WE GOT THIS YESTERDAY. WE JUST HAD HIM ON THE PROGRAM. I ASKED HOW MUCH OF TODAY’S

52:39 DECLINE IN BANK OF AMERICA IS ABOUT THIS VERSUS THE NUMBERS? HE SAID IT IS NOT THE NUMBERS. I WANT TO DRAW EVERYONE’S ATTENTION OVER TO THE STOCK. YOU GOT THIS ONE ON MY RADAR TODAY. DOWN 4.3% OVER THE LAST SIX DAYS. THEY HAVE A RAISED $1 TRILLION IN MARKET CAP. THAT IS WILD.

53:18 THIS IS ACCORDING TO THE CHIEF INVESTMENT OFFICER. LET’S GET OVER TO COREWEAVE. JUST TO RELATED TO WHAT IS HAPPENING. AI RELATED STOCKS FELL. THERE WAS DISTRESS. DUE TO THE MARKET ACTING IRRATIONALLY. DOWN ABOUT 8% THIS YEAR. ROMAINE: THE YIELD STORY WAS A BIG STORY TODAY.

53:50 ON THE BACK OF THE CPI REPORT. FOR THOSE OF YOU WATCHING US ON TELEVISION, YOU CAN LOOK AT THOSE NUMBERS. THE REST OF THE CURVE IS LOWER. SOME OF THAT APPEARED TO BE A HAVEN BID. BECAUSE OF CONCERNS OF WHAT IS GOING ON IN EQUITIES. >> EXACTLY. THAT IS A WRAP.

54:23 WE WILL BE BACK HERE ON RADIO. WE WILL SEE YOU AGAIN. SAME PLACE TOMORROW. ROMAINE: THE BOND VOLATILITY AS THEY ARE BUT SO TOO COUPONS. THERE IS A CASE FOR ACTUALLY EMBRACING THIS CRAZY BOND MARKET. WE WILL TALK ABOUT IT WHEN WE COME BACK AFTER THE BREAK. ♪ >> THE COUNTDOWN IS ON. EVERYTHING YOU NEED TO GET THE EDGE OF THE END OF THE MARKET DAY.

54:55 ROMAINE: A THIRD STRAIGHT DAY OF SOFTNESS FOR U.S. BENCHMARK EQUITY INDEXES. CLOSING OUT THE DAY. THE RUSSELL 2000 LOWER BY ABOUT 2%. DOWN ABOUT 11% FROM THAT AUGUST HIGH. THAT IS CORRECTION TERRITORY. IT IS A BIG PART OF THE STORY. IT LINKS TO THE YIELD PICTURE. A LITTLE BIT BENIGN. WE SAW A LOT OF VOLATILITY IN THE SESSION.

55:28 WE WILL DIG DEEPER INTO THAT STORY LATER IN THE DAY. THANKS STOCKS WERE ON THE BACK FOOT FOR MOST OF THE DAY. WE SAW BENDING SPOONS HAVING A PHENOMENAL DAY. ANOTHER BRIGHT SPOT ON THE DAY WAS IN HEALTH CARE. AND THE CONSUMER STAPLES SPACE. MAYBE A LITTLE BIT OF THE DEFENSIVE NATURE TO THAT TRADE. TAKE A LOOK AT THESE STOCKS.

56:01 A 9% DROP FOR ORACLE. THAT BRINGS US TO OUR TOP STORY OF THE HOUR. IT IS ABOUT THE REVERBERATIONS. THEY CLOSE TODAY BELOW 80% ON THE DOLLAR. LOSING ALMOST 16%.

56:32 THAT IS NOT A TRANSFORMATIVE YIELD. THAT IS DISTRESS. THE REST OF THE AI INFRASTRUCTURE TRADE WENT DOWN WITH IT. TRILLIONS OF DOLLARS PROJECTED TO BE NEEDED TO CHASE THIS DREAM. TRILLIONS THAT HAVE ALREADY LED TO RECORD REVENUE AND PROFITS. THEY ARE BEING FINANCED WITH BORROWED MONEY. AND BORROWED MONEY HAS A PRICE. IN THAT PRICES GOING UP AND UP

57:04 AND UP. THIS RAISES THE DISCOUNT RATE ON EVERY GROWTH STOCK OUT THERE. JAMIE DIMON AND BIG BANK EXECUTIVES CITING BROADER ISSUES. THIS IS A THREAT TO GLOBAL FINANCIAL STABILITY.

57:36 TODAY WE ARE WATCHING THESE FACTORS COLLIDE. BEFORE WE GET TO THE SOVEREIGN STORY, I WANT TO GET TO THE CREDIT STORY. IT GETS TO SOMETHING THAT I THINK INVESTORS HAVE BEEN TALKING ABOUT FOR A WHILE. THE AI TRAIN IS PROBABLY NECESSARY. AI WILL BE TRANSFORMATIVE. BUT THERE IS A PRICE TO THIS BUILDOUT. WE ARE STARTING TO SEE THE CONSEQUENCES OF THAT. WILL THIS BE SOMETHING WE THINK

58:07 ABOUT MORE BROADLY? >> IT IS A GREAT QUESTION. I THINK YOU FRAMED IT VERY NICELY. I THINK THE BREAK – BIG PROBLEM IS PROJECTED GROWTH. FUTURE PROJECTED EARNINGS. WHAT THEY WILL BE.

58:41 THERE IS CONCERN ABOUT THE PROJECTED EARNINGS. WE ALSO SEE TECHNOLOGY ADVANCES COMING OUT OF CHINA. THEY OPENED THE DOOR TO QUESTIONING HIS EFFICIENCY GAINS WILL MAYBE START TO QUESTION THE UNDERLYING ASSUMPTIONS OF WHAT WAS SOLD ONE A LOT OF THESE BONDS WERE BROUGHT TO MARKET. ADD ON TOP OF THAT THE RISE IN INTEREST RATES. OVER THE PAST MONTH WE HAVE SEEN A REPRICING ACROSS THE MATURITY SPECTRUM.

59:17 HIGHER TERM STRUCTURE. THE UNDERLYING FACTOR BENEATH THAT WAS INCREASING GROWTH EXPECTATIONS. THERE WERE ALSO EXPECTATIONS ABOUT A INFRASTRUCTURE. YOU CAN SEE A LITTLE BIT OF THE CIRCULAR LOGIC.

59:48 WE COULD GET A LITTLE BIT OF A CYCLICAL HEADWIND. ESPECIALLY ON RISK MARKETS. I THOUGHT IT WAS INTERESTING TODAY TO SEE THAT SNAPBACK. THAT WE SAW IN TREASURIES. I’M CURIOUS ABOUT THAT. DOES THAT MONEY ROTATED TO TREASURIES? >> I THINK YOU NAILED IT.

1:00:23 FOR PRETTY MUCH THE PAST SEVERAL YEARS THE MARKETS HAVE BEEN FOCUSING ON THE GROWTH STORY. CREDIT SPREADS HAVE REMAINED TIGHT. TODAY GIVEN THAT DIRECTOR OF THE VALUE PROPOSITION IS THE HIGHEST IT HAS BEEN IN RECENT MEMORY. IF WE GET A LITTLE BIT OF A CYCLICAL HEADWIND LIKE WE DISCUSSED AT THE BEGINNING OF

1:00:56 THE SEGMENT, WE ARE FOCUSING MORE ON THE HIGHER QUALITY CREDITS. YOU CAN PICK UP A HEALTHY COUPON. AND DENNIS IT IS YIELDS RALLY. I FIND IT VERY INTERESTING THAT WE HAD A HOT CPI REPORT. THAT CAUSED A BIT OF AN EYE-POPPING RISE IN YIELDS. THEN IT COMPLETELY RETRACED. WHY IS THAT CATCHING MY EYE? THE CORRELATIONS CHANGED BACK TO WHAT YOU WOULD EXPECT. IN THIS BACKUP OVER THE PAST

1:01:32 MONTH OR SO, HIGHER INTEREST RATES WERE NOT CAUSING INDIGESTION IN RISK MARKETS. BUT TODAY THAT CHANGED. AS WE SAW THIS RISK WOBBLE. FIXED-INCOME IS DOING WHAT IT SHOULD BE DOING IN YOUR PORTFOLIO. WHEN I THINK ABOUT WHERE WE ARE POSITIONED TODAY AND THE LOFTY EXPECTATIONS FOR FUTURE EARNINGS AND FUTURE GROWTH THAT IS EMBEDDED IN A LOT OF THE UNDERWRITING THAT IS ALREADY TAKING PLACE, GIVEN THE HIGH LEVEL OF CURRENT YIELDS,

1:02:06 REBALANCING THE PORTFOLIO AND TAKING MORE OF A STAB AT THE FIXED INCOME PIECE OF YOUR PORTFOLIO MAKES A LOT OF SENSE. ROMAINE: GIVE ME A SENSE OF HOW YOU VIEW DURATION. WE HAVE TALKED ABOUT IT. I KNOW YOU ARE A LITTLE BIT MORE FAVORITISM OF THE BELLY OF THE CURVE. IS THERE ANY INCENTIVE TO GO A LONG DURATION GIVEN WHERE YIELDS ARE MORE A LOT OF PEOPLE THINK THEY WILL BE? >> THAT IS A GREAT QUESTION. THE MARKET IS SPLIT ON IT.

1:02:37 WE ARE STILL FAVORING THE BELLY. WE THINK THE LONG BOND, EVEN THOUGH IT HAS A LOT MORE DURATION, MIGHT NOT GIVE YOU THE RALLY YOU HAVE SEEN IN PAST RISK OFF CYCLES. ONE THING WE DID NOT SEE WAS A SIGNIFICANT WIDENING OF THE PARK – TERM PREMIUM. THAT HAS TO BE MORE ASSOCIATED WITH THE FISCAL OUTLOOK. THAT IS NOT IMPROVING.

1:03:14 IF WE LOOK INTERNATIONALLY AT FRANCE AND THE UNITED KINGDOM IN JAPAN, IT IS GETTING WORSE. AS THE MARKET STARTS TO THINK ABOUT NEW FACTORIES THAT ARE IMPACTING RATES OVER THE COMING QUARTER, OUR CONCERN IS THAT WOULD POTENTIALLY KEEP A FLOOR ON HOW MUCH THE BACKEND CAN RALLY. WE STILL THINK YOU CAN GET THE DEFENSIVE PROPERTIES WE ARE LOOKING FOR IN THE BELLY OF THE CURVE. WE ARE STILL A LITTLE BIT CAUTIOUS ON THE BACKEND. ROMAINE:

1:03:45 I’M CURIOUS ABOUT THE E.M. SIDE OF THIS. ESPECIALLY GIVEN THE NARRATIVE OF THE PAST TWO MONTHS. THE IDEA THAT THE FISCAL SITUATION SOME OF THESE NATIONS WAS BETTER. DO YOU STILL FAVORING OR TO SOME EXTENT EMERGING MARKET LOCAL DEBT? >> WE DO. I WILL SAY THE PAST MONTH GAVE A BIT OF A TEST CASE. WITH RATES REPRICING HIGHER. IN THE CONTINUATION OF THE

1:04:19 GEOPOLITICAL AND ENERGY SHOCK. NOT JUST IN THE MIDDLE EAST BUT IN RUSSIA. EMERGING MARKET CURRENCIES, YOU POINTED TO ONE FACTOR. THAT MAKES IT DIFFERENT. WE HAVE SEEN THIS ACROSS LATIN AMERICA.

1:04:54 WE HAVE SEEN A SHIFT IN THE LANDSCAPE. MORE MODERATE CANDIDATES. THEY ARE BUSINESS FRIENDLY. THIS IS THE RISK WE ARE POSING. ROMAINE: GREAT STUFF AS ALWAYS. ONE OF THE BEST IN THE BUSINESS.

1:05:25 WE TALK ABOUT THE DATA CENTER BOOM AND THE PRESSURE TO HAVE BEEN UNDER. THIS IS BLOOMBERG. ♪ ROMAINE: THE BLOOMBERG NEW ACADEMY FORM IS UNDERWAY IN NEW DELHI. WITH A CHORUS OF LEADERS CALLING FOR MORE PROTECTION AGAINST AI. THIS IS BECAUSE WARNING THAT SAFETY CONCERNS ARE VALID.

1:05:57 >> I DON’T THINK THE REALITY IS IT CAN BE SLOW DOWN. I THINK WE NEED TO SPEED UP THE OTHER STUFF. OUR DEFENSES AND OUR FOCUS ON CYBER DEFENSES IN THIS NEW WORLD. SPEED UP HOW CUSTOMERS ARE THINKING ABOUT HARDENING THEIR INFRASTRUCTURE. THAT IS WHERE WE SHOULD SPEND OUR TIME. THERE IS THOUGHTFULNESS WE SHOULD USE. BUT I DON’T THINK THERE IS ANY SLOWING IT DOWN. >> THERE ARE SECURITY AND SAFETY CONCERNS. ARE THEY VALID? >> THEY ARE VERY VALID. YOU CAN SAY A FEW THINGS.

1:06:33 YOU ARE DEMOCRATIZING THE CAPABILITY. YOU DON’T HAVE TO BE A ROCKET SCIENTIST TO BE A VERY GOOD HACKER AT THIS POINT. YOU STILL HAVE THE COST OF THE UNDERLYING INFRASTRUCTURE. PEOPLE WILL FIGURE THAT OUT. IT IS A LEGITIMATE CONCERN. THEY ARE MOVING FASTER NOW. A BIT MORE PERVASIVE.

1:07:07 I HAVE A LOT OF FAITH IN OUR ABILITY TO SOLVE IT. ROMAINE: A FORUM THAT OVERLAPS WITH A BIG EVENT IN BEVERLY HILLS. THERE WAS A LOT OF TALK ABOUT AI. AND THE DATA CENTER BUILDOUT. SOME OF THE ROADBLOCKS TO GETTING THOSE THINGS BUILT. I WAS ACTUALLY OUT THERE JUST YESTERDAY AND HAD A CHANCE TO CATCH UP WITH THE LEADERS OF THE INFRASTRUCTURE ARMS OF BLACKSTONE AND KKR. THEY ARE BULLISH BUT THEY ALSO

1:07:40 ADDRESS THE CHALLENGES THEY ARE FACING. >> THE SUPPLY CONSTRAINTS HAVE GROWN IN A DRAMATIC WAY. THERE ARE A COUPLE OF KEY ONES. IT DOES NOT FEEL LIKE IT’S GETTING EASIER ANYTIME SOON. YOU USED TO BE ABLE TO CALL THE UTILITY AND SAY WE NEED SOME POWER. THEY SAY NO PROBLEM, COME BACK IN A FEW MONTHS AND WE WILL HAVE YOU CONNECTED. TODAY IF YOU MAKE THAT SAME CALL THEY WILL TELL YOU SEVEN

1:08:13 YEARS MAYBE. YOU MIGHT NEED TO SPEND A BILLION DOLLARS TO GET THAT POWER. LAND IS A HUGE CONCERN. LAND THAT HAS ACCESS TO POWER AND IS ACTUALLY ZONED TO BUILD DATA CENTERS. YOU ARE SEEING SIGNIFICANT COMMUNITY OPPOSITION. PEOPLE ARE FEARFUL OF AI. THAT HAS MADE IT A LITTLE HARDER TO BUILD THESE PROJECTS. WE HAVE BEEN SPENDING YEAR IS GETTING OUT OF THAT. WE HAVE A LAND BANK THAT WE OWN.

1:08:47 IT IS ZONED. WE HAVE POWER TO SUPPORT FUTURE DEVELOPMENT. >> THERE ARE ALL SORTS OF THINGS TO THINK ABOUT. WE PROBABLY UNDERCOUNTED HOW QUICKLY THAT WAS BUILDING UP. THE BACKLASH WE HAVE SEEN. THE ECOSYSTEM WE HAVE BUILT. THE REGULATORY SUPPORT WE NEEDED FROM UTILITY COMPANIES WAS A LITTLE BIT THINNER THAN WE THOUGHT.

1:09:18 DATA CENTERS ARE PULLING SO MUCH OUT. WE HAVE A RIDICULOUSLY OLD GRID. WE ARE TRYING TO BUILD THE INFRASTRUCTURE OF THE FUTURE ON. THERE ARE THOSE SAME MACRO TAILWINDS THAT ARE GETTING EVERYBODY EXCITED ABOUT THIS OPPORTUNITY. THEY ARE BUMPING INTO SOME REAL PRACTICALITIES ON THE GROUND. TRANSMISSION AS WELL AS SUPPLY. ROMAINE: PEOPLE ARE LOOKING AT THEIR UTILITY BILLS AND SEEING THEM HIGHER.

1:09:51 HAVE WE WORKED OUT OR GOTTEN CLOSER TO A MORE PLIABLE SOLUTION IN REGARDS TO NOT JUST WHERE WE GET ENERGY BUT HOW DISPERSED? >> THERE ARE A FEW CONCERNS OF PEOPLE .2. CONCERNS AROUND WATER. WHICH WE ARE ADDRESSING WITH THE NEWER TECHNOLOGIES. CONCERNS AROUND ELECTRICITY PRICES. I THINK THERE IS A LOT OF CUSTOMER SUPPORT FOR THE HYPERSCALERS TO PAY THEIR FAIR SHARE IF NOT MORE.

1:10:24 I THINK A LOT OF THE VERY LOCAL CONCERNS CAN BE ADDRESSED. WHEN YOU CUT TO THE CENTER OF IT, A LOT OF FOLKS ARE VERY UNCOMFORTABLE WITH AI GENERALLY. WHAT DOES THAT MEAN FOR THE FUTURE? THEY DON’T WANT THE PHYSICAL INCARNATION OF THAT TO SHOW UP NEXT DOOR. THEY ARE TALKING ABOUT WATER AND POWER BUT I THINK EVEN IF YOU ADDRESS SOME OF THE MISINFORMATION OR IMPROVE SOME OF THE INCENTIVES IN THE WAY THE REGULATORY STRUCTURE WORKS,

1:10:56 YOU WILL STILL HAVE THE CORE ISSUE. IN THE U.S. THERE IS A LOT OF ANXIETY AROUND AI. ROMAINE: YOU ARE LOOKING AT BRANDON FRIEDMAN OVER AT KKR. WE ALSO HEARD FROM MIKE FOREMAN AT BLACKSTONE. PART OF GREAT PANEL WE HAD. ON FINANCING THE AI BUILDOUT. WE WILL CONTINUE OUR FOCUS ON FINANCING BUT FOCUS MORE ON WEALTH MANAGEMENT. LOOP CAPITAL BRINGING MORE

1:11:27 ATHLETES INTO THE HOLE. A DEAL THAT ACTUALLY EXPANDS ITS BUSINESS WITH A LOT OF THOSE ATHLETES AND ENTERTAINERS. WE WILL TALK TO THE FOUNDER AFTER THE BREAK. ROMAINE: TIME FOR A LOOK OF SPORTS. THE ATHLETE ECONOMY HAS BEEN HITTING NEW HIGHS IN RECENT YEARS AND NOW LOOP CAPITAL IS TAKING HIS PLACE AS A MAJOR PLAYER IN THE FIELD. THEY ARE BUYING ASSETS FROM LIFELINE CAPITAL, EXPANDING ITS WEALTH MANAGEMENT BUSINESS TO

1:11:57 ADD MORE ATHLETES AND ENTERTAINERS TO ITS CLIENT ROSTER. JOINING US IS THE FOUNDER, CHAIRMAN AND CEO. LET’S TALK CONCEPTUALLY WHAT YOU’VE BEEN DOING PRIOR TO LIFELINE. PROFESSIONAL ATHLETES, MOST OF THEIR INCOME IN THEIR 20’S, MAYBE IF THEY ARE LUCKY IN THE 30’S. IN THE OLD DAYS IT WAS ENDORSEMENTS. YOU TOOK AN APPROACH AT MOVING

1:12:31 THEM NOT JUST INTO ENDORSEMENTS BUT OWNERSHIP. I’M CURIOUS HOW THIS DEAL EXPANDS ON THAT, IF AT ALL. JIM: FIRST OF ALL, GREAT TO BE HERE. YOU ARE MY SECOND FAVORITE BLOOMBERG ON AIR PERSONALITY NEXT TO BETTY LOUK, AND YOU KNOW THAT COME ABOUT GOOD. ROMAINE: IT IS. [LAUGHTER] JIM: SOME DEALS PULL U.N..

1:13:04 YOU SAID IT, THE WEALTH OF THESE ATHLETES, EARLY AND AS YOU SAID, IF THEY ARE LUCKY, THEY MAY GET TO 32, 34, AND THEY HAVE 60 MORE YEARS. WHAT DID THEY DO? I TALKED TO PLAYERS ABOUT THE LONG GAME. IF THEY CAN, AND MANY OF THEM CAN – LET’S GET AWAY FROM THE LICENSING DEALS, GET AWAY FROM THE WILL GIVE YOU 4 MILLION AND

1:13:37 $5 MILLION FOR A FEW YEARS WHILE YOU ARE HOT TO ENDORSE MY PRODUCT. TO SAY NO, LET ME INVEST FORM\ – INVEST FOUR OR $5 MILLION. ROMAINE: ONE EXAMPLE THAT CAUGHT ATTENTION A FEW YEARS BACK WAS THE COCOA FIVE DEAL, THAT YOU CAN HAVE OWNERSHIP.

1:14:08 HAS THAT BECOME A TEMPLATE NOT ONLY FOR YOUR OWN CLIENTS BUT IN GENERAL? JIM: IT IS THE TREND OF SMART PLAYERS AND THEIR ADVISORS TO PLAY THE LONG GAME. LOOP IS POSITIONED AS AN INVESTMENT BANK AND WE ARE SEASONED AROUND COVERING INSTITUTIONAL CLIENTS SO WE BRING AN INSTITUTIONAL STAND TO THIS BUSINESS.

1:14:41 AS WE LOOK AT THE LEVEL OF SOPHISTICATION OF THE ADVISOR ON THE OTHERS, IT MAKES ALL THE DIFFERENCE IN THE WORLD AS TO WHAT THEY CAN ADVISE YOUNG PLAYERS TO DO BECAUSE THEY TRULY DON’T KNOW. I TALK TO THESE PLAYERS NOW – MY OLD FRIENDS, MAGIC JOHNSON AND I HAVE AN INFRASTRUCTURE FUND TOGETHER. WE DID LAGUARDIA, THE WORST AIRPORT IN NORTH AMERICA TO THE FINEST, THAT WAS $4 BILLION,

1:15:13 AND NOW WE ARE DOING JFK, WHICH IS $11 BILLION. CHARLES BARKLEY AND I HAVE BEEN PARTNERS DOING DEALS, AND ON AND ON. ALL OF MY FRIENDS I HAD THAT ARE MY GENERATION MADE MOST OF THEIR MONEY AFTER THEY STOPPED PLAYING BASKETBALL, AFTER THEY LEFT. I TELL THESE YOUNG GUYS AM A THESE GUYS DIDN’T MAKE THE MONEY YOU ARE MAKING NOW SO YOU CAN DO TWO THINGS. YOU CAN MAKE THE MONEY THEY ARE MAKING NOW AND OWN COMPANIES IN YOUR 20’S AND 30’S. YOU CAN BE AND SHOULD BE YOUR

1:15:50 OWN PRIVATE EQUITY OR VENTURE FIRMS, SIDE-BY-SIDE WITH US SUCH THAT WHEN YOU GET TO BE EARLY TO 33 OR 34, IT’S NOT OVER, IT’S REALLY JUST BEGINNING. ROMAINE: OBVIOUSLY SOME ATHLETES ARE PRIMED FOR THIS AND IT’S FUNNY YOU BRING UP MAGIC JOHNSON BECAUSE I REMEMBER WHEN HE STARTED MAKING DIRECT INVESTMENTS IN THE THINGS. A LOT OF PEOPLE ARE LIKE WHAT

1:16:23 IS THIS ATHLETE, IN THE PEJORATIVE, BUT THEN HE PROVE PEOPLE WRONG. HOW DO YOU TAKE SOMEONE WHO DOESN’T HAVE THE SAME APTITUDE BUT STILL WANTS TO DO THIS? IS THIS WHERE YOU AND YOUR ADVISORS COME IN WHERE YOU HOLD THEIR HANDS AND HELP GUIDE THEM ON THE BUSINESS SIDE? JIM: I BEGAN THE CONVERSATION BY SAYING IT’S KEY TO THE ADVISOR. AS I’VE LEARNED, AND YOU KNOW I’VE BEEN IN INSTITUTIONAL GUY MY ENTIRE CAREER. BETH AS I’VE BOUGHT THE ASSETS

1:16:56 OF LIFELINE I’VE BEEN ON THE PHONE FOR THE LAST 30 DAYS TALKING TO THREE OR FOUR PLAYERS A DAY. THESE GUYS ARE 22, 23, 24 AND I AM ON WITH THEIR MOTHER AND FATHER AND SISTER AND SPOUSE EXPLAINING WHAT I WILL DO WITH THIS YOUNG MAN’S ASSETS AND THEY DON’T TRULY UNDERSTAND EVERYTHING I’M SAYING BUT THEY KNOW JIM REYNOLDS AND MAGIC BUILT SOME BIG THINGS.

1:17:33 THEY RESPECT THE ADVICE AND COUNSEL AND THE LEVEL OF SOPHISTICATION THEY ARE GOING TO GET FROM A LOOP CAPITAL IN THIS SPACE. ROMAINE: THIS ATHLETES ARE INVESTING THEIR OWN CAPITAL TO START, RIGHT? JIM: 100%. BUT THEY ARE INVESTING TWO THINGS AND WE’VE ALREADY TESTED IT OUT. THEY HAVE CAPITAL, WHICH IS MONEY BUT THEY ALSO HAVE THEIR NAME, IMAGE AND LIKENESS.

1:18:05 IF I GO INTO A DEAL AND WE GO TO A MAJOR CLIENT WE ARE PURSUING AN CHARLES COMES IN WITH ME COME UP WE DID THIS WITH THE MAJOR CLIENT WE WENT TO SEE TO TALK ABOUT BRINGING CORPORAL FIVE TO THE HOTEL. WHEN I DID THAT, EVERYONE CAME OUT TO TAKE SELFIES WITH CHARLES PENN WHEN WE – WITH CHARLES.

1:18:37 WHEN WE TALKED WITH THE BOARD MEMBERS, THEY ALL CAME OUT TO TAKE SELFIES WITH CHARLES. THEY DIDN’T EVEN MENTION MONEY. THESE PLAYERS DON’T KNOW, THEY REALLY DON’T KNOW THE VALUE OF THEIR NAME, IMAGE AND LIKENESS. MICHAEL JORDAN DID AND HE DOES NOW, WHEN MAGIC FIRST STARTED, HE WAS JUST TAKING ENDORSEMENT DEALS AND IT WASN’T UNTIL HE GOT GOOD COUNSEL THAT HE DECIDED TO TAKE EQUITY AND THAT

1:19:09 MADE A DIFFERENCE. ROMAINE: WHY DO THESE ATHLETES CHOOSE LOOP CAPITAL? THEY CAN LOOK AT THE BIG MANAGERS AND SAY WHY WOULDN’T I GO WITH A GIGANTIC COMPANY, WHY WOULD I GO WITH A SMALLER FIRM? JIM: WHEN YOU TALK TO THESE ATHLETES, YOU LEARN A FEW THINGS. YOU AND I BOTH KNOW WHO GOLDMAN SACHS IN JP MORGAN IS, WE KNOW WHAT THEY DO AND WHAT THEY

1:19:49 STAND FOR. THESE ATHLETES, AND THEIR PARENTS, MOST OF THEM HAVE READ ABOUT LOOP AND THEY KNOW ABOUT JIM REYNOLDS. SECOND, THIS COMPANY IS RUN BY A BLACK GUY. IT’S NEVER MADE A DIFFERENCE IN MY INSTITUTIONAL CAREER BUT THEY FEEL COMFORT IN THAT WITH THEIR YOUNG SON OR DAUGHTER. WITH ME THEY HAVE A LEVEL OF SERVICE THAT IS NOT SECOND TO ANY AND THEY WILL TAKE CARE OF MY SON.

1:20:21 HE WILL NOT BE A NUMBER, HE WON’T BE LOST, THEY WILL TAKE CARE OF HIM AND IT WILL BE PERSONAL. WHEN I TALK TO THE PLAYERS, I TALK ABOUT AS MUCH ABOUT WHEN THEY STOP PLAYING AS WHEN THEY PLAY BECAUSE I SAY TO THEM, YOU’RE MAKING A LOT OF MONEY NOW AND I GET IT BUT WHAT YOU DON’T WANT TO HAPPEN IS WHEN YOU ARE 34, 33, IF YOU WERE FORTUNATE ENOUGH TO GO THAT FAR, YOU DON’T WANT YOUR INCOME TO DROP TO ZERO. YOU WANT TO PIVOT TO THE

1:20:58 BUSINESSES YOU’VE INVESTED IN, THE RELATIONSHIPS YOU’VE CULTIVATED ALONGSIDE JIM REYNOLDS. JIM WILL WALK INTO THE MEETINGS WITH THEM. WE GO IN TOGETHER AND I’VE INTRODUCED THEM TO CEOS AND LEADERS IN THE PRIVATE EQUITY BUSINESS. WE HAVE OUR OWN PROPRIETARY CAPITAL AND WE INVEST SIDE-BY-SIDE WITH IMPUTE WE ALSO HAVE, AND THIS IS INCREDIBLY IMPORTANT, LOOP UNIVERSITY.

1:21:29 I TELL ALL THE PLAYERS, IN THE OFF-SEASON, COME IN, LET’S LEARN ABOUT WHAT A STOCK IS, WHAT BONDS ARE, TAX EXEMPTS, WHAT TAX HARVESTING IS. WHAT EQUITY DOES. I’M OFFERING THIS TO PARENTS AND INEVITABLY THE FAMILY IS LIKE CAN I COME TOO? THERE’S A HUNGER TO LEARN ABOUT THIS AND THE PLAYERS ARE SMARTER THAN YOU THINK. THEY KNOW THIS STUFF COME TO AN END AND WHAT WILL I DO LATER?

1:22:02 THAT’S A LOT OF THE REASON WHY THEY CHOOSE US. ROMAINE: FASCINATING STUFF AND UNFORTUNATELY WE HAVE TO LEAVE IT THERE. IT’S INTERESTING TO SEE THE EVOLUTION YOU HAVE THIS BIG PUSH INTO WEALTH MANAGEMENT AND HELPING THESE ATHLETES GET MORE FOR THEIR NAME THAN JUST AN ENDORSEMENT. WE WILL BE BACK IN A MOMENT. THIS IS BLOOMBERG.

1:22:33 ROMAINE: LET’S TALK ABOUT THE ELEPHANT IN THE ROOM OR AT LEAST THAT’S ABOUT TO ENTER THE ROOM – ANTHROPIC HOLDING ITS PRE-IPO INVESTOR DAY, PUTTING THE DEVELOPER ON TRACK FOR AN EXPECTED NOVEMBER DEBUT. JOINING US IS OUR REPORTER WHO COVERS THE AI SPACE. WE REPORTED LAST WEEK OR SO THAT THEY WERE GOING TO HOLD THIS PRE-IPO INVESTOR DAY. WE KNOW WHAT’S HAPPENING. DO WE HAVE ANY SENSE OF WHAT TRANSPIRES, ARE THEY DISCLOSING REVENUE? SETH: A SELECT GROUP OF INVESTORS ARE

1:23:10 GATHERING AT ONE OF ANTHROPIC’S OFFICES IN COMPANY LEADERSHIP IS EXPECTED TO BRIEF THEM ON THE STATE OF THE BUSINESS. IT’S EXPECTED THEY WILL PROVIDE UPDATED FIGURES FOR THE THIRD QUARTER. AS WELL AS THE STRATEGY AND TIMELINE. ROMAINE: AT SOME POINT THEY HAVE TO MAKE THAT PUBLIC. WHEN DO WE EXPECT A FORMAL FILING? SETH: ANY DAY.

1:23:43 THEY WANT TO GO PUBLIC AROUND THANKSGIVING OR SOONER. ROMAINE: IF FEEL LIKE IF WE HAVE THIS CONVERSATION A FEW MONTHS AGO, WE WOULD SAY THIS IS A SLAM DUNK AND EVERY BUDDY WANTS A PIECE. HAS ANYTHING CHANGED GIVEN APPETITE AND ALL THE THINGS GOING ON WITH CONCERNS ABOUT WHAT THE REVENUE GENERATION IS FOR SOME OF THESE LARGE LANGUAGE MODEL COMPANIES RELATIVE TO WHAT THEY HAVE TO SPEND TO BUILD IT OUT? SETH: IF FEELS LIKE EVERY FEW MONTHS WALL STREET GETS JITTERY ABOUT

1:24:15 THE STATE OF THE AI BOOM AND I DON’T GET WILL STOP ANYTIME SOON BUT IT FEELS LIKE YOU’RE SEEING TWO DIFFERENT IPO MARKETS, ANTHROPIC AND EVERYBODY ELSE AND THERE’S SO MUCH EXCITEMENT ABOUT THIS ONE COMPANY THAT IS THE LINCHPIN OF THE AI BOOM. ROMAINE: WE ARE AWAITING SOME DISCLOSURE, AND WHEN WE COME BACK, A BIG PIVOT TO THE WORLD OF FOOD AND THE PROTEIN CRAZE. THE CEO OF A NUTRITION COMPANY WILL JOIN US NEXT AS THEY JOIN

1:24:51 THE COMPANY BEHIND EVIAN WATER. ROMAINE: LET’S CHECK IN ON THE STATE OF THE CONSUMER WITH U.S. RETAIL SALES OUT TOMORROW. FOOD MAKERS ARE GOING ALL IN ON THE PROTEIN CRAZE. THE COMPANY BEHIND EVIAN WATER ACQUIRED THE U.K. COMPANY HUEL. THE CEO OF HUEL JOINS US. I’VE BEEN FAMILIAR WITHHUEL FOR

1:25:30 A WHILE AND FOR A WHILE THE ONLY WAY YOU COULD GET IT WAS TO GO ON THE WEBSITE AND ORDER IT. IS THIS A PLAY FOR THE U.S. MARKET OR TO BE BIGGER IN THE U.K. IN EUROPE, WHAT? JAMES: WE WANT TO BE A BRAND THAT’S COMPLETE NUTRITION. WE HAD LOCAL MANUFACTURING AND LOCAL WAREHOUSES IN THE U.S. AND WE GOT TO A PLACE WHERE WE ARE A BIG SIZE RELATIVE FOR A U.K. BUSINESS AND WE EXPANDED WELL INTERNATIONALLY. WE FELT THAT WAS THE BEST

1:26:02 PARTNER TO DO IT WITH. ROMAINE: A LOT OF COMPANIES HAVE COLD FOLLOWINGS WHEN THEY SELL TO A LARGER COMPANY. THERE’S ALWAYS THE QUESTION OF CAN YOU MAINTAIN THAT EITHER THOSE – MAINTAIN THE ETHER HOUSE? JAMES: A LOT OF WHAT’S MADE US SUCCESSFUL IS THE CULTURE. WE ARE VERY STRONG ON INNOVATION AND A KEY THING FOR MYSELF AND THE TEAM IS TO KEEP

1:26:34 THAT SO WE WILL RUN THE BUSINESS INDEPENDENTLY. FOR ME IT’S ABOUT YOU GET ONE PLUS ONE TO EQUAL THREE. WE HAVE INCREDIBLE DIGITAL CAPABILITIES, VERY FAST-PACED AND ENTREPRENEURIAL AND IT CAN OFFER INCREDIBLE SCIENCE ABILITY SO THAT WE CAN GO MORE INTERNATIONAL AND THEN THE RESEARCH AND INNOVATION SIDE. I THINK WE CAN EXPAND AND DO IT IN THE RIGHT WAY TO KEEP THE CULTURE. ROMAINE:

1:27:06 THE PLANT-BASED ASPECT WAS A SELLING POINT FOR A LOT OF PEOPLE, MAYBE YOU CAN EXPAND FROM THAT, GIVEN THE SCIENCE. JAMES: OUR MAIN FOCUS IS HOW DO WE GET BIGGER AND PROVIDE THE RIGHT PRODUCTS TO CUSTOMERS, HOW DO WE KEEP OF ALL VANG. WE ARE TRYING TO MAINTAIN ALL THE GREAT THINGS WE DO AS A BRAND AND KEEP THE TEAM TOGETHER.

1:27:41 WE WERE IN NEW YORK THIS WEEK AND THE BUZZ IS GREAT, PEOPLE ARE PROUD OF WHAT WE ARE DOING AND IT’S A GREAT SIGN OF SUCCESS AND NOW WE ARE FOCUSED ON BUILDING THE BUSINESS. ROMAINE: IN THE U.S. I WAS GOING THROUGH SOME OF THE NUMBERS. OBVIOUSLY THE U.S. IS THE BIGGEST MARKET IN THE WORLD. I’M CURIOUS HOW MUCH HEADROOM IS THERE FOR YOU TO GROW ACED ON WHAT YOUR MARKET SHARE IS RIGHT NOW RELATIVE TO THE REST OF YOUR BUSINESS? JAMES:

1:28:13 THE U.S. FOR US IS ABOUT $150 MILLION IN REVENUE. HUEL WAS A HOBBY BUSINESS FROM OUR FOUNDER TO KEEP HIM BUSY. IT WORKED REALLY WELL ONLINE AND WE REALIZED ABOUT FIVE YEARS OR SO AGO THAT THE MAJORITY OF FOOD AND BEVERAGE SALES ARE IN STORES AND WE WERE NOT THERE. IN THE LAST YEAR WE REALLY CHANGED THAT. WE LAUNCHED IN TARGET AND THEN WE GOT INTO COSTCO AND MORE

1:28:45 RECENTLY MARKED WE ARE ALSO IN WHOLE FOODS AND SPROUTS. ROMAINE: HOW DID YOU GET INVOLVED IN THIS? YOU MENTIONED THE FOUNDERS, BUT YOU WERE WORKING AT COCA-COLA, RIGHT? JAMES: I’VE WORKED AT DIFFERENT BRANDS. ROMAINE: BUT YOU GO BASICALLY TO A START UP AND YOU WERE THERE PRETTY EARLY. JAMES: YEAH. ROMAINE: A COUPLE GUYS IN THEIR GARAGE OR SOMETHING? THE GARAGE WAS THE BEGINNING BIT AND THEN IN OFFICE WITH 20 PEOPLE IN THE U.K. ROMAINE: WHAT ATTRACTED YOU? JAMES: I LOVE THE EXCITEMENT AND I’VE

1:29:19 DONE THAT BEFORE WERE I’VE JOINED EARLY AND SCALED. HUEL IS DIFFERENT, COMPLETE NUTRITION. PEOPLE WANT TO EAT HEALTHY AND LIFE GETS IN THE WAY SO IT’S A WAY OF HAVING CONVENIENT NUTRITION IN A COMPLETE WAY. ROMAINE: I KNOW THERE WERE ISSUES WITH REGARDS TO BRAND CAMPAIGNS IN THE U.K.

1:29:55 AND COMPLAIN – AND WHAT YOU WERE REGULATING. HOW DO YOU HAVE THE SELLING POINT OF THE HEALTH ASPECTS THAT PEOPLE THINK THEY ARE DRINKING THIS WITHOUT VIOLATING ANY OF THE RULES WITH MAKING HEALTH CLAIMS THAT HAVE BEEN VETTED? JAMES: OUR JOB IS COMMUNICATING WHAT HUEL CAN OFFER THEM. I SON’S TEACHER LIKES IT, IT MIGHT BE A DOCTOR OR PEOPLE WORKING IN AN OFFICE. OUR JOB IS TO FIND DIFFERENT

1:30:27 WAYS OF EXPLAINING THAT HUNDREDS OF ADS EVERY MONTH. ROMAINE: I SAW THE AD, CHEEKY AS YOU GUYS SAY. GIVE ME A SENSE OF THE BROADER CONSUMER. WHEN I BECAME AWARE OF THIS, IT WAS THE PEOPLE YOU KNEW IN YOUR GEM AND THE MORE FITNESS AREAS THAT WERE MORE LOYAL AND NOW YOU SEE MORE MARKETING TOWARD

1:30:59 PEOPLE THAT WANT TO BE HEALTHY OVERALL, WANT TO LOSE WEIGHT, I DON’T KNOW IF THE GLP-1 CRAZE HAS HELPED YOU LOSE WEIGHT, BUT WHEN YOU’RE ON THESE DRUGS, THERE’S AN IDEA THAT YOU NEED TO BE MORE MINDFUL OF WHAT YOU TAKE AND. JAMES: IT IS REALLY IMPORTANT NEW HAVE YOUR PROTEIN AND VITAMINS, MINERALS AND FIBER AND IT’S TRICKY. WHEN YOU HAVE HUEL WE MAKE IT EASY TO DO THAT.

1:31:36 ROMAINE: I WAS ONLY FAMILIAR WITH THE BOTTLES, BUT YOU HAVE POWDERS AND BARS. IS THIS ONE COHERENT PRODUCT OR DISPARATE PRODUCTS? JAMES: FOOD AND DRINK. WE EAT THREE MEALS A DAY IN THE CHOICE YOU WANT IS QUITE HIGH. WE HAVE CUSTOMERS SAYING I LOVE THE CONCEPT, CAN YOU MAKE ME A HOT MEAL?

1:32:07 WE RECENTLY WATCHED – LAUNCHED ROMAN. ROMAINE: FASCINATING COMPANY. IT WILL BE INTERESTING TO SEE WHAT THE NEXT STEP IS. THE CEO OF HUEL. WE WANT TO SET YOU UP QUICKLY FOR WHAT TO WATCH OVER THE NEXT 24 HOURS THAT COULD MOVE THE MARKET. BIG BANK EARNINGS ARE GONE BUT WE ARE GETTING SOME OF THE OTHER MANAGERS INCLUDING BNY AND CHARLES SWAB, THEY REPORT OVER THE BELL TOMORROW. WE WILL HEAR FROM JB AND ALCOA.

1:32:44 AND WE GET RETAIL SALES AND PRODUCER PRICE INDEX AT 8:30 A.M. WE WILL HAVE FULL COVERAGE. BACK HERE TOMORROW AFTERNOON, WE WILL HAVE COVERAGE OF AN EXPECTED, BECAUSE WHO KNOW WHAT’S GOING ON WITH ELON MUSK, BUT HE IS EXPECTED TO FILE THE NEXT GENERATION ROADSTER. WE WILL SEE YOU TOMORROW RIGHT HERE ON BLOOMBERG. ♪