미국-중국 무역 협상 기대와 S&P 500 분석 해설

>> A QUIET DAY ON WALL STREETSTARTS TO PERK UP AS TRADE TALK OPTIMISM PUTS A FLOOR ON THEPRICES.

 REPORTING LIVE, I AM ROMAINEBOSTICK.

 >> I AM ALIX STEEL.

 SLEEPY DAY.

I'VE GOT TO SAY.

 HOWEVER, WE GOT SOME POSITIVETRADE HEADLINES.

 HOWARD LUTNICK SAID THAT THEYARE GOING TO TRY AND FINISH CHINA TALKS.

THEY COULD GO INTO TOMORROW IF NEED BE.

 HE TALKED TO REPORTERS.

YOU ARE SEEING THE MOVEMENT, S&P AROUND THE HIGHS OF THESESSION.

 A STONES THROW AWAY FROM THERECORD HIGHS TO THE NASDAQ.

 THE GOOD NEWS IS YOU HAVE THEBOND AUCTION THREE YEARS GOING OFF WITHOUT A HITCH.

 ROMAINE:INTERESTING TO SEE THE PRICE ACTION ON THE EQUITY SIDE.

WE ARE STILL SITTING ON FRACTIONAL GAINS.

BACK TO BACK GAINS, BUT FRACTIONAL GAINS.

IT WILL BE THE NINTH DAY IN THE PAST 10 SESSIONS WERE MOVESHAVE BEEN UP OR DOWN.

 THAT OPTIMISM BECAUSE OFPROGRESS ON THE U.

S.

-CHINA TRADE TALKS.

IN THE BIG QUESTION NOW, WHAT BREAKS US OUT TO THE NEXT LEGOF THE RALLY PRAYED THE ECONOMIC DATA SO FAR HAS BEENSUPPORTIVE.

 NFIB SAID SMALL BUSINESSSENTIMENT ROSE FOR THE FIRST TIME THIS YEAR.

THE AUCTIONS KICKED OFF TODAY WITH LITTLE TO NO DRAMA.

THAT SAME SURVEY, NET 31% OF BUSINESS OWNERS SAID THEY PLANTO RAISE PRICES OVER EIGHT MONTHS.

CITY REPORTING MILLIONS OF DOLLARS THAN IT DID LASTQUARTER TO ACCOUNT FOR POTENTIAL LOAN AND CREDIT CARDLOSSES.

 THE NEXT BIG TEST FOR THEMARKET WILL PROBABLY COME FROM THAT CONSUMER PRICE INDEXREPORT, WHICH IS DUE IN LESS THAN 24 HOURS.

IT IS PROJECTED TO SHOW UNDERLYING INFLATION PICKED UPLAST MONTH.

 MORGAN STRATEGISTS ARE CALLINGIT CRUCIAL IN THE INITIAL EFFECTS OF THE TARIFFS BUTADVISE TRADERS TO BE PREPARED FOR THE ONE-OFF CHANCE OF ADOWNSIDE CPI SURPRISE.

 PARTICULARLY WITH OIL PRICESDUE.

 >> YOU WOULD THINK THERE WOULDBE MORE VOLATILITY, BUT NOT A CHANCE.

 THE BLUE LINE IS THE VIXCONTRACT, BELOW 18.

 THE WHITE LINE IS THE VIXFUTURE CONTRACT SIX-MONTH OUT.

 YOU CAN SEE THE DIVERGENCEBETWEEN THE TWO IN THE LAST TWO MONTHS.

HIGHER VOLATILITY PROBABLY IN THE NEXT SIX MONTHS.

MY QUESTION IS IF IT DOES NOT COME TO FRUITION AND OVER THENEXT SIX MONTHS THE VOLATILITY COMES DOWN, DO WE RERATE AGAINWITH THE EQUITY MARKET OR ARE WE IN FOR ANOTHER SHOCK EVENTTHAT WE ARE NOT POSITIONED FOR IN THE MARKET? ROMAINE:KICKING YOU OFF TO THE CLOSE, JULIE BILL JOINS US NOW.

I WILL PICK UP WHERE ALIX LEFT OFF.

 I'M CURIOUS ABOUT WHATFACILITATES THE NEXT LEG OF ANYTHING.

 >> WE ARE SORT OF COMING OUT OFTHIS PERIOD WHERE THE NEWS FLOW WAS SO FAST AND HEAVY, IT ISLIKE WHEN YOU ARE A NEW PARENT AND YOU GET NO SLEEP ANDSUDDENLY YOU GET THREE AND FOUR HOURS AND YOU ARE LIKE WOW THISIS SO NICE.

 IT HAS BEEN LIKE THAT WHERE WEARE NOT USED TO HAVING A TON OF NEWS FLOW TO DRIVE THE MARKET.

WE ARE BACKED BY BORING OLD FUNDAMENTALS.

THAT IS A GOOD THING.

 IT ALLOWS PEOPLE TO DIGEST WHATHAPPENED DURING EARNINGS AND TO THINK MORE CLEARLY ABOUT ANYKIND OF DOWNSIDE RISK THEY HAVE VIS-A-VIS TARIFFS.

WE DON'T REALLY HAVE AGREEMENTS, WE HAVE THE IDEASOF AGREEMENTS, CONCEPTS OF AGREEMENTS.

I'M HOPEFUL WE GET MORE CLARITY.

 WE STILL HAVE A LOT OFUNCERTAINTY.

 ROMAINE: ABSOLUTELY.

THE GREAT THING IS ONCE YOU GET TEENAGERS, YOU HIDE OUT THEBEDROOM.

 I'M CURIOUS IN ALL SERIOUSNESS,WE TALK ABOUT THE HEADLINES MOVING ACROSS THE WIRE ABOUTPROGRESS ON THE CHINA-TRADE TALKS.

THERE HAS BEEN A LOT OF TALK AS TO WHAT DROVE THE REBOUND RALLY.

WHETHER IT WAS TRULY ABOUT TRADE AND BROADER ECONOMICCONDITIONS, INCLUDING THE CONDITIONS THAT MIGHT SOMEWHATDIVORCE.

 >> I THINK IT IS A MIX.

PART OF THIS IS RECOGNITION AND REALIZATION THAT THERE MIGHT BEMORE BARK TO BITE WITH THIS ADMINISTRATION.

THAT GIVES PEOPLE A LOT OF COMFORT THAT THERE MAY BE A LOTOF RHETORIC BUT WE WILL PULL BACK.

 NOTHING WILL GET SO CRAZYCHAOTIC WE STILL DON'T KNOW THAT.

 I DO THINK IN GENERAL,FIRST-QUARTER QUARTER EARNINGS WERE GOOD.

THE HARD DATA STILL LOOKS OK.

 I THINK IT WILL STILL LOOKMESSY BECAUSE WE DON'T KNOW HOW MUCH WAS PULLED FORWARD INANTICIPATION OF TARIFFS.

 I THINK BROADLY SPEAKING,THINGS LOOK OK.

 CERTAINLY BETTER THAN YOU WOULDHAVE GUESSED READING A LOT OF THE HEADLINES IN APRIL.

THAT IS CAUSING INVESTORS TO BE UNCERTAIN BUT GENERALLY A BITMORE POSITIVELY POSITIONED.

 ALIX: THAT IS WHAT I'M TRYING TOUNDERSTAND, DO WE NEED LESS BAD NEWS FOR THE MARKET TO GRINDHIGHER, OR GOOD NEWS? WHAT DOES THE GOOD NEWS ENTAIL?IF YOU WANT TO STAY AWAY FROM THE SCENARIO, WHERE IS A GOODPLACE TO HIDE? ? >> THE THING IS, NOW THAT WEARE IN A PLACE WHERE THE GOOD NEWS HAS TO BE MOREFUNDAMENTALLY DRIVEN.

 VALUATIONS ARE NOW BACK ANDLOOKING ON THE RICH SIDE.

 IN ORDER TO PUSH FORWARD FROMHERE, WE NEED EARNINGS GROWTH TO LOOK SOLID AND DURABLE.

BROADLY SPEAKING THE SET UP FOR THE SECOND QUARTER EARNINGS ISPRETTY IMPORTANT AND CRITICAL.

 WE MAY SEE COMPANIES WILLING TOPUT FORWARD GUIDANCE SO YOU CAN ANCHOR ON SOMETHING A LITTLEBIT MORE RELIABLE.

 BUT I THINK YOU STILL HAVE THISUNDERLYING CONCERN THAT THINGS CAN TURN REALLY QUICKLY.

MY BROADER CONCERN IS IF I THINK ABOUT THIS FIGHT THAT HASHAPPENED THIS WEEKEND BETWEEN TRUMP AND HIS NUMBER ONE ALLY,ELON MUSK, IS IT SOMEONE I WANT TO NEGOTIATE WITH IF I'M ALARGE COUNTRY? IT IS CONCERNING IF AGREEMENTSWILL SLIDE AND MOVE AROUND.

 I WORRY THAT IT IS NOT IN THISMARKET.

 THAT IS SOMETHING PEOPLE NEEDTO BE MINDFUL ABOUT.

 >> WHAT IS ALSO CONFUSING ISTHE GOOD NEWS PRICED IN, THE PRICE ACTION FOR 15 MINUTES,THE HOWARD LUTNICK COMMERCE SECRETARY TELLING REPORTERS HEWILL TRY AND FINISH THE TRADE TALKS.

THEY CAN GO INTO TOMORROW.

 BUT THEY COULD CONTINUE IN THEMARKET JUMPS.

 >> YES, IT IS A QUESTION ABOUTWHAT WERE PEOPLE'S EXPECTATIONS FROM THESE TALKS.

I DON'T THINK PEOPLE WERE LOOKING FOR ANYTHING VERYSPECIFIC.

 MAYBE SOMETHING ON PRECIOUSMATERIALS.

 WHAT MOST PEOPLE WERE LOOKINGFOR IS WHAT IS THE TONE? THE TONE SOUNDS GROWN-UP READTHAT IS CAUSING PEOPLE TO FEEL GOOD.

WE ARE GOING TO HAVE RATIONAL HEADS AT THE TABLE, EVERYONEWILL BE ACTING FROM A THOUGHTFUL ECONOMIC PLACE.

 I STILL THINK THAT THEPOSITIONING WITH CHINA IS WEAKER THAN WE ARE PLAYING ITOUT TO BE.

 IF WE THINK ABOUT WHERE CHINAWAS IN TERMS OF TARIFFS, THE FIRST TIME WE DID TARIFFS WITHTHE TRUMP ADMINISTRATION WE DID 19% OF CHINA'S TRADE, NOW WEARE DOWN TO 12.

 I WORRY THAT WE OVERPLAY THISHANDY LITTLE BIT TOO MUCH BECAUSE WE HAVE TO RECOGNIZE WEARE THE BIGGEST GAME IN TOWN BUT NOT THE ONLY GAME IN TOWN.

ROMAINE: WHAT IS AN INVESTABLE OPPORTUNITY RIGHT NOW?A LOT OF TALK ABOUT THE THEMATIC TRADES WHETHER IT ISAROUND A.

I.

 IN THOSE TYPES OF THINGS.

WHAT DO YOU FIND ATTRACTIVE GIVEN ALL THAT WE HAVE SAIDOVER THE LAST FEW MINUTES? >> THE THING I'M INTERESTED INIS UNDERNEATH ALL OF THIS HAS BEEN THIS MASS IN THE CAPITALMARKETS WHERE THERE HAS NOT BEEN A LOT OF TRANSACTIONS.

I'M GETTING EXCITED THAT I'M GETTING INVITED TO SIT ON MOREMEETINGS WHERE WE MEET WITH COMPANIES BEFORE THEY ARE GOINGTO DO THEIR IPO'S.

 WE DO A NICE, GENTLECONVERSATION SO THEY CAN LEARN WHAT IT IS LIKE TO TALK TO ANAWFUL PO LIKE ME.

 THAT MAKES ME EXCITED.

THAT IS SOMETHING I HAVE BEEN LACKING FROM THIS MARKET.

SOMETHING I THINK WOULD BE AN OFFICIAL.

THE OTHER THING IS MORE STRATEGIC IN PRIVATE EQUITYDEALS AND THEY HAVE TO HAVE.

 AND THEY ARE EXTREMELY LONG INTHE TOOTH.

 MORE OF YOUR PURE PLAYINVESTMENT BANKS, WHERE THEY HAVE GREAT POSITION WITHPRIVATE EQUITY TO DO SOME OF THESE TRANSITIONS AND CREATELIQUIDITY FOR THEIR LPS.

 ROMAINE:A BIG TRANSITION ABOUT TO TAKE PLACE.

ALWAYS A GREAT CONVERSATION.

 JULIE, THE CHIEF MARKETSTRATEGIST OVER AT GAGNE ANDERSON RUDNICK.

WE HAVE BREAKING NEWS CROSSING THE WIRE.

 ALIX:PRESIDENT TRUMP POISED TO REPEAL BIDENS CURBS ONPOWERPLANT POLLUTION.

 THESE WERE CURBS THE EPA WASGOING TO ENFORCE THAT LIMITS GREENHOUSE GAS EMISSIONS FORPOWER PLANTS.

 THAT MAY THE UNWOUND AS SOON ASWEDNESDAY.

 THIS IS ACCORDING TO PEOPLEFAMILIAR WITH THE MATTER.

 ROMAINE:MORE COMING UP ON THE PROGRAM INCLUDING A PREVIEW OFTOMORROW'S CONSUMER PRICE INDEX REPORT.

JP MORGAN'S CHIEF ECONOMIST STOPS BY THE PROGRAMMING OFSECOND --IN A SECOND.

 ALIX: JP SMOKER SHARES IN A JAM AFTERTHEY REPORTED UNDER WOMAN FIRST QUARTER RESULTS AGAINST TARIFFPRESSURES.

 WE HAVE THE SPREAD UP AHEAD.

ROMAINE: THEY DON'T WRITE THOSE PUNS FORME.

 U.

S.

 AND CHINA TRADE TALKS RESUMINGFOR YOU HOPES THE TRADE WAR MIGHT BE EASY.

WE WILL GET INSIGHT OUT OF MARISSA ADAMS AT HSBC.

THAT IS COMING UP ON THE CLOSE.

 THIS IS BLOOMBERG.

♪ \ -- THIS IS BLOOMBERG.

 ♪ ALIX: SMALL BUSINESS OPTIMISMBOUNCING BACK SLIGHTLY IN MAY.

 BUSINESS OWNERS STILL FEELINGTHE HEAT OF TAXES OF THE MOST SINGLE IMPORTANT PROBLEM.

A FULLER PICTURE FROM THE CONSUMER PRICE DATA.

BRINGING IN THE CHIEF U.

S.

 ECONOMIST OVER AT J.

P.

 MORGAN.

WHAT DO YOU GET TOMORROW? >> WE ARE LOOKING FOR THE SAMENUMBERS.

 .

30.

 WE DON'T THINK WE WILL SEE THEBIGGEST IMPACT OF TARIFF PASSED THROUGH.

THAT IS MORE JUNE AND JULY STORY.

THAT IS WHY WE PLAY THE GAME.

 >> IF YOU GET THE CONSENSUSNUMBER, IS IT DOVISH OR HAWKISH? >> I THINK IT IS THE NUMBERTHAT DOES NOT CHANGE NEXT WEEK FOR THE FED.

THE TEXT HAS BEEN CONSISTENT SAYING THEY ARE GOING TO WAITTO SEE WHAT WILL HAPPEN.

 I THINK IF WE GET SOMETHINGLIKE WE ARE LOOKING FOR, IT WILL NOT TELL YOU ANYTHING.

NOTHING TOO DECISIVE JUST YET.

 ROMAINE:WHEN DOES IT TELL US SOMETHING? DOES INFLATION TYPICALLY RAMPUP, OR IS IT A SHOCK? >> THE EVIDENCE FROM THE 2018AND 2019 TARIFFS WAS WHEN THEY PASSED IT THROUGH THREE ANDFOUR MONTHS, THAT IS WHAT WE ARE EXPECTING THIS TIME.

THERE HAS BEEN SOME SURVEY EVIDENCE IN THE FED SUGGESTINGTHAT IS THE TIMEFRAME TO LOOK AT IT.

 WE COULD SEE SOMETHINGTOMORROW, PROBABLY LATER IN THE SUMMER.

 ROMAINE:WE HAD THE SMALL BUSINESS DATA TODAY, OPTIMISM UP.

THE LARGEST SHARE OF FOLKS IN THAT SURVEY ARE ANTICIPATINGTHEY WILL RAISE PRICES OVER THE NEXT THREE MONTHS.

WE COULD SEE SOME ELEVATION.

 >> I THINK WE ARE SEEING THAT.

IT IS A PRETTY FORM EXPECTATION.

 ALIX: WE HAVE SEEN INFLATION INEUROPE AND THE U.

K.

, IS THERE A DIFFERENCE BETWEEN US AND THEM? >> THEY ARE NOT IMPOSINGTARIFFS , BY AND LARGE.

 ALIX: THEY KIND OF ARE IN RESPONSE TO.

>> WE HAVE NOT SEEN THAT MUCH IN THE WAY OF RETALIATORYTARIFFS.

 BUT THAT IS NOT SOMETHING WECAN RULE OUT DOWN THE LINE.

 I THINK WE ARE LOOKING AT ADIFFERENT PICTURE NOW BETWEEN THE U.

S.

AND A LOT OF THEIR TRADING PARTNERS.

 ALIX: WHAT ABOUT PPI?I KNOW YOU ARE GOING TO TALK ABOUT COMPANIES, BUT SMALLGROUPS COMING IN AND TALKING ABOUT HOW MUCH THEY WILL GETHIT BY PRICE INCREASES BY TARIFFS AND COFFEE PRICES.

DO YOU THINK WE WILL SEE A REAL DISPARITY BETWEEN PPI ANDCPI? >> PPI CAN GO ONE WAY, IMPORTEDINPUTS THEY ARE USING.

 THE OTHER IS SOME DOMESTICPRODUCERS MAY SEE THIS AS AN OPPORTUNITY TO RAISE PRICES IFTHEIR COMPETITORS FROM OVERSEAS ARE ALSO HAVING THEIR COSTS GOUP.

 WE SAW THAT GO TO THE 2018 TARIFFS TRADE WARS THEN, WHENWE IMPOSED TARIFFS ON WASHING MACHINES, DOMESTIC WASHINGMACHINES.

 THAT IS SOMETHING I THINK WECOULD WATCH OUT FOR IN THE PPIS.

 ROMAINE:IN THE ONE-TWO PUNCH ON WHAT HAS BEEN GOING ON WITH TARIFFSAND THE TAX-AND-SPEND BILL WORKING THROUGH THE SENATE.

A LOT OF PROVISIONS CAN BE REVISED.

TWO BIG ONES, ONE HAVING TO DO WITH THE FACT TAX CUTS ARE NOTNECESSARILY PAID FOR AND THE PROVISION THAT WILL END UPBEING A TAX ON OUTSIDE CAP.

 A LOT OF DISCUSSION ABOUT THATCOULD HAVE A MAJOR ECONOMIC IMPACT ON THE U.

S.

 >> SECTION 899, WHICH IMPOSESTAXES ON FOREIGNERS RECEIVING U.

S.

 SOURCE INCOME.

WE THINK ECONOMICALLY IT SHOULD RAISE THE COST OF CAPITAL ORFIRMS THAT RELY ON OUTSIDE FOREIGN CAPITAL.

SO THAT COULD BE A HEADWIND TO INVESTMENT IN THE U.

S.

IN ADDITION, WE THINK IT PROBABLY IS -- COULD WEIGH ONTHE DOLLAR AND PUT UP OR PRESSURE ON INTEREST RATES.

 IT CAN ALSO AFFECT THE ECONOMYAND FINANCIAL CONDITIONS BUT SOMETHING WE ARE KEEPING ACLOSE EYE ON.

 ROMAINE: WHEN I READ ABOUT THAT, ITSEEMS SOMETHING RELATIVELY MINOR.

WE WILL NOT SEE A BIG DROP IN ECONOMIC ACTIVITY.

 >> I DON'T THINK SO.

INITIALLY IT WILL BE 5% AND RAMP UP TO 20%.

 IT IS ON A SUBSET OF COUNTRIESTHAT HAVE TAXES WE THINK ARE UNFAIR LIKE DIGITAL SALES TAX.

IT DEPENDS ON THE SCALE.

 YOU CAN ENVISION SCENARIOSWHERE IN THE WORST CASE IT WOULD HAVE AN IMPACT.

THERE IS ALSO SENTIMENT CHANNELS YOU HAVE TO INC.

ABOUT IF FOREIGN CAPITAL PLEASE, WHICH IS NOT WHAT WEARE EXPECTING.

 I THINK THAT IS A CHANNEL YOUCAN SEE MORE LARGER IMPACT ON THAT REASONABLE CASE.

 ALIX:HOW HARD IS YOUR JOB RIGHT NOW? HOW OFTEN AND QUICKLY DO YOUNEED TO REDO MODELS BASED ON THE IF'S WE HAVE TALKED ABOUT? >> WE ARE USED TO IT.

SPENDING A COUPLE OF MONTHS.

 IT FEELS LIKE WE SLOWED DOWNTHE PACE AT WHICH TARIFFS WERE BEING REVISED.

WE HAVE THIS BIG BEAUTIFUL BILL MAKING ITS WAY THROUGH CONGRESS.

WE WILL SEE THE FINAL SHAPE OF THAT.

NOT EXPECTING ANYTHING IN THE NEXT FEW DAYS.

BUT THERE IS DEFINITELY A LOT GOING ON.

 ALIX:HOW DO YOU MODEL DEFICITS AND THE IMPACTS OF DEFICITS ONFUTURE GROWTH BASED ON WHAT WE KNOW IN THE BILL? >> THE PRIMARY IMPACT OF HIGHERDEFICITS AND DEBT IS IT IS CROWDING OUT.

INTEREST RATES TO ATTRACT BUYERS OF THE BET.

IT RAISES THE COST OF CAPITAL FOR PRIVATE COMPANIES AND COULDDISCOURAGE INVESTMENTS.

 THAT IS THE PRIMARY CHANNEL.

I THINK WE SEE IT IN THE BEHAVIOR OF THE LONG END OF THECURVE.

 SO I THINK IT IS SOMEWHAT INTHE PRICE.

 IT IS WEIGHING ON THE HOUSINGMARKET AND OTHER AREAS.

 ROMAINE: WHEN IT COMES TO WHAT WE SEE INTHE TREASURY MARKET, A LOT OF DISCUSSION OF WHAT IS HAPPENINGON THE LONGER END OF THE CURVE, MAYBE MORGAN STANLEY, TALKINGABOUT THE IDEA THAT THEY DON'T NECESSARILY EXPECT AN INCREASEAT TURN PREMIUM IN THE LONGER END, FROM A FISCAL STANDPOINTTHEY ARE ALREADY PRICED IN.

 >> WE ALL KNOW WHAT ISHAPPENING IN WASHINGTON.

 THEY SHOULD HAPPEN IN THE PRICE.

WE COULD GET WORSE NEWS ON THE DEFICIT.

THE PROJECTIONS DON'T ASSUME ANY RECESSIONS, ANY WARS, ANYOF THE THINGS THAT ADD TO DEFICIT.

 ROMAINE:IT GETS TO THE POINT.

 OR EVEN THE CBO, WHICH ISSUPPOSED TO BE NONPARTISAN.

 AND SAYING I DON'T BUY IT.

 >> I THINK THE CBO IS AN HONESTWORKING GROUP.

 THEY ARE CONSTRAINED BY CERTAINRULES YOU COULD ASSUME OR NOT.

 I THINK THE CBO NUMBERS ONCEYOU AND -- UNDERSTAND THEIR LIMITATIONS ARE A GOOD STARTINGPOINT.

 YOU HAVE TO START WITH SOMETHING FOR YOU CANNOT JUSTTHROW UP YOUR HANDS.

 ROMAINE: THE CHIEF U.

S.

ECONOMIST AT JP MORGAN.

 WE HAVE THE CPI REPORT AT 8:30A.

M.

 TOMORROW MORNING.

 >> TO YOUR POINT, BNP TALKEDABOUT BY 30.

 BUT YOU SAW PIMCO SAYING WEWANT TO SAY WITH THE FIVE INTENSE.

 BUT LONGER-TERM WE ARE WORRIEDABOUT TARIFFS, WE DID NOT WANT TO TOUCH THEM.

 ROMAINE:THE IDEA THAT THERE IS REALLY NOT CONSENSUS.

IT GETS BACK TO THE INTERVIEW A FEW WEEKS AGO.

I NEVER MET A BOND VIGILANTE.

 ONE THING THAT IS NOT WORKINGTODAY, THEIR SHARES OF GM'S.

 WHEN PUBLIC BACK IN 88 AND AREHAVING THEIR WORST DAY ON RECORD.

THEY HAVE BEEN RAISING PRICES ON KEY PRODUCTS FOR THE LASTFEW MONTHS AND THEY WILL CONTINUE RAISING UP.

OUR STOCK OF THE HOUR COMING UP NEXT.

 THIS IS BLOOMBERG.

 ♪ ROMAINE:JM'S IS OUR STOCK OF THE HOUR.

 SHARES SEEING THEIR BIGGESTDROP SINCE GOING PUBLIC ABOUT 40 YEARS AGO AFTER SAYINGTARIFF FEW COST INCREASES IN ITS COFFEE BUSINESS ARE GOINGTO HIT PROFITS.

 MORRIS CONSUMER PRICE DATA ALSOINCREASING.

 THAT'S BRING IN ISABELLE LEE TOTALK ABOUT THIS.

 THE 15% DROP IN THE STOCK.

THEY HAVE BEEN DEALING WITH THE TARIFFS ISSUE FOR LONGER THANTHE LAST QUARTER.

 WHAT IS GOING ON? >> THE 14% DROP IS THE BIGGESTINTRADAY SINCE GOING BACK TO 1988.

 TARIFFS, WE ALSO HAVEINCREASING PRICES OF COFFEE.

 WE WERE TALKING ABOUT FOLGERSEARLIER.

 ALIX: FOLGERS.

 I'M GOING TO SAY THE JINGLE.

 >>>> J.

M.

SMUCKER COMPANY WHICH OWNS FOLGERS, GENERATED ONE THIRD OFTHE REVENUE FROM COFFEE.

 WE ARE SEEING COFFEE PRICESINCREASED BECAUSE OF CONFIDENCE FACTORS LIKE INCREASED DEMAND,CLIMATE REASONS, CLIMATE DISRUPTIONS, COMPLICATIONS.

GENERALLY ONE THIRD OF THEIR AMOUNT, INCREASING COFFEEPRICES THREE TIMES PER THEY PLAN TO INCREASE IT AGAIN INAUGUST.

 CONSUMERS WILL PULL BACK.

 ALIX: BUT REALLY COFFEE?DO WE SAY COFFEE AND MEAN IT? THAT IS FAKE COFFEE TO ME.

BUT COMING IN STRONG.

 WELCOME TO MY TED TALK.

 >> ANOTHER THING COUNTRY BUTINTO WEAKNESS IS WEAKNESS IN ITS ACQUISITION OF HOSTESSWHICH IT ACQUIRED IN 2023.

 THIS SHOCKED ME THE MOST.

 ALIX:I THOUGHT WE LOVED THE DOGS.

 ROMAINE: THAT IS NOT DOING WELL?>> THE DOG SNACK CATEGORY IS NOT DOING WELL.

 ALIX:PETCO STRUGGLED, OUR DOG OWNERS ABANDONING THEIR PETS?ROMAINE:ROMAINE: WE HAVE MORE DOG SNACKS THANHUMAN SNACKS.

 HUMAN SNACKS -- SNACKS, WHAT ISHAPPENING? >> CONSUMERS ARE PULLING BACK,AND THEY ARE BECOMING HEALTHIER.

 ROMAINE: I DON'T BELIEVE THAT.

 >> BUT -- WERE SLAPPED FORCELEBRATING BECAUSE NOW PEOPLE WANT THE HEALTHIER OPTION.

 JAMES ARE KNOWN FOR SMOKER JAM-- SMUCKER JAM AND PEANUT BUTTER.

I LOOK AT PETER BUTTER WITH NO SUGAR.

 HOSTESS ARE KNOWN FOR TWINKIES,DING DONGS, DONETTES.

 ALIX: THOSE HOSTESS CUPCAKES ARE SOGOOD.

 >> IF YOU'RE HEALTH-CONSCIOUSYOU ARE NOT GOING TO BE BUYING THOSE PRODUCTS.

 ALIX: ALL JOKING ASIDE, WHY DO SOMECOMPANIES STRESS THE TARIFFS AND OTHERS DON'T WHEN THEY AREIN THE SAME BUSINESS.

 THAT IS WHAT I FIND CONFUSING,HOW MUCH THEY ARE OBSCURING OTHER ISSUES LIKE A SHIFT TOSTAY HEALTHIER PRODUCTS.

 >> SOME SAY WE DON'T KNOW WHATTHE FUTURE WILL HOLD, BUT SOME PROVIDE DUAL OUTCOMES.

 I FEEL LIKE HONESTLY, INVESTORSPREFER THOSE WITH MORE CLARITY RATHER THAN I DON'T KNOW WHERETHIS IS GOING.

 THAT IS KIND OF WHAT WE ARESEEING.

 ALIX: THANK YOU, REALLY APPRECIATE IT.

ISABELLE LEE JOINING US.

 I KNOW YOU DON'T LIKECHOCOLATES, HOSTESS CUPCAKES ARE OUT FOR YOU.

 ROMAINE:WHEN I WAS A KID I LIKED THE CUPCAKES.

 REGULAR CUPCAKES.

ALIX: PEELING OFF THE TOP AND THEICING -- ROMAINE: I DID NOT LIKE FONDANT.

 ALIX:SO GOOD.

 JUST ROLL IT RIGHT OFF.

 ROMAINE: A LITTLE TOO MUCH.

ALIX: MAYBE IF THEY PUT IN DUMMIES ORSOMETHING.

 COMING UP.

 WE ARE GOING TO HEAD TO D.

C.

THE COHEAD OF PRIVATE EQUITY FOR THE AMERICAS AT CARLISLE,THEY HAVE AN ANNUAL WASHINGTON DAY WHERE THEY WILL ADVISECLIENTS HOW TO MANAGE CURRENT UNCERTAINTY, HOW MUCH IS ON THESIDELINES, HOW OFFENSIVE OR DEFENSIVE YOU HAVE TO BE TAKE ALOOK AT THE MARKETS, THE S&P IS UP.

BUT MOVING HIGHER INTO THE LAST HALF HOUR OF TRADING.

THE NASDAQ .

6%.

 THIS IS THE CLOSE ON BLOOMBERG.

 >> A VERY POSITIVE VIEW OF THEFUTURE.

 WE THINK WE ARE GOING TO BEABLE TO INVEST $500 BILLION OVER THE NEXT DECADE.

 IT IS A MAJOR OPPORTUNITY FORUS.

 THEY ARE STARTING TO CHANGE THEIR APPROACH HERE.

 ROMAINE:STEPHEN SCHWARZMAN SPEAKING EARLIER TODAY.

JUST ABOUT 3:30 P.

M.

 HERE IN NEW YORK.

YOU'RE WATCHING THE COUNTDOWN TO THE CLOSE.

 ALIX:STEVE ECHOING WHAT A LOT OF INVESTORS ARE TALKING ABOUTWHICH IS MOVING MONEY INTO EUROPE.

HOW MUCH YOU SELL OUT OF THE U.

S.

TBD BUT MOVING INTO EUROPE IS THE VALUE OPPORTUNITY AND IT ISEUROPE'S RACE TO LOSE.

 ROMAINE: IT BECOMES A QUESTION AS TOWHAT IS GOING ON.

 IS THIS A DIRECT EFFECT OF WHATWE ARE SEEING IN WASHINGTON RIGHT NOW? ALIX:OR SOMETHING ELSE ALTOGETHER AND YOU NEED TO DIVERSIFY OUTOF U.

S.

 TECH NAMES.

 TODAY CARLYLE IS HOSTING THEIRANNUAL WASHINGTON DAY.

 THE EVENT WILL BRING TOGETHERTHE FIRST CLIENTS OF POLICYMAKERS FROM THE HILL ANDTHE ADMINISTRATION AS A LOOK TO MAKE THE MOST OUT OF CARLYLE'SBAR PARTISAN TIES ACROSS L.

 JOINING US TO DISCUSS IS ONE OFTHE MEN IN CHARGE.

 BRIAN BERNASEK CHO HAD OVER ATCARLYLE.

 REALLY GOOD TO SEE YOU ANDTHANK YOU FOR JOINING US.

 WHAT ARE THE THEMES YOU GUYSARE GOING TO BE ADDRESSING TODAY? BRIAN:I THINK THE THEMES HERE WE ARE MOST FOCUSED ON IS GETTING THATGROOVE THAT YOU MENTIONED.

 SOME OF OUR MOST SIGNIFICANTINVESTORS TOGETHER WITH OUR TEAM AND IN FRONT OF A NUMBEROF THE LEADING POLICYMAKERS HERE IN WASHINGTON.

FOLKS FROM THE ADMINISTRATION AND THE HILL, GENERALPOLICYMAKERS TO SHARE VIEWS ON WHAT IS HAPPENING HERE AND WHATINSIGHTS AND RELATIONSHIPS WE CAN SHARE TO HEAD IN THE RIGHTDIRECTION.

 ALIX: FOR YOUR LPS AND YOUR CLIENTSWHAT IS THE NUMBER ONE THING THEY ARE WORRIED ABOUT AND HOWDO YOU ADVISE THEM TO MANAGE THAT? BRIAN:DO NUMBER ONE THING FOLKS ARE FOCUSED ON IS WHERE DO WE FINDCERTAINTY AND A PATH FORWARD.

 AND BASED IN WASHINGTON ON THEGROUND HERE AS YOU KNOW WE ARE HEADQUARTERED IN WASHINGTON.

ABOUT A THIRD OF OUR PEOPLE GLOBALLY ARE BASED HERE.

OUR HEADQUARTERS IS RIGHT IN BETWEEN THE WHITE HOUSE AND THECAPITAL.

 THAT IS BENEFICIAL FOR GETTINGA SENSE OF THAT DIRECTION OF TRAVEL AND WHERE THINGS AREMOVING.

 WHAT IS THE CERTAINTY AND WHEREWE HEADED? WHAT WE HEAR FROM PEOPLE INTOWN AND THOSE RELATIONSHIPS WE HAVE IN QUIET CONVERSATIONS ISTHERE IS STEADY PROGRESS.

 YOU WOULD NOT SEE THAT FROM THEHEADLINES WITH OUR VIEW IS THERE IS STEADY PROGRESSBECAUSE FOLKS ARE FOCUSED ON THE MIDTERM ELECTIONS.

PEOPLE WANT TO MAKE PROGRESS AND MOVE FORWARD ANDCOMMUNICATE THAT TO THE FOLKS THEY MIGHT ELECT IN 18 MONTHS.

ROMAINE: WHERE IS THE PROGRESS? LET ME FLIP THAT AROUND.

WHERE IS THE BIGGEST CONCERN? IS IT TRADE, THE FISCAL ISSUES,IS IT ALL THE OTHER NONFINANCIAL-RELATED STUFFGOING ON? WHAT? BRIAN: I THINK THE NUMBER ONE CONCERNTHAT WOULD TAKE MORE TIME TO SETTLE THROUGH IS THE TARIFFS.

 IS A LOT OF PROGRESS IS THEFACT FOLKS ARE JUST TALKING BUT THAT PROGRESS IS AWFULLYIMPORTANT.

 YOU NUMBER ONE CONCERN AS WESEE IT IS IN ACTION.

 OUR VIEW IS WE WORK CLOSELYWITH OUR PORTFOLIO COMPANIES IS MOVING FORWARD AND MAKING GOODSMART MOVES FOR THE LONG TERM.

 CONTROLLING WHAT YOU CANCONTROL AND OPERATING AS LONG-TERM INVESTORS MEANSMAKING DECISIONS FOR THE LONG-TERM AND NOT THE NOISE.

SEPARATE THE SIGNAL FROM THE NOISE.

 ROMAINE:IN FAIRNESS IT IS KIND OF HARD TO DO THAT BECAUSE THERE IS ALOT OF NOISE.

 I WORKED A NUMBER OF YEARS ANDI UNDERSTAND THE THEATER OF IT ALL.

WHAT WE HAVE SEEN THE LAST FEW MONTHS IS ON A SCALE I DON'TTHINK ANYONE HAS SEEN IN THEIR LIFETIME.

 PERIOD.

 SO THE QUESTION BECOMES HOW DOYOU SEPARATE THE WHEAT FROM THE CHAFF AND HOW DO YOU EVEN KNOWWHAT IS NOISE AND WHAT IS REAL? BRIAN:THERE IS A HUGE BENEFIT FOR US BEING BASED IN WASHINGTON ANDSEPARATING THAT SIGNAL FROM THE NOISE.

HEARING DIRECTLY FROM THE FOLKS WHERE THE PROGRESS IS.

WE DO SEE FORWARD REASON FOR OPTIMISM.

YOU HAVE TO BE VERY CAREFUL ABOUT WHERE YOU INVEST IN HOWYOU MANAGE YOUR BUSINESS IS.

 CLOSE TO 90% OF OUR BUSINESSESARE NOT IMPACTED AT ALL BY THE TARIFFS FOR EXAMPLE.

WE BOUGHT BUSINESSES THAT ARE SERVICES BASED,TECHNOLOGY-BASED, THAT DON'T HAVE TRADEFLOW IMPACTS FROMTARIFFS.

 AND WE SEE GREAT OPPORTUNITY INTHIS AS WELL.

 WE SEE REAL OPPORTUNITY TOINVEST IN GOVERNMENT SERVICES IN SUPPORT OF NATIONAL SECURITY.

THAT HAS BEEN A PLACE WHERE WE HAVE INVESTED FOR A LONG TIMEAND WE SEE A LEVEL AND WE SEE A LEVEL IN A STEP UP IN THAT AREAOVER THE NEXT 18 TO 24 MONTHS AND BEYOND GIVEN THE BIPARTISANSUPPORT FOR THOSE EFFORTS GOING FORWARD.

AND WE SEE AN OPPORTUNITY IN EUROPE FOR SURE GIVEN THEGEOPOLITICAL CHALLENGES THERE ON THE INDUSTRIAL AND DEFENSESPACE.

 IN A MACRO UNCERTAINTY PERIODLIKE THIS THERE WILL BE MORE CORPORATE CARVEOUTS.

THERE ALWAYS ARE AND THERE WILL BE HERE AND WE ARE ESPECIALLYWELL POSITIONED AROUND THOSE OPPORTUNITIES.

IT IS THINKING ABOUT THE LONG AND INVESTING AROUND THAT.

 ALIX:THERE IS A LOT OF AMORTIZATION ABOUT EXITS.

EXITS ARE REALLY HARD.

 IT IS WHY SECONDARIES AREHEATING UP.

 IS THAT TRUE FROM WHERE YOU SIT?BRIAN: WE HAVE BEEN VERY ACTIVE ANDVERY SUCCESSFUL IN OUR EXITS OVER THE LAST 18 MONTHS IN THEU.

S.

 WE RETURNED ABOUT $12 BILLIONOF CAPITAL ACROSS THE FUNDS AND OUR PACE CONTINUES TO MOVEFORWARD IN THAT DIRECTION.

 THERE IS NO DOUBT IT IS AHARDER TIME TO DO THAT IN GENERAL BUT IF YOU INVEST INGOOD BUSINESSES AND MAKE THEM MORE VALUABLE OTHERS WOULD LIKETO OWN THEM AND WE HAVE BEEN ABLE TO TAKE COMPANIES PUBLIC.

WE HAVE SOLD COMPANIES TO PRIVATE SPONSORS AND STRATEGICBUYERS ACROSS THE BOARD.

 THE ONE THING YOU CAN BE SUREOF IS LPS ARE VERY FOCUSED ON GETTING RETURNS OF CAPITAL ANDSO ARE WE.

 ALIX: IS THAT OPPORTUNITY SET EXITSTRATEGIES AS OPEN AS YOU THOUGHT IT WOULD BE AT THISTIME SIX MONTHS AGO OR DO YOU THINK IT IS ON PAR?AND WHAT IS YOUR OUTLOOK FOR THE BACK HALF? BRIAN:AT THE BEGINNING OF THE YEAR I THINK MOST EVERYONE WAS PRETTYOPTIMISTIC AND BULLISH ABOUT THE FUTURE AND WE HAVE A PRETTYROBUST YEAR AHEAD OF US.

 I THINK WE SAW THAT SLOWLY FADETO A LITTLE LESS LIKELY OF SUCH A BULLISH YEAR WHEN WE LOOKEDINTO JANUARY AND FEBRUARY AND CERTAINLY AROUND LIBERATION DAY.

BUT WE ARE SEEING THAT CREEP BACK UP.

MORE BUYERS OR SELLERS ARE JOINING TOGETHER AND THERE ISMORE OPPORTUNITY GROWING FORWARD.

WE ARE BULLISH ON THE EXIT PATH BUT ALSO IN SOME INTERESTINGNEW DEALS IN THE POWER ALLEYS WE HAVE EDGES.

I EXPECT YOU WILL SEE A BETTER SECOND HALF BECAUSE THE MARKETSLOOK GOOD, THE FINANCING MARKETS ARE GOOD, AND I THINKYOU WILL SEE PROGRESS ON THESE BIG ISSUES IN WASHINGTON THATWILL CLEAR THE WAY A BIT.

 ROMAINE:I AM CURIOUS ABOUT THE APPETITE FOR COMPANIES TO EVEN GO PUBLIC.

I DON'T KNOW IF YOU WANT TO TALK ABOUT IPO.

THERE HAS BEEN A LOT OF DISCUSSION ABOUT WHETHER THEREIS EVEN A NEED AT THIS POINT, GIVEN THAT THERE IS GREATERACCESS TO CAPITAL IN THE PRIVATE SPACE THAT MAYBE YOUDON'T NECESSARILY NEED THE COSTS AND THE HASSLE OFBECOMING AND MAINTAINING YOURSELF AS A PUBLICLY TRADEDVEHICLE.

 BRIAN: WE BELIEVE WE LIKE TO HAVEOPTIONS AND WE LIKE TO HAVE OPTIONS IN LOTS OF AREAS.

CERTAINLY THE PRIVATE MARKETS ARE QUITE ROBUST AND HAVE BEENFOR SOME TIME AND AS AN ALTERNATIVE ASSET MANAGER WEARE CERTAINLY BULLISH ON THAT PATH FORWARD AND WE SEE LOTS OFOPPORTUNITY IN THE PRIVATE MARKETS.

 BUT THERE ARE SPECIALBUSINESSES THAT THE PUBLIC MARKETS ARE GOING TO VALUE THATWILL BECOME A CURRENCY FOR THAT PARTICULAR BUSINESS TO MOVEFORWARD AND DO MORE AGGRESSIVE THINGS GOING FORWARD AND WE SEETHAT ANY A NUMBER OF OUR BUSINESSES.

STANDARD AERO IS A GREAT EXAMPLE.

AIRSPACE BUSINESS FOCUSED ON REPAIR OF AIRCRAFT ENGINES.

WE BOUGHT IT BEFORE COVID AND WORK CLOSELY WITH IT THROUGHCOVID TO REALLY DRIVE CHANGE IN THAT BUSINESS WITHOPERATIONALLY DOING A BUNCH OF SIGNIFICANT M&A AND WE TICKETPUBLIC AND IT HAS BEEN PERFORMING EXCEPTIONALLY WELLAND THE PUBLIC INVESTORS IN THAT ARE VERY HAPPY WE TICKETPUBLIC AND THAT ARE INVESTORS THERE.

 ALIX:WHAT IS YOUR BIGGEST CONCERN RIGHT NOW?YOU SEEM PRETTY OPTIMISTIC AND CONSTRUCTIVE AND ENGAGED INTERMS OF GETTING STUFF DONE.

 WHAT IS THE WORRY IN THE BACKOF YOUR MIND? BRIAN: WE ARE WEARY EVERY DAY ABOUTJUST WHAT WE CAN CONTROL AND DRIVING PERFORMANCE IN EACH ANDEVERY BUSINESS THAT WE HAVE.

 THAT IS WHAT I SPEND MOST OF MYTIME FOCUSED ON, INVESTING IN GOOD BUSINESSES THAT ARE ONESWHERE WE CAN DRIVE VALUE IN IT AND RETRACT ROW CLASSMANAGEMENT TEAMS AND WE HAVE A PROFILE AND A PLAN TO DRIVEPOSITIVE CHANGE IN EACH AND EVERY BUSINESS.

THAT IS WHAT I WORRY ABOUT IS WHAT I CAN CONTROL.

THAT IS WHAT THE WHOLE TEAM WORRIES ABOUT.

 ROMAINE:GREAT TO CATCH UP WITH YOU AND OF COURSE EVEN BEFORE NOW FOR ALOT OF FOLKS CARLYLE WAS ALREADY SYNONYMOUS WITHWASHINGTON AND OF COURSE NOW PUSHING DEEPER INTO THAT.

WE WILL LET YOU GET TO YOUR VERY FIRST WASHINGTON DAY FORCARLYLE.

 AS WE KEEP IT ROLLING HERECLOSER TO THE CLOSING BELL'S WITH ABOUT 20 MINUTES TO GOLET'S GET OUR TOP CALLS.

 BIG MOVER IS ON THE BACK OFANALYST RECOMMENDATIONS AND WE START ON MCDONALD'S.

THIRD DOWNGRADE AND AS MANY DAYS.

 REDBURN JOINING THE PYLON BECOMING THE ONLY -- ONE OFONLY 41 WALL ST ANALYSTS TO US ON THE STOCK A SELL RATING.

THE WEIGHT LOSS DRUGS CONSUMER -- DROPPED THE PRICE TARGET TOA STREET LOW OF $260 A SHARE.

 NEXT UP BOOKING HOLDINGS BTIGUP IN THE PRICE TARGET THE 6000 TO 55 5500 SAYING MACROCONDITIONS HAVE STABILIZED.

 THE ANALYST SEES A STEADYPICKUP AND RESERVATION VOLUMES THAT PUTS BOOKING ON TRACK TOTOP ITS GUIDE.

 SHARE IS .

3% ON THE DAY.

 FINALLY DISNEY PLUNGING ITSPRICE TARGET AND KEEPING A BUY RECOMMENDATION.

THEY TOOK A LOOK AT THE LATEST HULU LUTEAL AND DISNEY TAKINGFULL CONTROL OF HULU WILL LET IT TO FULLY INTEGRATE THESTREAMER INTO DISNEY+ AS WELL AS THE UPCOMING ESPN STREAMINGSERVICE SET TO LAUNCH IN A FEW MONTHS.

 SHARES UP ABOUT 2.

25 PERCENT ONTHE DAY AND THOSE ARE SOME OF OUR TOP CALLS.

LET'S STAY IN THE MEDIA SPACE BECAUSE THE MAIN UNIONREPRESENTING BOTH ACTORS HAS REACHED A TENTATIVE CONTACTAGREEMENT WITH VIDEO DEVELOPERS.

 THIS POTENTIALLY ENDS OF STRIKETHAT HAS DRAGGED ON FOR ALMOST A YEAR AND MADE A BIG DISPUTEOVER THE USE OF AI IN THE GAMING INDUSTRY.

 EA, TAKE-TWO, ROBLOX ALLFLATTENING -- ALL FRACTIONALLY HIGHER.

HERE TO DISCUSS THAT, JUST AN EXCUSE TO TALK TO HIM ABOUTANYTHING, IS MICHAEL PACHTER FROM WEDBUSH SECURITIES.

ALWAYS GREAT TO TALK TO YOU.

 LET'S START WITH THIS DEAL.

I DIDN'T EVEN REALIZE THEY WERE STILL ON STRIKE.

THIS GOES BACK FURTHER THAN WHEN THEY WENT ON STRIKE BACKIN JULY.

 GIVE US A SENSE AS TO WHAT WASACTUALLY BEING HASHED OUT.

 THE GENERAL IDEA WAS THAT THEACTORS WERE UNCOMFORTABLE WITH THE IDEA THAT VIDEOGAMEDEVELOPERS WERE LEANING MORE HEAVILY ON AI FOR WORK THATWOULD TRADITIONALLY GO TO HUMAN BEINGS.

 MICHAEL: IT HAPPENED OBVIOUSLY INHOLLYWOOD WITH FILM AS WELL.

 I THINK PEOPLE UNDERSTAND THATREPLACING AN ACTOR IN A FILM WITH A CGI IMAGE IS EASY TO DO.

GAMES ARE ALL CGI IMAGES.

 WHAT REALLY HAPPENED HERE ISTHE VOICE ACTOR TO DO WHAT IS CALLED CUT SCENES, THEY DO THEPART OF THE GAME BETWEEN LEVELS OF THE GAME WHERE THEY GIVE YOUTHE TRANSITION OF WHERE YOU ARE GOING AND WHY YOU ARE GOINGTHERE, THEY WERE REALLY WORRIED THAT THEIR VOICES WERE GOING TOBE PROGRAMMED.

 PROBABLY THE MOST FAMOUS DEMONHAS CUT SCENES IS GRAND THEFT AUTO.

YOU HAVE SEEN THE NEXT ONE THAT YOU ARE GOING TO GO FROM AMISSION IN MIAMI BEACH TO A MISSION IN THE EVERGLADES TO AMISSION IN NORTH FLORIDA.

 THEY HAVE TO GET YOU THERE ANDSO THE ACTORS SET THE TONE AND YOU GET THE BOSS IS TELLING THEUNDERLINGS WHAT TO DO.

 AND IT REALLY IS ACTING.

IT IS INTERESTING TO ME BECAUSE I HAVE TALKED TO A WHOLE BUNCHOF DEVELOPERS ABOUT THEIR FAVORITE PART OF MAKING VIDEOGAMES AND THEY HAVE SAID DIRECTING THE VOICE ACTORS.

THEY GET TO WORK WITH REAL PROFESSIONALS AND GET THEM TOHAVE THE EMOTION BEFORE THE GAME.

THOSE SAG-AFTRA MEMBERS WERE WORRIED THEY WERE GOING TO BEREPLACED BY AI AND RIGHTFULLY SO.

THE GAMES INDUSTRY WAS BEHIND THE MOVIE INDUSTRY AND DID NOTREALIZE HOW IMPORTANT THOSE PEOPLE ARE TO MAKINGHIGH-QUALITY GAMES AND HOW LITTLE THEY COST IN THE SCHEMEOF THINGS BECAUSE THESE ACTORS MAKE $5,000, $10,000 FOR APIECE OF WORK IN A GAME COSTS LITERALLY UPWARDS OF $100MILLION.

 GRAND THEFT AUTO OVER $1BILLION TO MAKE.

 REPAIRS ABOUT PAYING 30 PEOPLE$10,000.

 WELL THE ACTORS CARE VERY MUCH.

ALIX: WHAT DOES THAT MEAN FOR THEGAMERS? MICHAEL: GAMERS I THINK ARE JUST GOINGTO GET A BETTER EXPERIENCE.

 THERE IS A FINE LINE BETWEENREALISTIC AND TOO REALISTIC.

 SOME OF THESE GAMES ARE PRETTYVIOLENT AND SOMETIMES IT REALLY DOES FEEL LIKE YOU ARE KILLINGSOMEBODY.

 I PLAYED A GAME CALLED FALLOUT.

I ACTUALLY LOVE THE PERK WHERE I CAN SHOOT AT A GHOUL'S HEADAND IT WOULD EXPLODE.

 BUT NOW THEY ARE MAKING THEGHOUL'S WALDEN GOD AND.

 HE IS IN THE -- WALTON GOGGINS.

KIANA REEVES IS IN CYBERPUINK.

 NORMAN READ-- IT GETS TOO REALSOMETIMES.

 BUT IF THE GOOD GUY HAS A VOICEYOU RECOGNIZE AND TRUST, WHAT IS HIS NAME, KIEFER SUTHERLANDWAS IN CALL OF DUTY, THAT ADDS A LOT OF VALUE.

THE NUMBER ONE DOWNLOAD IN THE AUGHTS IN ANY GAME WAS SNOOPDOGG DOING THE VOICEOVER FOR CALL OF DUTY.

PEOPLE LOVE SOMETHING FAMILIAR.

 THAT IS WHY WE HAVE ACTORSDOING COMMERCIALS.

 ROMAINE: WE KIND OF FORGET THAT SOME OFTHESE VOICE ACTORS HAVE BECOME CELEBRITIES IN THEIR OWN RIGHT.

I AM CURIOUS IS THERE GOING TO BE SPACE FOR THAT UNKNOWNPERSON TO VOICE SOMETHING LIKE THIS AND BASICALLY ELEVATETHEMSELVES, OR IS IT NOW JUST GOING TO BE THE SNOOP DOGGS,KIEFER SUTHERLANDS OF THE WORLD AND AI? MICHAEL:THAT IS A GREAT QUESTION.

 EVERYBODY CAN'T BE SNOOP DOGGAND NOT EVERY GAME CAN AFFORD SNOOP DOGG.

SO THERE IS ALWAYS ROOM FOR JUST REALLY GOOD ACTORS.

I THINK IT WILL BE SIMILAR TO TELEVISION COMMERCIALS.

THE VOICE ACTORS AND MOST OF THEM ARE NOBODIES EXCEPT THEYARE TALENTED AND THEY CAN ACTUALLY SELL YOU THE PRODUCT.

I THINK THAT IS WHAT YOU'RE GOING TO GET MOSTLY IN VIDEOGAMES.

 OCCASIONALLY THEY WANT THATVOICE YOU CAN TRUST.

 TO BE THE VOICEOVER OF STATE FARM ORSOMETHING WILL BE AN ACTOR THAT YOU RECOGNIZE.

BUT THERE IS PLENTY OF ROOM.

 AND THERE ARE PEOPLE WHO MAKE ALIVING DOING VOICES IN GAMES.

 THE OTHER ASPECT OF THIS WASMOTION CAPTURE AND THOSE PEOPLE ARE SUPREMELY COUNTED --TALENTED.

 THEY ARE ESSENTIALLY STUNTMEN.

THE GUYS IN MADDEN NFL, THEY HIRE EX-NFL AND NCAA PLAYERS TOBE THOSE PEOPLE.

 ALIX: WE HAVE TO LEAVE IT THERE.

WAS GOOD TO SEE YOU.

 MICHAEL PACHTER.

15 UNTIL THE CLOSE.

 THIS IS BLOOMBERG.

 ♪ ROMAINE:10 MINUTES UNTIL THE CLOSING BELL.

ROMAINE BOSTICK ALONG WITH ALIX STEEL.

FRACTIONAL GAINS BUT A THIRD STRAIGHT DAY OF GAINSNONETHELESS.

 ALIX: RUSSELL SMALL-CAP STOCKS UPFAIRLY STRONGLY AND SEEING A DIVERGENCE IN THE S&P ANDENERGY OUTPERFORM AND INDUSTRIALS NOT SO IT IS HARDTO GET A NARRATIVE.

 MAYBE POSITIVE HEADLINES OUT OFHOWARD LUTNICK.

 TALKS COULD WRAP UP TODAY BUTNONETHELESS IT IS HARD TO GET A STRONG READ THROUGH AND THEOVERALL MARKET NARRATIVE.

 ROMAINE:THE ONLY THING THAT SEEMS TO BE CONSISTENT IS STRENGTH IN CHIPSTOCKS BUT IT DOES NOT REALLY PAINT A PICTURE OF ANYTHING.

IT IS KIND OF A HODGEPODGE AND MAYBE THAT IS OK.

 ALIX: IS IT?AT WHAT POINT DOES THE HODGEPODGE LEAD TO HIGHERPRICES OR COMPLACENCY? ROMAINE: THE NUMBER IS GIVES YOU A SENSEOF SOME COMPLACENCY.

 IT IS NOT ON THE SCREEN BUT OFCOURSE THE BOND MARKET NOT DOING MUCH OF ANYTHING.

THE VIX FALLING TODAY BACK BELOW 17 AS WE COUNT YOU DOWNTO THE CLOSING DOLLARS WITH ABOUT NINE MINUTES AGO.

LET'S BRING IN MANDY XU, VICE PRESIDENT AND HEAD OFDERIVATIVES INTELLIGENCE AT CBOE.

 GREAT TO SEE YOU.

LET'S START WITH THE VIX BECAUSE I AM CURIOUS ABOUT THIS.

WE TALK ABOUT THIS IDEA OF COMPLACENCY.

A LOT OF METRICS IN THIS MARKET DO SCREEN THAT PEOPLE ARECOMPLACENT OR ABSENT.

 WHEN I SEE THE VIX BELOW 17WHAT DOES THAT TELL YOU? MANDY: NOT ONLY IS THE LEVEL OF THE OFTHE VIX LOW IT IS LOW COMPARED TO THE RECENT LEVEL OF REALIZEDVOLATILITY IN THE MARKET.

 WITH THAT IS TELLING YOU ISINVESTORS EXPECTING THIS COLUMN TO CONTINUE THERE IS NOT A TONOF HEDGING GOING ON IN THE NEAR TERM.

KEEP IN MIND THE VIX IS IN MOM -- ONE MONTH VOLATILITY.

IF YOU WANT TO TALK ABOUT LOW LOOK AT VIX EQ WHICH IS OURMEASURE FOR A FOR SINGLE STOCKS.

 THAT IS CURRENTLY AT A YEAR TODATE LOW.

 RETRACING FROM APRIL HIGHS BUTSTILL HIGHER THAN WHERE IT WAS IN JANUARY AND FEBRUARY.

SINGLE STOCK VOLATILITY IS CURRENTLY AT A YEAR TO DATE LOWAND THAT IS TELLING YOU PEOPLE STILL BELIEVE CORPORATEFUNDAMENTALS ARE STRONG IN THIS ENVIRONMENT.

 ROMAINE: WHEN WE LOOK AT THE TECHNICALMEASURES, MOMENTUM PARTICULARLY AND SOME OF THOSE OTHERMEASURES THAT HAVE BEEN DRIVING THE MARKET HIGHER, IS THATSTILL THERE IN LIGHT OF TEPID MOVES OVER THE LAST COUPLEWEEKS? MANDY: I AGREE.

 PEOPLE ARE STRUGGLING FORDIRECTION BUT I WOULD SAY EVEN HERE THE PAIN TRADE IS STILLHIGHER AND YOU CAN SEE THIS IN THE POSITIONING AND THE OPTIONSMARKET.

 IN THE NEAR TERM IT IS MUCHMORE BIASED TOWARDS CALLS OR THERE IS NOT THE DEMAND FORPUTS AND WE ARE STILL SEEING INCREMENTAL DEMAND FOR UPSIDECALLS.

 THAT CHANGES IF YOU GO OUTLONGER IN THE TERM STRUCTURE.

 IF YOU LOOK AT SIX-MONTHOPTIONS OR EVEN LONGER WE ARE SEEING MORE DEMAND FOR HEDGING.

IN THE NEAR TERM I DEFINITELY STILL THINK THE PAIN TRADE ISHIGHER.

 HE DELIVERED IN APRIL AND MAYBEDIDN'T GET FULLY BACK.

 LEO RETAIL IS THEY ARE BUT IDON'T KNOW IF INSTITUTIONAL INVESTORS HAVE RE-LEVERED ANDTHEREFORE I THINK THE PAIN TRADE IS STILL HIGHER.

 ALIX:IF VOLATILITY STAYS RELATIVELY SUBDUED DO FUNDS NEED TO STARTRE-RISKING LIKE VOLATILITY FUNDS IN CTA'S? MANDY: YES.

THERE ARE FUNDS LIKE THE MORE SYSTEMATIC STRATEGIES LIKECTA'S OR FALL TARGET FUNDS WHICH HAVE AN EXPLICIT LEVEL OFVOLATILITY THEY ARE MANAGING FOR.

THE KEY THING HERE IS REALIZING VOLATILITY, NOT IMPLIED.

AS THAT CONTINUES TO FALL YOU WOULD EXPECT TO SEE MORE ANDMORE ALLOCATION TOWARDS EQUITIES.

 ALIX:HENCE THE RISKS TO THE UPSIDE AND THE DOVES SCENARIO.

YOU ARE MENTIONING THE INDIVIDUAL OPTIONS FOR STOCKSWAS ALSO REALLY LOW.

 WHY IS THERE THEBELIEF, OR DO WE BELIEVE THE BELIEF THAT CORPORATEFUNDAMENTALS ARE HOLDING UP? MANDY:RIGHT NOW EARNINGS REVISION HAS BEEN FAIRLY POSITIVE.

EARNINGS SEASON WE JUST WENT THROUGH ONE.

IT IS NOT GOING TO REFLECT THE TRADE WAR AND THAT IS GOING TOBE AN ONGOING RISK.

 WE WILL SEE WHAT COMES OUT OFTHE U.

S.

 CHINA TALKS.

 BUT SO FAR FOR THE MEGACAPSWHICH IS REALLY WHAT IS DRIVING THE WEIGHTED AVERAGE SINGLESTOCK, THAT IS STILL PRETTY POSITIVE ON THE OUTLOOK FORCORPORATE EARNINGS.

 ROMAINE: LET'S GO OUTSIDE THE U.

S.

BECAUSE WE KNOW THIS WAS A BIG PART OF THE TRADE AT LEAST FORTHE FIRST FEW MONTHS.

 THIS IDEA THAT MORE PEOPLE WERESNIFFING AROUND AND EMERGING MARKETS IN EUROPE.

I KNOW IT HAS WANED A LITTLE BUT ON A YEAR-TO-DATE BASIS --IS THE VOLATILITY THE SAME? MANDY: IT IS INTERESTING.

FOR THE FIRST TIME IN A LONG TIME THIS YEAR THE U.

S.

STOCKS HAVE BEEN MORE VOLATILE THAN EMERGING MARKET STOCKS.

NOT JUST ON A REALIZED VOLATILITY BASIS WHICHOBVIOUSLY WENT ON IN APRIL BUT EVEN IF YOU LOOK AT CURRENTLYTHE IMPLIED VOLATILITY OF S&P COMPARED TO AN EX ETF WHICH ISTHE MSCI E.

M.

 INDEX, S&P IS STILL IMPLYINGHIGHER LEVELS OF VOLATILITY THAN EMERGING MARKET STOCKS.

AND I TIE THAT TO WHAT IS GOING ON ANY FIXED INCOME ANDCURRENCY MARKETS WHERE THE U.

S.

 DOLLAR VERY MUCH BEHAVING LIKEHOW EMERGING MARKET ECONOMY WHAT IT.

HIGHER BOND YIELDS BUT WEAKER DOLLAR.

 ROMAINE: HOW DO YOU CHART A PATH AS TOWHERE THERE -- PARTICULARLY WHEN YOU TALK ABOUT BONDS ANDAFFECTS.

 A LOT OF THAT IS TIED TODECISIONS AND WORDS SAID OUT OF WASHINGTON.

THAT IS NOT EASY TO PREDICT.

 MANDY: DEFINITELY NOT.

 WHAT WE HAVE SEEN POST APRILAND IN MAY PARTICULARLY IS A SIGNIFICANT DROP OFF IN LONGERDATED OPTIONS VOLUME AND THAT TELLS ME PEOPLE ARE STRUGGLINGFOR THAT DIRECTION.

 WHAT WE HAVE SEEN IS ARESURGENCE IN TERMS OF VOLATILITY WHICH IS PLAYING ONTOTALLY DIFFERENT FACTORS.

 IT IS MORE INTRADAY RISKPREMIUM AND THAT IS DRIVING A LOT OF OPTION ACTIVITY.

 ALIX:WHERE IS HEDGING STILL CHEAP? IT SOUNDS LIKE EVERYTHING ISGOING TO BE CHEAP.

 MANDY: SINGLE STOCK VOLATILITY, YOURTO DATE LOWS, VIX HITTING 16 LAST I CHECKED.

IF YOU ARE LOOKING TO HEDGE I THINK THE PREMIUM YOU'RE GOINGTO PAY NOW IS A LOT LOWER THAN IT WAS A MONTHS AGO.

 ALIX:WHAT CHANGES THE CALCULUS? WHAT CHANGES? MANDY:OBVIOUSLY WHAT IS COMING OUT OF WASHINGTON.

IF WE GET THE RE-ESCALATION OF THE TRADE WAR.

I THINK A LOT OF PEOPLE HAVE WRITTEN DOWN THAT RISK.

A LOT OF THE OPTIMISM AROUND TRADE IS ALREADY PRICED IN.

THE SECOND THING IS OBVIOUSLY THE STRENGTH OF THE UNDERLYINGU.

S.

 ECONOMY.

 SO FAR IT HAS HELD UP AND THATIS WHY I THINK THE MARKETS ARE ALMOST BACK TO ALL-TIME HIGHSBUT IF THAT WERE TO CHANGE THAT WOULD CHANGE THE VOLATILITYLEVELS.

 ROMAINE: THIS IDEA OF IF WE COULD BERANGE BOUND.

 SO MUCH OF THE RISK WE FEEL HASBEEN PRICED IN.

 SOME OF THE UPSIDE WE ALSO FEELIS PRICED IN.

 YOU DO NOT GET A BIG SHOCK DOESTHIS MEAN WE JUST DRIFT ALONG WHERE WE HAVE BEEN? MANDY:I CAN SEE THAT.

 YOU COULD DEFINITELY MAKE THECASE FOR THAT.

 THE CASE WOULD BE THATPOSITIONING IS NOT THERE YET.

 SO MANY PEOPLE HAVE THE LEVERED.

AND HAVE BEEN CASING THIS REBOUND AND WHERE THEY ARE NOWVERSUS THE BEGINNING OF THE YEAR.

I WOULD SAY PEOPLE ARE STILL MORE UNDERWEIGHT EQUITIES.

ROMAINE: IF YOU HAD TO MAKE A DECISIONAND SAY IS THIS A MARKET DANGER BEING DRIVEN BY FUNDAMENTALSARE TECHNICALS, WHICH ONE? MANDY: FUNDAMENTALS.

AND THE FACT THE U.

S.

 ECONOMY, ALL THE DATA IS STILLSO STRONG AND EARNINGS REVISION IS STILL SO STRONG.

THAT IS WHY THEY ARE BACK TO THE HIGHS.

BUT HARD DATA IS GOING TO BE A LAG.

 SO WE WILL SEE IN THE NEXTCOUPLE OF MONTHS.

 ROMAINE: ALWAYS GREAT TO HAVE YOU IN THESTUDIO.

 MANDY XU, VICE PRESIDENT ANDHEAD OF DERIVATIVES MARKETS INTELLIGENCE WITH CBOE GLOBALMARKETS WITH THE S&P 500 NOW UP ABOUT .

5% RIGHT AROUND THEHIGHS OF THE DAY.

 OF COURSE THESE ARE FRACTIONALGAINS.

 YOU ARE SEEING OUTPERFORMANCEIN THE TRANSPORTATION SPACE AND SEMICONDUCTORS.

NOT A LOT OF WEAK SPOTS IN I GUESS THAT IS A GOOD THING.

ALIX: INTERESTINGLY ENOUGH, TALKS ALOT ABOUT THE FUN POSITIONING AND SAYS IF WE CONTINUE THISDAILY CHANGE WITHIN THE S&P AND THAT ENVIRONMENT YOU'RE GOINGTO SEE A LOT OF BUY COMING FROM VOLATILITY IN THE BALLPARK.

 YOU COULD SEE MATERIAL BUYINGIF THINGS STAY CALM.

 ROMAINE: ABSOLUTELY.

WE TALK ABOUT WHAT IS MOVING IN THE MARKET.

SOME BIG NAMES ARE DOWN.

 MICROSOFT AND NETFLIX ANDSALESFORCE ALL IN THE RED.

 THEN YOU HAVE MONSTER GAINSFROM TESLA UP ALMOST 6%.

 MET UP 1%.

ALPHABET ALSO GETTING IN ON THE ACTION AS WE GET CLOSER TO THECLOSING BELLS.

 WE WANT TO BRING IN SCARLET FUAS WE DO EVERY DAY AT THIS TIME.

 ALSO JOINING US HERE AROUND THEDESK IN THE STUDIO IS EMILY GRAFFEO TO HELP US BREAK DOWNALL OF THE MARKET ACTION.

 NOT AN EXCITING DAY BUT YOU AREPUTTING TOGETHER SMALL GAINS AND I GUESS THAT IS GOOD.

SCARLET: IF WE CONTINUE TO GET THESE 50BASIS POINT DAYS EVENTUALLY BE WILL GET TO THAT RECORD HIGH.

IT MIGHT TAKE A FEW OF THOSE BUT IT FEELS LIKE WE AREGETTING THERE ALTHOUGH THE CATALYST STILL REMAINS WHATCOMES OUT OF THESE TRADE TALKS WHICH ARE ONGOING RIGHT NOW.

THEY HAVE CONTINUED TO MOVE FORWARD WITH AN IT IS NOT CLEARIF IT IS GOING TO WRAP UP TODAY OR GO INTO A THIRD DAY.

 ROMAINE:FRACTIONAL GAINS ACROSS THE BOARD ON THIS TUESDAY AFTERNOON.

THE DOW JONES INDUSTRIAL AVERAGE WHICH VERY BRIEFLYDIPPED INTO THE RED EARLIER CLAWING BACK GAINS.

FINISHING HIGHER ABOUT .

3%.

 S&P 500 HOLDING THAT 6000 LEVEL.

UP ABOUT A HALF A PERCENT.

 NASDAQ COMPOSITE UP ABOUT .

6%.

SIMILAR MOVE FOR THE NASDAQ 100.

 THE BIG GAINS TODAY UP 1.

3% ONTHE DAY.

 AIRLINES MOVING HIGHER.

 RUSSELL 2000 HIGHER AS WELL UP12 POINTS OR .

6%.

 ALIX: THEY HAVEN'T EVEN REPORTEDEARNINGS.

 TAKE A LOOK AT THE S&P.

333 STOCKS ADVANCE ONLY 168 ARE DECLINING.

A FUN STAT FOR YOU THAT THE AVERAGE FOR THE S&P 500 MEMBERSIS STILL 23% BELOW THE RECORD HIGH.

EVEN THOUGH THE OVERALL INDEX SEEMS TO BE GRINDING HIGHER DAYBY DAY, OVERALL YOU'RE STILL SEEING BROAD-BASED -- I DON'TWANT TO SAY WEAKNESS BUT NOT A LOT OF MOMENTUM.

 SCARLET:YOU LOOK AT THE IMAP AND THERE IS A LOT OF GREEN ON THE SCREEN.

10 OF THE 11 SECTORS FINISHING HIGHER WITH AT LEAST FOURGROUPS FINISHING WITH 1% GAINS.

 ENERGY, CONSUMER DISCRETIONARY,HEALTH CARE.

 THE LAGGARD IS INDUSTRIALS, THEONLY SECTOR IN THE RED DOWN BY .

4%.

 EMILY: TAKE A LOOK AT INDIVIDUALMOVERS.

 FASTENAL HITTING A 52-WEEK HIGH.

ABSOLUTELY NO NEWS.

 WE WERE LOOKING AT SOME WINNERS.

LOOKING AT THE GAINERS.

 DISNEY UP HIGHER AFTER CHIEFEXECUTIVE OFFICER BOB IGER SAYS HE HAS NO PLANS TO DIVEST THECOMPANY TRADITIONAL TV ASSETS.

 THIS OF COURSE IS BUCKING APATH PURSUED BY RIVALS RECENTLY AS CONSUMER MEDIA PREFERENCESSHIFT TOWARDS STREAMING.

 WE SAW WARNER BROS.

DISCOVERY SAYING IT IS GOING TO SEPARATE HIS LEGACY MEDIACHANNELS FROM STREAMING.

 I THOUGHT IT WAS INTERESTING ATTHE HULU DEAL, THIS IDEA OF THE 500 MILLION DOLLARS OR WHATEVERTHEY ARE PAYING TO TAKE FULL CONTROL AND HOW THAT FOLDS INTOTHE BROADER IDEA OF WHETHER THERE COULD BE MORE SPIN UP BUTIGER SAYING THAT AIN'T GOING TO HAPPEN.

HOW LONG IS IGER SUPPOSED TO BE AROUND? ALIX:IT KEEPS GETTING PUSHED OFF.

 ROMAINE: DISNEY A BIG GAINER.

 SCARLET:THEY ARE NOW ONLY GOING TO BE WORKING WITH TELEHEALTH FIRMSTHAT AGREED TO STOP SELLING COPYCAT VERSIONS OF WEIGHT LOSSDRUGS.

 THIS IS DIMINISHING THE LIKELIHOOD OF A PARTNERSHIPWITH ONE OF THE MOST VISIBLE PLAYERS IN INDUSTRIES.

HYMNS AND HERDERS HAVE TEAMED UP WITH NOVO DO OFFER THE RIVALGLP-1 FROM ELI LILLY WEGOVY AT A DISCOUNTED PRICE TO PATIENTS.

INVESTORS ARE LOOKING AT THIS BEING A POSITIVE HERE FOR ELILILLY.

 SCARLET: IT IS HARD TO BELIEVE BUT WEHAVE EARNINGS FROM GAMESTOP.

 NET SALES FOR THE QUARTERDROPPING 17%.

 FIRST QUARTER NET SALES UP$732.

4 MILLION.

 FIRST QUARTER HARDWARE ANDACCESSORIES NET SALES MISSING ANALYST ESTIMATES.

 SOFTER NET SALES -- THE ONEPART OF THEIR BUSINESS THAT THEY DO BETTER WAS COLLECTIBLES.

200 AND $11 MILLION OF 55% YEAR-OVER-YEAR.

WHEN WAS THE LAST TIME EITHER OF YOU STEP FOOT IN A GAMESTOP?ROMAINE: IT HAS BEEN A WHILE.

 IT IS THIS IDEA WHAT THEY WANTTO BE.

 COLLECTIBLES HAS BEEN THE ONLYTHING THEY ON THEIR HEAD ON.

 ALIX:ARE THEY MICROSTRATEGY NOW? ROMAINE: NO.

 SCARLET:INSMED, I HAVE NOT HEARD OF THIS COMPANY.

IT IS AN INSTANT HEALTH COMPANY WHICH IS A SMALLER MARKET CAPTHAN DISNEY AND ELI LILY.

 IT WAS THE HIGHEST LEVEL INOVER 24 YEARS.

 THE DRUG DEVELOPERS AT AMID-STAGE TRIAL OF THEIR EXPERIMENTAL INHALATION POWDERFOR THE TREATMENT OF A TYPE OF LUNG DISEASE MET ALL ENDPOINTSAND THERE WERE A NUMBER OF WALL STREET ANALYSTS THAT SAID THEDATA EXCEEDED EXPECTATIONS AND THEY WERE VERY POSITIVE SO ITWAS A GOOD DAY TO BE LONG.

 SHOULD BE GET TO THE DECLINERS? EMILY:IT WAS EASY TO FIND A DECLINE IS BECAUSE A LOT OF POPULARNAMES INCLUDING FOOD.

 THE PARENT COMPANY OF SMUCKERSPEANUT BUTTER, FOLGERS COFFEE.

 THEY HAD A RECORD DROPPED TODAYAND FALLING TO THE LOWEST LEVEL SINCE 2021.

THEY DISAPPOINTED ON GUIDANCE.

 OBJECTIVE EPS WILL DECLINE 25%YEAR-OVER-YEAR.

 THEY SPECIFICALLY SAID THE U.

S.

TARIFFS ARE INCREASING COSTS IN THE COFFEE BUSINESS AND THATWILL HURT THEIR PROFIT.

 ROMAINE: WE ARE GETTING SOME OTHEREARNINGS.

 DAVE AND BUSTERS.

 NOT NECESSARILY A GREAT QUARTER.

THE COMPANIES THAT HAVE REPORTED EPS OF $.

62 A SHARE.

REVENUE COMING IN AT ABOUT 567.

7 MILLION.

THAT APPEAR TO BE A BEAT.

 THE STREET WAS LOOKING FOR A$569 MILLION.

 ENTERTAINMENT REVENUE CAME INLIFE.

 ROUGHLY 300 $66 MILLION IN CHANGE.

COMP SALES OVERALL WERE DOWN ABOUT 8.

3% IN THE QUARTER ANDADJUSTED EPS MIST AS WELL.

 $.

76 A SHARE IN THE STREET WASLOOKING FOR $.

94.

 SHARES DOWN ABOUT 4% IN THEAFTER HOURS TRADE.

 ALIX: TAKING A LOOK AT STITCH FIX ANDTHE THIRD QUARTER LOSS PER SHARE COMING IN AT ABOUT SIXCENTS.

 TAKING A LOOK AT EBITA FORCONTINUING OPERATIONS COMING IN AT ABOUT $11 MILLION FORADJUSTED THIRD QUARTER.

 THE FORECAST FOR THE FOURTHQUARTER LOOKING AT THE NET REVENUE FOR CONTINUINGOPERATIONS ON THE HIGH-END.

 THAT WOULD BE A DECLINESEQUENTIALLY QUARTER ON QUARTER AND NO STOCKS GETTING HIT DOWN13%.

 SCARLET: GET LAB DOWN ABOUT 10% RIGHTNOW.

 FIRST QUARTER REVENUE DID COMEIN SLIGHTLY AHEAD OF ESTIMATES.

 FIRST QUARTER REVENUE OF 214POINT $5 MILLION VERSUS ESTIMATES OF TO 13.

ADJUSTED EPS ALSO BEAT.

 IT LOOKS LIKE THEY LOWEREDSECOND-QUARTER REVENUE SO THEY NOW SEE SECOND-QUARTER REVENUE$226 MILLION TO $227 MILLION.

 ESTIMATES WERE FOR $227.

1MILLION.

 THEY STILL SEE FULL YEARREVENUE WHERE ANALYSTS HAD EXPECTED.

 SCARLET:THEY CALL THEMSELVES A PACKAGE COMPANY BUT WE ARE TALKING THECANNABIS COMPANY.

 SHAREHOLDERS APPROVED A REVERSESTOCK SLIP.

 YOU LIKE THAT? THAT IS WHAT WE SHOULD ALL CALLOURSELVES.

 THEY HAVE PAUSED IMPLEMENTATIONAS THEY EVALUATE THE TIMING AND THE STOCK PRICE.

 ROMAINE:WE WERE TALKING ABOUT ALL MARIJUANA STOCKS BECAUSEEVERYONE WAS ANTICIPATING THIS NEW REGULATORY ENVIRONMENT INTHE U.

S.

 NOT ONLY IN TERMS OF BEING ABLETO SELL IT BUT ALSO FINANCIAL REGULATIONS.

THAT NEVER REALLY HAPPENED.

 YOU GOT SOME STATE-BY-STATEDE-REGULATION BUT NOT NECESSARILY THE CROSS-BORDERSTUFF AND THEN YOU SAW THE STOCKS START TO DIVE AND THEYHAVE NOT REALLY RECOVERED.

 THERE HAS BEEN NO REAL CHATTERHEADING INTO THIS ADMINISTRATION BECAUSE THEREWAS DISAPPOINTMENT WITH THE BIDEN ADMINISTRATION AND PEOPLETHOUGHT THE TRUMP ADMINISTRATION WOULD BE MOREFAVORABLE BUT THEY HAVE NOT BEEN.

 SCARLET:WHEN YOU CAN'T DO BANKING THAT'S NOT GREAT.

 ALIX: IT WAS AN OPTION.

TOMORROW IS THE TENURE.

 ROMAINE: NICE BREAKDOWN OF TODAY'SMARKET ACTION.

 WE ARE GOING TO SAY GOODBYE TOALIX STEEL WILL BE REJOINING US TOMORROW.

SCARLET FU IS STICKING AROUND.

 OUR THANKS TO EMILY GRAFFEO ASWELL.

 WHEN WE COME BACK, THE GAP BETWEEN THE U.

S.

AND EUROPE AND HOW TO BRIDGE THAT GAP.

WE ARE GOING TO SIT DOWN WITH THE RELATIVELY NEW CEO OF THEAMERICAS FOR DWS GROUP, THE ASSET MANAGEMENT GROUP OFDEUTSCHE BANK.

 THAT IS COMING UP NEXT.

THIS IS BLOOMBERG.

 ♪ SCARLET: WELCOME BACK.

 ROMAINE:ANOTHER MIDDLING DAY ON WALL STREET BUT IT IS STILL THREESTRAIGHT GAINS OF -- THREE STRAIGHT DAYS OF GAINS.

AS FAR AS SOME INDIVIDUAL SECTORS HE SAW THE PHILADELPHIASEMICONDUCTOR INDEX RISE 2%.

 UP 4% OVER THAT SAME THREE DAYSTRETCH.

 KEEP AN EYE ON A LOT OF WHAT ISGOING ON IN THE TRANSPORTATION SECTOR.

RAILROADS GOT A BIG POP TODAY LARGELY BECAUSE THERE WASCHATTER COMING OUT OF WASHINGTON ON THE REGULATORYFRONT AS WELL AS INVESTOR PRESENTATIONS MADE TODAY THATSEEM TO SUGGEST MAYBE THE BOTTOM AND SOME OF THE FREIGHTTRADES MUST BE IN.

 WASHINGTON CHATTER DRAG DOWNHEALTH CARE NAMES ON THE DAY.

 IT IS NOT CLEAR WHAT IS DRIVINGTHIS.

 THIS IS THE SECOND STRAIGHT DAYWE HAVE SEEN MEANINGFUL DECLINES.

 SOME HAS TO DO WITH ANEXECUTIVE ORDER PUT OUT WITH MEDICAID PRICING.

 SCARLET:WASHINGTON, D.

C.

 DRIVING EVERYTHING.

LET'S LOOK AT TAS LEFT FINISHING THE DAY UP ALMOST 6%AFTER ELON MUSK AND OTHER EXECUTIVES PROMOTED A VIDEO OFA DRIVERLESS TESLA ON THE ROAD IN AUSTIN.

IT PRETTY CLEAR HINT THE COMPANY IS CLOSE TO LAUNCHINGITS ROBOTAXI SERVICE.

 TESLA AIMS TO START THEROBOTAXI SERVICE ON JUNE 12.

 INSMED UP ABOUT 29%.

THIS IS A 24 YEAR HIGH AND HAD GAINED AS MUCH AS 30%.

IN A TRIAL OF A LUNG DISEASE TREATMENT TOPPED ANALYSTEXPECTATIONS AND TOP OF THE HIGHEST EXPECTATIONS ACCORDINGTO ONE FIRM.

 AND THE SMUCKERS COMPANYFALLING MORE THAN 15%, THE MOST EVER AFTER ITS QUARTERLY ANDFULL-YEAR FORECAST MISSED ANALYST ESTIMATES.

 WHY? U.

S.

 TARIFFS ARE INCREASING COSTS INITS COFFEE BUSINESS IN PARTICULAR.

THAT BRINGS US TO OUR TOP STORY WHICH IS TRADE AND INFLATION.

THESE ARE THE TWO KEY CATALYSTS KEEPING STOCKS IN A HOLDINGPATTERN IN U.

S.

 TREASURIES LITTLE CHANGED.

THAT IS BECAUSE THEY HAVE YET TO PLAY OUT.

 U.

S.

AND CHINESE OFFICIALS EXTENDED THEIR TRADE NEGOTIATIONS INTOTUESDAY EVENING IN LONDON.

 THOUGH THEY ARE STILL VERYEARLY ON IN THEIR TALKS GIVEN THE HAVE REALLY BROADENED FROMCHIP DESIGN SOFTWARE AND RARE EARTH MINERALS TO JET ENGINESAND HIGHER EDUCATION.

 MEANTIME INFLATION ENGINE OVERTHE NEXT TWO DAYS WILL PROVIDE SOME SIDE THAT -- ROMAINE:WE ARE GOING TO SPEND THE NEXT HOUR TALKING ABOUT THAT AND ABRIDGE BETWEEN WHAT IS GOING ON HERE IN THE U.

S.

 AND OVERSEAS.

WE HAVE A SPECIAL GUEST TO KICK THINGS OFF.

TO TALK ABOUT THAT GEOPOLITICAL UNCERTAINTY, DWS GROUP, THETRILLION DOLLAR GLOBAL ASSET MANAGEMENT UNIT OF DEUTSCHEBANK IS IN A UNIQUE POSITION AS A BRIDGE OF SORTS BETWEENALTERNATIVE ASSETS IN THE UNITED STATES AND THOSE INEUROPE.

 ABOUT SIX MONTHS AGO THE AMERICA CEO WAS NO.

HEPSEN UZCAN IS NOW THE AMERICA CEO AT DWS GROUP AND JOINS USIN STUDIO TWO.

 AN INTERESTING TIME FOR YOU TOTAKE OVER A UNIT I THINK IS PROBABLY MUCH MORE IN FOCUSTHAT AND MAYBE YOU EVEN REALIZE IN DECEMBER WHEN YOU TOOK OVER.

A LOT HAS CHANGED OVER THE LAST FEW MONTHS WITH POLICIES COMINGOUT OF WASHINGTON AND MORE IMPORTANTLY INVESTORS LOOKINGFOR I GUESS SOMETHING DIFFERENT.

 WHAT ARE THEY LOOKING FOR?HEPSEN: FIRST OF ALL I DID COME IN ATTHE HELM OF A VERY UNIQUE TIME.

 YOU ARE CORRECT, IT WASDECEMBER WHEN I GOT APPOINTED.

 BEING A FIRST-GENERATIONAMERICAN MOVING OVER TO THE UNITED STATES AT THE AGE OF 15WITH A BAG OF DREAMS, I AM EXTREMELY HUMBLED AND GRATEFULTO BE AT THE HELM OF THIS ORGANIZATION.

LOOK, IT'S AN EXCITING TIME TO BE AT DWS.

OVER THE PAST SIX MONTHS, AND I AM NOT SURE IF IT HAD ANYTHINGTO DO WITH ME, BUT I THINK WE HIT VERY IMPORTANT MILESTONESFOR OUR FRANCHISE.

 IN DECEMBER AS YOU MENTIONED WEHIT THE $1 TRILLION MARK IN TERMS OF ASSETS UNDERMANAGEMENT.

 WHICH ALSO MARKED A 10%INCREASE IN TERMS OF NET FLOWS IN 2024.

A VERY REMARKABLE RESULT COMPARED TO THE OTHERS.

IN FEBRUARY OUR SHARE PRICE ACTUALLY WENT UP TO THE 50 EUROMARK WHICH AGAIN IS SOMETHING WE ARE INCREDIBLY PROUD OF.

OUR MARKET CAP NOW EXPANDING TO $10 BILLION.

THEN CERTAINLY IN MARCH WE HAVE BEEN LISTED AMONG THE 50 GERMANCOMPANIES.

 I THINK THE MOST INTERESTINGTHING IN TERMS OF THE VOLATILITY IS EXACTLY WHAT YOUMENTIONED, WHICH IS A GATEWAY TO EUROPE.

 ROMAINE:YOU ARE HELMING THE AMERICAS BUSINESS.

THIS IS A BUSINESS THAT IS ALSO TAKING U.

S.

 MONEY, U.

S.

INVESTORS WHO ARE LOOKING FOR OPPORTUNITIES OVER IN EUROPE.

WHAT EXACTLY DO THEY WANT? HEPSEN:WE ARE A VERY DIVERSE ASSET MANAGER.

WHEN YOU LOOK AT OUR OFFERINGS WE PROVIDE ACROSS ACTIVE,PASSIVE AND ALTERNATIVES.

 IN THE UNITED STATES WE HAVEDEEP ROOTS IN ALTERNATIVES ESPECIALLY IN U.

S.

REAL ESTATE, LIQUID REAL ASSETS AND INFRASTRUCTURE.

WE JUST HAD OUR CONFERENCE IN SCOTTSDALE, ARIZONA WHERE WECELEBRATED OUR 50 YEARS OF PRIVATE REAL ESTATE PLATFORMROUTING BACK TO THE REBRAND.

 INTERESTINGLY ENOUGH AT THATCONFERENCE BROUGHT OVER OUR CLIENTS PROSPECTS AND INVESTORSAND CERTAINLY OUR INVESTMENT PERSONNEL.

AND WHAT WE ARE HEARING ABOUT IS THEY WANT TO HEARPERSPECTIVE.

 A DIFFERENT PERSPECTIVE THANOUR AMERICAN PERSPECTIVES -- COMPETITORS.

THAT IS THE ADVANTAGE WE HAVE.

 SCARLET:AS A POSITION DWS HAS EUROPE I AM CURIOUS WHAT THECONVERSATIONS ABOUT REGIONAL DIVERSIFICATION SOUNDS LIKERIGHT NOW.

 WE KNOW CONVERSATIONS HAVE BEENTAKING UP SPACE FOR A WHILE BECAUSE THERE IS SO MUCHVOLATILITY BUT WHAT DOES FOLLOW-THROUGH LOOK LIKE ANDHOW MUCH DOES IT CORRELATE WITH THE VOLATILITY OR LACK OFVOLATILITY THE PAST COUPLE WEEKS? HEPSEN:THANK YOU FOR THE QUESTION.

 IT IS CERTAINLY AN INTERESTINGTIME BECAUSE WHEN WE THINK ABOUT A FEW MONTHS AGO GLOBALINVESTORS DID NOT HAVE THAT MUCH DEMAND.

THEY WERE ACTUALLY LOOKING AT EUROPE WITH A LOT OF SKEPTICISM.

BECAUSE THEY DID NOT SEE THE GROWTH PROSPECTS.

I THINK THAT GEOPOLITICAL PRESSURES HAVE REALLY CHANGEDTHAT FORCING EUROPE TO TAKE ACTION.

BUT I AM TALKING ABOUT IS THE REFORMS AND INVESTMENTSPARTICULARLY IN DEFENSE AND INFRASTRUCTURE.

AND INDEED THAT IS WHAT WE ARE HEARING FROM CLIENTS.

BEING A LEAVE BEING ASSET MANAGER THAT IS EUROPEAN-BASEDAND UNDISPUTEDLY BEING THE NUMBER ONE ASSET MANAGER INGERMANY.

 THEY REALLY WANT US TO CONNECTTHE DOTS IN TERMS OF REGIONAL PERSPECTIVE AND ASSETDIVERSIFICATION.

 AND LET'S MAYBE FOCUS BACK ONTHE ALTERNATIVES.

 CERTAINLY THE INTEREST RATESHAVE NOT REALLY BEEN KIND TO THE ASSET CLASS OVER THE PASTFEW YEARS BUT WITH THE INTEREST RATES AND CHANGING WE ARESEEING A LOT OF INTEREST BACK INTO PARTICULARLY LIQUID REALASSETS, REAL ESTATE AND INFRASTRUCTURE.

 ROMAINE:SO THOSE POTENTIAL RETURNS ARE GOING TO BE COMPETITIVE WITHWHAT WE SEE IN PUBLIC? HEPSEN: WE REALLY THINK SO.

AND WE HAVE A DEEP-ROOTED FRANCHISE THAT HAS THEEXPERTISE TO BE ABLE TO DELIVER THAT.

 I THINK THAT OUR THOUGHTFULLEADERSHIP IS VERY IMPORTANT FOR OUR INVESTORS AND THAT ISWHY THEY TURNED TO US IN TERMS OF POSITIONING THEIR PORTFOLIOS.

ROMAINE: BUT THERE IS A LOT OF COMPETITION IN THE ON SPACERIGHT NOW.

 THIS IS NOT THE NICHE POCKET OFTHE FINANCIAL MARKETS THAT IT USED TO BE.

 HEPSEN:AGREED AND ESPECIALLY THE EXPANSION OF ALTERNATIVES AS ALOT OF OUR COMPETITORS GO TO THE DEMOCRATIZATION OFALTERNATIVES.

 IT IS A VERY INTERESTING ANDATTRACTIVE TIME.

 WHEN WE THINK ABOUT OURFRANCHISE WE ARE ALSO LOOKING AT EXPANDING.

WE HAVE EXPANDED OUR CAPABILITIES IN PRIVATE DEBT.

 AND AS THE MARKETS KNOW WE HAVEANNOUNCED OUR PARTNERSHIP WITH DEUTSCHE BANK IN TERMS OFPRIVATE CREDIT.

 THIS IS GOING TO PROVIDEINVESTORS AND US WITH UNIQUE OPPORTUNITIES THAT WILL BEORIGINATED BY DEUTSCHE BANK.

 SCARLET:HEPSEN UZCAN IS AMERICA'S CEO AT -- COMING UP WE CONTINUE THECONVERSATION AND FOCUS ON TRADE WITH MARISSA ADAMS FROM HSBC.

THIS IS BLOOMBERG.

 ♪ SCARLET:COMMERCE SECRETARY HOWARD LUTNICK TELLING REPORTERS TRADETALKS WITH CHINA WENT REALLY, REALLY WELL AND HE IS HOPEFULTALKS MAY END THIS EVENING BUT COULD STRETCH INTO TOMORROW IFNECESSARY.

 FOR MORE ON HOW COMPANIES AREDEALING WITH THE UNCERTAINTY AROUND TRADE LET'S BRING INMARISSA ADAMS, REGIONAL HEAD OF GLOBAL SOLUTIONS FOR THEAMERICAS AT HSBC.

 WE HAVE SEEN MARKETS REACT IN AVOLATILE WAY CERTAINLY THROUGH MOST OF APRIL TWO ALL THISTRADE UNCERTAINTY.

 COMPARE AND CONTRAST THAT TOWHAT YOU DESCRIBED AS CORPORATE RESPONSE WHICH YOU CALL FAIRLYMEASURED.

 MARISSA: THANK YOU FOR HAVING ME AND ICOMPLETELY AGREE.

 I HAVE BEEN ON THE ROADSPEAKING TO CUSTOMERS AND CLIENTS ACROSS THE U.

S.

IN EUROPE OVER THE PAST TWO WEEKS AND WHAT I WOULD SAY ISREGARDLESS OF INDUSTRY CORPORATE'S ARE TAKING A WATCHAND WAIT APPROACH.

 THEY ARE PAUSING SOMEINVESTMENTS AND WE DID A SURVEY A COUPLE WEEKS AGO, 5700CLIENTS GLOBALLY IN 1000 IN THE U.

S.

AND OVER 70% OF THEM SAID THEY ARE PAUSING OR RECONSIDERINGLONG-TERM INVESTMENTS.

 THAT IS THE ONE THING WE ARESEEING THAT IF THE TRADE SITUATION CONTINUES WE ARE MORECONCERNED ABOUT.

 SCARLET: THE PRESIDENT SEEMS TO FAVORTHESE 90 DAY PAUSES.

 IN WHAT SPECIFIC INDUSTRIES ISTHIS ENOUGH TIME? MARISSA: IF YOU LOOK AT CONSUMER RETAILWHERE WE WILL SEE TOMORROW WHAT THE CPI DATA SHOWS THOSE ARESHORT ORDER CYCLES.

 IN THAT SENSE WE CAN SEECOMPANIES ARE SEEING PRICE INCREASES COMING THROUGH VERSUSIF YOU LOOK AT OIL AND GAS, LONGER-TERM INFRASTRUCTURE,THEY HAVE NOT SEEN THAT COME THROUGH.

OVER 70% OF COMPANIES WE HAVE SPOKEN TO IN OUR SURVEY EXPECTCOSTS TO CONTINUE TO INCREASE.

 NOT ONLY WILL THAT 10% BASELINETARIFF AND YOU HAVE DIFFERENT ONES WHEN IT COMES TO STEEL ANDOTHER PRODUCTS THAT THEY EXPECT TO CONTINUE TO RISE.

 ROMAINE: EVEN IF WE DO STRIKE DEALS ATLEAST IN FINANCIAL MARKETS THERE HAS BEEN A JITTERY NEWSLACK OF A BETTER PHRASE THAT ANYTHING CAN CHANGE.

YOU CAN STRIKE A DEAL AND MADE A YEAR LATER THE PRESIDENTWANTS TO RENEGOTIATE THAT.

 SO HOW MUCH STOCK CAN YOU PUTINTO WHATEVER THE NUMBERS LOOK LIKE WHEN WE FINALLY SEE THEMON PAPER? MARISSA: COMPANIES ARE TRYING TO CONTROLWHAT THEY CAN CONTROL.

 THEY CANNOT CONTROL WHAT THEPOLICY CHANGES ARE EVERY DAY AND I THINK IT IS NOT JUST WHATIS HAPPENING WITH TERRACE IN THE U.

S.

, YOU HAVE A LOT OFOTHER GEOPOLITICAL CONFLICTS AROUND THE WORLD.

THEY ARE LOOKING TO CONTROL ON THE SUPPLY SIDE HOW THEY CANLOOK AT CREATING SUPPLY-CHAIN RESILIENCY.

THIS IS NEW TO THE COVID ERA, HOW DO THEY FIND NEW DEMANDMARKETS.

 THE U.

S.

 CONSUMER REMAINS THE BIGGESTCONSUMER MARKET IN THE WORLD AND WE ARE SEEING SOME U.

S.

CORPORATE'S DOUBLE DOWN ON THE U.

S.

MARKET BOTH FROM A SUPPLY CHAIN PERSPECTIVE AND DEMAND.

 ROMAINE:WHERE ARE THEY LOOKING? WE WENT THROUGH A TRADE WARBEFORE AND A LOT OF COMPANIES CHANGED SUPPLY CHAINS.

YOU HAD COVID WHICH WAS ALSO A CONTRIBUTOR OF THEM LOOKING TODIVERSIFY SUPPLY CHAINS AND OF COURSE THEY WOKE UP IN 2025 ANDREALIZED IT IS NOT JUST CHINA IN THE CROSSHAIRS IT ISEVERYBODY.

 MARISSA: IT IS INTERESTING INDUSTRY BYINDUSTRY.

 IF I TALK ABOUT HEALTH CARE ASAN EXAMPLE EVEN PRE-COVID THEY TRIED TO DO REGION BY REGION.

IT IS INSTEAD OF TRYING TO SWITCH EXACTLY WHERE YOURSUPPLY CHAIN IS BRINGING SUPPLY CLOSER TO DEMAND.

YOU CAN STILL BE HIT BY TARIFFS.

 I ALWAYS LIKE TO BRING THIS UP.

LARGELY UNTOUCHED BY TARIFFS.

 EVEN TRADITIONAL COMPANIESWHETHER THEY ARE TRADITIONAL MANUFACTURING OR OIL AND GASARE MOVING TOWARDS SERVICES MODELS BECAUSE THAT IS AN AREAWHERE WE SEE TRADING BY FIVE TIMES.

 SCARLET:AND THEY ARE INFLATED.

 WITHIN THE C-SUITES WHICH PARTOF THE BUSINESS IS LEADING THE EFFORT TO RESPOND TO ALL OFTHIS? OBVIOUSLY THE CEO BUT HE OR SHEIS RELYING ON SOMEONE WITH EXPERTISE.

IS IT THE PURCHASING MANAGERS OR THE CFO? MARISSA:IT IS A GREAT QUESTION AND WHY I SAY THAT IS WHAT WE ARESEEING RIGHT NOW AS YOU HAVE A GREAT TRIANGLE OF THE CFO COMEPROCUREMENT AND SALES AND THEY ARE COMING TOGETHER TO FORMTEAMS AND DIFFERENT RESPONSE TEAMS AROUND IT.

WHAT IS BECOMING A REAL FOCUS FOR THEM IS WORKING CAPITAL.

IF WE SEE A QUICK RESOLUTION AND RIGHT NOW WE ARE EIGHT ORNINE WEEKS AFTER LIBERATION DAY, QUICK LIBERATION ISBECOMING LESS AND LESS LIKELY.

 WORKING CAPITAL IS KEY.

THEY ARE WORKING TOGETHER TO GO HOW DO I BRING PROCUREMENTSALES AND CAPITAL TO SAY I MIGHT NEED MORE CASH.

I MIGHT NEED TO HOLD MORE INVENTORY.

IT IS MORE ABOUT THESE SQUADS THEY ARE FORMING.

EVEN MORE THAN COVID I WOULD SAY THIS IS A C-SUITEDISCUSSION, ABSOLUTELY.

 ROMAINE: GREAT TO CATCH UP WITH YOU.

MARISSA ADAMS FROM HSBC.

 THIS IS OBVIOUSLY A BIG TOPICOF CONVERSATION NOT ONLY ALONG WITH THE COMPANIES BUT INVESTORS LOOKING FOR MAYBESOME IDEA.

 SCARLET: ANYTHING CAN CHANGE SO YOU HAVETO MOVE FORWARD WITH FACTS ON THE GROUND.

 ROMAINE:OF COURSE A LOT OF COMPANIES ARE BEING PROACTIVE IN THATSPACE PARTICULARLY WHEN IT COMES TO INSURANCE.

BELIEVE IT OR NOT A LOT OF COMPANIES ARE TAKING OUTINSURANCE POLICIES AND LOOKING FOR GUIDANCE OF HOW TO NAVIGATETHE TRADE ENVIRONMENT.

 WE ARE GOING TO CATCH UP WITHTHE CEO OF AON, EDMUND REESE.

 THAT IS COMING UP NEXT.

THIS IS BLOOMBERG.

 ♪ ROMAINE:EVEN INSURERS HAVE TO DO WITH THE WEIGHT OF TARIFFS.

AON SAYING YESTERDAY IT IS STARTING TO BROKER INSURANCEPOLICIES BASED ON POTENTIAL TARIFF IMPACT.

WE ARE ALSO OFFICIALLY IN HURRICANE SEASON WHICH COULDMEAN A POTENTIAL WINDFALL FOR INSURERS AS WELL.

LET'S BRING IN THE CFO OF AON.

 EDMUND REESE JOINS US.

I WANT TO START WITH TRADE.

 EVERY COMPANY IS LOOKING FORADVICE AND GUIDANCE AS TO HOW YOU NAVIGATE THIS.

WHEN THEY COME KNOCKING ON YOUR DOOR, WHAT EXACTLY ARE THEYASKING? EDMUND: WE HAD I THINK NINE DAYS AFTERTHE GLOBAL TARIFFS WERE ANNOUNCED WE HAD A CALL FORRISK MANAGERS TO JOIN.

 WE WERE WORRIED ABOUT WASANYBODY GOING TO SHOW UP.

 WE HAD 4000 RISK MANAGERS SHOWUP BECAUSE THEY WERE ASKING HOW DO I CHANGE MY SUPPLY CHAIN,HOW DO I HANDLE THE OPERATIONS OR RESILIENCY OF MY TEAMS.

 THISTRADE IS ONE OF THE FOUR MEGATRENDS I WAS TALKING TO YOUABOUT WHEN YOU LAST HAD ME ON THE SHOW IN ADDITION TO CLIMATE.

THERE IS CLEARLY A BOARDROOM TOPIC THE CFO, THE CEO, AND THEBOARD ARE ALL TALKING ABOUT RIGHT NOW AND WE ARE GIVINGTHEM INSIGHT INTO HOW THEY MANAGE.

 ROMAINE:WHAT IS THAT INSIGHT? WE TALK ABOUT HOW THINGS ARECHANGING SO FAST.

 A 10% TARIFF TODAY COULD BE 20% TOMORROW ANDBACK TO 10% TWO WEEKS LATER.

 SO WHAT IS THE ADVICE YOU GIVETHEM? IS IT TO DO SOMETHING OR TOSTANDSTILL OR WHAT? EDMUND: THE REASON WE JUST HAD INVESTORDAY WAS TO TALK ABOUT THE INSIGHTS AND THE CAPABILITIESWE HAVE THAT CAN HELP CLIENTS WITH THESE.

WHAT WE ARE DOING IS HELPING THEM UNDERSTAND WHAT THEIREXPOSURE IS.

 IF THERE OPERATIONS AREIMPACTED IN COUNTRY A OR B, HOW DOES THAT IMPACT THEIR GROWTHOR THE OBJECTIVES THEY HAVE.

 SO WHAT IS THE EXPOSURE IN THEVOLATILITY THAT WOULD COME WITH DIFFERENT TARIFFS IN THEDIFFERENT LOCATIONS AND HOW MUCH OF THAT RISK DO THEY WANTTO HAVE OR HOW MUCH OF THAT THEY WANT TO TRANSFER TOINSURERS OR OTHER CAPITAL PROVIDERS.

THAT IS WHAT THEY ARE ASKING US ABOUT.

IF THIS IMPACTS OUR BUSINESS, WHAT IS THE P&L IMPACT, THECASH FLOW IMPACT, AND WHAT WE WANT ON OUR BALANCE FLOW.

SCARLET: HOW MANY SCENARIOS DO YOUSKETCH OUT FOR THEM? EDMUND: THE ABOUT OUR SCENARIOS IS THATIN EXCEL -- IT IS LIVE DEMONSTRATION OF HERE ARE WHEREYOUR ASSETS ARE.

 WE HAVE FOUR DIFFERENT SOLUTIONLINES WITH TONS OF DATA.

 WE ARE A MARKET LEADER ININSURANCE BROKERAGE.

 WE KNOW WHERE CATASTROPHES AREHAPPENING AND WE KNOW ARE THE PROPERTIES ARE AND WE CAN HELPYOU WITH YOUR SUPPLY CHAIN.

 THEY ARE SEEING REAL LIFE WHERETHEIR LOCATIONS AND BUSINESS OPERATIONS ARE A.

WE ARE SHOWING THEM IF TRADES ARE IMPACTING THOSE AREAS THENHOW WHAT THE IMPACT COULD BE TO THEM AND WHAT THEY WANT TORETAIN VERSUS TRANSFERRED TO THE OTHER COMPANIES.

 SCARLET:WE ARE OFFICIALLY IN HURRICANE SEASON.

THE PRESIDENT TODAY SAID HIS TEAM WILL START WINDING DOWNFEMA ONCE HURRICANE SEASON IS OVER.

HOW DO YOU THINK ABOUT WHAT THAT TRANSLATES INTO FOR YOURCLIENTS.

 EDMUND: THAT WAS A TOPIC THE LAST TIMEI WAS HERE.

 FIRST IT WAS THE CALIFORNIAWILDFIRES UNFORTUNATELY AND NOW WE ARE GOING INTO HURRICANESEASON.

 THESE ARE INCREASED RISKS THATARE CREATING MORE COMPLEXITY FOR OUR CLIENTS.

IF YOU ARE WINDING DOWN FEMA, HOW ARE YOU SUPPORTINGCORPORATIONS NEED TO SUPPORT THEIR WORK KEEPING THEIROPERATIONS GOING? WE ARE COMING UP WITHSOLUTIONS, CLIENTS ARE WORKING FOR MORE ADVICE AND WE AREWORKING TO BRING MORE CAPITAL INTO OTHER MARKETS AND HELPTHEM DEAL WITH THE COMPLEXITIES OF MAYBE NOT HAVING ALL OF THETRADITIONAL SUPPORT THEY HAVE HAD PREVIOUSLY.

 ROMAINE:WHAT I LOVE ABOUT YOUR COMPANY IS YOU GUYS REALLY DO HAVEINSIGHTS A LOT OF GROUPS ARE NOT GOING TO HAVE.

TECHNOLOGY HAS BECOME A BIG ISSUE.

EARLIER WE WERE TALKING ABOUT A HACK OF A COMPANY THAT IS KINDOF AFFECTING ALL FOODS AND CUSTOMERS AND WE ARE SEEINGMORE OF THESE HACKS.

 WE ARE SEEING TECHNOLOGY BECOMEMUCH MORE OF A THREAT TO WHAT COMPANIES ARE DOING.

AT THE SAME TIME IT IS POTENTIALLY A BENEFIT AS WEKNOW WITH AI BUT WITH THAT BENEFIT COMES A CERTAIN RISK TOPUT IT INTO YOUR PARLANCE.

 IS THAT EVEN MANAGEABLE? EDMUND:ABSOLUTELY.

 BY THE WAY, WHEN I WAS LASTYEAR THERE WERE FOUR MEGATRENDS.

 WE TALKED ABOUT WHETHER ANWORKFORCE AND TRADE WHICH WE JUST HIT AND TECHNOLOGY.

IN THAT TECHNOLOGY I CALLED OUT COMPANIES BEING HACKED.

PARTICULARLY AS THERE IS MORE DATA WITH AI.

THAT CREATES AN EVEN BIGGER RISK.

HE THING RIGHT NOW IS HOW MUCH OF THAT RISK IS BEING COVEREDAND HOW MUCH IS BEING INSURED.

 WE ESTIMATE $15 BILLION TO $20BILLION BUT THE EXPOSURE IS MUCH LARGER.

THAT IS PROBABLY COVERING ABOUT 12% OF THE OVERALL EXPOSURE ATTHE LOW END.

 SO THERE IS AN OPPORTUNITY FORCLIENTS TO ASSESS HOW THESE RISKS ARE EMERGING.

 WE AGAIN HAVE DATA AND INSIGHTSTHAT CAN HELP THEM ASSESS.

 ROMAINE:TO SOME CLIENTS JUST WANT TO THROW IN THE TOWEL?I THINK IF YOU WERE TO MAKE A BOARD COMPARED TO 20 YEARS AGO,CERTAINLY 30 OR 40 YEARS AGO, IT HAS TO BE INFINITELY MORE.

EDMUND: TO ME IT IS PARTIALLY BECAUSETHERE IS MORE RISK BUT NOW MORE CONNECTED RISK.

CLIMATE IS NOT JUST IMPACTING YOUR OPERATIONS BUT YOURWORKFORCE AS WELL.

 AND BY THE WAY SITTING IN THECFO SEE THE RISK MANAGERS PREVIOUSLY REPORTED TO ME.

I REMEMBER 10 YEARS AGO I WAS INTERESTED IN WHAT THE PREMIUMWAS.

 NOW TO SEE THAT THERE IS AN IMPACT ON OUR WORKFORCE INADDITION TO OPERATIONS, ROT -- MY RISK MANAGER --[INDISCERNIBLE] [NO AUDIO] SCARLET:HOW ARE THINKING ABOUT THE IMMIGRATION RAIDS WE'RE SEEINGIN LOS ANGELES AND A THREAT OF A MILITARY RESPONSE? IN L.

A.

WE HAVE SEEN THE DEPLOYMENT OF 700 TROOPS TO PARTS OF THE CITY.

THESE ARE GOING TO BE COMPANIES THAT ARE AFFECTED THAT CANNOTSEND THEIR WORKFORCE INTO THE OFFICE BECAUSE OF THIS.

HOW DO YOU PREPARE YOUR CLIENTS FOR THAT? EDMUND:YOU PARTIALLY GIVE THE ANSWER IN YOUR QUESTION.

 OUR FIRST FOCUS IS TO MAKE SURETHAT OUR ASSOCIATES OR COLLEAGUES ARE PROTECTED.

BECAUSE WE ARE A GLOBAL COMPANY IN 120 COUNTRIES.

ENSURING THAT OUR COLLEAGUES ARE TAKEN CARE OF.

BUT THEN HELPING OUR CORPORATIONS WERE DOING EXACTLYWHAT YOU ARE SAYING.

 HOW IS IT DISRUPTING THEIRBUSINESS AND IMPACTING THEIR WORKFLOW COULD THEY WANTSOLUTIONS FOR THAT.

 BUSINESS RESILIENCY ISSOMETHING THAT WE ARE PLANNING FOR ON AN ONGOING BASIS.

WHETHER IT IS DRIVEN BY CLIMATE OR WHAT IS HAPPENING INCALIFORNIA RIGHT NOW.

 THAT IS ONGOING PLANNING.

IT IS NOT JUST HAVING INSURANCE COVERAGE.

IT IS EMBEDDING IT IN YOUR ONGOING PLANNING.

THAT IS WHY IT IS A BOARD TOPIC THESE DAYS.

THAT IS WHY IT IS AN INCREDIBLY EXCITING TIME TO BE IN THISINDUSTRY.

 SCARLET: NOT JUST THE CFO BUT OVERSEEINGEVERYTHING.

 EDMUND REESE, THANK YOU FORJOINING US.

 SHE FUTURE OFFICER.

 BY THE WAY THAT IS A SHOW THATAIRS ON BLOOMBERG.

 LET'S TAKE A LOOK AT HOW THEMARKETS CLOSED ON THE DAY.

 IT WAS A MELT UP IN EQUITIESWITH THE S&P 500 STILL HOLDING ABOUT THE 6000 LEVEL BUT STILLABOUT 2% SHY OF THAT RECORD HIGH.

 ROMAINE:THIS IS ONE OF THOSE WHEN YOU CLIMB THE WALL OF WORRY AND THEBIG QUESTION IS WHAT GETS US BACK TO 6144.

IS IT ECONOMIC DATA TOMORROW OR GOING FORWARD OR A BREAKTHROUGHANNOUNCEMENT AS WE ARE WAITING TO HEAR THE OUTCOME OF SOMETRADE TALKS GOING ON.

 SCARLET: LOOK AT THE VIX BELOW 17.

THAT VOLATILITY HAS REALLY CALMED DOWN.

NOTHING HAPPENING IN TREASURIES AND THE DOLLAR CONTINUES TOHOLD YEAR TO YEAR LOWS.

 ROMAINE: WE WILL BE BACK IN A MOMENT.

THIS IS BLOOMBERG.

 ♪ ROMAINE:SECOND DAY OF TRADE TALKS WRAPPING UP BETWEEN THE U.

S.

AND CHINA.

 SCOTT BESSENT SPEAKING INLONDON.

 >>MY COLLEAGUE SECRETARY LUTNICK AND AMBASSADOR BAIRD JOINS MECONTINUING AS NEEDED WITH THE CHINESE DELEGATION.

THANK YOU VERY MUCH.

 THANK YOU VERY MUCH.

 >> WHAT ARE YOU GOING TO OFFERTHE CHINESE? >> WE JUST HEARD FROM SECRETARYSCOTT BESSENT COMING OUT OF THE NEGOTIATIONS.

 HE SAID HIS COLLEAGUES,AMBASSADOR JAMIESON GREER AS WELL AS COMMERCE SECRETARYHOWARD LUTNICK ARE GOING TO STAY PUT HERE IN LONDON ANDCONTINUE THE TRADE NEGOTIATIONS.

 THE TREASURY SECRETARY SAYS HEIS HEADING BACK TO WASHINGTON, D.

C.

BECAUSE AS WE HAVE BEEN NOTING HE IS TESTIFYING TOMORROWBEFORE THE HOUSE WAYS AND MEANS COMMITTEE.

AT THE MOMENT THE TRADE TALKS ARE STILL ONGOING.

 THIS IS THE SECOND DAY AND INTOTAL THEY HAVE BEEN TALKING FOR ABOUT 13 HOURS HERE INLONDON.

 REMEMBER JUST A MONTH AGO THEYMET IN GENEVA.

 BOTH SIDES SAID THEY RENEGED ONWHAT THEY AGREED UPON IN GENEVA AND THAT IS HOW WE ENDED UPHERE TODAY IN LONDON.

 ROMAINE: WHAT ARE THE MAIN STICKINGPOINTS? HAS THAT BEEN ARTICULATED ATALL BY ANYONE? >> WHAT WE HAVE BEEN HEARINGAND WHAT HAS BEEN SIGNALED AS WELL BY THE ADMINISTRATION ARETWO KEY STICKING POINTS.

 REALLY THE CHOKEPOINTS FORWASHINGTON AND BEIJING.

 WHEN IT COMES TO WASHINGTONTHEY WANT TO SEE AN ADVANCED CASE OF THE RARE EARTH MINERALSAND THE MAGNETS.

 CHINA HAS MORE THAN 70% OFCONTROL ON THIS MARKET.

 AND WHEN IT COMES TO CHINA,THEY WANT TO SEE MORE ACCESS TO SEMICONDUCTORS.

SINCE THE GENEVA TALKS WE HAVE SEEN THE U.

S.

PUT IN PLACE MORE EXPORT CONTROLS ON THINGS I JET ENGINEPARTS AND NUCLEAR MATERIALS.

 THEY WANT TO SEE THAT LIFTED.

THEN THERE IS THIS REDLINE WHERE KEVIN HASSETT THE NECDIRECTOR SAID EARLIER THIS WEEK THAT THEY WOULD NOT BE WILLINGTO GET INTO THINGS LIKE THE NVIDIA H20 CHIPS THAT NVIDIAMADE TO MEET EXPORT COMPLIANCE UNDER THE BIDEN ADMINISTRATIONSO THEY CAN STILL EXPORT TO CHINA.

BUT YOU HAVE TO WONDER, THESE TALKS ARE TAKING SO LONG.

POTENTIALLY IS THAT A REDLINE AND A STICKING POINT THAT THEYARE STILL DISCUSSING HERE TODAY? THESE ARE JUST TWO OF THEPOLICY ISSUES THAT ARE BEING DISCUSSED AS PART OF A BROADERDEAL.

 WE HAVE TO REMIND OURSELVES, WEARE REALLY ONLY A MONTH INTO THIS WHEN YOU CONSIDER THEFIRST SIT DOWN WHEN IT COMES TO GENEVA.

 IN THE FIRST TRUMPADMINISTRATION THE TRADE WAR STARTED IN 2018 AND DIDN'T ENDUNTIL 2020 AND THAT WAS JUST A PURCHASING AGREEMENT.

WHEN IT COMES TO THIS TRADE NEGOTIATION WE ARE TALKINGABOUT A WHOLE HOST OF ISSUES.

 A PLETHORA OF ISSUES BETWEENTHESE TWO COUNTRIES ARE ON THE MENU AND IT IS GOING TO TAKE ALOT MORE TIME.

 SCARLET: THANK YOU SO MUCH ANNMARIEHORDERN AND JOINING US FROM LONDON.

OF COURSE SCOTT BESSENT DID COME OUT AND SAY THEDISCUSSIONS BETWEEN CHINESE AND U.

S.

 OFFICIALS WILL CONTINUETOMORROW FOR A THIRD DAY WITH THE COMMERCE SECRETARY AND THEU.

S.

 TRADE REPRESENTATIVE STAYING ONIN LONDON TO HOLD DISCUSSIONS WHILE SCOTT BESSENT WILL BERETURNING TO WASHINGTON TO TESTIFY BEFORE CONGRESS.

LET'S SWITCH GEARS BECAUSE WE ARE GOING TO LOOK AT THE REALESTATE CONFERENCE WHICH IS KICKING OFF IN LOS ANGELES HEREIN THE U.

S.

 LISA ABRAMOWICZ IS THERE NOWWITH JOSH PACK AND TIM SLOAN.

 I WILL HAND IT OVER TO YOU.

LISA: THANK YOU SO MUCH.

 IT IS SORT OF LIKE ONE PULL OFTHE STORY DOMINATING NEWS TO THE OTHER HERE IN LOS ANGELES.

WE ARE IN BEVERLY HILLS AND I AM SO GLAD TO SAY I AM HEREWITH JOSH PACK AND TIM SLOAN.

 YOU HOLD A WHOLE HOST OFDIFFERENT TITLES INCLUDING THE CALL HEADS OF REAL ESTATE.

I WANT TO START WITH THE FACT THAT WE ARE IN LOS ANGELES ANDTHERE HAS BEEN A LOT OF DISCUSSION ABOUT THE PROTESTSIN THE MILITARY PRESENCE AND THERE IS A REAL QUESTION ASINVESTORS HOW MUCH SOME OF THESE TYPES OF POLITICALBACKDROPS AND SOCIAL BACKDROPS AFFECT WHERE YOU INVEST.

 AND IAM CURIOUS TO WHAT DEGREE IT IS REALLY AFFECTING THE FLOW OFINVESTMENT.

 TIM: THE PRIMARY DRIVER IF YOU JUSTWANT TO LOOK AT LOS ANGELES OF INVESTMENT HERE IS WHERE THEECONOMIES ARE VERY ACTIVE.

 SO WHAT YOU ARE SEEING IN L.

A.

IS DOWNTOWN L.

A.

 WERE SOME OF THE PROTESTS ARE,THAT OFFICE MARKET IS UNDER A TREMENDOUS AMOUNT OF STRAIN.

YOU ARE SEEING BUILDINGS THAT ARE NOW SELLING FOR LESS THANTHEY SOLD FOR IN 2014.

 YOU GO 10 MILES WEST TO WHEREWE ARE OR MAY BE JUST SOUTH OF WHERE WE ARE IN CENTURY CITYAND CULVER CITY AND YOU ARE SEEING NEW OFFICES BEING BUILTBECAUSE THAT IS WHERE THE DEMAND IS.

I WOULD SAY IT IS MUCH MORE A FUNCTION OF THE ECONOMY THAN ITIS POLITICAL EVENTS.

 JOSH: I WOULD SAY WITH THESE THINGSGOING ON IT IS NOT LIKE THE WAR ZONE PEOPLE MAKE IT OUT TO BE.

L.

A.

 IS A HUGE PLACE.

 THERE ARE SOME ISSUES CURRENTLYHAPPENING THAT TEND TO BE PRETTY LOCALIZED.

 LISA:THERE IS THIS QUESTION ON THE BROADER LEVEL HOW MUCH THEPOLITICAL BACKDROP HAS CHANGED NOT ONLY WHERE YOU WANT TOINVEST BUT ALSO AWARE OF YOUR INVESTORS WANT TO INVEST INWEATHER OVER THE PAST SIX MONTHS OR EVEN SIX WEEKS YOUFEEL LIKE SOME OF YOUR INVESTORS HAVE BEEN SHIFTINGGEARS ABOUT WHERE THEY WANT TO BE INVESTED.

IS IT STILL THE UNITED STATES OR MORE OUTSIDE OF THE UNITEDSTATES? JOSH: I THINK ACROSS THE BOARD THEREIS SIGNIFICANT DEMAND FOR INVESTMENT HERE IN THE U.

S.

 THERE IS A LARGE TREND TOWARDSPRIVATE CREDIT TAKING MARKET SHARE AWAY FROM THE COMMERCIALBANKING SYSTEM AND WE HAVE SEEN THAT IN A NUMBER OF DIFFERENTPRODUCTS.

 WHETHER THAT IS REAL ESTATE,PRIVATE CREDIT, FORWARD FLOWS, CONSUMER FINANCE.

WE THINK IT IS A TERRIFIC OPPORTUNITY.

WE THINK IT IS A LONG-LIVED OPPORTUNITY AND ONE WE AREGOING TO BE INVESTING IN FOR A SIGNIFICANT AMOUNT OF TIME.

AT THE SAME TIME WE ARE SEEING A LOT OF OPPORTUNITY IN EUROPE.

WE ARE SEEING GREAT CONTINUATION OF INVESTING OFOUR JAPAN FRANCHISE.

 SO WE ARE PRETTY ACTIVE ALLOVER THE WORLD NOW.

 TIM: AT THE END OF THE DAY INVESTORSGO TO WHERE THEY ARE GOING TO GET THE BEST RETURNS AND THEREARE STILL INCREDIBLE OPPORTUNITIES HERE IN THE U.

S.

BUT ALSO THE OTHER MARKETS.

 LISA:WHEN YOU TALK ABOUT THE UNITED STATES ARE YOU TALKINGRESIDENTIAL OR COMMERCIAL WITHIN THE RESIDENTIAL MARKETIS THERE MORE ROOM FOR PRIVATE ASSET MANAGEMENT AT A TIMEWHERE THERE IS AN INCREASINGLY STAGNANT MARKET? TIM:THERE IS A LOT OF OPPORTUNITY IN THE RESIDENTIAL MARKET.

FOR EXAMPLE WE ARE ONE OF THE LARGEST PURCHASERS OF TAX LIENSIN THE U.

S.

 AND THOSE ARE VERY ATTRACTIVERISK-ADJUSTED RETURNS.

 GENERALLY BUYING THOSE AT ABOUTA 10% YIELD FOR BEING LESS THAN 1% LOAN TO VALUE.

 WE ARE INTERESTED IN BUYINGMORTGAGE SERVICING RIGHTS.

 PARTICULARLY WHERE THE COUPONSARE BELOW 4% WHICH ARE UNLIKELY TO BE REFINANCED FOR A LONGTIME.

 SO THERE IS OPPORTUNITY EVERYWHERE IN RESIDENTIAL.

 JOSH:AND ON THE COMMERCIAL SIDE TRYING TO GET A CONSTRUCTIONLOAN TODAY FROM YOUR BANK IS VERY HARD.

WE ARE FILLING THAT GAP.

 NOT ONLY ARE WE FILLING ITTHROUGH OUR OWN LENDING PRODUCTS BUT OTHER PARTS OF OURBUSINESS.

 FOR EXAMPLE OUR NET LEASEBUSINESS DOES A LOT OF BUILD A SUIT NOW.

WE ARE PROBABLY DOING MORE BUILD TO SUIT PRODUCTPARTICULARLY IN THINGS LIKE TECHNOLOGY DATA CENTERS, THINGSOF THAT NATURE, THEN WE HAVE EVER DONE IN THE PAST.

 BECAUSEIT IS HARD FOR THESE DEVELOPERS TO GET FINANCING ON ACONSTRUCTION BASIS.

 LISA: YOU USED TO BE CEO OF WELLSFARGO.

 IT STRIKES ME THAT A LOT OFWHAT YOU'RE DOING RIGHT NOW IS SOMEWHAT SIMILAR.

 TIM:VERY SIMILAR.

 SCARLET: HOW IS IT DIFFERENT AND HOWMUCH DO YOU SEE IT TAKING OVER THE ROLES ARE USED TO HAVE? TIM:JOSH MENTIONED THE DISINTERMEDIATION OF THE BANKSOF PRIVATE CREDIT.

 WE SAW THAT INCORPORATE CREDIT OVER THE LAST 10 YEARS WE HAVECREATED A $1.

7 TRILLION INDUSTRY.

WE THINK THAT IS GOING TO HAPPEN IN COMMERCIAL ANDRESIDENTIAL REAL ESTATE.

 IT IS HAPPENING RIGHT NOW INTHE GROWTH OF OUR BUSINESS.

 AND ALL THAT IS HAPPENING ISTHE RISKIER PART OF THE LENDING BOOK THAT BANKS HAVEHISTORICALLY DONE IS MOVING TO PRIVATE CREDIT.

THE GOOD NEWS IS THE BANKS ARE PROVIDING US WITH OUR FINANCINGTO BE ABLE TO MAKE THOSE LOANS.

 BECAUSE WHEN YOU LOOK AT THELARGEST CATEGORY OF LOANS THAT ARE GROWING ON THE BALANCESHEETS OF THE LARGEST BANKS IN THIS COUNTRY, IT IS LOANS TONONDEPOSITORY FINANCIAL INSTITUTIONS.

THAT IS 12% OF THE BAGGING SECTOR TODAY.

 LISA:I AM CURIOUS WHERE WE ARE IN THE CYCLE GIVEN THE FACT THATWAS THE STORY FOR THE PAST NUMBER OF YEARS.

NOW THERE IS A REAL FOCUS ON DEREGULATING THE BANKING SECTORWHICH WOULD ALLOW THEM, UNSHACKLE THEM TO GO BACK INTOTHESE BUSINESSES.

 AT A CERTAIN POINT IS THEREGOING TO BE THAT KIND OF COMPETITION? JOSH:THERE COULD BE A.

 I THINK WHAT YOU ARE SEEINGWITH PRIVATE CREDIT IS ABSOLUTELY HERE TO STAY.

THE PRIVATE CREDIT MARKET ITSELF IS GOING TO BE A $6TRILLION MARKET IN FIVE YEARS.

 YOU ARE NOT ONLY SEEING US DISSINTERMEDIATE BANKS BUT OTHER TYPES OF FINANCING IN THEMARKET.

 THINGS HAVE BEEN MOVING AWAYFROM CIELO FINANCING INTO PRIVATE CREDIT.

SO THOSE ARE ALL TRENDS WE THINK ARE GOING TO CONTINUE ANDNOT WITH REAL ESTATE EMERGING AS THIS LARGE PRIVATE ASSET ASWELL, IT GIVES US A GREAT OPPORTUNITY.

 LISA:YOU KEEP USING THE WORD OPPORTUNITY.

IT DOESN'T MEAN THAT THINGS ARE GOING TO BE GOING SWIMMINGLY INTERMS OF PRICES GOING UP OR EVALUATIONS GOING UP.

I AM CURIOUS WHERE YOU THINK WE ARE GIVEN THE FACT THAT RATESARE HIGH, THE VOLUME OF SALES HAS FALLEN OFF A CLIFF TO THELOWEST LEVELS WE HAVE SEEN IN MORE THAN A DECADE, AND THEREIS A FEELING OF STAGNATION.

 DO YOU HAVE A SENSE OF WHERE WEARE? JOSH: TIM AND I HAVE BOTH BEENTHROUGH OUR SHARE OF FINANCIAL CRISIS IS AND RESTRUCTURINGS.

THE PAST COUPLE WE HAVE HAD WHETHER IT IS THE PANDEMIC ORTHE GLOBAL FINANCIAL CRISIS, THOSE WERE KIND OF UNUSUALCRISES AT THE END OF THE DAY BECAUSE THE CENTRAL BANKS CAMETO THE RESCUE AND FLOODED THE WORLD WITH LIQUIDITY.

ASSET PRICES WERE BUOYED UP.

 WHAT WE HAVE TODAY I THINK IS AMORE NORMAL TYPE OF RE- STRUCTURING OF THE BANKINGSYSTEM IN REAL ESTATE MARKETS AND THAT TAKES TIME.

THAT IS GOING TO TAKE YEARS TO ULTIMATELY GET ONE POINT A TOPOINT B.

 TIM: YOUR POINT ABOUT RATES GROWINGUP.

 I REMEMBER IT WHEN I GOT MY FIRST MORTGAGE AND IT WAS 13%AND IT WAS NOT THE END OF THE WORLD.

 LISA:PRICES ARE WAY DIFFERENT NOW.

 TIM: SO WAS MY SALARY.

THE POINT IS WE THINK THIS CYCLE WILL BE ELONGATED BECAUSEIT WAS NOT NECESSARILY DRIVEN BY OVERBUILDING.

IT IS NOT BEING DRIVEN BY A PANDEMIC.

IT IS NOT BEING DRIVEN BY A DECLINE FROM A RECESSIONARYENVIRONMENT.

 IT IS DRIVEN BY RATES.

SO WHAT WE ARE SEEING IS THE BANKS SLOWLY BUT SURELY AREMOVING BACK FROM PROVIDING COMMERCIAL REAL ESTATE LOANSAND WE ARE STEPPING IN AND THEY ARE SLOWLY BUT SURELY WORKINGOFF THE TOP PORTION OF THEIR PORTFOLIO THAT IS NOTPERFORMING AS WELL.

 JOSH: WE SAY THAT BANKS AREADVERTISING THEIR PROBLEMS AWAY AND THAT IS GOING TO TAKE TIME.

BECAUSE THEY ARE NOT REINJECTED NOT CAPITAL OUT INTO THEMARKETS.

 THEY ARE USING IT TO BUILD OUTRAZORS TO GET INTO A POSITION TO SELL ASSETS, HOPEFULLY TO USAT THE STRESS LEVELS.

 LISA: HOW MANY TRILLIONS OF DOLLARSOF ASSETS DO YOU ESTIMATE A GOING TO BE MOVING FROM THEBANKS TO THE PRIVATE MARKET? JOSH:I DON'T KNOW FOR SURE BUT ONE OF THE STATISTICS WE LOOK AT INTHE COMMERCIAL REAL ESTATE WORLD IS OVER THE NEXT FOURYEARS THERE IS $4.

5 TRILLION OF LOANS THAT ARE GOING TO BEMATURING.

 AND THEY HAVE GOT TO FIND AHOME.

 COULD IT BE $1 TRILLION OR $2TRILLION? ABSOLUTELY.

 LISA: WE HAVE BEEN TALKING TO A LOTOF INVESTORS ABOUT THIS.

 WE TALKED ABOUT HOW YOU AREEXPANDING IN EUROPE AND OVERSEAS.

JOSH, CONGRATULATIONS, YOU ARE MOVING FROM DALLAS TO LONDON.

DO YOU SEE THAT AS A MORE RIGHT OPPORTUNITY FOR INVESTMENTRIGHT NOW THAN EVEN THE UNITED STATES? JOSH:THERE ARE A BUNCH OF REASONS.

 THE INVESTMENT PIECE ISCERTAINLY AN IMPORTANT ONE.

 WE THINK THERE IS GREATOPPORTUNITY NOT ONLY IN OUR REAL ESTATE OVER THERE BUT OURPRIVATE CREDIT BUSINESS.

 WE HAVE BEEN EXPANDING ANDPUSHING HARD INTO PRIVATE CREDIT AND LENDING.

BUT WE ALSO THINK WE CAN LOOK AT THE FUNDRAISING SIDE OF ITAS WELL.

 NOT ONLY OUR INSTITUTIONALCAPITAL BUT PRIVATE WEALTH IS A GROWING SECTOR OF OUR BUSINESSLIKE EVERYBODY ELSE'S AND SOMETHING THAT WE HAVE ZEROPRESENCE IN EUROPE CURRENTLY.

 LISA:TO ASK THAT ANYMORE POINTED WAY, AT A CERTAIN POINT HASSOME OF THE PAUSE THE UNCERTAINTY CAUSED A GREATERDEGREE OF RELUCTANCE TO MAKE LONG-TERM COMMITMENTS IN THEUNITED STATES IN CERTAIN AREAS? BECAUSE THAT AS A CERTAIN RISKPREMIUM THAT MAYBE YOU'RE NOT GETTING COMPENSATED FOR.

DO YOU SEE THAT ON A GLOBAL SCALE? TIM: ABSOLUTELY NOT.

LISA: OK.

 WHERE IS YOUR FAST EXPANDINGPLACE? I WILL LEAVE WITH THAT.

 IN TERMS OF FORTRESS'S PRESENCEGEOGRAPHICALLY.

 JOSH: WE ARE GROWING EVERYWHERE.

WE JUST OPENED AN OFFICE IN ABU DHABI.

OUR OFFICE IN LONDON IS GOING TO BE DOUBLING, ALMOST TRIPLINGIN SIZE OVER THE NEXT TWO YEARS.

 SO THERE IS A TIME OF ACTIVITYIN DALLAS.

 WE ARE 150 PEOPLE NOW AND WETHINK WE ARE GOING TO BE 200 BY THE END OF NEXT YEAR.

SO WE THINK THERE IS AN INCREDIBLE AMOUNT OFOPPORTUNITY FOR US, PARTICULARLY AS THE MARKETSSTAY UNSTEADY TO A CERTAIN EXTENT AND WE CAN DEPLOYCAPITAL IN REALLY INTERESTING WAYS.

 LISA:THANK YOU BOTH SO MUCH.

 REALLY APPRECIATE YOUR TIME.

I WILL SEND IT BACK TO YOU IN NEW YORK.

 ROMAINE: OUR THANKS TO LISA ABRAMOWICZOUT THERE AT THE FORTRESS INVESTMENT MANAGEMENTCONFERENCE WITH JOSH PACK AND TIM SLOAN.

WE WILL BE HEARING MORE FROM HER TOMORROW.

WE WANT TO SET YOU UP WITH WHAT THE MARKETS WILL HAVE THEIR EYEON OVER THE NEXT 24 HOURS.

 STRAIGHT OFF THE TOP, WE AREEXPECTING TRADE TALKS WITH CHINA TO RESUME.

SCOTT BESSENT HAS TO COME BACK TO THE U.

S.

FOR A PREVIOUSLY SCHEDULED ENGAGEMENT BUT HOWARD LUTNICKAND THE U.

S.

 TRADE REPRESENTATIVE ARESTAYING BEHIND.

 SCARLET: AND THEY SAID THEY WILL STAYFOR AS LONG AS NEEDED SO RIGHT NOW WE ARE COUNTING INTO OURTHIRD DAY OF TRADE TALKS.

 SCOTT BESSENT HAS A FULL DAY OFTESTIMONY ON CAPITOL HILL.

 SO WE WILL OF COURSE BRING YOUUP-TO-DATE ON THOSE HEADLINES.

 ROMAINE: WE WILL KEEP AN EYE ONEARNINGS.

 WE ARE GOING TO GET YOU BEFORETHE MARKET TO A BIT OF A READ POTENTIALLY ON CONSUMERSPENDING.

 SCARLET: THIS SHOULD BE A CONSUMERSTABLE.

 ROMAINE: YOU SPEAK ON BEHALF OF ALL THEDOGS AND CATS OUT THERE.

 OF COURSE 8:30 A.

M.

WASHINGTON TIME.

 SCARLET: OF COURSE THAT IS THE BIG ONE.

RIGHT NOW WE ARE LOOKING FOR AN INCREASE OF .

2% MONTH OVERMONTH.

 2.

4% YEAR ON YEAR.

 ROMAINE:IT WILL BE INTERESTING BECAUSE A LOT OF PEOPLE ARE EXPECTINGNOT THE SPIKE IN INFLATION THIS TIME BUT MAYBE THE NEXT REPORTOR THE REPORT AFTER THAT.

 WE GET THE FEDERAL BUDGETBALANCE AT 2:00 P.

M.

 EASTERN TIME AND MORE EARNINGSAFTER THE BELL.

 SCARLET: IT WILL BE ALL ABOUT THE CLOUDAND IMPLEMENTATION OF AI.

 ROMAINE:THIS IS BLOOMBERG.