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17:54
PDT

Big tech is driving demand for investment-grade debt.

Jim Zeltos SpaceX OpenAI Anthropic US Treasuries US AI

– Mega-IPOs are crowding the market, impacting government debt.

– The scale to go public has increased significantly.

– Broader industries beyond AI are experiencing capital expenditure growth.

– Market saturation may pose risks for smaller enterprises.

capital marketsIPO trendsAI investmentmarket saturation

▸ Full transcript

Jim Zeltos says investment-grade debt sales were outpaced by the issuance of US Treasuries this year as big tech companies seek massive funding to fuel their expansion. Zeltos also told us exclusively that mega-IPOs, such as SpaceX, are crowding the market and adding pressure on government debt. It's not only the scale of these; I mean, for the last 15-20 years, the annual equity issuance between IPOs and equity capital markets activity has been plus or minus $200 billion a year. That's the number for the last 20 years. If you take the year of 2021 out of SPACs, you know, with OpenAI, Anthropic, and SpaceX, those three companies will eclipse that number. I think there's commentary about what it means to take a company public today. The scale that you need to achieve to be relevant is much, much higher than it ever was before. That impacts a lot of smaller enterprises that are five to ten billion. I also think, as much as we're talking the last four to six weeks about the AI CapEx boom, which is phenomenal and unprecedented, I think we're forgetting that there are a lot of other industries, such as the defense industry and the utility industry; there are going to be a number of other industries. So I think it's broader, but these numbers are unprecedented, and it just shows you the scale of the marketplace. You're getting to the heart of a potential issue, though: is there space for everyone? Well, I do think, you know, we've been consistent.

Analysis

Investment-grade debt sales are being outpaced by US Treasury issuance as big tech companies seek massive funding for expansion, with mega-IPOs like SpaceX adding pressure on government debt. The scale required to take a company public has significantly increased, impacting smaller enterprises and highlighting a broader capital expenditure boom across various industries beyond just AI.

Smart money should note that while the AI CapEx boom is drawing attention, other sectors such as defense and utilities are also poised for significant investment. The unprecedented scale of capital needs may lead to market saturation, raising questions about the sustainability of this growth and the space available for smaller players in the market.

17:49
PDT

Korean market facing broad sell-off due to declining retail investor activity.

Samsung SK Hynix Cambridge Con SMIC Changxin Memory Technologies UBS Beijing Hong Kong Paul Chan Bonnichan Beidou Lenovo USDCNH

– Chinese chip makers' high valuations raise concerns compared to Samsung and SK Hynix.

– Retail investor deposits are decreasing while margin loans hit all-time highs.

– Market breadth is narrowing, indicating potential vulnerabilities.

– Investors are cautious about the sustainability of recent gains.

market volatilitysemiconductor sectorretail investor trends

▸ Full transcript

To avoid using these advanced equipment that they don't have access to. Investors and analysts are calling it a massive breakthrough. This is also becoming another catalyst, at least in the shorter term. However, there are certain worries. When we compare Samsung or SK Hynix that have just reached a one trillion market cap, Cambridge Con or SMIC, some of the biggest Chinese chip makers, they trade at around $100 billion in terms of market cap, and their forward earnings are very expensive. So there are these worries, but again, turnover is showing up in China's chip banking sector. To your point, given how big Samsung and SK Hynix have gotten, what's the risk and vulnerability of the broader Korean market that today is just taking a beating? Today itself is more of the broader, broad-com driven kind of sell-off. But again, the biggest problem that investors are pointing to is the breadth of the market. A lot of the companies are actually falling, and we're also seeing the retail that used to be the biggest driver of this whole rally that we have seen 105 percent gains for this year is actually waning. We can see that in the investor deposit which is coming down a little bit, but at the same time, the margin of loans is hitting all-time highs. So that correlation doesn't...

Analysis

The broader Korean market is experiencing a significant sell-off, driven by concerns over the market breadth and declining retail investor participation, despite the impressive gains seen earlier this year. Investors are also wary of the high valuations of major Chinese chip makers compared to their Korean counterparts, which could signal vulnerabilities in the sector.

The decline in retail investor deposits alongside record-high margin loans suggests a potential shift in market dynamics, indicating that the previous rally may not be sustainable. This divergence could lead to increased volatility as the market adjusts to these changing investor behaviors.

17:47
PDT

CSI Infotech index doubled in market cap over the past year.

Changxin Memory Technologies CSI Infotech index Shanghai Stock Exchange China CSI IPO Sangmi Chan USDCNH

– Changxin Memory Technologies plans a $4 billion IPO, the largest since 2022.

– Record turnover in the index indicates strong investor interest.

– Retail investors are shifting capital into domestic semiconductor stocks.

– China's semiconductor story is gaining momentum independent of global trends.

semiconductor investmentIPO market dynamicsretail investor sentiment

▸ Full transcript

Investors and analysts are saying that perhaps the rally in some of the mainland Chinese semiconductor stocks could actually extend for more. Let's bring in Asia equities reporter Sangmi Chan. Sangmi, we know that the CSI Infotech index has roughly doubled in the past year. So where does all of this confidence come from? That's right. We can start from this gauge. Actually, it's added about $900 billion in market cap over the past year. And all of this is actually a different story that we're seeing in the global chip market. China has its own chip story and it goes back to this mega IPO in Shanghai. Changxin Memory Technologies has filed last week for this Shanghai IPO, which is going to be the largest onshore since 2022. We're estimating about four billion to raise. And so all of this kind of points to that interest there. We can see the index actually had this massive turnover reaching that record this month, accounting for almost half of the market. So there is clearly that optimism there because investors are now saying that, okay, they cannot, the retail investors who were not able to participate in this global memory rally, now they have the actual domestic player coming in. So they can move some of their capital into the IPO.

Analysis

The rally in mainland Chinese semiconductor stocks, particularly the CSI Infotech index, has seen a significant increase in market capitalization, adding about $900 billion over the past year. This surge is largely driven by the upcoming IPO of Changxin Memory Technologies, which is set to be the largest onshore IPO since 2022, raising an estimated $4 billion and attracting domestic retail investors eager to participate in the memory chip market.

Smart money should note that the optimism surrounding the semiconductor sector is not just a reflection of global trends but is also fueled by domestic developments in China. The record turnover in the index indicates a strong shift in investor sentiment, suggesting that local players are gaining traction and could reshape the competitive landscape in the chip market.

17:45
PDT

Chinese Yuan appreciates over 3% against USD this year.

Chinese Yuan US dollar China Hong Kong HSBC Stan Chart UBS Sumitomo Mitsui SK Hynix Samsung Changxin Memory Shanghai Stock Exchange PRIVATE DXY

– Year-end target for Yuan set at 6.70.

– Crackdown on illegal trading in Hong Kong affects banks.

– Capital inflows into China are returning.

– China's exports remain strong despite currency strength.

currency appreciationcapital controlseconomic rebalancing

▸ Full transcript

Meets capital. A fad to some, the future of money to others. We see cryptos trillion-dollar swings. While others follow the noise, we follow the money. Bloomberg is covering all things crypto: the people, the transactions, and the technology. Bloomberg Crypto, Tuesdays only on Bloomberg. It's a really big kind of upfront cost to train the models and to sort of inference on them. And I think that is, you know, my guess is that, you know, over time, the sort of core set of companies that are working to advance the frontier are just going to need access to capital. And I think the public market is very well suited to that. Anthropi co-founder and president Daniella Amode speaking exclusively at the Bloomberg tech event in San Francisco.

Analysis

The Chinese Yuan has shown remarkable resilience, gaining over 3% against the US dollar this year, reflecting China's improved economic conditions and capital inflows. Analysts expect further appreciation of the Yuan, with a year-end target of 6.70, as it remains undervalued despite its recent strength.

The ongoing crackdown on illegal cross-border trading in Hong Kong is causing significant concern among banks, impacting their operations and potentially leading to tighter capital controls. This situation highlights the increasing importance of monitoring capital flight from China as the domestic economy struggles, which could have broader implications for regional financial stability.

17:42
PDT

China intensifies crackdown on capital flight.

China Hong Kong Changxin Memory Beijing Paul Chan Lenovo Beidou UBS Steven Engle HKX CEO IPO PRIVATE USDCNH

– Hong Kong authorities align with Beijing's financial stability efforts.

– Changxin Memory receives IPO green light, signaling growth in chip sector.

– Investors should monitor shifts in foreign investment dynamics.

– Potential implications for China's economic policy direction.

capital controlssemiconductor sectorforeign investmenteconomic policy

▸ Full transcript

To source very forensically, find out the source of that wealth. So again, I can't say how deep and broad this is going to go, but it looks as though the crackdown on capital flight from China, at a time when the Chinese domestic economy obviously is sputtering, is taking on greater importance to Beijing and in lockstep, Hong Kong authorities. Bloomberg Chief North Asia correspondent Steven Engle there. Cash Steve alongside of On Man and odd lots and hosts Joe Isenthal and Tracy Allaway for a special episode of The China Show that's on Monday at 9 am. They'll be part of our team at the Bloomberg Invest Hong Kong event happening later this week. We'll be hearing next week, I should say, from a strong lineup of guests including the Hong Kong financial secretary Paul Chan, HKX CEO and Bonnichan, the CEOs of Beidou and Lenovo as well, Sherry. And so, hello, the Asia trade Heidi, China's chip makers gaining attention among investors, especially after memory chip maker Changxin Memory received the IPO green light from the Shanghai Stock Exchange. We'll talk about China's chip boom next. This is Bloomberg. This is it. The trade that will make your number. And with next-generation speed, automation, and integration, this is the new trend.

Analysis

The crackdown on capital flight from China is intensifying, reflecting Beijing's growing concern over its sputtering domestic economy. This move is being mirrored by Hong Kong authorities, indicating a coordinated effort to manage financial stability amidst rising economic pressures.

Investors should note that the focus on capital controls may signal a shift in China's economic policy, potentially impacting foreign investment flows. Additionally, the recent IPO approval for Changxin Memory highlights the strategic importance of the semiconductor sector in China's economic recovery plans.

17:38
PDT

Japanese banks are experiencing slight gains despite broader market declines.

Sumitomo Mitsui SK Hynix Samsung HSBC Standard Chartered Beijing Hong Kong UBS Iqbal Khan SK CEO North Asia USDCNH

– HSBC and Standard Chartered stocks fell due to regulatory actions in Hong Kong.

– The crackdown on illegal trading in China is affecting financial institutions in Hong Kong.

– Market volatility is likely to increase as regulatory pressures mount.

– Investor sentiment may shift as banks reassess risk in cross-border operations.

regulatory riskfinancial sector volatility

▸ Full transcript

The beneficiary, as we see in Japan in particular, as Sherry mentioned, we'd already seen some lofty heights when it comes to the financials and the Japanese banks. When we're seeing that extended now about two-tenths of one percent higher when it comes to the big gainers, Sumitomo Mitsui, they're over in Korea. That rotation also taking place. But broadly speaking, given the heavy weights of SK Hynix and Samsung and how much that has really dominated that equity trading story, we are still seeing that broader market extending the drop to as much as 6% in the early part of the session. HSBC and Standard Chartered fell in London, alongside other Asia-exposed financial stocks, after a media report that some banks have suspended opening Hong Kong bank accounts for clients in mainland China. It's the latest reaction to Beijing's unprecedented crackdown on illegal cross-border trading. Let's get to our Hong Kong and North Asia correspondent who is there. Steve Engel is with us. So Steve, what do we know about this, particularly as to how the banks are viewing this? Yeah, well obviously the banks and the insurance companies, the financial sector here in Hong Kong is taking it quite seriously. This is a story that first started bubbling to the surface last week. Around May 27th, I believe the story hit the wires and I was at the UBS China conference here in Hong Kong and I talked to Iqbal Khan of the UBS Asia Pacific CEO about it. He says he felt it was really more targeted toward...

Analysis

Japanese financials, particularly Sumitomo Mitsui, are seeing gains amid a broader market drop of up to 6%, influenced by heavyweights like SK Hynix and Samsung. Meanwhile, HSBC and Standard Chartered have declined following reports of banks suspending Hong Kong accounts for mainland Chinese clients due to Beijing's crackdown on illegal trading.

The situation highlights the fragility of the financial sector in Hong Kong, as banks react to regulatory pressures that could reshape cross-border trading dynamics. Smart money should note the potential for increased volatility in Asian financial stocks as regulatory scrutiny intensifies, impacting investor sentiment and capital flows.

17:36
PDT

The Yuan has gained over 3% against the US dollar this year.

China US dollar Middle East Strait of Hormuz US CL=F USDCNH DXY

– China's economic conditions are improving, allowing for further Yuan appreciation.

– The real effective exchange rate of the Yuan indicates it is still undervalued.

– A stronger Yuan may help boost domestic consumption in China.

– Petro currencies remain vulnerable to Middle East tensions and oil price fluctuations.

currency valuationgeopolitical riskemerging markets

▸ Full transcript

I mean last year amidst the escalation of the trade war, the yuan weakened significantly. And now I think part of it is playing catch up. But if you look at the exchange rates, the real effective exchange rate, not the nominal but the real effective exchange rate, it's still very low. It's still back at levels similar to 2015 or 2016. So in my view, the yuan is still undervalued, it's still cheap. And further strength is not going to erode China's overall export competitiveness. China has moved up the value-added chain very rapidly and having further currency strength is not going to impede that. And I think further currency strength can actually also help in China's goal of trying to rebalance the economy, trying to boost domestic consumption which so far is somewhat lackluster still. So I think a stronger currency can help to be part of that overall policy mix. What's your view when it comes to petro currencies then? So heavily dependent on where we go with the Middle East situation and how oil travels from here? I don't think there's going to be any major changes to that anytime soon. I think we're still all waiting to see the situation in the Middle East, whether or not the Strait of Hormuz will open up. I think trading in oil will still be predominantly done in US dollars, so I don't think.

Analysis

The Chinese Yuan is showing strength, gaining over 3% against the US dollar this year, reflecting a shift towards appreciation as capital inflows return to China. This resilience is attributed to China's improved economic state and its ability to weather high oil prices better than neighboring Asian currencies.

Despite the Yuan's recent strength, it remains undervalued based on real effective exchange rates, which are at levels similar to 2015 or 2016. A stronger Yuan could support China's goal of boosting domestic consumption, which has been lackluster, while also maintaining export competitiveness.

17:34
PDT

Chinese Yuan appreciates over 3% against USD.

Chinese Yuan US dollar China US The Chinese Yuan Iran War The Yuan USDCNH FEDFUNDS CL=F DXY

– Chinese authorities support further Yuan strength.

– Strong exports and capital inflows bolster Yuan.

– China exits deflation, improving economic outlook.

– Year-end target for Yuan set at 6.70.

currency appreciationemerging marketsgeopolitical impact

▸ Full transcript

The Chinese Yuan, right? Very resilient and also perhaps a reflection of their less exposure to the impact from the Iran War. Will we see that effect a broader emerging market complex and potentially even the Yuan starting to challenge the dominance of the dollar? I think the term resilience doesn't do it enough justice. The Yuan is the strongest Asian currency this year, having gained over 3% against the US dollar amidst a very challenging geopolitical backdrop. And it's very clear that the Chinese authorities are basically accommodating further Yuan strength, and the trend has clearly shifted towards one of appreciation. We are starting to see capital inflows return into China. Their exports continue to be very strong and very competitive. So a stronger currency is not going to derail that. China is out of deflation now. So a lot of the underlying worries about the Chinese economy of the past few years have gone away. And now I think China is definitely in a better state to weather this high oil price compared to some of the other neighboring Asian currencies. Hence, you know why the Yuan has fared very well. And we expect further appreciation of the Yuan to come. I mean my year-end target is 6.70.

Analysis

The Chinese Yuan has shown remarkable resilience, gaining over 3% against the US dollar this year, reflecting a shift towards an appreciation path supported by Chinese authorities. With strong exports and a return of capital inflows, the Yuan is positioned to challenge the dollar's dominance, with a year-end target set at 6.70.

Smart money should note that China's exit from deflation and improved economic conditions position it favorably against high oil prices, unlike other Asian currencies facing vulnerabilities. This trend suggests a potential for further capital inflows and a strengthening Yuan, which could impact broader emerging market dynamics.

17:31
PDT

High oil prices are a key driver of currency sell-offs in India, the Philippines, and Indonesia.

India Philippines Indonesia KUN ANZ US AI Iran War Asia Research CL=F DXY

– Political instability is worsening economic conditions in the Philippines and Indonesia.

– Current account deficits leave these economies vulnerable to external shocks.

– The AI investment boom is not benefiting these countries, adding to their economic challenges.

– Interest rate hikes alone may not be sufficient to stabilize these currencies.

currency vulnerabilityoil price impactpolitical instabilitycurrent account deficits

▸ Full transcript

In about three weeks or so, you can see, of course, the impact has been big on repercussions from the Iran War, especially when it comes to net oil importers such as India. You can see the rupee also trading at that 95 level. We had seen a little bit of strength for the Philippine peso against the US dollar. But of course, we continue to watch the political drama playing out in that country as well. Our next guest now says that raising interest rates alone may not be sufficient to alleviate some of the pressures on some of these currencies. Joining us now is KUN, head of Asia Research at the ANZ. Of course, KUN, we do have the rate decision coming from India as well. Will the rate differential issue not be as big as other macro challenges that these economies and currencies face? Good morning to you. It's not really about yield differentials at this stage. I think the high oil prices are the initial catalyst for the sell-off, but there are also broader underlying concerns. Both of these three economies, the Philippines, India, and Indonesia, face current account deficits. The starting point was already leaving them vulnerable to high oil prices. All three of these are not beneficiaries of the AI investment boom. On top of that, you also have idiosyncrasies; you mentioned the political situation domestically is not helping. And in Indonesia's case, huge concerns around governance.

Analysis

High oil prices are exacerbating vulnerabilities in net oil-importing countries like India, the Philippines, and Indonesia, leading to currency sell-offs. The political instability in these regions, particularly in the Philippines and Indonesia, compounds the economic challenges these currencies face.

Smart money should note that the current account deficits in these economies make them particularly sensitive to external shocks like rising oil prices. Additionally, the lack of benefits from the AI investment boom highlights a broader economic fragility that could lead to further currency pressures.

17:29
PDT

Nuvine focuses on long-term investment strategies.

Nuvine Bloomberg Haslinda Anand Airbnb Brian Chesky Bloomberg Tech Bloomberg Savannah Watch Bloomberg Tech Wall Street Mount Everest PRIVATE

– The company anticipates substantial revenue growth.

– There is a consistent demand for computing power.

– Nuvine's approach spans multiple asset classes.

– The investment landscape is evolving with new opportunities.

long-term investmentcomputing demand

▸ Full transcript

Nuvine invests with the foresight and vision that come from navigating more than 125 years of market cycles. Unlocking the potential of public and private markets, spanning real estate to private credit, and infrastructure to natural capital. Finding opportunity today to shape how portfolios are built for tomorrow. Nuvine, invest like the future is watching. This is on the day's top stories. Insight with Haslinda Anand only on Bloomberg. In case you missed it on Bloomberg Tech. This is not perishable demand. It's not something that if a window closes, there's not going to be a need for compute. So we are thinking about this in the long game. We are very confident that we are on track to that $15 billion number in a very, very short time, which is quite transformational for the company relative to the size of opportunity and the amount of revenue that we'll deliver. Don't miss Bloomberg Tech live every weekday. Good morning. This is Bloomberg Savannah. Welcome back to the opening trade. Watch Bloomberg Tech. This is the Asia trade. This is Wall Street week. Welcome to Balance of Power. You're watching Bloomberg deals. Welcome to Bloomberg this weekend. This is Bloomberg television. Bringing you the world's business and financial news whenever and wherever it happens. I'm Mike on the Key at Mount Everest.

Analysis

Nuvine is strategically investing across various markets, including real estate and private credit, aiming to shape future portfolios. The company is confident in reaching a $15 billion revenue target soon, indicating a significant growth opportunity in the computing sector.

17:26
PDT

Jane Street is exploring a new data center to boost computing capabilities.

Jane Street Airbnb Brian Chesky Bloomberg CEO AI This White House PRIVATE

– Airbnb is establishing an AI lab under CEO Brian Chesky.

– Increased demand for data infrastructure is evident in the finance sector.

– AI integration is becoming a priority for traditional industries like hospitality.

– Strategic investments in technology are likely to shape competitive advantages.

data infrastructureAI integrationtechnology investment

▸ Full transcript

And this is Bloomberg. Morning breaking news in the last few minutes on the ground perspective coming to you from the foam shelter. This White House is still pushing, and the analysis you need to make informed decisions fast. Clearly, nothing is final until it's well and truly fine. The really important question is whether we'll get second-round effects. Nobody covers geopolitics like Bloomberg, bringing you up to date in the news whenever and wherever it happens. I'm Sherry on in Seoul, and this is Bloomberg. Here are some corporate stories that we are tracking this hour. Bloomberg has learned that Jane Street is planning to build and finance its own data center to keep up with growing demand for computing power. Sources say that the market-making firm is talking to companies in the technology, crypto, and finance industries about building a facility. Talks are still in the early stages, and the exact capacity and location of the data center are yet to be determined. Bloomberg is being told that Airbnb CEO Brian Chesky is starting an AI lab. Our sources say Chesky is in the early stages.

Analysis

Jane Street is planning to build and finance its own data center to meet increasing demand for computing power, engaging in talks with various tech and finance companies. Meanwhile, Airbnb CEO Brian Chesky is initiating an AI lab, indicating a strategic pivot towards artificial intelligence in the hospitality sector.

The move by Jane Street highlights the growing importance of data infrastructure in finance, suggesting that firms are preparing for a future where computational power is critical. Chesky's focus on AI could signal a broader trend of traditional industries integrating advanced technologies to enhance operational efficiency and customer experience.

17:24
PDT

Korean stocks, particularly chip makers, are down 6%.

Korean stocks chip makers NASDAQ Bloomberg AI PRIVATE

– Retail buying previously supported semiconductor rallies is now under pressure.

– A rotation away from AI stocks is occurring.

– Leverage use among retail investors is increasing.

– Market sentiment is shifting, indicating potential volatility.

market volatilitytechnology sector correction

▸ Full transcript

When it comes to how it's all playing out with Korean stocks at the moment, the cost is extending that early decline to 6% now as we see that extended stomp in chip makers opening sharply lower just about 25 minutes ago. It was already down more than 4% in the early part of the trade. Chip makers are extending those declines as we really see this relentless rally in semiconductor stocks, meaning that every intraday dip invited heavy retail buying, increasingly that use of leverage as well to amplify that impact. This will be a real test when it comes to whether we'll continue to see that again. This really reflects the sell-off that we saw and the broadening rotation away from the AI names. NASDAQ futures are also extending the overnight declines there as well. We'll continue to monitor whether this rotation continues through other Asia markets as well. More ahead on the Asia trade, this is Bloomberg.

Analysis

Korean stocks are experiencing a significant decline, with chip makers extending losses to 6% amid a broader sell-off and rotation away from AI names. This trend reflects a shift in market sentiment as retail buying, previously seen during semiconductor rallies, faces a critical test in sustaining momentum.

Smart money should note the increasing use of leverage among retail investors, which could amplify market volatility. The ongoing rotation away from AI stocks may signal a broader market correction, indicating potential risks for investors heavily positioned in technology sectors.

17:22
PDT

U.S. foreign policy emphasizes military support for allies.

United States Ukraine United Arab Emirates Saudi Arabia Qatar DXY

– Bipartisan agreement on defense capabilities is crucial.

– Allies lack resources to develop advanced military systems independently.

– Cost-effective defense solutions are being prioritized.

– Geopolitical dynamics may shift due to U.S. defense exports.

defense spendingU.S. foreign policymilitary capabilities

▸ Full transcript

So those are very clear rules. It's not like I'm making a decision about like, oh, I really think we shouldn't sell to this country. It's like, yeah, the government has already kind of pre-decided that that's the case. But yes, it is important for U.S. foreign policy in a bipartisan way. This is not a partisan issue. In a bipartisan way, it's important for U.S. foreign policy to provide capabilities to our allies to make sure that they are fully integrated into our joint operations, which is really important, but also that they have the capabilities to defend themselves utilizing U.S. production that may or may not exist in many of these countries. Like, they don't, you know, our allies, many of them, are not going to fund and build a fifth-generation fighter plane on their own, nor are they going to develop really complex, multimillion-dollar counter-air missile systems. And so this is a role that we play in the ecosystem is to go out and say, you know, to countries like Ukraine or like, you know, the United Arab Emirates or Saudi Arabia or Qatar. Hey, the United States has the capability. We want you to have that capability as well. And this is how we're thinking about the cost curve for deploying these capabilities and kind of the layered approach that you can take to reducing the cost per intercept or whatever it is. Now, the tricky thing about all this is that there's a big difference between being a startup that is designing and developing a capability, which is great.

Analysis

The U.S. is reinforcing its commitment to provide military capabilities to allies, emphasizing the importance of bipartisan support for foreign policy. This includes supplying advanced defense systems to countries like Ukraine and the UAE, which lack the resources to develop such technologies independently.

Smart money should note the strategic implications of U.S. defense exports, as they not only bolster allied military capabilities but also create a dependency on U.S. production, potentially influencing geopolitical dynamics. The focus on cost-effective deployment of these capabilities could signal a shift in defense spending priorities among U.S. allies.

17:18
PDT

Zelensky proposes peace talks with Putin.

Volodymyr Zelensky Vladimir Putin Andrel Industries Trace Sievens U.S. military AI White House Ukrainian President Volodymyr Zelensky President Trump Silicon Valley Defense Tech Startup PRIVATE

– Ukraine is ready for a full ceasefire.

– Putin has pushed back against European mediation efforts.

– The ceasefire remains fragile with ongoing missile strikes.

– Geopolitical tensions continue to affect market stability.

geopolitical tensionsdefense sector dynamics

▸ Full transcript

Very quickly, but I do think that this is a lot more difficult to get done right now, with the president really not letting down on his demands. You know, the ceasefire is existing, but there are still missile strikes, as we know, so it's very, very fragile. So every day we're waiting for updates from the president. He's pretty much spoken every day since the start, but we'll continue to monitor things as they unfold. Make a solner there, Bloomberg government senior White House reporter joining us from Arlington. And here's another conflict that we're watching right now. Ukrainian President Volodymyr Zelensky is now saying that he proposed peace talks with Russian leader Vladimir Putin. Zelensky made the offering in an open letter saying Ukraine is ready for a full ceasefire during negotiations. Putin has already pushed back at separate efforts by European leaders to help negotiate and end the war, saying they cannot be mediators when actively supporting Ukraine. President Trump has welcomed Zelensky's initiative. I'm glad that they're maybe talking about meeting. I think we had a lot to do with it. I know exactly what you're doing. But I think it would be great if they met. They should get it done. Silicon Valley's top value, Defense Tech Startup, says it's expanding production of AI and autonomous weapons systems for the U.S. military. Andrel Industries co-founder and executive chairman, Trace Sievens.

Analysis

Ukrainian President Volodymyr Zelensky has proposed peace talks with Russian leader Vladimir Putin, indicating Ukraine's readiness for a full ceasefire during negotiations. This initiative comes amid ongoing missile strikes, highlighting the fragile nature of the current ceasefire situation.

Smart money should note that while Zelensky's offer may signal a potential thaw in relations, Putin's resistance to mediation complicates the landscape. The geopolitical tensions remain high, and any resolution will likely be slow and fraught with challenges, impacting market stability in the region.

17:15
PDT

U.S. military operation in Iran is ongoing with claims of progress.

Trump administration Lebanon Hezbollah Iran U.S.Middle East Although Hezbollah

– Lebanon's situation complicates peace negotiations.

– Hezbollah's rejection of ceasefire adds to tensions.

– Domestic economic pressures remain, particularly with gas prices.

– Market sentiment may be affected by geopolitical instability.

geopolitical riskenergy market volatility

▸ Full transcript

The timeline of this U.S. military operation, this war in Iran, waged by the Trump administration, continues to show that strong progress is being made to end this operation and complete it. However, there are indications from the Middle East that a deal is nowhere near, complicating the situation further. Lebanon remains a key sticking point, and it seems that the ceasefire might not be holding. Hezbollah has rejected the ceasefire agreement between Israel and Lebanon, complicating the U.S. efforts to broker simultaneous peace deals. Although Hezbollah is not an actor in the peace talks waged by the U.S., they are backed by Iran, which adds complexity to the negotiations. Currently, things are still in flux as this war wages on for more than four months now. There are indications that the president is feeling domestic pressure, as many Americans are experiencing economic strain, with gas prices still high and fluctuating.

Analysis

The ongoing U.S. military operation in Iran, as stated by the Trump administration, is claimed to be making strong progress, which is expected to boost the economy. However, complexities arise as Lebanon remains a significant obstacle, with Hezbollah rejecting the ceasefire agreement, complicating the peace process further.

Smart money should note that despite the administration's optimistic outlook, domestic economic pressures persist, particularly with fluctuating gas prices affecting American consumers. The geopolitical landscape remains unstable, which could have broader implications for market sentiment and economic recovery.

17:13
PDT

AI sector faces sustainability concerns despite current hype.

Steve Bloomberg AI Bloomberg Surveillance PRIVATE

– Success in business requires a foundational approach, not entitlement from past achievements.

– Emotional decision-making can hinder effective market analysis.

– Understanding market signals is essential for future investment strategies.

– Potential downturns in AI could impact broader financial markets.

▸ Full transcript

The end of jobs or the end of human struggle. We see the endless funds fueling the AI hype. While others follow the noise, we follow the money. But it is going to end, and the day it ends, the day before it ends, you're one of the best in the world. Great, the next day you wake up, that's gone. What are you great at? And the truth is nothing, right? I'm not great at anything else. I talk about it all the time, Steve, is this whole idea of it's not from penthouse to penthouse. And what I mean by that is you played for 15, 20 years and you're in the penthouse. That doesn't mean that you come to the business world and you're going to be in the penthouse. Now you don't start in the third floor or the lobby. You actually have to start in the basement. Making money isn't about drowning in emotions. It's about understanding what's actually happening. Markets are the best way to glean signal from noise. And that is what we try to do every morning. This is Bloomberg Surveillance. I think we're doing very well, but we're going to see if we're going to win one way or the other. We're going to win on paper or we're going to win military.

Analysis

The ongoing AI hype is fueled by endless funds, but there is a looming concern about its sustainability. The speaker emphasizes that success in business requires starting from the ground up, rather than assuming past achievements guarantee future success.

Smart money should recognize that market dynamics are shifting, and emotional decision-making can cloud judgment. Understanding the underlying market signals is crucial for navigating potential downturns in the AI sector and broader financial landscape.

17:11
PDT

Japan's fiscal policy aims to maintain trust in the yen.

George Babura K2 Asset Management Prime Minister Takahashi Finance Minister Katayama Bank of Japan Topics Bank Index US Managing Director Asset Management PRIVATE

– Market pricing indicates over 80% odds of a rate hike by the Bank of Japan on June 16th.

– Topics Bank Index is at its highest level since 1997.

– Rotation from tech to financials observed in U.S. markets.

– Potential for continued gains in financials with rising interest rates.

Japan fiscal policyBank of Japan rate hikefinancial sector rotationmarket sentiment

▸ Full transcript

George Babura is really great to get your insights. Managing Director K2 Asset Management as we continue to watch all of the moves here in Japan because Prime Minister Takahashi is also speaking in parliament right now, saying that the economic fiscal policy is not targeted at the currency itself. That the investment strategy here in Japan will actually help maintain trust in the Japanese currency, according to Prime Minister Takahashi. This coming on the back of comments also by the Finance Minister Katayama that the macroeconomic policy is among factors affecting effects. Of course, we are expecting a rate decision by the Bank of Japan on June 16th, and right now market pricing implies more than 80% odds of that June rate hike. And with that, we're actually seeing expectations of perhaps more gains for these banks on rising rates. You can see right now on top of that the Topics Bank Index trading at the highest level since 1997, being helped also by that massive rotation that we saw in the US session out of tech into financials. More ahead, this is Bloomberg.

Analysis

Prime Minister Takahashi stated that Japan's economic fiscal policy is not aimed at the currency, asserting that the investment strategy will help maintain trust in the Japanese yen. Market expectations for a rate hike by the Bank of Japan on June 16th have risen, with over 80% odds priced in, contributing to gains in the Topics Bank Index, which is at its highest level since 1997.

The shift from tech to financials in the U.S. market is indicative of a broader rotation that could benefit banks as interest rates rise. Investors should note the potential for continued gains in financials, especially if the Bank of Japan follows through with the anticipated rate hike, which could further support the Topics Bank Index and overall market sentiment in Japan.

17:07
PDT

Active managers are diversifying into mid-cap and other sectors.

Indonesia Singapore Australia Cosby NICI NICI

– Indonesia's economic reforms are failing to meet investor expectations.

– Singapore and Australia are favored for their high payout ratios.

– There is a persistent short position on Indonesia due to currency weakness.

– Investors are looking for broader market exposure beyond big tech.

market diversificationeconomic reformmid-cap stocksdividend yields

▸ Full transcript

Active managers will continue to take some profit where they can and again do the broadening out trade to the mid-cap, broadening out trade to the other sectors or other asset classes for that matter. We have these markets across Asia that are very heavily concentrated on big tech names, and at the same time, we have the ones that don't have that much tech exposure, that have lagged behind this incredible rally that we're seeing globally. Could we see any more diversification or broadening out in terms of different market regions? Because we have seen the likes of, say, Indonesia and India, for example, being some of the worst market performers right now. From our perspective, on retracement, we like NICI, we like Cosby. It's been a real volatile run with the Cosby, and that rally's been historical year to date. We like Singapore; it's a hub, and Australia because it has large oligopolistic earnings coming through with high payout ratios and dividends. Specifically in Indonesia, it continues to be a short for Indonesia, with currency weakening and flight of capital. They just need to get reform consistently. They need to stay on top of their economic reforms for the long term. It's just not happening. They keep disappointing investors, and they're obviously exiting onto the sovereign market from Indonesia. So that short Indonesia will be maintained until they can get on top of some.

Analysis

Active managers are shifting towards mid-cap and diversified sectors as they take profits from heavily concentrated big tech positions. Indonesia's ongoing economic reform challenges and currency weakness are prompting a continued short position in the market, indicating investor disappointment and capital flight.

The focus on diversification highlights a potential shift in market dynamics, where regions like Indonesia and India lag behind the global rally. This suggests that smart money should be cautious about concentrated bets in tech and consider broader market exposure, especially in regions with stronger fundamentals like Singapore and Australia.

17:04
PDT

Tech sector earnings are historically high, justifying current valuations.

SpaceX Open AI Anthropic Google George Barbaros K2 Asset Management AI US GOOGL

– Upcoming IPOs in AI and tech are critical for market liquidity.

– Concentration of capital in tech may benefit the broader economy.

– Investor commitment to mega tech IPOs indicates strong market sentiment.

– Productivity gains could emerge from the ongoing tech investment trend.

tech sector growthAI investmentIPO market trends

▸ Full transcript

The P is just matching it. So just to reinforce that it is extraordinary what's happened, but these earnings are extraordinary. While you can't say there's crowding out within the private sector, it's really a public-private sector debate, but within the private sector, there is this concentration of finite capital going to the equity part of that investment. Obviously, all parts of the capital structure could get issuance and be dominated again by chip making and AI, and obviously equity returns. But the earnings are coming through; they are historically high. It is matching the P, so the multiples are justified on this extraordinary earnings. Therefore, having said all of that, it seems logical and consistent that that broadening out has got some benefits for the broader economy and that productivity gain that you're looking for in the US and other parts of the world. Hopefully, that narrative makes a bit of sense from an investment point of view. George, what are your thoughts when it comes to this pipeline of mega tech and largely AI-centered IPOs? Obviously, SpaceX, Open AI, Anthropic, before that we also have the massive fundraising by Google. Do you think it's meaningful for markets in terms of being a test of liquidity and of investor commitment to the theme? Yes, in short, and just reinforcing the following. The upcoming IPOs are going to continue the trend that is quite historical, and that is equity participation.

Analysis

The discussion highlights the extraordinary earnings growth in the tech sector, particularly in AI and chip-making, which justifies current equity valuations. The upcoming IPOs in this space are expected to test market liquidity and investor commitment to these themes, indicating a continued trend of equity participation.

Smart money should note that the concentration of capital in the tech sector may lead to broader economic benefits and productivity gains, suggesting a potential shift in investment strategies. The historical trend of mega tech IPOs could signal renewed investor confidence and a robust pipeline for future capital flows.

17:02
PDT

Geopolitical discussions remain unresolved, impacting market sentiment.

U.S.Iran Israel Lebanon Hezbollah President Trump Brent Crude RBI Indian rupee Korean won Indonesian rupee Japanese banks DXY CL=F FEDFUNDS

– U.S. non-farm payrolls whisper number is higher than expected.

– Asian FX, particularly the Indian rupee, is under pressure ahead of RBI commentary.

– Oil prices are steady despite geopolitical tensions.

– Tech sector gains are contingent on strong forward guidance.

geopolitical riskU.S. labor marketAsian FX dynamicstech sector guidance

▸ Full transcript

To wait for further progress on these geopolitical discussions. Pretty steady at the moment, in fact, not much of a move at all. The first decline that we've had this week, though, on that optimism between the U.S. and Iran holding these talks, that tentative ceasefire between Israel and Lebanon, of course, which has been pushed back upon by Hezbollah, potentially this optimism that will see energy flows resume through the Strait of Hormuz. But the reality seems to be that we're quite far from that, despite President Trump saying that the talks are continuing to go well. This is a picture when it comes to treasuries. We also saw that rise in the overnight session with the dollar slipping as investors drew on those prospects for a peace deal. But those yields have been pushed lower by two to four basis points really across maturities as we saw that slide in oil as well. But of course, we're setting up for non-farm payrolls in the U.S., a whisper number looking a little bit higher than what we had been previously expecting and whether or not that's going to set up for more heightened expectations for sooner than expected Fed tightening as well. So Brent Crude at the moment was coming online just about two-tenths of 1% higher with that trade. And Australia, just a couple of minutes into the start of the session, taking a very slow approach there, despite futures showing a little bit of a gain of about half a percent at the open. Ms. Brea in George Barbaros is a managing director at K2 Asset Management. George, great to have you with us. So there's so many sort of cross currents as to what's going on at the moment but let me get you started on the tech view.

Analysis

Geopolitical tensions continue to weigh on market sentiment, with energy flows through the Strait of Hormuz still uncertain despite ongoing U.S.-Iran talks. The upcoming U.S. non-farm payrolls report is expected to influence Fed tightening expectations, with whispers suggesting a stronger number than previously anticipated.

Investors should note the potential for a shift in Asian FX dynamics, particularly with the Indian rupee under pressure ahead of the RBI's commentary. The interplay between geopolitical developments and economic indicators could create volatility in both commodities and equities, particularly in tech and financial sectors.

17:00
PDT

Market rotation observed in Korea and Japan.

Japan U.S.Aniki JGBs Japanese banks economists As Aniki FEDFUNDS

– Geopolitical concerns remain a significant factor.

– U.S. jobs numbers and Fed tightening are key uncertainties.

– Japanese banks are closely watched amid stable JGB yields.

– Weight growth data surpassed economists' expectations.

market rotationgeopolitical risksU.S. labor marketJapanese fiscal policy

▸ Full transcript

Out of that trend and the proper broadening of this market and the rotation away from such highly concentrated trade, particularly when it comes to markets like Korea and Japan, are we deciding to see a little bit more of a broadening in this market? But still, of course, geopolitical concerns still match at the forefront as well. We also have U.S. jobs numbers to contend with and some worries about more Fed tightening on the agenda too. But at the same time, she talked about not clearly having a direction when it comes to those sales tax cuts for food here in Japan. But at the same time, she said that they will not be using more debt. So do watch out for JGBs, the 10-year yield holding at that 2.66 level. As Aniki and the topics, a little bit of divergence, as you can see there, with Aniki stocks falling 7.10 of 1%. And as I said, do keep an eye on those banks. And of course, we did get some weight growth data earlier this morning and we saw them beat all economists' estimates. So we will be watching the June 16th.

Analysis

The market is experiencing a rotation away from concentrated trades, particularly in Korea and Japan, amidst ongoing geopolitical concerns and uncertainty regarding U.S. jobs numbers and potential Fed tightening. Japanese banks are under scrutiny as the 10-year JGB yield holds at 2.66%, with recent weight growth data exceeding economists' estimates, indicating potential shifts in economic sentiment.

Smart money should note the divergence in performance between Aniki stocks and broader market trends, as well as the implications of Japan's fiscal stance on JGBs. The lack of direction on sales tax cuts for food could signal a cautious approach from policymakers, impacting consumer sentiment and spending in the near term.

16:53
PDT

Japanese and Korean banks are well-positioned due to US market exposure.

Japanese banks Korean banks US markets Korean won Indonesian rupee Indian rupee RBI Bloomberg US FX The Indonesian So Asian PRIVATE DXY

– Asian currencies, including the yen and rupee, are under intervention watch.

– The RBI's commentary on the Indian rupee will be critical today.

– Strong US labor market data could further pressure Asian FX.

– Market rotation in Asia is expected as economic conditions improve.

Asian FX pressureUS labor market impactBank performanceCurrency intervention

▸ Full transcript

Of expansion, Japanese banks are quite exposed to the US markets now and the US economy. So they tend to benefit. Korean banks have also liked Korean tech a lot. Korean banks are obviously quite exposed to the improvement in the Korean economic situation and the yield curve there as well. So we will probably have this decent round of rotation in Asia as the market cycles higher. What are you watching when it comes to FX? Are we looking for that dollar yen to take another leg higher? Look, it's not just the dollar yen, right? Literally the entire region, north to south, is on intervention watch. So we have the yen, we have the Korean won in clear air now, you know, getting record weaker. The Indonesian rupee was record weak yesterday and broke a new big figure at 18,000. And the Indian rupee is also struggling to kind of find a level. What's very interesting about the Indian rupee is that we have the RBI on deck today. Their commentary around the rupee and what they can do about it while holding rates is going to be super interesting. So Asian policymakers here have a lot to look at. Ahead of the non-farm payrolls in the US today, that number becomes extremely vital to Asian FX because any strong number, and there have been some private indications that the US labor market is fine, any strong number will put even more pressure on Asian FX. And that matters to the vast majority of the Asian population, anyway more than what tech stocks are doing.

Analysis

Asian markets are poised for a rotation as Japanese and Korean banks benefit from their exposure to the US economy, while the region's currencies face pressure ahead of US non-farm payrolls. The Indian rupee's struggle and the RBI's upcoming commentary will be crucial for Asian FX stability, especially with indications of a strong US labor market looming.

16:51
PDT

Broadcom's outlook negatively impacted tech stocks.

Broadcom NASDAQ Dow Hong Kong Anthony Stevens EMS AI US Wall Street Bloomberg Markets NASDAQ PRIVATE

– Dow outperformed NASDAQ by over a thousand points.

– Market is seeking aggressive guidance from tech firms.

– Economic gains are broadening beyond tech.

– Potential shift in investor sentiment towards stability.

tech sector rotationfinancials strengthinvestor sentiment shift

▸ Full transcript

Next generation speed, automation, and integration. This is the new fixed income EMS that will make sure you win it. Expect more from your execution management system. Bloomberg trade EMS. We had huge rotation in the overnight session on Wall Street where we have the Dow outperforming the NASDAQ by more than a thousand points. In fact, we were headed towards financials gaining ground in the overnight session, really with that disappointing outlook coming from Broadcom that AI trade, anything around tech, semiconductors, lost grounding the overnight session. So this could be a big theme to watch in the Asian session as well. Let's discuss all of this with Bloomberg Markets reporting Anthony Stevens now watching all of the moves for us in Hong Kong. What will be key today? Yeah. So we saw a little bit of a pullback in tech on the Broadcom guidance. Right. It's important that it was the guidance. So now you see that the bar to further tech gains requires very aggressive forward guidance from these companies. But the results are quite strong. So what's happening in the US is this dynamic of broadening economic gains. So people are not selling the headline index per se.

Analysis

Broadcom's disappointing outlook has led to a significant rotation in the market, with the Dow outperforming the NASDAQ by over a thousand points. This shift indicates that the tech sector, particularly semiconductors, is losing momentum, which could set the tone for trading in Asia.

The market's reaction to Broadcom's guidance suggests that investors are now looking for aggressive forward guidance from tech companies to sustain gains. Despite strong results, the focus on economic broadening indicates a potential shift in investor sentiment away from tech-heavy indices towards sectors that may offer more stability.

16:49
PDT

SpaceX's IPO is highly anticipated, focusing on ambitious projects.

SpaceX Elon Musk U.S. power grid advanced nuclear fuel AI IPO Michael Highthaw PRIVATE

– Data centers are a significant cost driver for tech companies.

– The U.S. power grid is under pressure from rising electricity demand.

– Advanced nuclear fuel may become a key solution for energy supply.

– Elon Musk's incentives are tied to long-term space colonization goals.

energy innovationspace technology

▸ Full transcript

For example, in that video, the AI portion, which of course is the cash-burning aspect of the company right now. They're developing data centers, and that gets played into the next phase, of course, our future of having data centers in space and all of the technological innovation and capital expenditure requirements that will take. And of course, the pitch ends with colonies on Mars, right? Starting with the moon. There's a provision in the incentives for Elon Musk where if they get a million people in a colony on Mars, he gets a rather large reward for that. Michael Highthaw, really good to get your insights on SpaceX. Editor on U.S. deals with, of course, this very much anticipated IPO. Much more ahead. This is Bloomberg. The U.S. power grid faces the challenge of meeting rising demand at a magnitude that hasn't been seen for decades. In the next few years, U.S. data centers could consume electricity that's comparable to millions of homes. Our answer is advanced nuclear fuel.

Analysis

SpaceX is developing data centers, which are currently a cash-burning aspect of the company, with future plans for data centers in space. The company is incentivizing Elon Musk with rewards tied to establishing a colony on Mars, highlighting ambitious long-term goals.

The U.S. power grid is facing unprecedented demand, with projections indicating that U.S. data centers could consume electricity equivalent to millions of homes in the coming years. This shift underscores the potential for advanced nuclear fuel solutions to meet rising energy needs, presenting investment opportunities in energy innovation.

16:44
PDT

Crude oil prices remain stable despite geopolitical tensions.

Hezbollah Israel U.S.Lebanon Iran Japan Bank of Japan S&P SpaceX AI NK IPO

– Japan's market is poised for potential benefits from capital flows away from South Korea.

– S&P futures indicate a slight bearish sentiment ahead of the trading day.

– The tech sector is seeing a rotation into U.S. financials, influenced by upcoming IPOs.

– SpaceX is actively engaging retail investors ahead of its IPO.

geopolitical riskmarket rotationIPO activity

▸ Full transcript

This broader AI risk rally. Speaking of which, take a look at how we're trading at the moment as we head into the start of the day here in Asia. New York traded crude, looking pretty flat at this point as we continue to mull over these considerations when it comes to the stalemate over the ceasefire, Hezbollah refusing when it comes to this Israel, U.S. and Lebanon brokered ceasefire there, and that broader ceasefire, those discussions, according to President Trump, continuing even though Iran's saying that they have now stalled with the conflict and tensions now being escalated. When it comes to Japan, this is set up for the NK-225, which is about 15 minutes away from the start of trading there, down by just about half a percent there. We are watching for that steady rotation when it comes to flows away from the South Korean market, which of course is rallying so hard, so fast, and in such a concentrated way and potentially seeing more of that beneficiaries coming through from the Japanese market at around that 160 level. We're now watching for potentially whether the Bank of Japan might actually move sooner rather than later this year. S&P futures at the moment are softer by three-tenths of one percent, Sherry. Yeah, Heidi, of course, we continue to watch the rotation potentially here across Asia as well. We saw that big rotation out of tech into U.S. financials. But the sequencing of course, of some likely IPOs to come will be so important for the tech trade. Starting with SpaceX, it set out its IPO pitch to retail investors with a video in which CFO.

Analysis

The market is currently experiencing a broader AI risk rally, with crude oil trading flat amid geopolitical tensions surrounding a ceasefire involving Israel, the U.S., and Lebanon. Japan's Nikkei 225 is set to open down by half a percent, while S&P futures are softer by three-tenths of one percent, indicating a cautious sentiment as investors rotate from tech to financials.

16:42
PDT

Broadcom has a strong portfolio in semiconductor products, particularly for AI chips.

Broadcom OpenAI Google Gemini Alibaba AI

– Demand for AI networking solutions is described as massive and growing.

– The company prioritizes strategic customer relationships for sustainable growth.

– Investment in AI technology is seen as a long-term commitment.

– Broadcom's approach may enhance customer loyalty and recurring revenues.

AI technologysemiconductor marketstrategic partnerships

▸ Full transcript

Create competition for you there. Well, we do business in a very, I mean we're very fortunate. I use it very truthfully, not tongue-in-cheek. We have been in semiconductor for 20 years and we have accumulated a portfolio of about 17 semiconductor product divisions in specific core areas where we are literally number one or we're not in. We're number one and we continue to invest, and about five or six of those divisions happen to be very important in creating AI chips and AI clusters. So it all became that way. And one of them is networking, as you say, for switching gear. And that's taking off like a rocket. But we also try to be, as we always have been, when we sell our products, to be very, I like to call it, strategic. We look at the customer, are they using it for a particular purpose? Are they sustainable? Do they want not just one generation, but the next and the next, sustainable? And so we prioritize our products to those kinds of strategic customers. And demand, as I said, for AI and AI networking today is just massive. So it's okay for us that we've such strength and the way we look at this.

Analysis

Broadcom is strategically positioned in the semiconductor market, particularly in AI chip production, with significant demand for AI networking solutions. The company emphasizes a sustainable approach to customer relationships, focusing on long-term partnerships and product generations, which is crucial as AI technology continues to evolve rapidly.

The insights reveal that while Broadcom is experiencing massive demand for AI-related products, the emphasis on strategic customer engagement and sustainability may provide a competitive edge. This approach could lead to stronger customer loyalty and recurring revenue streams, positioning Broadcom favorably in a rapidly changing technological landscape.

16:40
PDT

Enterprise AI usage is still developing.

Broadcom Alibaba CIOs OpenAI Google AI

– Companies are focused on reducing token costs.

– There is a strong belief in AI's potential for ROI.

– Leaders are cautious but optimistic about AI tools.

– Learning curve exists for effective AI utilization.

AI adoptioncost managemententerprise productivity

▸ Full transcript

The list of Alibaba's, Quinn, are you seeing that at all from your vantage point? I mean, from my, one I've heard, I can't say we're doing it here in Broadcom, but one I've heard a lot of, and I assume you hear from the same source, a lot of company leaders, CIOs of companies talking about, hey, you know, we're trying to find ways to reduce token costs and all that. And maybe they are ahead of the game where we are. But my sense of enterprise usage of AI was still at the early innings of this game. And I think we're still trying to learn what we can get out of this phenomenal tool that we have created and continue to enhance and improve with each succeeding generation. So from my personal viewpoint, as I said earlier, and from the experience running at Broadcom, yeah, I don't want my guys to go nuts over spending on tokens. But on the other side, if you can create value out of it, and that you have a return on investment that you otherwise could not, why stop? And this is not going to a video arcade when we...

Analysis

Enterprise usage of AI is still in its early stages, with many companies focused on reducing token costs while exploring the value these tools can provide. The sentiment among leaders is cautious yet optimistic, as they recognize the potential for significant returns on investment through effective AI utilization.

Smart money should note that while there is a push to manage costs, the underlying belief in AI's transformative potential remains strong. Companies are still learning how to leverage these tools effectively, indicating a longer-term growth trajectory for AI adoption in enterprises.

16:38
PDT

M&A distractions may hinder focus on generative AI growth.

Google Nvidia Broadcom OpenAI Entropic Microsoft AI

– Insatiable demand for AI compute capacity is a priority.

– Finding suitable acquisition targets is challenging.

– Internal development in AI may yield better returns than M&A.

– Companies should avoid 'bright, shiny objects' in strategy.

generative AIM&A strategyorganic growth

▸ Full transcript

My revenues would create over $50 billion per year annualized on revenue. I'm looking around at what I can buy that even comes close to that. And that's the tricky part. I mean, it's a distraction. All M&As are distractions to acquire, go to regulators, further distractions to integrate. Another year. Meanwhile, organically, this phenomenon we call generative AI and our ability to ship them picks and shovels, the compute capacity into this demand, which is almost insatiable, makes it very hard to choose M&A over focusing and succeeding in generative AI compute. Is there any area where you think you might want to sort of make an exception to this, whether it's maybe photonics, just to name one area? Photonics, or you mean optics? I'm just throwing out anything. Yeah. We ran a business. I ran a business for 20 years. I tried to, very hard, I know, try to avoid bright, shiny objects.

Analysis

The speaker emphasizes the challenge of pursuing mergers and acquisitions (M&A) while focusing on the rapidly growing demand for generative AI compute capacity. They highlight the difficulty of finding suitable acquisition targets that can match their revenue goals, suggesting a strategic pivot towards organic growth in AI technology instead.

A key insight is the recognition that the insatiable demand for generative AI tools may outweigh the potential benefits of M&A, indicating a shift in focus towards enhancing internal capabilities. This suggests that companies prioritizing generative AI may gain a competitive edge, as traditional M&A strategies could distract from capitalizing on this emerging market.

16:33
PDT

AI tools can drastically improve engineering productivity.

Broadcom OpenAI NVIDIA Microsoft Opus 4.7 AI MSFT

– Training is essential for maximizing the effectiveness of AI applications.

– Broadcom's partnership with OpenAI is crucial for AI chip development.

– Return on investment is a key consideration in AI tool adoption.

– Challenges in partnerships may affect market dynamics.

AI productivityAI chip developmentinvestment strategy

▸ Full transcript

They do. Now, a big part of it is when you use a tool like Opus 4.7 and the engineers start using it, they go through a learning process, even how to use it. You can't get a tool to be very productive at the start, but as you keep using it fairly and you use it long enough, you get very good at it. And then the tools become much more productive. As you get much more productive, just think about it. You can get one great, very senior engineer to produce an application design in one week, what you would, otherwise, take 10 engineers, which we pay at $300,000 a year, and take them three months to produce the same thing. The return on investment is still pretty compelling. So to say we're throttling probably is a question of return on investment and what application you're using. But it is also been able to be trained to be able to use it better and better. Last year you announced a landmark agreement to work on AI chips with OpenAI. Could you give us an update on where things stand in bringing that to fruition, in particular addressing what another publication wrote about maybe some snags there, and you're wanting Microsoft to.

Analysis

The discussion highlights the significant productivity gains from using advanced AI tools like Opus 4.7, which can enable a single senior engineer to achieve what would typically require ten engineers over three months. This shift in productivity underscores the importance of training and adaptation in leveraging AI technologies effectively.

Investors should note the ongoing collaboration between Broadcom and OpenAI on AI chips, as any delays or challenges in this partnership could impact the broader AI chip market and the competitive landscape against companies like NVIDIA. The emphasis on return on investment in AI applications suggests a critical evaluation of technology adoption strategies in enterprises.

16:31
PDT

Broadcom and Google are investing in Entropic's generative AI model.

Broadcom Google Entropic OpenAI Gemini AI At Broadcom GOOGL

– Generative AI tools are rapidly evolving and enhancing productivity.

– Collaboration among tech giants indicates confidence in AI's future.

– AI tools are outperforming traditional engineering methods.

– The landscape of enterprise productivity is shifting due to AI advancements.

AI investmentproductivity enhancementtech collaboration

▸ Full transcript

We are making a bet on Entropic. We've been working with Google too, jointly doing that. I guess we're not just making a bet on Entropic and its business model; we're also making a bet that generative AI would take off in a fairly substantial way, particularly among enterprises, as Entropic has shown. That's a pretty good reason for it, though when it started a year ago, I knew probably a fraction of what I know today. What I know today would be a fraction of what I'll know in six months' time. These things are changing very fast. The tools we see coming out of companies like Entropic, and the same applies to OpenAI and Gemini out of Google, are phenomenal in terms of what they can achieve to help productivity. At Broadcom, we use these tools for engineering design and code assistance, and it's remarkable what can be achieved in terms of enhancing productivity—more than enhancing productivity; I think even making product designs that are probably better than what our engineers could do. And these are very good engineers that we have.

Analysis

Broadcom and Google are making a significant bet on Entropic and its generative AI business model, anticipating substantial enterprise adoption. The rapid evolution of AI tools is enhancing productivity and product design, surpassing traditional engineering capabilities.

Smart money should note the accelerating pace of AI development and its implications for productivity across industries. The collaboration between tech giants like Broadcom and Google signals a strong belief in the transformative potential of generative AI, which could reshape competitive dynamics in tech and engineering sectors.

16:29
PDT

Entropic's collaboration with Google is pivotal for AI compute capacity.

Entropic Google NVIDIA AI GOOGL

– The generative AI market is gaining traction with enterprise applications.

– Investors should monitor the demand for AI-driven coding tools.

– The success of this partnership could influence future tech investments.

– There is a notable reliance on capital for chip and compute resources.

AI investmententerprise softwaretech partnerships

▸ Full transcript

In the ways that these foundation model builders are obviously in great need of capital in order to finance their needs for chips and the compute that are needed to build and develop. Can you talk a little bit about the way that that relationship is being structured and financed and the provisions that you are having to take to kind of protect yourself against downside? How concerned are you about the end user demand materializing and enabling them to meet their commitments? I frankly think in this particular case, we were partners with Google to provide compute capacity through TPUs, which we co-designed with Google for Entropic. And frankly, there's no shortcut about it when we first started almost a year ago now, which is basically a leap of faith that Entropic and generative AI and Entropic through its business model of addressing enterprises with code assistance and coding tools would make a difference. We went in on that leap of faith and I guess to date that was a great bet. They do see.

Analysis

Entropic's partnership with Google to provide compute capacity through TPUs is seen as a significant leap of faith in the generative AI space, with early indications suggesting it was a wise investment. The focus on enterprise coding tools highlights a growing demand for AI-driven solutions in business operations, which could reshape the tech landscape.

16:27
PDT

Google is focusing on developing new technologies to compete with Nvidia.

Google Nvidia Marvel GPU TPU GOOGL NVDA

– The company is leveraging smaller partnerships to enhance its product offerings.

– Nvidia's continuous innovation poses a significant challenge for Google.

– The tech sector is witnessing a shift towards rapid innovation and diversification.

– Strategic pivots in product development are crucial for maintaining market relevance.

tech competitioninnovation strategy

▸ Full transcript

Saya rasa itu adalah sebab saya telah melakukan ini dengan berjaya. Itu yang kita lakukan setiap tahun, setiap masa. Kita ada banyak perniagaan produk, setiap yang kita terbaik dalam apa yang kita lakukan. Dan kita baru-baru mencari. Dan esasinya, anda cuba mengajar perniagaan. Pernahkan perniagaan sendiri yang Google cuba membuat, yang cuba membuat diri sendiri, dengan bantuan kejadian yang lebih kecil, seperti Marvel, atau media yang begitu, mereka kata mereka seperti angkut-biter. Tapi mereka bekerja untuk Google untuk mencari kawasan pelanggan. Jadi kami berjaya mengenai pelanggan yang saya sendiri, dalam bahagian yang berbeza, dan ideanya adalah untuk dapat membuat produk yang berbeza dan teknologi yang menyebabkan apa yang mereka ada. Dan semua ini sangat bagus. Ia telah membantu dengan sebab kompetitor, kompetitor real yang mencari semua ini adalah GPU dari Nvidia. Dan sejauhnya, Nvidia terus mengeluarkan generasi, setelah generasi yang adalah teknologi superb, Google perlu membuat teknologi yang sangat berguna untuk menggantikan itu. Dan itu sebabnya kita datang. Ya. Pada proses TPU, ia cukup bergurau. Saya minta jika ada...

Analysis

Google is actively developing new technologies to compete with Nvidia's superior GPU offerings, indicating a strategic pivot in their product development. The focus on creating diverse products and leveraging smaller partnerships suggests a shift towards more innovative solutions in the tech landscape.

Smart money should note that Google's competitive strategy hinges on its ability to innovate rapidly in response to Nvidia's advancements. This could signal a broader trend in the tech sector where companies must continuously evolve to maintain market relevance amidst fierce competition.

16:23
PDT

Strong recent non-farm payroll reports contrast with negative market sentiment.

Meta Alexander Wang Bloomberg Nuvine NFP AI Ann Marie The May San Francisco Daniella Amadeus PRIVATE META

– Meta's focus on AI scaling indicates a shift in investment strategies.

– Labor market dynamics may influence corporate hiring strategies.

– Technological advancements could reshape portfolio allocations.

– Investor sentiment may not align with underlying economic data.

labor market dynamicsAI investmenteconomic indicators

▸ Full transcript

Finding opportunity today to shape how portfolios are built for tomorrow. Nuvine, invest like the future is watching. It's jobs day and Bloomberg has the report under surveillance. Gearing up for the latest jobs report. Why do we see nothing but doom and gloom on jobs? The last two headline reports from NFP have been really, really strong. Today, Jonathan, Lisa, Ann Marie, and Mike will bring you crucial data and expert analysis at terminal speed. Things really are not tiered in the labor market. Will we see firms have a smaller footprint when it comes to employees? The May jobs report today on Bloomberg. This is, in many ways, a year where all of the labs are dramatically scaling up their models. And we are on, we think, a much faster trajectory to do so. Meta's chief AI officer Alexander Wang speaking at the Bloomberg tech event in San Francisco. We also heard from Anthropics co-founder and president Daniella Amadeus saying that the high cost of developing...

Analysis

The upcoming jobs report is generating significant attention, with recent non-farm payroll data showing strong performance despite prevailing pessimism in the labor market. Meta's chief AI officer highlighted the rapid scaling of AI models, indicating a shift in technological investment priorities.

Smart money should note the disconnect between strong job data and market sentiment, suggesting potential opportunities in sectors tied to labor and technology. The emphasis on AI development could signal a transformative phase for companies investing heavily in automation and innovation.

16:21
PDT

Daley sees potential in AI but notes current lack of widespread productivity gains.

Mary Daley Bloomberg President Trump Iran Israel Lebanon Mika Solna Dubai Ayo Kamatsu TGR-HAS F1 TGR Supreme Court PRIVATE

– Businesses are expected to take time to fully integrate AI into their processes.

– The White House is concerned about economic struggles impacting public perception.

– President Trump's foreign policy may be influenced by domestic economic pressures.

– Midterm elections could further complicate the administration's legislative agenda.

AI productivityeconomic pressuresforeign policyDubai investment

▸ Full transcript

Issue to the president. I know that this is something that he has really promised on day one. Of course, he has had blowback from legal challenges from the Supreme Court. But again, the White House really has to factor in how this is going to impact people's pocketbooks right now at a time when there's a lot of economic struggle for millions of Americans out there. Bloomberg Government Senior White House reporter Mika Solna there in Arlington, more ahead on the Asia trade. This is Bloomberg. Why are global businesses doubling down on Dubai? Even as recent events test the region, business confidence in Dubai is holding up and global firms are leaning in. That confidence is rooted in fundamentals, growth, fiscal strength, and sector momentum. Dubai remains a hub for investment, finance, talent, and technology, turning global shifts into a catalyst for institutional confidence. As motorsport pivots to a new hybrid era, the math has changed. Ayo Kamatsu and his TGR-HAS F1 team are here to create a winning formula. In order to do that, people cannot be afraid of failure. Everyone needs to put their opinion on the table. It doesn't matter if I don't agree.

Analysis

San Francisco Fed President Mary Daley expressed optimism about the potential for productivity gains from AI, although she noted that businesses have yet to report transformative changes. The timeframe for significant economic transformation is anticipated to be next year or the year after, highlighting a cautious yet bullish outlook on AI's impact on the economy.

Despite rising inflation, the White House is concerned about the economic struggles facing Americans, which may influence President Trump's foreign policy decisions. The administration's focus on economic factors suggests that domestic pressures could shape international negotiations, particularly as midterm elections approach.

16:18
PDT

President Trump's approval ratings are declining, impacting his political leverage.

President Trump White House Congress Cuba Middle East Oval Office

– Economic concerns are influencing foreign policy negotiations.

– The midterm elections are a critical factor for the administration's agenda.

– Increased pushback from Congress on military actions is evident.

– The administration's communication with Congress is under scrutiny.

political instabilityforeign policy impactmidterm elections

▸ Full transcript

Different, at least comfortable with the speed at which things are progressing despite domestic economic pressures, the price of gas, going into the summer driving season, getting ever closer to November midterms. Is this because of that situation where someone's saying that he's essentially already a lame duck president? You know, the president was asked about this today in the Oval Office, if the domestic concerns are a factor in the way that he's approaching these negotiations. I think the White House is extremely concerned privately about the state of the economy. And we are seeing President Trump's polling numbers, his approval rating continues to fall. I think some polling is showing it's below—it's high 30s, below 40 percent, and five months out from the midterms, where the president really has to have Republicans hold the house. Otherwise, his legislative agenda is essentially out the window. So, I think it's a really, really big factor whether or not the president is going to publicly say so or not at this time. You know, he's getting pushback, of course, in that House vote against the war. At the same time, his foreign policy ambitions don't seem to have been limited, right? He's saying that he'll handle Cuba after the Middle East situation is sorted. Yeah, and we're seeing increased pushback from the Hill, I think, when it comes to the president's actions, not just in the Middle East, but around the world in terms of how was the administration communicating with Congress that has historically had a say when the U.S. gets involved, takes military actions around the...

Analysis

The White House is increasingly concerned about the state of the economy as President Trump's approval ratings fall below 40%, just months before the midterms. This economic pressure may influence his foreign policy negotiations, although he continues to assert his ambitions in the Middle East and beyond.

Smart money should note the disconnect between public statements and private concerns within the administration, as economic factors could lead to shifts in policy that impact both domestic and international markets. The upcoming midterms will be critical for Trump's legislative agenda, making economic stability a priority.

16:16
PDT

President Trump optimistic about Iran deal despite stalled talks.

President Trump Iran Israel Lebanon U.S. troops Mika Solna And Iran Lebanese Health Ministry White House So Mika

– Israeli strikes in Lebanon result in casualties, indicating escalating conflict.

– U.S. attempts to broker peace complicate negotiations with Iran.

– President's red line on U.S. troops may lead to increased military engagement.

– Market sentiment may be affected by the disconnect between administration optimism and ground realities.

geopolitical riskmilitary conflictU.S. foreign policy

▸ Full transcript

I think we're doing very well, but we're going to see if we're going to win one way or the other. We're going to win on paper or we're going to win militarily. One way or the other, it's going to be militarily or on paper. Well, President Trump continues to claim a deal with Iran is close, even as Tehran says talks have stalled. And Iran, back to Asperger, has rejected a truce between Israel and Lebanon, with the Lebanese Health Ministry reporting at least eight people killed in the latest Israeli strikes. Let's get more with our senior White House reporter Mika Solna. So Mika, all evidence seems to point to the stalemate continuing or even a worsening of the situation. But the president is still saying that soon, over the next week, previously had said perhaps even a deal by this weekend. Yes, absolutely. I mean, we are seeing this conflict go on for four months now after the administration initially promised about five weeks for a conclusion into their military operation in Iran. We can see the talks are extremely fragile right now, and now the U.S. is trying to work simultaneously to try and also broker deals between Lebanon and Israel, which complicates things to a great extent. And I think the president drew a red line today saying if U.S. troops are attacked, then that's going to continue the fighting. But right now he says things are still making progress in his view.

Analysis

President Trump claims a deal with Iran is close, despite Tehran stating that talks have stalled, while the situation in Lebanon worsens with recent Israeli strikes resulting in casualties. The U.S. is attempting to broker deals between Lebanon and Israel, complicating the fragile negotiations with Iran.

Smart money should note the potential for escalating military conflict, as President Trump has drawn a red line regarding U.S. troop safety, which could impact geopolitical stability. The administration's optimistic outlook contrasts sharply with the reality on the ground, indicating a disconnect that could affect market sentiment.

16:11
PDT

Businesses are not yet seeing transformative productivity gains from AI.

Mary Daley San Francisco Fed AI inflation economy LLM Our Fed Enda Karan San Francisco Fed President Bloomberg Tech FEDFUNDS PRIVATE

– Fed President Daley is optimistic about future economic transformations.

– The timeline for realizing AI benefits may extend into next year.

– Inflation is rising, impacting the likelihood of future rate cuts.

– The Fed's policy direction may shift based on evolving economic conditions.

AI productivityFed policyinflation outlook

▸ Full transcript

Our Fed and Economy report, Enda Karan there in Washington for us. Let's take a little bit more of a listen from that exclusive conversation with the San Francisco Fed President Mary Daley at the Bloomberg Tech event. What I think of it is as sure it's possible that businesses are looking for cost savings and they hire fewer workers and they do just as much because they're using an LLM assistant to help, but we just haven't heard from businesses that they're seeing transformative, ongoing productivity gains yet, and they want to always underscore yet. And so then I said, well, what's the timeframe? And they said, next year, year after, because what we know is it isn't just about getting a model and using it for things or an agent, it's about transforming your business processes so that you really take advantage of things we don't even think about today. What can be done differently that will transform the economy? So you can definitely find a single business or sectors who are using it and seeing the gains. But we haven't seen that across the economy going forward. But I'm pretty bullish. I see the possibilities and I'm hearing more and more that people are seeing early rewards and really recognizing that next year is the litmus test. Look, so you've kind of established where we sit right now. Inflation continues to rise. How likely or unlikely would that make a rate cut in 2026? How do you tie the two together from this junk?

Analysis

The San Francisco Fed President Mary Daley highlighted that while businesses are exploring cost-saving measures through technology, transformative productivity gains from AI have yet to be widely realized. She remains optimistic about the potential for future economic transformation as businesses adapt their processes over the next couple of years.

Smart money should note that the current lack of widespread productivity gains suggests a lag in the economic impact of AI, which could influence Fed policy decisions. As inflation continues to rise, the timeline for potential rate cuts may be pushed further out, complicating the outlook for monetary policy.

16:09
PDT

U.S. jobs data expected to show solid growth.

Broadcom Federal Reserve Kevin Sherri Annan Anna Curran U.S.manufacturing construction retail leisure healthcare FEDFUNDS

– Manufacturing and construction sectors driving job growth.

– Market pricing in a 70% chance of Fed rate hikes by year-end.

– Fed officials shifting focus from weak jobs to inflation concerns.

– Upcoming inflation data could impact Fed policy decisions.

Fed policyemployment growthinflation concerns

▸ Full transcript

The U.S. labor market is boosting manufacturing, which is driving some of the jobs growth. However, it's broader than that too; it's not just government hiring, but also expected growth in construction, retail, leisure, and healthcare. If the numbers come in as expected tomorrow, it should be a solid set of employment data. It's incredible how in just a few months we've shifted from the narrative of Fed rate cuts to a potential Fed rate hike, with apparently 70% odds priced in by the markets by the end of the year. It's not surprising we're getting some conflicting signals from Fed officials. Right now, policy is in a good place. We are prepared to respond either way, depending on what the economy brings. However, giving more forward guidance about what's possible could be misleading, as we need to wait for the economy to evolve. Everybody wants to resolve the uncertainty today, but that could be a mistake, as it may close off our minds to what we really need to look at. Looking at the fundamentals, the direction the Fed could take is clear. We've had a dramatic turnaround here at the beginning of the year; a few months ago, the big concern among policymakers was the jobs market, which they feared was too weak. That's all changed now, as it seems like every day an official comes out expressing more concern about inflation. We will have inflation data next week, just one week before the all-important Fed meeting with the new chairman.

Analysis

The U.S. labor market is showing signs of strength, with expectations for solid employment data driven by growth in manufacturing, construction, retail, leisure, and healthcare sectors. This shift in narrative from potential Fed rate cuts to a 70% probability of rate hikes by year-end indicates a significant change in economic outlook and Fed policy considerations.

Smart money should note the Fed's evolving stance, as officials express increasing concern over inflation rather than a weak jobs market. The upcoming inflation data next week will be crucial, occurring just before the Fed's important meeting, potentially influencing market expectations and policy direction.

16:06
PDT

85,000 jobs expected to be added in May.

Anna Curran Sherri US construction leisure manufacturing FEDFUNDS

– Unemployment rate projected to hold at 4.3%.

– Broad hiring anticipated across multiple sectors.

– Manufacturing sector showing signs of revival.

– Potential shift from stabilizing to improving jobs market.

labor market recoveryemployment trendseconomic momentum

▸ Full transcript

Coming out on Friday, US time, economists are now expecting 85,000 jobs to be added in May, with the unemployment rate holding at 4.3%. Let's go to Washington and our Fed and Economy reporter, Anna Curran. We have seen more solid upside surprises when it comes to US data. What are we seeing in the labor market? Well, we are expected to see fairly solid numbers tomorrow, Sherri, like you mentioned. If they come in around consensus, it would mean that on a three-month average, it would be the strongest payrolls data in a year, which is clearly a positive sign. At the same time, unemployment is holding steady, and it's expected the breadth of hiring will be quite wide, not just in the health sector, which we've kind of known about, but also keep an eye out for construction, the leisure sector, and interestingly, the manufacturing sector showing signs of revival over the past few months could add some workers as well. So if the numbers play out the way the consensus projects, then tomorrow we may not be talking about a stabilizing US jobs market, but the conversation might move on to perhaps an improving jobs market. Not a tight one or anything like that; there are lots of nuances, but certainly an improving jobs market. What do we see when it comes to the health of small business hiring and the impact of tech as well?

Analysis

Economists are projecting an addition of 85,000 jobs in May, with the unemployment rate remaining steady at 4.3%. The anticipated payroll data suggests a potential shift from a stabilizing to an improving jobs market, with broad hiring expected across various sectors including construction, leisure, and manufacturing.

The consensus indicates that the labor market is not just stable but showing signs of revival, particularly in manufacturing. This could signal a shift in economic momentum, suggesting that small business hiring may also benefit from this broader recovery, influenced by technological advancements.

16:02
PDT

U.S. jobs report may signal Fed tightening.

U.S.Federal Reserve Dow Broadcom Bank of Japan Brent crude New York traded crude Israel Lebanon Hezbollah AI New York FEDFUNDS DXY CL=F

– Dow hits all-time highs amid sector rotation.

– Broadcom's outlook affects chip maker sentiment.

– Yen remains under pressure despite potential rate hikes.

– Oil prices decline amid geopolitical uncertainties.

Fed policyAI sector concentrationgeopolitical riskinterest rate outlook

▸ Full transcript

We're also getting that monthly employment report as well, the Friday jobs numbers from the U.S. at a too tight labor market potentially increasing the risk of Fed tightening as well. This is a picture as we look at cost-be features looking softer by eight-tenths of 1%. Some really interesting views when it comes to where this leverage proxy essentially for the global AI cycle goes, right? There's rising risks it seems of some sort of reversal given how concentrated we've seen that cost-be rally being in really just a handful of these stocks. The dollar yen is now pretty comfortably at that 160 level, but as much as we're on intervention watch, we're hearing also that the Bank of Japan is mulling hiking interest rates this month as well as later in the year. So that brief gain in the yen though didn't really hold on for very long. We do have that broader dollar retreat as we're also watching the situation when it comes to short-term yields taking a dip as well. Oil prices, the city as we continue to monitor the uncertainty, the ceasefire of course between Israel and Lebanon really depended on if Hezbollah also agrees to stop those hostilities. That's a pretty big if at this point. Brent crude though still lower by almost 3% there in the last trade and New York traded crude looking a little bit to the downside. Sydney stocks looking like we might actually buck that regional trend with a little bit of positivity at the open. In the meantime though, the Dow take a look at that hitting at all-time highs, more straight seeing that rotation out of chip makers, Broadcom's underwhelming outlook.

Analysis

The U.S. labor market remains tight, raising concerns about potential Federal Reserve tightening, as indicated by the upcoming monthly employment report. Meanwhile, the Dow has reached all-time highs, but there is a notable rotation out of chip makers following Broadcom's disappointing outlook.

Smart money should note the concentration risk in the AI sector, as the cost-be rally is heavily reliant on a few stocks. Additionally, the Bank of Japan is considering interest rate hikes, which could impact the yen and broader market dynamics.

16:00
PDT

Broadcom's outlook has negatively impacted chip makers.

Broadcom Hock Tan Dow U.S.SpaceX Anthropic Apollo AI CEO IPO Guy Johnson Anna Edwards PRIVATE

– The Dow's all-time high reflects strong market sentiment.

– U.S. jobs data is anticipated to show solid growth.

– SpaceX is preparing for a $75 billion IPO with ambitious plans.

– The AI trade continues to influence market dynamics.

semiconductor marketU.S. economic dataIPO activityAI investment trends

▸ Full transcript

Open across Europe. I'm Guy Johnson. I'm Anna Edwards. And I'm Tom McKenzie. This is your Opening Trade Only on Bloomberg, bringing you up to date on the news whenever and wherever it happens. I'm Sherri Annan Sol, and this is Plum Bar. This is Asia Trade. I'm Sherri Annan in Tokyo. The top story this hour: a cautious open ahead for Asia's investors drives a rotation out of chip makers after Broadcom's disappointing outlook. The Dow hitting an all-time high ahead of U.S. jobs data expected to show solid growth. Broadcom CEO Hock Tan joins us live this hour at the Bloomberg Tech Summit in San Francisco. We also have conversations with Anthropic and Apollo. Plus, SpaceX makes a video pitch to retail investors for its $75 billion IPO, outlining bold ambitions including data centers in space. I'm Heidi Stradewalds in Sydney, taking a look at the setup for trading across Asia. As you mentioned, it's looking like a bit of a muted start to the end of this trading week, one that has been filled with some highs and lows when it comes to the continuation of this AI trade.

Analysis

Asia's investors are facing a cautious open as a rotation out of chip makers follows Broadcom's disappointing outlook. The Dow has reached an all-time high ahead of U.S. jobs data, which is expected to indicate solid growth.

15:55
PDT

Preference for one-on-one basketball indicates a competitive mindset.

Kobe Bryant Kevin Durant Orlando Magic Buffalo Bills T-Mac Gen-X Gen-Sports OBL NBA KD MAC New York

– Dream team includes Kobe Bryant and Kevin Durant, highlighting star power.

– Interest in the Orlando Magic and Buffalo Bills reflects personal investment ties.

– Potential for increased focus on legacy players in sports investments.

– Emphasis on personal connections to teams may influence market sentiment.

sports investmentlegacy players

▸ Full transcript

Yes, sir. Yeah. Yes, sir. Yeah. Interesting. All right. So we're going to wrap this up with our rapid fire. This is going to be a good one. That's dueling. Really good questions. All right. So just, you know, first thing that comes to your mind, if you had to pick one to play for the rest of your life, one-on-one or 5-on-5? For the rest of my life? Yeah. One-on-one. Build your dream OBL roster with NBA players from any era. Who would you pick? Oh, that's easy. Myself, Kobe and KD. Oh, wow. I would not want to play against that team. All right. Which current NBA player would win a league-wide one-on-one tournament? KD. KD. KD. Best one-on-one basketball city? New York. Who's your dream OBL investment partner? I have him. Gen-X Gen-Sports. All right. It’s A-Rod. What team do you want to see win a championship more than anything? It's supposed to be rapid fire, buddy. Stop me on that one. Should be easy for you. No, not really, because I played for three franchises that I did to my heart, but I'll say Orlando Magic. Yeah. Any sport. Oh, any sport. Oh, Buffalo Bills. There you go. There you go. There you go. I got a few more than you have. I know it's any sport. All of the money, baby. Listen, Buffalo Bills probably a better bet than the Orlando Magic, unfortunately. I was confused why he wasn't saying anything. I did hear any sport. Yeah, there you go. And he's for it. Well, T-MAC, this has been amazing. I really, you know, as we got.

Analysis

The discussion highlighted a preference for one-on-one basketball over team play, indicating a personal approach to competition. Additionally, the guest expressed a desire for the Orlando Magic and Buffalo Bills to win championships, reflecting a connection to his past teams and current investments.

Smart money should note the emphasis on building a dream team with iconic players, suggesting a potential trend in valuing legacy and star power in sports investments. The mention of specific teams like the Orlando Magic and Buffalo Bills may indicate market sentiment around their future performance and investment opportunities in sports franchises.

15:51
PDT

The OBL platform is designed to support emerging basketball talent.

OBL Kevin Garnett Kobe Bryant Tim Thomas Trace McGrady LeBron James Lamar Odom ABCD New Jersey Tracy Mc Bron James

– The speaker's personal journey highlights the impact of exposure and opportunity in sports.

– Grassroots initiatives are gaining traction in professional sports development.

– Investment in talent identification platforms could yield high returns.

– The evolution of sports recruitment is shifting towards inclusivity.

sports developmenttalent identificationgrassroots initiatives

▸ Full transcript

And we're going to do a little pitch session here. But go ahead. So OBL came from, it was all a dream. Son of a Carol started ABCD camp in Teaneck, New Jersey. Yeah. Kevin Garnett, Kobe Bryant, Tim Thomas, Tracy McGrady, LeBron James, like all the greats. And I was an unknown basketball player like my junior year, only known within my region in Florida. Outside of that, no one knew who I was. After my junior year, I get invited to this camp. I'm the last guy invited. I keep hearing about Lamar Odom, so I go to this camp and he's the first player I play and I held my own. So throughout this camp, I'm holding my own, right? Unknown basketball player, who was this kid from Florida? Well, I leave that camp and a month later, I'm the number one player in the country. So I went from unknown to the number one player in the country, now it talks about, Damn, this kid is actually good. Kobe Bryant just came out the year before him. Kevin Garnett came out the year before him. So now that talk about being a draftee in the 1997 draft straight out of high school. That platform did it for me. I'm creating this OBL platform for those guys that still have a deep love and passion for the game of basketball. And my proof of concept trial was I went to six cities. I'll invite 32 players and I'll take eight players, the best players.

Analysis

The OBL platform aims to elevate basketball talent by providing opportunities for lesser-known players to showcase their skills, similar to how the speaker transitioned from obscurity to the top of the rankings after attending a prestigious camp. This initiative reflects a growing trend in sports where grassroots development is increasingly recognized as a pathway to professional success.

Smart money should note the potential for investment in platforms that democratize access to sports opportunities, as they can yield significant returns by identifying and nurturing untapped talent. The success of such initiatives could reshape the landscape of sports recruitment and development, creating new revenue streams in the sports industry.

15:47
PDT

Basketball's popularity is surging in China.

Houston Rockets Sacramento Kings Michael Jordan Kobe Bryant Dale Harris USDCNH

– Economic opportunities in sports are expanding globally.

– Mentorship from established players can provide valuable insights.

– Trusting the process is crucial for success.

– The evolution of basketball presents new investment avenues.

global sports marketeconomic opportunitymentorship in sports

▸ Full transcript

You know, I've seen a trajectory of that sport just trending up. Now you're talking about over 350 to 400 million people playing basketball in China. That's the evolution of basketball. I was part of the team that played with the Houston Rockets and the Sacramento Kings, opening up the China game. I was part of the first global China games in 2004. It must have been incredibly eye-opening from an economic opportunity perspective. I'm still capitalizing off of it. Really? To this day. Absolutely, man. We talk about having a whole continent on your back and carrying that. Tia, I want to go back to you. You mentioned Michael Jordan and Kobe Bryant. Did you ever have conversations with Michael or Kobe that helped you out? If so, what did they tell you? So I had conversations with Cole. Cole was like my brother because he came out a year early before me out of high school. I was struggling my rookie year. Cole struggled his rookie year because Dale Harris, for some reason, wanted to make it hard on the high school kid. He went through it, then I went through it. There was a time when I was like, man, I have to talk to someone that has actually been through this. Let me call my brother Cole. We had extensive conversations, just stand and trust the work, Mac, trust the work. It's going to pay off. You know who you are and just having no...

Analysis

The basketball market is experiencing significant growth, with over 350 to 400 million players in China, indicating a strong upward trajectory. Conversations with basketball legends like Kobe Bryant emphasize the importance of perseverance and trust in one's work, which can lead to long-term success in the sport and beyond.

15:44
PDT

Investing in sports franchises can open new networking opportunities.

Buffalo Bills Vince Carmelo Maria NBC NBA TV GC=F

– Character and humility are critical for success in elite business environments.

– Personal relationships can significantly impact investment decisions.

– The nostalgia associated with sports can enhance engagement and passion.

– Ownership in a franchise can lead to increased visibility and influence.

sports franchise investmentnetworking opportunitiescharacter in business

▸ Full transcript

And I'm like, cause this is for us to capitalize off of this energy and everything that's happening for us. So it's like Buffalo Bills, I call him. I told you I invested in a lot of people, others' ideas, but it's now it's like I'm taking my own chances and being able to do this with my family. So it's been, man, that one of the greatest things, decisions that I've made to actually just be involved with my cousin and take this ride with him. Yeah, see, you're lucky, because you found a cousin like Vince. I'm Dominican. I find cousins both times that I never wanted to buy two things. I'm just telling you about one shit. I found a million though. Now, I saw you guys this past Sunday, and I'm such a big fan of that show. You guys are killing it. Appreciate it. First of all, you guys look good, you sound good. Carmelo's great. Maria's a star. Yeah, yes she is. So this is the NBA on NBC. Pre and post game, right? And I love how you guys go on location, which is kind of cool. What, first of all, you enjoying it? I never thought I would do TV. And with NBC, it was like, man, this is like the golden era. This is what I grew up on in the 90s, right? When I fell in love with basketball, this like watching NBC back in the day would made me want to be a basketball player. And I played on NBC. So that nostalgia feeling just coming back. And now I get to talk about the game that actually raised me. It was just, it was awesome.

Analysis

The conversation highlights the personal and financial commitment involved in becoming a minority owner of the Buffalo Bills, emphasizing the excitement and opportunities that come with ownership. The speaker reflects on the importance of character and humility in business dealings, noting that financial success alone does not guarantee acceptance in elite circles.

Smart money should recognize the potential for networking and influence that comes with ownership in high-profile franchises like the Buffalo Bills. Additionally, the emphasis on personal relationships and character in business dealings suggests that investors should prioritize integrity and reputation in their partnerships.

15:39
PDT

Character and humility are essential for business success.

Tracy McGrady Buffalo Bills Jason Kelly Alex Rodriguez Terry Pagula And Jason

– Behavior in professional settings can impact opportunities.

– Learning from others' mistakes is a valuable lesson.

– Financial capability does not guarantee acceptance in elite circles.

– Networking requires both skill and personal integrity.

business conductnetworkingprofessionalism

▸ Full transcript

He brought several groups that were trying to come in and be the minority partners. So we're in the suite and I'm quiet as a mouse watching the game, but there's another partner there just loud enough, not just going crazy. And I'm sitting back, I was like, you know, I know damn well, they're not gonna allow this guy. No way, no way because of what he was portraying in that moment. Right, there wasn't a person of like being humble and just really understanding the situation. So he ended up not getting in, being part of that group. And I saw that and I was like, damn, it don't matter how much money you have, like you gotta be solid, a solid dude, a solid person to be a part of this group. And Jason, I find that to be really interesting what TMac just said, because one of the lessons that I've learned sometimes from being in those rooms and those board rooms, that you just like look around, you're like, what am I doing here? Right, I cannot believe. But sometimes more than learning what to do is sometimes you learn what not to do. That's it. And those lessons like stay with us forever. That's it. And that was that lesson for me, because that was that night when I don't even know if I'm gonna be a part of this group. But I know I can't be acting like that.

Analysis

Tracy McGrady highlighted the importance of personal conduct in business dealings, sharing an experience where a loud partner's behavior led to their exclusion from a minority ownership group. This underscores that financial capability alone is insufficient; character and humility are crucial for success in high-stakes environments.

The lesson learned from observing others in boardrooms can be as valuable as formal education. Understanding what not to do can shape one's approach to business and networking, emphasizing the significance of maintaining professionalism and composure.

15:37
PDT

Ownership in sports franchises opens unique networking opportunities.

Buffalo Bills Trey DMS David Weston Ken Rogoff Jennifer Zabasaja Tracy McGrady Terry Pagula A-R LP

– Former athletes are leveraging their status for business advantages.

– The experience of ownership provides valuable lessons in dealing with diverse personalities.

– Access to influential circles can lead to new business ventures.

– The sentiment around athlete ownership is increasingly positive.

sports ownershipnetworking opportunitiesbusiness influence

▸ Full transcript

I don't give a damn. I mean, I don't know. I don't care whether they do or they don't. I guess maybe asking in a different way, has that come to fruition that you feel like you are able to go into different rooms because you're an owner? Sure, for sure, for sure. I mean, it gives you, yeah, because everyone knows how difficult that is, right? And just anybody, I don't care how great you were on the basketball or how great you are on the field, like just anybody can't get that opportunity. Yeah. Right. So yeah, I'm looked at differently, can walk in different doors. And those doors are steady opening up. I mean, you've seen that. Yeah, there's no question. I mean, everything that T says, I've said in some interview where like I feel the same gratitude and the doors open up like wildfire. I guess my follow-up question on that is you talked about some of the benefits from being an owner and for being an LP to the Buffalo Bills. What are some of the lessons you've learned from being in that room? That's a good question. I guess certain individuals as involved in this, you know, certain people are difficult to deal with. But then you run into those people like I ran into one of our owners all-star weekend. She was actually one of the owners that went in with the group that you know we went in with and I was having some comfort.

Analysis

The discussion highlights the advantages of ownership in professional sports, emphasizing how it opens doors and creates opportunities that are otherwise inaccessible. The guests reflect on their experiences as minority owners of the Buffalo Bills, noting the unique insights and relationships gained from being part of the ownership group.

Smart money should recognize that ownership in high-profile franchises not only enhances personal brand value but also provides strategic networking opportunities that can lead to lucrative business ventures. The sentiment around ownership is shifting, with former athletes leveraging their status to gain influence in various sectors, particularly in sports and entertainment.

15:35
PDT

Tracy McGrady became a minority owner of the Buffalo Bills.

Tracy McGrady Buffalo Bills Terry Pagula

– Proactive networking was key to securing the ownership opportunity.

– McGrady felt excitement rather than nervousness about the investment.

– The trend of athletes becoming franchise owners is growing.

– Personal connections can lead to significant business opportunities.

sports franchise investmentathlete ownership

▸ Full transcript

We went to a game, and after the game, we sat with Terry Pagula. I was thinking we were auditioning, and I had to be on my best behavior to really sell this guy that I wanted to be part of this ownership group. We just casually had a conversation after the game, sitting in his office and chopping it up for about an hour. From that conversation, he asked if I wanted to be a part of this, and of course, I absolutely did—that's why I was there. I love how you were proactive and called your cousin Vince. I love how you went to a Bills game. That's really how deals are done, right? My question is, once you finish that conversation and get home, reality hits, and you know you have to write a big check. The first time I wrote a big check, I couldn't sleep for a week because we're not used to writing those types of checks. Walk me through that conversation and how nervous you were when you had to write that check and actually release your bank account. I would say this: I wasn't nervous about it because I had put in the work. My excitement overshadowed what the check was that I was writing. I'm part owner of this franchise, and my mind went to the fact that it's not just about writing this check.

Analysis

Tracy McGrady shared his experience of becoming a minority owner of the Buffalo Bills, emphasizing the importance of proactive networking and relationship-building in securing ownership opportunities. His excitement about the investment overshadowed any nervousness about writing a significant check, highlighting a mindset focused on long-term value rather than immediate financial concerns.

Smart investors should note that McGrady's approach underscores the value of personal connections in high-stakes deals, suggesting that building relationships can lead to lucrative opportunities. Additionally, his confidence in the investment reflects a broader trend of athletes transitioning into ownership roles, which may influence market dynamics in sports franchises.

15:32
PDT

Increased focus on bridging US and Asian markets in sports.

Buffalo Bills A-R China US NFL USDCNH

– Athletes are increasingly becoming minority owners in sports franchises.

– The journey of personal growth and awareness is crucial for professional success.

– International relationships are key for business expansion.

– The Buffalo Bills' minority ownership reflects a trend in sports investment.

sports investmentUS-Asian market relations

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What is that? But I looked it up and I was like, oh, this is big time. Like, this is where I need to be. And I'm driving in, man. I've never been to Switzerland. I'm driving in. I'm just amazed by the scenic route. Amazing scenery driving in. Traffic is a little, you know, backed up a little bit and I looked to my left. It's like, yo, that's A-R right there. A-R walking on the street right there. So he was the first person I saw. So I'm just flipping and sliding around. The reason why I was there, I spoke on this sports panel. And of course, I have a lot of international relationships. I do a lot of travel into China, a lot of business that I do over there. But just having conversations with a lot of powers that be, I was discussing how to bridge that gap between the US and Asian markets. It was an eye-opener. I'm in the stage of really learning business, right? He said we come from humble beginnings and that is very true for me. Everything that I've been learning at 18 years old to where I am now is just me being aware of who I am, where I come from, and wanting to learn more about me, you know, every single day. So it's interesting, one of your signature deals of late is going in as a minority owner of the Buffalo Bills. We talk about the NFL a lot on this show. Give us the origin story. How does that happen? And what are you thinking as you?

Analysis

The discussion highlights the growing interest in bridging the gap between the US and Asian markets, particularly in sports and business. The speaker emphasizes the importance of understanding one's background and the journey of learning that accompanies professional growth.

A notable insight is the speaker's recent minority ownership in the Buffalo Bills, which reflects a trend of athletes transitioning into ownership roles. This shift could signal increased investment opportunities in sports franchises, particularly as they seek to diversify ownership and engage with broader markets.

15:30
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Tracy McGrady is now a minority investor in the Buffalo Bills.

Tracy McGrady Buffalo Bills NBA NFL TV Jennifer Zabasaja Lesotho Highland Jason Kelly Alex Rodriguez Tracy Mc New York PRIVATE

– There is a trend of former athletes moving into ownership roles.

– This shift may influence team dynamics and fan engagement.

– Athlete-led initiatives could reshape franchise operations.

– Investors should watch for changes in franchise valuations.

athlete ownershipsports managementfranchise valuation

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Bringing you up to the minute geopolitical news whenever and wherever it happens. I'm Jennifer Zabasaja in the Lesotho Highland, and this is Bloomberg. 18 years old, I'm a millionaire. I've never learned anything about finances, didn't know anything about being a professional basketball player. Everything that I've been learning at 18 years old to where I am now is just me being aware of who I am, where I come from, and wanting to learn more about me. Welcome back to the deal. I'm Jason Kelly. And I'm Alex Rodriguez. And coming up on today's show, Tracy McGrady. This is a legendary, Hall of Fame basketball player, but a guy who has a lot in common with you. First of all, he's one of my favorite players of all time in the NBA. Just an incredible talent. As far as what we have in similarities, we're both from Florida. We both come from humble beginnings, and we're one of the few that went straight from high school into the pros, and now we're both part of team ownership. That's right. In your case, obviously in the NBA. In his case, the NFL. He came in as a minority investor in the Buffalo Bills. So we're seeing a lot of him in owner's suites, but also seeing a lot of him on TV. We're gonna get into that a lot more with TMac here on the deal. Tracy, what a treat to have you here in New York. We're gonna get into everything you've done throughout your career.

Analysis

Tracy McGrady, a Hall of Fame basketball player, is now a minority investor in the NFL's Buffalo Bills, highlighting a trend of former athletes transitioning into ownership roles across sports. This shift reflects a growing interest among retired athletes to leverage their wealth and influence in professional sports management.

The increasing presence of former players in ownership positions could signal a new era of athlete-led initiatives in sports, potentially reshaping team dynamics and fan engagement. Smart investors should monitor how these transitions impact franchise valuations and operational strategies in both the NBA and NFL.

15:26
PDT

Women's Club World Cup to launch in 2028.

Club World Cup US France Argentina Marta Maradona Kansas City World Cup Favorite World Cup

– Emphasis on high standards and commercialization.

– Potential for significant viewership and access improvements.

– Growing investment in women's sports infrastructure.

– Increased focus on youth engagement in events.

women's sports growthcommercialization of sportsyouth engagement

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A lot of different conversations around that. But ultimately it's like, what are we doing? I mean, like the Club World Cup for women. It's now a real thing. The first iteration will be in 2028. It's important that it's a high standard. And I've said to them, we've got to have it in a region. Hopefully, it'll be here in the US that we can commercialize it, that we can really give it what it deserves in terms of access around the world, viewership. Alright, we're gonna move to our rapid fire. Pretty easy, we'll bounce it back and forth. I'll start in the new pickup. You ready? Alright, favorite World Cup memory as a coach? France, 2019, quarterfinals. Favorite World Cup memory as a fan? Qatar, last World Cup final, amazing. France, Argentina, classic. That was a hell of a match. Storyline you're most excited about going into this World Cup? Just the debutants, the new teams, I think it's exciting. One change to the World Cup you would make tomorrow? I would put 500 tickets aside for kids, just for kids to come. Alright, that's a good one. Underrated host city for 2026. Oh, god my wife's from Kansas City so I can't say that. I don't think there is one. I think these cities are going to be amazing. Favorite player of all time? Oh, I'm Maradona, male player, Maradona. And women? Women's player, I would probably go with Marta. Marta. Team you'd like to see win a championship more than any. My team says I was...

Analysis

The Club World Cup for women is set to debut in 2028, with a focus on high standards and commercialization, potentially in the US. This reflects a growing recognition of women's sports, with significant investments and infrastructure improvements expected to enhance the game's visibility and economic viability.

15:21
PDT

Women's soccer league stability is improving with more teams and better contracts.

women's soccer WNBA

– Professionalization is leading to enhanced facilities and player standards.

– Economic growth in women's sports is reflected in rising player compensation.

– The women's game is gaining traction similar to the WNBA's trajectory.

– Increased regulation and attention are fostering a more sustainable ecosystem.

women's sports growthprofessionalization of sports

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Women's soccer, and especially women's soccer in this country, is on the right track. I think it's stability; we are in our third iteration of a women's professional league. The first two failed, so this one is now in year 13, perhaps. You're seeing the growth of it in terms of teams added; we went from 12 to now 16. You're just seeing all of the numbers go up in that. But I think it's just the professionalization of the game. At its core, if you put the players in the middle of it, it was part-time contracts, paying for their own luggage to get on planes, things that just shouldn't really happen in professional sports. Now you're seeing legitimate minimum standards imposed, facilities being specifically built for women's teams, and a lot more stability. There's a lot more attention on it, and there's a lot more regulation of the sport as well in terms of expectations and minimum standards. I can tell you, Joe, when you were speaking, I was like, wait a minute. If you're speaking about the WNBA, it was exactly the same playbook and the same traction. But I was recently at the WNBA draft, and we had the second pick. I had an opportunity to speak to a lot of the young women, and I said to a few of them, are you excited? Is your family happy? She goes, heck yeah, I'm a millionaire. I'm gonna be a millionaire. They said it with such pride, and they deserve it. I do think that the economic growth and the compensation is going to be.

Analysis

Women's soccer in the U.S. is experiencing significant growth, with the current professional league showing stability and expansion, moving from 12 to 16 teams. The professionalization of the game is evident through improved player contracts, dedicated facilities, and increased attention and regulation, mirroring trends seen in the WNBA.

15:19
PDT

Attendance for women's games is rising significantly.

FIFA Denver Women's World Cup World Cup

– Projected revenue from the Women's World Cup exceeds $1 billion.

– All profits from the World Cup will be reinvested in women's football.

– The ecosystem for women's football is becoming more stable and lucrative.

– Women's sports rights are being unbundled, indicating a shift in market strategy.

women's sports growthinvestment opportunitiessports rights management

▸ Full transcript

Now, how fluidly you move in your job and obviously based on your experience between the men's game and the women's game. It is not at all hyperbole to say you have been a chief architect of the women's game globally and certainly in this country. Where are we in that journey? You know, I mean, I know we're very focused on the World Cup, the men's World Cup this summer, but there'll be one next summer for the women. How would you describe the state of the women's game? I mean, I think it's, you know, the signals are out there, right? We're seeing attendances go up. I mean, I think the Denver and the end of a cell team, it was 62,000, 63,000. So you're seeing a lot of these amazing signals, you know, the women's World Cup next year. And so yes, I straddle both, but obviously have one eye on next summer as well, because, you know, this will be the first, It was 500 million, I think they made off of the last one. Now we're looking at billion and 100% of that money will be reinvested in the women's football, which is huge. But we're also seeing the ecosystem grow. We're seeing now club championships for global club championships for women like we have on the men's side. We're seeing professional leagues become more stable, become more in terms of attendance investment. So I think, listen, and even internally in FIFA, it used to be everything, and this was true, I think in a lot of sports you sell the men's game the women's game was an add-on you sell this it was an add-on now We're unbundling rights. We've just got.

Analysis

The women's game is experiencing significant growth, with attendance figures reaching 62,000 for events like the Denver match, indicating a strong upward trend. The upcoming Women's World Cup is projected to generate over a billion dollars, with all profits reinvested into women's football, marking a pivotal shift in the sport's financial landscape.

Smart money should note the evolving ecosystem around women's football, including the establishment of global club championships and more stable professional leagues. This shift from viewing women's games as add-ons to unbundling rights reflects a broader recognition of their market potential, suggesting lucrative investment opportunities in women's sports.

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