This is Bloomberg business Week inside from the reporters and editors who bring you America's most trusted business magazine, plus global business, finance and tech news. The Bloomberg Business Week Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.
Well, our and best founder, CEO and CIO, Kathy Wood joined our etfiq team to discuss the race for a spot bitcoin ETF. Here's just a little bit of what she had to say.
In June when Blackrock announced its filing, or when it was announced that Blackrock had filed for Bitcoin ETF, the bitcoin price did shoot up, but has been fairly stable since then, so I do think it's.
Had an impact.
A bigger impact this year was the regional bank crisis. It was very interesting to watch bitcoin go from nineteen thousand to thirty thousand right in the middle of that banking crisis as a regional banks were going bankrupt.
So it was a flight to safety.
So I thought that move was just as interesting.
And a flight to safety is buying bitcoin somehow a flight to safety, Isn't it a little too volatile for that?
Well, if you think about it, bitcoin serves as two kinds of hedges. One is a hedge against inflation and outright confiscation of wealth. The other is against counterparty risk. And you know, when the regional banks started going down this fear sort of you know memory, our memories are fresh. With eighth nine, the counterparty risk became real and so there was this flight into Bitcoin, a completely decentralized, transparent network which is not subject to counterparty risk.
Kathy, So you are in this race. Let's talk about the race a little bit. The first important deadline coming up is August thirteenth, where the ARC filing. The SEC's either going to delay it, which we think they'll probably delay it, and then Blackrock is later. You filed before Blackrock, but Blackrock came in with the surveillance sharing agreement with coinbase that was novel. Right now, we're looking in the future.
There's talk of a common clock where the SEC could approve a bunch of ETFs at once, putting you on a level playing field with Blackrock and others. What's your take on how this will play out? Given you filed earlier.
I think you're probably right that August thirteenth will come and go, and I think I think the SEC, if it's going to approve a bitcoin ETF will approve more than one at once, so then again because most of these essentially will be the same, and it will come down to marketing communicating the message. You know, we've been putting out our bitcoin monthly for the last year. We are now starting a bitcoin brainstorming session. Our first one
we launched last Thursday. So we're trying to get the word out there that you know, our research is deep and we've been doing it since twenty fifteen when we gained our first exposure to GBTC. We were the first public asset manager to gain exposure to bitcoin at all in twenty fifteen.
That's exactly where I want to go. The Grayscale Bitcoin Trust, known by its ticker GBTC. If you look at ARCW for example, your ARC next Generation Internet ETF. Right now, I see GBTC as the third largest holding. If we are in a situation where the SEC does give its blessing for a spot bitcoin ETF, would you plan to sell out of GBTC and buy one of these physically backfunts.
I cannot talk about what we would and would not do, and in fact, our compliance team is giving us marching orders not to talk very much about this filing and it's aftermath at all. So just the fact that we filed with our partner twenty one shares is as far as as I can go.
Fair sorry, Katie, fair.
Enough, No, I was expecting something along those lines. I am curious to get your take on the regulatory temperature right now, because in addition to this rush of spot bitcoin ETF filings that we've seen, there's also been sort of a race that's unfolding for an ether futures ETF. There's been a ton of filings to that effect, and
not specific to those funds. But do you sense that the moon music around the SEC and what their appetite to allow these products to launch has changed in the last several months.
Well, I think that the two other branches of government, the judicial branch and the legislative branch, are giving the SEC pause because the SEC is losing cases in court having to do with its regulations around crypto, that's the first thing. And there are bills that are making their way through the House and are seeing some bipartisan support.
All right, Well, there you have it. That was our coinvest founder CEO in Cio, Kathy. Would she spoke earlier with our ETF IQ team on Bloomberg Television. Now one such member of that team, Bloomberg Intelligence Senior ETF analyst Eric Beltchunas he joins us now to discuss his takeaways from their conversation. So we just got to hear Eric about four minutes of that interview with Kathy Wood talking about multiple bitcoin ETFs. There was some stuff she didn't
touch on though in that clip. Give us big takeaways from here interview this afternoon.
Yeah, I think the first block was on crypto couple takeaways. She kind of agreed that probably if the SEC is going to prove, it'll be a bunch at once, so you might have like three or four out the same day. That's weird because when they approve the future's ETF bidows first, and if you're out even by a day, you can get all the volume. It's called first mover advantage and it's big in the ETS base. So I don't think
the SEC wants play kingmaker here. I think they'll probably put about a couple out at once, but ARC is in the main race, so it could be ARC, Black Rock, Fidelity, something like that. She also talked about how Grey scale is probably going to lose their case, I mean, win their case against the SEC. That's kind of another loss the SEC would take, and we think that's that would further put them into a politically untenable position where they have to approve it. So all this stuff was I
think bullish. Also, she talked about Coinbase being the most compliant of the exchanges. That's also good for spot back coin ETF approval hopes because that's the exchange that all of them are connected to in the filings, and so I think the idea is if Coinbase can be seen by the SEC is willing to play ball a little bit share information, they'll feel more comfortable approving the spot ets. That's been the hanging up the whole time. But obviously
we had other segments on single stocks and geography. I'm not sure if you want to get into those, but that's the crypto takeaway.
What's the timetable for as far as when this could be approved for this spot b co on ETF.
Yeah, so James and I have a sixty five percent chance of approval this year. We think that it won't it'll if you know, October, November, December, obviously, are there likely times the Greyscale suit, which we could get a ruling on in the next month. That could fast track the timetable. There's a lot of unknowns here, but I do know we give a higher percentage chance that they're going to approve ether futures. But they had originally said
they're not doing that. There's been like five different attempts to get one of these and they always tell people to withdraw. Well, now they're not. We have good information that they're actually going to let ether futures comes out, So that's a policy shift there. So again, if they let the ether futures out, they come out October, so maybe we're looking November December. Again, we still have a thirty five percent chance it doesn't happen. So it was
just like basically not a done deal at all. But I think the winds are shifting. You can feel that. There's a bunch of little details on why. But that's our take.
Okay, single Stocks, what does she say?
Yeah, we asked her about Tesla and the new CFO or the CFO leaving. She was okay with that.
Yeah, Zach Kirkhorn has been there for thirteen years, so I want to say he's like a really young guy, because he's younger than I am. But he's been there for thirteen years, so I don't know how young I am anymore.
That also seems like that's a long time for Tesla. How old is that company? Right?
I mean I think it was like his job at a business school.
Also, she was.
Selling Roku recently too.
Yeah, well, the Roku, it's weird. In Kathy's portfolio. She tries to maintain weights. So sometimes if a stock go's on a run, she will sell some to maintain the nine percent waiting or whatever, and it looks like she's selling one of her favorite names. But I try to look at the percentages, and Roku she's actually increased percentage over the past year, so I would say she's bullish
Roku bullish coinbase. That percentage has gone up. So sometimes Kathy got to know, she's always trying to keep these weights in line, and so she can sell when it winners, right, and it looks like she's bearished, but she's just keeping the weight. We also asked her about more Tesla somehow the Elon Musk and Mark Zuckerberg fight came up.
Somehow asked her who's her money On.
I didn't see she kind of sidestepped that, but she said I she could. I think she could tell. She hopes Elon doesn't like hurt himself because he's got to run all these companies and so he got is a neck problem. And she's just like, I hope he takes care of himself.
This has gotta not happen. This can't happen. This is ridiculous.
So my theory is the whole thing is to do it on X or Twitter, and that's that's what he's really trying to do. This is all to get attention.
And eyeballs threads think.
Well, maybe if so, that would be fair. But if it's only on X, I would say Elon Musk won the real fight.
Right well, Eric bel so great to meet you finally in person in the Bloomberg game.
You guys didn't know each other. Bringing people together.
Here right etf analysts at Bloomberg Intelligence. Such a pleasure meeting you in person when you do all things for Bloomberg.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Eastern Listen on Bloomberg dot com, the iHeartRadio app and the Bloomberg Business App or watch us live on YouTube.
Jess, my question for you is have you heard of live shopping? I already asked you this.
Well, so I hadn't before, and then I started looking things up and then I knew. I was like, I knew exactly what this is.
I just didn't know all well, I was. What's crazy is Amazon has like added it to their app. Right, so if you if you there's this redesign of the Amazon app that happened at some point recently. So if you click on like this little ideas thing, it turns into this sort of like Instagram stories of shopping.
It does friends that actually use that. And so now I'm hope we're still like do I need to jump on the spamwag?
Okay, well we've got a great guest to talk all about this. Mary Garrimani is joining us. She's the CEO of Bamboozer. It is a company that creates a shoppable video and live shopping shows for retailers. You with us, Mary, how are you?
I'm good, thank you, Happy to be here with you guys.
Well, I really happy to have you here. As I was doing prep for this interview with you. I was looking for statistics about live shopping and it's pretty incredible to see. I mean I heard of it. I first heard of it through like stories about China because the way it blew up in China during the pandemic. According to Insider Intelligence, nearly twenty percent of retail e commerce in China will be livestream commerce, with total sales rising to more than eight hundred and forty billion in twenty
twenty five. That's a huge number. And then clarnas what yeah, and Clarna says that only twenty percent of shoppers in the US have actually said they've done live commerce, but thirty four percent say they haven't, hadn't participated, but they've they've heard of it. What are you seeing on your platform?
So, I mean we are lagging quite a lot, I would say, looking to China. So it took almost five years, you know, for this new channel to become really it has really transformed the retail industry in China and it establish itself as you know, a major sales channel.
But it took them five years.
And just to go back to that, I mean, China is the world's largest e commerce market by far, So I would say that we see somewhat similar adaption, you know, trend in the US and Europe, but with the lag what I would say approximately five years, right, So it's really early days for the Western world and live shopping or video commerce as we like to frame it. So, I mean it's a huge market, it's growing, but of course the adoption is not where it is in China.
I have to call out the retailers and companies that you are working with, one of them being QBC, which my mom is shopped at for decades, so I should probably ask her she's probably using this type of technology too.
That you raise a good point, Jess, like this is a new QVC, right, yes.
Definitely, and so other companies like Bloomingdale's, Dick Sporting Goods, Adidas, Clinique. I'll talk to us about how this works.
So I would say, you know it is.
It is a very different experience too, if you would experience live shopping on team model in China. So I would say the Western approach to video commerce or live shopping is much more educational. It's much more driven by education and really you know, connecting with the end consumer to create a platform to you know, have a better discovery phase, increase conversion, you know, build a stronger customer
relation and releace returns. If I look to China, it's very driven by promotions, right, It's very promotion driven and
very heavy on just pushing the consumer to shop. So looking at our customer base, I mean we work with a lot of Fortune five hundred companies, a lot of them you mentioned, and they are much more so They've tapped into our platform and is using Bamboozo technology to really, you know, add something that is is more likely to look like something you would do on social or what you started talking about, rather than just adding a video
to their website to just sell something. Right, So it's much more about adding a layer on top of the very static shopping experience rather than just pushing promotion and making you know, the end consumers buy something. So I always say, in the Western world, you give something to the consumer, You give something to them and then you ask them to buy. In China you just ask them to buy. If you understand that the comparison between really how it's working outside.
Of China, well, I feel like you know the thing that in correct me if I'm wrong, Mary, And I'm interested to see what you see on the platform. But the way that at least I shop online is I know what I want and then I go and I search for it, I find it.
I'm the same way.
It's not like you go and browse, right.
No, I usually go exactly, it'll compare it to different places by what's the cheapest one?
Yeah, exactly, So you're shopping based on price, but you go into it knowing that this is what you want. Mary, how do you change that experience? So going online to shop is less about what Jess and I do and more about like you're walking down Fifth Avenue and you see something that catches your interest and then go in a store.
I would say it's it's a combination.
So I would say it's where a product, discovery and purchase happens in a single journey. That does make sense for you, guys. So what we do with adding a video layer on top of an e commerce experience is that we really help the brands to bridge the offline and the online experience.
Right.
So I can give you a great example. So LVMH is one of our customers. We work with many of the Maison's and we just added so there is using our one to one solution to do consultations. So instead of you guys going to sex Fifth Avenue and going to ther counter and buying something, you could actually book that experience through bambooser platform. It would be of course
we're native platforms, you would never see Bamboosuri. It would be a dr you know, player, just like the conversation we're having now on Zoom right, So it would be a player where you have a lot of interactivity where you can compare products, you can help the customer to add to Kart, and then you will go to the checkout right. So it's really enriching the customer experience and helping them and then you know, we you know, one
to one solution. For example, with your we actually have a virtual try on, so I could actually try on the lipstick I want to buy and see how that looks on me before I add it to cart. So it's really adding the journeys that you guys talked about, but combining them in one single journey.
We only have about thirty seconds left. But based on what you're seeing, do you think the economy is headed for a recession? On those shopping trends you're viewing.
Good question, I would say, I mean, we're seeing a slowdown in retail overall. It's you know, because of the macro and how the economy looks. I would say we're seeing that. You know, we're live in most countries and
work across a lot of more sutiple markets. I would say what we see as trends is really you know, going more towards a sustainable way of shopping and really helping the consumers to make better purchase decisions by adding, you know, different type of technologies, ours being one of them.
Mary Good, I have to leave it there. Thank you so much for joining us this afternoon. Mary Garrimani is CEO of the online shopping platform live shopping platform Bambooser, joining us this evening from Italy.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Eastern on Bloomberg Radio, the Bloomberg Business App, and YouTube. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa, play Bloomberg eleven thirty.
Well, a lot of big professional moves come in today. Jeff Curry, the prominent commodities analyst known for making bold and often bullish pronouncements. Is leaving Golden Sachs Group after twenty seven years, and ubs We've happening the leadership of its investment banking division as lender presses ahead with its integration of former rival Credit Suisse. Joining us now to tell us about all these big people moves is Bloomberg senior finance reporter shrinad Rajen Shred. Good to see you,
good to have you with us. I got to tell you. I go to your bio page on the Bloomberg terminal, and I see the Goldman Commodities Research chief Jeff Curry set to leave story. I see b of a wealth chief risk officer leaving story. I see Goldman's Lisa Opoku joining a recent spate of partner departures. I see Goldman Investment chief exits after change is Royal Key unit. Like Jess said, I'm starting to see a pattern here with Goldman Sachs and a lot of these stories. What's going on?
Can I say? Covering Wall Street is all about people in capitol? Right?
Yeah?
Right?
There you go, all the money, but all the people.
But is the door revolving like this all the time?
I would say that.
You know, when we look at all the names that have been reported in the last couple of weeks, this is the sixth partner exit out of Goldman. Late July early August is not the time when we see a pickup in these names. So that has been a bit of a surprise.
Do we know why? Like what the catalyst is, different reasons.
You can't fit them all under one umbrella. There have been a number of people like Julian Salisbury. Those were people on the rise inside Goman. Those were handpicked by the CEO for better, bigger roles, and they suddenly leave. It's quite interesting. On the other hand, you have people like Jeff Curry, who's been there nearly thirty years, who's done all that you need to do in that space, who is the de facto celebrity in the world of
commodity analysts, right that's the most recognizable name. He's the most recognizable brand out there. So you can't really tack him on to some of the other departures, but it is a serious brand name inside Goman, and his departure will have an impact on their franchise.
And tell us about who's taking his place.
You sometimes appreciate the value of a person when you realize that he's being replaced not by one person, but by three people.
And that's what stuck out to me. There's three or four different names on there.
It's also entirely possible Goldman just doesn't want a broad head of commodities research anymore, and that's why there's someone who runs there are oils research business, they're natural gas research, they're metals research. Now Goldman and Commodities. It's a storied franchise, it's a storied name. It's it's it's been a name everyone in the market looks that. Pre crisis, Goldman, Sachs and Morgan Stanley used to be known as the Wall Street refiners just because of sort of the physical and
financial trailing they used to do. The structure in the shape of that business has changed a lot, but commodity is still a big engine, a big driver of the Goldman trading machine, which by the way, is pretty damn good on Wall Street and it is one of the best out there. So anytime you hear from the research folks at Goldman, they may not always be right, but people certainly want to pay attention.
Where's he going?
Do we know as of now, it looks like he doesn't. He's not taking on any other job immediately. He's spending some time with family, has two young kids. So you know, after almost thirty years in a high pressure job where everyone's paying attention to everything, you say, maybe it is well deserved rest for him.
You're here, I have to agree with that.
When I wanted to switch it over and just talk about the UVS revamp in leadership, because while Tim was away, we did have that shake up when it came to the regional banks, but then also heard about that. But then also not just the smaller banks, you did have this banking giant UBS that did buy it's troubled rival, Credit Sueeze. So when I'm seeing these leadership changes at ubs, how much of this is playing it into it and really impacted because of what had happened within Credit Sueeze.
Oh, it's all about that right now, You've made this big decision Switzerland. The banking landscape in Switzerland has been altered and altered dramatically when you have this combination of
UBS and Credit Squeeze. Now what's important is to make sure that the merger goes smoothly, make sure that they're able to execute on the indig because a lot hinges on that, and part of that, when you have this gigantic memo that names forty different people into various leadership positions, it obviously forces a lot of homework on people just to just to get their arms around what all the
changes are. But in some ways, there's also ubs reiterating what their focus areas are, what their interest areas are, and you have about a dozen or so Credit Suitez investment bank is also getting roles, which is to say, not everyone who's in investment banking at Credit Suitez would be undesirable at ubs. They certainly want to keep the cream of the crop.
Shre.
I'm thinking back to the conversations that we've had with you over the last two or three years, and if we kind of think about them in terms of themes, we can think about the talent, the talent wars of twenty twenty and twenty twenty one. We can think about burnout, and we can think about over the last couple of years on Wall Street, people going to crypto firms or going to join private equity firms, in some cases joining tech firms. Where's the pole coming from today.
Twenty twenty one, we're time to be alive. When all the analysts could go out there and say, hey, we might be the junior most people, but you better pay us a lot of money.
Look at it, Look at the PowerPoint deck that we created.
Exactly right now, it's all about police. Let us stay in our jobs.
How the tables have turned.
There are absolutely a lot of opportunities out there right today, but the difference being if previously two years ago, almost anyone could find a role because everyone was all on hands on deck. There were so many deals happening, so many transactions happening, you needed to put bodies to work. Now the opportunities are more geared towards the top performers, those who are doing really well, those who are absolutely desired.
It is not that you just show up, put your arm up, hand up and say I want a job. You will get one. And I think that's the big difference. So you will probably still see headlines of talented names and brand names going elsewhere, but it's more about who they are than what seat they're taking on.
I feel like this is the Hunger Games, right especially when you think about how competitive that type of environment is what anecdotally do you hear whenever you speak to your sources, especially if there's maybe people earlier in their careers that are trying to get to that point.
You know, all of this goes through in a cycle. I still vividly remember about two years ago we spoke to the former CEO of Goldman Sacks, Lloyd Blankfind, and he was you know, he made a very pointed reference
at that time. It because remember a lot of the junior banker agitation caught a lot of attention because of what happened inside Goldman Sachs, the PowerPoint deck that Tim was talking about, and blank Find was very clear back then that all these things go in a cycle, and you know, you might feel like you have the upper hand right now, but that will not always be the case.
And he was right. The cycle has turned. It has become harder at a lot more people are sitting around twiddling their thumbs because deal activity has completely fallen off a cliff. Which is why I sort of like go back to the earlier point I made is now you really need to stand out. Just because you showed up and have a role does not mean you are immediately wanted in all corners, inside the bank, outside the bank, outside your firm. You really have to be able to stand out to be wanted.
Now, what's the projection look like.
We've been talking about green shoots out there, right We've been talking about a pickup in activity the first seven months of the year, investment, banking, the deal deal environment's sluggish. But the challenge with talking about green shoots right now is we're already in the second week of August. You're
heading into the summer doldrums. So you're not going to see a ton of deals in the rest of August, September post Labor Day, you know, as New York gets off it's post US Open, tennis high you're hoping that there will be people out there willing to do deals again.
You read my mind. My last question is about tennis.
But let's point out one important thing though. You have that the possibility of government shutdown again. You know, there's sort of Washington Games being played again, and that deadline is October one. That could throw a spanner on the works for September. And if that's actually something that drags on, let's hope it does not. But if that becomes a bit of an issue, then you're again heading towards you're in. Unfortunately, twenty twenty three might be a wash, just like twenty twenty two.
Okay, thirty seconds, we have to talk about what's gonna happen at the US Open this year. This is your favorite month because it's the beginning of the US Open and you spend a lot of time there. We'll be there for Bloomberg Radio. What do you think for the finals this year? For the on the men's side, in Alcoraz Djokovic final.
Ah, that would be delightful, wouldn't it. You have you already saw what the two of them can bring into consecutive Grand Slams. Now, the French Open sadly curtailed a little bit because of injury, and definitely they epic at Wimbledon, and we saw the exploits of Alcaraz in New York. He certainly won a lot of fans in this city. So if this city can get an al Karaz Djokovic final, we'll take that, even if we've never gotten a Federal at all.
I'd like to see Tiafo in there as well. He's such a crowd pleaserre on the women's side, Jessica Pagoula would be awesome too, you know, rooting for the American from Buffalo, That would be very cool, should we not? Oajin Good to have you with us.
A Bromac.
A journal.
Now about you?
Let me drive?
Oh no, no, no, no, who's going?
Honry? Please, I'll do the gravel.
Wait, I want to drive.
It's a good question that try.
This is the drive to the clothes well by an on Bloomberg Radio.
It's hard to believe it's about that time. We're just shy of eighteen minutes away from the clothes of equity trading here on this Monday afternoon. And what a Monday it is. The Dow Jones Industrial average higher by more than one percent, the SMB five hundred dire by close to eight tenths of one percent, of the Nasdaq moving
higher by more than four tenths of one percent. For some commentary, not just on today's trade, but on the macroeconomic environ in and really how he's deploying clients money. Let's turn now to Dave Donabedian, chief investment officer at CIBC Private Wealth Management. Dave, good to have you back with us. How are you I'm good, tim are you. Yeah, we're doing pretty well. Thanks having a good summer. Thank you. Uh, the US equity market certainly having a good six months.
How do things feel to you right now? Sentiment wise, It's interesting.
I think the you know, the first five months of the year, obviously, we're tremendous in the sensitive you look at the you know five month returns on the SMP, you know, phenomenal start to the year. But as we know, it was driven by that handful of stocks that had moonshots, and had that environment continued, I would have been concerned about, you know, an outright bubble developing in the market because it was so unbalanced. I'm interested and I think pleased
to see you. In the last two months, it's been different. A lot of those moonshot stocks have slowed down, some of them have corrected a little bit. And if you look over the last couple of months, the equal weighted S and P has actually done better than the market cap weighted version, indicative of more sort of balance in the market. So to me, the kind of the technicals feel better today than they did, say back in April or May.
And you bring up the last two months, especially with the equal weighted index for the S and P five coundry, but also more cyclically oriented sectors in the market, like industrials materials picking up some speed here. What's your view as far as your second half outlook after we saw such outperformance in the first half by tech and growth stocks.
Yeah, again, I think we'll see more balance in terms of relative performance. But the other thing I think we'll see is we'll see a market that, frankly is more is more challenged and halting and maybe even have a somewhat of a pullback and correct or correction here sometime
in the next few months. And that's simply because while many have thrown overboard the idea that there's a risk of recession, I unfortunately think there still is and in the short term anyway, that'll be you know, a potential source of a stumble by the market, because of course, question right.
Talk more about that, Dave. What what is giving you the notion that we're not out of the woods yet?
Yeah, I mean a lot of the data that investors have taken comfort from lately, UH retail sales last quarters, GDP, employment and so forth, are absolutely solid. The problem is they're they're coincident indicators. They tell you what happened today or what happened in the recent past. They have no predictive value. They don't tell you anything about the future. And when we look at the things that are more
leading indicators, most of them are kind of troubling. The most obvious is the you know, intensely and persistently inverted yield curve number one, the index of leading economic indicators, which can give off all all kinds of false positives, but not at extreme readings. And it's added extreme reading
and just the general idea. We know that, you know, the FED has raised rates more than five hundred basis points in a call it a sixteen month period, We've not begun to feel even you know, the minimal effects of that that lies ahead, the sort of anti growth impact of tight money lies ahead. So the leading indicators say there's still something to be concerned about with the economy.
In other words, the long and variable lag of higher interest rates has not been.
Felt, only a little bit.
There's more to come.
Like what percentage have been felt in your estimation?
Oh, I don't know, a quarter maybe, okay.
Okay, So then how are you positioning? What are you buying What are you selling?
Yeah, generally, you know, recently we've been i'd say we've been doing more sort of trimming and adding to portfolios. We've been trimming, you know, some of the high flyers that have done extraordinarily well earlier in the year and are now at higher evaluation level. And we've been adding to the things that you know, are unloved but inexpensive in the markets, things like healthcare, utilities, roots.
Some more defensive corners of the market, somewhat.
More defensive, but but but we think of them. We're more interested in the valuation than the defensive characteristics.
If you will.
So, then if we do see a pullback five ten, what are you.
Buying, Well, it'll depend where the pullback is and and and where they are. It's you know, a lot of the names that that that soared in the first five months of the year. It's not that we don't like those names, in fact, we own some of them. It's it's the price you pay for them. If we have a correction that focuses on a lot of those higher growth names and they have meaningful pullbacks, we you know, we'll be buyers there of the higher quality names at a more appropriate price.
If a client comes to you with a lot of new money, how are you deploying it.
We're deploying it, you know, slowly. On the equity side, you know, it's important when you're allocating money not to make all or nothing bets. You know, don't say how we're not going to invest in anything because we know there's a correction around the corner. You can wait forever for that to happen. At the same time, you don't
throw it all into the market. So we've been been counseling patients putting money to work slowly over the over the over the weeks and months, with an emphasis on on stocks that have dividend growth potential, high quality names. And there will be a place in a growth oriented investor's portfolio for growth oriented stocks, but only at the right price, and a lot of them aren't there right now.
What's the top question you hear from clients.
It's probably still about the FED. What are they going to do next? I would say that said that's been pretty much the case for the last year of our view there is that they're done raising rates. They're still going to talk as if they might, but we think they're done, and again that's consistent with our forecast that core inflation is going to come down quite a bit of the next six months and their risk of recessions, so.
They're more optimistic about inflation.
Yeah, I will, Dave real quick. We only have thirty seconds left. If they're done raising rates, how long do they hold them here?
Well, the futures markets tell you they don't. They don't cut rates until March and then do it. You know, have an accelerated number of cuts later next year. Because of our economic outlook, I think that first cut will come before March.
All right, first cut before March.
All right.
We're going to have you back on before then, see if you've updated your call at all. Really appreciate you joining us this afternoon. Dave Donabedian, Chief investment Officer at CIBC Private Wealth Management.
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