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.
You're going to stay with cars a little bit with cars.
It does already seem like a theme of twenty twenty four is the way that the American car buyer has cooled when it comes to electric vehicles. The latest is that Ford said it would reduce the number of workers making its F one to fifty lightning truck as demand for EV's continues to weaken. Fort cheers bouncing around early in the session on the news, off an earlier loss of one point five percent, now up nearly two percent, though the stock already down eight point four percent so
far this year. Carol, It comes a bit over a month after Bloomberg reported that Ford would cut production goals for the F one fifty EV in half in twenty twenty four.
Yeah, it's a big move, right, So what happened lessen two years ago? Ford CEO Jim Farley saw the electric F one fifty Lightning as a bet that the company was kind of all in in terms of its way forward. Ford's biggest move in fact, since Henry Ford ditch the AG model to you to make way for something new. I'll go to when it comes to things on forward And really what's going on in the EV space is our own Keith Notton.
Yeah.
He actually wrote a cover story for Bloomberg Business Week back in April of twenty twenty two that featured the Ford CEO and the company's massive make or break bet on EV's, and since then and before then, he's been chronicling the ups and recently the downs of Ford's transition to EV's. He joins us on Zoom from Detroit. So, Keith, I'm good to have you back with us. It's always good to chat EV's with you and what's going on
in the environment. I went back and read that April twenty two cover story of Jim Farley and the debut of the f one to fifty Lightning give us sort of the post mortem here.
Is it too.
Early to say that this was a bet that's gone wrong?
It's probably too.
Early to go that far, Tim, but certainly it has not worked out the way for imagined it would. And you know, one of the comments from Jim Farley back around the time of the F one fifty lightning introduction kind of rings ominously now. He said this will be a test of acceptance of electric vehicles in America, because of course, the F series truck is America's number one
selling vehicles. So if you can't sell an electric version of that, is America ready for evs Well, it turns out they're not as ready as Jim Farley and many others in the other industry thought they would be. A couple of years ago. You know, the EV sales growth rate has really slowed down. Now EV sales are still growing, we need to be clear about that. They're growing faster than the market. But last year they grew forty seven percent and this year UBS says they'll grow about eleven percent.
So I know We've gone round and round with you on this, but I'm going to go back there. So Keith, it's just a matter of time or timing, and so maybe the timeline is a little bit longer on the ramp up to EV. Certainly here in the United States, globally we're seeing certainly a pickup. But help us out here.
Yeah, it is a much stronger take rate in China and in Europe, but there are some you know, government incentive reasons for that, particularly in China. You know, if you want to get an EV in Shanghai, well your license plate is free. If you want to get an internal combustion engine vehicle, you have to pay twelve thousand dollars for that license plate. So China has used a real stick approach to become the world's largest EV market. Here in the United States, consumers are saying prices are
still too high. The average price of an EV is still around sixty thousand dollars even after all the price cuts, and that the charging network is just not robust enough. People are worried about being left stranded by the side of the road with no charg or nearby.
Yeah, and certainly the cold weather around the country hasn't helped the image or the thought of that. I think
for a lot of people. Keith, what do you think needs to happen for the US to actually consistently sell more evs and make sure that it is a country that's moving in that direction, Because I think what's so striking about the news that we got earlier today that you reported is that Ford's actually redirecting some of the money that was going to EV's and actually to build more of the new Ford Bronco, which is an internal combustion car.
Yeah, exactly, we are going back to gas fueled cars at Ford with this announcement today. They are cutting a shift at the electric vehicle plant and taking some of those workers and moving them over to the Bronco and Ranger pickup truck plant, which are both internal combustion engine vehicles that are selling well, and those are the vehicles that make money for Ford, so they need them to sell well so they can finance this EV future. It's
this very delicate balance. I think Americans have to be convinced that they don't give up anything to get an EV but instead they gain some and right now they see, you know, convenience being sacrificed because it takes longer to charge than it does to gas up a car, and it's just simply more expensive.
Hey, I'm just thinking about how hard this has got to be for Jim Farley on this whole idea of balancing production to meet customer demand and still being committed to a future with evs, but also as a publicly held company, knowing that every quarter they're going to have to answer to their investors. So it's not going to be easy, is it?
No? And they are losing billions on evs. In fact, last year they initially said they expected to lose three billion dollars on evs in twenty twenty three, and then they had to increase that to four and a half billion dollars for four point five billion dollars, and now they're maybe even worse. So it's it's it's a very difficult business case to make, particularly when the uptake is going slower than you expected because they counted on volume to really kind of turn it around.
Keith, is this a Ford problem or is it uh systemic systematic wide problem?
Like? Is it?
Yeah? Is it? Like?
Is it affecting the other companies the same way that it's affecting Ford?
The EV slowdown is affecting everybody. GM has delayed the launches of a couple of evs. Everybody is sort of scaling back their EV spending. Even Elon Musk is cutting the prices of his best sellers to try and stimulate sales, but it's still seeing market share losses and margins getting compressed. So there is an overall slow down in the US EV market.
But is it hitting.
Yeah, And so to the forward point, So Ford got out there early with the lightning by essentially converting you know, the gas fueled F one fifty into an electric vehicle. They have a second generation of EV's coming that will be ground up. You know that we're designed from the start as electric vehicles, and they promised those will be just really advanced, lots of digital features that consumers will love.
Those don't come till twenty twenty five or twenty twenty six, and they were just downgraded this week by UBS who said that the EV payoff is going to take longer than expected for Ford.
You know what I don't understand. We're coming off of COP twenty eight, right that happened in Dubai and the agreement, the big agreement that everybody pointed to, this transition away from fossil fuels as part of a global stock take if you were will It was the first time that COP mentioned this. So it's out there, and I think about the regulatory push also, so it means we're going
to get there again or I don't know. I try to kind of make sense of it, if you will, Keith, that we've got stuff like that, I think it means.
Yeah, I think what you're seeing is that it'll just take longer to get there because you know, government regulation or guidance can only go so far. It becomes a pocketbook issue for consumers. We're just not going to shell out sixty thousand dollars for an electric vehicle when an average internal combustion engine vehicle costs thirteen thousand dollars less.
Hey, before we go thirty seconds, who is buying or who are buying evs here in the United States? What's the demographic and just quickly if you can, sorry.
Yeah it is. It is primarily men wealthy. They're buying it as an extra car for their household rather than as their primary daily driver.
All right, good stuff, as always listen, Thank you so much. I always appreciate it. Have a great and safe weekend. Bloomberg News auto reporter Keith Nott and joining us there and again for shares if we take a look there. Higher on the day on this news up about one and a half percent off their earlier highs of two percent, but also off their lows of the day when they were down about one and a half percent.
And if you want some good weekend reading, and maybe you missed the first time around, go check out Keith's cover story about Jim Farley and Ford's bed on evs back in April of twenty twenty two. It's on the Bloomberg terminal and it's at Bloomberg dot com slash business.
With Yeah, that cover store is a great one.
Yeah.
Yeah, I think it's important and I love kind of also hearing from Keith that you know, longer term, the commitment is still there and that's the direction. It's just again maybe taking a little bit longer, especially here in the United States.
You're listening to the Bloomberg Business Week podcast. Catch us Live weekday afternoons from two to five pm Eastern Listen on Apple car Play and then brought auto with a Bloomberg Business app, or watch us Live on YouTube. Thanks again, be love to make what lives.
Yeah, all right, Well, life is about a lot of things when it comes to investing, and it often means transitioning. We talked about that kind of with the EV space. There's a lot going on. There's a term that I came across and kind of getting ready for this segment Transition finance, which is shaping up to be one of the new year's most important subjects for anyone professing to care about the climate crisis too.
Yeah, So it's distinct from green finance, which generally targets so called climate solutions like wind farms or battery plants, and said, it's loosely defined as investments mainly in industries and infrastructure that helped drive efforts to achieve a net zero economy exactly.
So we've discussed about a lot of these things, and we've also talked about kind of the rethink among investors when it comes to esg's investing, specifically, declining in the US has resulted in an overall slide in the global market for ESG investing. A recent assessment by the Global Sustainable Investment Alliance. They provide updates on the size of
the market every two years. Well, the twenty twenty two review FOLKS published in late November, shows that investors had thirty point three thirty point three trillion and sustainable assets. That's down from thirty five point three trillion in twenty twenty and in US you really saw a big drop sustainable assets falling to eight point four trillion last year from just over seventeen trillion two years earlier. According to that report, a lot of it was attributed to a
change of methodology used to calculate the numbers. But we are seeing investors kind of rethink and retrench a little bit.
It's not the first time we're hearing this. So here to talk emerging trends in the ESG space. We got more In O'Brien, SVP of Corporate Governance at Siegal Macro Advisors, US based investment consultancies with combined advisory assets exceeding five hundred billion dollars. She joins us on a zoom Seagle Marco Advisors. I should tell you I read that incorrectly. I'm sorry, Maureen. So tell us a little bit about the study and the findings here.
Yeah, thanks for having me on.
So every year, Siegal Market Advisors surveys our top investment managers on emerging ESG trends. This is what they're doing in house, how they're tracking admissions, how they're looking at DEI, whether they're continuing to have a hybrid model. So we ask them a variety of questions and then put those results together in a summary report that we put up on our website.
All right, so what were some of the summary and why do you think it's important to kind of remind people of what's going.
On so on climent.
As you guys were just talking about, we are seeing some movement there of investment managers who are tracking their emissions internally and then also tracking emissions for clients.
So what that's.
Telling us is that more retirement funds benefit funds are seeking to establish their carbon footprint and then see how they can reduce that footprint over time. So we're seeing more than a majority of investment managers start to track those emissions and look at zero targets, which is a
change that we're seeing incremental progress on. Another big finding in the survey this year is on DEI during the Black Lives Matter movement and from the follow up to that, we saw a lot of investment managers making announcements about hiring and promoting women and people of color, and unfortunately, the survey results this year showed that those gains have essentially disappeared.
It looks like women have.
Gone down as an overall percentage of the workforce and a percentage of the c suite and particularly black employees have seen big reductions in the overall workforce and fifty decrease of black representation the c suite is what the survey found this year.
Hey, Maureen. When Carol and I talk about this, we always go back to this one idea, and it's actually makes sense because it's earning season. When we hear from companies and we hear what moves a company's stock during earnings, it's top line, it's bottom line, and it's what the outlook is. They're not talking about ESG that doesn't move
the stock. It never comes out, It never comes up in the context of it actually being something that they're talking about with relation to the company's stock pricer or the company's business. I don't want to say never, because it has before, but mainly that's what we're hearing. Does that change. Do we ever start to see some sort of some sort of metric that actually moves a stock relating to what you're talking about.
Part of the difficulty when we talk about ESG is that it's not one thing. So there's a lot of discussion about ESG in the regulatory environment right now and among investors, but essentially it's being talked about. It's sort of one concept and it's really many things. So aspects like worker rights and climate change are gonna affect how
successful companies are. I don't think it's a clear line between there is a good DEI program and then the next day the company is shooting the lights out compared to the competition. These are inputs and factors that do have an impact over time, but they're not overnight market movers.
I guess too.
It's just, you know, it all seemed to make so much sense early on, and I think, you know, the original idea of VESG was kind of the vulnerable vulnerability excuse me, of companies publicly held companies when it came to ESG metrics, right, what it meant for them, I don't know whether media, whether what narrative change, and it was like kind of this doing good thing. And I'm
not saying that they can't be both. But having said that, all the money that has gone into ESG investing, maren, what what can we turn to to say, Okay, it's really improved things, Because you just talked about that things haven't in some ways gotten better.
Yeah.
I mean, the first of all, we used to not know right, We just didn't have a lot of data. I mean, the only required ESG information out there was how many employees you have, so not even a breakdown of demographics, for example, But we didn't have any data around carbon emissions.
We still don't have.
A lot of data around that workplace issues. You know, how companies are doing with their turnover rate. You know, companies will often say employees are their most valuable asset, but there was no required measurement of that asset apart from where the operations are and how many people work there. So a large part of ESG has just been trying
to get that data available. You've seen a huge increase in the number of companies that have sustainability reports, that are joining up for organizations like CDP, the Climate Disclosure Project and other initiatives where they're voluntarily providing this data. But it's still not at the point where the data is as easily comparable as it is with financial data.
So that's a big part of the problem. But that is changing.
The SEC has a pending climate rule that is looking like it will require lots of information on climate and so once companies begin reporting on that, it's much easier to do that evaluation of who are the winners and losers in this climate transition.
We want to share from our audience though some of the stats I think that you talked about earlier and reminding us how things haven't changed. If you look at the workforce, you know, it's still predominantly white. So it's sixty three percent of the individuals who are working are are white individuals. If you look at race, right, again, white predominantly about seventy nine percent.
If you look at it, it's in the C suite.
So that's a sweet yeah.
Get so that's I mean the people making the decisions, it's three percent black, seventy nine percent white.
Right, exactly overwhelmingly. And then again gender, which you talked about earlier, again c suite gender composition, you're talking about only twenty six percent or women. I mean it just I've been doing this a long time and nothing's changed. Just got ten seconds here. What do you hope people take away from this conversation? Please, if you could be quick.
Yes, it's important to set goals, track progress, and be public about the journey without intentionality. The historical trends do not reverse.
Themselves, all right, And it's there is something to having, like the importance of data so that you can actually understand what's going on.
We're talking about it now.
Yeah, well we've talked for a long time. But see the numbers of the concrete numbers.
Marine.
Thank you so much. Marin O'Brien, Senior vice president of Corporate Governance at Siegel Marco Advisors from Chicago.
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Well.
A billionaire couple is giving one hundred million dollars to Atlanta's Spelman College, which the woman's school says is the largest ever single donation to historically black college or university. The donation announced yesterday by Rhonda Striker and her husband William Johnston. She is the billionaire granddaughter of the founder of medical device maker Striker Corporation. He is the chairman of money management firm green Leaf Trust. They live in.
Michigan, Spellman said it would use seventy five million dollars to indow scholarships. The rest of the money will be used for other purposes, including developing an academic focus on public policy and democracy and improving student housing, a sore point in recent years among Spelman's students.
We are so delighted to have with us to talk about this historic gift in what it is a historic here for Spelman Doctor Helene Gale, she's president of Spelman College. She is on Zoom from Atlanta and also with us. Delighted to have here, Bloomberg News Higher Education Finance reporter Janet Lauren in our Bloomberg Interactive Brokers studio. Doctor Gail, congratulations,
Thank you for giving us some time here. Can you talk to us a little bit about how this gift came up, how did Ronda Striker come to be a trustee at Spelman, and what's it like to receive the news of a gift of this magnitude.
Well, thank you and thanks for having me on.
Well.
Rando Striker is one of our longest serving trustees. She was brought on by one of my predecessors over twenty years ago, and over the years she and her husband have continued to contribute to Spelman and you know, have been incredibly generous donors, but this is clearly the largest single.
Gift that they have ever given.
And as you said in the run up to this, it's the largest single gift that Spelman has ever received, and the largest gift to any HBCU. So it's pretty exciting and you know, truly a transformational gift that I think can make such a huge difference for Spelman, not only now but bar into the future.
So thank you again for coming. So tell us how does this donation impact your endowments long longjectivity, especially when it comes to scholarships.
Yeah, so you know, we plan to use seventy five percent of it or endowing scholarships. We will obviously put that money to work immediately, and you know, in a year or so there will be returns that we can use to start increasing our scholarships already. But you know, as you know, endowments really really what you can do with an endowment is to think about future generations. And so you know, we look at this as the way that we can secure the future for right talented young
women who want to get us an education. But oftentimes are not able to because of financial barriers. So you know, we think this is going to make a difference for our students today but also for the students of tomorrow.
Well, and I was looking at your most recent value of June twenty twenty two, it was less than five hundred million dollars. And then this gives you a huge amount of money more to invest. Can you talk about what that means for having you know, having that in the fund and to be able to build on it and to be able to do things like help students graduate and boost those rates and help them return the next semester if there's trouble.
Yeah, no, totally, that's exactly what you know, we hope to be able to do. As you stated, you know, we have an endowment that's just under five hundred million dollars. You know, that's that is large for an age for
many of our h PCU colleagues. But you know, when we compare ourselves to similar schools, similar size, type, and similar types of populations, you know, our endowment is trails many of our peer institutions, and so you know, we think that this which is a huge increase in our endowment, will be able to provide scholarships for students.
As you know, we have a high need population.
We've got brilliant students grade point averages to range three point nine and above, but we have we also have a high need population. Forty percent of our students are pale eligible. About eighty percent of our students get some sort of need based financial aid. So, you know, we want to be able to bridge that gap between the talent that we see walking through the door and the
you know, real gap in financial resources. You know, when you can take this incredible talent pool and match it with the resources that allow them to have this kind of life changing education, you know, I think we can make a huge contribution through this gift, and you know, hopefully many more. We hope that this is the kind of gift that will inspire others to invest not only in Spelman, but other HBCUs.
So, you know, I want to talk a little bit about more about the cost of higher education because we got some news earlier today that the President Biden is continuing with his efforts to try to reduce the debt looad that Americans have. Whether or not that is successful remains to be seen. But the cost of higher education at your school is forty six thousand dollars a year for a student living on campus. I got to tell you that's a relative bargain in this day and age.
We were talking with a colleague recently who about another school, not an Ivy League school, a small liberal arts college, over ninety thousand dollars a year. Why does the cost of higher education continue to be so high?
Doctor Keal, Well, you know, every school is different. We've tried very hard to keep our costs as low as possible.
In fact, we reset our tuition and fees a couple of years ago to be able to try to make our education as affordable as possible.
But you know, costs continue to rise. Employment costs continues to rise.
You know, we have to be able to attract the kind of high caliber faculty that attracts our you know, the student population that comes to Spelman.
We've got to make sure that we pay our staff and administer rate to support the kinds of resources and so, you know, a lot of the cost of a college or university are the personnel costs that continue to go up. But we also know the construction costs, other supply costs have all continued to go up. So you know, we try as hard as we can to manage those costs to not have to increase tuition and fees.
But we also have to be competitive in today's market.
But does it feel a little crazy when it's almost one hundred thousand dollars? I'm just you understand this world?
Well, you know, I think we've got to work on both sides.
We have to work on making education more and more affordable, but we also have to look at how are we making sure that students do have the kind of resources, access to scholarships, access to low cost loans to be able to afford education. So we've got to you know, we've got to work on both ends, and you know, we've got work to do.
So I write a lot about fundraising, and I would love to hear how does a gift like this come about? It must have you must have been working on it for years and years. If you could take us through that, And also, what's it like to get the nod? Yes, we're giving you one hundred million dollars.
Well, you know, as I mentioned, Ronda Striker has been a long serving board member and she has seen the transformative nature of a Spelman education you know, we we have young women who walk through the door, you know without you know, as young women and whose lives are transformed by the education that they get here. She has seen the economic value that occurs when a young girl comes in the door leaves ready to get go.
Out into the workforce. You know, if you look at.
The statistics, HBCUs like Spellman have punched above their weight for so many years. And I think she has seen that the value of investing can make such a huge difference. And so, you know, gifts come because people believe in your mission. People who have resources who believe in your mission have the opportunity to experience why it's so important
to invest. So Ronda Striker has had the opportunity to see what it means when you can match the talent pool that we have with the kind of resources that can be transformational and change lives. You know, Spelman College has the The product is Spelman College is obvious. You know, we can rattle off the names of important leaders in business, in policy and politics and arts, entertainment, entrepreneurship, and so we know that there's a product comes from Spelman that changes lives.
Well, thank you so much for finding time for us. Congratulations. We know it's also an important annivers You're for you guys in the official naming of the school, So congratulations on that, doctor Helene Gail, President of Spelman College, and of course, Bloomberg's own Janet Lauren.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Eastern Listen on Apple card Play and then Broun Auto with a Bloomberg Business app, or watch us live on YouTube.
Well, Bitcoin this week down nearly two percent. Interesting to see the given the risk on mood that we saw in equities, driving the S and P five hundred and Nasdaq one hundred and the Dow carroll to finish at fresh records. Since that spot bitcoin etf or I should say, since the spot bitcoin ETFs began trading last week there are eleven of them and spike to more than forty eight thousand dollars per bitcoin. We're now seeing bitcoin trade down about quite a bit at about forty one thousand,
six hundred and forty six dollars per coin. Okay, so let's get into it with Stephen mcclug, chief investment officer at Valkyrie Investments. We should note Valkyrie is one of the eleven companies with US Bitcoin ETF. That ticker is br r R Burr. Stephen, good to have you back with us. First full week of trading for Spot bitcoin ETFs. We saw bitcoin move lower for the week. Just give us your take now that we've had a full week of this.
Yeah, absolutely, and thanks for having me back. Well, first of all, what's happening in bitcoin is what we expected. We do expect bitcoin to be pretty range bound between about forty two and forty eight through probably closer to March or April. A lot of the risk on that we're seeing in the markets is due to an expectation that fed's the FED will probably start louring rates in
May or June. But with the Bitcoin Spot ETF coming out, there's been a lot of outflows actually out of the grayscale ET.
I saw that.
Yeah, why is that sort of a buy the news by the rumor sell the news. I don't even know.
The saying yeah, yeah, so I I previously was an investor in that particular trust as well. And really what's happening is people were locked in and couldn't get redemptions out when the fund was trading at a at a pretty big discount, and now that that discount is narrowed back to zero, people are able to begin to withdraw again,
sell out, sell out of it at market. So we've seen about five billion dollars in outflows so far just in that ETF, which which we did expect to happen, but we are seeing positive inflows into Hours and all the other ones.
Well.
Talk to us about that, because I'm curious if those outflows out of Grayscale are finding their way to you. Give us an idea size and scope in terms of the flows that you, guys Steven, are seeing into your spot baycoin ETF specifically.
Yeah, we're seeing a very steady stream of flows in. Ever since the first day of trading, we've probably witnessed anywhere between twenty and thirty million dollars a day for the most part, a few exceptions, but it's a very very constant stream coming in. I think some of those flows out of Grayscale is coming to us, but I think a lot of it's new money people that want access to an ETF and now have one and have an in their in their broker's account. It's easy to
easy to maintain. So so that's where we're probably seeing more of our flows is new money as opposed to flows out of greyscale.
Any money coming out of your fund though in that.
Comunity, Yeah, yeah, we haven't really seen anything coming out of our funds.
Uh.
You know.
We we also have a mining fund as well as a mixed bitcoin and the futures fund, and we've actually seen positive inflows into those as well. Particularly the mining fund. A lot of people are looking at that as a way to gain extra beta or you know, more more than a one x beta to bitcoin.
Do you know if any of that money going into b R r R is coming from advisors?
It is, and a lot of the financial that we speak to they have been waiting for a Bitcoin spot etf Most of them are independent. A lot of the advisors that work in the big wires, it's going to be a little bit of time before they start coming in. You know, the firms like UBS and Morgan Stanley, their committees have to go through due diligence on the managers on the product. Usually takes somewhat of a track record
anywhere between one and three years. So that's when we see a lot of the big flows, but the independent arias are definitely coming in, and some of them that don't feel like they quite understand bitcoin yet are making their moves into some of the bitcoin ecosystem funds as well as the Bitcoin mining fund which again we've seen a lot of positive inflows into that, just as much as we've seen into bitcoin spot.
So help me understand or how you see it right? One would assume bitcoin and know that. Some have said it's a safe haven like gold. Some would say no, it's when the risk trade is on. We've seen it kind of go each way. But I'm looking at Bitcoin down about nine and a half percent since these Spot bitcoin etf started trading last week. I'm looking at a
NASDAC that's up three percent. I'm looking at an S and P five hundred that is up about one point two percent in that same time frame, timeframe we've seen Stephen the risk trade come back. Is it surprising not to see Bitcoin moving up and the whole group overall, Yeah.
I'm not too terribly surprised, only because of the expected outflows that we were to see in grayscale. I think once that has watched out a bit, we should start seeing the market move up again. And you also have to keep in mind that you know, in the short run things aren't always correlated, but in the long run they are. And in the last three months leading up to the Bitcoin Spot ETF launches, we did see bitcoin rising price quite a bit. So I think the market
get a little bit too excited. Now it's waning down or getting back to a level that we think is sustainable, and once these outflows begin going out, I do believe we'll see it again. And and on that note, I'll also mention that you know, bitcoin acts in response to the way that people treat it. So some people use it as an inflation hedge or as a safe haven, some some use it as a as a risk on asset, and depending on the cycle or the mini cycle, we
will see bitcoin react in those various ways. I think this short term move really is more of a reflection of selling out of one fund, and we should probably see it move more like a risk app set through the rest of the year.
Heay back to the ETF. So I'm just wondering if you're planning to do a proof of reserves or maybe share your addresses at some point in the in the future.
Yeah, absolutely, so we actually do post, we do post our reserves and and really simply put, we hold everything at coinbase. So there is uh, there is a one to one uh uh bitcoin to to what we say is in our fun sitting at coinbase. Now we probably won't show the address just because that's a security reason or that's a security issue, but we can point back to.
Coinbase on Hey, can you give us twenty five seconds on the next steps and plans you've been acquired by coin shares. We're already seeing consolidation the crypto asset management space, So what can you share about next steps? And again, just got about twenty five seconds.
Oh, absolutely, And this is exactly what we expected in the market when we launched our firm three years ago. Once a bitcoin spot etf comes to fruition, we will see consolidation. We'll see larger asset managers that want access to this asset class and want expertise, and we're seeing, just like with us, we're seeing consolidation within the space.
All right.
It's always fun to watch, that's for sure, Steven, Thanks for taking some time out for our Stephen mclard, chief investment Officer over at Valkyrie Investments on Zoom from Nashville, Tennessee. This is Bloomberg Radio, and this is Bloomberg Business Week, Carol Master, Tims Danovic, This is Bloomberg.
Come Bromack.
The journal.
Now about you.
Let me drive?
Oh no, no, no, no, alright please, I'll.
Excuse me.
I want to drive.
It's a good question.
Good, this is good. Drive to the clothes. Do a thing, well, Don on Bloomberg Radio.
All right, well it's that time to drive to the clothes. And before we do that, I want to get to a headline. A redhead crossing the Bloomberg terminal. Apollo Global Management considering making an offer for National Amusements Inc. That's, of course, the Redstone family company that controls film and TV giant Paramount Global. This by your own team, including Lucashaw, Ryan Gould, and Michelle Davis.
Yeah.
Interesting too, because you're seeing Apollo Global hitting a record in today's trade. So it's been actually moving up in the session. Nothing that that's necessarily related to this news, but it's up about almost two percent today.
We should note that Apollo is one of a number of investors, both wealthy individual and professional money managers that have reached out in recent weeks to BDT and MSD Partners, the investment bank advising the Red Stones. That's according to people familiar with the discussions.
All right, so something to track on this Friday. We're tracking a lot on this Friday, including an equity market that is pretty much at its best levels of the session. So we've seen really investors, certainly on the equity side of things come back. Nasdaq, as we heard from Denise, really the outperformer up one point six percent. We saw this trade yesterday. So let's get to it. Let's get to our drive to the closed guests. Back with us is Doug Sioca, CEO and partner at Cavar Capital Partners.
They've got over a billion in assets under management. He is on Zoom from Leewood, Kansas. Hey, Doug's so nice to see you. I can't remember if we've had a chance to say Happy New Year. It's already been kind of a busy twenty twenty four.
How are you.
Yes, I'm great, happening here to you guys as well. Thank you for having me on.
Is it cold in Kansas?
No, it's frigid and ridiculously freezing in Kansas. It's forty three right now in dropping.
Where is it colder? Buffalo, Kansas, Kansas.
Yeah, let's for the game on Sunday, so the Chiefs will We have been up in Buffalo.
Looks like twenty two and in no precipitation, so it's gonna feel balmy after the game last weekend when it was minus twenty seven.
It's a big game this weekend. And I got to say, Doug, it's so great that Taylor Swift came along to help out the Chiefs and really get Travis Kelcey on track. I bet you're really happy that she came into his life.
I am.
I am happy for her, I'm having for the city. It's been great to have her around town. And he's very visible. She's got a bit of a cloak of protection around her, which is necessary, but she's been seen around town and it's been a lot of positive buzz in the city and we love it.
Well.
Talk about the game, Patrick Mahomes, it's hard not to like this guy, even if he's not your team. Every time he's in a Super Bowl I love watching is just this great little player and just seems to pull it out all the time. But speaking of the Chiefs and the team and their strategy. My understanding is you think investors should take note of what they've been up to as well.
Yeah.
I mean it's kind of a little corny on what's happening at Arrowhead Stadium, but our town tends to sort of evoke the character of their sports teams, and I've kind of made a little bit of a it's probably a bit of an extension, but the Chiefs have some characteristics that they also share with kind of fundamental portfolio management at the prevailing markets. And right, we've been saying, look, you've got to have good defense, and that's been kind of heart and soul of the Chiefs team this year
in the bond market. Right, in this silly analogy, right, it's offering very stout defense.
Right, you've got sound portfolio protection, robust income.
You've got to have secondarily, kind of like to your point, this mahomes magic leadership, we need to have some tried and true, probably tech centric gross stocks embracing AI distancing themselves from the competition and exhibiting incredible agility in a fast paced ententry sector. And you've got to Thirdly, you've got to have sound diversification right in your portfolio, and it's certainly on the football field, and you've got to be able to score in multiple ways.
Expectations are high.
Playbooks well warned this part of the season, so you got to pull all the stops and have it sold.
Like Andy Reid as our head coach.
There's never any there's ever any lack of creativity and offense, that's for sure.
Doug, do you like football?
I love football?
Yeah, I thought so.
I thought so.
I just wanted to make sure, just wanted to make sure. Yeah, hey, can can you connect to the chief season and all of the key themes to watch for twenty twenty four because I know you're watching certain elements here, including geopolitics, are going on with rates.
Absolutely timid and like everybody right, like interest rates are the are the overriding sort of priority one theme of twenty twenty four, as they were in twenty twenty three, as they certainly were in twenty twenty two. So interest rates, earnings, geopolitics, and domestic politics sort of cross pollination there, and then we really feel like in twenty twenty four we're going to see an appreciable increase in M and A activity so I'm happy to talk about any or all of those.
The four prong theme thematic outlook for sure.
Can we go to interest rates? We just talked with our Bloomberg News rates reporter Michael McKenzie, and this whole idea of you know, bond traders really very closely watching maybe the treasury curve here in the US getting back to normalization, This whole idea of you know, no longer an inverted yield curve and those longer durations moving up. But having said that, the path to getting back to normal is it?
The question is.
Does the longer end of the yield curve go higher or does the shorter end go lower? And I am curious what your take is on it, because there it means different things.
Yeah.
So throughout last year, Carol, we saw what's called it, it's called a bear steepening, right, and we saw as the short end came up in the long end, I should say that the long end barely budged and that sort of unwound kind of going into that to midsummer, we saw the pullback in equity markets when the expectation was, hey, the FED may not be done right. There was a lot of mixed messaging coming from some of the FED governors on their speaking tours. We've actually now seen some
more of a bull steeping that's taken place. Well, the expectation in the market, and it's begun to dissipate right from definitely putting in six cuts next year to maybe more like four and a half or five, if that's possible. So you've seen the expectation that the FED might not be cutting as much as had been anticipated. So the two years really been pegged and all the action has
been on the longer end. Now, we did see some normalization even on twoes and thirties earlier this week, right where we finally saw that was kind of a refreshing deal. We've gone from ninety eight basis points to steepness to tens. Now we're just at like twenty three. So we're seeing the right kind of steeping that's taken place. And why is that right? Because everyone knows the FED is done right, how quickly the FED cuts is really open for debate.
I saw an interesting interview this morning with Austin Goolsby.
He was saying, which I thought was really interesting, is the investors are hinging on the words of the FED and they need to be hinging on the data. But at the same time, we will still raise rates we feel like the data is inconsistent with the general trajectory inflation. So that was a little bit of this messaging as well. But what the market is trying to do is ascertain two and a half to four percent GDP growth.
Boy, that's pretty good. Yeah, And labor market that's finally coming into balance. Boy, that's pretty good.
Certain industries in the in the stock market, they're just starting to hit kind of a sweet spot of the upswing, of their sweet spot of the up spring of their profit cycle. So you can see the soft landing scenario with rate normalization without seeing like a widening of the normalization, but just getting to where we have opportunities to pick up turn premium. That's going to be really reassuring the face of declining inflation.
Well, certainly something to think about as we head into the weekend and get ready to watch a lot of football. That's what I'm going to say, Hey, listen, be well, great to check in with you. Dex Sioka, CEO and partner at Kvar Capital Partners. As we mentioned earlier, they've got over a billion dollars in assets under management. He's joining us on zoom from Leewood, Kansas, where it's chilling.
Is he gonna, Doug? Are you gonna go to the game. No, the game's in Buffalo, I know, but you could still go.
Yeah, still go. No, I will be here.
Yeah, the kvar jet might take you.
Oh now you're talking.
Thanks, good luck this weekend. I appreciate you as always enjoining us.
Luck.
Thank you too.
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