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Amazon said today that it will not display the cost of US tariffs on products, after the White House blasted the reported move and President Trump called Jeff Bezos to complain. The White House earlier Tuesday seized on a brief punch Bowl News report that Amazon would quote soon begin displaying the cost of US tariffs on individual products next to the total listed price. White House Press Secretary of Caroline Levitt blasting the purported plans.
I just got off the phone with the President about am Amazon's announcement. Uh, this is a hostile and political act by Amazon. It's another reason why we are on shoring critical supply chains here at home to shore up our own critical supply chain and boost our own manufacturing.
That was White House Press Secretary Caroline Levitt earlier today Matt Day joins us. He's Bloomberg News technology reporter. He covers Amazon. He's out there in Seattle. Matt, clear this up for us, what's going on here?
So Amazon says, there's nothing to see here. What they say is they do have a program that kind of like TAMU will ship parcels cross border from China and hunt.
This is Amazon Hall, Amazon Hall.
That's right.
This is a This is kind of a little known service compared to their retail site. They launched it last year. So what Amazon says is they were considering for a time, you know, putting import duty notices on those products. Right, those products you know today are exempt from from duties. That's loophole that the Trump administration is playing to close as soon as this week. TIMU has already you know, shown customers and shoppers, you know, some version of what
the import duties would be. They were considering doing that. The report out this morning from punch Bowl that you referenced earlier didn't make that distinction, and that's what the White House was responding to. Amazon comes back to us today and says, you know, listen, we were never thinking about anything for our wide retail site. They also say they're not going to implement this for for haul either.
So Matt, Amazon's response was it directly because they were, you know, responding to the White House, or does your reporting show that they really weren't ever planning on doing this.
It's not clear to us how far along these talks were. I mean, it is worth noting again that you know, people have been throwing around screenshots on TIMU for a couple of weeks now showing that for folks getting things cross border after the Dominus loophole as they call it, gets closed, they were showing them duties. So it would make a whole lot of sense for Amazon to be
considering something like this. We don't know how close it was to rolling out and to take Amazon that there were this is not something most shoppers would have seen. It wouldn't have been on their their main retail site.
Well, what could show us like, sorry, go ahead, Matt.
And that definitely looks like they were re spawning to the White House. You know, Yes, once the you know, before Seattle was awake this morning, the Press Secretariat you know, accuse them of a hostile and political act. So they've definitely had to had to pick up the microphone on this one.
Yeah, maybe gets the attention of a certain Jeff Bezos who spends time in Florida these days. Matt, I'm I'm wondering specifically about the Deminimus tax and like what consumers might see as a result of these tariffs going into effect, Like our prices on Amazon for stuff that we buy that is imported, how much are those how much are this price is going to go up?
It really depends. You know.
It's Amazon.
They buy things, and they get things to consumers in a whole lot of ways, right in addition to the direct you know, ta Moose style shipments. You know, they're also a classic big old retailer. They buy in bulk, you know, just like Target or walmarto home depot. Might they import things themselves, you know, some things they're sellers import So it is, it is all a big mess.
You know. We reported that Amazon in some cases has asked some of its vendors in China to do the importing themselves, right, which seems sort of a first sort of negotiating tactic to maybe pressure them into eating some of this costs. But we just don't know what the bottom line is going to be. For consumers. There's a lot of a lot of estimates out there.
You know what we were speaking earlier with Mike McKee, Emily, you brought up this idea of looking at container shipments and ships that are going into the US, Matt. At this point, are we starting to hear of concerns with regard to empty you know, quote unquote shelves, empty storefronts on Amazon as a result of a slowdown in shipments from China.
You know, nothing specific to Amazon kind to be on those broad reports we've all seen about you know, hey, containers, sailings are way way down from you know, this point a year ago. I think that's probably still too early for an Amazon specific story, given that, you know, we haven't seen the calendar roll into May, which is really when the first glimpses of this might appear. That's worth knowing too, that Amazon hasn't said a whole lot about
tariffs one way or the other. They really don't want to stick their neck out on this, and so that's that's part of why today was so interesting, is that they've just they're in the conversation, whether they want to be or not.
Matt.
I'm sure the folks at Amazon today, we're hoping that we'd all be talking about something else Amazon related, and that's Project Kuiper. It's their first batch of production satellites that reach low Earth orbit, and it's a step in the company's effort to establish a broadcasting Internet connectivity from space. It sounds a lot like SpaceX. Is it a viable competitor to SpaceX?
No, A lot of people are hoping, so, a lot of businesses have dreams that it's not just going to be elon Musk's Starlink with an Internet from space outfit. A lot of government fees as well have banked on Kuyper Amazon satellite offering coming online at some point. So this is this is much delayed, but it's welcome news for the folks at Amazon, and we're plugging away on this. They got plans to launch something like three thousand more satellites here in the next few years.
How far ahead of Amazon is SpaceX right now with starlink? And also I'm curious about who actually did the launch here, because Starlink has SpaceX satellites which can do the launching. Besos of course has Blue Origin, but who got these satellites into orbit?
So these ones were sent by United Launch Alliance Workhorse Boeing Lockheed joint venture that accounts for a ton of US government business. But you're right, because SpaceX has its own you know, sort of captive launch arm that is the most successful rocket launch outfit in the world right now. They've been able to get out to a huge lead with their Starlink constellation. You know, they've got more than
seven thousand satellites. I think it is an orbit. You know, Amazon sitting on twenty seven, so they got a whole lot of catching up to do just before they're in the same conversation as Starlink.
And I know that retail customers like individuals house Cheryl Masser, Karen Massel's using Starlink, She's got Starlink. So is this project supposed to also gear towards just regular everyday people getting Internet connectivity from space from Amazon?
It will, Yeah, they plan to offer a regular consumer business. It's going to vary market to market. In some places you'll be working with a cellular service provider probably, and others they're going to sell direct to consumers. We don't know a ton about the business plan, but they've already kind of showed off the little terminals you can put on your garage or on top of your house.
All right, Matt Day, gonna leave it there. Thanks for clearing all of this up for us. We do appreciate it. Matt Day covers Amazon. He's out there in Seattle. He's Bloomberg News technology reporter.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app, or watch us live on YouTube.
Let's chift gears a little bit and talk sports and sports business. Because former New York Giants quarterback Eli Manning is putting together an investment group to bid for a piece of the NFL team. That's according to people with knowledge of the matter. Randa Williams is part of the team with the Scoop. He's US sports business reporter. He joins us here in the Bloomberg Business Week studio Randall. Eli wants a piece of the Giants.
What do we know exactly that? I mean, he's putting together a group. He's long express interest. He said it on NBC earlier this year. He's told me privately, he said it publicly. And there's one team that Eli was going to own. It's going to be the team to do plays for.
How much money is this worth?
Like?
What give us a sense of the numbers that we're talking here?
So I think we don't know right now.
But if you look at the previous two transactions, or two of the three transactions that the NFL had, the Philadelphia Eagles are valued at eight three Philadelphia is obviously smaller than New York, and then the Miami Dolphins were valued at eight to one when Aries and Joe Sie bought a piece of it. So when you think of it in that aspect, I would imagine that the Giants could go for more. But also when these teams are being sold sometimes owners have a little bit of soft
spot in their heart for former players. They're like, all right, i'll sell you a little bit less and we'll have to see.
They are also business people though, I mean we're talking about the Mara family and the Tish family. Yeah, where would this piece of the asset actually come from? Would it come from the Mara family, would come from the Tish family. With a little bit of each kind of give way here.
From my understanding they're selling ten percent total, that could be five to five. But that's what makes the most sense. When the Tish family bought fifty percent some years ago. I believe in nineteen ninety one they bought fifty percent, So if it's ten, I would imagine that it's five to five.
But I'm not.
So sure that ten percent numbers. For a reason though, right, it's this new rule that allows private equity to buy a piece.
Yeah, most of the teams that are considering selling steaks start at ten.
Now.
The Buffalo Bills sold ten to Arcdols and then they sold another ten to limited partners. Joe Side bought three percent and an Ares bought another three So we're seeing these NFL teams shed small pieces of steaks, and they're not controlling steaks. A lot of times. These partners are coming in. I mean, like, I'm happy to own a piece of the team. It's a prideful thing, and you know, the teams move on from there.
What's the precedent here for former sports players bidding for you know, their own their own teams.
There's been a lot of them recently. I mean when.
Rob Penner brought the Denver Broncos. Lewis Hamilton was part of that group. You have Venus and Serena Williams, who are sort of like the original former athlete owners. You have, of course, Dominique Dawes and the Atlanta Falcons, Tom Brady and the Raiders along with Richard Seymour.
You have Vince.
Carter, Tracy McGrady and Josie Altador with the Buffalo Bills. So there's a little bit of a precedent here. But Eli and the Giants would obviously be a big deal because they have not had much success lately.
In general, are the controlling owners using this as an opportunity and I don't mean the Tisch families of the Morrow families right now, but when they sell a piece such as this, are they using this as an opportunity to kind of gain on the asset appreciation that we've seen in recent years and get some cash as a result of that.
It really depends on the group.
There are some owners who are using this money towards stadium, stadium development and training facilities. There's other owners who have secession issues. I'm not so sure that the Marraw family or the Tisch family have either one of those they could just be looking to add owners. If you look at what Mark Davis did with Tom Brady, tom Brady's helping along with the football operations thing, he's not. I mean,
the Raiders have a brand new stadium. They have no need for that specifically, But Mark Davis is trying to have more success. So you bring in the greatest quarterback of all time, and surely Tom Brady's going to help with that.
Eli won two Super Bowls. Maybe this will look something similar.
That's what I wanted to ask about.
What would you expect Eli Manning's plans to be here as an owner.
Would it be more just to.
Earn an investment return or to actually get involved with the operations of the team.
Well, if you're a limited partner, I think that the NFL's business has proven to be invincible in some aspects. I mean, when you think about the Super Bowl that just happened, it had one hundred and twenty seven million viewers, and that was a blowout game. At one point it was forty to six, and that's the pinnacle of things. So the business of the Giants is going to continue to grow. But for Eli, as far as his role with the Giants, that's going to have to be negotiated
with the Damar and Tisch family, these limited partners. It depends on how sensitive a controlling owner is. Sometimes these owners will be like, yes, absolutely, help me. I have no idea what I'm doing. But La Mar and Tisch family have won two Super Bowls in a life last twenty years and four in the last thirty or forty. I think their first super Bowl was in eighty seven, so they've had some success.
We only have like ten seconds, but the business of sports doing in general doing very well, as we've seen other assets move lower in the last few months.
Absolutely, sports is fun.
Okay, everything's fine. You've heard it from Randa Williams, US Sports business for now. That's the caveat. He's US Sports business reporter. Check out his reporting and the team's reporting on the Bloomberg terminal, and of course, at Bloomberg dot com.
This is the Bloomberg Business Week Podcast. Listen live each weekday starting at two pm Eastern on Applecarplay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station, just Say Alexa played Bloomberg eleven thirty.
We'll let shift gears and talk about what's going on in China, because Shijinping has faced growing skepticism and discontent within China due to strict COVID lockdowns, a slowing economy, and a time hacks on entrepreneurs. Now Donald Trump has handed him a gift to rally support at home an external enemy. Jennifer Welch is chief geoeconomics analyst for Bloomberg Economics. She joins us here in their New York studio for
Bloomberg Business Week. It's the Bloomberg Interactive Brookers Studio. Jennifer, good to see you. We've been trying to get an understanding about what's happening on the ground in China. I had the I've been there once. It was pre pandemic, it was twenty nineteen. I believe there was this view that during the pandemic the COVID lockdowns, sentiment among Chinese
locals was very low. There was the property crisis. There is the property crisis, and suddenly fast forward to you know, close to halfway through twenty twenty five, we're seeing incredible developments when it comes to evs in China. We're seeing an essential silence when it comes to negotiations with President Donald Trump. What is the environment right now now in terms of how the Chinese consumers doing and the power that chijin Ping.
Has well, I think all of the challenges that you laid out are still there. There's still the property bubble that they're dealing with, There's still the weakend sentiment, there's still the sort of overhanging of the COVID pandemic lockdowns and recovering sentiment and animal spirits.
All of that is still very much there.
But I think what has lit a fire under Chinese people's sort of sense of consumer sentiment and economic nationalism has been this trade war with the United States. And it's been kind of conveniently time from Beijing's perspective to kind of distract attention from those problems and really draw a lot of unity around this idea of standing strong in the face of this US trade war and these massive tariffs.
Talk a little bit more about just what makes Chinese consumers manufacturers excited in this environment, What is there to rally around.
I think it's US excitement so much as in Chinese you would say true cool or eating bitter, like being prepared to kind of dig their heels in and hold out in the face of what they see is US aggression in the form of this trade wark. Right from Beijing's perspective, from the Chinese people's perspective, they didn't do anything. The US just kept ratcheting up terrace, and now we're
at unprecedented high levels. I think people are sober about the fact that this is going to cause a lot of economic pain at home, especially at a time of economic weakness for China. But at the same time, they're not willing to kind of engage with the idea of looking weak in the face of that. And so that's what I think, is this rally around the flag phenomenon that we're seeing and that the piece talked about.
One question that I still don't know the answer to is who has the cards in this negotiation. On the one hand, the US consumer is incredibly powerful, and no question China wants access to the consumer. Speaking of that we love to buy things, those things often come from China. Who has the power here?
I think in a sense everybody loses. I think it's a question is that's not good in time frames right? You know, for example, from the US perspective, those prices are going to start to hit a pretty dramatic spike once the stockpiling and other kind of advanced efforts that we saw ahead of these tarifts coming into play start to run out, and now companies have to deal with the tariffs themselves, right. I think the other question is
a political question, right. Of Again, from China's perspective, they didn't start this trade war. They're on the kind of receiving end of it, and that's allowing them to dig their heels in a little bit. I think a lot of Americans feel like, sure, we knew President Trump was going to do tarifts at some point. He was talking about that pretty frankly on the campaign trail. This isn't necessarily the trade war that Americans wanted, right, and on
your largest source of goods, right. And I think the pain when it starts to hit in a month or two from now, when those stockpiles run out, then the key question is who has sort of the political will to withstand that economic need. But to be clear, the economic paying for China is going to be very tough, especially if the US is successful and convincing other countries not to let those Chinese goods just flow through other markets.
So what is the Chinese government's role here, I guess in shaping public opinion within China.
So we saw the propaganda machine going to overdrive pretty soon after Liberation Day, facing in two fronts, the internal front, building up that China national sentiment, which again they had a little bit of an easy role to play in that because the people were already predisposed to being upset at the United States, but also externally taking advantage of Liberation Day tariffs to say to the rest of the world,
the US is not a reliable partner. Work with us, don't work with the US to counter US, and let's join up on sides. Now, I think that effort's going to be a lot more difficult in this ninety day pause, where if I'm Vietnam, I'm enjoying right now a pretty good tariff differential with China.
When you were saying external pr I thought you were going to talk about those videos that went viral of like the AYI generated Americans actually making things.
There's that there's the sort of like peace in our time video saw.
This, Yeah, everybody saw this.
Very overweight people like making Yes, they've got a very effective AI video generation scheme over.
There, Hey, you got to run. We really appreciate you staying late to hang out with us. Jennifer Welch's chief geoeconomics analyst for Bloomberg Economics, strening us here in the Bloomberg Interactive Brokers studio.
You're listening to the Bloomberg Business Week Podcast. Catch us live weekday afternoons from two to five pm Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app, or watch us live on YouTube.
Starbucks quarterly sales felt one percent in the quarter that ended March thirtieth, that missed estimates. They've declined, shares of declining about seven percent so far this year. Brian Nickel, he hasn't quite been there a year. You know him from Chipotle, you know him from Young Brands.
He's there.
The company has quote real momentum, he says, with its turnaround plan and expects to return to business to growth despite current financial results not refctm progress formorrow. Let's bring in Bloomberg Intelligence's senior restaurant in food service analyst, Michael Halen. He joins us from New Jersey. Michael good to have you with us this afternoon. You've had a few minutes to dig into these Starbucks results. Where is Starbucks in its turnaround?
We were kind of hoping they'd be a little bit further along here in the United States, US Same Star sales definitely disappointed in the corner quarter. You know, in their defense, it was the coldest January on record. I'm sure there were store closures due to the snow in February, and I probably saw some sort of recovery in March. But yeah, US Same Star sales came in a little bit weaker. On the positive side, China in the International both did a little bit better. International probably is in
the biggest concern and something they're tackling second right. US has really been the focus thus far far in Brian nichols tenure, China and international is something we expect them to topple later this year.
Bloomberg's Daniella sar Tory is writing that these earners reports highlight how hard the coffee chain will have to work to regain lost ground.
Who are they losing ground to right now?
You know, that's a great question. You know, there's a lot of speculation that it's too you know, some of these fast growing chains like Dutch Bros. And Seven Brew, they're also most likely losing some some business to people just brewing coffee at home. People are working from home more often, right and you know when, and they're looking to save money because you know, low income consumers especially because you know while it's are strapped.
I mean, one of the biggest I feel like personal finance tips that you here is make your coffee at home.
Whether or not that actually there's builds wealth.
That is something that we hurt a lot and now a lot of people like to throw water on it. Barry Ridholtz, who has the Masters in Business podcast here, he's got a whole part of his book where he's like, just ignore that.
Just buy the coffee.
Yeah, that's what it's called. It's called buy the blank coffee. That's literally what it's called. That's so funny.
But it is interesting that potentially people are pulling back because.
It adds up. It does add up.
Yeah, well how much is it the average not the average ticket price necessarily, but what are people spending at Starbucks right now?
Yeah? I don't I don't have those numbers for you, but listen, it's you know when you're on the go, when you're working in an office and you need to stop on your way, right, if you're in a rush, it's a lot easier to stop at Starbucks than it is to make it yourself. Starbucks is working really hard to improve the operations to get customers through the store and through the drive through much faster.
Right.
That was really a big part of their issues. I would say most of their issues that they've had under the previous management team were self inflicted. It wasn't because of Dutch bros. And people making coffee at home. It's because the service suffered significantly.
Right.
The speed of service, it was just way too long. The sequencing of orders both in the store and for mobile orders didn't make any sense. There was no real sequencing based on location for the mobile app, which is just mind blowing. So first and first out kind of queue, no matter how far away a customer was from a particular store, right. And so these are all things that management is working hard to improve on to get customers to come back, because it's, for the most part, it's
a convenience occasion, right. Brian Nicol definitely wants people to stay in the stores more and linger and they're doing that by you know, bringing back ceramic cups and offering free refills, right, But a large bulk of their customers, I'd say a large majority of their customers really want to be in and out quick, right. It's a convenience type. The cage and speed of service is powermount and that's that's really been the primary focus since Brian Nickel came on board.
What's the China story here, Michael, Because earlier in our program we spoke with Jennifer Welch at Bloomberg Economics, she's chief geoeconomics analyst, and she spoke about nationalism in China in the midst of this trade war that we're seeing. In twenty twenty four, China accounted for about eight point three percent of Starbucks's total revenue. Is that a number we expect to see grow because for years Starbucks the China was the growth story for Starbucks. But you know
that was years ago. Now they got luck In and so many other homegrown brands there people can want to support Starbucks.
Yeah, Listen, that's you know, a big reason why Starbucks has probably underperformed their restaurant peers over the last few weeks. Since the tariff announcements were made because of their exposure to China, because their stores are company owned in China, right, so there is a risk here. There is definitely a risk of you know, boycott's. The Chinese government has done it before the US retail companies. There's no reason why it couldn't happen with Starbucks. We're not saying it's going
to happen. But what was once seen as a strength owning their stores in China, I think is now being looked upon as maybe, you know, a bigger risk. And so you know, it also comes at a bad time because Starbucks was thinking about franchising that business, selling that China business to a partner and just collect royalties on it.
Right.
But with all of the tariff drama, you know, I think it's buyers aren't necessarily lining up to pay a premium for that business. So the timing is kind of tough. But I would say that's the number one concern about this company. That's why it's down about twenty I think about twenty four percent from its hies just you know, earlier this year. And the other concern would be coffee prices.
Right, So the tariff.
Drama has caused a lot of commodity deflation over the last three four weeks, but we haven't seen that with coffee prices. Coffee prices remain elevated, and that's definitely a concern. They buy forward and they lock in supply right, so they may be okay for the next couple of quarters, but further down the wrong line. If coffee prices stay elevated, that's gonna hurt margin.
Just twenty seconds. Coffee prices also include tariff implications.
Michael, it could we're you know, we're gonna hear more on the call. I'm sure, but I can't give you a number on that just yet.
Hey, appreciate you joining us. We're gonna let you go and go jump on that call. Michael Halen is Bloomberg Intelligence, is senior restaurant and food service analysts joining us from New Jersey.
Yeah, I bet you let me drive.
Oh no, no, no, no, This is not a who's.
Gone to j honey, Please, I'll do the graveled excuse.
Wait, I want to try.
It's good question time.
This is the drive to the clothes Punks A musing well on Bloomberg Radio.
It is Bloomberg Business Week We just got an update from Bill Maloney and Charlie pell at the S and P five hundred, up six tens of one percent, but off its best levels of the day, up more than Emily what is it, seven and a half percent in the last six days, it's been.
It's been a run of risk on.
As Eric Leaner said, at least in the short term, investors are riding the momentum upwards, even if there are risks building in the background that maybe will come to fruition later on once we get more certainty about.
Tariff's Well, curious about some of those risks that Michael Green has his eyes on. He's portfolio manager over its Simplify Asset Management. He joins us out there in California. Hey, Michael, you've got an interesting note that you sent to our producers ahead of ahead of this conversation, and it makes me think of something that Emily brought up earlier, and that's alternative data. Because you're saying that real time indicators
of business activity like trucking are slowing rapidly. What are you seeing out there, Well.
That's absolutely what we are seeing.
We are seeing forward looking metrics, things like railcar bookings, things like trucking indicators. Those are weakening very rapidly. We're already seeing ports slowing down in particularly Los Angeles, which is going to be the first to feel the impact associated with the Chinese tariffs. That's the first destination that you hit. It takes longer to get to the East
coast locations. We're absolutely seeing something that looks very similar to the initial COVID shutdown, in which basically activity just came.
To a grinding halt.
The key difference this time around is, unlike the COVID events, in which we knew that going outside and being in physical proximity to other people meant that we were potentially putting our lives at risk, We're not seeing that type of slowdown of economic activity. It's just this slow rumbling boil that's effectively occurring underneath the surface that is painfully apparent.
It's a little bit more like the stage of COVID where we were watching the events in Italy or in China and beginning to think is this possibly going.
To make it here?
So how do you square that kind of like bubbling of alternative data that looks concerning with the fact that, as Tim had mentioned, the s and P five hundred is up something like seven percent over the last just few days. Here, we really have had a risk on moment. Does that all make sense in the context of what the data is telling.
You, Well, it doesn't make sense in the context of what that data is telling us, But it makes perfect sense in the context of another alternate data set, which is just the very simple observation that very few people have lost their jobs yet. And so if this economic slow down persists, if we do see the impact of this carry through, we are likely to see that show.
Up as job losses.
But for the past five years, most businesses have struggled to attract and retain qualified employees. That means that if something like tariffs that could be removed with a tweet or a speech are revoked, they're terrified that they're going to wake up and suddenly find that they are back behind the eight ball and they are faced with not enough employees to meet the potential rebound in the economy
that could occur. That's causing basically companies and they're planning departments to freeze and say, well, let's try to reduce hours a little bit. We saw clear evidence of that in the Dallas Fed Manufacturing Survey. I think it was yesterday in which we're seeing the expect the expectation for hours begin to fall if this persists, if it does actually manifest, And again, unlike the COVID experience, this time there's not the sense of national emergency.
There's not the sense that this is a unifying event.
Instead, this very much feels like it's a fracturing event, or half the power population is saying I told you so, and the other half of the population is saying, well, we had to do this.
You know, under these.
Conditions, we're looking at a situation where that stimulus is likely to arrive much later, and only after we've begun to see the impact of it.
If people start to lose their jobs.
Then their contributions to four oh one k's begin to decline, Then their contributions to their iras begin to decline. Then they begin to tap into their four oh one k's or iras for additional spending power. We're starting to see the first elements of that, but it really has not hidden in a meaningful fashion yet. And this is one of the paradoxes of a passive dominated world. All that matters is do people have jobs and are they contributing to their four oh one k's.
The answer so far is yes, And yet I am seeing over the last seven days the S and P five hundred and five point two percent over the last seven trading sessions.
Yeah.
Well, the simple answer is is that people still have their jobs, They're still contributing to their four oh one k's, and anyone who is trying to trade in advance of this has already sold.
Right.
We've seen the d risking from Europe. We've seen the d risking from systematic strategies like CTAs or vault targeting funds. We've seen the active managers move to rapidly de risk their portfolios. This is particularly true in the hedge fund community. Once they've sold, they've got nothing left to sell, so the pressure on the market then becomes upwards.
Mike, have you made any recent portfolio changes in light of the tariffs post Liberation Day? Have you added any specific hedges or taken risk off the table.
Well, we were fortunate in being positioned for this, so we actually saw this as a COVID like event that was unlikely to lead to a slow and gradual decline and said it was likely to manifest itself very much on the event, and so we were fortunate in the high Yield Fund that iron that carries credit hedge protection, to have positioned ourselves well ahead of this event that
allowed us during the event to actually re risk. And now we're in the process again of putting back on hedges, positioning ourselves for what we think will be the second leg down on this.
Now that could be wrong, right, we could see a reversal of tariff policy.
But it does very much feel like significant damage has been done and that will ultimately have to be reflected in the flow dynamics.
That I was referring to before.
As I start to add back hedges, I'm sure other people are doing something similar.
Whether they are re risking and contributing.
To that rally, or whether they are taking this opportunity to add back hedges is their individual choice. But the simple reality is that we've seen much of that impact already, and so I'm looking to actually reduce risk.
As the month comes to a close, I.
Have to ask about bitcoin because it's doing so well over the last few days.
It's up ninety five thousand.
Now, is that a hedge that people are using or people using bitcoin now as a safe haven.
Well, that certainly is the dialogue, right, that's the narrative associated with bitcoin. The reality of bitcoin is the same reality that exists for any financial asset. If people buy it, you have to find people willing to sell it. If they are less willing to sell it, the price will move higher. That is what we are seeing with bitcoin. Just like we've seen a return to buying of stocks once the selling was done, we largely have seen a
reversal of the outward flows in bitcoin. We've seen positive inflows into the ETFs and other avenues in which people buy it, and that obviously creates a self fulfilling mechanism. Right, we're on the radio talking about is bitcoin a flight to safety instrument? I'm sure somebody out there is suddenly now looking at the screen and saying, gosh, it might
be maybe I should buy some bitcoin. If it were to start to fall, that process would likely reverse itself and you would see the flows reverse, and ultimately the price would fall to reflect that. Bitcoin is just a fantastic illustration of the inelasticity in markets that I often highlight in my writings and in my speeches.
Hey, we appreciate you taking the time to join us today. We got to have you back soon. Michael Greeney's portfolio manager over at Simplify Asset Management.
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