CPI Data, Cybersecurity, And Tech

the market perform in the face of that headwind? Let's check in with Avery Sheffield, co founder and c I O Advantage Rock that's part of Rockefeller Asset Management. Every thanks so much for joining us. What did you take away from a seven point five CPI print? Yes, well, I mean inflation is raging. I mean it was kind

of added anticipated given what we've seen in companies results. UM. I think what this means is that, you know, we're going to continue to see more pressure on consumers um and consume we're spending and really what the the key for us is, you know, where is this price into the market and and and where it isn't you know from a stock perspective, do you expect uh this to cool down by year? End significantly. I mean, we've had people say it's going to come down, but you know,

it's still going to be four percent. We've had the other people, um at the minority of the people we asked, say yeah, we'll get back down to too. Yes. I mean I think it's going to uh continue longer than anticipated and higher than anticipated, because you know, even just in earnings results this morning, we're hearing companies talk about price increases in the midst at least in the mid single degens, even in the food space that we haven't

even seen yet in stores. Um, you know, we have a wage rate going up that are just starting to factor in. And if I would say, like, I mean, no one knows, of course what the absolute where this is going to settle out. You know, is it going to run seven percent plus forever? You know, I don't know if it will be at high UM two percent

though just instinctively seems seems far too well. And I really think, what what what's changed, um that that will endure UM is that one one piece factor that has drive kept inflation so low for many years has actually been that companies have been paid um by investors to invest, to grow and to grow at any at any cost um in meaning it at low margins or negative margins.

And now that many of these companies have reached a large scale and aren't able to grow UM by gaining share anymore, they're actually having to raise price UM in order to justify their business models. We've seen this in e commerce recently, We've seen this in UM home entertainment.

We've seen this in that even the exercise space. Across the board, companies that have been lost generating or nearly lost generating and gaining massive share are now flowing growth dramatically and looking to raise price in order to to grow revenues. And so that dynamic I think is very underappreciated it and likely to lead to a higher level of inflation than we've seen in the past. All Right, So, given that background every where, are you and your friends

advantage rock? Were you guys putting money to work these days? Yeah? Great questions. So we are, um, you know, we're long short and so on the long side of we're invested in companies that we think have underappreciated pricing power and a really position to benefit um from these inflationary dynamics.

From a competitive perspective, so UM, so and and and then on the short side, we we actually your short companies that we think UM are believed to have pricing power UM and and and probably are not likely to so. Two specific areas on the long side that that we're we're excited about. One is retailers that have kind of been disintermediate or to everyone's thought, we're going to go away because of e commerce growth. And now e commerce

is significantly flowing. I've been talking about like peaking e commerce UM, and now that that's blowing, that's the headwind that's gone away to gone away to are that's that's that's UM subsiding to margins. And we expect that dynamics to contain you because the costs of e commerce delivery are continuing to go up. In those companies that actually have stores and great merchandise, we're gonna to cost advantage to offer lower prices to their consumers. I think that's

really under appreciated. These stocks are not are all all still priced like they're gonna have massive headwinds for a long time. UM. Another area with under appreciate pricing power is actually UM into the telecommunication space. Actually, this morning's CPI if UH tele like wireless telecommunications bill came in, actually get a little bit negative year over year, down negative points five. And we think that that's about to change.

You know, if you look at cable, if you look at even landline services UM, their CPI is run and kind of mid single digits, and those companies are trade like they're they're never gonna have any pricing power. But you have consolidation in the sector UM and UH and and and you actually have a lot more stability in turn, which we think UM can lead to under appreciate pricing powers for evaluations. And then again on the short side, UM, you have e commerce players that are still very expensive

even if stock prices have come down. And then you have companies in other areas UM that have been considered to be very stable businesses with with strong barriers to entry, but again growth is slowing and UH and we think that they're going to be less successful in passing on price increases than people thought. All right, all right, Avery, thank you so much for joining us. Really appreciated. Avery Sheffield, co founder and c I O Advantage Rock. It's part

of the Rockefeller Asset Management Group. All right, let's talk about one of the fastest growing areas on wall streets, certainly attracting a tremendous amount of capital. That's e t F And nobody better to chat et F s than Ben Slaven, Global head of ETFs at B and Y Melan Assets Servicing. Ben, thanks so much for joining us here.

You know, I look at the E t F space and it's just I'm wondering, is it just cost or lack there of in terms of fees that is really driving the I guess a reallocation of capitals maybe from mutual funds to e t s. Is it just cost? What else is the attractive or what else is the driver there? Fees are a big part of this, but there's really more going on. After a quiet January, we've seen an absolute avalanche of flows into et F the past week, um. You know of about thirty six billion

that came over the past five days UM. And we're coming again off a record year. So clearly there are investors that are looking not just for fees but other ways to access investment strategies in the U t F rapper. They also provided a much needed about a liquidity recently with the volatility we've seen, and it sent e t F soaring to overt of the total market volume, up

from of the total trading volume last year. And so while those broad based, cheap passive e t f s are getting their share and will continue to get their share, we are seeing investors and cretantly look at other ways to play this market, such as financial sector semiconductors, floating rate ETFs, just trying to look at other ways to tactically positioned for this market with what we're seeing with the FED potential FED hikes, UH, the inflation print this morning,

and repositioning at this part of the market cycle. So quite a bit going on there. How do you I mean, on the one hand, UM, you want to make sure you're buying the right sectors, the rappers that you have are around the right companies. But on the other hand, you want to make sure that you're getting UM the right E t F structure, not paying UM fees that

are too high. How do you look at the sort of more technical side UM, the kind of back office side of E t F s. Well, on one hand it's getting easier and on one hand it's getting more complicated. I think the more complicated part of this is really UM the explosion in the number of products UH that are available. We saw a record year last year in terms of new launches, but we also saw a record number of new entrants come into the e t F market.

I think the statistic is around a quarter of issuers right now in the e t F market came to the market last year, and that's increasingly creating a lot of noise. The good news for investors is that the transparency that e t s offer UM provides an excellent window and tool for investors to be able to dig in and really see what those e t F s

own on a daily basis. And all of that information UM, you know, is made available, whether it be on the website or other data sources, so for investors to to really understand what their exposure is and how to quickly find UM the types of either broad based index trackers or tactical, more thematic type funds that that investors are seeking these days. And then another really hot area hot topic within financial services is crypto and talk to us

about the crypto et F opportunities out there. I know we've had some recently, but it's more on the futures rather than the underlying crypto give us a sense of how that market's evolving. Yeah, it's an incredibly hot space, UM. As you mentioned. UM. First, we've seen you know, the markets start to stabilize. I mean, you know, Bitcoin is broken through the downward trend resistance level here since the low in November. It's up today. It's trading around forty UM.

But we've seen an incredible amount of investor interest and an expansion in the products that are available. They are now more than eighty crypto et s trading around the world. UM. But you know, the flow picture more recently has been negative in the last few months, not surprising given markets, but turned positive recently and we've seen inflow into those products.

Now in the US, we just have futures as uh E t f s here available given what's currently allowable under the rules UM, and we have seen uh interest uh in those products, but no particular movement yet around the physical or spot based bitcoin ETFs from the SEC. So at this point investors have the future is based products to choose from UM that are currently active and trading in the market, but but again offer a different type of exposure compared to a spot bitcoin position. Ben,

thanks so much. For joining us. Really appreciate your insight here. People are working from home, they're learning from home, they're putting more and more data in the cloud. That raises some security issues in my mind, UM, and I think in a lot of people's minds as well as again, they do more banking from home and all that type of stuff, more financial services. T J Jung, CEO and co founder of a Point that is a public trader company on nastac A VPT is the symbol there. It's

got a market cap about one point two billion dollars. UM. T J, thanks so much for joining us here. I just can you step back and just give us a sense of how the average person's data is secure? How secure is it generally speaking? Good morning, It's a pleasure to be here. UM. Well, so, we actually really focused on large enterprise and B two B data usage patterns and even small businesses. We found is actually nine of

the data leakage happened unintentionally done by internal actors. At the same time, though, we actually did a survey of over a thousand what we call managed service providers. These are small service outfits that helped small businesses get onto cloud. UM and over fifty of them have reported uh we and ransomware attacks. So there's a saying our industry. Uh, it's really not a matter of um, you know, whether you got attacked hacked. It's it's just a matter of

when you realize it or when. So yeah, it's it's it's a scary time right now. UM. That means you know, your data, your enterprise data in cloud on prem need to be secure. And this is where Appling comes in, or a software company that build technology to help businesses to collaborate on prem in the cloud with confidence across Microsoft Space five, Google work Space and Salesforce. So, um, how can this be changed? I mean it seems to be it's just getting worse and worse the uh you know,

the attacks. Um, and I can't I can't be confident that the defense can keep up. Yeah, it's definitely a multi layered approach. Obviously you have the authentication then pass word, uh you know control multi factor authentication just too. From the parameter, what we do is we also focus on,

you know, internally, who's accessing what when. So we actually recently released a cloud product called confide that allow business users to control who has access uh security share that, but also mindful of the data residency requirements that you may have uh to satisfy regulatory requirements. So we actually support this over a million cloud users today, so it's

truly a multi layer approach. We're also um looking at releasing solutions where we can alert business users in real time when a ransomware attack is happening, so that detection capabilities. So but it is you know, there's that technology. There's also the education because you're only astroids your weakest link. There's all kinds of social engineering happening now in real time around you know, getting somebody to like something right,

so then the taper getting system. So what we focus on, you know, looking in the system and looking for weird patterns and and try to catch that. But you're right, it is a catamouse game and it's a it's also weapons race at the same time, it's it's not a easy problem to solve and t J you know, I guess I have some level of confidence that large corporations can you know, make the investments needed to secure their data, although there's lots of examples where that they get hacked

as well. But small and midsized businesses and people and people what and what can small midsize businesses? In the last week, I've been fished yep, and also kind of scammed on the phone. And it sounds like I feel it's worse in the US and isn't Germany. It's never happened to me in Germany. As soon as I get back to the US, it's like I'm getting all these calls telemarketers, scammers, and then I get fished. And so thirty seconds t J. What do the small midsized businesses do?

So small to mid sized businesses. One obviously education right to be aware. Uh. Secondly is deployed technology that can also recover for them in case of a attack. But will you talk about the fishing. I actually had the experience where when I landed into a country, third world country at one point, where as soon as my phone PINZA antenna, they actually sent me a SMS from City Bank right and mascurating as a logging page. So yeah,

it is scary. Were here almost another week. Uh, it's a it's a you know, a combination of process with education as well as deployment technology. And this is what we actually help a lot of small businesses with the century even ransomware data recovery warranties. So yeah, it's a it's a combination, but it is someone something that we have to be very mindful of. The continue to be vigimin. All right, t J, thanks so much for joining us.

Really appreciate getting your thoughts here on this big issue cybersecurity board. You can talk about it all day. T J. Jung, CEO and co founder of A Point. All right, let's bring on somebody who actually knows what's going on in this whole space. Dan Ives, Managing Director Senior Equity an also Wedbush Securities. We talked to Dan about a whole number of topics related to technology. Dan, thanks so much for joining us here. Had some good numbers out of

Disney last night. The streaming business seems to be doing pretty well for them. You know, as you take a look at Peloton again, the stock bounced back Dan from those lows here. Do you think there's a natural owner for Peloton that other than it being a standalone company. Yeah, And I think the streets interpreting the Peloton's there's gonna be first sale sign on the lawn, right And and now that's why the stocks up because I think when you look at Apple, that's probably, in our opinion, the

most natural buyer that would see it. It's accursor size as well as sort of next gen healthcare initiatives, and I think other bidders could be there and Amazon and Nike. You tell about Disney because it's all about content getting more into the living room, and you've got three million subscribers in a premium brand. And if you look at the history of consumer brands that then started to cut cost, Fitbit, go Pro, there's a graveyard of them, right, So I

think Peloton that the rings in the law. But what about streaming fitness? Does that make sense to you as an emerging market? I mean, um, if Disney starts to pick up Peloton trainers and Tonal trainers, can it eventually, Um, you know, get a Netflix style foothold in that market. Well, And I think what you're seeing with Disney, I mean they're on the aggressive starting to close that gap with Netflix.

And I think part of why the stocks were acting way did after that Netflix disaster quarter, the view has ripped a band aid off with Disney. Instead, it was the opposite on with Strong on the park side. So I think Disney is going to continue agrestaurant content. Yeah, you look at things like the Sunday Night ticket, which we believe Apple would also bid for as well. More and more, there's gonna be an arms race. It's content and that's why even when you look at Peloton, can't

just about extreaming exercise. It's it's a content service that goes more and more another touch point to the consumer. It's interesting, uh, Danny, I guess it is all about content. Some of the red Stoner's right, content is king, but it's hard to kind of, you know, sync up the disappointing sub numbers from Netflix versus the better and expected for Disney. I mean, I'm a huge Ozark fan, so I'm all in on that Netflix in this quarter. But is it just about content? And uh, is it just

whoever spends the most? I guess when else they're bundled with ESPN? You know, has as I think been very successful. The Beatles was another driver in terms of watch that it comes down to. They have a unique ecosystem. But Netflix, Netflix is on the top of the mountain, so from there you can only go down. Right, There's much more, especially on the international subside. But I mean we'll give you take a step back. This has been a Nathan Chin like earning season for Tech bringing it. That's see,

Matt didn't get your reference. But I watched the figure skating last night. I'm all over that. I was like, who's Nathan Chen? He killed it is he does for America. Yeah, so he didn't switch his allegiance to China. You know he didn't. He's the ice skating good Yeah, he beat it all right. You know, I know Matt doesn't like to talk about autos very much, damn, but I gotta get your thought here on Tesla as just I really

want to get it. From the perspective of competitive position, how do you think Tesla positions itself and what will be an increasingly competitive EV market? Why didn't they further flexed him muscles? From a supply perspective, right now, demands outstripment supply by and if you look at electric vehicles for GM VW and know others are gonna significantly go

after this and there's mean many winners. But in terms of Tesla, because of the distribution and because of the factory build out, what's happened in Austin as well as the further build down in China and wee wee Berlin. In the coming months, they're going to be able to really expand supply two million units per year and that's the key. And you know, I think part of Tesla's

language is because Musk talk about the supply chain. I think really, you know, sort of fan the flames there and I think now it's just about a supply issue, not a demand issue. How do you think the UH supply chain crisis and the chip shortage is sorting out? Are you getting um this earning season better visibility? Yeah, I mean we're seeing a queer moderation going into February and marks we saw not just from GM, We're seeing it across our check snesia and I think we could

talk inflation and tenure all we want. The biggest overranging tech is the supply chain that starts to moderate hugely bullish. And that's why I think you coming at earning season techer earnings really across the board, from chips to software, some of the large players and cloud, Microsoft, Apple, Amazon and others robust. And that's why we've tech socks move higher here in terms of what we're seeing on the fundamentals. Hey, Dan,

always good catching up with you. We just throw all things that come to our minds at you, and you've got great color. We appreciate it. Dan Ive's managing director and senior equity analysts that web Bush Securities covering off things tech. Thanks for listening to the Bloomberg Markets podcast. You can subscribe and listen to interviews with Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller. I'm on Twitter at Matt Miller three. On bal Sweeney, I'm

on Twitter at PTS we need before the podcast. You can always catch us worldwide at Bloomberg Radio. M