Nasdaq's Dillard: The SPACs, IPO Pipeline Remains Strong

an executive vice president. And Lauren, You've got a lot of great experience, including um working at the Carlisle Group. But you know, the the NASDAC name jumped out at me today because of UM, the rotation that we've been seeing lately and then the huge jump today. Do you have any thoughts on value versus growth, Nasdaq versus Dow,

um Tech versus old economy. Well, first of all, thank you for having me, and I am am Apell, a time user and they joined the Nazack one hundred at the end of last year, so let's make sure we speak to that first. UM. Look, I think a couple of things, UM, what you're certainly seeing our investors expressing, you know, concerns around rates UM frankly, some uncertainty and moving maybe into more cyclical sectors that were out of favor. If you look back to March of last year, UM,

the NAZAK composite has almost doubled. So UM. That was certainly an expression of a belief in what we would call the you know, the digital economy that people certainly believe in. NAZAC one hundred represents UM. We saw position degree brillion of influence. But I think what you're seeing now is is a broadening expression with some of the

uncertainty that's going on. So, Lauren, one of the things we've really seen over the last twelve months, it's really been fascinating, has been the really the surge in specs UM. They you know, started out with a trickle and we've seen specs over the years, but it's been really a small part of the market. It's just exploded over the last twelve months. What do you make at it from your perspective at the NASDAC, Yeah, Um, you're exactly right.

I think in two thousand fourteen we had a stat that they counted for about three percent of the deals and year to date, in one we have welcomed a hundred and forties six packs once the NAJAC. So UM, it's definitely, ah, you know, a significant way that UM

people are accessing the public markets. I mean as a market provider, I think, you know, we saw several years and the States back of course too to my time at the Carlover where companies were staying private longer UM they were in the hands of private investors, and that was certainly a trend we were seeing. Now you're seeing companies accessing the public markets, whether it's via I p

O s, whether it's via direct listings. And then of course back I think, of course there's an important sort of education UM market understanding underpinning that that is there by it UM. I I actually believe if you think about value creation UM for companies, that accessing the public market and allowing those companies to be in the hands of investors during more of the value creation is a

long term a good thing. I think it's theoretically to me it's so cool because it's like the democratization of earlier stage investing, or it's someone called it a poor man's UM pe uh you know, I'm not going to be able to get into a private equity deal. I'm not a sophisticated investors, so I think it'd be sweet to take a shot at a couple hundred of a spack. The thing is, Um, it's it's gone beyond Haywire at this point. I mean, there's a company called just another

acquisition corps Um. The numbers that you named already, Laura, Laura, are are huge. And you know C C I V, for example, trading at like seventy dollars um for a while and then dropped like sixty the deal was announced with Lucid. Isn't this a problem for retail investors? I mean, aren't they getting in a little too deep? I mean,

I think it goes back to market education. It will be interesting to see what our regulators decided to look at their obviously looking at some of the trends going on with lit markets, um with intelligent ticks if you want to get into some of the market structure. So you know, the regulators will have to decide where to look. Again. Um, I think you're probably right. There's a fine line between

accessing the public market, which is a good thing. I mean our whole belief at Nasadak is championing inclusive growth and prosperity. So it aligns with market access, and it aligns with getting value creation into the hands of investors. But they are they are riskier and people have to understand their rights. Lauren, what's the outlook for I p O S in one. It looks like, um, you know, the stock markets at a near all time highs seems and we have an economy reopening. Seems like conditions will

look pretty good. Yeah, the pipeline is incredible, really strong. Um And already, frankly, have we've seen more companies UM. I think it's a hundred and forty eight and I'm quoting that number UM Access actually the public the public markets year to date, so it's we've already are seeing that. I think that's a good thing. Again, going back to investors, UM And and certainly you would argue the window is open and we still have a strong pipeline. UM. I

just want to quickly ask you about trading. What are your thoughts on the whole pay for order flow situation? Since we're talking about this already, might as well get get into it. UM. You're a market provider. This touches obviously everything that you do, UM does. Does that worry you or do you think we're going to be able to find a decent solution to it? So I mean, as a capital markets operator, we believe obviously in fair

and open markets and form all market participants. So we have been saying that the rise of the retail investor participating in our markets is a good thing UM, and it's certainly reflected in UM in the numbers we've seen and frankly, in a time if you look back from a year from now, the volumes of that have that have transacted on the markets between equities and options, it's extraordinary and we as a market provider are very frankly

proud of that resiliency. UM. It's something we've invested in as you look forward for retail, for retail trading and the discussions that the the SEC and SENERA are looking at. You know, we've engaged with our regulators for close to two decades on you know, very arguably esoteric but really important market structure concepts, having lip markets, having price discovery UM.

We're obviously subject to regulatory oversight. UM Intelligent tixs you heard in the SEC discussions around tick sizes, um and all of that is with with the lens of making you know, price discovery. Financial markets serve all investors, including retail investors, so without into the nuances of payment for order flows. I think broadly speaking, we as a capital markets provider want there to be fair and transparent markets. We would like these investors to stay in the market

long term. I think that's very important to us. Hey, Lauren, thanks so much for joining us. We appreciate it. We always like speaking to smart people that come out of the Robin School of Business at the University of Richmond, my alumn I'm an alumnus there, so it's great to speak with you. Lauren. Lauren is the e d P Head of Investment Intelligence at the NASTAC Private What a cool title. What a cool I mean, what that's an awesome title. I'd love to have that, But also what

a cool career. I mean she managed more than thirty billion dollars in assets across six international offices at the Carlisle Group, which is already an incredible name, and then moving on to Nasdaq, which is kind of the you know, the modern story of equity markets. I mean, the old stuff is like old. And you know I was talking about the Dow Jones Industrial Index earlier. The kids don't

even don't even talk about that. John Farrell, Yeah, you can't talk about you can't quote the down joys industrials to John Ferrey gets all upset. So we'll have more coming up. This is Bloomberg, all right, Matt Miller. I'm gonna tell you one of my bucket list items which you probably wouldn't guess, and that is to take a trip on one of those big ocean going cargo ships, you know, the ones to see out there on the

ocean with a container ships stacked like twenty high. I have no idea how those things float, how they don't tip over, how the cargo doesn't fall into the sea. But maybe our next guest can help me hit your ride there. Gary Vogel, CEO and director of Eagle Bulk Shipping. They're based at Stanford, Connecticut. Boy, it's a public company trades on the nastac on aner the symbol e g l E. The stocks had a great run as economy start to open up, up eighty six percent year to date,

up eleven percent over the trailing twelve months. Gary, thanks so much for joining us here. Boy. When we talk to you, Gary, we get a great, great bird's eye view of the global economy. What can you tell us about global shipping and what that's what that's telling you about the global reopening? Yeah, well, as you said, it's it's really is about this UM. This reopening, I mean was severely impacted. It was a tale of two halves the first half of the year, a real UM a

real demand shock. Uh. You know, dry bulk is highly correlated to global GDP. We actually don't carry containers. Are ships carry you know, bulk cargoes commodities such as grain, minerals, cement, and fertilizer. But but really you know, building building products if you will, for the global economy. And so, but what we've seen is by the fourth quarter UM a real return and many many of our commodities to pre COVID levels. And uh, that's that's also continued to into

the first quarter. And that's also on the back of what's been fairly muted supply growth as well. On terms of ships. So, but these are ships that I mean, you send them a long way, right, they go all the way around the world. Um not just like from uh Charlotte too. I don't know absolutely do you ever have stowaways or do you Is there a way for Paul to to just buy a ticket and take a ride from like the Horn of Africa to I don't know, Um Australia, is that is that a possibility? Well, we

we don't. We don't take passengers. They're they're on occasion. There are issues with stowaways, but but the industry deals with that. But we don't take passengers on board our ships now, so sorry about that. Gary. You know, one of the things we've seen, and again I'm really fascinated by the global shipping business in the big ships that

you guys operate. Uh, but I've seen, you know a lot of stories over the past a month or two about ships having a hard time unloading their goods in various ports around the world, perhaps due in part two, you know, that just aren't enough workers there, maybe due to COVID to to you know, unload things and load things. And what are you finding in that regard? Yeah, I think what you're speaking to again is the headline has been about the container industry and and and significant congestion.

You fortunately dry balk we go to different terminals, and notwithstanding certain areas of congestion, in general, UM the trade flows have been fairly normal, and so we've been able to to meet demand, increase demand, and and and get cargoes on and off ships. Now with the exception really of the second quarter into the third quarter of last year, as as countries you know, send people home to stop the spread of COVID nineteen. But we're really operating, you know,

quite efficiently. Now. You know, one of the one of the challenges last year, which if I can take a moment, it was the humanitarian crisis of trying to repatriate our seafarers, our crew on board the ship. We typically work about six months, and as countries enacted these trade travel restrictions excuse me, um, you know, these people were unable to get home and and so there's been a real push

within the industry. We were fortunately able to to you know, UM return to normal by by November, and the industry is focused on it now to ensure that doesn't happen again. But that was probably the biggest challenge we faced as an industry last year. Terrifying. Actually, there's a Bloomberg Business Week story about not shipping employees, but cruise employees that faced really traumatic conditions. UM. Glad that's over for for your people, Gary, and that the um that the industry

seems so healthy right now. I wonder what the biggest concern is going forward? What are the headwinds so to speak? There's literally no pun intended. But is fueling an issue? Is the greening of the earth a problem? Or is the way you can is there a good way you can work with that? Yeah? So a few things to unpack. Their one is um, you know that the the you know, challenge for for shipping rates historically has been an oversupply

of tonnage. In fact, dry boat demand has grown in eighteen of the last twenty years, the two out hours being the financial crisis and last year COVID, So we haven't had a demand issue. It's really as I mentioned, linked to global GDP growth, So supply we've had an oversupply, but at the moment, supply of ships is actually at a twenty five year low at just six percent of

the of the on the water fleet. So I think that boads very well as you have you know, demand and GDP growth coming back with a limited amount of ships supply coming in and you mentioned the greening. I mean, you know, emissions reduction and decarbonization is on the forefront of all the discussions within shipping and and dry bulk

is no exception. And and as as we are looking towards zero emission vessels to get to the I m O targets of a reduction of fifty by fifty and so because of that uncertainty about what future regulations will mean is also uh, you know, a reduction of ordering because of that uncertainty. Right, It's it's an impediment to ordering because you simply don't know how long the vessel you order today will actually be allowed to trade due

to emissions regulations. All right, It's really interesting and we could do that's another thing. We could do a whole show on right now. And I talk so in go. I talked to a lot um up here well up in Copenhagen, and he talks a lot about the fuel issue as well. Gary. It's been great to have you

on the program. Thanks very much. It's a bummer that you don't even let a few people travel as passengers, because I know, Paul, it's not just your dream a lot of people want to get on a shipping, a container ship or a dry good ship and and take a long trip, maybe as a stowaway. It's a little bit easier, Gary Vogel there from Eagle bulk Shipping. Let's get back to the markets, because, of course Greg was talking about the rally that we're seeing in equities and

not the chicken sandwich maker. David Dietz joins us right now. He's managing principal and senior portfolio strategist at Peapack Private Wealth Management. David, Um, I I wonder when I look at this, and I've been asking all of our guests today, um is the rotation that we saw, kind of a surprised rotation over from UM from growth to value as we see the NASDAC today rally and dow UM not

doing nearly as well well. Certainly, UM, what's been driving the tune tune here is this rapid rising interest rates from the start of the year with the tenure treasury below one percent, got up uh close to about one point six percent, and that did feed this huge rotation into stocks that will do well with the economic reopening.

UM banks of course can loan money at higher rates. UH, some of this uptick and interest rates is due to inflationary fears, and so commodities, energy industrial is doing well. And of course they rotated out of the NAZDAC the David territory yesday, David today. Of course it's going the other way around, David. Doesn't that march higher for rates? Doesn't it have a lot further to go? I mean, I've talked to a few people who are real outliers.

Scott Minored, for example, thinks the tenure could go negative. But most other people are saying, look, with the incredible growth ahead of us. Bloomberg Economics UM did a survey UH and found seven point six percent expectation in nominal GDP growth, then rates have to keep going higher from here. You know. I tell my clients that said, there's only one thing more difficult than predicting the direction of the stock market, and that's predicting the direction of interest rates.

But I'll tell you this, If the vaccine rollout continues to march along well, if the stimulus is well distributed and we see another infrastructure bill coming down the pike, If UM, the Federal Reserve does not try and somehow captorizing interest rates. If consumer confidence continues to go in the right direction, I do think there will be a normalization of the economy. That will mean a normalization of interest rates. Remember in two thousand nineteen interest rates range

between two point eight and one eight. Why wouldn't they go back to those levels? So I think that's the path of least resistance, all right, given that bullish background, David, what are some of the names you like right here that you guys are working on. Yeah. Absolutely, So you've got to stay with tech. We've got the long term themes um uh tail winds for increase use of technology. We've heard about the chip shortage. So I want to go with the number one chip producer in the world,

which is Intel. And what I like about Intel it has a cyclical twist to it because it's the chip manufacturer. It also has a value twist to it because of its valuation. You've got a too, almost two and a half percent dividend you're creating about twelve times earnings, is the largest in the world. And also it allows you for participation in for example, artificial intelligence, autonomous driving, uh, the movement to the cloud, and so you kind of

have your best of both worlds. You've got the tech exposure, plus you've got your you know, your value exposure, which I think it's going to do well this year. I think I heard you mentioned the word infrastructure, and for me this is one of the most exciting things about the not too distant future. We all know the two trillion dollar fiscal stimulus package is going to be uh, we're we're likely to see it past in the next

few days. But for me, even more exciting is thinking about what President Biden will do in terms of stimulus spending or infrastructure spending. What do you expects there? So, you know, I think that you know, once they notch this early win in the Biden administration under their belt with the near two trillion regular stimulus, I think they are going to push ahead and get something in infrastructure. What I think is going to be interesting here is

there's not just gonna be bridges, tunnels, and roads. I think it's also going to include, um, you know, the expansion of the Internet to those who have less access to it. So my stock for my clients here for that is Verizon. Now, Verizon is the stock that still hasn't come back to where it was in late ninety nineties. But if you're talking about five G, Verizon is your play.

They've just spent big time to get more spectrum um there by far the best wireless service out there, and so I think that you know, uh, with your four and a half percent divedn about twelve times, earning the Horizon is a low risk way to play expansion of the Internet that could be fueled by an infrastructure package. About thirty seconds, I know, fightsers on your list, has this been a pre pandemic players? Is this your play on their their vaccine? Yeah? You know, I think it's both.

So the stuck ran up to about forty three on the excitement of being the first to get the emergency use authorization from the FDA up there, and now it's back down to thirty four. Why is that because there's two reasons. One is, if we have this big economic expansion, what does that do to healthcare? Do people use more drugs? Probably not. Second, there is still concerned as to whether heavy handed legislation comes out of Washington, but I think

that's well priced into the stock. Remember, healthcare is the other growth sector. You've got about a four and a half percent dividend on fires about thirteen fourteen times earnings, the best d pipeline, and also great exposure overseas who wanted the same kind of deluxe health care that we have. So I think this is a nice way to participate in continued growth in the stock market without taking a whole lot of risk. Hey, David, thanks so much. We

really appreciate it. As always, nobody pitches a name better than David Deeds. He gets it all out there in twenty to thirty seconds. Nobody does it better David Deed's managing principle. And see your portfolio strategist at Pepack Private Wealth Management in Lovely Summit, New Jersey. Let's take a look at the auto business. Man, I know you're a big, big auto van gear head. Let's take a look at the car parts business. There's nobody better to do that

with than Left Peaker. He's the CEO of car Parts dot Com. Love thanks so much for joining us here. We're Matt and I were just looking at the five year chart for your stock again. The symbol is PRTs Trades on NASDAK. It was kind of just, you know, almost a penny stock. Therefore, we're looking at the five year chart until you know kind of you know, kind of March of last year, and then it just exploded. Is this a pandemic play? Is that what your stock

has become? Yeah, that's a common misconception. I think you know, the business wasn't really going anywhere for a long time. Um. You know, the company has been public since two thousand eight. Uh, didn't really grow for twelve years, and then an entirely new management team came in. UM I started in January of two thousand nineteen, and we executed a great turnaround

plan focusing on solving a customer problem. And uh, last quarter alone, we grew nine For the full year, we grew fifty two fifty million, and so you know, we're we're executing really well. I'm really proud of the way the team is executing right now. And uh, wait, way beyond the pandemic now. But I mean, it can't be just a coincidence that your stock is trading for like

two or three bucks for four years. I mean it's fair to say that you executed on a plan to even double revenue, but in March of you go from like a dollar thirty seven to more than twenty dollars a share. UM, that's gotta be more, have more to do with something else than just doubling revenue, right, I mean, what's your outlook? Yeah, so we just released a long term model UM, and what we believe is that we

can grow at er over over the long term. We also believe that we can achieve the dumb margins, and so we have a really bright outlook. We're only limited by the inventory that we have. Uh, there's no no demand issues at all. Demand is really strong and so UM by positioning the inventory closer to the customer, we believe we can disrupt an industry where business has really been done the same way for the last shift. Now, are you're talking about the parts? Are you talking about

the parts industry or electric car UM industry? Because I know you're starting an e v UM UH plug in hybrid hub as well to sell whole cars, right, correct, not to sell whole cars. You know, we're really focused on UH selling parts UM and so for us, disrupting

industry means you know, selling selling more parts. I am going against the likes of Auto Zone and advances and so yeah, yeah, well for evs as well, of the parts that we sell our power train agnostic and so you know, the NYV vehicle has the same will hubs and shots and struts and control arms, um and bumper covers and mirrors. So a lot of the parts are really agnostic to the power train. And so we're just focused on solving the customer problem and getting them back

on their oath. Uh, let's talk to us about the competitive position here. You mentioned a couple of your competitors. Where does car parts dot Com stand in terms of market share in this business and kind of what you're your goals and aspirations. Yeah, so this is a really large industry um billion dollars um. We're a tiny company

with only half a billion in revenue. And so you know, we think that by getting closer to the customer and we have a unique value proposition and that we get the parts from the factory, will put them in our distribution centers, and we'll ship them straight to the customers. So by cutting out all the middleman, we're able to pass on a lot of the savings to the customers.

So most of our parts are you know, fifty to sevent cheaper than you will buy them at your local advance or AutoZone store, and so that's how we believe we can win by passing on a lot of the savings to the consumer and cutting out all the middlemen. Are you do you think that your customers are going to increase in number due to the pandemic in any way?

I mean the idea that people won't want to ride the subway anymore or buses, They're gonna want to buy cars, and maybe the used car market is a huge part of that. Is that part of your plan that is correct. So a few tailwinds here. One is that you know, more people will be relying on personal mobility. Uh, there's going to be more used cars on the road. Um. Additionally, it's not good for cars to be parked for a while and driven, then parked for a whild and driven again.

A lot of the rubber gaskets and things like that breakdown. People have been delaying some of the maintenance because they haven't been driving as much. UM. So all of these are tailwinds because eventually, you know, cars start breaking down. And there are a lot of cars on the road today, about two days seven million in the US UM and the average age of the vehicle is about twelve years, So a lot of old cars on the road. This

is great for us. By the way, you used to be at RAMA, which if people don't know the U, the A V space and cameras, it's huge. So what are you bringing from Adderrama to car Parts? I say, get just a relentless focus on on the customer. And uh. You know, electronics is a tough space to be in because margins are so low, and so you have to find a way to differentiate yourself from all the other competitors. You know, Buz, Buy, Amazon, you have some some big

guys in the electronic space. And so at the ROAMA we did that by focusing on the customer and solving our customers customer problem. That's what we're doing here as well. All right, love great talking you love peaker there um coming to us from car Parks dot com. Uh, and what an interesting story. The stock has jumped more than I guess tenfill over the last year. 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, Opole Sweeney, I'm on Twitter at pt Sweeney. Before the podcast You Can Oh catches worldwide at Bloomberg Radient m