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Like a financial advisor, i'd be telling people just relax, Yeah, take the long term. It'll be very good. I'm not sure if that works. But somebody who does this stuff for living, Sarah Ponzak, She's a senior vice president ubs Private Wealth Management. She used to be here with us and then she bailed on us with the Southern Florida. So I just checked Miami Weather today eighty seven and so oh so that's you, like, more power to you? Yeah what I mean, it sounds like we live in
the seasons here. I don't know that. Sarah, Thank you so much for joining us. Always appreciate getting a few minutes of your time here. So what are the conversations you're having with your UVS clients these days? I mean, you see the markets whip around. They've seen, you know, news just kind of move the market as it relates to terrifs and trade policy and maybe things they haven't really thought about too much in the past. What are your conversations like with your clients.
Well, it's getting very toasty down here in South Florida, so caerying up for the summer. And I think, based off your statement, Paul, you would make a great financial.
Yeah, I'm sure you're having those conversations too, but no, I think it all seriousness.
Just think of the month that we just came off of, the month of April. If you were someone as you know the three of us are, who was watching the markets every single day, every single moment, every single second, checking futures first thing in the morning and first you know, before bedtime, going to sleep, you pull your hair out. You would drive yourself insane. And for many of our clients, who are frankly longer term investors, they're not day traders.
You know, if you would have went to bed at the beginning of April and woke up at the end, you would have missed out on a whole lot of indigestion and you could have relaxed and not driven yourself crazy. And I think it's important to put the volatility in context. Look at the end of the day, Yes, we are witnessing a sea change, and we are going to see changes to trade policy that could affect the economy, and
very well probably will affect the economy. But if you put volatility into context and you think about the stock market and how much volatility you typically witness as an investor, I mean, since nineteen ninety eight, just to put some numbers in front of you, we've seen nineteen years with intry year drawdowns greater than ten percent, and yet in twenty one of those twenty seven years, we finished the
year higher. Stocks finished the year higher. And if you put that in percentage terms, because maybe that's easier to visualize it, that's seventy percent of years we saw injury, your draw greater than ten percent, and in eighty percent of years of stock market finished the year higher. So
this is part of investing. I think Warren Buffett said it very very well last weekend before announcing his retirement, and he said, if you're someone who watching a fifteen percent correction in the stock market makes you freak out, maybe you need to, you know, reassess your investment philosophy, because that's just part of being investor. Frankly, and many of.
Your clients are CEOs who do have operations in China. What are they telling you? How are they being impacted? Right now?
Their businesses are certainly being very impacted. We were actually in New York last week visiting a few clients. I wanted to come in to see you guys at Bloomberg, but we just had back back back meetings and I couldn't, unfortunately make it in. But you know, it's been really difficult.
I spoke with one client last weekend who's the CEO, and they're in the clothing business and they import a lot of goods, as you can imagine, from China, and she said she just came off of the you know, the most difficult few weeks of her life, and the company, frankly, is facing paralysis. You know, we have one hundred and forty five percent tariffs with China right now, and companies
can't operate in that environment. So it's over the next few weeks, and I'm sure that you guys have had many conversations where people have told you this, So over the next few weeks, we're really going to start to see the effects of that, and we're going to start to see empty your shelves we're going to start to see the effects of fewer you know, shifts coming into US ports bringing in goods because no one really wants to operate under a one hundred and forty five percent
tariff regime. What of the expectation we have negotiations in Switzerland this weekend is that that's not going to be the end goal. We are going to see progress move
at least in the right direction. No one knows what that number is going to be at the end of the day, But for you know CEOs and companies trying to operate right now, it's really become impossible because they're just waiting for some type of deal to be struck or at least there to be movement to a lower tear regime because no one can operate right now.
Sir, if your clients want to diversify, where do you suggest they do that.
So I think this year has been a really great opportunity to look overseas. It's the first time in a long time that we're actually seeing international stocks outperform in the United States. I don't think that means that you need to completely dump the US And yes, there's been a lot of talk about the end of US exceptionalism.
I'm not sure we're necessarily on the same page of that, but still I do think it's good to make sure that you're right sizing your portfolios and you do have some exposure to international and you know, our team has been increasing our exposure to international a bit. I also think gold, even though we have seen quite the red this year, still offers a nice hedge for the worst case scenario. And having say, you know, a low mid single digit exposure to gold in portfolios isn't a bad
idea either. And then bonds, you know, bonds. Yes, we're also very volatile in April, but again, if you fellosy for the beginning of April, we'll go. But at the end, you know, you didn't seem nearly as much volatility as you witnessed in FRA month, you know, based off of all the headlines, and especially seeing as though you know, our economists do expect that starting in September we could see one hundred basis points of rape cuts from the
Federal Reserve. Although yes, that's it right now, we're very much in a wait and see mode. As FED Chair Powell, did you know reinsist this week? You know, that would be something that would be reinvigorating to bonds. So to bonds as well are a nice diversify if or someone who's not comfortable with, you know, the ups and downs of stock market volatility every day. And then I would add one more two private markets, private equity, private credit,
private real estate. Even those are areas of the market where you're not going to be witnessing good day to day volatility of stocks, but you still might get you know, equity like returns, so you know, looking to you know, incorporate private markets into your portfolio if you're someone who can handle the illiquidity of those types of investments.
At least, what's the top question you're getting from your clients now?
What the heck is going on? You know, what should we be doing? I think it's so interesting in April. April was obviously a month in which we were talking to clients every day. We were fielding multiple calls every day because there was concern that has you know, ever since we've seen the rally, that's very much calmed down, which just I think is insight into investor sentiment right now.
People feel pretty comfortable after the latest equity rally. Everyone wants to know what next, but unfortunately none of us have you know, insight into the administration. There was a headline that dropped this morning, you know, from President Trump talking about eighty percent taraphrase. Maybe that's the best place to be for China. I don't think anyone believes that's really where we're going to end up, but everyone wants to know what's coming next, and unfortunately known as a
crystal ball. And when we are operating an environment where markets are so attuned to headlines in the day to day, that's when you really have to focus on the long term. Especially if it's a client who recently sold their business, they had a large liquidity event. They're sitting on a pile of cash, and how how do you deploy that?
What's the right strategy to get that invested and not feel like you're paralyzed when the headlines are coming so quickly and there's so many twists and turns in the administration policies.
Sarah, thank you so much for joining us. Always appreciate checking in with you. Sarah Ponzick good friend of Bloomberg. She's senior vice president UBS Private Wealth Management down there in South Florida, getting it done.
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Shane Sissel joins US CEO Banrion Capital is SHANEA. What kind of conversations are you having with your clients today? Are they glass half full people buying or glass half empty people saying this THINGE could get even worse from here.
So under the caveat that, I don't deal necessarily with individuals or even advisors that are looking broadly at markets. I kind of deal with a subset of advisors who really like to look at other ways to manage risk and portfolios, specifically through alternative strategies. The vast majority of the conversations I'm having are with advisors who are concerned about continued volatility in the market and how they can implement some risk management strategies using alternatives to kind of
bolster portfolios to ride through the volatility. And that's really where our focus has been. But I think the takeaway from that is that there's increased interest from advisors and their clients and finding way to deal with what will largely be an extended period of volatility because the administration that is in power right now here is known for, you know, making kind of vast decisions, pulling them back, putting them back in, and I think that that doesn't
bode well for calm markets. And so that's the kind of conversations we're having.
So in the world of alternatives, which I consider kind of private equity, private credit, hedge funds that those types of things, how how do alterners fit into that kind of portfolio in the time of maybe higher uncertainty.
So most of our advisors are at first and foremost looking at the easiest and quickest way to implement alternative strategies into client portfolios. So that's through ETFs and mutual funds and interval funds, mostly ETFs. At this moment, we have a suite of clients that offer ETF solutions that are hedge fund like and I think that that's kind of the key here. Private equity, private credit, that's equity
and credit. At the end of the day, they may not mark to market, but they are very much influenced by what's going on in the public markets. For equity and credit. But the hedge fund like strategies are doing investment philosophies that are inherently diversifying and inherently about hedging out risk, hence hedge fund. So there are ETF mutual
funds and interval fund strategies that implement those. And there are things like BTL which is an equity market neutral fund, CBLS, which is an actively managed long short equity fund, RDFI which is closed down fund arbitrage MRSK. So these are like hedge fund like strategies, and if you look at how they've performed during this period, they've actually done extraordinarily
well and outperform the market. So implementing strategies that are diversifying in client portfolios is how we manage risk during bodol times.
Speaking with Shane Sissel, CEO at banryun Capital, Jess.
So, I actually to talk to you, Shana about your view when it comes to retail. I know it we'll have Walmart actually reporting earnings next week and we'll have a home depot lows target the following week after that, later in May. How are you viewing that? Because I know Walmart in particular was trading more like a growth stock before it's last earnings report. There are only a couple of magazeven stocks that actually had done better than that over twelve minutes span, like in Nvidia in some
others like that too in Tesla. But you know, how do you view and how are you positioning when it comes to retail shares.
So I'll start by saying that we have this very weird dichotomy going on with the consumer here in the US, where their confidence numbers are not great, and we're seeing sentiment with consumers really being negative, but they're spending in the retail actual spending numbers remain quite strong. So there's this weird dichotomy there that makes it hard to kind of predict how some of these retail names are going
to do. Now that said, a company like Walmart, you got to look at that's a company that has some pricing power, has the ability to kind of bully around some of their suppliers. And if we continue to have above average ERA, specifically with China, where a lot of the goods, especially the lower cost goods that we have here in the US, come from China, that's going to
be positive for something like Walmart. You would also intuitively think that would be good for something like Target, but Targets had some execution issues as of late, so it'll be interesting to see how that plays out. But if you look at some of the lower the lower the retail sorry retail companies that are focused on the lower income consumer, they have done well, but it's kind of the middle of the pack names that have done best. But I would I would think that if the terraiffs
stayed quite high. We haven't seen that come through in the numbers yet because there was some pre ordering of increasing inventories before tariffs took place. But I think as that changes, you might see the middle income consumers start to move into the Walmarts of the world, and that
would be positive for a name like Walmart. But you have to be really particular where you pick your spots in retail, because retail is a very large space and it includes names like Nike and Adidas, under Armour and some of the apparel brands, and those brands will be
disproportionately impacted by the tariffs. So I would probably stay away from apparel brands, choose things of that nature, anything that is manufactured overseas, specifically in China and focus more on, like you said, like where you go to buy your groceries and things of that nature, where people are going to be wanting to save money because there's really no way to avoid the tariffs and other essential areas.
Shana thanks so much for joining. Shane Sissel, she's the CEO of band reyon Capital, offering her thoughts on these markets.
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Next Guess She's now popular. Heck Co part is Joanna Diego's joined us. She's a partner bomb Blocks. Where do you go? I mean, there's so much opportunity now in fixed income joinna and your ETF structure has something for everybody, it seems. Where are you seen to flows these days?
Yeah?
I think where we want to focus people's attention on is the income and fixed income. It's at historically high levels, and that income is really offsetting all of this volatility that we're seeing it's not twenty twenty two. So when we entered twenty twenty two, rates were at all time lows and they zoomed up in four hundred and fifty
basis points that year. So bonds were under pressure, equity under pressure, and everybody was sort of figuring, like, couldn't make sense of twenty twenty two because both bonds and equities went down. So what it felt like was that bonds weren't working for you. Well, now bonds are working for you in your portfolio. They reclaimed their place as
you know, protection in your portfolio. And if you look at what happened you know here to date and even in April, the equity markets were down, but bonds, even in some cases in some weeks where they were down, they were protecting your portfolio. So we want people to focus on the fact that bonds are working for you. Income is really upsetting volatility. And then you know, we think that the themes of resiliency and economic positivity are still there and I'd love to tell you about it.
So what about when you're talking about short duration uish treasuries versus other corners, when you're talking about investment grade corporates, what are you seeing there.
Yeah, So one thing we want to remember is that a lot of focus was on the tenure and all the volatility we saw on the tenure. I think it reversed itself over seven and a half percent in a week, I think the second we of April. So people will really nervous about the long side of the curve. And since twenty twenty two we've seen lots of bouts of volatility in the twenty year and the ten years. That's what it's supposed to do. It's supposed to reflect the
uncertainty because it's a long dated bond. So people have been going to the short side, to the six month and one year because there's really attractive rates there. In April, you know, they were over four percent.
They're not just a.
Place to park your cash there. They are the safe haven of this of the treasury curve. What you want to do is you want to be short interest rate risk. So we recommend even in corporates that you should be shortening your interest rate risk and shorten your duration. It's it's okay to reach for corporates right now and get into high quality corporate debt, even high yield corporate debt. Benefit from the yields that are there, but take the
interest rate risk out. And so that's why we recommend short corporate debt.
Where are you seeing the funds flow? Because you know in your TF complex at bomb blocks, you guys have something for everybody. It seems like where you're seeing the fund flows, yes.
You're seeing you're seeing flows into into corporate debt. You see a lot of movement in treasuries, it's just it's sort of where you would you would expect. Maybe some softening in high yield is what we've seen in the last week or so. We think that what you should be doing in these markets is trading in precision. So what we offer and what we explain is that now because of the ETF structure, you can actually trade the higher quality segment of high yield if you will, So
you can trade triple B high yield. You're going to be able to benefit from, you know, the higher income and high yield, but you're up in quality. That's one rung down from investment grade and investment grade.
We say reach all the way to triple.
B because the incremental default risk of triple B is negligible compared to triple A. So you're getting all the good credit quality, plus you're getting a lift in yield in triple B space. So being able to trade these precise and lean into these precise characteristics and think fics
income are really powerful. And if you haven't talked to your advisor and you don't know where your interest rate risk is in your portfolio, and you're not sure exactly how it's any different than your ag position, you know you should be asking that question.
Whenever you're speaking with your clients. How are their questions different this year versus last year.
I'll tell you one question we get all the time, and we talk a lot about this, and so sometimes things repeat. I heard it earlier this morning on the show, like, well, spreads are tight, so we're not going to go into corporates, We're not going to take on any credit risk. We have heard that since twenty twenty two.
I'm not going to come in until I.
See distress levels of spread. That's an investor that's trying to time the market. They're trying to say I want the best possible return today, and they missed all of the return from twenty twenty three to twenty twenty four.
They haven't enjoyed these income levels I'm talking about. So we still hear that, We still hear I think towards the end of last year, well, spreads are tight, and when spreads are tight, what it's reflecting in corporate bonds is it's reflecting the fact that that's a positive economic outlook and there's less risk to taking on that credit risk. So if you dial down the interest rate risk and you take that credit risk, it's actually good for your portfolio.
Income is offsetting the sequity of volatility.
Been a good time, I mean again, the bond market are the cool kids again. Diegos, thank you so much for joining us. Joining Gayegos. She's a partner at Bond Blocks.
This is the Bloomberg Surveillance Podcast. Listen live each weekday starting at seven am Eastern on Apple Corplay and Android Auto with the Bloomberg Business app. You can also watch us every weekday on YouTube and always on the Bloomberg Terminal.
Online jewelry retailer. I didn't know what it was the thing until we met our next guest on cour Daga. He's the CEO. His firm is called Angara a n G a R. A online retailer Encurt. Thanks so much for joining us here in studio.
Thanks for having me.
You're the CEO of a business, you know, kind of a global business. How are you guys in the jewelry business dealing with tariffs? Did tariffs impact the global jewelry business?
Yeah, quite a bit. It's kind of the perfect storm. So diamond prices have been down forty to forty five percent over the last three years.
And that's is that because of the synthetic diamonds, because.
Of lab grown exactly lab lab done.
Yeah, which is something I learned about.
Reason Okay, I didn't realize that to make him, okay, tell us about that.
Yeah.
So they're chemically, physically optically identical to natural diamonds, but now ninety percent less. So they're a perfect substitute for natural So the industry has been reeling because of that.
You know.
De Beer's revenue in twenty twenty two was six point six billion, twenty twenty four was three point three billion, so it had and this with tariffs and with high goal prices, it's a double whammy now, so the industry is going to go through a lot in the very near term.
Wow, I have so many questions. I did I realize this was a like what if.
I have a question just I don't know, for Lisa and just okay, would you be indifferent to getting a versus synthetic?
I'm going to ask that question that I'm curious about.
Absolutely the same, But is.
It as strong? Does it last as long?
Like?
Hey, how durable as real diamond on my finger and it's lasted me twenty five years so far?
Yeah, I mean, will they last?
It's the same thing. So there's not a jeweler in the world with a loop that could tell the difference chemically, physically, optically identical boat tens on the mow Scille. Yeah, it's still the hard substance on earth.
Absolutely. So I go back to the question mischief or to say, hey, I've got this beautiful rain, but it's not real.
I would be all for it. Okay, Yeah, I would, because it's more affordable option.
I gotta say.
Interesting, I don't know, I think I want this is a year I would think.
All right, let's get back to the business at hand. How is your business? How was the online jewelry business these days?
It's still quite strong. We've seen the industry overall has been flat for the last three months, but before that we saw pretty substantial growth. We're starting to grow again now, but with uncertainty that's rising. Jewelry is interesting because it gets hit first in any downturn, and so we're a little bit we're hopeful that that doesn't happen, but we're being cautious at the moment.
That's interesting too, just given the dynamic in recent years, Like what's the setup moving forward, Like what's the outlook that you see after the last few years between kind of the differences we've talked about.
Yeah, so if I was to real back to COVID, COVID was amazing for the jewelry industry just in terms of people couldn't go out, they couldn't travel. All that money went to luxury goods and jewelry was a prime beneficiary.
It's interesting because you're not really going anywhere, so people were still buying jewelry.
That's right.
There was nowhere else to put money. So yeah, and so the industry really took off at that point, and there was a moderation in twenty three twenty four after that as people started going out again, and so we're starting to see growth again now after a while so that's pretty exciting.
I mean, we've seen e commerce as a percent of total retail sales just explode during the pandemic, and a lot of folks said kind of brought forward maybe ten years of that growth into the pandemic. What's the e commerce aspect, which is where you guys operate as a part of the overall jewelry business.
So about twenty two percent of US sales are online, so it's a pretty big number. And as you said at the beginning, it's surprising that people buy jewelry online, but it's a far better option in terms of price. There's so many reviews out there, and you know, it's growing very quickly as an overall portion of the market.
So I guess what's kind of next for you moving forward.
So we're just launching in India April twenty fourth. It's a pretty exciting market for US. So just for context, So the overall jewelry industry worldwide is four hundred billion dollars, out of which eighty five billion for the US and eighty five billion for India, so they're the same size market. India is growing a lot faster at ten to fifteen percent per year. As opposed to four percent in the US.
But interestingly, US GDP's thirty trillion dollars India's GDP's four point three trillion, so it's a seven x difference, but jewelry consumption is the same, which is pretty amazing.
Why is that cultural?
It's cultural, you know, when somebody's getting married. Jewelry is a big part of what is gifted, and people think of it as a stable asset. That's an inflation hedge, so it's an investment as much as something that's beautiful.
All right, it's fascinating stuff. We love having you in our studio to learn about this business and expense. We could spend the whole timeline. Just would you take great? I would synthetic diamond versus the rear one if it's the exact same.
I don't know, God, you asked it because I was figured it out. I was like, how do I broach this?
Ces?
All right?
On Cordaga, CEO of Angara Online a jewelry and we appreciate him coming in to our studios.
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The newspaper segment Lisa Mintay, Lisa, what do you got for us today?
All right, this is for all the space fans. I'm sorry, Tom Kin's not here exactly, okay, But this Soviet spacecraft, it is falling back to Earth after fifty three years. It's called Cosmos forty twould launched back in nineteen seventy two. So basically what happened. It was meant to travel to Venus, but then at Malfactions month foul function have to lift off and it into orbit around the Earth. So it's
been orbiting. It's only about three feet in diameter, but it has this heat shield so it could actually go through the atmosphere and land on Earth. We don't know where. That's the thing, That's what I was going to ask exactly. There's no word on where. Some people have said maybe some experts from the Space Force but place it over the Gulf of Oman, northeast of Africa, but really not
sure yet. But it's also the space debris because that can be a concern with things like this too, So that's another concern of it.
We still have to make it. Space force is still a thing, right, yes, yes, okay, I I haven't heard anything about it since the initial on that front, but you hear.
These stories of like, sometimes these things do happen in space where he does come down into people's homes. It's happened before.
I live New Jersey, that's the least. Okay, a lot of things happened in Florida that you're kind of surprised about.
Okay, So we go from space flight to regular flights. So this is ubs right. They're trying to cut costs in Asia. Deal making slowing because escalating trade tensions. So it's changing the global travel policy. So bankers are now not allowed to fly business class on short trips to China. Okay, so before this, they were allowed to book those business flight trips on short ships because they're actually generally lower which I didn't realize in other markets for the same distance.
So you have a flight from Hong Kong to Shanghai just under three hours, right, it can cost less than five hundred dollars one way for business class.
Really, so yeah, you realized there was you used to travel a lot for your job.
So my investment banking, all the investments I worked for it. Generally, unless times are really tough, if your flight was five hours or more, you can fly business or first class, right, Okrect. Anything less than that was and that was generally the rule unless things were getting so were you.
A flout or maybe sometimes you could go question, I.
Just asked you forget, you know, so I always booked and said, oh, I'm sorry that messed up, clicked the wrong But no the day, you know, back before Bloomberg, like Bloomberg, you have to do everything yourself. There's no Secharrect, there's no assistance age. But back in investment back and I had like lots of people doing stuff. Oh wow, live in the good life. You need to be in Chicago by you know, eight am. Just do it, you know.
And then I just stay here by the way. And then I got I got here a Bloomberg and I'm like, wait a minute, I got to do.
This in the laptop, like okay, look here, that's how.
You do it, and this is the best way. Anything else.
Last one Pintures came out with their earnings, right Paul I know you're not on Pinterest, right, I actually am not.
I have friends who rave about it.
But okay, so this is this is the point.
Okay.
So what's interesting is that the CEO is saying that their big audience is actually gen Z, So that's those like so they say that's where they go to shop because they're raised on like the internet is this visual content. So basically millennials and gen X, right, we had them all, but gen Z has Pinterest so you buy, you can buy.
Yeah, they different links.
So it's it's very visual, it's very pretty. Like if you're redecorating, you want to go to Pinterest to get ideas.
I know because my sister what she is.
But they're saying it's attracting advertisers because they like that group because gen Z is the one who's starting like a lot of first like they're the first to get you know, insurance or their first credit card, Like that's a time. So they're saying they want to attract these so now advertiser coming in. That's why their shares are up this morning too.
I was trying to explain to my youngest whole concept of the Yellow Pages that wasn't a thing for those come I see trucks going by that are just a plumbing because you just a comes first in the public way. Crazy. So times have changed, Steo Newspapers, thank you very much for that.
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