Transcripts For BLOOMBERG Bloomberg 20240703 : vimarsana.com

The 10 year yield going in the other direction. A little bit of a lift in yields. 457 on the day. We will keep our eyes on that. There was a bit of a messy auction people had looked forward to. A lot of dynamics going on under the bond market. Midday movers. We will look at shares of rent the runway. It reported fourthquarter revenue and topped average analyst estimates. The for your outlook was mixed relative to wall streets expectations. Shares slid 90 in the past year through wednesdays close. We are looking at a stunning gain in that stock. Alphabet shares are climbing as investors are becoming more optimistic about its ai strategy. The companys market cap inching closer to the 2 trillion mark. Nvidia, microsoft, and apple are the only other companies that hit that milestone. Back to the economy. That is driving the story. The Producer Price index increased by the most in 11 months in march. Still below wall street estimates. We will discuss how it impacts the feds Interest Rate path with michael mckee. When you look at the ppi and the softer pieces of information, how do you pair that with the hot inflation print we saw a day ago . It looks like some of the input prices are going down now after a jump for a month or 2. Which is what we cannot say about cpi. Markets seem to be taking it as well. It could have been worse. The statistic on the timing of the increase is for the yearoveryear number. On a month over month basis, the numbers came in better than forecast. 2 rise for the headline and the koran a core on a yearoveryear base. It was up by 2. 4 . Which is more than the 2. 1 last month. 2. 1 compared to 1. 6 for headline, which is the timing statistic. U. S. About the relationship between the two. What we are looking at is a relationship among all of the free main inflation indicators people watch. Cpi, ppi, pce. They broke down during the pandemic. We saw three of them running in tandem for years until 2020. Then they split apart. Ppi is what im talking about. This is the relative change in each one. It is not the level of prices. The ppi on top. Cpi is coming closer to it. The pce numbers are still way below both of those. The fed looks at the pce. If we get a mild pc, do we forget all about what we have seen with cpi . Sonali basak we Sonali Sonali have not we have not forgotten everything. You have to wonder how much the market is also reacting to a lot of fed speak. Susan collins speaking at the Economic Club of new york. John williams earlier today. How do you put all this together . The messages are becoming similar. Susan collins just out with her Economic Club of new york speech. She said we may have fewer cuts this year and we may have cuts later this year. Which is pretty much what most of the rest of our colleagues have been saying. Similar to what John Williams said, phrasing it a different way. Saying there is no need to adjust rates in the near term. Both of them saying they made a lot of progress. But there is more to be done. Williams suggesting they want to see more progress on the labor front, as well. So theres a general agreement among fed officials that maybe we are not going to see this kind of rate move wall street was expecting. Which is interesting because today we got an assurance from the European Central bank, christine lagarde, that they will move as soon as june. Sonali michael mckee, thank you for the data with a dose of reality. We have a Federal Reserve economist and chief economist at new Century Advisors joining us now. Also to react to the flurry of the data we have seen in the last couple of days. And how you think ahead to the pce. When you look at what happened in Consumer Prices, Producer Prices, how does that factor into how the fed is able to move moving forward . In all likelihood, they will see a better pce month over month. Theres a lot of dark matter that goes into those pce numbers. We really dont have a good read on it. At the end of the day, there are sticky places in inflation. They are going to be focused on that. They looked under the hood and there are problems. Having office because ppi and Motor Vehicle insurance prices are less then cpi does not change the fundamental story that they are not in a sustainable 2 kind of place, or even moving towards it. Sonali it begs the question, will they be able to cut once this year . To me, when is the fed going to cut and how much in some sense it has become into a parlor game. At this point, the inflation data are driving. It is as reactive as any of the rest of us. They dont have a read on where they should go with policy. Weve all been thrown for a loop these first three months. The big question is we have problem parts to shelter inflation, just grindingly slow. And we have some other auto cases like the Motor Vehicle insurance that also have a connection to before covid. And really how long is it going to take to get those down . That is the case because the fed will follow the answer to that question. Sonali do you see more areas where you even see reacceleration of some forces in inflation . When you look broader picture in terms of category, there is a lot to be encouraged by. We have many categories that seem to be really stuck. Stuck in a place that is not consistent with sustained 2 cpe. In 2022, we had it all over the place. We narrowed it up a lot. And frankly, for a lot of these components that are in a 2 consistent place, we want them to get stuck there. That is what sustainable inflation looks like. We cannot have these oneoff special offsets of our big problem children in the cpi. We have to get it all together. Some of that sticky is good. They are where they need to be categories. Then there is a handful that are not in a good place right now. Sonali i want to pull up this comment from jason furman about a day ago. He said a huge asymmetric uncertainty is a problem. He said if hes too optimistic and inflation is 3 , we are in a world of hurt and they need to tighten more. If it is more like 2 refined and there is no reason to worry unless it fell below one point 5 . Im curious how you would react to that . I would frame our world of hurt the sectors that are still problems. There is an interesting study that looks at the categories. I think we absolutely have to go under the hood to figure out the inflation dynamics. We are down to categories that are not Interest Rate sensitive. If we see a pickup in those sectors, we are in a world of hurt. What rate increase are you going to do that will get all of these people to move back home with mom and dad and get rent down . What will it take to get these insurance structural changes done more quickly . We are in a place where the feds tools, they can do it, they can destroy enough demand in other places. But that is where the hurt comes in. I dont see that as the base case. My base case, the bad base case is we just grind along this year. It is slow. We talk so much about the idea of hurt being seen in the Inflationary Forces in the economy, but at what point do you think higher for longer rates will lead to more hurt in other parts of the economy . Labor weakening here . All eyes should be on the labor market. Last friday should give us a lot of comfort. It probably will take longer to get to a place where Interest Rates can come down. They have been causing some pain. What we have enough strength in the economy to push back on it. Even the strongest of labor markets, you put enough pressure on it long enough, bad things will happen. Nothing can withstand forever. And i think a lot of the problems we are still working out, like the Interest Rates are in the mix. But we are readjusting from a lot of disruptions over the past four years. We have a very strong labor market. If we have a strong labor market, a strong american consumer. If those things are going together, we will push through it in a good place. That is what we want to see. Sonali claudia sahm, after a wave of Critical Data that will inform what we see out of the fed. Thank you for your time. Coming up, we will talk to the blue owl copresident on the latest move in commercial real estate of the company. A lot of ties to banking and the Interest Rate environment. That is up next. Super excited to open up my diploma from Southern New Hampshire university. Im nervous, im excited. [man] okay, lets see it. Lets see it. Oh my gosh. Jesus suarez, i did it and its here. group cheers [narrator] next term starts soon. Visit snhu. Edu. Visit snhu. Edu. Sonali this is bloomberg markets. Im sonali basak. Blue owl is launching another real Estate Strategy with the purchase of prima capital advisors. They are to pay 70 million, prima manages about 10 million of assets. We will bring in the blue owl copresident who runs the real estate side of the business. It is interesting because blue owl got deeper into the real estate business by acquiring your business a number of years ago. It begs the question on what the play is . It is a phenomenal entry point to Real Estate Finance. As traditional lenders are slowing down, and you are seeing a pickup in rates and spreads, we think it is a great time to enter that marketplace. Sonali when you say traditional lenders, are you referring to the slow of regional banks that are feeling pressured . Correct. Sonali how big is the opportunity . Marc zahr 5 trillion plus from our perspective. One point 2 trillion over the coming 12 months. Again, a great time to enter. Sonali how much of that is something you can tap into . There are so many concerns about the real estate environment. I know when we talked to a lot of your rivals, they say you cannot treat property or commercial real estate all as one. You cannot even treat office as a monolith. How do you think about that . Marc they are exactly right. Commercial real estate is painted with an extreme the wide brush. To do commercial Real Estate Finance, you can tap it a number of different ways. You can do your traditional mortgage, buy cps securities, or loans from banks looking to get them off of their balance sheet. All of those opportunities present an unique entry point. Sonali it shows you have an appetite for taking on some risk. What type of risk will you not be willing to take on . If you look at the market now, will you be wondering what dive deeper into distress . Marc if you look at our history, 15 years of doing single tenant, triple net, great credit, we have been extremely riskaverse. When i think about the entry point into Real Estate Finance today, i dont view it as a distressed opportunity play. I view it as a great value play. For the first time in a long time, we are getting substantially higher riskadjusted returns while taking less risk, i. E. Risking . 50 or . 60 in the stack and delivering 8 on better yields. Sonali you said single tenant. This is a good place to talk about the leaseback business you do. How do you choose the right credits, the right tenants, the right counterparties . When youre looking at who is in the buildings you are actually in at a time where people cannot even bring people back to work, who do you choose . Marc great point. Historically, the vast majority of our tenants have been investmentgrade companies. When you think about our tenant base, walgreens, amazon, whirlpool, johnson controls. When you think about other real estate strategies, we dont even spend time talking about the credit quality of their tenant base. With single tenant, you do. The way we mitigate risk substantially is focusing on great credit quality. What is even more important is the triple net lease. And theres not enough time spent talking about that. We have seen the data come out with substantially higher rates, sticky inflation, the triple net lease is the perfect information instrument to mitigate risk and give you predictable income while protecting your accounts. That is what we are focused on. Sonali you mention higher rates. What is the impact of higher for longer rates in your business and industry . Marc you have to think of the buy side and sell side. From the buy side standpoint, that is a very good thing for us. As rates creep up, especially with the combination of higher rates, you will see less Credit Availability and spreads increasing as well. You take that, nation it makes it harder for groups to transact. It makes it a better buying opportunity. We are lucky enough today to be to raise our fund in excess of our heart cap, which puts us in a good position to be a buyer of assets. Something to mention on rates, it is not just rates. It is the combination of the three things i mentioned. If you think about the rate environment over the last two decades, the highest Interest Rate environment we have seen was actually 2006. 10 year treasury, on average 4. 8 . 20 blips higher than where we sit today. But that was a frothy market. At that time, you had banks lending . 85, . 90 on the dollar, 10 years interest only, with 25 to 50 bit spreads. Rates are one piece of the puzzle, but need to be taken in, nation with credit spreads and Credit Availability. Sonali you just agreed to buy a new company. 10 billion in assets on the table for you. Plus you mentioned the fundraising you have recently done. As you look to deploy fresh capital, what are the check amounts you are looking to write . How much money are you willing to put to work at one time . Marc that is a good question. It all depends on how much we like the opportunity. But we also want to be a holistic provider to the companies we are dealing with. If company a wants to do a sale leaseback for 50 million, we want to accommodate them. If they want to do a 2 billion transaction, we want to accommodate them. In this environment, being able to have that scale and speed to capital and deliver a proposition that reduces risk for the company is a tremendous error on our equivalent. Sonali blue owl has been regarded as one of the Fastest Growing firms on wall street. Do you see acquisitions ahead in the real estate business to gain more scale . Marc i think we are doing fine. Never say never. But we are focusing on the acquisition we currently have and deploying the capital base we just raised. Sonali thank you for your time, that is blue owl copresident marc zahr on a very complicated market for investors. Still ahead. A bloomberg analysis on more than 1500 nonprofit colleges showing the return on investment at many elite private institutions. It is actually no better, or far less than select public universities. We will talk about that data up ahead. This is bloomberg. Sonali this is bloomberg markets. Im sonali basak. Harvard university is planning to reinstate standardized test scores for admissions requirements. It follows some of its peers after a pause caused by the pandemic. Since a Supreme Court ruling last june that said colleges cannot use race in admissions. They have been trying to figure out the best ways to recruit students. The new policy would be for students applying for fall of 20 to five. It brings us to todays big take, whether these schools are worth the rising costs. New analysis from bloomberg shows the typical tenure return on the investment of a socalled ivy, a list of 63 top colleges, is 40 less than the official ivys, and known as public flagships. Bloombergs reporter reported on this, and i recommend anyone to look at the data. I put my own statistics in to see the return. It is ready ugly. It is a really great tool, not only for High School Students trying to make decisions about where to go to college, but also for graduates. I know i personally put in schools that i was i School Senior and it was fun to look at. What is the easiest way to think about the return on the investment numbers in the bloomberg story and how would you explain them . What we did is we worked with the Georgetown Center on workforce and education. They put together roi calculations which presented in a dollar amount. They took the average earnings minus the average price it took to attend that college after aid packages. All of the data is publicly available and includes information of people who took out Financial Aid to go to school. I guess to run through some of the numbers pretty quickly, the average roi for all colleges is about 98,000 10 years after they first enrolled. Then we looked at more than 1500 schools and grouped them into categories like ivys, hitting colleges, flagship schools, public and private schools, so that people can get a sense of how these schools perform. Sonali what surprised you most out of the findings after looking through so many universities, dozens, really . The most surprising thing is we know every student wants to go to the most Prestigious School that they can. But for those students that dont get into an ivy league school, and realistically, most dont, these other elite private colleges the roi starts to fall off. So the official 8 ivys have an roi of about 206 he 5,000 after enrollment. Elite private colleges have an roi of 135,000. The public flagship schools, which are fraction of the cost, have an roi that is higher at 148,000. Kailey how do you think about this relative to the amount of debt people are paying to go to the schools . One of the biggest things that ate away at the r y of these colleges was the high sticker price. For students enrolling next year, the average cost of attendance is stretching past 90,000. If you think about that, that means to earn a four year degree at an elite institution, a family will pay more than a quarter of a million dollars. When you think about how much debt it takes for you for a student to attend that school and paying it off after, it really eats away even though those students might have a higher income after graduation. Sonali thank you for your time and reporting. A really thorough story out there. And for anyone who went to college and is looking to go to one still. Lets look at the markets before break. An s p 500 firmly flipping into the green. About. 22 higher. The nasdaq 100 still sitting at gains at. 70 . The twoyear yield now above 495. The bid in the bond market was a little stronger earlier in the day to day. 10 year yield is still on the rise. Coming up, we will talk to the former bridgewater ceo, Eileen Murray about what shes doing next and what shes watching in the space after leaving the hedge fund. This is bloomberg so, what are you thinking . Im thinking. speaking to self about our honeymoon. What about africa . Safari . Hot air balloon ride . Swim with elephants . Wait, can we afford a safari . Great question. Like everything, it takes a little planning. Or, put the money towards a downpayment. On a ranch. In montana. With horses lets take a look at those scenarios. J. P. Morgan Wealth Management has advisors in chase branches and tools, like wealth plan to keep you on track. When youre planning for it all. The answer is j. P. Morgan Wealth Management. Youre probably not easily persuaded to switch the answer is mobile providers for your business. But what if we told you its possible that comcast business mobile can save you up to 75 a year on your wireless bill versus the big three carriers . You can get two unlimited lines for just 30 each a month. All on the most reliable 5g mobile network nationwide. Wireless that works for you. For a limited time, ask how to save up to 830 off an eligible 5g phone when you switch to comcast business mobile. Dont wait call, click or visit an xfinity store today. Sonali this is bloomberg markets. Im sonali basak. Lets get a check on the markets. Some positive energy in the s p 500. A red market earlier today, now flipping into the green. S p 500 up more than. 10 . A stronger bid in the market. Nasdaq 100 hanging out at almost. 70 . Still interested in the twoyear yields. Youre watching the bid in the bond market waning. 4. 95 on the twoyear yield. A basis point or two lower than the day before where we saw the massive jump off of the heels of Consumer Price index data coming out. The tenure yield still on the rise at 4. 50 eight. Midday movers on the equity side. Robinhood shares under pressure. Citigroup cut its recommendation to sell from neutral saying the companys 44 gain this year is tied closely to bitcoin. Which poses a risk if bitcoin were to suffer a correction. We are also watching shares of apple and hedge funds. Jp morgan says apple is drawing interest from Hedge Fund Investors because of a. I. Linked upgrades to its iphones and a slump in shares that has boasted its stock value and valuation premium. We will talk about apples moves and turned to isabel lee, who will talk about what is drawing hedge funds to the stop. Apple is trading at about 22 times forward earnings, lower than its mega cap tech peers like microsoft. Shares have faltered due to many reasons. One is the weaker sales in china. And also because the Justice Department has been accusing apple of violating the trust loss. This is not necessarily bad news, because hedge funds are attracted to apple because of its cheaper valuations. But also because of the a. I. Upgrades to its iphone. Apple is a little late in the game when it comes to capitalizing on the huge a. I. Boom compared to its mega tack cap peers. Mega tech cap peers. We have the Consumer Index up around 20 . S p and nasdaq are also around 10 year to date. Sonali lets talk about the magnificent seven, turn more to tesla, a tale of two cities. A steeper decline in tesla on the year. Still some bad news. Tesla was the first in the magnificent seven index to really falter. The first to enter in the red. It is down 30 yeartodate. The entire ev sector is not doing well. Tesla is a casualty of that. A couple of wall street shops, piper sander and jeffries, putting it simply. Growth is slowing, there is no quick fix. They both downgraded and cut prices. 205 and 165. Tesla shares are hovering at 172. Tesla had its biggest missed ever in its history. At least going back seven years, according to bloomberg data. It just delivered 386 thousand vehicles which is a shocker. Sonali thank you for that set up. We will stick with electric vehicles. Battery ev penetration can reach 25 by 2030 in the u. S. Alone. Lower cost cars are tough in mind for automakers committed to an electric vehicle strategy. The perfect person to discuss this with is former bridgewater ceo and advisor to the invisible urban charging, Eileen Murray. Invisible urban charging Just Announced a partnership with cbre to deliver one million ev chargers over the next five years. We know the charging piece of the puzzle has been a big Sticking Point when it comes to ev adoption. How do you see this playing out . Eileen im really excited about the cbr partnership with iu for one million chargers over the next five years. Why am i excited about that . Not just because im working with great people who want to have an impact on the environment in an economic way when i step back and you look at the fact transportation accounts for the largest share of u. S. Greenhouse admissions, it is about one third. Most of those admissions are coming from the cars, the school trucks in the vans most of us drive. In order to meet the zero emissions by 2050, it will require a largescale adoption of electric vehicles, which can produce zero emissions. The issue has been first it was the cost of the cars. We have seen a lot of governments give subsidies, china, india in the u. S. With the biden inflation reduction act, has really helped produce much more electric vehicles and has accelerated the production of them globally. You just talked about the price drop. When tesla first came out, they were under 10,000, now they are 25,000. What is the issue . Over the next call it by 2030, and the numbers might be low. But a lot of different estimates. It will be 35,000,002 50 million evs on the road. In the u. S. , we have about 106 5000 public chargers at this point. Current estimates are we need about 3. 5 million to 5 million chargers by 2030. Sonali im really interested in this partnership, too. Cbre was not one of the first players that would come to mind. Now you are seeing private players come together to start fixing this problem youre talking about. How did this come together, and why is it known for its real estate business the partner to step up in an Initiative Like this . Eileen the reason the partners step up is they need chargers in many of their sites. They are a partner in terms of site selection, engineering, installation, and design. Most important, maintenance. A lot of the chargers you see have not really been approached at scale. So this is a Great Partnership for both of us. It enables us to basically install these chargers in scale where there is availability to people in terms of parking lots, in terms of office space i can go on and on. The point is to make these available in a scalable way. That is why they are a critical partner, given their real estate footprint. We are also working closely with jlm. We have contracts for about 420,000 of these chargers across europe and in the u. S. , in addition to Just Announced with cbre. They are a great partner to work with on this. It is important to have maintenance of these chargers. How many times have you gone to fill up your electric vehicle and the charger you come up to is broken . We really need to have that infrastructure. Sonali i would love to pair together two things you talk about a lot. Not only here, the idea of electric vehicles and a greener future, but also the job market. You looked at jamie dimons annual letter, the idea that the electrification of the United States and the fact it could potentially create tens of thousands of jobs. Im curious in your view if this investment comes at a greater scale, what could it mean for the job market . How soon can these jobs really come to fruition . Eileen you know how to hit my heart. We talked about this in 2021. One of the big things i was concerned about was rescaling. The newer technologies that we are involved in, there are plenty of jobs. The issue is reskilling. I talked about jamie dimon as far back as 2020. He was putting money aside to read strain retrain every Skilled Staff in these technologies. The Labor Department says in this piece of what im talking about, it is probably 250,000 jobs annually. Some of these are much higherend jobs, but we need to reskill people. A big piece of the reason im involved in this is to make party to that whole movement. We just talked about electronic occasion. Im talking about chargers. What about modernizing the infrastructure and all of the Jobs Available for that . A big piece of this will be about reskilling, retraining. But the jobs are there without a doubt. Sonali how much investment is this ultimately going to take from the government . We see it in an era right now where every dollar is under question. We are running a massive deficit. And we still need to see the u. S. Government be getting involved when it comes to the ev space for Real Progress to be made. How big of a challenge is that . Eileen honestly, this particular company im involved with arent taking any government funding. I think the government funding was required to really put a booster and an accelerator in the production of the electric vehicles. You see this in china, too. These are profitable businesses that i think over time do not really require a lot of government funding. Where i think government funding will continue to help is on the infrastructure itself and is the infrastructure that needs to be modernized . Where are we with that in terms of really focusing on that . That is where i think government funding needs to coming. It can also be done in a way that creates massive amounts of jobs. I think instead of just looking at this as taxpayers paying for something, we need to look at this holistically and see what kind of jobs it is creating and what kind of tax revenues it is producing, and how companies are participating in that as well. Sonali we have to leave it there. That is the former bridgewater coceo, Eileen Murray, on her latest initiatives. We will talk about Something Else next, the big banks. The first test for wall street. Earnings season is just around the corner. We will give you the details. Stick with us. This is bloomberg. three little birds by bob marley the wailers discover our newest resort sandals Saint Vincent and the grenadines, now open. Visit sandals. Com or call 1 800 sandals. You dont have to worry about things like changing tax rates or filing returns. Avalarahhh ahhh sonali this is bloomberg markets. Im sonali basak. Investors are gearing up for the next round of Bank Earnings tomorrow. Big u. S. Banks kicking things off. Here are three things to watch when it comes to this quarters results. At the end of last year, wall street players took turns predicting a slow down after a record hall of more than 250 billion on expectations the fed would start cutting Interest Rates. Three months later, that has not happened. Economists are reducing the amount of expected rate cuts. When it comes to Net Interest Incomes, jp morgans set to win big. Partly because of its size compared to peers. Expected earnings of about 23 billion in the First Quarter is almost seven times more than the industry estimated average. Investment banking has benefited from strength in u. S. Equities, debt issuance, and skill making. Jp morgan has the edge with a projected 1. 8 billion in revenue, up 10 from a year before. Punching above its weight is bank of america. A rival likely to report 1. 3 billion in investment banking, up 14 from a year ago. For any updates on how big banks plan to counter exposure to commercial real estate problems, wells fargo is the one to watch. Its share of cre lending is the highest of its largest peers. Bloomberg intelligence says a 2 right down to cre loans would reduce wells fargos 22 for earnings by about 13 before accounting for reserves that have already been satisfied. That brings us to our stocks of the hour. The Banking Sector is among the worst performers today. Investors will be scrutinized in First Quarter results from the likes of jp morgan, bank of america, wells fargo, and citigroup in the coming day. We will discuss this with katherine doherty, who has been looking at the expectations and the reality. When we look at Net Interest Income expectations, jp morgan is the one that comes in as king. Do investors have a lot of pressure on them at this point to raise the bar . I believe so, i think investors will look at not just Net Interest Income and the money that is coming in from lending, which is slowing down over the quarters, but also expenses. Are they able to keep their expense guidance in check . We heard from the banks earlier this year in january when they set their 2024 expectations. They are not only going to have to meet those excitations for nii, they will have to show their expenses have been disciplined in the first three quarters of this month. If expenses are going off the rails, if they have to pay more for deposits for example, which we are not expecting. If that is shown, it will be scrutinized and you will start to see some differences between the big banks. Sonali what can you say about the differences in expectations from the impact of higher Interest Rates and the Net Interest Income expenses . He reported Analysts Expect a potential for as much as a 9 decrease when it comes to wells fargo. Fairly choppy numbers coming out of bank of america this year. You do have to look between the differences. Jp morgan with the highest, i believe 12 expected nii jump compared to last year. If you combine all of the big 4 commercial banks, it is really only a 1 rise. It is jp morgan that is responsible for that expected jump. When i say jump, 1 is not that much of a poll. But you are having to read between the tea leaves. Another metric here that i think is going to be important is investment banking. Weve heard about green shoots for quarter after quarter. When we have seen such a subdued investment with banking and fees, this is really going to be the first time the yearoveryear increase is meaningful and potentially could pave the way for future quarters of growth, which we have not seen for the last year plus. Sonali katherine doherty, thank you so much. We are going to be very busy starting very early tomorrow morning. Coming up next, we will talk about a shake at the top of Goldman Sachs. The top treasure leaves after about two decades. More on the departure and his new fill. Stick with us. This is bloomberg. You know whats brilliant . Boring. Think about it. Boring is the unsung catalyst for bold. What straps bold to a rocket and hurtles it into space . Boring does. Great job astropersons. Over. Boring is the jumping off point for all the unboring things we do. Boring makes vacations happen, early retirements possible, and startups start up. Because its smart, dependable, and steady. All words you want from your bank. Taking chances is for skateboarding. And gas station sushi. Not banking. Thats why pnc bank strives to be boring with your money. The pragmatic, calculated kind of boring. Moving to boca . Boooring. That was a dolphin, right . Its simple really, for nearly 160 years, pnc bank has had one goal to be brilliantly boring with your money so you can be happily fulfilled with your life. Which is pretty unboring if you think about it. Thank you, boring. Sonali this is bloomberg markets. Im sonali basak. Kkrs coceos are taking a cue from brookshire hathaways business model. Theyre betting big on ownership and dividend from that ownership. They spoke with Lisa Abramowicz earlier today. I think Strategic Holdings is a segment we have been incubating for the last seven or eight years. Berkshire hathaway is an apt analogy in the sense we look at a lot of business models, why certain firms have been successful over time. And there are a lot of powerful messages and what they have built. It is the power of longterm ownership assets, the power of compounding, and the real power of smart account allocation within your business. That is what they excel at doing. Our version of that is we built a per folio portfolio today. Great businesses we expect to own for a really long time. Those businesses will start generating meaningful cash flow for us. We started this business eight years ago. As those Companies Grow and deleverage, they are in a position to start paying meaningful aftertax dividends. What we announced yesterday is dividends 300 million plus. By 26, doubling and ultimately getting to 1 billion plus at the annual upgraded earnings for us. The background to all of this is we are students of longterm value creation. When we became a public company, our market cap was 7 billion. It is now roughly 90 billion. What we are focused on is how to double that again and how to do it as we look to the future. If you look at organizations that get above a certain size market cap, their growth slows. The dominant denominator becomes heavy. Like a lot of tickers growing today, seeds planted 10 or 15 years ago, with insurance we think we can double and Strategic Holdings that will have a Significant Growth trajectory, we think we have created a model that as we look out for the next 10 to 15 years, we have a way to keep compounding what is a large market cap at a very attractive rate and not slow down the growth rate. Critically as part of all this, we built all as purpose built to be able to retain the culture. We started this with no new headcount. It was monetizing an idea flow that was already in. Sonali that was kkrs coceos speaking excessively today. It is time for the wall street beat. We look at a shakeup at Goldman Sachs. The global treasurer leaving the company to head to millennium management. For more, we are joined by our correspondent. This is not the first talent to be leaving for millennium. It would not be the last goldman executive. When he moves over to millennium, he will see Friendly Faces around. We have been joking about this a little bit. It is not much of a stretch to start wondering whether we should call it millennium sachs. Sonali even i Goldman Sachs, Musical Chairs makes rooms for new people. Will take his role. What is the task ahead of her moving forward . Treasurer at Goldman Sachs is important. They have been trying to diversify its funding mix. Unlike its bigger bank peers, goldman doesnt have a flood of cheap deposits to rely on. It has been trying to work down its mountain of unsecured moorings. And that has been a priority for the firm. That is something that they continue to focus on. That will be the task ahead of shes been at the firm for 25 years. Wellregarded, has been the face of the firm. It is the deeply analytic. It is one of those David Solomon moves that is being applauded around the firm. That is not something we get to say all that often. Sonali i want to point out the elephant in the room, goldman is putting another woman to their Management Committee at a time where they have been under fire for not having enough women that high up in the csuite, or even close to it. Lets separate the two issues. Carrie haley was getting the job because she was one of the most well positioned and regarded executives at the firm. Best positioned to be the next treasurer of Goldman Sachs. There is no denying there has been a concern and a lot of talking inside Goldman Sachs about women in its senior ranks. That is generally a problem across wall street. In particular, at Goldman Sachs. When David Solomon took over as ceo, he acknowledged hes not really succeeded on. That front. And he needs to show hes taking charge and will be able to fix it in the coming months and years. Sonali a lot of Musical Chairs on wall street. One other big shocker at bridgewater. Hiring ben melkman. Speak about his role and what he is doing at a particularly transformative time for bridgewater. How often do we get to hear of a firm like bridgewater making a higher like this. It is one of the splashes we see in our story today that it is the most highprofile external money manager the firm has hired. Hes someone who made a name that burden howard, had his own hedge fund, backed by steve cohen, dan loeb. Download one to join show feld, left when they were dealing with their issues. And bridgewater is at a crossroads. 18 months, ray dalio, who has been synonymous, gave up the reins. Now the new ceo and some investors, bridgewater needs to be able to prove it can continue to charge ahead and keep the title of the Worlds Largest hedge fund and also a well performing hedge fund. Sonali certainly very competitive from millennium to bridgewater. Thank you for your time, sridhar natarajan. Leaving you with the markets real quick. We have turned into the green. This has been the golden hour. Stick with us through the flows. Lets see if it sticks. That does it for bloomberg markets. Im sonali basak. This is bloomberg. Her uncles unhappy. Im sensing an underlying issue. Its tmobile. It started when we tried to get him under a new plan. But they they unexpectedly unraveled their price lock guarantee. Which has made him, a bit. Unruly. You called yourself the uncarrier. You sing about price lock on those commercials. the price lock, the price lock. so, if you could change the price, change the name its not a lock, i know a lock. So how can we undo the damage . We could all unsubscribe and switch to xfinity. Their connection is unreal. And we could all unexperience this whole session. Okay, thats uncalled for. From the world of politics to the world of business this is balance of power