Markets Rebound as Oil, Yields & AI Remain in Focus | The Close 9/2/2026

>> THE COUNTDOWN IS ON. EVERYTHING YOU NEED TO GET FOR THE END OF THE MARKET DAY. THIS IS THE CLOSE. ROMAINE: A RESPITE FOR WALL STREET EVEN THOUGH THE ROAD AHEAD STILL LOOKS INSANE. LIVE FROM BLOOMBERG HEADQUARTERS IN NEW YORK, I AM ROMAINE BOSTICK. SALLY: WE ARE CONJURED UP TO THE CLOSING BELL HERE IN THE U.S.. LET'S GET A CHECK ON WHERE MARKETS STAND. THE SLOW DOWN IN THE ADVANCED OIL HAS ALLOWED THE S&P TO RISE A LITTLE BIT. IT IS UP 0.4 PERCENT. THE 10-YEAR YIELD IS DOWN. WE ARE SEEING BRENT CRUDE IS UP, STILL ABOUT 90 AS THE ESCALATION BETWEEN IRAN AND THE U.S. ATTACKS CONTINUES. DIESEL IS DOWN A LITTLE BIT BY 0.5%. ROMAINE: THE NEW SESSION JUST GETTING STARTED. FLAT IN A NEW SESSION. THE PAST SESSION, A SPIKE OF 5% HIGHER. IT IS THE COMMODITY MARKET ONCE AGAIN WAGGING THE DOG AS TRADERS PONDERING THEIR NEXT MOVE WHICH LEADS EQUITY TRADERS TO PLOT THERE IS. J.P. MORGAN STRATEGIST GRACE PETERS SEES FURTHER UPSIDE FOR STOCKS THIS YEAR BUT SHE DID CAUTION THAT A CORRECTION REMAINS POSSIBLE IF THAT BENCHMARK 10-YEAR GETS UP TO 5%, SOMETHING IT HAS NOT DONE SINCE OCTOBER OF 2023. IN THE HERE AND NOW, THERE ARE BRIGHT SPOTS OUT THERE PARTICULARLY WHEN IT COMES TO A AND THE SPENDING AND PROFITS BEING GENERATED. WE HEAR FROM BROADCOM AFTER THE BELL WHICH IS STILL LOOKING FOR ITS OWN NVIDIA-LIKE MOMENT, WHIL E DELL IS ALREADY IN ITS MOMENT. THEY INCREASE THEIR ANNUAL SALES FORECAST BY 14% TO A RECORD $192 BILLION, ALMOST DOUBLE THEIR REVENUE JUST TWO YEARS AGO. THE REASON IT CAN BE FOUND IN A NEW REPORT FROM PRICEWATERHOUSECOOPERS JUST TODAY. THEY ESTIMATE THE GLOBAL DATA CENTER SPENDING MAY TOTAL $32 TRILLION THROUGH 2050. THAT IS AN UNPRECEDENTED INFRASTRUCTURE BOOM THAT DWARFS PAST BUILD OUTS ON RAILWAYS, THE INTERNET, AND EVEN ELECTRIFICATION. BUT THERE IS ONE BIG RISK, AND IT HAS LESS TO DO WITH THE COMPANIES AND THE PEOPLE. THE POLITICAL BACKLASH THAT STARTED AS NOISE BUT IS NOW BECOMING A TANGIBLE BUSINESS RISK CASE THAT EXECUTIVES AND INVESTORS ARE NOW REALIZING THEY DO HAVE TO START ACCOUNTING FOR. >> THE COMMUNITY BACKLASH IS VERY REAL. CONCERNED THAT PEOPLE HAVE OUR HIGH UTILITIES, WATER USAGE, THE NOISE, EMISSIONS IN THEIR COMMUNITIES. IT NOW HAS TO BE CONSIDERED AS PART OF THE BUSINESS CASE. IT IS PART OF THE INVESTMENT CHOICES THAT HAVE TO BE MADE. CERTAINLY IT IS SHAPING WHERE THE CAPITAL ALLOCATION ENEMA THE SITE SELECTIONS ARE. ROMAINE: LET'S KICK THINGS OFF WITH ANKUR CRAWFORD, EXECUTIVE VICE PRESIDENT, PORTFOLIO MANAGER OVER AT ALGER. YOU ARE INVESTED ACROSS THE ENTIRE AI STACK. I AM CURIOUS ABOUT, WE TALKED A LOT ABOUT THE BOTTLENECKS, SUPPLY CHAIN CONSTRAINTS AND EVERYTHING. I DO WONDER IF WE HAVE REACHED A POINT WHERE SOME OF THE POLITICAL BACKLASH BECOMES AN ADDITIONAL CONSTRAINT TO THIS BUILDOUT? ANKUR: IT VERY WELL COULD. IT HAS NOT QUITE YET, BUT IT CAN IN THE FUTURE. IT'S IMPORTANT THAT WE ACTUALLY EDUCATE EVERYONE TO UNDERSTAND WHAT EXACTLY THE BACKLASH IS ABOUT. RIGHT NOW, I THINK PEOPLE ARE MISINFORMED. ROMAINE: WE DON'T NEED TO GET TOO DEEP INTO POLITICS, BUT AS AN INVESTOR, SOMEBODY WHO REALLY UNDERSTANDS THE TECHNOLOGY BEHIND THIS, IF WE GET TO A POINT WHERE WE START TO SEE ANY SORT OF SIGNIFICANT DELAYS IN THESE PROJECTS BECAUSE POLITICIANS DECIDE THEY WANT TO PUT A STOP TO IT HERE, DOES THAT CHANGE AT ALL YOUR CALCULUS FOR SOME OF THE INVESTMENTS YOU HAVE MADE? ANKUR: WHAT IT DOES IS CREATES CONFUSION, AND CONFUSION CREATES VOLATILITY. I HAVE NO DOUBT THAT IF WE DON'T BUILD THEM HERE, THEY WILL BE BUILT SOMEWHERE. ECUADOR, COSTA RICA, THEY ARE STARTING TO CLEARLY IMPORT DATA CENTERS. HEY, HYPERSCALERS, YOU CANNOT BUILD THERE, COME AND BUILD HERE. THERE ARE A LOT OF DIFFERENT COUNTRIES ARE GOING TO WELCOME AI AND WELCOME THE CHIPS WITH OPEN ARMS BECAUSE THEY REALIZE IT'S AN OPPORTUNITY AND NOT SOMETHING TO BE SO FEARFUL OF. SALLY: IT'S INTERESTING ON FRIDAY, WARSH DEDICATED A BIG CHUNK OF HIS SPEECH TO AI AND ITS ROLE IN PRODUCTIVITY, ALSO A VARIABLE IN MONETARY POLICY. OF COURSE, THE BOOM IN AI DEPENDS A LOT ON DEBT. WITH HIS MORE HAWKISH PIVOT, IS THAT UNDERMINING THE POTENTIAL FOR AI TO EXPAND? ANKUR: I DON'T THINK SO. A LOT OF THE AI BUILDOUT IS ACTUALLY BEING FUNDED BY CASH FLOWS FROM THE HYPERSCALERS. IF YOU LOOK AT THE OVERALL DEBT THAT NEEDS TO BE TAKEN ON FROM 2026 TO 2030, I WOULD SAY 50% OF THAT IS FUNDED FROM THE CASH FLOW FROM HYPERSCALERS. PROBABLY ANOTHER 50% -- THIS WILL SOUND CRAZY -- BUT CAN BE FUNDED BY NVIDIA'S OWN CASH FLOW. ROMAINE: THEY ARE OUR NEW CENTRAL BANK NOW? ANKUR: THERE IS A DEBT MARKET THAT WILL BE WILLING TO FUND THIS BECAUSE THEY ARE GOOD INVESTMENTS. DO I THINK THE INTEREST RATE NEEDS TO RISE A LITTLE BIT RELATIVE TO WHAT THEY ARE PAYING RIGHT NOW? IT PROBABLY DOES. DOES IT IMPACT THE BUILDOUT? IT WON'T. THE PRODUCTIVITY GAIN ON THE TOP LINE IS SO SIGNIFICANT USING AI THAT WE WILL BE WILLING TO PAY AS THE CONSUMER THE EXTRA INTEREST THAT HYPERSCALERS WILL HAVE TO PAY, NEOCONS WILL HAVE TO PAY. SALLY: I WILL TURN TO BROADCOM BECAUSE THEY REPORT AFTER THE BELL. IT HAS THIS VERY ENVIABLE ROSTER OF AI CLIENTS LIKE GOOGLE, META, ANTHROPIC. BUT WITH MORE BELL AGGRESSIVELY COMPETING, HYPERSCALERS BUILDING THEIR OWN CHIPS INTERNALLY, HOW DEFENSIBLE IS BROADCOM'S MARKET SHARE OVER THE NEXT 24 MONTHS? ANKUR: NEXT 24 MONTHS, VERY DEFENSIBLE. THE DESIGN TIMES ARE LONGER THAN 12 TO 24 MONTHS. THE RISKS TO BROADCOM IS WHAT HAPPENED WITH MEDIATECH AND MARVELL, WHETHER THEY ARE DESIGNED INTO THE GOOGLE TP U, THEIR VERSION OF THE GPU. IT IS WHY BROADCOM TRADES AT 13 TIMES AND NOT 23 TIMES. PEOPLE ARE QUESTIONING THE DURATION OF THEIR GROWTH. WHAT I WOULD SAY IS YOU CANNOT COUNT HIM OUT. HE IS BRILLIANT, HIS ENGINEERS ARE BRILLIANT. THEY MAY LOSE SHARE, BUT THEY WILL NOT LOSE SHARE EN MASSE. THEY COULD LOSE PARTS OF DIFFERENT SOCKETS, PART OF THE SAME SOCKET, BUT THEIR ASPS CONTINUES TO RISE BECAUSE THEY ARE GETTING MORE COMPLEX. I WOULD NOT COUNT THEM OUT. GOING INTO THIS CALL, WE ARE LOOKING FOR MORE OF A MORE CONFIDENT TONE FROM HIM ON THEIR AI REVENUES IN 2027 AND INTO 2028. AT 13 TIMES, THAT IS THE WHISPER NUMBER FROM THE STREET. THE RISK REWARD IS ACTUALLY THAT GREAT. ROMAINE: YOU MENTIONED ANTHROPIC, THE BIG ELEPHANT IN THE ROOM IN TERMS OF THE NEXT BIG ENTRANT INTO THE PUBLIC MARKETS. IN ONE OF YOUR FUNDS, YOU HOLD THAT AS A PRIVATE COMPANY RIGHT NOW. I'M CURIOUS ABOUT WHERE YOU SEE THE VALUATION AS A PUBLIC COMPANY, ASSUMING IT COMES OUT, SOME ARE THE TRILLION DOLLAR MARK. IS THAT SOMETHING THAT YOU WOULD LOOK AT IN THE PUBLIC MARKET AS PROVIDING A VALID OPPORTUNITY FOR INVESTORS TO SOME DEGREE OR ANOTHER? ANKUR: THE LATEST HAS BEEN THAT ANTHROPIC'S MARKETING -- I AM JUST READING A LOT OF THE PUBLIC REPORTS, AS YOU ARE. BUT THE LATEST HAS BEEN THAT IT WILL COME OUT AT 2 TRILLION VALUATION. I BELIEVE THERE IS UPSIDE FROM THEIR. JUST LOOK AT WHAT HAS HAPPENED FOR ANTHROPIC OVER THE LAST SIX MONTHS. THEY WERE AT $10 BILLION IN AR AT THE END OF THE YEAR. TODAY, THEY ARE AT 65. I WOULD ARGUE, AT THIS RUN RATE, THEY WILL COME OUT AND BE CLOSER TO 75 OR 80. BY YEAR-END, PROBABLY OVER $100 BILLION. IT IS NOT RECURRING REVENUE, IT IS ANNUALIZED REVENUE. ROMAINE: THIS IS THE BIG QUESTION THAT INVESTORS AND THE PUBLIC MARKETS HAVE. A LOT OF THE UPSIDE, AT LEAST THE PERCEPTION, A LOT OF THE UPSIDE HAS ALREADY BAKED IN FROM THE PRIVATE MARKETS, BUT YOU DON'T SEE THAT. ANKUR: I DON'T SEE THAT. THOSE THAT THINK THAT ARE ACTUALLY UNDERESTIMATING THE OPPORTUNITY FOR ARTIFICIAL INTELLIGENCE. WHEN WE THINK ABOUT HOW BIG THE OPPORTUNITY SET IS, IT IS BASICALLY COMMODITIZING INTELLIGENCE TO SOME EXTENT. THAT IS A MASSIVE OPPORTUNITY. I KNOW THE NUMBERS ARE ALSO BIG, BUT THE WAY I LIKE TO LIKEN IT, IF WE HAD TAKEN ALL OF THE INNOVATION FROM 2000 TO 2020 AND SHRUNK IT INTO FIVE YEARS, THAT IS WHAT IS HAPPENING NOW. ALL OF THAT SPAN, THE CLOUD SPAN, THE WAY THAT WE USE NETWORKING, PHONES, APPS, AND WE SHRUNK IT INTO FIVE YEARS, THAT IS WHAT IS HAPPENING TODAY. ROMAINE: I AM GOING TO CHERRY PICK. TAKE ANTHROPIC AND NVIDIA. IT IS CLEAR, JENSEN HUANG HAS AMBITIONS TO BE MORE THAN JUST A GUY WHO SELLS CHIPS. WE HAVE SEEN THAT IN THE REPORT ABOUT THIS HUGGING FACE DEAL. I GET THE SENSE THAT ANTHROPIC WANTS TO BE MORE THAN JUST AN LLM MODEL. WHAT CAN THOSE COMPANIES BECOME IF THIS AI BUILDOUT IS AS SOLID AND ROOTLESS AS IT SEEMS TO BE? ANKUR: I THINK THEY CAN BOTH SPREAD THEIR WINGS. THE OPPORTUNITY FOR A LOT OF DIFFERENT COMPANIES IS VERY BROAD TODAY. WHAT I THINK MOST OF THE MARKET IS NOT APPRECIATING ABOUT NVIDIA IS THEY ARE MOVING DOWN MARKET. THEY ARE MOVING INTO THE INFRASTRUCTURE AND THE MODEL LAYER. WHICH WILL ALLOW THEM TO BASICALLY BE THE PROVIDER NOT ONLY THE SOFTWARE THAT YOU INTERACT WITH, THE INTELLIGENCE LAYER, BUT ALSO THE GPUS THAT PROVIDE THAT INTELLIGENCE. IT'S A VERY POWERFUL BUSINESS MODEL FOR THEM AS THEY START TO GET INTO THE OPEN MODEL REALM, SUPPORT THEIR OWN CHIPS WITH THE INTELLIGENCE LAYER. I THINK IT'S A VERY, VERY INTERESTING. IF THEY DECIDE TO REALLY FOCUS ON THAT. ANTHROPIC, IT IS VERY CLEAR THEY ARE GETTING INTO ENTERPRISE. IT WOULDN'T SURPRISE ME IF THEY DECIDED TO BUY AN OLD WORLD SOFTWARE COMPANY IN ORDER JUST TO GET THE DISTRIBUTION FOR THEIR OWN PRODUCT, MODERNIZE THE ENTIRE ECOSYSTEM. I KNOW THAT'S A LITTLE FAR-FETCHED, BUT I DO THINK THERE OPPORTUNITY AND ENTERPRISE IS MASSIVE. THEY ARE GETTING INTO LIFE SCIENCES, GETTING INTO DRUG DISCOVERY TOOLS, BIG MARKETS. I THINK THAT IS WHY, WHEN PEOPLE ARE QUESTIONING AT $2 TRILLION, HOW MUCH MORE VALUE IS THERE ON THE TABLE? WHEN YOU ARE EFFECTIVELY COMING IN AND REWRITING ENTIRE SECTORS, THE OPPORTUNITY SET IS BIG. ROMAINE: WE APPRECIATE YOU BEING CANDID WITH US. ANKUR CRAWFORD IS EXECUTIVE VICE PRESIDENT AND PORTFOLIO MANAGER OVER AT ALGER. LATER IN THE SHOW, WE WILL CONTINUE THE CONVERSATION ABOUT WHAT IS GOING ON WITH AI AND TAKE A LOOK AT IT FROM THE VIEW OF THE POWER SECTOR. MORE IMPORTANTLY, FROM BILL PERKINS, THE GUY WHO SAYS HE HAS A WAY TO BET ON WHOLESALE ELECTRICITY POWER FUTURES. THAT CONVERSATION COMING UP IN A BIT HERE ON "THE CLOSE" ON BLOOMBERG. ♪ ROMAINE: YIELDS A LITTLE BIT FLAT ON THE DAY BUT THAT BELIES THE UPWARD PRESSURE WE HAVE SEEN ON THE LAST COUPLE WEEKS. OUR NEXT GUEST SAYS BOND MARKET FEELS MIGHT BE A BIT OVERBLOWN. ALESSIO DE LONGIS IS HEAD OF RESEARCH AND CIO AT PROSHARES. ARE YOU ACTUALLY WILLING TO EXTEND DURATION IN THIS MARKET RIGHT NOW? ALESSIO: AFTER THE JACKSON HOLE SPEECH, PARADOXICALLY, EXTENDING DURATION MAKES SENSE. ROMAINE: YOU HAVE TO EXPLAIN THAT TO ME BECAUSE EVERYONE WHO HAS COME ON THIS PROGRAM SEEMS TO BE SCARED OF DURATION. WHEN I SAW IN YOUR NOTES YOU ARE EMBRACING IT, MY FIRST QUESTION WAS WHY? ALESSIO: A COUPLE OF THINGS. WHICH PART OF THE CURB? WHAT CHANGED MATERIALLY SINCE THE JACKSON HOLE SPEECH FROM THE LAST TIME I WAS HERE A FEW DAYS AGO, THAT SPEECH CREATED AN ENVIRONMENT WHERE THE FED HAS REITERATED THEIR ON THE CASE, AND THE CURVE FINALLY BEAR FLATTENED INSTEAD OF STEEPENING. THAT MEANS THAT THE LONG END OF THE CURVE IS NO LONGER CHOOSING THIS RISK PREMIUM THAT NEEDS TO BE BUILT IN BECAUSE WE DON'T KNOW WHAT IS NEXT. WITH A BARE FLATTENING OF THE CURVE, OF THE CURB, OF COURSE BONDS STILL UNDERPERFORM, BUT IT IS A AN ENVIRONMENT WHERE THE FED IS ON THE CASE AND WE MAY EXPECT A LONG END OF THE CURVE NOW TO BEGIN STABILIZING, REFLECTING WHAT HAS ALREADY BEEN PRICED IN. NOW THE FED IS PRICED FOR AT LEAST TWO HIKES BY MID-2027. MOST IMPORTANTLY, THIS RISE IN YIELDS WAS DUE TO REAL YIELDS, NOT INFLATION EXPECTATIONS. REAL YIELDS HAVE MORE OF A NATURAL ANCHOR, BUT ALSO THEY ARE REFLECTIVE A GOOD GROWTH, STRONG PRODUCTIVITY, RATHER THAN A LOSS OF CONFIDENCE IN THE BOND MARKET. SALLY: I WANTED TO ASK YOU ABOUT CORPORATE CREDIT SPREADS. THOSE ARE NEAR MULTIYEAR TYPES DRIVEN LARGELY BY STRONG BALANCE SHEETS, CORPORATE EARNINGS. IF WE SEE CRACKS IN CORPORATE EARNINGS DRIVEN BY A POTENTIAL RATE HIKE, WHAT DOES THIS DO? DOES THIS ERODE THE CREDIT BUFFER THAT WE CURRENTLY HAVE? ALESSIO: CREDIT SPREADS AT THE MOMENT, AS YOU POINT OUT, ARE AT ALL-TIME LOWS IN PRACTICALLY EVERY SECTOR. IS THAT A SUFFICIENT BUFFER IN CASE THE FUNDAMENTALS PICTURE WERE TO REALLY DETERIORATE? OF COURSE NOT. THAT IS MY WE ACTUALLY PREFER, GIVEN THE STRONG FUNDAMENTAL PICTURE WITH EARNINGS, WE ARE RUNNING AT 30 PLUS PERCENT YEAR ON YEAR EARNINGS GROWTH. THAT IS NOT GOING TO SINGLE DIGITS OR ZERO OVERNIGHT. THERE IS ROOM, THERE IS A BUFFER. THE CYCLE IS STILL IN PLACE. BUT WE DO AGREE WITH YOUR STATEMENT, MEANING IN THIS FUNDAMENTAL PICTURE, YOU ARE FAR MORE COMPENSATED IN EQUITIES THAN IN CREDIT. THAT IS WHY FROM A MULTI-AS A PERSPECTIVE, THIS FUNDAMENTAL PICTURE ARGUES MORE TO RETAIN THE UPSIDE TO EQUITIES FUNDED FROM CREDIT. IF YOU OR ANY FIXED INCOME ONLY PORTFOLIO, HOWEVER, EQUITIES ARE NOT AN OPTION, WE BELIEVE STAYING INVESTED IN CREDIT SPREADS TO THE RISKIER PART OF THE CURB, HIGH-YIELD, EMERGING MARKETS, STILL GIVES YOU A LITTLE BIT MORE FUNDAMENTAL BUFFER GIVEN HOW STRONG THE FUNDAMENTALS ARE THEN IN INVESTMENT GRADE. ROMAINE: IF YOU ARE AN INVESTOR ANTICIPATING A MATERIAL RISE IN YIELDS, EQUITY INVESTOR, EXCUSE ME, DOES THAT CHANGE HOW ATTRACTIVE SOME OF THESE STOCKS MIGHT BE, DO YOU WORRY AT ALL THAT THAT ERODES THE FUNDAMENTAL VALUE CASE? ALESSIO: THAT'S A VERY IMPORTANT QUESTION BECAUSE HISTORICALLY I WOULD HAVE SAID, IF YIELDS GO UP, REDUCE YOUR EXPOSURE TO HIGHER DURATION STOCKS SUCH AS TECHNOLOGY. WHY? LONG DATED CASH FLOWS. HOWEVER, IF YIELDS ARE RISING BECAUSE EARNINGS GROWTH IS ACCELERATING, AND THE EARNINGS GROWTH IS EXACTLY IN THOSE STOCKS, THEN THE CASE IS WEAKER. THIS IS WHY IT'S IMPORTANT TO MAKE THAT DISTINCTION OF RATES RISING BECAUSE REAL RATES ARE RISING AND BECAUSE PRODUCTIVITY IS GOING UP. WE ASK A BEING UNDERWEIGHT CYCLICALS WHICH IS COUNTERINTUITIVE IN A RISING RATE ENVIRONMENT, WE PREFER BEING UNDERWEIGHT CYCLICALS AND BEING OVERWEIGHT TECHNOLOGY, COMMUNICATION SERVICES. WHY? QUALITY BALANCE SHEETS, HIGH PROFITABILITY. ROMAINE: GREAT STUFF AS ALWAYS, ALESSIO DE LONGIS, HEAD OF RESEARCH AND CIO OVER AT PROSHARES. WHEN WE COME BACK, WE WILL FOCUS ON THE RETAIL SPACE AND CHECK IN ON FIVE BELOW, SET TO REPORT AFTER THE BELL. WE WILL TALK TO AN ANALYST WHO HAS THOUGHTS ON WHAT TO EXPECT HERE ON "THE CLOSE" ON BLOOMBERG. ROMAINE: AS WE AWAIT THOSE EARNINGS AFTER THE BELL OUT OF BROADCOM, WE WILL GET ANOTHER READ ON THE RETAIL SPACE, AND THAT IS WITH FIVE BELOW. THE DISCOUNT RETAILER OUTPERFORM ITS BEERS SO FAR THIS YEAR. SHARES OF ABOUT 28 PERCENT. JOINING US NOW IS MANAGING DIRECTOR, SENIOR ANALYST OVER AT OPPENHEIMER. HE HAS FIVE BELOW WITH A MARKET BELOW RATING. I WAS CURIOUS ABOUT SOME OF THE TURNAROUND THAT WE HAVE SEEN IN THIS COMPANY. OBVIOUSLY, THE EXPANSION OF WHAT THEY'VE DONE WITH REGARD TO THE PRODUCT OFFERINGS. I NEVER KNOW WHAT TO MAKE A FIVE BELOW. WE CALL IT A DISCOUNT RETAILER, THAT IS ITS ORIGIN STORY, BUT EVERY TIME I GO IN THERE, IT SEEMS LIKE A HODGEPODGE OF EVERYTHING. WHAT IS THIS COMPANY, WHAT DO YOU EXPECT TONIGHT? >> THINK YOU HAVE ME ON, APPRECIATE IT. FIVE BELOW IS A UNIQUE RETAILER. WE ON WALL STREET TEND TO LUMP IT IN WITH THE OTHER DOLLAR STORES BUT IT IS DIFFERENT. FIVE BELOW IS A UNIQUE MERCHANDISER THAT YEARS IT STORES AND OFFERING TOWARDS KIDS. PARENTS BUYING THEIR KIDS PRODUCTS. WHAT FIVE BELOW HAS DONE HISTORICALLY VERY SUCCESSFULLY IS JUMP ON, AND IN SOME CASES DRIVE KEY TRENDS. MOST RECENTLY, SQUISHING DUMPLINGS, OTHER THINGS. THEY SELL VALUE PRICED PRODUCTS THAT ARE GEARED TOWARD KIDS, MORE ON TREND PRODUCTS. SALLY: I HAD TO LOOK UP WITH THE SQUISHY DUMPLINGS ARE. ON THE EARNINGS CALL, THE COMPANY NOTED THE PRICE OF ENTRY IS ESSENTIALLY ONE DOLLAR, SO IT'S A PRETTY GOOD MARKET PROPOSITION. BUT WITH CONSUMER DEALING WITH RISING FUEL COSTS, STICKY INFLATION, SOFTER LABOR MARKET, WHAT KIND OF PROPOSITION DOES A COMPANY LIKE FIVE BELOW HAVE IN THAT MARKET? BRIAN: GREAT QUESTION. WE WILL GET AN UPDATE ON THAT QUESTION AFTER FIVE BELOW REPORTS TODAY. ON THE ONE HAND, FIVE BELOW IS VERY GOOD AT DELIVERING ITS CORE CUSTOMERS VALUE. YOU HAVE AN ENVIRONMENT THAT WE ARE IN RIGHT NOW, WHERE MORE CONSUMERS ARE SEEKING VALUE. THAT IS A MARKET YOUR OPPORTUNITY FOR FIVE BELOW BECAUSE THEY ARE GOOD AT DELIVERING THAT VALUE. ON THE OTHER HAND, TO BALANCE THIS OUT, WHAT FIVE BELOW CELLS ARE DISCRETIONARY ITEMS. AGAIN, FOR KIDS. OFTEN TIMES KIDS ARE BUYING -- PARENTS ARE BUYING THE PRODUCTS, SO THAT IS LESS DISCRETIONARY. WITH HIGHER GAS PRICES, THAT COULD HAVE SOME NEGATIVE IMPACT. OVERALL, TO ANSWER YOUR QUESTION, IT WILL SHAKE OUT MORE ON THE POSITIVE SIDE WHERE THE VALUE PROPOSITION OF FIVE BELOW IS STRONGER IN THIS CONSUMER BACKDROP. ROMAINE: WHEN WE TALK ABOUT THE LONGER-TERM GROWTH STORY, WHAT INVESTORS WANT TO SEE, OBVIOUSLY, THE STOCK IS PERFORMED WELL, BUT WHAT KEEPS THIS GOING? DO WE LOOK AT IT ON THE SAME SEASONAL BASIS AS OTHER RETAILERS, IS IT IMMUNE TO THAT TO A CERTAIN EXTENT GIVEN THE ARRAY OF PRODUCT OFFERINGS? BRIAN: THERE IS DEFINITELY SEASONALITY HERE. LIKE MOST OTHER RETAILERS, THEY HAVE THEIR PEAKS. THE BETTER WAY TO ANSWER THE QUESTION, WHICH IS KEY FOR FIVE BELOW, IS TO STAY ON THESE TRENDS. UNDER NEW MANAGEMENT, THEY DOING -- THEY ARE DOING A MUCH BETTER JOB OF SPEAKING TO THEIR CUSTOMERS, THEY KNEW WHO THE CUSTOMERS ARE BETTER. WHAT IS HAPPENING NOW, FIVE BELOW IS POSITIONED MORE APPROPRIATELY, BETTER TO STAY ON TOP OF THE TRENDS. THAT IS THE KEY TO KEEPING THIS SALES FLYWHEEL GOING. ROMAINE: WE BELIEVE THAT THEIR CRIME BRIAN NAGEL, SENIOR ANALYST OVER AT OPPENHEIMER. FIVE BELOW SHARES DOWN 2% HEADING INTO THE PRINT AFTER THE BELL TONIGHT. REMINDER THAT WE GET SOME OTHER EARNINGS INCLUDING FROM BROADCOM AS WELL, HPE. WE TALK ABOUT WHAT IS NOW FINALLY THE END OF THE EARNINGS SEASON, ALTHOUGH IT NEVER SEEMS TO END. WE HAVE LEARNED SO MUCH ABOUT THE RETAIL SIDE AND THE AI SIDE. THESE LAST COUPLE STRAGGLERS, MAYBE THEY GIVE US A GLANCE INTO WHAT WE CAN EXPECT THE REST OF THE YEAR. SALLY: IT HAS BEEN A PRETTY MIXED PICTURE. COMING OUT OF EARNINGS WITH A MIXED PICTURE ON CONSUMER HEALTH, INDEED SURROUNDING A. EARNINGS ARE STRONG BUT THERE ARE STILL A LOT OF HEADWINDS. ROMAINE: HAVE YOU EVER BEEN IN A FIVE BELOW? SALLY: THIS WAS THE FIRST TIME I FAMILIARIZE MYSELF WITH ONE. ALSO HOW LONG BEFORE IT SHOULD BE CALLED FIVE BELOW? ROMAINE: WE WILL TALK TO THE CEO OF MONGODB WHEN WE COME BACK ON THE HEELS OF YESTERDAY'S RESULTS. THIS IS BLOOMBERG. >> 3:30 P.M. IN NEW YORK, THIS IS THE COUNTDOWN TO THE CLOSE. I'M ROMAINE BOSTICK. LET'S TAKE A LOOK. SHARES OF MONGODB, ON PACE FOR THEIR WORST DAY GOING BACK TO MARCH FOLLOWING THE COMPANY'S EARNINGS REPORT YESTERDAY. ANALYSTS CITING THAT GROWTH ON THE DATA PLACE -- DATABASE PLATFORM CAME AMID LOW EXPECTATIONS. LET'S HEAR FROM THE PERSON RUNNING THE COMPANY, CJ DESAI CEO OF MONGODB. WE DON'T HAVE TO REHASH THE NUMBERS, BUT WE ARE TALKING THE FASTEST GROWTH YOU HAVE SEEN IN A COUPLE YEARS. PRETTY MUCH BEAT ON EVERY LINE. YOU SEE THE SHARE REACTION. I WAS LISTENING TO THE CONFERENCE CALL. THERE SEEMED TO BE ON FOCUS ON WHAT IS GOING ON WITH THE ATLAS CLOUD BUSINESS. THERE WOULD SEEM TO BE A BIT OF A STEP DOWN IN THE GROWTH RATE IN THE SECOND HALF, WHAT IS GOING ON? >> OVERALL, WE FEEL VERY GOOD ABOUT THE BUSINESS, THE DEMAND ENVIRONMENT. ON ATLAS, IT WAS FIFTH QUARTER OF 29% GROWTH. IN THE DOLLARS WE BRING IN FOR ANALYSTS QUARTER OVER QUARTER HAS BEEN GOING VERY NICELY. WHEN WE GUIDE, WE GUIDE QUARTER AND QUARTER AS Q3, AND WE ALWAYS GUIDE PRUDENTLY FOR ONE QUARTER OUT AS IN Q PLUS ONE. AND WE HAVE FOLLOWED THE SAME GUIDANCE PHILOSOPHY. BUT OVERALL, WE FEEL VERY STRONG ABOUT THE ATLAS BUSINESS AND THE DEMAND ENVIRONMENT. ROMAINE: THERE WAS A HUGE RUN-UP IN YOUR STOCK, A LOT HAD TO DO WITH MONGODB WAS MAYBE THE NEXT BIG A.I. ACCELERATION STORY. ARE YOU? >> WE ABSOLUTELY ARE. WHEN WE LOOK AT ENTERPRISE, LARGE CUSTOMERS USE US FOR A WORKFORCE, WE ARE RUNNING MANY PILOTS, SOME GOING TO PRODUCTION THAT I SHARED YESTERDAY. A.I. NATIVE COMPANIES LIKE 11 LABS, VERY WELL DOING COMPANIES, SUCCESSFUL COMPANIES, ALSO MONGODB, WE ALSO SHARE THAT FRONTIER LABS FOR MANY WORKLOADS ARE USING MONGODB. IT IS EARLY, AND OUR GROWTH IS SOLID AND CONSUMPTION IS SOLID. IT IS NOT IF, IT IS WHEN WE WILL SEE THAT INFLECTION POINT. >> IT IS SAID BY MANY AND AI CEO THAT THE BEST AI APPLICATIONS NEED STRONG DATABASES. IF YOU ARE EMERGING AS THE DATA PLATFORM FOR THE A.I. ERA, DOES IT MAKE YOU A POTENTIAL TAKEOVER TARGET FOR AN A.I. FIRM? HAVE YOU HAD ANY INTEREST AT ALL? >> ONE, WE WILL SAY ARE WE RELEVANT IN THE AI WORLD? ABSOLUTELY. WE BELIEVE OUR PLATFORM IS TRULY INTELLIGENT DATA PLATFORM. WE JUST STARTED DATABASE, WE HAVE ADDED FUNCTIONALITY LIKE SEARCH AND MANY OTHERS. THE COMPANY CONTINUES TO DO WELL. THE GROWTH IS ORGANIC. GREW 30%. YESTERDAY WE CHOSE THE HIGHEST GROWTH IN THREE YEARS. OVERALL, WE BELIEVE IN THE POTENTIAL PERFORMANCE IS GREAT, AND THE POTENTIAL OF THE COMPANY. >> YOU ALSO SET ON THEIR EARNINGS CALL MONGODB SEEKS AN EARLY MOMENTUM WITH AI WORKLOADS. WHAT KIND OF USE CASES OR WORKLOADS ARE YOU REFERRING TO? WHICH WILL BE MOST EARNINGS GENERATING? >> I WOULD PUT THEM IN THREE BUCKETS. BUCKET NUMBER ONE, FRONTIER LABS ARE USING US FOR SOME OF THEIR PRODUCTS. SOMETIMES ON THE RESEARCH SIDE, SOMETIMES ON THE INFERENCE SIDE, SOMETIMES ON THE CORE DEVELOPMENT WHERE THEY RELEASE MODELS AND THINGS LIKE THAT. THAT IS ONE BUCKET. WHERE WE ARE BEING USED BY THESE FRONTIER LABS, AND AS WE ALL KNOW, THEY ARE GROWING VERY FAST. OUR RELATIONSHIP WITH THEM IS STILL EARLY. SECOND BUCKET IS COMPANIES. WHERE A.I. IS THEIR BUSINESS. ELEVENLABS OR FIREFLIES, WHERE AI IS THEIR BUSINESS, MONGODB IS USED AS THEIR DATA PLATFORM. AND THIRD, WHICH IS WHERE WE ARE TODAY, OUR MULTIBILLION DOLLAR REVENUE, PUBLIC SECTOR, THEY USE US AS A NATIVE PLATFORM. WHEN THEY START CREATING TRULY AGENTIC APPLICATIONS, CUSTOMER FACING, THAT IS WHEN WE WILL SEE OUR GROWTH INFLECTION CHANGE. ROMAINE: WITH THE FRONTIER LABS, ARE THEY USING THE VOYAGE PRODUCT WHEN WE TALK ABOUT POLLING DATA AND STUFF? >> THEY ARE MAINLY USING US FOR OUR CORE OPERATIONAL DATA LAYERS. SO THEY ARE USING AT FOR US. A.I. NATIVE COMPANIES USE US FOR VOYAGE, SO THAT YOU CAN HAVE A MEETING OF THE DATA AND THE INTELLIGENCE ON THE DATA. BUT THE LABS ARE USING US FOR TRULY OPERATIONAL DATA. ROMAINE: WHAT IS THE FUTURE OF VOYAGE? IT SEEMS IT IS A CRITICAL COMPONENT OF THIS. I DON'T KNOW WHAT THE MONETIZATION OF IT IS. WHEN WE GET TO THE IDEA OF YOUR END USERS, THE BEAN COUNTERS OF YOUR END USERS LOOKING AT THE COST OF USAGE, DOES IT BECOME AN IMPEDIMENT TO GROWTH? >> YES, I WOULD SAY FIRST THAT ARE VOYAGE CUSTOMER ACCOUNT, IT IS A COMPANY WE ACQUIRED OUT OF STANFORD UNIVERSITY LAST YEAR. THE CUSTOMER ACCOUNT, BECAUSE VOYAGE IS RECOMMENDED AS THE CUSTOMER CLASS EMBEDDING MODEL WHICH GIVES MEETING -- MEANING TO YOUR DATA. THAT PARTICULAR COMPANY IS PART OF US, AND THE REFERRAL FOR DEVELOPERS TO USE VOYAGE COMES FROM EITHER CLAUDE, SO THAT IS DRIVING THE GROWTH. MANY OF THESE CUSTOMERS ARE NOT MONGODB CUSTOMERS, BUT THEY BECOME VOYAGE CUSTOMERS. SO THEY BECOME A FUNNEL FOR US. AND THEY SAY WOULD YOU LIKE TO USE DATABASE, WHICH IS INTEGRATED WITH SEARCH. IT ACTS AS A GROWTH DRIVER. THE NUMBERS ARE SMALL BECAUSE WE ACQUIRED THE COMPANY OUT OF STANFORD ABOUT 18 MONTHS AGO NOW. BUT THE CUSTOMER COUNT IS GROWING RAPIDLY. THE REVENUE BASE IS SMALL. THE REVENUE BASE WILL GROW OVER TIME BECAUSE THE APPLICATIONS PEOPLE USE VOYAGE FOR ARE ALMOST ALWAYS AI APPLICATIONS. THEN WE CAN UPSELL THE OTHER PRODUCTS WE HAVE. >> TELL US ABOUT WHO IS THE MONGODB CUSTOMER, YOU MENTIONED A LARGE BANK IS USING YOU, WHAT CUSTOMERS ARE YOU TARGETING? >> OVERALL, WE GUIDED ON THE HIGH END OF THE GUIDANCE YESTERDAY. FOR THE FIRST TIME, $3 BILLION IN REVENUE. ON THE HIGH-END, GROWING AT 23%. OUR REVENUE HAS ACCELERATED FOR TWO YEARS. WHEN YOU LOOK AT OUR CUSTOMER BASE, WE HAVE 70,600 CUSTOMERS. WE ARE DOING AMERICA, EUROPE, VENEZUELA, ASIA. IN FORTUNE 100, WE ARE HIGHLY CONCENTRATED. LARGE BANKS, LARGE INSURANCE COMPANIES, RETAIL CUSTOMERS, YOU CAN ALSO LOOK AT CONSUMER PRODUCT GOODS, THAT IS WHERE OUR CONCENTRATION IS TELECOMMUNICATIONS, ALL OF THE NAMES YOU HAVE HEARD OF IN FORTUNE 100. ALSO IN FORTUNE 500, AND DIGITAL NATIVES, AI NATIVES, SOME OF THE TECH COMPANIES KEY PRODUCTS ARE ALSO BUILT ON MONGODB. ROMAINE: TO SCALE BACK TO THE REACTION WITH HIGH EXPECTATIONS, BEING ABLE TO HIT THE BAR, YOU HAVE AN INVESTOR DAY COMING UP AT THE END OF THIS MONTH. SEPTEMBER 29. IS THERE ANYTHING MATERIALLY DIFFERENT THAT YOU WILL BE ABLE TO SHARE WITH INVESTORS THAT YOU DID NOT SHARE WITH THEM YESTERDAY? >> YES, WE WANT ALL OF YOU WATCHING TO DIVE INTO THE INVESTOR DAY. ONE IS WE ARE GOING TO SHOW SOME EXCITING PRODUCTS ON WHILE WE ARE RELEVANT FOR AI, WHY AI IS A TAIL WIND. THERE WILL BE EXCITING PRODUCTS AND INNOVATION WE DID NOT COVER YESTERDAY. WE WILL ALSO INTRODUCE OUR NEW LEADERSHIP TEAM IN PLACE, THEY WILL SHARE WHAT THEY ARE SELLING FOR AND HOW TO CAPTURE THE POTENTIAL LARGE MARKET MONGODB PARTICIPATES IN. NUMBER THREE, OUR FINANCE TEAM AND THE CFO WILL GIVE AN UPDATE ON THE FINANCIAL METRICS. ROMAINE: HOPEFULLY WE HAVE YOU BACK AFTER YOU ARE DONE WITH YOUR INVESTOR DAY. CJ DESAI. WHEN WE COME BACK, WE TAKE A LOOK AT GE, OUR STOCK OF THE HOUR. IT IS RISING ON THE BACK OF A DEAL BROKERED BY THE TRUMP ADMINISTRATION TO RESTORE VENEZUELA'S ENERGY SUPPLY. THAT IS COMING UP NEXT. ROMAINE: TIME NOW FOR OUR STOCK OF THE HOUR. SHARES OF GE -- SOLD OFF IN AUGUST, TRYING TO'S STAGE A REBOUND. THIS AFTER THE COMPANY INKED A DEAL WITH VENEZUELA TO HELP STRENGTHEN AND RESTORE THE COUNTRY'S ENERGY SUPPLY. LET'S GO DOWN TO WASHINGTON. JENNIFER DELETE, WHO COVERS CLIMATE AND ENVIRONMENTAL POLICY FOR US, TO TALK ABOUT EXACTLY WHAT THAT MEANS. A LOT OF TRUMP ADMINISTRATION OFFICIALS IN VENEZUELA, WE HAD THIS BIG ANNOUNCEMENT COMING OUT EARLIER TODAY. WHAT EXACTLY IS GE VERNOVA'S INVOLVEMENT? >> THEY SIGNED THIS STRATEGIC ALLIANCE TO REVIVE AND REBUILD THE COUNTRY'S ELECTRIC GRID. THIS IS AN ELECTRIC GRID THAT WENT FROM DECADES AGO BEING A SHINING EXAMPLE OF WHAT CAN BE DONE IN LATIN AMERICA, THE EPITOME OF MODERN TECHNOLOGY, TO ONE THAT IS BADLY DETERIORATED. BLACKOUTS ARE COMMON, POWER. THAT IS NOT JUST FEEDING PROTESTS AND MAKING LIFE HARD FOR THE VENEZUELAN PEOPLE, IT IS A HARDSHIP AND AN OBSTACLE TO GROWING OIL DEVELOPMENT AND OUTPUT AND PRODUCTION IN VENEZUELA, CLEARLY A CHIEF GOAL FOR THE TRUMP ADMINISTRATION AND VENEZUELA AS IT FORGES GREATER TIES WITH WASHINGTON. THIS FITS INTO THIS BROADER TRUMP ADMINISTRATION PUSH TO ACCELERATE ENERGY DEVELOPMENT IN VENEZUELA WITH WESTERN AND U.S. COMPANIES. >> GIVEN THAT LEVEL OF DETERIORATION IN THE GRID, HOW MUCH OF AN UNDERTAKING COULD THIS BE FOR GE VERNOVA? IT IS A COMPANY THAT DOES A LOT OF DATA CENTER BUILDING, COULD THIS END UP SUCKING AWAY INVESTMENT THAT SHOULD BE GOING TO MORE PROFITABLE ASSETS? >> ABSOLUTELY, IT IS A HUGE UNDERTAKING. ANALYSTS HAVE PUT THE PROJECT AT $25 BILLION. IT IS NOT SOMETHING THAT IS GOING TO HAPPEN OVERNIGHT. GE VERNOVA IS ONE OF THE WORLD'S LARGEST MANUFACTURERS OF THE EQUIPMENT THAT IS GENERATING ELECTRIC POWER AND GETTING IT TO WHERE IT NEEDS TO GO. THE TURBINES AND TRANSFORMERS ARE THE BACKBONE OF OUR ELECTRIC SYSTEM. THAT IS IN BIG DEMAND ACROSS THE WORLD, AS PART OF THE AI AND DATA CENTER BUILDOUT. THE COMPANY IS ALREADY SEEING BIG DEMAND FOR ITS PRODUCTS, THIS WILL BE A NEW SOURCE OF IT. ONE THING WE ARE HEARING ABOUT THE GE VERNOVA DEAL AND DEALS WITH CHEVRON IS THAT NONE OF THIS WILL HAPPEN OVERNIGHT. THERE IS OBVIOUSLY A PUSH TO DO THINGS VERY QUICKLY TO BRING A BIG TRANSFORMATION TO THE GRID AND REALLY INCREASE IN OUTPUT QUICKLY. BUT EVERYTHING NEEDS REPAIR DOWN THERE, AND MUCH OF IT WILL BE A SLOWER PROGRESSION THAN I THINK SOME FOLKS IN WASHINGTON, CERTAINLY THE PRESIDENT WOULD LIKE TO SEE. ROMAINE: IT IS INTERESTING, A LITTLE BIT OF A SLOW STEP HERE IN THE WAY HE'S VIEWING THINGS. JENNIFER, REALLY APPRECIATE IT. IN WASHINGTON COVERING THIS FOR US. WE'LL COME BACK TO WALL STREET AS WE COUNT DOWN TO THE CLOSING BELLS. ON SEPTEMBER 2. STOCKS TRYING TO GET THEIR MOJO BACK AFTER STARTING THE MONTH ON THE BACK FOOT. MONA MAHAJAN WILL BE JOINING US AFTER THE BREAK. THIS IS BLUE. . ♪ -- THIS IS BLOOMBERG. ♪ ROMAINE: WELCOME BACK TO THE CLOSE. I'M ROMAINE BOSTICK. >> I'M SALLY BAKEWELL. ROMAINE: WE ARE COUNTING DOWN TO THE CLOSE. STOCKS WERE BASICALLY FLAT. WE SAW A LITTLE BIT OF A BARGAIN-HUNTING, MATT PROVIDED A LIFT FOR MOST OF THE MAJOR INDICES. SALLY: OIL IS STILL UP, ABOUT $95 NOW AMID AN ESCALATION OF U.S. AND IRAN ATTACKS. THE RALLY HAVING SLOWED A LITTLE BIT. THAT HELPED WITH THE S&P 500, GIVEN A BOOST. WE ALSO SEE THAT THE U.S. 10 YEAR YIELD IS DOWN A TOUCH, 4.8 CURRENTLY. IF YOU LOOK AT DIESEL FUTURES, DOWN JUST A TOUCH TO ABOUT 1.419. ROMAINE: WE TALK ABOUT THE IDEA OF BARGAIN HUNTERS COMING BACK IN. THE BACKDROP PEOPLE WERE CONCERNED ABOUT YESTERDAY STILL REMAINS. YIELDS ARE STILL ELEVATED, OIL PRICES ARE. A LOT OF UNCERTAINTY ABOUT WHAT TRANSPIRES OVER THE NEXT FEW MONTHS. MONA MAHAJAN JOINS US, HEAD OF INVESTMENT STRATEGY AT EDWARD JONES COUNTING US DOWN TO THE CLOSING BELLS. I WANT TO START OFF WITH THE YIELD STORY. IT SEEMS LIKE ONE WAY OR ANOTHER, THAT WILL CONTINUE TO BE THE STORY. IS IT A STORY THAT EQUITY INVESTORS ARE GOING TO BE ABLE TO LIVE WITH? >> THE RISE IN YIELDS HAS BEEN STARK THUS FAR IN 2026. THE 10 YEAR IS 4.75%, PLUS. WE'VE HAD A 60 BASIS POINT MOVE YEAR TO DATE. THERE ARE TWO THINGS EQUITY MARKETS WORRY ABOUT WHEN IT COMES TO YIELD. THE ABSOLUTE RISE IN YIELD LEVEL AND THE SPEED OF THAT RISE. 60 BASIS POINTS OVER THE COURSE OF THIS YEAR SEEMS FAST. BACK IN 2022, 234 BASIS POINT MOVE IN A SHARP PERIOD OF TIME, THAT PUT DOWNWARD PRESSURE ON THE MARKET. WE ARE AT THAT POINT WHEN IT COMES TO SPEED, ALSO BELOW THE 5% THRESHOLD WE SAW IN 2023. ALL THAT BEING SAID IS A COST OF BORROWING FOR CONSUMERS AND CORPORATIONS RISING. COULD THAT WAY ON LONGER-TERM GROWTH AND GROWTH OVER THE NEXT TWO TO THREE QUARTERS, POTENTIALLY? BUT THE SILVER LINING PERHAPS IS THIS IS AN ECONOMY THAT HAS BEEN ABLE TO HOLD IN DESPITE YIELDS REMAINING ELEVATED FOR THE LAST YEAR AND A HALF OR SO. AND WE HAVE A SECULAR BULL MARKET BEHIND US SUPPORTING THE GROWTH STORY AS WELL. NOT ABOUT OUTCOME, BUT SOMETHING WE ARE WATCHING. ROMAINE: JUST TALKING ABOUT THE IDEA, THE CHANGE, THE RATE OF CHANGE AS WE SEE IN THE YIELDS RELATIVE TO WHAT WE SAW IN THE PREVIOUS CYCLE. THE QUESTION THAT HAS TO BE ANSWERED IS WHY YIELDS ARE RISING IN THE FIRST PLACE. THAT WOULD BE A BIG DETERMINANT ON WHETHER IT IS GOOD OR BAD FOR EQUITIES. WHY DO YOU THINK THEY HAVE BEEN RISING? >> THERE HAS BEEN A CONFLUENCE OF FACTORS COMING TOGETHER, ONE IS THE FUNDAMENTAL STORY ON THE U.S. FISCAL PICTURE. RISING DEBT DEFICITS PUT UPWARD PRESSURE ON YIELDS. BUT YOU COMBINE THAT WITH A GLOBAL YIELD STORY THAT HAS BEEN MOVING HIGHER. INFLATIONARY PRESSURES COMING FROM UNCERTAINTY AROUND OIL AND GEOPOLITICS. WE HAVE THE AI NARRATIVE, WHICH AI HYPERSCALERS AND PARTS OF THE MARKET ARE TAPPING DEBT MARKETS AND BECOMING COMPETITORS FOR U.S. TREASURY. THAT PUTS PRESSURE ON YIELDS AS WELL. WE THINK FUNDAMENTALLY IF WE CAN SEE SOME BETTER STABILIZATION ON THE INFLATION AND OIL PRICE FRONT, COMBINED WITH SOME INDICATION THAT WE ARE ADDRESSING THE FISCAL STORY, THOSE ARE THE MEANINGFUL DRIVERS TO BRING YIELDS BACK. SALLY: IT IS THE GLOBAL YIELD STORY, NOT JUST A U.S. PHENOMENON. WHILE THE U.S. IS BACKED BY PRETTY ROBUST GDP GROWTH, OTHER MAJOR ECONOMIES AREN'T, SOME HAVE FISCAL DEFICITS AND ALONGSIDE WEAKER GROWTH. GIVEN THIS DIVERGENCE, HOW ARE YOU POSITIONING YOUR GLOBAL ASSET ALLOCATION? >> IT IS A GREAT POINT. IN MANY CASES, THERE IS THIS OLD ADAGE THERE IS NO ALTERNATIVE. THERE IS REALLY NOT MUCH OF AN ALTERNATIVE TO EVEN THE U.S. TREASURY MARKET, WHICH IS A VERY DEEP AND LIQUID MARKET, VERY WELL REGULATED. U.S. DOLLAR IS REALLY THE RESERVE CURRENCY OF THE WORLD, EVEN STILL OVER 60% OF GLOBAL RESERVES ARE HELD IN THE DOLLAR. THERE IS IDEA EVEN THE U.S. TREASURY YIELD CLIMBS HIGHER, MORE ATTRACTIVE THAN THE GLOBAL MARKETPLACE WE HAVE SEEN. THAT BEING SAID, WE THINK ABOUT PORTFOLIO POSITIONING. WE WEAR IT -- VERY MUCH REMAIN OVERWEIGHT EQUITIES VERSUS FIXED INCOME. WITHIN EQUITIES, WE LIKE U.S. LARGE AND MID-CAP. BUT WE ALSO DO LIKE EMERGING MARKETS AND INTERNATIONAL VALUE. AND WE THINK IT PLAYS THE ALTERNATIVE TO U.S. TECHNOLOGY, IT ALSO HAS A GROWTH STORY WHEN IT COMES TO EARNINGS AS WELL. THERE ARE DRIVERS OUTSIDE OF THE YIELD STORY WE ARE WATCHING. WE ARE MORE CAUTIOUS ON DEVELOPED INTERNATIONAL, EUROPE AND JAPAN, THE PARTS IN THE VALUE SPACE ARE. SALLY: IS HOW YOU ARE TELLING CLIENTS TO NOT BE OVER INDEXED ON THE AI TRADE? WHAT ARE YOU PITCHING? >> ABSOLUTELY. I THINK WE WANT TO BE DIVERSIFIED WHEN IT COMES TO THE AI TRADE. WE KNOW THERE'S CONCENTRATION RISK. TOP 10 NAMES, LEVER TO AI AND MAKE UP OVER 40% OF THE INDEX. SIMILARLY, EM HAS A LARGE CONCENTRATION OF AI. IN FACT, A LOT OF MAJOR INDEXES HAVE AI AS A KEY DRIVER IN NARRATIVE. ALL THAT BEING SAID, WE KNOW THAT WHILE AI IS IN THE DRIVER SEAT RIGHT NOW, WE THINK SOME OF THOSE PRODUCTIVITY GAINS, WE HAVE BEEN HEARING MORE ABOUT THIS, THEY WILL COME IN SECTORS THAT ARE OUTSIDE OF TECHNOLOGY, THAT INCLUDE AREAS LIKE HEALTH CARE, MANUFACTURING AND INDUSTRIALS, LIKE FINANCIAL SERVICES. WE THINK THE INFRASTRUCTURE PLAYERS ARE WINNING, BUT WE WANT TO HAVE EXPOSURE TO THOSE PARTS OF THE MARKET THAT COULD PLAY SOME CATCH UP OVER TIME AS WELL. ROMAINE: ALWAYS A PLEASURE. MONA MAHAJAN HEAD OF INVESTMENT STRATEGY AT EDWARD JONES. THE STOXX NOT FAR OFF OF SESSION HIGHS. SOME BREAKING NEWS CROSSING THE BLOOMBERG TERMINAL. A RED HEADLINE ON SCHWAB SAYING THEY WILL FURTHER RESTRICT TAX AWARE LONG SHORT ACCOUNTS. THAT WILL BASICALLY BE A CAP OF 10 MILLION DOLLARS, ACCORDING TO A LETTER CIRCULATING. I DON'T KNOW IF YOU REMEMBER A COUPLE MONTHS AGO, REPORTERS REPORTING ON HOW THE TREASURY DEPARTMENT WAS TAKING A CLOSER LOOK AT THESE STRATEGIES, WHICH CAN BE CALLED TAX AVOIDANCE, DEPENDING ON YOUR WAY OF LOOKING AT IT. THE 351 CONVERSIONS, THE BOX TRADES, AND ALL OF THESE DIFFERENT SPREAD PRODUCTS WHO START TO BECOME MORE POPULAR. THE TREASURY SAID IT WAS LOOKING INTO IT, MAKING SURE THEY WERE NOT "ABUSIVE." SALLY: THAT IS FASCINATING. WE WILL HAVE TO SEE HOW THAT PANS OUT. ROMAINE: WE'VE HEARD FROM A COUPLE ASSET MANAGERS TAKING A LOOK AT WHAT THEY WOULD LIMIT WHAT IS GOING ON. WE NOW KNOW THEY ARE GOING TO FURTHER RESTRICT LONG SHORT ACCOUNTS TO A $10 MILLION CAP ACCORDING TO A LETTER BLOOMBERG REPORTERS HAVE OBTAINED. COUNTING YOU DOWN TO THE CLOSING BELLS AND FROM EARNINGS. BROADCOM AND PVH, THAT COVERAGE STARTS RIGHT NOW. >> THE CLOSING BELL, BLOOMBERG'S COMPREHENSIVE CROSS-PLATFORM COVERAGE OF THE U.S. MARKET CLOSE STARTS RIGHT NOW. ROMAINE: AND RIGHT NOW WE ARE TWO MINUTES AWAY FROM THE END OF THE TRADING DAY. ROMAINE BOSTICK WITH SALLY BAKEWELL TAKING YOU THROUGH TO THE CLOSING BELL. A GLOBAL SIMULCAST WITH TIM STENOVEC AND LISA IN TODAY. WELCOME TO OUR AUDIENCES ACROSS OUR BLOOMBERG PLATFORMS TELEVISION AND RADIO. OUR PARTNERSHIP WITH YOUTUBE AS EQUITY MARKETS TRY AND GET THEIR MOJO BACK HEADING FOR A GREEN CLOSE TODAY AFTER A BIT OF A SELLOFF THE PREVIOUS THREE DAYS. TIM: MAYBE THAT IS WHY. WE SPOKE TO DEREK WEINER, HE SAID IT WAS A CATCH UP RALLY. STILL, YOU HAVE TO QUESTION -- SOME WOULD SAY WHAT ABOUT WHAT WE SAW IN THE BOND MARKET EARLIER THIS WEEK AND THE ELEVATED OIL PRICES THAT REMAIN? INVESTORS AT LEAST OPTIMISTIC TO BE LONG SOME OF THESE. LISA: THE OIL PRICES, BRENT CRUDE ABOUT $95 A BARREL, .70 PERCENT, WTI, 90 DOLLARS A BARREL. THIS IS A U.S. AND IRAN CONFLICT THAT IS STARTING TO INCREASE ONCE AGAIN. NOW IT IS BACK IN ACTION AGAIN. SALLY: I'M WATCHING FOR FIVE BELOW'S EARNINGS, WHICH WILL HIT ANY MINUTE NOW. THE MAKER OF THE DUMPLING, WHICH WE ARE OWNERS OF. ROBUST EARNINGS, IT IS ABOUT TO POST ROBUST EARNINGS IN A DECENT POSITION ON THE BALANCE SHEET. DECENT CASH. THEY ARE TALKING ABOUT WHETHER THERE ARE PROSPECTS FOR ROMAINE: RETURNS TO SHAREHOLDERS. PVH AND PETCO FROM THE CONSUMER SIDE, A LOT OF TECH EARNINGS, A COUPLE MIGHT BE CONSEQUENTIAL. WE WILL HEAR FROM BROADCOM AND WHETHER HOT 10 IS FINDING A WAY TO LEAN INTO THE A.I. TRADE. A PE, SNOWFLAKE, AS WELL AS C3 AI. FOR NOW, THE CLOSING BELLS IN NEW YORK. GREEN ACROSS THE SCREEN FOR MOST MAJOR INDICES. THE DOW INDUSTRIAL STANDING ABOUT 300 POINTS, .60 PERCENT. S&P 500 ADDING ROUGHLY 46 POINTS. .50%. HALF PERCENT GAIN FOR THE NASDAQ COMPOSITE. POINT 20% FOR THE NASDAQ 100. THE OUTPERFORMER ON THE DAY. THE SMALL CAPS, THE ONES CAROL MASSAR LOVE SO MUCH, IT IS THE RUSSELL 2000, 2000 OF THEM. TIM: SHE'S ON VACATION, I DON'T THINK SHE'S LISTENING. ROMAINE: I KNOW SHE IS. TIM: SAILING THE HIGH SEAS. ROMAINE: ON A LITTLE HAM RADIO. TIM: I THINK THEY HAVE STARLINK. MAYBE SHE'S WATCHING. THREE STOCKS HIGHER FOR EVERY TWO STOCKS THAT ARE LOWER. 302 MOOD HIGHER, 200 FELL. SALLY: LOOKING AT THE IMAP FUNCTION, WE CAN SEE IT IS THE COMMUNICATION SERVICES SECTOR THAT SEEMS TO BE BOOSTING THINGS AT THE MOMENT. FOLLOWED BY BOTH HEALTH AND FINANCIALS. LOOKING STRONG. TIM: LET'S TALK ABOUT THE STOCKS THAT MOVED HIGHER. WE HAVE TO START WITH DELL. A REMARKABLE REPORT, SHARES UP MORE THAN 200% GOING INTO THIS. DELL SHARES UP ON THE DAY 15.8%. WE SEE SHARES JUMPING AFTER THE COMPANY BOOSTED ITS ANNUAL SALES FORECAST DUE TO SERVICE TO RUN A.I.. I KNOW WE ARE GETTING SOME EARNINGS. CAN I KEEP GOING? ROMAINE: I LIKE THE DELL STORY. I'M BAFFLED BUT FASCINATED. TIM: HPE AS WELL. ROMAINE: THEY WILL BE INTERESTING, BECAUSE DELL. RAISING THEIR FORECAST FOR THE YEAR. THAT IS WHAT THEY ARE EXPECTING. THAT IS PHENOMENAL. WHAT IS HPE GOING TO DO? TIM: I WILL TELL YOU IN ABOUT SEVEN MINUTES, MAYBE EVEN THREE MINUTES. ROMAINE: I THINK WE WILL BE GONE THEN. TIM: THE AIR SERVER FORECAST, A THREEFOLD INCREASE OVER THE PRIOR YEAR. THE COMPANY IS WORTH MORE THAN $130 BILLION IN AI ORDERS IN THE PAST 12 MONTHS. THEY SET THE TONE FOR TODAY'S TRADE. I ALSO WANT TO CHECK IN ON GE VERNOVA, ABOUT THE U.S. AND VENEZUELA. SHARES CLOSED UP BY 2.6%. THE COMPANY HAS COMMITTED TO REPAIRING LARGE PORTIONS OF VENEZUELA'S POWER GRID AS PART OF A SERIES A DEAL TO BOOST THEIR ENERGY OUTPUT. VENEZUELA'S GRID HAS DETERIORATED OVER THE PAST TWO DECADES. THEY NEED AT LEAST $25 BILLION IN INVESTMENT. GE VERNOVA SHARES UP 2.6%. ANY TIME THERE'S AN EXCUSE TO TALK ABOUT THE SPHEERE, YOU WENT TO THE BACKSTREET BOYS SHOW, DIDN'T YOU? ROMAINE: I DID NOT. TIM: I THOUGHT YOU DID. NEXT TIME. ROMAINE: I'M WAITING FOR NSYN C. TIM: SHARES OF 5.5%. THIS IS THE SPHERE. WE SAW THE WIZARD OF OZ IN 4-D, YOU'VE HEARD OF 3D. ROMAINE: WHAT WERE YOU JUST ON VACATION TOGETHER? TIM: WE WERE THERE FOR WORK. LISA: SURE. TIM: I ACTUALLY THOUGHT WE COULD EXPENSE THE TICKETS BECAUSE I'M TALKING ABOUT THE SPHERE ALL THE TIME, BUT WE HAD TO PAY OURSELVES. IT WAS WORTH IT. ROMAINE: CAN I GET THE FIVE BELOW HERE? ? THE DISCOUNT RETAILER WITH ITS EARNINGS. A BEAT ACROSS THE BOARD, ADJUSTED EBS AT A DOLLAR. SALES IN THE QUARTER AT 1.2 6 BILLION DOLLARS, THAT IS ALSO A BEAT. COMP SALES UP 14%. THE STREET WAS LOOKING FOR A JUMP OF 11%. FOR THE FULL YEAR, EXPECT GUIDANCE. COMP SALES OF 10% TO 12% FOR THE FULL YEAR. THE STREET WAS LOOKING FOR 9%. SHARES UP 1% TO 2%. TIM: THE SIXTH -- CEO OF FIVE BELOW SAID WE ARE THRILLED WITH SECOND-QUARTER PERFORMANCE AND CONTINUED MOMENTUM OF OUR CUSTOMERS. ECCENTRIC STRATEGY. DELIVERING STRONG RESULTS BY DELIVERING ON FRIEND FROM THE RIGHT PRODUCT STORES, AND FUN AND EASY TO SHOP. WE ARE MANIACALLY FOCUSED ON DELIVERING OUR BRAND. TO BE THE DESTINATION FOR THE KID AND THE KID IN ALL OF US. I'VE NEVER BEEN TO A FIVE BELOW. ROMAINE: IT IS A LOT OF CANDY. TIM: I THINK WHEN KIDS GET A LITTLE OLDER -- ROMAINE: THE ENTERTAINMENT OF THE DAY. A KID WAS EATING FOR BREAKFAST A CARROT. TIM: IT IS A GREAT SOURCE OF ANTIOXIDANTS. SALLY: I JOIN YOU IN NOT HAVING BEEN TO A FIVE BELOW. WE KNOW THE COMPANY HAS BEEN LEVERAGING THE SOCIAL MEDIA AT INFLUENCER TREND. TIM: OTHER EARNINGS, SHARES UP 2.6 PERCENT. LOOKING AT SHARES OF NETAPP, UP ABOUT .70%. IT IS AN APPLICATION SOFTWARE COMPANY, IN THE REAL ESTATE -- REAL ESTATE SPACE. EPS COMING IN ABOVE ESTIMATES AT $2.58. THE OUTLOOK, SECOND-QUARTER NET REVENUE 2.18 BILLION DOLLARS THAT BEAT ESTIMATES SIGNIFICANTLY. NET REVENUE -- SECOND QUARTER ADJUSTED EPS. GO AHEAD. ROMAINE: HPE CROSSING THE WIRE. THE FORECAST FOR THE FULL YEAR. THE COMPANY SAYS EXPECT EPS OF 375 TO 385, A RADIUS OF WHAT WAS PREVIOUSLY GUIDED, 335 TO 345. ALSO FOR THE FULL YEAR, THE COMPANY SAYS EXPECT FREE CASH FLOW OF AT LEAST $5 BILLION, HIGHER THAN THE 4.8 3 MILLION THAT THEY HAD BEEN LOOKING FOR AND THE REVENUE GROWTH OUTLOOK GOES UP TO A RANGE OF 34% TO 37% GROWTH. RAISING THEIR FORECAST. AS FOR THE QUARTER THAT WAS ALSO A BEAT ALL AROUND, REVENUE IN THE MOST RECENT QUARTER $12.21 BILLION. THE STREET WAS LOOKING FOR ABOUT 11 POINT $9 BILLION. THE BOTTOM LINE, $1.11. THE STREET WAS LOOKING FOR $.90 A SHARE. IN AFTER-HOURS TRADE, THEY HAD BEEN IN THE GREEN. NOW SLIGHTLY IN THE RED. TIM: SNOWFLAKE SHARES ARE SURGING. THE COMPANY SEES FISCAL YEAR ADJUSTED OPERATING MARGIN OF 14.5%. IT'S 13.5%. THEY SEE THIRD QUARTER ADJUSTED OPERATING MARGIN 15.5%. THIRD-QUARTER PRODUCT REVENUE 1.5 9%, BEATING ESTIMATES OF 1.5. 6.0 $7 BILLION. THAT IS A SIGNIFICANT INCREASE FROM WHAT IT SAW EARLIER. SECOND-QUARTER REVENUE BEATING ESTIMATES, THIRD-QUARTER PRODUCT REVENUE FORECAST BEATING ESTIMATES. SNOWFLAKE SHARES UP 17.5% IN AFTER HOURS. ROMAINE: I WAS SURPRISED BY THE INITIAL POT. THE STOCK SAW MID AUGUST AT ITS HIGHEST LEVEL, SINCE WE HAVE SEEN LATE 2021. IT SEEMED LIKE A LOT OF INVESTORS HAD PILED IN. A LITTLE MORE JUICE BASED ON THAT RELEASED WE JUST GOT. LISA: I WANT TO GO TO PETCO. WOOF. REPORTED NET SALES SECOND-QUARTER MATCH ANALYST ESTIMATE. SHARES A LITTLE BIT HIGHER, $1.49 BILLION. ESTIMATE $1.49 BILLION. 122 POINT $2 MILLION. THE ESTIMATE WAS NINE POINT $6 MILLION. COMPARABLE SALES. JUST ABOUT THE SAME. ON PAR WITH THAT. SHARES RIGHT NOW UP ABOUT 8%. SOME GOOD NEWS FOR PETCO. TIM: IT IS STILL EARNINGS SEASON. IT NEVER ENDS. FORTUNATELY, WE ARE ALL OVER IT, WE ARE ON TOP OF IT. THAT IS GOING TO DO IT FOR OUR CROSS-PLATFORM COVERAGE OF THE MARKET CLOSE. I WOULD SAY WE WILL SEE YOU TOMORROW, BUT WE ARE NOT. WE ARE AT THE U.S. OPEN. THURSDAY AND FRIDAY. COMES A IF YOU ARE THERE. ROMAINE: ANOTHER ONE OF THESE "WORK-RELATED" THINGS? TIM: YES. TUNE INTO OUR COVERAGE 3:00 TO 5:00 WALL STREET TIME. WE WILL MISS YOU, BUT WE WILL BE BACK ON TUESDAY ALL TOGETHER AGAIN. ROMAINE: COMING UP ON THE CLOSE, OUR COVERAGE CONTINUES. AWAITING THE RESULTS OUT OF BROADCOM. A BROADER CONVERSATION ABOUT THE A.I. TRADE, WHERE TO INVEST. WE WILL TALK TO SOMEONE WHO KNOWS IT BETTER THAN ANYONE, MARC GANZI JOINS US AFTER THE BREAK ON BLOOMBERG. ♪ >> THE COUNTDOWN IS ON. EVERYTHING YOU NEED TO GET THE EDGE OF THE END OF THE MARKET DAY. THIS IS THE CLOSE. ROMAINE: WE GET THE CLOSING BELLS HERE IN NEW YORK A FEW MINUTES AGO. THE S&P 500 SNAPPING A THREE-DAY LOSING STREAK. CLOSING AT 7006 HUNDRED 66. OMINOUS. UP ABOVE HALF A PERCENT. A LOT OF BUYERS CAME IN EARLY IN THE SESSION. THEY STUCK AROUND. YIELDS WERE SUBDUED. OIL PRICES STILL ELEVATED. A LOT OF THE BACKDROP WE HAD THAT LED TO THE SELLOFF OVER THE PREVIOUS THREE DAYS IS STILL OUT THERE. SOFTWARE SERVICES INDEX DOWN ABOUT 2% ON THE DAY, A BIG LEG DOWN. MONGODB ONE OF THE BIG DECLINERS IN THAT SPACE. IF YOU LOOK AT WHAT IS GOING ON ELSEWHERE, FINANCIALS SNAPPING A FOUR-DAY LOSING STREAK. A BIG BOOST FOR THOSE NAMES. PG&E COMING OUT. A LOT OF CONCERNS ABOUT SOME OF ITS LIABILITY WITH REGARDS TO THE WILDFIRES. IN THE TECH SPACE, DELL POSTED A PHENOMENAL QUARTER YESTERDAY. GAVE PHENOMENAL GUIDANCE FOR THE FULL YEAR. WE ARE STILL AWAITING EARNINGS OUT OF BROADCOM, WHICH SHOULD BE HITTING THE TAPE SOMETIME SOON. THAT BRINGS US TO OUR TOP STORY FOR THE HOUR, THE TOP STORY OF THE YEAR. THE NEXT PIECE OF THE AI PUZZLE. IN MOMENTS WE WILL HEAR FROM BROADCOM. A WILL IT OR WON'T IT STORY WITH ITS ABILITY TO CAPITALIZE ON THE AI BOOM. THE STOCK SURGED 50% IN THE WEEKS AFTER ITS EARNINGS REPORT IN MARCH. THIS LEGACY CHIPMAKER BEST KNOWN FOR THE BLUETOOTH AND OTHER CONDUCTIVITY COMPONENTS IN MOBILE PHONES MADE A CASE FOR REINVENTING ITSELF FOR THE A.I. DATA CENTER FUTURE. THE CEO AT THAT TIME BOASTED OF THE POTENTIAL FOR AI CHIP SALES OF $100 BILLION FOR NEXT YEAR, OR MORE THAN HALF OF TOTAL COMPANY REVENUE. BUT THE STOCK RALLY TURNED INTO A 20% SELLOFF AFTER ITS EARNINGS REPORT IN EARLY JUNE SHOWED A I REVENUE GROWTH WAS FALLING SHORT OF ESTIMATES. NOW HERE IN SEPTEMBER, BROADCOM GETS A SHOT AT REDEMPTION. >> PEOPLE ARE QUESTIONING THE DURATION OF THEIR GROWTH. WHEN I WOULD SAY YOU CAN'T COUNT HIM OUT. I THINK HE IS BRILLIANT, HIS ENGINEERS ARE BRILLIANT, THEY WON'T LOSE SHARE IN MASS. ROMAINE: THE MONEY IS THERE FOR THE TAKING. THE -- SAYING TO GLOBAL DATA CENTER SPENDING WILL INCREASE FROM $800 BILLION ANNUALLY THIS YEAR TO ONE POINT $1 TRILLION IN 2023, AND 1.8 TRILLION BY 20 TO FIVE. AS WE WAIT FOR BROADCOM TO TELL US ABOUT THE DEMAND FOR A.I. SILICON, THERE'S A LARGER QUESTION WHETHER THE PHYSICAL WORLD IS KEEPING UP. DIGITAL BRIDGE INVESTS ACROSS DATA CENTERS, EDGE INFRASTRUCTURE, IT IS CAPITALIZING ON THAT SO-CALLED "KEEP UP." IN JUNE THEY AGREED TO ACQUIRE OUR CLIENT, ADDING A DEVELOPMENT PIPELINE THAT WOULD FUEL ITS GROWTH. IT IS FUELING MORE QUESTIONS AS TO WHETHER THE SUPPLY CHAIN CONSTRAINTS FOR CHIP PRODUCTION ARE STARTING TO BE OVERSHADOWED BY POWER, BY PERMITTING, BY FINANCING, EVEN PUBLIC ACCEPTANCE. ARE THOSE THE REAL BOTTLENECKS OF THE AI BUILDOUT? MARC GANZI, THE CEO OF DIGITAL BRIDGE, JOINS US NOW TO TALK A LITTLE BIT MORE ABOUT THAT. GREAT TO HAVE YOU ON THE PROGRAM. I LOVE YOUR PORTFOLIO BECAUSE YOU ARE PRETTY MUCH ACROSS THIS WHOLE A.I. TECH TRADE, YOU CUT YOUR TEETH YEARS AGO IN THE TELECOM DAYS. I'M CURIOUS AS TO WHERE YOU SEE THE PUCK GOING? SHOULD WE LOOK LESS AT CHIPS AND MORE AT POWER RIGHT NOW? >> I THINK LIKE IN ANY INVESTMENT, YOU HAVE TO HAVE A DIVERSIFIED APPROACH TO INVESTING IN AI. I DON'T THINK YOU CAN PUT ALL THE CHIPS IN THE MIDDLE OF THE TABLE OF HARD WORK, YOU CAN PUT YOUR CHIPS IN THE MIDDLE OF THE TABLE IN THE SOFTWARE LAYER OF THE INFRASTRUCTURE PIECE. AT THE DAY, IT STARTS WITH THE ELECTRON. WITH THE THESIS IN BUYING ARC LIGHT, TO GET TO A TOKEN, YOU HAVE TO INVEST IN THE POWER. AND JENSEN SAID IT BEST, YOU DON'T GET A TOKEN WITHOUT ELECTRON. SO WE STARTED WITH THE FUNDAMENTAL CONCEPT BY BEING ABLE TO CONTROL OUR DESTINY ON POWER AND BEING ABLE TO PROCURE BUILD POWER FOR COMMUNITIES AND DOESN'T HURT TAXPAYERS, WE THOUGHT IT WAS A GOOD IDEA ABOUT TWO YEARS AGO. SO WHEN WE STARTED BUILDING POWER BEHIND THE METER THAT DOESN'T IMPACT ON THE GRID, AND DOES NOT HURT MAIN STREET, WE THOUGHT THAT WAS A GOOD IDEA. TWO YEARS LATER, THAT TURNS OUT TO BE THE RIGHT DECISION. WE HAVE TO KEEP GOING AND BUILDING POWER THAT DOES NOT IMPACT THE GRID. MORE IMPORTANTLY IT KEEPS OUR CUSTOMERS AND OUR COUNTRY ON SCHEDULE WITH BUILDING A.I. ROMAINE: WE ARE IN CONVERSATION WITH MARC GANZI AT DIGITAL BRIDGE. HOLD THAT THOUGHT ONE SECOND. THE THREE Q ADJUSTED EPS NUMBERS, 332 PER SHARE. THE STREET WAS LOOKING FOR 323. REVENUE COMING IN AT $29.6 BILLION. THE STREET WAS LOOKING FOR 29.5 BILLION DOLLARS. BASICALLY IN LINE FOR THE QUARTER. FOR THE FOURTH QUARTER, THE COMPANY SAYS EXPECT REVENUE OF 38 POINT -- 34.8 BILLION DOLLARS. LOWER THAN THE AVERAGE ESTIMATES FOR ROUGHLY ABOUT 35.1 BILLION DOLLARS. THE COMPANY ALSO SAYS IT SEES THE SEMICONDUCTOR SOLUTIONS BUSINESS PICKING UP STEAM LATER. BUT FOR THE MOST RECENT QUARTER, COMING IN JUST A LITTLE TOUCH LIGHT, $20.84 BILLION. THE SHARE REACTION DOWN ABOUT 6%. WE WILL DIVE DEEPER INTO THAT AND GET SOME MORE DETAILS. WANT TO GO BACK TO MARC GANZI . I WANT TO PICK UP ON THE POWER CONVERSATION. BROADCOM AND OPENAI, EVERYBODY ELSE ARE TARGETING GIGAWATTS AFTER GIGAWATTS OF CUSTOM A.I. SYSTEMS THROUGH AT LEAST 2029. I'M CURIOUS WHEN WE TALK ABOUT WHAT IS AVAILABLE NOW, WHAT CAN ACTUALLY BE BUILT TO FACILITATE THAT? IS THERE A MISMATCH BETWEEN WHAT WE ARE SEEING IN THE CHIP-SILICON PIPELINE AND IN THE POWER PIPELINE? >> I THINK THE TWO ARE INEXTRICABLY LINKED. TO GET TO A TOKEN, YOU HAVE TO HAVE ELECTRIFICATION. BY BUILDING UP OUR THAT IS ADJACENT TO THE INFRASTRUCTURE, WE HAVE TO PUT POWER BACK INTO THE GRID. MOST IMPORTANTLY, NOT DIMINISHING OR HURTING THE LOCAL ECONOMIES WERE WE ARE BUILDING INFRASTRUCTURE. I DON'T THINK THERE'S A DIRECT LINK BETWEEN WHAT WAS HAPPENING WITH BROADCOM EARNINGS AND AI BUILDOUT. HARDWARE IS AN IMPORTANT PART OF THE STACK. WHAT IS IMPORTANT IS THE ABILITY TO KEEP BUILDING AND THE ABILITY TO TURN ON COMPUTER. THE MINUTE WE MAKE THAT A POLITICAL ISSUE AND STOP TURNING OFF COMPUTE IN THE NAME OF PLAYING POLITICS AND TRYING TO FIGURE OUT HOW TO GET VOTES IN THE MIDDLE OF MIDTERMS, I THINK THAT IS A DANGEROUS ALGORITHM. WE HAVE BEEN TO THAT MOVIE. IN THE LATE 1990'S, PEOPLE VILIFIED CELL TOWERS, AND WE SLOWED DOWN OUR BUILDOUT AND WIRELESS COMMUNICATIONS IN THE LATE 1990'S AND THE INDUSTRY HAD TO ANSWER OUR CALL. WE ARE AT THAT MOMENT IN AI, IT HAS COME FULL CIRCLE, AND AS SECRETARY BESSENT SAID TODAY, OUR INDUSTRY HAS TO DO A BETTER JOB EXPLAINING THE UTILITY, AND MOST IMPORTANTLY, AND THE CRITICALITY OF NATIONAL SECURITY AND INFRASTRUCTURE AND HAVE THIS BECOME A POLITICAL LIGHTNING ROD. ROMAINE: IT ALREADY IS. I DO WONDER MAYBE THIS GOES AWAY ONCE WE GET THROUGH THE MIDTERMS. BUT THERE IS OBVIOUSLY A LOT OF FEAR AMONGST THE GENERAL PUBLIC ABOUT WHAT THESE DATA CENTERS MEAN FOR THEM IN THEIR BACKYARD. WOULD YOU ACTUALLY WALK AWAY FROM A DEAL THAT OTHERWISE LOOKED ATTRACTIVE BECAUSE OF THE POTENTIAL THAT THERE COULD BE LOCAL OPPOSITION, SOME SORT OF PUSHBACK BY THE LOCAL GOVERNMENT TO EITHER SHUT DOWN THAT PROJECT OR STALL IT? >> I DON'T THINK WE HAVE TO MAKE THE DECISION. I DON'T BELIEVE WE MADE IT IN THE LATE 1990'S WHEN WE TURNED THE DEBATE ON CELL TOWERS ARE ON PUBLIC SAFETY, HURTING VALUES, ALL OF THOSE SAME ISSUES ARE BACK AND THEY ARE BACK AT AN AMPLIFICATION WE HAVE NOT SEEN BEFORE. WE HAVE TO MAKE THE CASE WHAT WE ARE DOING IN LOCAL COMMUNITY IS IMPORTANT, AND WHAT WE ARE DOING IS NOT TAKING AWAY THEIR WATER, NOT GOING TO RAISE REAL ESTATE TAXES, NOT GOING TO HURT THE ENVIRONMENT. AT THE END OF THE DAY, THE FACTS ARE ALWAYS BETTER THAN THE FICTION. DATA CENTERS DO NOT REPRESENT A SYSTEMATIC RISK TO REAL ESTATE TAXES, THEY DON'T REPRESENT A SYSTEMATIC RISK TO WATER. BUT THE HYPERBOLE IS WINNING THE NEW CYCLE AT THE MOMENT. SCOTT WAS CORRECT WHEN HE SAID WE HAVE TO ANSWER THE CALL, EXPLAIN THE UTILITY, AND AI IS NOT THE VILLAIN. EVERYONE IN THIS ENVIRONMENT WANTS TO LOOK FOR THE VILLAIN. DATA CENTERS ARE NOT THE VILLAIN. DATA CENTERS HAVE BEEN AROUND FOR OVER 25 YEARS. AI IS LESS THAN 50% OF THE ACTIVE COMPUTE TODAY. COMPUTER OCCURS EVERY DAY, WHETHER IT IS PUBLIC CLOUD, PRIVATE CLOUD PROTECTING OUR SOVEREIGN NATION, COMPUTE IS HERE TO STAY. TO SAY IT WILL NOT EXIST OR WE WILL NOT BUILD COMPUTE IS A BIT IGNORANT CANDIDLY. THAT BEING SAID, WE HAVE TO PICK THE RIGHT MODELS. UNLIKE WITH THE GOVERNOR OF VIRGINIA HAS DONE, A GREAT JOB MAKING THIS NOT A POLITICAL ISSUE, SHE HAS CANDIDLY SAID DATA CENTERS ARE GOOD FOR VIRGINIA WHEN OUR INDUSTRY DOES IT IN A SENSIBLE WAY. THAT SENSIBILITY IS ABOUT PUTTING MONEY BACK INTO THE GRID, PAYING OUR FAIR SHARE, AND MAKING SURE IN COUNTIES LIKE LOUDOUN COUNTY VIRGINIA, REAL ESTATE TAXES HAVE GONE DOWN, THE COST OF POWER HAVE GONE DOWN. BECAUSE OUR INDUSTRY WORKED WITH VIRGINIA, VIRGINIA AS YOU KNOW AS A DATA CENTER, THE FULCRUM OF THE DATA CENTER INDUSTRY SETS IN VIRGINIA. NOW THE GOVERNOR OF VIRGINIA HAS BEEN CLEAR, SHE SAID WE ARE NOT GOING TO DENY DATA CENTERS, WE WILL MAKE THE HYPERSCALERS AND DATA CENTER DEVELOPERS PUT SOMETHING BACK INTO THE ECONOMY AND BUILD WHAT IS CALLED SENSIBLE COMPUTE. THAT IS THE MODEL THAT WE HAVE TO REPLICATE ALL ACROSS OUR COUNTRY. ROMAINE: WELL SAID. I WANT TO ASK ABOUT THE FINANCING ISSUE GOING ON RIGHT NOW WITH A LOT OF THESE A.I. PROJECTS, LONG-TERM LEASES, VENDOR SUPPORT, GUARANTEES FROM COMPANIES INCLUDING NVIDIA. DOES THAT BOTHER YOU AT ALL? ARE YOU COMFORTABLE WITH THE WAY SOME OF THESE DEALS ARE STRUCTURED? WOULD YOU ACTUALLY ENTER INTO AN AGREEMENT TO BE PART OF A DEAL WITH THESE TYPE OF STRUCTURES, BACKSTOPS OR NOT? >> WE HAVE, WE WERE ORIGINALLY THE FIRST ONES TO FINANCE GP USE. WE HAVE A BIG CREDIT BUSINESS. HER CREDIT BUSINESS WAS A GREAT PARTNER AND CONTINUES TO BE A GREAT PARTNER, COREWEAVE, TO FIGURE OUT HOW TO SECURITIZE GP USE. THE WHOLE THING WAS GPU COMMITMENT HAD A REVENUE TENOR OF ABOUT SEVEN YEARS, AND WE WERE ABLE TO CREATE A BOND THAT WAS FIVE YEARS. WE KNEW THE ANTICIPATED REPAYMENT DATE WAS ULTIMATELY INSIDE OF THE MATURITY. CONTINUING TO FINANCE THE SECTOR IS ABOUT PAIRING THE LIABILITY WITH THE CONTRACTUAL OBLIGATION. AND ULTIMATELY, WHO IS INVESTMENT GRADE AND WHO IS NOT INVESTMENT GRADE. WHAT IS HAPPENING IN AI TODAY IS INTERESTING. THE MARKET IS NOT BIFURCATED BETWEEN GOOD CREDIT AND BAD CREDIT. IT IS REALLY TRAFFIC AIDED. ONE, INVESTMENT GRADE. INVESTMENT GRADE ACROSS CORPORATE DEBTS AND BONDS CONTINUES TO TRADE PERFECTLY, SAFELY. THERE IS A MARKET FOR INVESTMENT GRADE LONG DERATED CASH FLOWS. THEN YOU HAVE NONINVESTMENT GRADE CASH FLOWS. THE STUFF IN THE BB, B, IN THAT RANGE. THAT IS BEING PRICED EVERY DAY AND PRICED CORRECTLY. HERE'S WHERE WE GET SOME ALTITUDE SICKNESS, WE THINK ABOUT WHAT IS GOING ON IN NONINVESTMENT GRADE LAND WHERE YOU HAVE BUSINESS IS BEING FINANCED BY PRIVATE CREDIT. WHAT WE SAW TWO OR THREE YEARS AGO IN PRIVATE CREDIT WAS BEING IN THE EIGHT TO 10% RANGE. IT IS CAPPING OUT AT 12%, 14% BECAUSE INVESTORS NEED TO GET CREDIT FOR THAT RISK. SO WHEN WE LOOK AT THE CREDIT PROFILE, WHETHER IT IS NVIDIA OR IT IS COREWEAVE OR ANY OF THESE CRYPTO MINORS THAT ARE CONVERTING INTO DATA CENTER BUILDERS, THE MARKET HAS SIGNALED TO THOSE COMPANIES THAT ULTIMATELY IT IS GOING TO PRICED CORRECTLY WITH THE RISK INVESTORS ARE TAKING, WHETHER IT IS NON-RATED NONINVESTMENT GRADE, THERE IS A HOME FOR ALL FORMS OF A INFRASTRUCTURE AND ALL FORMS OF AI CREDIT WRAPPERS. THE MARKET IS EFFICIENT. YOU CANNOT FOOL CAPITAL MARKETS AT THE END OF THE DAY. ROMAINE: WE GET TO LEAVE IT THERE, WISH WE HAD MORE TIME. ALWAYS APPRECIATE YOU GETTING UP FOR US. MARC GANZI OVER AT DIGITAL BRIDGE. WE SHOULD JUST POINT OUT BROADCOM SHARES DOWN ABOUT 4% AFTER EARNINGS IN LINE WITH ESTIMATES, BUT NOT MUCH MORE THAN THAT. MAYBE A BIT OF A DISAPPOINTMENT FOR INVESTORS. CONTINUING OUR CONVERSATION ABOUT THE BROADER AI BOOM AND THE CREATION OF A NEW RACE NOT JUST FOR TIPS AND SERVICE, BUT THE POWER NEEDED TO RUN IT ALL. BILL PERKINS IS A VETERAN GAS AND POWER TRADER, FOUNDED SKYLER CAPITAL, HE'S TRYING TO MAKE WHOLESALE INVESTMENT IN INVESTABLE ITSELF. WINNERS OF THE DIGITAL AND INDUSTRIAL BUILDOUT WHILE PAYING FAR LESS ATTENTION TO THE INPUT THEY DEPEND ON. HE SAID THE BLIND SPOT MATTERS BECAUSE THE NEXT PHASE OF GROWTH IS GOING TO BE INCREASINGLY DEFINED BY ACCESS TO POWER. HE JUST LOST AN ETF A MONTH AGO THAT HOLDS A MONTH AGO THAT HOLDS SHORT DATA POWER FUTURES TIED TO THE ELECTRICAL GRIDS IN TEXAS AND THE U.S. NORTHEAST. THANKS FOR BEING HERE. WHEN WE START TALKING ABOUT THIS IDEA OF THE SHORT DATA TYPES OF FUTURES AND WHAT THEY CAN DO, WHY CHOOSE THAT PARTICULAR INSTRUMENT? >> YOU GET ACCESS TO THE PROMPT. IT IS A 12 MONTH CONTRACT AND PEOPLE HAVE ACCESS TO ETF'S IN OIL, NATURAL GAS. BUT PRIMARILY, THE PROSPERITY OF THE NATION IS TIED TO POWER AVAILABILITY AND PRICING. THERE HASN'T BEEN AN ETF OR WAY FOR PEOPLE TO HAVE EXPOSURE TO THAT. WE FELT THE TIME WAS RIGHT GIVEN ELECTRICITY DEMAND IS EXPECTED TO GROW. IT MAY BE LUMPY, WE ARE SEEING POLITICAL PUSHBACK WITH DATA CENTERS. NEVERTHELESS, THE RESHORING OF MANUFACTURING IN THE U.S. AND THE DATA CENTER STORY AND THE GENERAL GROWTH STORY IS THERE. I WANTED TO GIVE PEOPLE THE ABILITY TO TAKE PART IN THAT, HAVE EXPOSURE TO IT. WHETHER FROM A SPECULATIVE POSITION OR HEDGING POSITION. ROMAINE: THE REASON I ASK, I SAW THEY WERE SHORT DATED FUTURES. I LOOK AT THE STORY AS A LONG-DURATION TYPE OF TRADE TO A CERTAIN EXTENT. I'M CURIOUS TO HOW THAT MATCHES UP WHEN YOU TALK ABOUT THE BUILDOUT OF THE DATA CENTERS TO USE THE USAGE GOING FORWARD AND THE TRANSITION THAT COMES IN. WHY FOCUS MORE ON THE SHORT DURATION SIDE? >> WE SAY SHORT SIDE, WE ARE TALKING 12 MONTHS. BUT WE DO ROLL ONE MONTH AT A TIME INTO THE 12 MONTHS SO THAT YOU DO HAVE SOME SHORTER TENOR AND SOME INTERMEDIATE TENOR. IT DOES ROLL, AND IF YOU FEEL IT IS SOME EXPOSURE I WANT TO HAVE IN MY COMMODITY BASKET, IT ALLOWS YOU TO DO THAT. THE AI STORY AND THE CUSTOMER STORY WILL PAN OUT OVER MANY YEARS. YOU CAN HOLD AS LONG AS YOU ROMAINE: LIKE. GIVE ME A SENSE. IS IT A BIT ON WHERE ELECTRICITY PRICES WILL GO IN TERMS OF BEING HIGHER, OR ON THE VOLATILITY THAT MIGHT COME AS A RESULT OF SOME OF THE CAPACITY CONSTRAINTS? >> IF YOU GO ALONG THIS PRODUCT, PRICE IS RISING OVER TIME. PERHAPS QUICKLY OVER TIME, BUT RISING OVER TIME. HAVING SOME INFLATION HEDGING AS WELL IN THE ELECTRICITY BUCKET. THAT IS THE BET. YOU ARE BETTING IT WILL GO UP. ELECTRICITY IS A TALE PRODUCT. MOST OF THE PRICING COMES FROM THESE EXTREME U.S. EVENTS. SOMETIMES YOU CAN PRINT $5,000 FROM $60 OR $60 IN THE SUMMER. MOST OF OUR PRODUCT ALLOWS YOU TO GO INTO THE CASH. WE DO NOT ROLL THE FUTURES CONTRACTS BEFORE THEY LIQUIDATE IN THE CASH. WE ACTUALLY GET THE CASH PRINT AND THEY REROLL THAT CLACK -- CASH INTO THE REST. SO YOU DO GET SOME HIGH VOLATILITY IN THE FRONT, BUT YOU ARE ALSO IN THE WHOLE STRIP. ROMAINE: IF THIS IS A BET ON PRICE ACTIVITY, WHAT AM I GETTING OUT OF AN ACTIVELY MANAGED ETF LIKE YOURS AS OPPOSED TO BUYING A UTILITY ETF? >> I GUESS YOU ARE PAYING FOR MANAGEMENT, SOME OF THE COST, SOME OF THE REGULATIONS AND THE OTHER THINGS THAT GO INTO UTILITY. WHEN YOU BUY THE ETF, YOU HAVE DIRECT EXPOSURE TO ERCOT NORTH AND PJM. THAT IS IT. THE FEES ARE VERY SLIM, IF THE PRICE GOES UP, YOU ARE SURE TO MAKE MONEY. IF THE PRICE GOES UP IN UTILITY, WE ARE NOT SURE YOU WILL MAKE MONEY. THERE ARE OTHER THINGS GOING NINE -- GOING ON INSIDE OF UTILITY OTHER THAN PRODUCING THE POWER. ROMAINE: ONE LAST QUESTION ON THIS, I WANT TO MAKE SURE, IS SOMEONE ALREADY BAKED INTO THE FORWARD CURVES WE HAVE SEEN FOR PJM, WHICH RUNS THE ELECTRICAL GRIDS IN THE NORTHEAST AND ERCOT DOWN IN TEXAS? IS IT BAKED INTO THOSE FORWARD CURVES? >> THE INFORMATION IS CONSTANTLY CHANGING. SIX MONTHS AGO WAS QUITE BULLISH. THE POLITICAL WINDS HAVE CHANGED. THERE'S BEEN A LOT OF PUSHBACK AGAINST DATA CENTERS IN THE PRIMARY ENGINE OF ELECTRICITY GROWTH IN THE U.S. SO A LOT OF PLANS IN TERMS OF THE GIGAWATTS THAT WERE SUPPOSED TO GO IN THE GROUND ARE KIND OF DELAYED OR IN QUESTION. I THINK THERE WERE LEGITIMATE CONCERNS AND PROPAGANDA. WHEN THE PROPAGANDA CLEARS, WE WILL BE BACK ON TRACK FOR GROWTH. IN THE FORWARD CURVE WILL REFLECT THAT. THE 12 MONTH CURVE IN TEXAS IS THE CHEAPEST IT HAS BEEN IN OVER 10 YEARS. THE PRICES ARE QUITE ATTRACTIVE GIVEN THE UNCERTAINTY INTO WHAT AI GROWTH IS GOING TO BE IN THE NEXT TWO YEARS. ROMAINE: BEFORE WE LET YOU GO, I HAVE TO PICK YOUR BRAIN. GIVEN YOUR HISTORY, I ASSUME YOU HAVE SEEN SOME OF THE RECENT DISRUPTIONS IN NATURAL GAS PRICES BECAUSE OF THE SITUATION GOING ON IN THE MIDDLE EAST. DO YOU HAVE A SENSE OF WHAT THE LONG-TERM OUTLOOK MIGHT BE IF THE SITUATION IN THE MIDDLE EAST IS NOT RESOLVED SOMETIME SOON? ARE WE HEADING INTO A WINTER WHERE WE WILL SEE ELEVATED EUROPEAN NATURAL GAS PRICES, AND IN THE U.S. ELEVATED DIESEL AND FUELS AS WELL? BILL: I AM MORE CONCERNED ABOUT EUROPEAN NATURAL GAS PRICES THAN OIL PRODUCTS. THEY ARE FINDING OTHER WAYS TO MOVE THE OIL. THERE'S A LOT OF CRAFTY WAYS TO MOVE OIL OUT OF THE GULF REGION THAN THERE ARE NATURAL GAS. THE LNG TANKERS ARE MUCH MORE EXPENSIVE, A BIGGER CAPITAL INVESTMENT, AND BIGGER RISK TO ANY KIND OF LOSS. WITH THOSE TRAINS DOWN, AND THAT BEING A KEY SUPPLY TO EUROPE, AND STOCKS BEING EXTREMELY LOW IN EUROPE, THIS MUCH MORE CONCERN FOR A COLD WINTER IN EUROPE THAN THERE IS A SHORTAGE OF CRUDE OIL AROUND THE GLOBE. THAT SAID, CRUDE OIL IS TIGHT. THEY ARE FINDING WAYS TO LOOSEN IT UP. NATURAL GAS DOES NOT HAVE THE NATURAL FLEXIBILITY CRUDE HAS. I AM MORE CONCERNED ABOUT NATURAL GAS PRICES AND THE POSSIBILITY OF STALKING OUT THIS WINTER IN NORTHWEST EUROPE THAN I AM CRUDE OIL BEING AT CRISIS LEVELS. ROMAINE: REALLY GREAT TO CATCH UP WITH YOU. BILL PERKINS, A LEGEND IN THE NATURAL GAS SPACE. WE CONTINUE OUR CONVERSATION THIS HOUR ABOUT THE BROADER AI STORY AND HOW WE KNOW THAT AI IS A CHIP, SERVER, SOFTWARE AND REVOLUTION, BUT ALSO I CAPITAL MARKETS REVOLUTION. AN INVESTMENT FIRM BEGAN 20 YEARS AGO WITH A PLAYBOOK TO IDENTIFY BOTTLENECKS CREATED BY STRUCTURAL SHIFTS, FINANCE THOSE BOTTLENECKS WITH DOWNSIDE REDUCTIONS WHILE RETAINING UPSIDE EXPOSURE. COREWEAVE BECAME ONE OF ITS MOST NOTABLE CASE STUDIES AFTER PROVIDING SECURED AND CONVERTIBLE CAPITAL TO THE COMPANY IN 2021. ALMOST LIKE -- AN AI ERA MIDSTREAM ASSET. THE AUTHOR OF A NEW BOOK OUT NEXT WEEK CALLED THE ADAPTABILITY QUOTIENT ABOUT MAKING DECISIONS WHEN THE OLD PLAYBOOK NO LONGER WORKS. LET'S TALK ABOUT THIS. I WANT TO CONNECT WHAT YOU WERE DOING WITH THE BOOK. A LOT OF PEOPLE LOOK AT THE INVESTMENT IN COREWEAVE, WHICH IS IN THE CRYPTO SPACE AT THE TIME. BUT IT LOOKS REALLY PRESCIENT NOW. YOU TALK ABOUT UNCERTAINTY IN HER BOOK, HOW YOU EMBRACE IT, AND A LOT OF CASES IT IS NECESSARY. WAS THERE UNCERTAINTY WHEN YOU WERE STARTING THIS FIRM AND WHEN YOU WERE KICKING THE TIRES ON A COMPANY LIKE COREWEAVE? >> MY CONJECTURE HAS BEEN WHAT MAGNETAR FOCUSED ON WAS THINKING ABOUT TIMES WHERE THERE IS RAPID CHANGE. WHEN THERE ARE PERIODS OF UNCERTAINTY, PEOPLE RUN AWAY FROM IT, WHICH CREATES AN OPPORTUNITY IF YOU ARE THE FIRST TO RESOLVE THE UNCERTAINTY. YOU MIGHT NOT HAVE CLAIRVOYANCE ABOUT EVERYTHING COMING NEXT, BUT BIG REGIME CHANGES LIKE AI TENDS TO UNFOLD IN FOUR PIECES. SOMETHING CHANGES ABOUT THE PRODUCTION. THERE IS A CHANGE IN ABUNDANCE VERSUS SCARCITY. YOU WIND UP HAVING A BOTTLENECK, AND THEN IT IS IRREVERSIBLE. APPLYING THAT TO AI FROM MAGNETAR, THE PRODUCTION OF KNOWLEDGE CHANGED. KNOWLEDGE USED TO BE FOR 100 YEARS OUR DOMAIN, HUMANS. ALL OF A SUDDEN IT IS SYNTHETICALLY MADE. KNOWLEDGE WAS SCARCE IN HUMANS, NOW IT IS ABUNDANT. THAT MIGRATES WHAT IS HUMAN TERRITORY TO JUDGMENT AND AGENCY. FROM A PRODUCTION PERSPECTIVE, WHEN YOU HAVE A CHANGE IN THE PRODUCTION OF KNOWLEDGE, IT THEN LEADS TO A SCARCITY OF AGENCY AND AN ABUNDANCE OF KNOWLEDGE. THE BOTTLENECK BECAME THE PHYSICAL PRODUCTION OF IT. WHERE COREWEAVE STEPPED IN IS WHERE WE ARE MODELING UNCERTAINTY, WE GO WHERE IS THE BOTTLENECK? TURNED OUT IT WAS AT THE BEGINNING OF THE PRODUCTION OF IT, THE DATA CENTERS. ROMAINE: WHERE DO YOU THINK THE NEXT BOTTLENECK MIGHT BE? ALEC: THEY TEND TO MIGRATE. RIGHT NOW POWER IS SOME OF THE BOTTLENECK. WE HAD A GRID THAT WAS MADE FOR A LONG TIME AGO. IT IS GREAT WE HAVE RENEWABLES, BUT THAT ADDS SOME INSTABILITY. WE HAVE INCREASING DEMAND AND SOME OF THE SUPPLY WE HAVE IS INTERMITTENT POWER. SOLVING THAT IS ONE OF THE AREAS OF A BOTTLENECK GOING FORWARD. ROMAINE: WE TALK ABOUT THAT IS AN INVESTMENT OPPORTUNITY, BUT AT SOME POINT THE UNCERTAINTY BECOMES THE ORDINARY. WHAT HAPPENS THEN? DO YOU ROTATE OUT OF THAT AND FIND THE NEXT UNCERTAINTY? ALEC: I THINK THE WAY TO THINK ABOUT IT IS A LOT OF PEOPLE THINK ABOUT A WORLD OF RISK. AND THEN THERE'S THE WORLD OF COMPLETE UNCERTAINTY, WHERE I CANNOT PREDICT ANYTHING. WHAT WE DID AT MAGNETAR, AND IT APPLIES IN AI, WHERE IS THERE UNCERTAINTY WHERE I CAN RESOLVE? IF I CAN RESOLVE IT FIRST AND PRICE IT, I MIGHT BE ABLE TO STRUCTURE SOMETHING WHERE I HAVE A FORGIVING INVESTMENT. A LOT OF UPSIDE BECAUSE NOBODY ELSE IS THERE. AS PEOPLE BEGIN TO UNDERSTAND AND RESOLVE THE UNCERTAINTY, WHEN IT MIGRATES TO RISK, LOWER COST OF CAPITAL COME IN, SPREADS COMPRESSED. WE MADE OUR MONEY ONCE IT MIGRATES OVER TO A MORE RISK FRAMEWORK BECAUSE THAT IS WHEN THE LOWER COST OF CAPITAL DRIVES THE RETURNS DOWN. ROMAINE: YOUR BACKGROUND IS IN STRUCTURED CREDIT. YOU ARE ONE OF THE EARLY FOLKS WHO WALKED IN THE DOOR WITH KEN GRIFFIN AT CITADEL. WHEN YOU LOOK AT FINANCING STRUCTURES IN THE AI SPACE, PARTICULARLY THE CIRCULAR NATURE OF THAT, DOES THAT MAKE SENSE TO YOU? NOT JUST IN TERMS OF RETURN, BUT RISK AND UNCERTAINTY. ALEC: SOMETIMES WAY BACK IN HISTORY IS HOPEFUL. WHEN WE CREATED THE WHOLE RAILROAD SYSTEM, THE AIRLINES, THERE WAS CIRCULAR FINANCE. THE RAILROADS WERE GIFTED TO LAND. AROUND THE LAND AROUND THE RAILROADS, THEY CREATED SETTLEMENTS, WHICH CREATED DEMAND FOR PEOPLE ALONG THE RAILROAD LINES. THERE'S DIFFERENCE BETWEEN THE CIRCULAR FINANCE THAT IS OFF TAKEN BY ACTUAL DEMAND. THAT EARLY FINANCING IS HELPFUL. IT IS A TRANSITION MECHANISM. IF LATER THE DEMAND NEVER SHOWS UP, THEN THAT CIRCULAR FUNDING IS A PROBLEM. RIGHT NOW THE FACT THAT THERE IS CIRCULAR FINANCING HAPPENS THROUGH EVERY NEW TECHNOLOGY. THERE ARE PEOPLE GOING AND WHERE CAPITAL IS THE UNCERTAINTY AND IT IS PROVIDED. WHETHER THAT CREATES A PROBLEM LATER DEPENDS ON WHETHER THE REAL DEMAND SHOWS UP TO TAKE ITS PLACE. THAT SEGMENTS THE PROBLEM. THE FACT THAT IT EXISTS IS NOT THE PROBLEM. WHETHER IT STAYS FOREVER AND IS NOT REPLACED BY TRUE DEMAND THAT THEN FEEDS THE CASH FLOW LOOP IS WHEN YOU MAY OR MAY NOT HAVE A PROBLEM. ROMAINE: YOU MENTIONED THIS IDEA OF INTELLIGENCE BECOMING MORE COMMODITIZED. LAST WEEK WE DID A LOT WITH THE HEADS OF VARIOUS EDUCATION FIRMS AND TALKED ABOUT HOW TEACHING NEEDS TO CHANGE BOTH AT THE HIGHER AND ELEMENTARY LEVEL. WHAT DOES IT MEAN WHEN YOU HAVE THESE MACHINES THAT CAN DO A DECENT ENOUGH APPROXIMATION OF HUMAN INTELLIGENCE? WHERE DOES THAT LEAVE US? WHAT AM I SUPPOSED TO BE TEACHING MY CHILDREN AND MY GRANDCHILDREN? WHEN WE CAME UP, IT. . WAS ALL ABOUT KNOWLEDGE THAT WAS SUPPOSED TO MAKE US SUCCESSFUL IN DIFFERENT. NOW IT FEELS LIKE WE ARE MOVING INTO AN ERA WHERE THAT MIGHT NOT BE THE DIFFERENTIATOR. ALEC: IT IS NOT A STORY ABOUT THE OBSOLESCENCE OF HUMANS. THE HUMAN ADVANTAGE IS MIGRATING TO JUDGMENT AND AGENCY. IT IS NOT PURELY KNOWLEDGE GETTING COMMODITIZED. JUDGMENT AND AGENCY, THE DRIVING. BEHIND THEM IS ADAPTABILITY. JUDGMENT IS THE ABILITY TO TAKE KNOWLEDGE AND MAKE CHOICE. MAKING AND ACTING IS EXPRESSING AGENCY. IF YOU USE YOUR JUDGMENT AND TAKE AN ACTION WITH A MODEL OF THE WORLD THAT IS NO LONGER VALID, IT GETS YOU NOWHERE, YOU'RE JUST GOING FASTER IN THE WRONG DIRECTION. ADAPTABILITY IS THE ABILITY TO SAY I WILL UPGRADE MY MENTAL MODEL AND THEN USE MY JUDGMENT TO DRIVE AGENCY. IT MIGRATES WHAT WE NEEDS TO -- WHAT WE NEED TO TEACH KIDS. I BELIEVE ADAPTABILITY IS A LEARNABLE SKILL. ROMAINE: TWO WE SEE THE SEEDS OF THAT BLOOMING IN OUR EDUCATION SYSTEM ALREADY? WHAT GETS US THERE? ALEC: IT HAS TO START WITH THE UNIVERSITIES AND THE SCHOOL SYSTEMS SAYING WHAT IS OUR FUNCTION? IT IS NO LONGER VALID TO SAY I TRANSFER KNOWLEDGE AND STAMP A CREDENTIAL. THAT IS GONE. WHAT YOU SHOULD BE TEACHING PEOPLE IS NOT WHAT TO THINK, HOW TO THINK. HOW DO I LEARN, HOW QUICKLY CAN I LEARN AND RELEARN WHEN THINGS ARE CHANGING. IT IS AN INNATE HUMAN CAPABILITY, THE ULTIMATE CAPABILITY WE CAN OVERRIDE OUR GENES, WE CAN DECIDE WHETHER THE RULES ARE THE SAME OR IF THEY HAVE CHANGED. AN AI MODEL WILL NOT COME TO YOU AND SAY MY MODEL IS OBSOLETE. A HUMAN CAN SAY THAT AI MODEL IS OBSOLETE. THAT IS BEING ADAPTIVE. THAT ABILITY TO GO IN, USE AI AS AN AUGMENTING TOOL TO MAKE BETTER DECISIONS AND BE OPEN TO SEPARATE YOUR IDENTITY FROM BEING RIGHT AND, MAKE YOUR IDENTITY BEING ADAPTIVE BECAUSE A PERSON WHO WANTS TO BE RIGHT DEFENDS THEIR ANSWER. IF YOU TEACH KIDS TO BE ADAPTABLE, WHAT HAPPENS? TO BE CORRECT WITH THEIR IDENTITY OF BEING ADAPTABLE REQUIRES THEM TO UPDATE EVERY TIME THE WORLD CHANGES. THAT IS A SKILL THAT PERSISTS OVER TIME. THE ONLY SKILL THAT PERSISTS WHEN THE WORLD IS CHANGING QUICKLY IS ADAPTABILITY. EXPERTISE GOES AWAY. ROMAINE: FOUNDER OF MAGNETAR CAPITAL. THE AUTHOR OF "THE ADAPTABILITY QUOTIENT." WE WILL BE RIGHT BACK ON BLOOMBERG. ♪ ROMAINE: SING THE BLOOMBERG TERMINAL WE ARE LEARNING THE NBA HAS ASCEND -- SUSPENDED THE CLIPPERS OWNER STEVE BALLMER, FORMER CEO OF MICROSOFT, HAS BEEN SUSPENDED ONE YEAR FOR VIOLATING SALARY CAP RULES. WE WILL TALK A LITTLE BIT MORE ABOUT THIS. IT LINKS BACK TO AN INVESTIGATION AROUND KAWHI LEONARD. >> THEY INVESTIGATED SALARY CAP CIRCA INVENTION -- CIRCUMVENTION. BASICALLY ENDORSEMENT RULES NOT DISCLOSED PER THE SELLER CAP IS TO CAP PLAY OR PAY OTHERWISE BILLIONAIRES CAN PAY THEM WHAT THEY WANT AND THAT IS WHAT WAS GOING ON, THE NBA INVESTIGATING THIS ALMOST A YEAR NOW AND THEY FOUND THEY WERE ESSENTIALLY GUILTY. ROMAINE: SO THE PUNISHMENT IS, BALLMER IS REMOVED FROM ONE YEAR AND KAWHI LEONARD WAS FINED $700,000, THEY WERE STRIPPED OF FIVE FIRST ROUND DRAFT PICKS AND FINED. >> IT IS FIVE YEARS UP UNTIL 2033. IT ESSENTIALLY CUTS THEIR TEAM AND HAVE PROBABLY FOR THE NEXT 10 YEARS, SOMEONE BEING SUSPENDED, THEY CAN DRAFT IN NINTH GRADE. IN TERMS OF THEIR FUTURE, THEY ARE TRADING KAWHI LEONARD AWAY BUT THE PUNISHMENT IS EASILY THE HARSHEST PUNISHMENT WE HAVE SEEN SINCE THE NBA REMOVED AN OWNER WHICH WAS DONALD STERLING OF THE CLIPPERS YEARS AGO. ROMAINE: IS THERE ANY RISK STEVE BALLMER WOULD BE REMOVED? >> I DOUBT IT. THE BAR IS HIGH. WE HAD ROBERT SERVER YEARS AGO WHO SOLD THE TEAM OVER DIFFERENT ALLEGATIONS. SALARY CAP CIRCUMVENTION IS NOT GROUNDS TO REMOVE AN OWNER AND THIS PUNISHMENT OF FIFTH -- OF $30 MILLION IN FIVE FIRST-ROUND DRAFT PICKS BEING FORFEITED IS HUGE. ROMAINE: RANDALL WILLIAMS, WHO COVERS EVERYTHING SPORTS ON BLOOMBERG. SUSPENDING STEVE BALLMER ONE YEAR FOR BREAKING SALARY CAPRILES. WE WANT TO STAY WITH SPORTS, THE BUSINESS OF SPORTS. WE HAD A CHANCE TO CATCH UP WITH A FRIEND OF THE PROGRAM AND 15 TIME ALL-STAR SHAKEEL O'NEIL, WHO IS PARTNERING WITH CREDIT ONE BANK TO EDUCATE STUDENTS ON BUILDING HEALTHY FINANCIAL HABITS. HE IS A CREDIT AMBASSADOR NOW. HERE'S WHAT HE HAD TO SAY. SHAQ: WE ARE GOING TO GET INTO REAL QUESTIONS ABOUT CREDIT, WHY I HAVE SOME CREDIT RECORD TIPS, WHAT TO AVOID, I WILL TAKE QUESTIONS FROM THE CROWD. WE HAVE SOME GAMES. IT IS A BIT OF EDUCATION. FEELS LIKE HOME TO ME BEING BACK ON COLLEGE CAMPUSES. I'M IN SCHOOL RIGHT NOW WORKING ON A DEGREE IN CRIMINOLOGY. BEING BACK ON COLLEGE CAMPUSES IS NATURAL TO ME. I LOVE WHAT YOUNG MINDS HAVE TO SAY. I'M EXCITED ABOUT LEARNING AND GROWING. THIS PARTNERSHIP WITH CREDIT ONE IS IMPORTANT TO ME. ROMAINE: I SEE YOU MADE SURE TO INCLUDE LSU ON ONE OF YOUR STOPS. YOU MADE A JOKE ABOUT HOW YOU WILL MAKE A DANCE AFTERWARDS BUT THAT IS NO JOKE. IT WILL BE CREDIT TIPS AND THEN DJ DIESEL. THIS IS A BIG BUSINESS YOU BUILT UP FOR YOURSELF. SHAQ: WHEN I WAS A YOUNGSTER, NOBODY SET ME DOWN AND EXPLAINED WHY A GOOD CREDIT SCORE MATTERS WHEN I WAS YOUNG. I'M APPALLED THEY DON'T TEACH THIS IN COLLEGES. I HAD TO LEARN THE HARD WAY. I HAVE KIDS IN COLLEGE RIGHT NOW. SOME OF MY KIDS JUST GOT OUT AND I DON'T WANT THEM FIGURING THIS OUT THE SLOW WAY LIKE I DID. ROMAINE: YOU YOURSELF ARE A BIG NAME BUT A LOOK AT THE OTHER CONTENT CREATORS COHOSTING WITH YOU, CREATORS THAT SPEAK TO THAT YOUNGER GENERATION LIKE THE GUYS FROM THE SCHOOL OF HARD KNOCKS, CHICKEN FRY AND OTHERS. WHAT DO THOSE PEOPLE AND THEIR AGE AND SENSIBILITIES BRING TO THE TABLE FOR THIS PROJECT? SHAQ: BRINGING IN CERTAIN INFLUENCERS, WILL HAVE DIFFERENT CROWDS. YOU SPEAK TO A DIFFERENT CROWD -- YOU SPEAK TO A VERY INTELLIGENT CROWD, I SPEAK TO THE ATHLETIC CROWD. GIVING THEM TIPS. ONE THING THAT SURPRISED ME, MISSING A PAYMENT CAN MESS YOUR CREDIT UP FOR ABOUT SEVEN YEARS. SETTING UP AUTO PAY RESCHEDULING TO MAKE A PAYMENT, LITTLE STUFF LIKE THAT MATTERS. ROMAINE: CAN YOU SHARE, WHAT ARE THE CONVERSATIONS IN YOUR HOUSEHOLD WITH YOUR OWN CHILDREN AND THEY ARE IN A MUCH DIFFERENT FINANCIAL SITUATION BUT JUST BECAUSE YOU HAVE MONEY DOESN'T MEAN YOU ARE RESPONSIBLE WITH IT. I'M CURIOUS AS TO WHAT CONVERSATIONS YOU HAD WITH THEM AS THEY WERE MATURING TO MAKE SURE THEY WERE READY TO HANDLE ADULTHOOD. SHAQ: I TREAT MY CHILDREN, ESPECIALLY THE YOUNGER ONES, LIKE COLLEGE STUDENTS. I DEPLOY A FIGURE IT OUT SYSTEM. IF YOU DON'T KNOW THE ANSWER, YOU COME TO THE PROFESSOR. I DON'T WANT TO BE THE ONE TELLING THEM HOW TO DO SOMETHING. YOU SHOULD FIGURE THIS OUT, LEARN HOW TO EXPLORE ON YOUR OWN, CHATGPT, GOOGLE, ASK YOUR FRIENDS AND TRY TO LEARN ON YOUR OWN. THAT IS WHAT I DID AND IT MADE ME STRONG. I TELL THEM IF THEY CAN'T FIGURE IT OUT THEY CAN ALWAYS GO TO THE PROFESSOR. ROMAINE: I KNOW THIS PROJECT IS FOCUSED PRIMARILY ON CREDIT, BUT I ASSUME SOME KIDS WILL WANT TO PICK YOUR BRAIN ABOUT INVESTING AND BUILDING BUSINESSES, SOMETHING YOU HAVE BEEN SUCCESSFUL WITH SINCE HE RETIRED AND EVEN PRIOR TO WHEN YOU LEFT THE NBA. SHAQ: I ALWAYS TRY TO KEEP IT HONEST WITH THE CHILDREN. I'M NOT A MASTER INVESTOR BUT MY STRATEGY HAS WORKED FOR ME. WE TALK ABOUT THIS A LOT, MY NEW STRATEGY OF INVESTING IN THINGS THAT WILL CHANGE PEOPLE'S LIVES HAS ALWAYS WORKED FOR ME. I DON'T GO INVEST IN THIS AND THAT. MY STRATEGY, THE STRATEGY I'VE BEEN USING OF LATE HAS WORKED FOR ME. ROMAINE: YOU MENTIONED YOU ARE BACK IN SCHOOL WHICH I DIDN'T KNOW. YOU HAVE ALWAYS HAD THIS INTELLIGENT STREET, THIS CURIOSITY I SHOULD SAY, TO CONTINUE LEARNING. I WAS WONDERING IF YOU CAN ARTICULATE WAY THAT IS IMPORTANT? YOU HAVE GRAY HAIR AND MOST PEOPLE WOULD SAY IT YOUR AGE WHY ARE YOU STILL IN SCHOOL? BUT THERE HAS TO BE SOME VALUE IN YOUR 30'S, 40'S, 50'S AND BEYOND ALWAYS LEARNING. WHAT DOES THAT MEAN FOR YOU? SHAQ: FIRST OF ALL, THIS IS SEX SYMBOL HAIR. [LAUGHTER] LISTEN, I LOVE TO LEARN. WHEN I SPEAK ON CERTAIN THINGS, I LIKE TO BE IN THE EXPERT CATEGORY WHEN I SPEAK. IN LAW ENFORCEMENT OVER 20 YEARS, PEOPLE KNOW I MAY RESERVE POLICE OFFICER. RIGHT NOW I'M WORKING ON A CAREER IN CRIMINOLOGY. I HAVE EXPERIENCE ON THE LAW ENFORCEMENT SIDE, BUT WILL HAVE A MASTERS IN CRIMINOLOGY, WHICH MAKES ME AN EXPERT IN CRIMINOLOGY. ROMAINE: TWO QUICK QUESTIONS. ONES GO -- ONE GOES BACK TO DJ DIESEL. YOU ENJOY THIS AND HAVE BEEN IN MUSIC WITH A RAP CAREER AND IS A DJ. WHEN I LOOK AT ALL YOUR BUSINESSES, IS THIS ONE OF THE MORE UNDERRATED BUSINESS LINES YOU HAVE UNDER THE SHAQ UMBRELLA? SHAQ: IT IS MORE OF AN ADRENALINE FIX FROM AGE 18 TO 39, AND A HALF A DAY. WHEN I GET THAT HIGH, IT IS MORE RESPONSIBILITY TO GIVE PEOPLE A GOOD SHOW. MY FATHER TOOK ME TO A GAME AND IT WAS TERRIBLE AND HE TURNED THE RADIO DOWN AND SAID, SON, YOU EVER GET IN THE POSITION WHERE PEOPLE PAY YOU TO PERFORM, GIVE THEM A GOOD SHOW. WHENEVER I GO ON THE STAGE, THEY PAY TO SEE ME PLAY, I GIVE THEM AN HOUR AND A HALF. ROMAINE: I SAW YOU PLAY A LOT. I REMEMBER SEEING YOU PERFORM IN EARLY 90'S. SHAQ: I REMEMBER YOU. [LAUGHTER] YOU HAVE THE GOLD CHAIN, EARRINGS. YOU CHANGED QUITE A BIT. ROMAINE: THAT WAS PART OF MY CONVERSATION WITH NBA HALL OF FAMER SHAQUILLE O'NEAL IN HIS LATEST PARTNERSHIP WITH CREDIT ONE BANK. WE WILL SET YOU UP FOR WHAT TO WATCH IN THE MARKETS OVER THE NEXT 24 HOURS WHEN WE COME BACK AFTER THE BREAK. THIS IS BLOOMBERG. ♪ ROMAINE: HERE IS WHAT MARKETS WILL HAVE THEIR EYES ON THE NEXT 24 HOURS. EARNINGS IN THE MORNING OUT OF CAMPBELL'S AND VICTORIA'S SECRET. AFTER THE BELL WE WILL HEAR FROM LULULEMON. AND THE DRUMBEAT TO FRIDAY'S JOBS REPORT. WE WILL GET THE CHALLENGER JOBS CUT DATA IN THE MORNING AND THE WEEKLY JOBLESS CLAIMS NUMBERS AND AN UPDATE ON ISM SERVICES ALSO, FED SPEAK. THAT COULD POTENTIALLY MOVE THE MARKETS. IN THE AFTER HOURS TRADE, BIG MOVEMENTS AS WELL. SNOWFLAKE ON A TEAR, UP 21%. MEANWHILE CHIPMAKER BROADCOM PROVIDED A FORECAST DISAPPOINTING SOME INVESTORS, PARTICULARLY AFTER NVIDIA WOWED EVERYONE. BROADCOM DOWN 3%. THAT CONFERENCE CALL SET TO START AT THE TOP OF THE HOUR. FIVE BELOW UP 6% IN AFTER-HOURS. HPE DOWN 0.8% AND PBH ADDING TWO POINT 5% ON THE BACK OF ITS EARNINGS REPORT. THAT DOES IT FOR THE CLOSE. BALANCE OF POWER IS COMING UP AT THE TOP OF THE HOUR ON BLOOMBERG. ♪