which will provide you with important, never seen before facts you should know about making gold purchases u.s. money reserve is one of the most dependable gold distributors in america. >> welcome to "bloomberg markets ." noon in new yorker, plenty of action across asset classes against key headline data. numbers masking some of the action.

u.s. stocks giving up early gains but continuing to advance thanks to a strong forecast from micron. the s&p, up .4% right now. gold at a record high, silver is at its best record since two thousand 12. a little bit of action right now in the treasury market, the 10-year yield moving up to 3.8 0%. plenty of price action in chinese assets. offshore u.n., strengthening that china might inject capital into their biggest state banks. already this week beijing has unveiled broad stimulus measures, including interest rate cuts. going back to equities for a moment, checking in with abigail doolittle, she has individual names she is following. abigail: some of that stimulus out of china is boosting the chinese tech adr. you can see all of these names in fact, the well-known china,

tech, auto ev names higher on that stimulus involving the housing market, the property market, along with a boost to banks that follows earlier this week when rates were cut and bank reserves were lower. it's a bazooka of stimulus helping out these stocks. it's such as chinese tech stocks trading higher. shares of micron with a stock surging off the highs and from a healthy 13% to 14%, best day in six months, closer to 20%, best day since 2011, boosting the guide for the first quarter, top line by a healthy 5% better than the street. bottom line double digits better than the street, ai double digit demand creating a new chip relative to what they have helping out these results. finally, on a wall street journal report, we have the

shares of super micro computer down 16% right now. this is the justice department, opening a probe. it follows a short seller report earlier this year related to a whistleblower who had been at super micro computer. the probe is in early stages. it's interesting, earlier this stock before being added to the s&p 500 was up 3% on the year now just 41%. still pretty healthy, but relative to 300%, not so much, and there is a big short on this stock, not surprisingly, 17 percent, the bears are in control today. scarlet: good stuff, thank you for the individual movers. we will keep an eye on it. a lot of fed speak today. eight different speakers, including jay powell with pce inflation data out tomorrow. earlier today, evan brown that ubs gave us his take on where he

thinks things stand right now. >> it's kind of the best of all worlds where they are supporting growth and inflation becomes more of an issue if we get trump tariffs and the like down the road, but i think that is kind of tomorrow's story as opposed to today. scarlet: let's focus on today's market action and where things stand going forward with nicole at hsbc. thanks for joining us. if the s&p 500 closes higher, this will be the 42nd record close of 2024. all the groups are gaining this year. what has been the most underappreciated or surprising aspect of this broad advance? nicole: i think that what you are saying about the s&p rate -- reaching record highs are falling into place. the fed, cutting 50 basis points, front loading these rate cuts.

gdp growth is looking pretty resilient. the labor market is looking ok. the consumer is looking ok and what companies are saying in terms of commentary in the second quarter was positive and you haven't seen analysts revising higher. on this kind of macro basis, everything is looking extremely strong. i would say that the one big push back that we get is evaluation where you pay the price for these equities and what you see is the s&p trading at a hefty premium to where it has traded historically, even looking at certain sectors like the mag seven where the s&p is trading at a premium. we think there are opportunities to look beyond these premium high equity valuation stocks into other sox with less demanding valuations. scarlet: walk us through your work outside of big tech. big tech has clearly been the leader getting the attention, but you mentioned that especially with the 11 sectors in the green, there have been

notable valuation -- not inflation, but increases in sectors you might not have anticipated. nicole: definitely. looking across these seven sectors they are trading at a premium of 10% from what we have seen historically what we noticed that it's really concentrated. we have talked about this big tech concentration, mag seven concentration year to date, but it is also big retail, big pharma, big oil. looking at consumer staples, for example, 80% of the returns are from three stocks. pharma, health care, similar story. what we see him valuation are the stocks that have performed very well, yes the earnings growth has been strong, the profit margins have been very good, and they have been responsible for the returns and are trading at premium valuations so the market is paying up for that. we think that this is a part of the reason you are seeing the

loftiness in terms of valuation, because of this high concentration. as we have recommended broadening exposure into different sectors, we recommend broadening exposure into different stocks within each one of these sectors that haven't been the stars here today. scarlet: which metric what you look at to determine which companies provide the most value? does he go to price of sales, for instance, or something else? nicole: pe, price-to-book, we are looking at where stocks are trading compared to the sector average and how earnings growth is shaping up for this year, next year, and the kind of leveraged ratio with quality plays. these are stocks that analysts like and they are across a broad range of sectors with financials, consumer discretionary, even tech, there are stocks that we see that provide good value and less

demanding valuation from some of these other higher premium valuation stocks. scarlet: let's talk about those higher valuation premium stocks. nvidia, broadcom, and yesterday micron reported results. market reaction to these ai plays has been pretty much mixed. what is the narrative on ai right now? nicole: we are still positive. tech will be less of an outlier going forward. we have had this concentration in the rally year to date, very focused on big tech and other big companies. looking over into the second half of the year, you have strong earnings growth in other sectors. tech, still seeing very high r.o.e. with high profit margins. this higher valuation is deserved, but we are looking into other sectors and it is a bit less of an outlier than we have seen in the first half of

the year. scarlet: does the broadening out include small caps because they were getting a big run up and now that the fed has done this, do we need to rethink that thesis behind small caps? nicole: that's a great question. we are not ready to go into small caps yet. historically, small caps tend to outperform going into a fed cut. and then they tend to underperform posts when the fed starts easing. this is in two scenarios. even when recession doesn't materialize, these small-cap stocks tend to underperform. when you look at the small-cap stocks compared to what we are seeing in the large gap, there still is a big, wide range in terms of profit margins and leverage. so, you know, i think that the quality is still there with the large-cap stocks. there are some with un-demanding valuations and we think that the

gap is still too wide when we look at r.o.e. and profit margin of the small caps compared to the scarlet: large cap space. scarlet:all right, hold off on small caps and continue to look at big caps with a more discerning eye. nicole, thank you so much. coming up, we have an exclusive conversation next with mark spitz naegele. this is bloomberg. ♪

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scarlet: this is "bloomberg markets." most investors cheered when the fed started cutting interest rates, but not necessarily mark spitznagel.

the hedge fund manager said this summer that they marked the moment when things would get really awful. sonali basak is standing by with him for an exclusive interview to understand where his thinking lands now. sonali: thank you for joining us here at bloomberg, mark. to provide context, universe is known as a tail fund, you tend to make money when things go wrong. over the next couple of -- last couple of years, you have been quite bullish. you thought that asset prices would soar. a year ago you said that when the fed cut rates is when things would go bad. do you still feel that things could be terrible? all-time highs, seems like nothing could go wrong in this market right now? mark: good to be with you and right now i do remain positive,, as i have for a couple of years. i just look back to two years

ago and i think people got that really wrong, where the general thesis was that we were in the 70's and i think that was so misplaced. the 70's was a very different time and the big difference of course is that we have more leverage in the system right now, this dense construct. i just think that people are making a big mistake. the sentiment was so negative. the way that i describe it is we are in the goldilocks zone. it really this sort of first order consequence of what's going on today. rates come down, you've got disinflation. not too hot, not too cold in the economy, people look at that and think -- that's good, first order consequence. that's good. we are good at first order consequences as humans. that's where we are. this is going to continue more into a sort of pure euphoria before it's over. sonali: does that mean that you

think we will be hitting evermore record highs in the next year? how long does the euphoria go on for? mark: i think we will be exiting the goldilocks zone in the next year. what's driving this isn't that first order effect, we have to think more about second-order. something we are just not as good at. we really need to look back to 22 and what happened there. that was a massive hike, a massive tightening in the economy. personally, i thought it was an enormous steak at the time, making me look like a fed apologist, nothing could be further from the truth, but i did think it was a big mistake and the second order of effect that we are feeling right now, what really, i think there are higher order impacts causing all of this and that's what happened 15 years ago. it was the bernanke area that got us to where we are. it is so easy for us to forget that. there are lack effects.

we are starting to feel that in the economy. sonali: explain that. we are not in the fed hiking cycle. we are exactly at the opposite place right now, beginning the cutting cycle. so, what happens now, in your view? mark: when the yield curve this inverts and on inverts, the clock starts ticking. that's when you enter black swan territory. they always lurk, but now we are in their territory. that's how we have to think about it. that's why i think it is misplaced to think that lower yields is a good thing right now. like i said earlier, when yields start going down in the fed starts cutting, that's when we should start to worry. sonali: for those who don't know, univera is speaking with the author of "black swan," as a scientific advisor. you know a thing or two about black swans.

you tend to also make money when black swan events occur. you did see some extreme volatility in the market, but a lot of complacency as well. mark: obviously i can't talk about that, i'm not allowed to do it, but yeah, we are in the risk mitigation game. it happens to be through explosive downside payoffs that allow our clients to be longer, we are there to protect the losses that matter and those would be the big losses, but the way that i think that people need to think about investing right now, to continue the dove tail end of this second order effect is second-order investing, not thinking about the opportunity set of investing right now, what people should be thinking more about is the opportunity set they will be seeing a year from now and that's the point of risk mitigation, you know, to allow yourself the ability to do that. sonali: double down on what you mean by being in black swan territory right now? what are your risks that you are seeing and is there something

investors are ignoring? mark: the risks are the second order effects that happened two years ago, the distortion in the system. it is not like a catalyst. these are narratives we come up with after the fact. it's really the environment that we are in. so, again, in thinking about risk and risk mitigation we need to think about it in terms of what we will be able to do in the future. not so much what the losses will be, but where is the dry powder? that's what risk mitigation is. son sue -- defense is the planning of an attack. dry powder is a catch 22. it's a double-edged sword. good to have dry powder, bad to wait to deploy it. good to buy cheap investment assets, bad to way to do it. risk mitigation is trying to solve that problem. as the markets move away from us, risk mitigation could be the cure that's worse than the

disease and that's the way that people need to start thinking about it. sonali: you have been quite critical of the idea of investors flocking too much into one asset for insurance. the idea of gold hitting record after record, is that the right thing for a portfolio right now? mark: it's a sit -- it's a superficial distraction. diversification has people distracted into mean variance and risk-adjusted returns. these are things that make people poor or over the years. sort of a solution looking for a problem in many ways. diversification is not the holy grail, as it has been touted by many. that is a big lie, actually. you know, we need to think about risk mitigated portfolio, our diversified portfolio or whatever it is, when you think about what it does in bad markets in good markets, we need to be comfortable with both, think about those scenarios

relative to each other if we were just in the market, we could start thinking about the relationship between them and what it means about compounding going forward. this is something that when people honestly assess it, they would move away from diversifying portfolios. sonali: how do you think that people should be hedging in this environment, to the extent that there are black swans around the corner, how should people navigate it? mark: it's hard. crypto is going to go down with risk assets when this is over. it's hard, we need to protect ourselves not from the market, but ourselves. we need to forecast not the market, but ourselves. we need to think about what we will do. markets zig in like poker. they try to squeeze us out to buy the high, so let's make sure we don't do that. there's not one solution for everybody, i'm not here to do that, but that's how people need to think about it. sonali: august 5, the vix shot

past 65, back down to 15. seems like things have calmed down, do you expect a spike like that again? mark: volatility tends to follow real-life volatility, that's kind of what's going on there. the bull markets, the derivatives markets are's -- are extremely inefficient and we love in efficient markets. the dealer community disappears when all the things get dicey. that makes sense. we consider ourselves sort of the liquidity providing part of that function. it's a hard place to play. yes, the markets get unhinged when things move outside of a certain range. the dealer community has to do this. we have got growth involved funds selling out there. that's how shaky the market is. when things get unhinged, we expected all to explode and in the months ahead, the year year ahead, we should expect more of that. sonali: mark, great to talk to

you in this moment. that of course is mark spitznagel. scarlet: thank you so much, sonali basak and mark for joining us this afternoon. coming up, and indictment formally announced against new york city mayor eric adams, responding to the indictment from the federal prosecutors now. more on this developing story, next. this is bloomberg. ♪ i can't believe you corporate types are still at it. just stop calling each other rock stars. and using workday to put finance and h.r. on one platform. tim, you are a rock star. using responsible ai doesn't make you a rock star. it kinda does. you are not rock stars. (clears throat) okay. most of you are not rock stars. oooh. data driven insights, and large language models. oh, that's so rock roll. it is, right. he gets it. yeah. [introspective music] recipes.

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> it's an unfortunate day. it's a painful day. but inside all of that, it's a day that will finally reveal why , for 10 months, i have gone through this. i look forward to defending

myself and defending the people of this city. scarlet: that was the mayor of new york city, eric adams, after being indicted following a federal corruption investigation . prosecutors held a news conference. damien williams spoke about the charges. >> today we are announcing campaign finance, bribery, and conspiracy charges against eric adams, mayor of new york city. as alleged, he engaged in a long-running conspiracy in which he solicited and knowingly accepted the leak -- illegal campaign contributions from donors and conch -- corporations. scarlet: for the latest, let's bring in miles miller, who covers new york city as a reporter. give us some color on the exact charges. miles: 57 page indictment, seven counts, amounting to service fraud and wire fraud. prosecutors allege that when he was the brooklyn borough

president he sought illegal campaign donations in the form of straw donations. when you go to someone and say -- hey, there is a new guy running for office, you should all bow to your money together and give him money and most of the times it is payback. in addition, it's also the scheme that he was allegedly getting free trips from turkish airlines and the implication was that he would get something back for. what we learned is that it was the development of the turkish embassy outside of the united nations, a consulate here in new york, it did not pass fire inspection and the mayor was putting pressure on the fire department to get it done, they believe, because of these campaign donations. scarlet: the pace really picked up this week with a lot of members of his administration resigning. miles: that's right, he's been under investigation since november of last year as far as we know, when they seized his

phone in greenwich village, asked to step out of the car and turn in his phones. what i learned in reading through this is something interesting, he actually changed the code to his phone when he knew the fbi was looking for it and then said he couldn't remember it, so that staff would keep his documents. scarlet: interesting detail, they are. miles, thank you for staying on top of that story. coming up, we are going back to the markets to take a look at shares of supermicro, falling under report that it is under investigation as well by the doj. this is bloomberg. ♪ t 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 down-payment... ...on a ranch ...in montana ...with horses let's 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 you're planning for it all... the answer is j.p. morgan wealth management.

the moment i met him i knew he was my soulmate. the answer is "soulmates." soulmate! [giggles] why do you need me? [laughs sarcastically] but then we switched to t-mobile 5g home internet. and now his attention is spent elsewhere. but i'm thinking of her the whole time. that's so much worse. why is that thing in bed with you? this is where it gets the best signal from the cell tower!

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scarlet: welcome to "bloomberg markets." midday in new york, let's get a check on where things stand and equities and treasuries. modest gains in stocks, s&p 500 up by .5%.

-- .2%. thanks to micron and a optimistic outlook. chinese stocks, that's where the real action is happening given their latest announcement, or i should say, our reporting that it is expected to unleash some fiscal stimulus adding to the package of stimulus measures they announced earlier this week . the golden dragon index jumping 10% on the day. like i mentioned, modest losses at treasury pushing up the yield on the 10 year to just over 3.80%. all right, let's turn to business as it pertains to the environment. it is climate week in new york and president biden spoke at the bloomberg local business forum about this. >> when it comes to climate, every time i talk about it, whether i was trying to convince labor into business to come along, i would say that when i think climate i think jobs. i think jobs and i mean it.

in fact, i'm proud to keep my community -- commitment to bring unity between business and climate. that's what we are seeing. scarlet: consumer facing companies from aaa to hilton are vocal in their pledges to reduce carbon footprints. this is something we have seen and heard, yet many of the same companies are key members of trade groups that have recently filed lawsuits to overturn some critical, local, can stay climate rules. the contribution -- contradiction that ben elgin has been reporting on and he joins us now from san francisco. this is happening in states like colorado. give us an example about company climate policies are at odds with their participation in these larger trade groups and legal efforts? companies like ben: -- companies like marriott and hilton have pledged to cut emissions in half

in roughly eight years, these are the improvements that need to happen to stave off the worst parts of overheating the planet. at the same time these companies have members or property managers and key positions in trade associations like the colorado hotel lodging association. this association to swallowing a lawsuit that is trying to beat back rules in denver and colorado that would require buildings to become more efficient. in many cases these requirements are less stringent than their own voluntary pledges. scarlet: what's the response from aaa and marriott when you point this out to them? ben: a lot of times companies would say they don't control the actions of the trade associations they belong to, but it raises the question that they , in all cases, don't want to address, which is what role did you play in the formulation of this policy, did you advocate for your own climate position or were you more than happy to go along with the trade association

opposition to these climate rules? scholar: is colorado an outlier? are they more ambitious than other municipalities? ben: it really isn't, that's what we focused on it. california, the city of berkeley five years ago, the first city in the country to halt the expansion of gas pipes into new buildings and that's just a baby step that has to happen if we are going to hit the climate targets, the gas system can't continue to expand. the california restaurant association filed a successful lawsuit to overturn that and dozens of other cities have had to similarly rollback those provisions here. again, it's the restaurants and hotels fighting these rules at a city and state level. scarlet: are there companies that have pushed back against trade groups? ben: yeah, it's fascinating, 15 years ago the chamber of

commerce was opposing all sorts of climate rules around the country. apple, the technology giant, had a very ambitious climate goal and said look, u.s. chamber, we can no longer continue to be a part of this and fund your activities, so apple made a clean break, but by and large these differences and discrepancies continue to linger and persist. scarlet: fantastic reporting, ben elgin. thanks for bringing our attention to this on climate week especially. we want to go back to an equity louver declining, a big decliner in this session, supermicro, reportedly under investigation by the department of justice, according to "the wall street journal." this following a report from the hindenburg short seller, raising questions about the accounting practices of the company. representatives did not immediately respond to requests for comments, but we reached out to bailey lipschultz, who has

been looking into all of this, he joins us now. what do we need to know? bailey: we saw that report come out say that there were misleading accounting product -- practices. the next day they delayed their full year financials, saying they needed more time and now, fast forward 200 a month later, this report about a justice department probe. it seems like these issues they first pointed out with the delayed finding are continuing to percolate. keep in mind, the stock is down 31% from the hindenburg report. shares didn't move on the report itself, but when you finally see if you see these reports of the looking into it and it caused investors to state scarlet: scarlet: delayed financials. how are you thinking about reporting this forward? any time they print something bearish, the doj starts to take a look at things? bailey: he definitely has

weight. they took down nicola. we have seen him call out the likes of block. he does have weight and is the most prominent short seller on wall street at this moment in time, an area where we are seeing short-sellers increasingly pulling back from bearish reports. it's something that we keep top of mind. i think that we look at the filing from nate anderson from about a month ago, then you see the company delaying financials and that is what resonated with wall street and again you see the government stepping in. scarlet: the other thing that we should mention is supermicro has been super popular with retail investors. in part because he got swept up in the ai frenzy. bailey: this stock was worth 2 billion in market cap a few years ago and right now after this sharp drop off, even, $22 billion. it is in the ai flavor. we have increasingly seen analysts pointing to what the path forward looks like.

they are one of the largest customers of nvidia. we saw the big news from micron coming out showing so much ai demand, but when you look at the hardware space, the area that supermicro plays in, those are thin margins that are super competitive and there is uncertainty about whether the company has come too far, too fast, and wouldn't we spoke to analysts around the initial report they called it a company that went from being a teenager to being an adult. from being a member of the s&p 500 people pay attention to you because there is so much passive flow. scarlet: a lot of scrutiny with a lot of growing pains. bailey, really appreciate it, covering super micro computer reportedly under investigation by the justice department. coming up, staying with equities. our stock of the hour went public today. the ceo will join us to talk about natural gas and their market debut.

a quick mention of hurricane helene, releasing tropical winds across south florida on the west coast, where it threatens to push a wall of water on shore, extending 340 five miles. we are keeping an eye on the storm. this is bloomberg. ♪

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scarlet: this is "bloomberg markets." covering the debut of bkv, the gas producing unit began trading after raising $270 million and raising 15 million shares -- $15 million in shares

-- 15 million shares. we have the ceo, chris kalnin. why go public now? what is it about the current market that makes sense for listing now when the ipo market has yet to fully recover? chris: scarlet, bkv great question. we see that bkv is at the confluence -- we see that bkv is at the confluence of multiple core doors down in mississippi. and we have power assets that can serve ai data center moves going on in texas. with the trends that are tailwinds to the business, we feel the market is ready for another kind of energy company like bkv and we think that the ipo success shows that. scarlet: i mentioned the ipo price, $18 apiece, is broke -- below the proposed range. what do you attribute that to? chris: when you do an ipo at a

market it as having not had much volume, you feel the market out. we set the price range as higher or lower depending on where the market was and we are very pleased. we think there is a lot of running room in the stock and we are excited about the future so at the end of the day we feel like the market prices it and we are thrilled that the ipo is done. scarlet: you mentioned louisiana, but your bread and butter is in texas in pennsylvania. i know that you sold off a chunk of your marcella's assets in two deals. do you expect to exit it completely in focus all of your expert -- efforts on barnett? chris: marsalis has been great for us. we are located right in the northeast. at the moment, the plan is to run the asset for cash. we believe we can cash flow it for 10 years to come in more. the core asset is of course barnett shale, as you highlighted. that is where we will see put --

production grow if prices are supportive and we think that there are a lot of additional inorganic opportunities in the area. we are all operated now, what we sold was not operated in northeast pennsylvania. we will maintain that position to cash flow it. scarlet: dipping into that, is there a conscious decision to be a producer in barnett and avoid places like eagle ford and hansford because they are more costly to operate? chris: listen, we are the dominant player in barnett shale, twice the size of the next producer in terms of growth -- gross production. our decline rates are market-leading, it allows us to really play with the capex as prices come down or up. we can toggle it. looking at the furor over haynesville, barnett is the indicator of where gas shale will go. at some point when these plays get to their midlife, bkv is ideally positioned to be the

producer of choice. at the moment, barnett has the running room organically and in organically and that is our home right now. scarlet: what sort of production growth are you anticipating this year? how do you expect capex to look next year? chris: the whole program is driven by price expectation and when it's driven in that direction, you will see us grow in the single digits. below three dollars we will toggle back and gently decline. if we are north of 350, we will be more aggressive in the mid to high single digit growth. it's a function of where we see prices. right now we see them at three to 350 land. scarlet: you raised 270 million dollars, i'm curious to see how you plan to use those proceeds around what you're looking at right now. chris: the plan out of the gates

is to de-lever, giving us huge flexibility, with organic growth we have tremendous inventory. we are the american leader in refracted and can drill up to five hundred wells. we have a good inventory, organically we can deploy it. in organically, it's full of smaller players that we have the potential fire at some point. having that low levered balance sheet gives us flexibility. that's how we see the business. scarlet: i'm curious as to whether the interest rate cuts that we could get in the next week or coming months sets the table for a more aggressive approach. chris: b kv has been the m&a engine. we built a portfolio by purchasing the first position in the barnett. we know how to do it, we are

poised for it, we are always leaning in if there are opportunities and we will be ready if there are interest rates where they are and market rates where they are, there will be good opportunities on the horizon. devaluing the balance sheet gives scarlet: chris: -- scarlet: bkv chris kalnin, thank you. coming up on "bloomberg markets ," commercial real estate has had a rough patch but our next guest company has invested 85 billion dollars into properties. amy price joins us to share where she thinks the right spots are. this is bloomberg. ♪ [introspective music] recipes. recipes written by hand and lost to time.

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scarlet: this is "bloomberg markets." now that the fed has cut rates,

commercial developers are hoping for a return on liquidity. a forecast from the mortgage bankers association expects liquidity to be up more than 25% this year. for more on what is next in this space, let's bring in abigail doolittle and bgo president amy price. thank you so much. amy, we know that buyers and sellers in the u.s. commercial real estate are feeling better now that the fed has cut rates. do you think we are at a bottom and we have reached an inflection point? amy: i do think it's a good start. putting office aside, we are at a low point. rate cuts have started, optimism is returning to the market. we are seeing more transaction productivity on the credit side and on the loan side. so, it feels like we are hitting an inflection point. office is the outlier to those.

abigail: the overall environment coming and had been stagnant, log jammed, not a lot coming in, now we are seeing more. sounds like we are still in the bottoming process. how many more rate cuts are required to really lifted this cycle and how long does that take? amy: the rate cuts, i think they will take longer and the cycle is going to take longer, but what is interesting about real estate is the interesting opportunities regardless of where we are in the cycle that are more secular and that's really where we are focusing, finding opportunities in the sector. abigail: how does that process start for you? what's the fundamental decision? what's your philosophy in your decision-making and what sectors do you like, i imagine you are being super selective. amy: super selective for sure. we look at where commercial real estate is critical to some of the other bigger, broader

secular trends and growth. technology, we all know we have got a i and data storage. automation, robotics, it's all going on around us. what's really interesting is thinking about where is physical real estate an important part of the infrastructure that it will take to actually drive productivity and unlock value. a couple of examples, everyone talks about it but i have to mention it, it's a good crisp example, david zucker. for sure, we understand that we have a i, we have an understanding of the need for storage, but sometimes i think we get confused, myself included, that when we talk about the cloud, the cloud is not the sky. the cloud is in the ground, it's in a data center and data centers are the physical real estate that we need to unlock the potential of productivity across the economy. another example, just to give one more, it's a little

different, broadly speaking industrial. again, you've got automation and robotics disrupting the supply chain of products. you have e-commerce disrupting the supply chain of products. what is interesting with real estate is the physical link that's necessary and what is different now is we need modern infrastructure, right? modern warehouse distribution facilities. 70% of the industrial space today is more than 20 years old and isn't really conducive to the demands we are seeing in the evolution of the supply chain. really, for robotics and buildings. they see opportunities there as well. scarlet: i like that you're trying to meet demand where it's weakest. another area would be residential properties as well. what does that look like for you, given where we are? a lot of demand, not a lot of supply.

amy: it's absolutely one of the large opportunities and challenges, we are undersupplied for housing in this country. the challenge is being able to own and create the housing that is going to meet the demands of the future. so, it's about market selection, using a analytics to predict better where population growth and migration trends happen so that we can be building and delivering and owning the presidential -- residential real estate necessary for demand going forward. abigail: the affordability houses crisis seem so extreme. it was a major topic of the election cycle. is it even possible to bring enough housing online over the next five to 10 years to stem it significantly? bailey: i think it will be hard and for that to happen we need to think about it more as a

public-private partnership. the real estate sector alone can't do this. we need to look at more ways to work with local governments on the ground with incentives and other structures to help deliver the housing we need. abigail: it's not just sectors, its geographies. i understand that asia is strong , but the chinese nonprofit market is really tough. square for us why asia is outperforming the u.s. and europe. amy: again, asia is a large place, i would restate that. like you pointed out, china has some challenges. we are not significant investors in china but in other areas, like japan, where we are significant investors, it's very different, fundamentally. very different macroeconomic environment and from a real estate perspective, much bigger demand for real estate. thinking quickly about office as

one example, there was never an issue getting employees back into the office in tokyo. so those are the types of opportunities where asia is functioning very differently, particularly in real estate markets, versus the other regions in the world. scarlet: amy, really appreciate you joining us along with abigail doolittle. thank you so much. that does it for "bloomberg markets." this is bloomberg. ♪ no. i can do some research. ya know, that's backed by j.p. morgan's leading strategists like us. when you want to invest with more confidence... the answer is j.p. morgan wealth management ♪ ♪ when with so much greatwith entertainment out there... wouldn't it be easier if you could find what you want, all in one place?

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>> from the world of politics to the world of business, this is "balance of power." live from washington, d.c. kailey: welcome to "balance of power," i'm kailey leinz in washington with an eye on new york city today. as the mayor eric adams becomes the first sitting new york city mayor to be indicted on federal bribery and chart -- fraud charges. we will have the latest details this hour. plus i will be joined by a trump campaign surrogate, republican congressman byron donalds will be with me. plus another special guest, u.s. treasury undersecretary for inte