♪ >> welcome to bloomberg markets. u.k. prime minister keir starmer is set to visit president trump at the white house seller and on their agenda, bilateral trade and the war in ukraine. monitoring headlines on their discussion before a news conference scheduled this afternoon. in the meantime with the with quick check on market as we get midday here in new york. you looking at the s&p 500. that is in the red, down

threepence of 1%. so we have some gains yesterday but we weren't able to hold on. and the verdict on nvidia results is good, but not great. revenue modestly higher than expected but profit margins less wide than anticipated. we will dig into that a little bit later on. the bloomberg dollar execs is gaining, up half of 1%. after president trump clarified that 25% tariff on canada and mexico would going to affect march 4 while china imports will be charged with an additional 10% tariff starting that day. treasury is taking a breather after a sustained rally. young living off of the 2025 lows before tomorrow's data and the end of the month. let's highlight a couple of individual equity movers and bring in isabel. isabel: we do have to talk about nvidia because you can see shares lower by more than percent. basically earnings were good, but not great which left some investors left blowout results feeling just did.

nvidia saying that sales will be about $43 billion for that of the lower end of the. some estimates as high as 48 billion dollars, so investors were released by that and we could see shares as a lower by 4%. salesforce shares also lower by around 2%. company revenue forecast fell short, agent for zwick's first sales growth. facing competition from light of microsoft and still, salesforce saying it has around 3000 customers using the. and lastly, edging slightly higher with gains on track for the biggest intraday rise in three months. a company reporting better-than-expected revenue growth after tools like products allow users to implement generative ai. the creature meant 24%, slightly higher than forecast. back to you. starlet: thank you so much for rounding those up the rest.

a broader u.s. economy, data showed jobless claims rising to the highest level this year. commodity economist have wondered how the efforts by doge to cut spending and fire workers will impact these claim numbers is not right now then down the road. earlier on we were told it is still too soon to tell. >> i don't see that happening yet. so much uncertainty even with the reported numbers have come under questions. generally this is still a tight market with a lot of opportunity from that core for leading u.s. consumer, so we will watch very closely, but we do need some people at least at work in the federal government pretty keep on turning >> for more on those numbers and the data that we did get this money, the three in michael mckee. i tripped over your title because it is so long and important. let's start with durable goods, which was a good news report. a bigger than expected gain in

the previous number was also revised in the right direction. >> i feel good about that because isabel was talking about good news, and we did have some good news. 3.1% increase in durable goods orders which suggest strong business spending, but much of that was boeing. a much bigger increase in sales then people anticipated. the court cap would goods orders , you take out boeing from that, of 8/10. a strong result. last month down a little bit but it does still suggest that businesses were spending money in january. the question is, is that because they were trying to get ahead of caps? scarlet: that is the question now. let's get to those jobless claims numbers because they moved in the wrong direction, the highest level this year. i know there's a lot of confusion over government

agencies because the washington, d.c. jobless claims rose to the highest since march of 2023. >> however, federal government workers have their own unemployment insurance system, and they are not part of the overall headline numbers. so we saw a rise in federal employees filing jobless claims by one. literally one over the week prior. they are two weeks behind, so it's too early for us to have seen anything in the federal workers. do you get contractors to have laid off? it doesn't appear that way because most of the subcontractors are in virginia and maryland in the suburbs. the other two big states with a lot of federal workers are texas and california. all four states saw jobless claims go down. d.c. may be a hangover with workers not going back to work,

working from home, that sort of thing. it's going to take a couple more weeks to find out. the big rise probably seasonal effects from the holiday last week. scarlet: and if people are getting paid severance, that won't show up in these claims numbers because they can't file for unemployment benefits until after that runs out. >> that's one of the difficult things besides the fact that we don't really know how many people elon musk has fired. if you get severance, you can't file. if you took the buyout, you can't file. it's going to be some time before we can say this was the impact of it. scarlet: got it. in the meantime, plenty of headlines coming out on a regular basis. michael mckee, thank you so much. let's stay with the job story because stanford university is implementing a hiring freeze as universities confront the threat of severe funding cuts from the trump administration. janet joins us now to break it down. did stanford tie its hiring freeze directly to the way --

white house's cut in research funding from the nih which itself is on pause because of legal challenges? >> i think the word here is uncertainty. for stanford, they are not really sure what is going to happen. we know that there is a proposed cap on nih responsible for more of the cost and out there, schools are bracing for what has been under the radar right now. only paying 1.4% on net investment returns and talk maybe of being the 20% range to be a quite sizable increase for them. hiring freeze not for professors seems reasonable first step. scarlet: so a hiring freeze would put the spotlight on a lot of ministry depositions. just kind of the bureaucracy in the school. and a lot of critics say universities are pretty bloated.

they added a lot of administrative jobs in recent years at a time when they've raised tuition far above the inflation rate. so the first step is hiring freeze and is the second step necessarily job cuts? >> not sure. it's not clear what it's going to happen. but if you think about some of the jobs they've added, we hear about title ix coordinators, sexual assault claims, mental health professionals, coaches and things like that. it is not unreasonable to say look at the headcount having less money coming in. scarlet: we all know that universities are in the political crosshairs by both the left and right at the moment. janet lauren covering higher education. coming up, part of their interview with the ceo of amazon andy jassy talked about the new alexa floss and his version for ai. that is all coming up on

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scarlet: this is "bloomberg markets," i'm scarlet fu. earlier on bloomberg technology coast caroline hyde spoke with andy jassy on how the company is building out its ai future. >> we are spending a pretty significant amount, the lion's share of it on generative ai. we sat in our aws business even though generative ai for us is a many billion dollar per your business and growing triple digit year-over-year, if we had even more capacity we could use it and monetize it.

and we have this really interesting and very fortunate flywheel in ai inside of amazon which is if your mission is to make customer lives easier and better every day, which is for us, and if you believe that all the customer experiences we know of today are going to be reinvented for generative ai, which we also do, you're going to be building a lot of generative ai apps. if you build a lot of generative ai apps, other companies are, too, so if there are a lot of generative ai apps being built on top of you, you can't help but get a lot of feedback from people on how they want those building blocks to be better. and if you are willing to invest in those building blocks, which we are as you know with our own chips, with our own frontier model, with amazon nova and model building services, and you are getting a lot of back, they get better much more quickly

which can't help but make it easier and quicker for people to build generative ai applications. so that flywheel is very unique for amazon. >> the lions share, you did say basically $100 billion run rate expenditure. even a percentage rate of how much that goes to distribution and logistics and how much goes to ai? >> most of it. the lions share is more than 50%, yes. >> more than 80%? >> are we playing the warmer and colder game? >> i love that game. talk to us about the capacity that you talked about. aws could grow even faster if you had all the chips that you needed, all the power you needed, the motherboards you needed. how much faster? >> it's hard to put an exact percentage, but i do think it could be growing faster. i'm confident it could be growing faster. for a long time, there still aren't as many chips as we all

want. we are fortunate that we are very big partners with nvidia than we also have our own custom ai which we just released which is 30%-40% more price performative which is a big deal at scale if you're doing generative ai. so we have made more chips than others might have access to, but we still don't have enough, and there just is not enough power in the world right now. we are all working to be hard on that. i expect that to relieve some in tecond alf of this year, and the world can change but right now we have just insatiable demand. >> we had amazing demand coming from jensen huang who had his numbers out yesterday with nvidia. was there a limitation on the chips in particular that pulled back capacity and at what point do you think you would depend even more on your own in-house chips? >> there's a lot of demand for generative ai right now, people

are very excited about it. i think that all the different providers of chipset been constrained to some extent. i think some of the generations maybe have gone from different evolutions of when they are going to be released, maybe a little later than people thought. there are some components like motherboards and things like that which we all use, particular ones are in shorter supply. i do think there are some supply chain issues, which i expect to get better. people are very excited about your question on whether we see more demand and we have gone back at least a couple occasions to make more than we intended because we have so much demand. i expect customers for as long as i can foresee wanting to run compute on instances of chips, but i think a lot of the demand will also be served by --. >> the customer that you couldn't serve because of the limited capacity, is it that you

just have to pull back from everyone a little bit more generally, or who lost out here? >> it's always a combination. from people who just have a very small amount of accelerators that they need, they don't usually have a problem. we have something called capacity blocks, and on-demand way to use accelerators and generative ai chips, and that continues to grow. it is really the folks who have built, who have an idea for a new application but they need a lot of chips where if we don't have the capacity, we have to give them what we can give them as fast as we can and then push our partners to get it in sooner and they can get their initiatives done as quickly as they want to if the capacity is not there. >>, tropics have all the capacity it needs. >> we have a very close partnership with anthropic. they are building their next version of their frontier model

on top of training them ii. they are going to use over 400,000 chips, so yes, they have capacity. scarlet: that was of course andy jassy speaking with caroline hyde, who joins us now live. you mentioned the partner for amazon the same way that microsoft relies on openai. talk a little bit about how amazon offers up its ai offerings. for the consumer it is through the voice assistant, but on the enterprise side it is mainly through aws. >> and also from the consumer perspective you can use the chatbot and amazon when you're trying to look up the best reviews overall which is what you want to be buying with amazon. amazon has been infused with ai for decades and i think what they want to be is from an enterprise ai perspective, the ai supermarket. so they have a relationship, and so does google, but they

basically have relationships with everyone. you could go into bedrock using deepseek new iteration of a model and the using it for your own purposes and making it bespoke. you could be using anthropic or a whole host of other. they really want to be the agnostic player. what is so interesting about the aiu are seeing in the consumer's hands is this alexa plus is using different models for different things, so it's going to be generative ai, too. >> in many ways aligned with amazon the marketplace. you also talked about chips and the fact that they are building, creating a lot of their in-house chips, trying to get some more details and hard numbers on the kind of spending that requires. amazon was a little further ahead of everyone else in bringing chip manufacturing in-house, wasn't it? >> certainly compared to microsoft. they've been focusing on it for years. back in 2009 they really managed

to persuade under andy jassy, they saw around corners that ultimately would be good to make more and more of your own hardware, with it is servers, and then they were like, let's make our own chips. this is the pivot point, if they can get this at scale into to be sure that ultimately this is the winning or mila, and this of course is what google is trying to do, microsoft is trying to do, they are all trying to become less dependent on nvidia. but it really is about how much money you're going to be pouring into this. how much is going to be on data centers, is going to be on chips, is going to be on innovation whether it is talent for the sheer data center power capacity you need as well. >> he wouldn't go close to answering that question beyond the lion's share which i guess is good enough. what did he say about the trumpet diversion plan to perhaps increase tariffs on chinese or increased restrictions, i should say, on

chips made available to export to china? >> the ai diffusion rule which i'm sure you've been, that microsoft has just put out a blog to say playing -- saying please, change this. it was very late by the biden ministration, meant to curtail jensen huang's ability to get his chips to allies. not just in stopping selling to china, but stopping his most sophisticated chips to other allies. it's basically meant to be more controls. microsoft saying please don't limit us because you are going to force china to innovate faster and hold back the u.s. amazon is a global seller. they didn't say it is a b issue but certainly they want to see u.s. innovation drive forward. in fact, he was very optimistic about the community -- a to medication he's having, saying they are really very business friendly. he said because with trump himself and they are saying it is hard with other in ministration and easier with others. at the moment, this is easy. he's not part of stargate, but

stargate is about bringing the infrastructure here into the united states, particularly its limitations run parallel. >> no one in the industry can afford to isolate the trumpet ministration right now. you mentioned power, along with the chest because we talk about how nvidia can't make them asked enough to meet demand which is partly why a lot of companies have taken matters into their own hands. what did he say about power and how to address the shortage? >> he mentioned it on his earnings call that they were limited, aws growth was limited because of access to chips, access to motherboards, but really access to power. and you drill this home that it has taken everyone by supplies -- surprise globally speaking. he's having positive conversations with global leaders. scarlet: caroline hyde, bloomberg technology cohost speaking with amazon ceo andy jassy earlier today. coming up on bloomberg markets, a weekly look at issues tied to retirement and an interesting fact for you, the number of 401(k) accounts with more than

$1 million at fidelity climbing more than 25% last year. might be why firms are now increasingly interested in tapping those funds. we've got more on that story next. this is bloomberg. ♪

♪ scarlet: this is "bloomberg markets", it's time for our weekly retirement segment and according to fidelity investments, the number of 401(k) accounts with balances of at least $1 million climbed 27% in 2024. that is thanks to a blockbuster year in the stock market ended might be part of why private equity firms are increasingly interested in tapping into retirement accounts. allison cowrote a bloomberg businessweek story exploring this trend and joins us now. great to see you. so you wrote about how these firms are reaching out to traditional asset managers.

how far have they gotten in this outreach, are we just talking about theoretical conversations or are there actual partnerships with joint products? >> last year partners group and black rock struck up a partnership and what they are trying to do is create model portfolios that would essentially allow advisors ap by numbers template of how to add private assets to their 401(k). we've also seen kkr and capita group form a partnership to do some the hybrid public-private product and of course the apollo state street credit etf which we saw lunch today. scarlet: we will get to that in a bit, but what is in it for each side? does one side need the other side more than the other? >> i think they both kind of need each other equally. everyone is kind about looking for their dance partner. traditional asset managers have the client recognition, the average mom-and-pop consumer has maybe heard of blackrock. they probably haven't heard of apollo or kkr or blackstone.

alternative asset managers have the assets, that the traditional's really need to sort of keep expanding their product base. scarlet: so the ultimate goal here is access to 401(k) but if traditional asset managers have been losing out to low-cost index funds because the fees look relatively higher, doesn't that just make private assets even more expensive on a relative basis? >> this is kind of a marketing puzzle that i think the industry is still trying to solve. private products and private investments are more expensive of the industry will tell you they are more expensive because you are more expensive because you're getting outsized returns. some people dispute whether or not they beat the stock market, that is almost a topic for another day, but yes, there is sort of this hearts and minds argument that the alternative asset managers are kind of going after right to say we are a bit more expensive but we are working. scarlet: you will get the returns that you wouldn't have gotten otherwise. great story, thank you so much for joining us. coming up, u.k. prime minister

visiting the white house today. he is due to arrive this hour. that is a live shot right now at the white house where we outline the stakes of their conversation next. this is "bloomberg." ♪ carin's heading into retirement. [screams] with a lifetime of savings. but that's not the only thing she's taking into retirement. hi! ♪♪ hi. every advisor knows retirement isn't a lump sum, it's the sum of their clients' life's work. ♪♪ now what? you protect their life's work with protected growth and income strategies from prudential. who's your rock? ♪♪

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♪ scarlet: welcome to "bloomberg markets," i'm scarlet fu. keir starmer set to arrive at the white house any moment now. we will be monitoring headlines of the discussion before they hold a scheduled news conference for later this afternoon. but first let's get a check on the markets and you can see the s&p 500 in a decline mode although just marginally lower

here by about 2.5, three points. "the magnificent seven" under greater pressure as nvidia results were ok, but not terrifically impressive. you can see that wing of the mag seven as a group down a 10th of 1%. trump clarified that 25% tariff on canada and mexico would go into effect on march 4. treasuries taking a bit of a breather with associated rallies so yield had come down. a little bit of a move up off the levels here before tomorrow's pce data. as we mentioned, the u.k. prime minister visiting the white house today and due to arrive this hour. there is a live shot there of the white house with the old executive office building in the background. the war in ukraine, nato, and even trade are all on the agenda. kailey leinz joins us down from washington. > this is a high-stakes meeting for keir starmer who to

this point has actually been able to build a pretty positive rapport with president trump despite their clear ideological differences in the fact that some close to donald trump like elon musk have been very critical of starmer. but really what is on the agenda for this meeting and the joint press conference later this afternoon is defense and economic policy. on defense, i'm speaking primarily about the war in ukraine at the trump administration is in active negotiations with russia to end the war and the u.k. together but france have said that they would pledge peacekeeping troops to ukraine in order to keep any kind of cease-fire deal in place. the thing that starmer is likely to ask trump for today our security guarantees from the west. they think that is actually required, a u.s. backstop to be effective deterrence against russia to make sure putin doesn't try to go into ukraine again. we have to this point not seen trump giving a signal that he is into the idea. he was asked about it yesterday and said he would be leaving security guarantees to europe and it is no secret that he things europe needs to shoulder

more of the burden here which is why defense spending is also likely to come up as keir starmer has announced recently that the u.k. will be up in defense spending to 2.5% of gdp by 2027 with the goal of getting to 3% by 2035. then there's the economic policy aspect of this, primarily trade which is highly in focus today. trump saying he will be putting into place 25% terrace on canada and mexico on tuesday and raising the rate on chinese goods another 10%. he said that europe could be next. those tariffs could come in april and the u.k. very much would like to not be included in that. trump has said that he is going to be targeting with reciprocal tariffs, specifically countries with value-added taxes. the u.k. could get wrapped up in the steel tariff season lamenting as well, and referred trump say as recently as earlier this month that he sees a huge trade deficit with the u.k. and we know he doesn't like those. so the outcome there is going to remain uncertain. i'm sure both of them will be

getting questions about their trading relationship in addition to questions about ukraine today. scarlet: great stuff. kailey leinz will be back at the top of the next half hour and once again we remind you that we are looking at live shots of the white house. we do expect keir starmer, u.k. prime minister to arrive and there is a car. if you can see president trump is actually there waiting in the doorframe for prime minister starmer to exit the vehicle. and there we go, you can see president trump making his way towards the vehicle. there we go, shake up the hands between keir starmer and president trump. the two will be holding discussions and then eventually they will hold a press conference as well. starmer has already been in washington, so this is the beginning of their formal discussions now as they now make their way into the white house. for more on this meeting, let's bring in and arisen come ahead of geopolitics. it is great to speak with you and it looked like a friendly

greeting between trump and prime minister starmer. do they have any kind of existing relationship to build off of, given that president trump is very much someone who relies on chemistry with his peers? >> not necessarily. i think that is certainly a new get together, i would say. however, we know that trump likes politicians who have a strong political capital and keir starmer certainly has won the election with a lot of support, meaning that it is a good encounter between the two. i think it's going to build on that relationship. clearly we also have a strong historical relationship between the u.s. and the u.k., something that starmer will leverage. >> keir starmer is known to be a cautious politician. what would a win look like for him? >> i think it would look like to get some guarantees were some commitments to provide ongoing

security to europe and to ukraine specifically. this is something that we seen throughout the week. emmanuel macron was there early in the week to discuss with trump these kind of security protections, the backstop to potential cease-fire in ukraine and starmer will continue with this message. a win would also be to try to change the narrative about the russia-ukraine war because clearly, the u.s. has shifted in the last few weeks toward a much more friendly attitude toward russia, and both macron and starmer are trying to change the narrative here to make trump see that a safe and secure europe is very much in the geopolitical interest of the u.s. as well. >> do you see them making any progress in that effort given the visit by mccrone? >> i think we are seeing a change and a walk back of what we've seen since munich, since the vance speech, since some of the war of words with zelenskyy. we are seeing the u.s. starting

to have these european leaders visit. we are seeing the signing of the mineral deals with ukraine and i think all of these are signs that the u.s. is not walking away. if you look at the underlying drivers it is not in the geopolitical interest of the u.s. to walk away from europe, to leave its partners and its allies on its own. you have to keep in mind that if you want to play geopolitical power plays, one of the biggest trump cards, if you will, is to have strong allies. so you don't want to weaken your allies to the degree that they start to undermine your strength on the global platform. this is something the trump administration is also acutely aware of. >> speaking of allies, we now talk about the e.u. and the u.k. in the same breath. how aligned are london and paris and to a larger extent, brussels when it comes to ending the war in ukraine, that idea that they are both seeking u.s. security guarantees, because this is a change from the relationship

u.k. and year had years ago. >> absolutely. i think we seen a big political change with the starmer government, which has been trying to bring the e.u. and the u.k. closer together again. but here we have a real reason to get together which is defense policy and defense protections. and we are seeing a lot more collaboration here. the interests for the e.u. and the u.k. are very much aligned. they want to make sure there's peace and stability and that russia remains contained, russia's threat remains contained. so we are seeing both sides getting closer together and we are likely going to get some announcements next week about e.u., u.k. defense collaboration so i think both sides are going to start to get closer and closer together. also when it comes to military defense capabilities and nuclear powers as well. >> you are the head of geopolitics, you help clients make better investment decisions. does this mean by european defense companies, buy u.k.

defense companies? >> this is something we can clearly saying for the last plus few years. this is an environment that benefits defense stocks clearly because there's a lot of demand for that and we are likely going to see more defense spending, so yes. scarlet: thank you so much, head of geopolitics in london. coming up on bloomberg markets, the office of ares management speaking to the new copresidents in an exclusive interview. from new york, this is bloomberg.

♪ scarlet: this is "bloomberg markets."

with the s&p 500 in the red, to have more gainers than decliner's. so let's highlight a couple of individual movers and bring in emily graffeo. emily: look at shares of warner bros. up 10% right now after the parent company of both cnn and hbo max said that they added 6.4 million new paying subscribers to their max streaming business. think of all those people watching "white lotus." they also aim to have one hundred 50 million subscribers by, so it is all about streaming for warner bros. because their overall revenue actually missed estimates, dragging down by that tv business. but today investors seem to be all in on that optimistic outlook on the streaming industry for warner bros.. it's a different story though for ebay. that stock is lower after a weaker than expected revenue forecast for the online e-commerce company. it was interesting that they said the growth could be impacted by potential tariff

pressure. seemed like prior to earnings everyone was looking for the word ai in the earnings reports and now we are all looking for companies talking about tariffs. this was one of them, that stock down 5%. in our last security is not a stock but an etf. this is a private credit etf from apollo and state street that started trading today, a hotly anticipated debut because for most, actually all of them, you can only have 15% of your assets in a liquids. this company is a partnership between state street and apollo, bringing more private credit into the etf. they said they are tapping into the liquidity of apollo's new trading desks to kind of bring what could be up to 35% of private credit in this fund. scarlet: an earlier today we did ask the ceo of aries about this etf. >> if you look at aries as an example, we have a 20 year track

record and almost $30 billion portfolio of private loans, private credit that has daily liquidity and is available to any regional investor around the globe. >> ares management recently announced new leadership and of course sonali basak has access to them. she's on-site now with the new copresident. sonali: yes, i am joined by the new copresidents. thank you both for joining. it says a lot to name both of you at this time, a lot of people being elevated across wall street but in this particular instance this seems to be a lot about growth. what are we learning that is saying things about the future of where aries is going? >> i've been here for 20 years, the firm has changed a lot. obviously we are at a point now where we are truly a global firm, a tremendous amount of

growth. it's 3000 plus people and growing and what i would say for me is it gives me the ability to kind of step out of my day today, having run the credit business now for a while and try to tackle some of the most important strategic and operational initiatives that we are focused on around the globe and obviously thrilled to be getting michael a bit more help on a handful of things. >> this also means, and by the way, you are really the only set of copresidents across both sides of the atlantic, it says something about your global growth strategy as well. what does it look like to expand into other parts of the world? >> seeing global is really important for us. we've been global almost 20 years. with 1000 people outside the u.s., almost $100 billion in assets. it is unique to elevate copresidents in both new york and london and certainly it recognizes all the hard work and efforts from teams around the globe as we seek to take a playbook to new geographies and

products. >> one thing we were talking about a little bit earlier is when you look at the market right now, there are a lot of jitters out there. that looks different on both sides of the atlantic. certainly both regions have their own challenges. walk us through how you were navigating some across europe in particular. >> i think as we come into 2025, you exit 2024, 2024 it was a bit better than expected. the economy kept growing, albeit at low levels. rates came down, however we have record deployment levels, so we are going into 2025 with big amounts of private equity on the sidelines coming into play, cost of capital down. interest rates down 150 basis points. that has a big impact on how deals look, so i think is a question for you have a really about the political frame. a big election year last year in the u.k. and france. we had germany just last week.

so the real question is how does that impact 2025 policy perspective? but we really aligned ourselves in sectors that i would say are less directly correlated to potential tariff and changes in defense spending. >> that interest rate story in the u.s. is not the same as europe. if you look at the 10 year yields, yes you see a very significant move in the yields, but a lot of that is on the back of growth concerns. with a volatile market and growth scares, how do you get anything done as a private equity firm? are you sitting there talking to private equity firms saying we need to lend you more money now because you can't take your company public anymore? >> i think everybody is waiting for that m&a machine across asset classes to pick back up. we are seeing some early signs that that is happening. the backdrop here in the u.s. is pretty good and the question i'm getting a lot from investors is about u.s. exceptionalism.

everybody wants to be invested in the u.s. but to your point, it's not quite as busy as folks would like it to be to deploy the amount of capital but i think everybody wants to put the work. and the other concern is that markets haven't really corrected all that much in response to a pretty significant uptick in rates. so markets feel expensive, but there's good confidence in the economy, generally in the consumer and companies. so i think everybody wishes we could be a little bit busier and again, we are seeing signs it is picking up, but it is picking up slow. >> both of you have seen record-breaking funding compiled at aries in the world of private credit, certainly in europe as well as the united states. how fast is that being put to work? >> the good news is we had record deployment last year as well. the key, if you are willing to continue to invest in the origination and risk management machine putting people on the

ground with specific asset level expertise and origination frameworks to drive that deployment, and you have confidence in those people to continue to pick the right risk reward, deployment isn't really a problem. >> i would just add onto that that from a european perspective it is really five or 10 years behind the u.s. market when you look at penetration of private credit. that in and of itself provides inherent tailwind. >> over across the street, up the street on apollo there is another thing happening were today they launched a private credit etf with state street. he talked about how you have things retail investors can invest in. the question is how much liquidity do you really need to get more retail money into this strategy? this is been a strategy for a large institutional investor and they can hold and lock up their money

for a long time. what happens when people want to pull out their money with more frequency? >> i'm going to roll that back a little bit. i think it is a very clear indication that this market has evolved a lot. investing in private credit, private markets is increasingly attractive to a different set of investors where we've grown up historically around institutional investors, sovereign wealth funding, etc. the other side of the aisle, so to speak. retail investors saying how do i get access to these products? they seem to offer premium returns relative to what i can get elsewhere with less correlation, and they are not beta driven, they are alpha driven. so it doesn't surprise me that etf has come into the world of distribution, but we've been diversifying our distribution

substantially with our wealth business, for instance, and we chosen to attack that for the most part with nontraded bbc's. we are certainly interested to see how it goes for our friends up the street. >> watching, waiting. it is quarterly liquidity. is that appropriate for this asset class? >> it depends how you manage that liquidity. i can't say that we've really dug in and looked at the liquidity mechanism that that vehicle in particular provides. i think mike said this when you spoke to him before. there are ways to access private credit in daily liquidity vehicles. you can buy stocks in mortgage rates. >> buy stocks in aries. >> you can buy aries stock. there's a lot of ways to get that exposure. i would probably kick the question on what we do etf or not to somebody on a product team who probably is smarter than i am.

>> this all comes down to a question about asset class for years. where is the risk? it is hard to see what is moving under the surface in an asset class that is more private. where is the risk? when you look across the board are you seeing some risks under the surface, some cracks under the surface? >> i see the typical question first on operating performance and for very careful credit selection are companies tend to grow much faster than gdp, so that puts us in good stead. the risk in particular that we are focused on as rates started to go up into 2022 is more around ready. can the companies afford to assert this higher rate on floating-rate assets? by the way, floating-rate assets is actually good for us. we've made it through that, companies that took on loans years ago and made the economy look different, the rate picture looked a little different. can they afford to refinance?

how do these company actually exit going back to your original questions? >>, and day is one part of the story. then that stress you are talking about, that could be brewing from some of these financing risks. what opportunity does that present to you guys, because you are focused on an opportunistic strategy as well. in the golden days, in the olden days, those are thought of as distressed opportunities. are they still distressed? >> i think the world that we are living in as you have companies that borrowed a fair amount of debt assuming that they would have cash flow that would allow them to create equity stories for the equity holders then all of a sudden with a significant rise in rates, and a lot of that cash flow is going simply to service debt. and they are able to service that debt. you haven't seen defaults spike, you haven't seen credit portfolios go up, but you see

challenged equity stories and folks with an inability to exit. so in each of the corporate asset class, the infrastructure asset class and the real estate asset class, that hybrid p's very often can't collect cash interest but can target equity-like returns and good companies with a love downside protection which we think presents somebody good risk reward. >> are either of you seeing real stressed opportunities out there to dive into? >> from time to time, but not any more so than the past. >> i think it's probably a little bit early and more sector-specific. >> realistically, rates are still relatively high. our companies able to take on new debt loads at the rates that we are seeing now? >> i think certainly some are. higher performing businesses in good sectors, but there will always be somewhere they need a little bit of capital to delever their capital structure in order

to affect refinancing and that has come from opportunistic credit that you mentioned earlier, from equity sponsors themselves where they do have options. >> it's been a long while since we've heard deleveraging. thank you both for joining me. guy's, back to you. scarlet: sonali basak, thank you so much. speaking with the two new copresidents. before we hand you off to "balance of power" because kailey leinz and joe mathieu, this could a quick check of financial markets. s&p 500 still declining down about two tens of 1%, dragged lower by nvidia and some of those other names. that group lower by three quarters of 1%. a bit of a reprieve here in the treasury rally and that yields are now moving higher, so that rally losing a bit of steam. four point 09% for the 10 year yield and of course, we are looking at a stronger dollar as well. we do want to mention again that the u.k. prime minister is

meeting with donald trump at the white house. they are due to hold a news conference later on this afternoon and we will bring you there live when that occurs. in the meantime, that does it for this hour of "bloomberg markets." check out "balance of power" next. this is bloomberg. while they're shopping for goggins for their noggins. ♪♪ the way i approach work post fatherhood, w has really trying to fo understand the generations. that we're building devices for. here in the comcast family, we're building an integrated in-home wifi solution for millions of families like my own. in the average household, there are dozens of connected devices. connectivity is a big part of my boys' lives. it brings people together in meaningful ways.

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live from washington, d.c. joe: they are in the oval office now. welcome to the fastest show in politics. keir starmer visits the white house to talk ukraine with president donald trump. i'm joe mathieu alongside kailey leinz. welcome to the thursday edition of "balance of power." this is just getting started. we expected to see these two shortly. maybe part of this hour. the president already has an invite to go to the u.k. kailey: a second state visit. got a letter from the king, which he was excited about. more pressing items on the agenda today. they started talking about some of that in the oval office. the ongoing war in ukraine. president trump describing talks being well advanced in a deal

but no deal