the situation allows for some opportunity for kkr. they say one thing the global financial crisis taught us is when investors are paralyzed by fear they often offer overlook opportunity. the opportunity cost of this oversight can be very painful indeed. let's discuss this with joel shaw. what is shocking is to hear of private credit investors save the default rates will take up more in private markets. joel: the junk bond market has gotten higher-quality in the last decade. a lot of them have moved into leverage loans were lower rated loans has been rising. that has moved into private credit which is where the risks now are. kkr points out the risks are among the smaller companies, which tend to be able to access private credit easier than the leveraged loan market or the high-yield market. sonali: on one hand you see kkr diving into riskier opportunities and they are expecting a mild recession into next year. broadly how are investors weighing the opportunity to start to buy in versus prevent losing some money here? jill: if you are

sonali: kkr sent a letter out to investors. bring in chris sheldon of kkr who wrote that letter. when you look at chances to dive in, what type of case are you starting to dive in the market to? >> we are of the view you should be consistently investing today. it's not a time to just sit on the bench and watch and wait for the bottom. what we've learned from previous cycles is the markets usually buy them well before the fundamentals do. you need to start and get going. . when you look at private credit assets, it takes a while to get invested. you should get going right away. sonali: there is this call you make in this letter from the private credit giant like kkr, people forget you also trade public assets. you said private credit could actually see more defaults. why is that? >> there has been a huge growth in private credit as a whole. a lot of that is focused on the middle-market in the lower middle-market. where we play in the private and corporate market is on the much higher end. what we've seen over the last 12-18 mont

both i kkr blackstone ar active in china.tially depends on the governments relationship wit their government kkr it's hot right, now to research firms - just this past week. as for blackstone, all the stock was in the penalty box for a while because of its exposure to the real estat industry, that's no longer a problem that that industries w are pulling back and i have an idea if you want to private equity firm which are next closure, and that's general atlantic, which is meant to be public next. it's made -- including a major investment and stop what your kids will probably addicted. to watch for the, one i thin will be a great deal for the buyers the second best performer from my didn't wait she champing -- when he just a buddy up to, as they buy aircrafts boeing has been a mess i recent years, but there are tw large-scale meant -- >> reporter: while that hasn't happened yet, it's certainly a possibility. even without a direct turnip boost, boeing stock has boomed in fact it's only had thre down days in the last 21 sessions

huge premium being paid by kkr.k that's done relatively well recently and take it out at a significant premium. that goes back to that story. interesting more of a positive picture coming through, there is a narrative the watch market is slowing down. drawing your attention to what happens with the relationship between high-end rolexes and crypto. crypto was popping back up again. i wonder if that relationship will reassert itself. talking about the day ahead. that's the housing stock. you see the numbers today painting a more positive picture of what's happening in the housing market. we made disabuse you of that idea in a moment. boe inflation, the main event will be the u.s. jobs report. we've got data as well. some instant analysis on that data tomorrow here on the show. taking you back to berkeley group out with numbers tomorrow. we have had halifax data today, suggesting a little bit of a tick higher with the u.k. housing market i think probably suffering from a lack of supplier. kailey: let's dig more into th

it is not just aries, kkr, bill, a whole coast of those companies who do those kind. things there are places where you can look at this besides utilities and real estate, when rates come down. there are a lot of different ways to play it. >> what about financials as a group? some would suggest under owned, underappreciated. >> under loved, under loved, right? undervalued, under loved. everyone is worried about regulation, a scenario where the feds are cutting, ipos are coming back on the market, emanates happening, i think it's a great environment. you have to be picky here. you have to choose your large banks. i think that is a great place to be. again, that is the second, the financials, so insurance, the alternatives, and large banks, the second largest bank sector in the s&p, is set up over here for just a better year. when you look at 2024 overall, will it be another 25% year? all i can tell you is when the markets are up double digits, 75% of the time the following year, it's also up double digits. >> you aren't looking for double digits, you are looking for a s

they went to work at apollo, kkr, carlisle. we like people to get private equity experience.ink that's the best background for what we do. we are really private equity investors investing in the public markets. the temperament of a typical private equity person fits well here. we only own really eight companies. they don't change that often. so this is not a place where a typical hedge fund firm is cycling through the idea of the week or idea of the month. we may do one new idea a year. david: another area investors have been very interested in lately as artificial intelligence. are you investing in things related to artificial intelligence? bill: the most direct investment we have in ai i would say is google or alphabet. we are a small shareholder. it is a large company. it was ai that created the opportunity for us to buy google at an attractive price. basically microsoft and openai had a very powerful demonstration at the launch of a product, and google's launch was a bit of a disaster. the stock got crushed on the basis of the fear that google is way behind in ai. you got

that's good for names like morgan stanley and kkr.trends over the next year. which favors a name like bank of america, which has the ability to more capitalize on the so-called nii trends, more conservative credit exposure, better valuation at current levels. so morgan stanley up fractionally, kkr thinly traded, not moving very much right now. bank of america up 1%, andrew. i'll send things back over to you. >> dom chu with the must watch list this morning. thank you. >>> when we come back, the advertisers x factor for not marketing on elon musk's social media platform. the new data from our cnbc all america survey. reaction from musk biographer walter isaacson as we head to a break. check out shares of boeing. last night, trade publication the air current reported the company has won a key clearance from china, moving boeing a step closer there to resuming deliveries of the 737 max aircraft after a freeze of more than four years. we're back after this. >>> data from the cnbc all america economic survey. it backs up the decision of ad

. >> reporter: that is kkr veteran todd fisher charged with determining which companies get the funds build everything from scratch and put out the rules of the road at the end of february >> reporter: since then, the 120-person chips team led by wall street pros have sifted through 530 statements of interest and over 120 applications some filed just in the last two months the team stays in communication with the applicants during the due diligence process. >> we want a good deal by giving the companies only the amount of money they need to be commercially viable in the long term and strengthen the national security >> reporter: to play catch up to taiwan and the u.s. two years behind the chips act aims to close that gap. dozens of companies have started on hubs in the united states and micron and intel have made promises >> for each award we will be making, we will set milestones construction based or commercial based. the companies have to achieve the milestones before getting the next payment >> reporter: with over 120 applications, the commerce department says not all companies wi

now the nonbanks that their money not from depositors but what is interesting is apollo, kkr, you seeg money from insurance companies. these are not traditional companies, but annuity companies which are retirement providers that look a little more like a bank that a typical insurance contract pure auto insurance would look like. do they get more regulation? they already have state-by-state regulation. what about the products they invest in? that is an open question. will the oversight council broaden the reach away from the banks into the nonbanks more? you can make an argument apollo, for example, is less than $120 in assets while blackrock is trillions and assets. what is a non-bank and who are the regulators going to be concerned about more immediately? alix: i can withdraw my funds at citibank no matter what at any time. if i put my money and apollo, that is like a 10-year thing. is it a time frame they will front? >> that is why they believe they think they can take these marker liquid bets than your average investor could. one source of the insurance companies, now increasingly

and he then served the director of the cia, and he is currently a partner of kkr and chairs its global institute. and lord roberts of belgravia, also known as andrew roberts for year for the name on the book, is a biographer, a historian whose books include bestsellers about winston napoleon and george the third. certainly people that you know, you can think of. i don't him doing something you know something as small as like martin van buren or something like that any time soon. he's he's a fellow no fence smarter than his in his and his ancestors. he's a fellow of the royal society of literature and the royal historical society. and but most importantly, he is a member, a proud member, if i can say, of the international churchill society's board of directors. gentlemen, thank you very much for your time and for being here this evening to with you. thank you so. andrew, i'll begin with you. pretty softball question. how did this book come about? and could i just my reply to that by saying how it is to be back at the national churchill leadership center. you are a great director. the ic

. >>> kkr is out with its 2024 outlook for the first time since the onset of covid.m is forecasting below consensus inflation for much of the next 12 months and says that investors need a glass half full approach to the markets ne year. joining us right now is the author of that thesis, henry mcveigh, he's the head of global macro balance eet and risk also serves as the chief investment officer of the firm's balance sheet. let me ask you this, remind me, what was your thesis for last year? because so many people called it wrong last year just looking at things thinking that it was going to be a really rough year for the markets when the opposite happened. >> yeah, i think to get back, we were actually in the constructive camp. i thinwhat we were saying is when you think about -- there's this intersection of fundamentals and technals and while the fundamentals weren't great in '23, the technicals were iredible. what doethat mean? there was no issuance, there was no m&a so ultimately -- and there's a huge aunt of money on the sidelines, so that created upward pressure.

kkr, shares up 79%. >> remember, this is -- you talked about the business model changing? >> yeah.ic getty came on from aires and the gains in that stock extraordinary. >> incredible. >> it is worth talking about them more. blackstone by far the leader at a trillion dollars in assets under management. >> we have to pivot and talk about these firms much more. fred smith's note, the founder of fedex, he talked about how the money that these firms have, it's worse. >> it's enormous. brookfield is another one. we talked to them a few times as well. the power of these companies and their -- it's not -- they still call them the private equity guys. private equity is so far down the list now. apollo is essentially a giant insurer with huge annuities business and they take all the money and their private credit. >> this is -- these are all middle berkshire hathaways. >> in some ways. >> recently completing an announcement to buy an insurer they took a position in a number of years ago. there's blackstone's christmas card. >>> a quick little update, u.s. steel moved up since earlier this we

today evercore, b of a, kkr and morgan stanley. >> and stanley.is performance has only exceeded by his hue m. i mean, this is a person that came from very humble gatherings and real humble. like humble when you're at wall street means you have only three houses. this guy is for real. >> and not one to be overly self-reflective. i hope we'll get him a little bit more today, carl, because these exit interviews are a little bit different. we won't be focused as much on all the parts of the balance sheets. >> although a favorite exit interview is an exit forever as we now know. >> that's a good point. that's a good point. >> let's get to the markets and talk about yesterday's selloff. as we mentioned, worst day for the s&p since september. every dow name down, first time that's happened since march, jim. goldman today says hard to explain. >> well, yeah, zero day options, they can put pressure. they have been taking over the market. about 40% of all the s&p option volume is the one-day thing, and it can put a lot of pressure on the market. you sell a

blackstone is up, kkr, apollo is only up more than 40. >> it's amazing.e were talking about last hour. the first half of the year, if you had good exposure to private credit, you look at an aries, because they were beneficiarying of a rising interest rate environment because they provide floating rate debt so they're able to capture higher rate debt. those with more exwit exposure underperformed because they're more exposed and they mark their portfolio companies based on what's going on in the stock market. you have a situation now where you is it i will have pretty high interest rates and you talk to private credit managers out there and they say, you know, just because things go down doesn't mean it's going to really impact, you know, our margins tremendously. and then you've got private equity where they say, okay, well, if rates do come down, that makes financing a little more pallatable, therefore we could do more deals, exit more deals, crystallize potential gains, all of that. >> we're not done with the critics saying there's a bubble forming in p

like kkr last week, the wonderful interview of sonali.irement investment will change in the years to come. tom: more conservative, more traditional than the fancy back-and-forth of private equity. lisa: they can afford to be. tom: is there coffee? jonathan: i have been told a rumor that we get breakfast. caviar breakfast. lisa: caviar breakfast? not caviar. ♪ what do you see on the horizon? uncertainty? or opportunity. whatever you see, at pgim we can help you rise to the challenges of today, when active investing and disciplined risk management are needed most. drawing on deep expertise across the world's public and private markets in pursuit of long-term returns... pgim. our investments shape tomorrow today. >> a lot of the optimists have been hanging their hat on the strength of the consumer and the consumer has remained strong. there is obviously appetite to spend come appetite to travel. you're seeing the consumer get out there and spend their money in stores and online. right now, the market is in this place where we are not sure if