#FinanceDaily Banks, $UNH $JNJ $DPZ; Bumble; Getty; Wonder; Home sales

of the words on top of it all. We didn't have a liquid bond market yesterday that meant treasuries in particular. And so we had on the 10 year on Friday, we closed that 5.24% and that's about where we're opened at this morning as Dave Levinson has reminded us the curve is quite flat. I'll just rattle off the numbers for you so you understand how flat, two year, four, eight, five year, five percent, 10 year, five in a quarter as I just said, 30 year, 5.6. So not that much extra risk for decades more of time. The mover is yesterday. I'll just summarize. Fair Isaac, which we've spoken about FICO with Paul at length about the vantage score being a supplement two or replacement for FICO. C saw on FICO yesterday was up 10%. Meta had a solid day up three and a half, Salesforce up about 2%. Bank of America got a double upgrade on its stock I forget from whom, but stock did well yesterday on that double upgrade. And then Cienna, Lumeintem, Coherent, all sold off. And that was really having to do with Hawk Tan, who's the CEO of Broadcom. Making some pretty wild remarks over in the Far East regarding investors in AI essentially being in a casino that mind you, this comes from a CEO that is directly tied to this entire quote unquote casino he's talking about, but so be it. So you'll hear Hawk Tan's comments reiterated wherever you go along with Ray Dalio's recent. This is an awful bubble. This is the worst bubble that we've seen since Dotcom or the great financial crisis or whatever other point in history you want to talk about. They're not getting yet to the great depression analogies. I'm sure we will. Sandisk, down 6%, micron down 4%. In pre-market this morning, a very unfortunate incident at six flags in Atlanta where someone died falling off of a roller coaster, has that stock down 8%, six flags, closing roller coasters across the country at various parks. The big winner, and I'll get to Andy Kaufman who we haven't heard from in a while, but I'm so thankful that he's here today on the opening of bank earning season. The big gainer this morning is Goldman Sachs, which really did well in connection or in relation to the expectations both on earnings and on revenue. JP Morgan came in generally flat. And I have a bunch of other stories relating to distress, but we'll get to that in a little while. Andy Kaufman, good morning, welcome. You're allowed to fill us in on everything that you've missed from the last time you were here until today. And then please go ahead anything to say on Goldman. JP Morgan, we also get this morning city and Wells Fargo. Please go ahead. Hey, good morning, I missed all you guys. Good to be back, good to be here. Lots happened, right? It's been almost two weeks since I last been on and the world keeps moving so much looks so different and yet so much still looks the same in many ways. It's interesting as I haven't seen all the earnings, but as I started digging into Goldman, I think the big story is everything equities look good. Investment banking looks strong, but the fixed income side was weak, which I think makes sense, given there just hasn't been as much volume in terms of trading because there's been this one way move higher and everyone's trying to say, well, what do I do? Where do I position? Where do things go? The last two weeks I've been in a mix of conferences, client meetings, prospect meetings, you name it for about two weeks straight. And there's two major themes and we hit it really hard in the show. So everyone who tunes in to listen, keep tuning in because we are spot on and David and the rest of the panel is on everything that's topical, but it's really the level of interest rates, the trajectory of interest rates in AI. And what is the AI exposure? And what is the definition of AI exposure mean in the portfolios? And I think that's kind of the biggest thing that I took away. The level of interest rates, there's not much to say. I mean, if you look at the bond market, we've been in a bull bond market for almost 40 years. So this movement and rates and this movement are where everything is. How do you sit here and tell anyone, this is where it's going to go or this is where it's going to stop. It's really hard to do. I think the biggest thing is when you look at a portfolio, and many of the people on this, I read through some of the comments, not every day, but here and there, they want to know, well, what am I supposed to do? What am I not supposed to do? So first thing is, this isn't financial advice, but this is how I look at the world. Is this is a great level. If you have excess capital, you're trying to deploy a dollar capital, at least 40% of that, if you're saying, look, I want it to be in fixed income. If you're going to the old 640 model, even if you're going to a 620 model, with 20% fixed income in 20% in alternatives, or real estate, this is an excellent level. You haven't seen these in a long time. You're able to get really high quality fixed income, put it in a portfolio. And if rates move 100 basis points higher from here, you're still going to get a lot of carry. You're still going to perform well. You're still going to pay off a par. And if rates rally, which I think that they should, at some point, because I still think that we're the place where excess capital has to go to get high quality fixed income, especially if you look at a lot of the European rate levels, and how much that they've moved, if you look at Japan and how much they moved, this is still where you want to be. They you're going to perform extremely well. So if you're taking that 20% allocation, and you want to leg into part of the trade, and you're saying, I'm going to put 20% here, and you put some other stops, or some other points of where you put excess capital in as rates may move, I still think this is an excellent level to get some exposure here. The one thing that I'm hearing though is around AI. And the question is those that don't want AI, they want to know how deep are you looking at your portfolio and where's exposure, especially in fixed income? And I think that's really what is the definition, and that's the hard thing to do, right? The easiest, do I have exposure to hyperscalers? Do I have exposure to SMIs? Where is that coming in? But then the next question is, oh, do you have new needs in the portfolio? If you have municipal, what counties are they in? Where are they exposed? They have data centers in there? Are they getting benefits? Are they not getting benefits? How are you looking at that? How are you defining it? And the truth is, right now, we don't have a true definition. Every data center is different. Every build out is different. Every exposure is different. Every payout to a certain community is different. Every use on the grid is different. So it's really a one-of-one, and it's really like you got to do your homework and dive in. And we're building that out. So at my firm and how we're looking at it and how we're trying to work with our clients and let them know whether they want exposure or whether they don't want exposure, it's a lot of work. We're still in this nation phase of how we're defining a lot of things and how things are going to come online. One of the cool things was, was it a board meeting at Penn State University last week, two weeks ago? I don't even remember at this point. I've said so much travel. But I went and I was able to see a nuclear reactor and how it operates in the test. It's one of, I think, five or 10 universities around the country that has one. They're actually building a new one to test some of the new small modular reactor going forward for a lot of these entities. And you look at the power that it takes. You look at the water usage and there is ways to do this very efficiently, very safely. This thing was one of the first nuclear test nuclear reactors that was built in 1955. The president at the time was Eisenhower at Penn State University. He happened to have a very famous brother, Dwight Eisenhower. So that's why they got the nuclear reactor and they've been running tests for almost 75 years. So there is ways to make this and to do this very efficiently and safely and the technology continues to improve. So it's going to be very fascinating how a lot of this technology moves going forward and how that's going to potentially change a lot of how the work goes around safety, energy, production for these data centers moving forward. So I'll turn it back to you, David. That's a lot of what I've been looking at and working on for the last two weeks. Outstanding. Thank you Andy. Appreciate it. And welcome back. And on energy and I'm sorry that Anna says in here to chat with you about nuclear. But for the audience knowledge, for those of you that were with us yesterday, you know that Anis is in Riyadh right now. He is speaking currently at the conference so he will not be joining us this morning if we all of a sudden lose half of our audience. I get it. I think we all get it. But please stick with us. I think we're worthwhile regardless of whether Anis is here or not. Carlo, good morning. Let's shift gears for a second. If you'd like to go ahead and touch on data centers, AI and so forth more than welcome to, but as well, wrap in crypto, please. Good morning, everyone. Welcome back. It's good to have Andy in the house. I want to carry over on what Andy's talking about and this general idea of the VC cycle when it comes to AI. I think people are missing. And that is the topic of today's on chain record newsletter that I put out. I think that people are missing a growing trend line and a VC cycle that is about to explode. And that is the building out and the financing of the plumbing for this on chain economy, this tokenization of all assets. What prompted me to write the article was an announcement by OKX that they got a massive infusion of $25 billion pre-money valuation and the cap table for that consisted of circle, ripple, cube research, SC ventures, standard chartered, and all on the backbone of the New York Stock Exchange is a recent infusion and joint effort to bring tokenized stocks onto the New York Stock Exchange with OKX. It reminded me of what Larry Fink said a year ago in Riyadh. And just how fast things are moving, Fink basically said, we spend so much time talking about AI. But he went on to continue to argue that little attention is going to how quickly every financial asset will be tokenized and how rapidly all of these assets are going to be trading 24, 7 worldwide on markets. And I think that as much as AI is scaling and people are talking about a bubble, people are talking about it's been overbuilt. I tend to think that that's going to be absorbed because this is essentially the biggest technological innovation that humanity has ever seen. And it is going to disrupt labor and how we work. But I think on the opposite side of that, the tokenization of all assets and the movement of all assets on chain is going to just as much massively disrupt markets around the world. So that is the thesis I'm testing. Crypto went red last night pretty much across the board. It's starting to rebound this morning. I don't think there's any major announcement that triggered that I can see. So I think it will rebound and continue to chop along as this thing continues to build momentum. Before I hand the mic back, I'd love to get Andy's thoughts on what Bessett and Treasury have announced with this proposed plan to end the 20 year. We saw the 30 year go that way. It seems like the long end is disappearing as part of the Treasury strategy. And I'm wondering how that impacts people who have that 60, 40 allocation because it seems to be. And this is probably a tag team for both Andy and Dave Levinson. But it seems to be that the short end is picking up the momentum and absorbing. And the long end is being phased out. Am I right in seeing that trend? I don't think you're wrong. I don't know if you're 100% right. That's fair to say. I think the real piece here is that that 20-foot year part of the curve is just a natural orphan. I was surprised when they even brought it back in the first place. When I was a Black Rock, one of my first bosses was Peter Fishert, the guy at the Treasury who got rid of the 30 year, in terms of, sorry, the 20 year, originally, and talked about getting rid of some of the other pieces. I just don't think there's a ton of liquidity. I think that if you're a percent and you're sitting there, does it maybe help because there's not as much to push around at that point from a technical standpoint? Yeah, but from the standpoint of if anyone does want the 20 year, is there a ability for them to continue to fund the deficit by issuing? If it was me, I would get rid of it. I think liquidity is king when you talk about treasuries. If no one's paying attention and no one's there, I think it's just another way for bond vigilantes to push the market around when there's not a real kind of story to behold at that point. There's not natural liabilities there. I mean, some roll down if you look at the market. I mean, I've done a lot of work. I've worked at a, you know, ran a bank treasury, et cetera. I've worked and managed tons of insurance assets. It's not a natural resting point.