Go Eff-TC & A Conversation with CME Group’s Terry Duffy
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Visit eye connections that I O A very warm welcome to the undertaking podcast. I'm guy adami, always joined by dana and dan. How are you?

I'm doing great guy Tommy.

Dan is we? You tell the audience .

why you aren't glowing. We won the financial face of prom team risk versa, which the way they through away standing cup champion as my partner instead of you guy. But this guy, dave bowen, to one the cup for the black bucks.

So I knew when we were getting close we would probably went. So leona aye was our pro. We finished for. I went to a playoff ff, where the other team had ney corta, and we were given lady a co for the one hall playoff, to which we then emerged .

Victorious before we get into the nuts and bolts of this pida. Ast, how did you play grade your trade? As they say.

I did not play well, but I had my moment. You know, it's a team effort is a shame bowley roll over the place. I made some big puts and I felt like I rally the team. I felt like I pumped us up enough there at the .

end that I will tell the audience that in the day is leading up to the I was completely in dani moses, he said, telling him that was going to have the ips to work on his driver. Maybe he should leave the driver at home. All those things in an attempt to basically loosen you up and clearly denied my reverse psychology work so well.

I had the ips. I had the ips, and then I found the bloody mary bar on whole sixteen. And things got loser from there. So thank you guys.

Well, this is a fun podcast because danny was down in a ples with us then and I were also there. We have the opportunity to interview Terry duffy, the city of cma group. So stick for that because they take far range in conversation with aria. And I think we really enjoyed IT, but I think we've been doing this podcast now for what four years have we ever mentioned the federal trade commissioners? Do you think in that four years other than passing dc here and there?

But I think I know where you're going in here is that for years IT feels like for decades going back to microsoft, right? We've had regulators trying to rain in the practices of some of these large tech companies.

And just really astounding, when you go back to the nineties and they are focused on microsoft and then putting the internet explored on there, I think about how this is coming full circle, right? So microsoft was getting threatened to be broken up because they were jammed on internet. Explore in the late nineties under the Operating systems. And here we are now. In late twenty twenty four, the ftc is trying to get google to spin off or sell their browser chrome.

And it's amazing about google. I mean, again, this is a trillion dollar company. So IT obviously reached the ranks of the trillion air long time ago. But this was the stock then that topped out back in july, not unliked. By the way.

Microsoft, I don't want to make a huge deal out of this, but that was the stock company in all time high around hundred and ninety two dollars as we're sitting here today trading about one sixty six. Now with that said, I did bounce off that september law, which was about one forty five, but stocks are training particularly well nors microsoft. And we LED with this because, you know, danny, I think this could have some far reaching effects. Like I don't think whether not leanna kind stays or goes, this is something seemingly out there in the either.

I think that gives people an excuse again to sell some these acts, which are run a little bit and grow my anywhere between thirty, twenty, thirty, forty billion dollars. You point out the total market cap, it's not important, but IT is a big engine within the company and IT does highlight the risk. And listen, you could argue this comes have naturally got ten bigger for the most part and hasn't been through a lot of back musicians.

And so ency on the side of people's, oh, you should stay away. But as a consumer and especially with the abbot of A I and not just is the market top heavy in terms stock, the technologies top heavy in terms of who controls IT. So I think you will watch just the right questions to be asked.

But again, if you're forced to take a look at the company for any reason at all, you then look at valuation. And when you look at the valuation on something big, it's an excuse to sell. I don't know what's going to have happening with the change of administration, but we know that jd. Evans has some more reviews to lean a console.

Just leave at that. yeah. But in this situation, that really isn't about valuation. I mean, folks have been making the valuation argument alphabet the whole time as this headwind had stuck out.

And it's basically would say maybe one of the reasons that traded at a discount, too many of its mag seven peers is because of this overhanging, but a lot of habits. So google is down five and five percent today. Do that math, right? So it's three hundred and fifty billion dollars in danny.

You just said maybe this thing is thirty billion dollars when they sell IT off. So I think a lot of investors are probably projecting a little bit. What does this mean for some of the other issues that the ftc has? And you know all to see this, amazon is down two and a half percent on the day.

This is a day where the market is kind of screaming a little bit, especially after apple unchanged. Meta, down about one percent. These are all in the cross hairs of regulators right now.

So maybe this sort of remedy gives some teeth, guy, to your point, little ism. Lee comes out into danny's point. We know that there's any in the new administration coming in that actually wants to keep the pressure on mega atteck.

That's exactly. And I think that's supply. Whether he stays or goes, one has to wonder if this is going to be a continuation into this new administration, which seemingly is counter tube would think you'd be more business friendly and maybe uncertain set of circumstances they will be.

But when IT comes to tech, there is seemingly a bit of across hair. So we bring IT up. We've also spent the last couple of weeks sort of hideous ghin and getting ready for the invidia earnings release took place on wednesday of this week.

And i'll tell you then, you spoke to this, the market was implying the option market was implying about an eight and half percent move, which are the three and half trillion of our company is approximately a three hundred billion dollar move, which, you know, we throw around seemingly like nickles. But for context, there only thirty five or forty companies in the world that are that big in the first place. Now we didn't get the magnus de of that movies.

We're sitting here on thursday afternoon. We have a stock trading either side of unchanged to slightly higher in video did make a new all time high to day thursday of one fifty two eighty nine. But the market reaction in is muted at best. So it's up about one percent.

I think that it's lose shortly after the open and IT moved up four percent or something like that. And then I had this huge swing, you know, did down about three percent. Here we are, up about one percent.

I think the bigger story though, is what's going on in this kind of general AI ecosystem on a day like today, say, okay, so microsoft down, amazon is down, google down, meters down. That is basically fifty percent, okay, fifty percent of in videos s revenue. So i'm thinking of this through the lens of investors, right, the way they're expressed in their views.

Now on the flip side of that, i'm looking at dell is up four percent super micro, which got a shout out despite all the problems that they are having by genson wing as a trusted partner. I think unlike seventeen percent, look at the memory, this is micron is up four and half percent. I mean, we can go around even some of these equipment makers that got absolutely destroyed aimed is up four percent. That was after their results last week is rilling. So again, it's kind of interesting how money is moving out of these mag seven names, moving into the specific names in around this kind of A I build out which to me, listen, the fact that the market can rally on this with those five big names down IT makes a case for the broader .

out of the rally. No, it's impressive. But you know, in video talking about sc, I being a trusted allier, whatever term they use a trust apart, yes or no, but I trust apart. They still trying to find somebody to come in and audit their financial.

So they will see how that sort of place up, ending what thing you've talked about for a long time and you've write, I mean, there's a secular growth story going on right before. Very the trick to this whole thing is to figure out when IT becomes a secular growth story to a signal story. And I guess in terms of invidia, this report probably did nothing to ano damp in in the enthusiasm around the psychotic grow story. But i'll tell you around the edges, the magnitudes of the beats and racist, although the numbers are bigger, the percentages are smaller.

I think the stock is. Telling you that today. And so is that a sell on this maybe is IT a short on this?

I don't think so. Is IT by probably done at this level. So IT has to keep growing into this multiple that IT has, and that is a supply issue, not a demand issue. And if that were to change, then you get to rerate the entire company. So again, you're talking about north of a three trillion dollar.

And just to go back to what day was talking about, just in general, of the government cracking down on kind of big tech, yes, these names aren't more expensive than some of the other names, but they're still expensive. Their historic multiples and IT is healthy to see money come out and go directly y into other areas. And yes, they gave a shout out to sc.

I as a trusted customer and they did announce that video is going to be obvious the order or going forward for C I. Again, I don't think that's the way it's going to play. The secret trade to dance point money is finding its way other pockets ts within there.

And so when you look at a name, or just point out like snowflake, which we can talk about, who put a new CEO and showing the growth that they need to show that dream a dream a little bit socks, still not back to near at all time high. But again, an excuse to own a company, you might be on a path and citing the deal that they did. I visually with anthropic that did just kids, people excited. So a lot of time is trying to position themselves and having had had the run that some of these other companies have. And I think that's what you're saying is a rotation out of, you know what we know is kind of finite and then what the hope trade might something yeah.

this is no question. We've to actually talked about snowflake all over this week, market called in and we thought we were looking at what could have been embarrassed to bosh reversal, and that played out. But the point being a dani saying that, you know, this stock is nowhere near its prior high, and I don't think we're going to get close to that anytime soon.

But what you're seeing here, I think especially across a swap of these names, is a sort of renewed enthusiasm around the software space. And you know, maybe names that we're left for dead in the form of a snowflake is picking up so many again. And the question is what point is valuation? And again, in the way, again, but clearly, there's something going on in that space.

Yeah into your point. I mean, snowflakes up thirty three percent on the day is still down thirteen percent of the year. Adobe, still down fifteen percent a year.

Db, which is up a lot of database company, is up today, twelve a hf percent, still down twenty percent of the year. I think you're seeing this move out of some of the hyper scales and are trying to find other places. And there was a quote, microsoft, actually they held this kind of user conference. He was called ignite.

And we're going to put this tweet from Daniel, from Daniel investment company in the shown nodes, but then wrote this IT was a quote from the microsoft CEO that would be set nadella, a ignite said amongst a very ub presentation the delay this just in the last multiple weeks, there's a lot of debate of how we have hit the wall of scaling laws. It's actually good to have some sketches ism, some debate because that I think we'll motivate, quite Frankly, more innovation. okay.

So now they're talking their own book right there. okay. So the risk what he's talking about is a lot of folks who are using their AI models and top of their public cloud are kind of hitting a wall is far as the productivity they're getting right from implementing this technology and then had a really good point.

So while i'm optimistic over the next several years on the A I build out, I have also been thinking that there will be a temporary A I digestion phase for the industry of the first half of twenty twenty five due to R O I that would be return on investment concerns. Now this is something i've talked to. Danny's been on OK computer with me.

But if you look at two comments that have come out, microsoft first, they basically talked about being capacity constraint. What danny just said is the demands there, right? But they haven't built out enough capacity.

This is also what invidia has been saying. I guess the point is you say that enough. At a certain point, you said yourself, okay.

What is underlying here if the rally is kind of the issue, if we do see a pullback in sort of cab cks budgets because sales start to decrease, doesn't have to be sales associated with A I usage on their cloud at forms at some point to dan niel this point, you're gna have this digestion phase and that's when you have a stack like in video that is still at all time hires. And it's basically ninety percent of the enthusiasm about this A I trade at this point in the year. There's some risk.

That guy, no question. I know again then any talks about this? You've mentioned that as well.

This is a sector that is extraordinary cynical. We're we're obviously not at that point yet. But danny, I would just admit it's almost by definition, a matter of time.

I guess the trick is trying to figure out and trying to sort of game IT out when that's gonna en. And i'll tell you mean this quarter, forgn video was fine. This nothing wrong.

Their margins are holding in there without question. I think there's some hope that next year, they'll do north of two hundred billion dollars of revenue. And you can start to do the math around what that suggests in terms of revenue growth and Price to sales and those types of things.

But now there is a precipice coming. And when IT happens, you know, you don't want to be the bag holder in some of these names. But again, the trick is to try to figure that out.

The animals is, you have a bunch of these names, two to three and half trillion dollar type companies. Everybody already owns them. The majority people are overweight them. I said, so it's very hard and criminality get an incremental buyer at this point that can start to look out and get excited on valuation.

The stories kind of playing out like IT is supposed to not saying they going to sell up, but that's really all this is as relocation into what people believe maybe smarter investment choice. And like I said, I believe you're seeing people short these names yet, right? This there is a lot of scar tissue trying to do that, obviously, but I just think we're seeing a little bit of a reset. And as we roll into the twenty five numbers, I think in video in particular and some of these games are going to turn into an actually show me story at these levels, and that's what I think is happening yeah.

I think that's probably why the stock is not up at nine percent. Plant move that we saw the aftermarket because again, I just think the beats are getting harder to come by as a percentage of what they were doing, let's say, a year or eighteen months ago. And I just want to read this is kind of interesting.

This xs, they are quoting a goldman sax piece and IT speaks to the concentration that we've been talking about. And i'll just see this as I look at microsoft, look at google, look at apple, they underperform the S M P and the nasdaq meaningly this year. You know if europe nineteen percent and you're those names and you have announced that ncp up about twenty five percent, that's a problem.

The golbin note I thought was really interesting here. The group of seven account for more than half of the fifty seven percent rise in the S M. P.

Five hundred over the last two years. We know that NVIDIA this year is twenty five percent of the S M. P. Five hundred gain. So they're talking about what ford performance looks like in twenty twenty. The seven sex generated seventy six point three percent return against thirteen point eight percent return for the others, about sixty three percent point difference in twenty twenty four so far, the premium return gap is twenty two percent points in twenty twenty five us equity. Goldman expects the premium gap would be a small as seven percentage points if earnings growth cools.

So I guess the point that I want to make here is that all those folks who are expecting a badding right next year to keep that expected return, you know, like willem is out there, couple others who are expecting eleven percent gains year over year in the S M. P. Five hundred on thirteen percent earnings growth. That seems totally fair, but you're going to need a lot of these other sectors to pick up the slack if you're only going to have a seven percent differential between the max seven and the rest. S M.

Sort of switch gears here. I find this fascinating as well. We woke up this morning or at some point over the evening, and when I say this morning, again, this is thursday that russia launched A I C bm at ukraine.

So an icb m is an international tal ballistic missile. Some have ranges, I think, up to about six thousand or so miles, others or maybe thirty four hundred or so miles. Now that in and of itself is shocking.

The united states came back and said, you know what, IT was an intermediate range ballistic missiles. So I think they're trying to sort tamped down some of the writer. Regardless, it's a big al now historically ally.

If you had told me that would happen earlier this week inside of k, guy, where's the market going to be I said, all right, i'll play this out with you. The S. M, P, let me down.

About a hundred handles. The vx is, can be north of twenty five goals, can be up anywhere from fifty to seventy five. You can go on and on and on and bind neels, by the way, will go lower in the form of a flight equality.

So Daniel, we're sitting here. We're looking at ten new yields, still around four point four three percent. So something doesn't make a lot of sense here to be.

Clearly, the market is discounting what I just talked about. But this rise and yields is in the face of a lot of things. You should be actually making yields go down. Thoughts on that. Well.

you could argue that without what's happening, yields would be way higher. And where is huge technical level on the two year as IT went back above four point three? And if we get above four point five in the ten year, youll, see IT.

So I could argue that IT is being Priced in because the economic data continues to be strong. You think where the rich should be moving higher. So maybe IT is you're seeing IT in gold.

You're seeing IT in bitcoin a little bit here right in those areas. And I. Are not seeing in the vicks.

But I feel like the market is just not looking where they should be looking protecting. I think the fact that these missile can these are the ones that can Carry nuclear bombs. That's why they're so important to talk about.

And so I don't see any these conflicts around the world debating, unfortunately, anytime soon. So you have to start to think about these things. But to your point, how do you how do you use that in what you're looking into the markets? And these markets for the last several years have been so kind of just immediate gratification.

What's right in front of me? No one thinking about the longer term of things and you're going to wake up one day, got forbid and something to give excuse to sell. But I do think we are seeing a guy in various products. We're seeing IT in the airspace defense talks to a degree which I have brought a bit. So you're getting pockets but nowhere near guy to your point of what would indicate something that's imminent or people that are really concerned?

yeah. And again, this might be a sort of situation that we're seeing in israel and gaza and lebanon, where certain things getting dialed up in the last kind of weeks of this spite administration. And when you think about how a you think about putin, they would be perfectly happy to give president trump, or or soon to be president trump, you know, some sort of win right right out of the gate.

And this kind may be a little bit of a tit for tat. And you think about the way that russia has just died up in the last week, they changed their nuclear doctrine. Then to guy's point, they are sending, even if they're intermediate I cbm day.

You just said these are the search of warheads that you can put nuclear bombs on. You know, it's probably one of those things that will obey. I don't see like any of these situations really testing trump very early, at least in the first few months.

But the other aspect to this is, I think, really important. Leading up to the election, we heard that huge surrogate, elon musk e for trump had been on calls with putin, you know. And since the election, he's been on calls with putin and linski.

Listen, hopefully there are some good result that could come all of this. But I guess is right now, IT seems like things are only getting ratched IT up. And let's hope that they cool down soon into the trump s. administration.

What we're going to find out. And danny mentioned some of the bouncers and era space of ten stocks. By the way, those were the same stocks that sort of got waked on the back of the announcement of the new secretary of defense, pete hegg, set that we go back and look at a lucky Martin, for example, and that a dramatic move lower.

Some of these stocks are sort of bouncing off what I think are all the same conditions. Now if you listen to the undertake podcast or market call, you've heard Daniel sis now for years talking about walmart in the reasons why he was bullish of. And we've sort of picked up that lead as well.

And I think collectively, this is a name we ve gotten our arms around as we're sitting here on this thursday afternoon. You have walmart, which made in all time high, and you just oppose that with a name like target, which is making a fifty two week low and is in danger of making now a multi year low. So target, I think a lot of ways is target specific then and you know, I all stand by that.

I think they're terrible Operators. I set IT on fast money earlier this week. But the fact that now wall mart, seventy five percent of their customer base earns a hundred dollars or more is really interesting to me. And I think that speaks to this trade down that we ve been talking about for a while.

Yeah, I mean, it's not just the trade down, right? So that speaks a little bit more about the us. consumer. We talked about this kind of a shape sort of economy, right, where you know the low end is not doing particularly well that any can speak to, like audio did. Linux is ticking back up.

But a name that you've talked about, guy dollar general, is making multi year lows calls, is not trading particularly wealth also at your laws. And then you have this trade down. I'm in walmart.

The one thing i'd say about target, I think this is kind of important to keep your eyes on. They have guided up three months ago. They guided down and miss. This quarter, the stock was down twenty percent. Yesterday, they were kind of blaming and on inventory relating to the stuff that they bought out in front of the expected port strike a couple months ago. Well, I read a headline this morning that we're seeing the same sort of behavior now in front of potential typhus, right? That may or may not come in the trumpet administration, even the fear of IT. And you say yourself, well, if they don't come and you have all these retailers loading up on stuff, right, because they don't want to have to try to pass through the cost to an already strapped consumer, are we going to see in late April when folks are reporting q one result, massive inventory issues? You know, as far as some of these retailers to dani, i'm just curious what you're thinking because that seems to be these retailers on the lower end who are seeing an amazing amount of discretion by lower and consumers right now, largely because of inflation.

Just to kind to close the looper and wall Martin target, the wall mart story has been when grocery Prices were so high and gasoline Prices were so high that the walmart consumer would come in and that's where they would buy the cheapest groceries. What happened? Grocery Prices came down.

Fuel Prices came down. They stayed anyway. So they ve got to directionally spin, which has worked.

Argo miscalculated, in my opinion. The e commerce business at walmart has been exploding now for years. The advertising businesses doing well.

As a matter fact, they committed that e ers will now turn a profit, and that's a lot of money of this been invested. And walmart has one hour delivery and three hour delivery now. So they are completely holding on our amazon.

So I think you're getting a multiple expansion. But target, to your point in to come out three months later and miss every financial target should be scared to people. So at some point, target will have its level.

I think there is a time to specific. And then to your point, I think this is a level of the consumer on the lower end, which can even reach up into the wall mart area for whatever reason. And you are seeing that type of attrition occurring in those people are struck. So you're seeing just like an every other sector, a by vacation of winners and losers that's going on. So I think this trends going to stand in place.

They're for a while. And and just to put a bowl on all that know, i've talked about this for years day and you know this and then you do as well. This cases in between the have and the have, that's in this economy that you are the middle, the lower class, you getting squeers in a major way.

And then on the other side of the equation, you look at a Williams 3 oma， which on the same day that target basically was down over twenty percent, again making a new fifty two week low. You have a Williams sonoma, which, by the way, of twenty billion doll company trading up the commentate, same amount pretty, and making a new all time high. So you understand, I think, why people are so a flapper gas about the economy when you can see on one side people doing so well, on the other side, people not.

And you can trade that, by the way. And we've been trying to point out how you do IT. You do IT in the form of costco, which continues to perform, and walmart, you avoid names like target, which are middle. You stay away from the lower end and you try to find some of these higher in names that makes sense. And that's been sort of the trend here then.

Yeah, no doubt. I mean, this gonna a tough one. You we're expecting a very promotional holiday season.

I know if you guys noticed this, like right after halloween, I started getting black friday emails from from no shortage of retailer. So that will be an interesting one to track. I want to hit something really quickly.

And this is not to dump on tesla, elon. This has to do with the thirty five percent raley since november six, since the election. And obviously, going back to elena connection that he has with the trump administration, I heard one of the most interesting things.

Okay, read in the information today, this is in their electric column does test so really stand a prospering from the trump presidency and and this is i'm just I don't mean to put two final points I think is really interesting because I haven't heard anyone say this is the tesla ventures that wall street investors most expect to prosper from White house favor. Artificial intelligence plays such as robot taxi, our long shot bets that rely on technological breakthrough, then friends in government, the trop administration can loosen federal oversight of autonomous vehicles. But experts say text, as far bigger, obscure, is getting itself driving technology ready for the road.

And this is a quote from a university, south CarOlina autonomous vehicle expert. Any suppose of regular ory hurdlers are remote and trivial compared to test us technological hurdles. Guys, help me think about that a little bit because a lot of people have given IT, you know like a much higher probability that robot taxi and full self driving force is going to get there. But it's not about regulating, it's about the technology logy.

right? And so we've mentioned this point that we o is working off lighter. We don't know of lighter skills, but it's certainly worked right now because they're in four different cities.

What we know though is that the regulators have not approved text, less full self driving, which is one of the building blocks for them to get to otto and this robot taxi. And that was one of the big reasons why people are willing to pay one point one trillion dollars in market out for this. So again, I don't need to put to final point in this. I just think it's really interesting that, that some of the narrative, especially after a thirty five percent rally in last two weeks.

it's a great point in again, I I don't think people are thinking that way right now for Better, for worse and supervisory fsc, whatever that really means. Obviously, as could be rolled out even more with with the next version. And when you read the ipad this morning from rome, swami and musk about heller approaching the government efficiency program, I mean, they're you're talking about literally in him.

Effectively, when I am, i'm talking about musk e slice and dice where he could potentially gain the most. What would that be to your point in to be the nitzsch IT would be the ft C2Be a l ot of the se are a. So again, part of this lift in tesla has just been to make the current investigation is just proof go away.

That's a big deal. There's a ton of overhang with the things he's done, twitter things tested, the epa stuff in texas on with space like. So I think that's far of the lifting.

And your point can to get to the next level from IT. I don't think he's thinking that way, but he's in a position where people are believing that he can. And so I as I said last week, as a consumer, forget that its text l forget that its mask is just company X, Y, Z.

You should be concerned potentially, that you could have something that unsafe on the road you wanted in a plane, you would wanted in a train. And if your choices to not want to own those cars, you're still vulnerable because other people may be not driving that are and it's an autopilot. So you're right, once the smoke clears yourself, people take deeper. Look, I certainly hope that smarter color heads prevail and make this up to standard what he needs to be. If indeed F, S, D is gonna, you know, the result of this .

getting back to the stock real quake one bern was see all this week. I think Becky quick interviewed him and obviously he's been a steadfast and staunched ed tesla ball for quite some time. For context, sector just went back above a trillion dollars a market cap over the last week or so.

Rn bar thinks it's a five trillion dog company in the next ten years, and elon mosque has said publicly they think the thirty trillion dollar company at some point as well. Now pying the sky stuff I know, but I wanted point IT out because there are other sides of this equation that people are looking at. Obviously, Cathy wood share some of those sentiments as so it's fascinating and see if you're training at home.

It's a pretty fascinating levels here right now. You know, it's sort of flatten out around the sort of three forty level or so. Again, the prior all time high in the stock, just so were on the same page, was probably done in november of twenty twenty one. I think you've got over four hundred hours is to share you know Better than I but here we are yeah .

you know one thing I want to say, and dad, there was a great point about you know what elan's project ves might be with this dose, right? Like I think all of us could agree. Think about deficit spending the way we're doing.

There's probably a lot of that to be cut out of the government, right? We think about elan when he bought twitter, he didn't want to pay forty four billion, okay? And so we use force to do IT.

He gets in there and he cuts seventy five percent of the workforce, right? And so a lot of folks were like, it's going to break. It's going to break.

Will still here, right? IT might be a slightly different product, is far less profitable. I don't even think they were get profitable at the time. But again, if they can do cuts in a way that doesn't look so advantages to their own interest, that would be fantastic, right?

The one thing i'll say about this though, and I totally miss this, and I started to get IT this summer, the business leaders, whether they were in tech, whether they were in finance, whether you were in private markets, public markets, whether you are in bator, only mean in the public markets or a start up founder. This was an overwhelmingly consensus view, that the by administration had overstepped in only every which way. We started out the conversation talking about some of these big cap remedies.

A lot of that was started in the prior trumpet administration. So let's be clear, but in the cod, for all sense of purposes, are no nothing trying to make her name by raining and big tech. Know you think about what are our national champions? They are apple, they are amazon, they are google, they are meta.

You know, when you think about the innovation that we've had in this country over the last twenty years, really since the internet has been harness and these businesses, uber, they've been created out of nothing, right? And so the fact that some of these regulators wanted to kind of burn IT down to the ground and break up these companies and forward innovation, it's a lesson that honestly took me too long to figure out. You know, I mean, and just think that's a really interesting thing .

I going forward that no question and and listen before we get to the conversation with Terry off and you make a great point. You know, sometimes you get bogged down in the weeds and IT almost requires you to take a few steps away and try to see the force for the trees. And Better late, the never, I guess.

But i'm guilty of that as well. And what's interesting to any you know, you've brought this to us over the years and it's something that I knew, but I know more so from you. Short play a vital role in the marketplace.

Say what you want, but IT was genuine of twenty twenty three. The hindon barge put out a report about, I think I was at ni. You know, this guy got on ed.

ni. So is, I think, the richest man in india. By the way, I got a lot of texas weeks from people thinking, IT was me.

Somehow IT was not. I mention that because IT came the formation that probably took longer than they thought. But here we are.

They also put out the report on S. M. C. I, as well. So just explained the folks listening .

why this is important. And I went, so again, the whole interpret, this is from genre, two thousand and twenty three. This actually was not on the radar screen.

But you can, I was argue, if the culture of the company itself is dirty, this could end up happening. So basically in corrupt practice that they were driving officials in india to win contracts and raising money from U. S.

Investors in doing that. So there is the crime right there. Stocks still not back to the levels of when henderson came out, but IT does point out, you can alert investors about what's going on in a certain type of they.

Listen, it's a forty billion U. S. Market equivalent and now dropped to thirty. I don't know how this whole things gonna play out. Sc, I those were relevant issues to what handbag was pointing out is still playing out. And in real time, stocks had a little bit of rally here.

But again, I think a lot of sure reported cast out there are just try to do IT to make money, but a lot of these aren't. And hindi burg does the work and a lot of names, and it's kind of work pointing out and all say, one last thing go on, received eighteen years, is found guilty. And archie s, to find the office.

And one thing you never do is cross wall street. A lot of wall street lost money. somehow. The legal system doesn't care as much about when individuals get hurt.

But if you mess around with the golden sax or Morgan, C, J, more, you're ready coming at. So eighteen years is a wake up call in general. So you want people police in the staff to protect everybody. So little a bit of legal news in the miss of all the other .

stuff going on this week. Well, one thing you should absolutely do is stick around, because on the other side, you can have a conversation that danny then and myself had with Terry duffy, CEO of C. M. E. groups. So stick around folks.

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I've been blessed sed to have met hundreds of people over there eighteen years now if we make IT the january eighteen years doing fast money, and I said IT before in one of the panels, i'm biased, but IT doesn't mean i'm wrong. And of all the CEO, I met women at the top of the list in terms of stewardship, in terms of respect of your peers, love of your employees and your teammates and admiration and adoration of your friends. I mean, I scarey. You're the top of. Once again.

thank you for join us and tell me thank you so much to come as a little over over the top.

No, it's well, it's over. The tight happens to be actually true?

no. And well, whatever. Thank you for that. You've been a great friend and what you've done for the industry, making sure from your career golden sex and then going forward about talking markets, educating people, you bring a look a tremendous amt of value, uh, in your everyday life. So I know this was having you host my panel today with those three gentlemen and bringing that expertise forward, everybody in that rumors smarter after the last forty five minutes and they were prior to walk and in there. And that's because of your leaderships are thank .

you about the conference because you back after a while and you this was obviously labor of love and something you feel strongly bad. And i'll say this, your team is an extraordinary job putting this together, its first class. And there's an excitement in the rooms and in the hotel, so speak, to sort of what your vision was. And if we're sort of approaching what you .

thought that would be, yeah, IT was to have a conference where you didn't have to attend to be attacked by you know a hundred different people selling you their products. I wanted to have a conference where people were here to hear other people that would make them Better in their everyday business, not to sell them the latest software. So every conference you go to, and I won't name names of conferences, but we've all went to them.

And all the people that are running round, I mean, business cards is prominent, as I used to be, but they were literally poker chips line around back in the ogles conferences. And that's what people are trying to do. So I wanted something more ble tiki.

I wanted something high end. I wanted people like you guys are. I want to people like the panel we just had. I got president and push coming here.

I got my friend went for n i'd like to have a bit of diversity in the panels, you know, from having IT a little fun and different that you don't see at most panels. We had a little man ties this morning before we started about some of the people at a ban here. And I look back, and sometimes I don't even realize who's been here.

Everyone from mobile one pre to county rice and bill and and George, watch you go through the list. Boon peace's and a guy from the back in the day we saw rest in peace bone was here so IT, so diverse, and people learned so much from that. And that's the vision via tary.

you know, the global financial leadership conference. You just explain in the importance of that in the industry, obviously have lots of stakeholders and they are all here. And this feels like celebration in some ways about a group of people you put together.

So we're all getting smarter. But let's talk about the other aspect of this week. You guys have been a huge backyard of saying jews.

You have this event that guide denied myself have been really fortunate enough to be add. No, it's just amazing how much money you raise from all sorts of different people. Talk to us about your continued commitment with saint jude because IT really, is that a great event?

Thanks for I appreciate very much. And I also want to make sure that your listeners know that yourself, danny moses and guidance, I have been big contributors to send, dude, and that means the world to me. You know, i'm a big believer that I don't care how much people give as people can give something to a cause sense.

And anything about Young children dealing with cancer is so brutal for us. It's it's a natural to want to contribute to. So they have friends like you guys participating. That well means the world to me.

I have clients, you know, I have a big then tomorrow you always six hundred thousand dollars just from a handful of clients coming together saying how much you need all right to check. It's about the kids know. And to me that that's important.

No family should be ever get a bill when they're dealing with their child. So then that means the world to me about sand. Dude, my wife and I are very much involved in that as well.

I had my friend Keith urban come into play tonight to do IT a charity, cancer for the nickem in who are both just awesome people. They're both the same dude. And so I like to get people to come to my conference from that part of the world that are connected with the dance.

So I think that adds to be a lot. And then as you guys know, i'm very big on the first responder. First responders are really important. And so we bring several hundred first responders here that really love the same dude, but what they do so much for us every day life. So it's it's a great event.

We were here a year ago, obviously, and we talked about the markets at that exact moment. And that day the CPI print came in one tent lower than expected at three point two versus three point three. So we know inflation.

That was a signal that power was actually done. I think he was audience with that. He was done.

But we talked about geopolitics as well. I would say that I see inflation has come down since then. Geopolitics are probably got in a little bit worse on the margin. Give us your current state of affairs here, just kind of the world here. You a quick overview?

No, dann, it's a broad question and is a great question. I think that a lot of us are trying to figure IT out. And now we have administration coming back that has some ideology about what they think the world shooter should not look like, our united states shooter should not look like and work global marketplace.

And I think that important. I hope we don't never decided that no matter whose our president and our administration is good, I think it's important for the growth. I am concerned about the geopolitics.

I am very concerned that ukraine, russia is on about page fifty of the newspapers today. As people are dying, I understand that how we can allow this to continue to happen. I am very concerned about what's going on in the middle ast and how that is going to continue to play out.

You know, you look at what's going on china, china and taiwan, I think that's unfortunate, only a matter of time, and get to say, well, now the united states will step in. United states needs a partner, absolutely, to convinced that we need a partner to help us deal with these foreign domestic issues. And you have to find a partner that has some kind of sense of market and growth to work with you and who that is.

You could say potentially china looks to know the way they treat your people is in humane. I'm not suggesting china is a good partner, but they can go on to taiwan and you got got to stop them. And if they are going to go to taiwan, they peacefully.

We cannot have what's going on here because he has a effect. And all of our life's economically in a will for generations to come. If we continue to let these geopolitical events play out the way they are because they're not playing out on the penniless over the going in the right direction and pendulum is stuck, it's not good.

And I think eventually, it's going to have a big impact on all about not only here in states, but around the world. So jee o politics, I think market, i've talked the guy about this offline. I think people discount deal politics because in today's world we were were no second people.

We want instant gratification of information in front of us. And whatever happened yesterday was yesterday, tell me what's going on this moment in time. And geopolitics is not taking a big back seat to other issues going on in the the global marketplace. So I am big very concerned .

that I don't know if people fully understand the importance of cma group and what you represent, what you clear in the products on the platform. Number one, you mention a global marketplace, but there's a scientist to the us. Dead and our treasury and you know interest rates and all the products.

London metals exchange a few years ago had to break twelve billion dollars worth of trades because they were not equipped to do certain things. If we were to allow other countries to sort of start to get involved with treasuries and our debt potentially cataclysmic, what that could be? There's a reason why cmi does what they do. And I know you know what I speak of here, so speak to the importance A C M E group through that length. I think when you look .

at foreign sovereign that especially like the U. S. Treasury market guy, would you referred to the derivative market really was played second fiddle to the cash market history. So IT, just to give your listeners a little history lesson here, everybody says what happened in the life exchange by the old life exchange. They in a contract over there, there was the biggest contract.

IT was the german bond futures contract and the german bond futures contract because over there, because german you in her was because IT was all about the cash markets as that Marks started to grow the german government. What what are we doing allowing another nation to be in charge of potentially part of our sovereign debt? And they moved that contract overnight.

And IT was not done by market makers or things like that. IT was done by the land dispense and moon despite and things of that in the elaborate together to german government. And they took their futures contract overnight from the life exchange and moved IT back to germany, adult bursa ux.

And I think they saw the relative importance of the of the futures contracts or the derivatives. So let's talk about today in the united states. In the united states today, the cma is larger than the us.

Treasure market on a notional basis on a daily basis. So we have legislation today that IT says the clear cash treasurer, which is a welcome and no play in twenty and twenty five and then for repo be twenty twenty six. You have to clear that in the U S.

Damasio exchange that cash treasury clearing peace and the overside is only under that of the esc. It's not under dual regulation. Is not under the bank of england, is under the U.

S. government. And that's where IT should be. We have to be in control of our sovereign. Bt, so you reference the bank of england in that trade.

So what happened with the bank of england when the london exchange went down and the land and clearing houses falt, this was the enemy had their own clearing entity. They busted trade. So you imagine you're an old J, R. And goals, x sky.

If you're a long gold, in short, silver and the spreads blown a bit, you making money on the gold and someone says, this guy, i'm going going to tell you what you know someone isn't doing so well so I have to bus all these gold trades and you say, okay, but what about my silver loss and they say, i'm started that gear problem. And that's exactly what happened, what the london metals exchange wit nickel. So they butted twelve billion dollars of nickel trades.

And every trade in today's world is particularly paired up against another. So copper, all these other products there, including ones that we have listed at cm e. And so my clients are left with the short league as people that were wrong on the nickel were let off of their trade.

And so the bank of england did not go through the default system as you're supposed to do. What there's a defauts fund there is hitting your members for the money. They went right to the tearing up of the trades as your reference, and they just got rid of the twelve billion doors of losses and left people, loser.

So let's talk about what does that mean if in fact, the U. S. Treasury market in futures gets by vocation in the same entity called the bank of england? There's a problem with that, and they go down the same path of tearing up trades.

I don't care if there's a ten percent of the volume cleared in london on the us. Treasury market. If they get sick, we all get a cold thread, so that will affect the other ninety percent.

And I don't care what anyone says. They're just flat out wrong if they say only if a small part. What's the big deal here? The argument is that the one in clearing house says they're duly registered with the common future trading commission.

I say, I have no objection to that. Then they say all the money will be held in U. S. banks. And I say, I don't care if it's in god dem.

Fort knox is irrelevant, is what I care about is called the resolution authority, and who has that resolution authority? And under the law in the U. K, anything that cleared in the U.

K. A resolution authority is the sole authority of the bank of england. So think about that. They would have the U. S. Government would have to take a back seat to the bank of england if there was a resolution or default scenario on this particular contract. To me, that's dangerous.

The last thing, there is not another country in the world that allows its foreign sovereign bt to be outside of its own laws. That, to me, is really important. So you might say, well, G, T, L, C, H is clearing in in paris.

Why are they clearing in paris? Where's paris at? It's in european union.

When break that happened? All these foreign nations that we are in the union together said, excuse me, mr. London, we are not clearing our products in london.

You want to continue to clear our products. You're doing IT in the block and a force london clearing house to move into the european union to clear this business. They don't over there.

My answer to all this is, come to the united states. Clear red in united states, under U. S.

Law, this product is so important, we have to have one set standards for U. S. Treasury market to U.

S. Seven and death. We have a twenty seven trillion dollars about standing of U. S. treasuries. We heard some more earlier today.

We Operate at one point nine trillion dollar deficit, spending thirty six million dollars in total death. And we're going to allow somebody to potentially terror trades in a market that's larger than the cash market. Does that make sense that anybody .

tell you this a great segway. I think because you a couple years ago, we are here, you would just announced this deal with google cloud. Yeah and you guys were really focused on kind of thinking ahead, guy said in on the equity panel, we can go on C, N, B, C.

For more than ten minutes and not hear A I and you know IT takes me back to I think you really had some foresight there thinking about this deal, migrating a bunch of your processes onto the cloud. If you think about google cloud, this is one of the biggest platforms, right, that are offering the sort of services that a lot companies who want to use this technology right to grow their products in their services. Help us think about that a little bit. What is meant for your business to kind of make that migration, I notice, is a multi year sort of process here really speaks to, I think, you're foresight about how to do some of those things globally.

When I did that, I did not want just a vender relationship with anybody. I want a partner. And so when I talk to the ceos, a google, and said that I need a partner, I saw them to my vision and I said, i'd like you to buy a billion dollars of our stock.

And they did. I one of them committed to be a part of the future that I saw now when I did that deal with google. And i'm not suggesting i'm a catalyst, but they had six percent of the cloud business, as you guys know, you follow the clouds.

So amazon, you follow microsoft and some of others, google, six percent. But what they had, what I thought working through this, I thought they had Better artificial intelligence going forward. And I thought that's really where I could make this work for cma when I saw their numbers come out two weeks. And I think, guy, you reference this when google released their cloud business, revenue was up thirty six percent.

And we've been cited as academy for this in which makes me feel really good and and is validate that this is a really strong decision for I always said that if in fact, that the the front end of the machine, if it's not Better or faster than what I have today, I will then not go there. And they know that and it's not a secret. I said day one, IT was really exciting two weeks ago when the shower went in the ground for them to build a one billion dollar but spoke data center for C.

M. A group. They build cookie cutter data center. They're building up a spoke data right next. My existing one. The cost and benefit to my clients will be second to the tools that they will help available so they can have risk management problem ls that they've never had before to work in the cloud, to work with artificial intelligence on a simulated basis as we continue to move forward into going into the cloud. So we will be taken the next two years as we get hopefully into the cloud.

My clients will have the only ability to test these markets in the cloud and to use different procedures and protocols to see what is your best interest to me. You don't never put a pilot behind a plane, not in a simulated first. I think this is gonna so exciting for my client pace. I think that the cost benefits will be second to none and will be a massive value at a proposition.

We spend a lot of time thinking about what are the use cases for this technology, and we haven't seen a lot of the companies that we ve follow be able to demonstrate that demonstrate that kind of return on investment. So I think this is one of the early use cases into your point about these hyper scales. You know you were so early on using this technology that they've been able to take meaningful share against AWS and microsoft as I I just wanted to wrap that up because these are things that we talk a lot on the power and on C M.

B, C. I think that if you tried to run any business like we did in one thousand and eighty five wouldn't be sitting in the room today because IT would be gone. So you have to have afforded to desert to think about what's next.

And don't never getting memorial with what you did before, getting memorial with what's next. Then when you guys talk about artificial intelligence, who's gonna write all these guard roles as refer to? Now, guy and I used to calm rules.

Now they call guard. Really nice word. But who going create all of the rules of the road for artificial intelligence? Because the only people that know the rules of the road are the people who are running artificial intelligence.

So there's not an outside agency or are a blueprint to say here, let's create these rules as a great artificial and intelligence. So my suggestion is too many, including my friends at google in other is work with congress, work with regulators and shape those in a way. Don't try to force those.

Because if you force those, ultimately this will fail. Because, you know, when things go bad, whether IT was the financial crisis or leverage, if you go into a situation where we think we understand the rules and we don't and things go on luck, it'll set this back light years and we don't want that to happen. So I think is really the .

next generation too late to throw your name in the appraiser secretary as soon.

Would that be too big of a loss for C. I, and figure out the next great big .

short here and .

hang out with you, danny Terry.

so all the stuff that you do with such passion is to protect not just investors, people on your platform, but the actual consumer that can be impacted by crazy changes in agriculture Prices. And so for so you've also made a big move on to retail over the last year, and we talked about last year when you're starting how's that going? And are you finding that retail traders are starting to really get used to the platform and using IT for many more things?

So dann, I love that I am massively excited about what people define retail is because I have a different definition of retail. 哦， 确定。 C, M.

E defines retail is a sophisticated trade who participates in the market every day. Retail because of would danaans is said artificial intelligence is going to have the same exact information is the most put down the street. They're just gna have IT.

That's what our official intelligence such that gives you that same information. And the question is how do they deploy IT? Now when you look at some of the biggest participants, they can weigh at last.

You know, a guy that is betting on a game that decides to make a trade one day, he just doesn't have the fire power. Do IT. My point is the information will be the same.

And that to me is really exciting. So when I look at retail, I think the retail and the institutional lines will be so blurred. In ten years, you will not be able tell what is retail and what is institutional. Every dollar that goes an institutional money over the last hundred years came from somebody.

So I call that retail when I get to have the ability in the sophistication as these newer, Younger participants coming into the marketplace are they're gone to have everything in front of them, and they are gonna know what to do, gonna be looking for advice from somebody to tell them what to do. Because if if they do tell me where that's happening today, these Younger people today are not looking for your confirmation, my confirmation, anybody else, they are acting out what they're doing. Look at in the gaming industry, the gaming industry, the proliferation of online gaming, of gambling.

Turn on your T, V. I guarantee you find a new one that's prepared to give you two hundred and free to get. But the Young people today are so much more sophisticated.

So I think it's gonna en answer your question. I think more, more people that have had access to that type of activity, they're gonna want something more. And I think they are gonna want markets, cash futures and others, but they want to control that. And they don't want to wait two hours, two days or two weeks to decide open account. They want that account opened in thirty seconds and fire away in thirty .

one seconds before we let to get back to the conference is big sports news. Couple weeks go in new york, aron boon resigned for a year that was overshadowed by the announcement that will be with cma through the end of twenty twenty six. What does that? What does that? Me, what does that mean? Tube, because I will say this. I mean, you embodies thing that see a me is from the business side to, again, the charitable side to the way people feel about the company. Speak to me about the .

next couple years. Yeah, i'd end again here. I'm no spring chicken, but I feel you guys still have a lot in the tank to go.

And I want to make certain that I have a transition and succession and whatever a one time that takes to the right person or persons as we move forward. And i've bent at C. M.

For forty four years. I bent the CEO and terminal since two thousand and two is a long time to be in these businesses, you know, a trade or before that. So I feel like you need to be a bit of a jack and all trade.

The only way you can do that is to show others that you're prepared to do IT as well. So I try to show my team i'm willing to do IT. I will get up.

I will do whatever IT takes to to make this company successful and you have to have that passion. And i'm a little concern post copy things of that nature. People are good a little bit lack of days ago, and I don't think people understand that to see you a fortune five hundred.

The company is twenty four seven and I don't even like that saying, but IT is twenty four a seven in this three sixty five. I mean, you don't get a day off, you don't get in time off. Your mind never relaxes.

And you can say, what do they can make me make more money. So is good. You have to have a passion.

And I think no matter what you do in life, guy, I think you have to be happy. And if you're not happy, I assure you, you will not be successful. I'm happy I have a great wife, great family, and that makes me happy.

I have great colleagues at work. I have friends like you guys that makes me happy. If I can move the needle to appoint educationalist or talk to students like I did with you at Georgetown not too long ago and just give them a bit of advice, and to me, that's what it's all about. So i'm gonna there until I decided enough is enough, and I have the right people in place.

Before I give you a guide to close this thing out, I just want to say this, I think we've said this again and again, when guy and I articulated our plan for risk of sal media, you like immediately said, I love IT and I want to back you guys. And I just want to say this, you've allowed us to be a steward of your brand over the last four years, and we just so much appreciate that partnership. So I want to thank you um very much for that. I know these guys feel the same way .

as nothing more important to me than brand. I remember sitting around a long time ago, and charlie rose me, his soul rest in piece was sitting around his head, Steve jobs, warn buffer and Larry ellison. And at the very end, the interview he said, that is three gentleman.

Can you tell me what is the single most important thing of your companies into a man? They all said brand because they said, when you lose your brand, IT is almost impossible to get IT back. And so I I cherish my brand. And that's why I like having a associated with danny and danny mosses and guy on me.

So thank you. We are honor to be able to do this every year. So tell you thanks for join on.