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- [00:02]
State Street Investment Management Spokesperson
Hear that? That's me in Tokyo learning to make sushi from a master. How did I get here? I invested wisely. Now the only thing I worry about is using too much wasabi. Get where you're going with spy, the world's most traded etf. Getting there starts here with State Street Investment Management.
- [00:18]
State Street Investment Management Legal Disclaimer Voice
Before investing, consider the fund's investment objectives, risks, charges and expenses. Visit state street.comim for prospectus containing this and other information. Read it carefully. SPY Subject to risks similar to those of stocks, all ETFs are subject to risk, including possible loss of principal Alps Distributors Inc. Distributor
- [00:32]
Anber (Host of Brew Markets Daily)
Cybersecurity Alert that says leaders of America's biggest banks have been summoned to Washington, D.C. to assess a new AI threat. We break down what's got their attention. Conagra getting a new CEO we take a bird's eye view on changes at the food giant and things are heating up at oil major bp. We look at why the company could face a shareholder revolt at its upcoming annual meeting for Monday, April 30th. It's blue markets Daily and I'm anber. More market details to come. But first we talk a lot about activist investors on the show, usually big investment firms of billions and billions of dollars under management and with big personalities at the helm like Bill Ackman's Pershing Square or Paul Singer's Elliott Management or Jeff Smith's Starboard Value with famous letters to boards and platforms on social and traditional media, racking up lots of but one company is finding that other shareholders are finding their voices. That's bp, the oil and gas giant that once was forging ahead with renewable energy and is now pivoting back to its hydrocarbon routes, much to the disappointment of at least a portion of its investor base. And that portion plans to make some noise at the $121 billion market cap company's annual general meeting just 10 days from now. Well, the UK's local authority pension Fund Forum, that's Lapff, is the top UK pension body that represents over £425 billion in assets. And this body has made a bunch of recommendations that go against those of BP's board. This includes recommending that its members vote against the re election of the BP chair, Albert Manifold, who by the way has only been in place since October. The body also wants shareholders to, quote, reject the revocation of binding climate disclosure resolutions. That's a lot of syllables. So as background in a Q and A with Manifold last month he said that BP wants to ret to climate related resolutions because the world had moved on since these were passed in 2015 and 2019 and its recommendations to members. That UK association. Again, that's the Lapff notes that BP previously was regarded as a leader amongst oil and gas majors on decarbonisation. But since BP came out in February last year with its fundamental reset, that's the name of its plan to raise operating cash flow by $2 billion by 2027. BP has been increasing oil and gas production, reducing investment in its transition businesses and lowering its 2030 climate ambitions. Well, Lapff said it would also support a proposal put forward by a climate group that's accr, lots of acronyms and that would demand clearer disclosure on how BP evaluates the cost, competitiveness, execution risk and long term value of its oil and gas investments versus the alternatives. Well, BP is not alone in seeing rising dissent among climate focused shareholders. We've seen some of this going on on with Shell, on ExxonMobil and Chevron, where there have been similar pushes for transparency in emissions targets. And amongst all of this, and don't forget, this is right now, against the backdrop of war in the Middle east that has been sending oil prices into realms of enormous volatility, something else has been going on at BP2 because the company shares are up over 33% year to date and up nearly 75% over the past year. So there's two things going on here. Partly rising oil prices in recent months knocking on to higher prices at bp. But this is also partly the result of takeover speculation because BP brought in a new CEO just 12 days ago. Her name is Meg O' Neill and she's mandated to turn around its underperformance compared to peers. And since last spring, Abu Dhabi National Oil Company known as Adnoc and Shell have been posited to be circling for an acquisition. Now the chatter has quietened down, at least for now. But this is why this timing is so important. This is going to be o' Neill's first annual general meeting. And these first few of her tenure will undoubtedly see pressure for a solid new strategy to be announced to keep BP's independence from some of those suitors credible. We're going to keep on watching. Coming up, quote, too powerful for the public. We survey the reaction to Anthropic's new tool. That's Claude Mythos and why it's raising alarm bells. And Nvidia reportedly seeking a major acquisition to, quote, reshape the PC landscape. Checking on the rumor mill that sent shares higher today for one computer maker. But first, a word from our sponsor Charles Schwab Trading at Schwab is powered by Ameritrade, bringing you an expanding library of education with even more ways to sharpen your trading skills. Access new online courses, insightful webcasts, articles, engaging videos and more, all curated just for traders.
- [05:21]
John (Co-host or Analyst on Brew Markets Daily)
Plus guided learning paths with content designed to fit your unique interests. So no sifting to find exactly what you need so you can spend your time learning to trade brilliantly. Learn more@schwab.com trading well as companies compete
- [05:34]
Anber (Host of Brew Markets Daily)
to outdo one another in the artificial intelligence arms race, news broke last week that a next generation AI model is raising real concerns about cybersecurity and the banking system specifically. Well, we took a look at the headlines and I was completely immersed in this news all week from the road. This was Bloomberg reporting last Tuesday that Treasury Secretary Scott Besant and Federal Reserve Chair Jerome Powell summoned the CEOs of the major banks to the Treasury's headquarters in Washington, D.C. and that was to discuss the increased cyber risks posed by or identified by Anthropic's newest AI model, Claude Methos. Preview CEOs from Citigroup, Morgan Stanley, bank of America, Wells Fargo and Goldman Sachs were all in attendance. I think Jamie Dimon probably would have been there too, but had a prior engagement, was unable to attend. And Besant cautioned the banks that the new AI software could pose a serious risk to sensitive customer data. So let's dig into this. John, give us some background on Mythos.
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John (Co-host or Analyst on Brew Markets Daily)
Right, Claude Mythos was officially announced just last week on April 7, and according to the company, according to Anthropic, it's the most capable yet for coding and agentic tasks. And reportedly the model is particularly good at identifying security vulnerabilities in software that human developers could not find. Anthropic released a 245 page report detailing the internal testing and I browsed it. I was looking at it today. A lot of technical information, of course, but also some curious observations. We're going to get to the important things in a moment, but just to show the range of this report, Claude Meathos, they also pointed out, was also able to come up with novel puns, not just those that it finds online. Here's one cited by Anthropic. The philosopher was commitment Phoebus, his friend said he was always Kierkegaarding his options.
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Anber (Host of Brew Markets Daily)
Very good. I'm stunned though, if that really was not anywhere sort of lurking online was that true? How can we know that it was truly novel?
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John (Co-host or Analyst on Brew Markets Daily)
Anthropic said.
- [07:28]
Anber (Host of Brew Markets Daily)
It is.
- [07:29]
John (Co-host or Analyst on Brew Markets Daily)
And so that's where it must be. Yes, exactly right. According to this report.
- [07:32]
Anber (Host of Brew Markets Daily)
Got it.
- [07:33]
John (Co-host or Analyst on Brew Markets Daily)
So, charming puns aside, the model also escaped sandboxes, took deceptive action and avoided triggering safety flags. And that remarkable ability to find and exploit software vulnerabilities is huge. It identified thousands of high security flaws in every major operating system and web browser, including this one was reported everywhere. A 27 year old vulnerability in OpenBSD. That's an operating system known for being one of the most security hardened in the world. It runs firewalls and critical infrastructure. The bug that Claude Mythos found allows anyone to remotely crash a machine just by connecting to it. So. So, and put that in perspective, it's 27 years of human review missing that bug. And so we're not just talking about a clever, better chatbot here that's punny. It's a system that can actively break software.
- [08:25]
Anber (Host of Brew Markets Daily)
So just to tie this back to the banks then, because the pun example, I love it. Though not specific to what's going on with the financial institutions, but there was one instance in amongst all of this testing in which Anthropic security team said it was able to compromise a web browser so that a website that was set up by hacker could read data from another website, essentially modeling how to collect data from a victim's bank. So what's the so what of all this? Well, the so what of all this is knowing its capabilities, knowing the capabilities of Claude and Mythos. Anthropic actually decided not to just send the new model out into the public domain. So this is really a critical, critical, critical moment because this is the first time that a leading AI lab has built a frontier model and simultaneously decided the public cannot use it, but also announced it. There have been instances where these labs have chosen, chosen not to unleash them quite yet. I'm going to come back to that at the end. The point is here, Anthropic has said we've got something we're not going to, not going to let you, the public have. Right. And instead what Anthropic has done is decide to limit its release for now to just a few major technology and finance firms in something that they're calling Project Glass Wing. And in Project Glasswing, the idea is to get Claude Methos into the hands of just a few and to let those major tech and finance firms experiment with it so that it could be used defensively to scan and secure critical software infrastructure before someone gets their hands on it and potentially uses it as offensively. So the participants in project last week include Amazon, Apple, Broadcom, Cisco, Crowdstrike, Goldman Sachs, Google, JP Morgan Chase, Microsoft, Nvidia and Palo Alto Network. So here we've got hyperscalers, we've got Amazon, we've got consumer tech, and Apple, we've got some of these cybersecurity giants. That's Crowdstrike and Palo Alto Networks. Again, we've got the big banks and we've got some of the other big tech companies there and the chip players. So in terms of the brain trust, that's what I'm going to call it. In and around Project Glass Wing, you've got massive brains and you've also got very, very, very deep pockets. Because if you look at that lineup, you know, the combined market cap is just astronomical.
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John (Co-host or Analyst on Brew Markets Daily)
Yes. And Anthropic has said that they're going to pledge hundreds of millions of dollars towards this project to give out tokens that these companies can use to explore. Anthropic will report back in 90 days on what initiatives, what has been learned, including vulnerabilities that have been fixed and improvements that can be disclosed. And you can tell they're putting tons of money behind this and getting lots of people together, because at one point I was thinking, this is sort of good pr. You're thinking like I was thinking of horror movies in the 90s where they would say it was so scary, they wouldn't even let us release it in the theaters, but you can get it on vhs, so saying, oh, this is so powerful, you can't even have it. But no, that's not the case. I mean, they're putting time, energy and money around solving these vulnerabilities.
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Anber (Host of Brew Markets Daily)
Do you know, I couldn't help but be struck. And this is. I don't want to go completely off topic, but I just couldn't help but be struck by. By Anthropic doing this. And then we had this terrible weekend of news of Sam Altman, right. Who. The attacks on his home when his family are there. I think in one case it was a Molotov cocktail. In another case, I think it was a shooting. I don't know if you saw these headlines. Didn't see the weekend. Yeah. And it's just such a contrast, right, because Sam Altman, there have been questions around whether he's been honest with his board. There have been questions around his commitment to safety. Players, including Anthropic, used to be at Open AI and actually defected, started up Anthropic precisely because they were concerned about the team's commitment to safety. And so it just. I just couldn't Help but think these were two contrasts. Right. On the one hand, such a terrible story and headline of someone being at personal risk because maybe because of their association with perhaps not enough safety focus and AI. And on the other hand of the spectrum Anthropic, which is using safety really as its key differentiator, as in its marketing story, really to your point, saying look, we've got something so dangerous, we're going to rein it in for the moment. So this whole safety discourse is something that I'm going to come back to quite a lot and certainly when I tee up our our interview for Friday. But anyway, that's sort of 2 thoughts on Project Last Wing.
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John (Co-host or Analyst on Brew Markets Daily)
Absolutely. Because all weekend, as you mentioned, there were stories about Samal and then some of them coming out of the New Yorker article, the very extensive investigation. Yes, I saw Ronan all over the news with his insight. Well, part of Project glasswing are two major cybersecurity companies. So we talked about the banks and obviously we've talked about these tech CrowdStrike and Palo Alto Networks. And they've been affected by the broader software sell off this year because this idea that AI is a threat, it's going to undermine their traditional security business. But both their share prices are down 20% in the last six months as part of this software sell off. But today Palo Alto Networks up about 5%. CrowdStrike holdings up about 5%. Perhaps the market pleased to see these players part of the solution or part of the suggestions going forward as opposed to just being on the outside and looking in.
- [13:19]
Anber (Host of Brew Markets Daily)
I think that's exactly right. I actually was sort of perplexed by the degree of sell off that we saw in these cybersecurity stocks. I've been a big proponent of both these stocks. Actually. I've gone on TV a lot and said that I believe in the platformization story that's behind Palo Alto NETWORKS. I bought CrowdStrike on the sell off and you know, I always thought that the rise of the intelligence of AI would just point to the fact we needed even more intelligence protection systems. But I think you're exactly right, John. I do think the fact that they're part of Project Last Wing, it almost reminds me of all these companies that store their stocks increase when Project Stargate was announced. Right. And the build out of AI infrastructure. This to me feels like being on the inside. Right. Being in the inner circle to try to make sure that the most challenging technology is being scrutinized. Probably does feel like it's creating a bit of a halo. Again, that's around Palo Alto Networks. PANW is the ticker and CrowdStrike the ticker CRWD really two of the biggest players in the space. Let's also take a look on the political side too, because the urgency is so clear here you've got Treasury Secretary Scott Bessant, obviously part of the Trump administration, working together with the Fed Chair Jerome Powell, who the President has been critical of. But here they are sort of from the same hymn sheet.
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John (Co-host or Analyst on Brew Markets Daily)
Yes.
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Anber (Host of Brew Markets Daily)
The Pentagon labeled Anthropic a supply chain risk, although for a different reason. That was actually after Anthropic put limits on how its models could be used by the Pentagon. And I would just flag here too, these same sort of thought groups are being set up also in Europe. I did see over the weekend that the UK was having meetings, central bankers setting up meetings again with Anthropic to try to make sure that there's a transatlantic approach to testing on the safety here.
- [14:52]
John (Co-host or Analyst on Brew Markets Daily)
Yes. On Friday, the Bank of Canada and the country's major banks and financial firms met to discuss this and the bank of England will meet with top bank and insurance executives to discuss it. And I think the larger narrative here is this idea that the financial institution, the global financial footprint is at this point digital.
- [15:11]
Anber (Host of Brew Markets Daily)
Yeah.
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John (Co-host or Analyst on Brew Markets Daily)
You know, it's not just a currency changing hands. And so if this is more than just oh, Wikipedia got hacked or something like that, I mean this could be potentially money's dollars just disappear.
- [15:25]
Anber (Host of Brew Markets Daily)
Huge scale. Huge, huge scale. And again, the timing couldn't be more on point because the major banks are reporting earnings this week. We are going to come back to that. We are not going to neglect earnings that Goldman Sachs had its earnings out this morning as one example. We just last Monday in his annual shareholder letter, we talked about it on the show and Jamie Dimon, who's the CEO of JP Morgan, explicitly called out the sort of knowns and unknowns of AI. He wrote, I'm going to read it. We have focused on some of the known and predictable and some of the known unknown events. But huge technological shifts like AI always have second and third order effects as well that can deeply impact society. We should be monitoring for this kind of transformation too. Well here specifically he was actually talking about job creation versus job obsolescence from AI and he's about the socioeconomic consequences of that. But he does adjacent to this paragraph and in that letter call out cybersecurity as a major risk, especially when it goes hand in hand with geopolitical uncertainty. Right. Whose hands could, who's. Which actors could this kind of technology end up falling into the hands of So a lot of focus on this and to your point, just banking so critical for the economic stability that so many of us have become used to. Well, just a heads up because this is all and we didn't plan it this way. This just kind of happened. On Friday we are going to provide for the episode a conversation that I just recorded with Sebastian Malaby, who is a fantastic writer and he's the author of his latest book called the Infinity Machine, Demis Hassabis, Deep Mind and the Quest for Super Intelligence. So I absolutely tore through this book and it is not a light book to get through. I'm talking 400 dense, dense pages talking about AI to AI technology, talking about the characters who are at the forefront of AI. Demis Hassabas being one, of course, Sam Altman being another. And it was so interesting because as you read the book and then also in the conversation with the author, Sebastian Malaby, it becomes very clear that after spending time with each of these AI leaders, Sebastian Malaby comes away with a very, very clear perspective on who he trusts with this technology, on the intentions of folks like Altman and Hassabis and Musk, why they want to be at the forefront of AI. Some good reasons, some perhaps giving him pause. So tune in on Friday for that conversation. It was a real eye opener. Well, let's take a break and when we come back, we take a spin through the headlines. Moving the markets today.
- [17:50]
John (Co-host or Analyst on Brew Markets Daily)
Vaneck's got a question for the market.
- [17:52]
Anber (Host of Brew Markets Daily)
Ask away.
- [17:52]
John (Co-host or Analyst on Brew Markets Daily)
What if energy, gold and infrastructure, long ignored by many investors, are becoming increasingly important again.
- [17:58]
Anber (Host of Brew Markets Daily)
Vaneck shares that the assets building the future aren't all in tech. Data centers need electricity, AI needs copyright, and gold is signaling that the old rules about money, debt and currency could be shifting. This is something VanEck's real assets team has been highlighting for years.
- [18:11]
John (Co-host or Analyst on Brew Markets Daily)
R A X the Vaneck Real Assets ETF can give investors active, diversified exposure across all of it in one allocation. It's built for this environment. Vaneck notes that if you're building a portfolio for a new era and Real Assets racks offers diversified exposure in one place.
- [18:27]
Anber (Host of Brew Markets Daily)
Learn more@vaneck.com that's vanek.com Brew R A
- [18:33]
John (Co-host or Analyst on Brew Markets Daily)
A X Read Fun Disclosures in the
- [18:35]
McDonald's Promotional Voice
Podcast Description K Pop Demon Hunters, Haja Boy's Breakfast Meal and Hunt Tricks Meal have just dropped at McDonald's. They're calling this a battle for the fans. What do you say to that, Rumi?
- [18:46]
Rumi (Respondent in McDonald's Promo)
It's not a battle. So glad the Saja Boys could take
- [18:49]
Anber (Host of Brew Markets Daily)
breakfast and give our meal the rest of the day.
- [18:52]
State Street Investment Management Spokesperson
It is an honor to share.
- [18:53]
Anber (Host of Brew Markets Daily)
No, it's our honor.
- [18:55]
State Street Investment Management Spokesperson
It is our larger honor.
- [18:57]
Anber (Host of Brew Markets Daily)
No, really stop.
- [18:59]
McDonald's Promotional Voice
You can really feel the respect in this battle. Pick a meal to pick a side
- [19:06]
State Street Investment Management Spokesperson
a participating McDonald's while supplies last.
- [19:08]
Anber (Host of Brew Markets Daily)
There it is, the closing bell. It's 4pm on the east coast and the market's wrapping up for the day. Well, we don't have a ticker tape so let's throw it over to our human ticker.
- [19:16]
John (Co-host or Analyst on Brew Markets Daily)
Our producer John the S&P 500 finished up 1%, the NASDAQ up one and a quarter percent for the day and the Dow finished up 6.10of a percent. Some other market headlines, shares in Dell Computers ticker Dell were up over 5% today on a report that Nvidia has been in talks for over a year to buy a large company focused on PCs and servers. For its part, Dell has about a 17% of the PC market share and already manufactures AI servers that use Nvidia chips. Neither company commented on the rumor and while it may just be speculation traders or maybe their trading algorithms sent Dell shares higher today, Nvidia finished the day down nearly half a percent.
- [19:56]
Anber (Host of Brew Markets Daily)
So interesting that Nvidia would finish off down showing the market isn't quite sold on the idea if the rumor does gain traction. Well, in other news, shares in Revolution medicines, that's ticker RVMD, good ticker by the way, jumped nearly 40% massive jump today, hitting a new all time high. And that's after the biotech company announced that its pancreatic cancer drug succeeded in a phase three trial. While the results are pretty striking, pancreatic cancer being one of the fastest moving and hardest to treat forms of cancer. The company though said the drug almost doubled the typical length of survival and cut the risk of death by nearly 60% compared to chemotherapy.
- [20:36]
John (Co-host or Analyst on Brew Markets Daily)
CEO Mark Goldsmith called the results, quote, unprecedented. Revolution Medicine said it plans to seek FDA approval using a Commissioner's national priority voucher. And that's a pathway that could shorten the review timeline to roughly one to two months. Months versus the typical six to ten. As you mentioned, pancreatic cancer has a five year survival rate of just 13%, one of the lowest of any cancer.
- [20:57]
Anber (Host of Brew Markets Daily)
And finally, shares in conagra brands. I just feel like we're all food news all the time at the moment because the food giant is the one behind Slim Jim and ready whip dipped 5% in afternoon trading. And that's after CEO Sean Connolly announced that he is stepping down from the big seat on June 1st. That's after 11 years at the helm as CEO of the business. John Brace has been named as Connelly's successor. He's currently the chief operating officer at GM Schmucker, and prior to that spent 30 years at Procter and Gamble. So he's a real industry veteran stepping into this seat.
- [21:31]
John (Co-host or Analyst on Brew Markets Daily)
Yes, but do you want to be stepping into that seat? He's joining a company facing clear challenges. Conagra stock has fallen 45% over the last year and consumer packaged good industry in general is facing buyer pushback over higher prices and folks looking for less
- [21:45]
Anber (Host of Brew Markets Daily)
processed food options being very difficult for the food industry to keep up with all of the differences in consumer preferences there. And also, of course, beverages. I feel as though every day at the moment we're talking about deals in the food and beverage space together. That's it for today's Brew Markets Daily.
- [22:00]
John (Co-host or Analyst on Brew Markets Daily)
Brew Markets Daily is hosted by Ann Berry and produced by John Curto, Tarkab delatif, Aveny Laroya and Emily Millarn. Bringing to Taco is our audio engineer and the president of Morning Brew Inc. Is Devin Emery.
- [22:09]
Anber (Host of Brew Markets Daily)
Wake up tomorrow with the Morning Brew newsletter and tune in to Neil and Toby on Morning Brew Daily. We'll see you back here tomorrow, same time, same place.
- [22:27]
Rumi (Respondent in McDonald's Promo)
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