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Many employees can't afford a hefty medical bill that pops up out of the blue. But it happens. And employees who are financially stressed are understandably more likely to be distracted at work, costing their employers greatly in lost productivity. Luckily, Aflac plans help with out of pocket expenses not covered by health insurance and can be offered at no direct cost to businesses. Learn more@aflac.com Frumarkets that's aflac.com Frumarkets PayPal, the digital payments OG reported its first earnings since rejecting a takeover bid to improve proved numbers make it a more expensive target. We have the latest It's Tuesday, meaning it's Money Mover Day. So we welcome David Chassler, head of Multi Asset Solutions at Vaneck, to unpack his real asset ETF and where momentum's heading. And Coca Cola, always Coca Cola, an affordable indulgence that's in quotes that keeps consumers coming back or a surprising signal about the U.S. economy. For Tuesday, July 28, it's Brew Markets Daily, and I'm Ann Berry. More market details to come. But first, Coca Cola. Yes, that's the titan of sodas, the Midas of Atlanta, the maker of enduring jingles and sometimes considered an indicator of economic health. There are a couple of these kinds of indicators, by the way, that have always struck me as a bit quirky. Just as a quick side note, they range from the mundane and little quoted, like the Cardboard Box Index, which monitors the demand for corrugated boxes to gauge future retail goods movement and consumer demand. And then on the other end of the spectrum, there's the mildly amusing Men's Underwear Index, which was followed by former Federal Reserve Chairman Alan Greenspan. Now, the premise there is that underwear sales are usually stable, as they're treated as an absolute basic necessity. But even then, when money gets tight, consumers will stretch the lifespan of their current wardrobe, especially when, like underwear, those clothes are hidden. Why men's underwear specifically is trapped, I don't know, but there it is. So back to Coca Cola. The company reported another strong quarter today, beating Wall Street's expectations on both sales and profits and raising its full year forecast. Revenue rose 7% to hit $13.4 billion. Global case volumes, that's true underlying demand climbed 5%, and the company said that this was all fueled by strong international growth as well as robust interest in a repackaged Coca Cola 00 line and a major boost for the trademark Coca Cola and Powerade products from marketing campaigns during the FIFA World Cup. But the headline, when you take a look at the press today, wasn't really the numbers, it was the fact that CEO Enrique Braun had some positive things to say about the US Consumer. Somewhat surprisingly, Braun said that consumers remain resilient that they are spending on Coca Cola because they deem it, quote, affordable indulgences. He said that in an interview today on cnbc. Well, Coca Cola has leaned into that affordable indulgence narrative by offering more value on options that could be mini cans or lower price packages so that consumers can stick with the brand without having to stretch their budgets too far. Well, this performance was an interesting counterpoint to that of Pepsi, which also beat expectations earlier this month. But Pepsi hit a very different tone, warning that North American consumers are pulling back, especially when it comes to snacks. Sales in its food business declined as shoppers looked for cheaper alternatives and healthier choices, forcing Pepsi to spend more on promotions and lower prices. So at the heart of all of this, at least my opinion is really is brand loyalty. Coca Cola's performance is just one's person's view is less an indicator of true economic or even general consumer strength and much more an indicator of its specific brand. Because even with stressed budgets, the Coca Cola customer just will not buy a cheaper alternative. And that is the reason why the stock that's ticker KO is up over 4% today and why this unique brand is trading at an all time high. We're going to keep on watching. We're moving on to some other headlines from the day's trading session. Kicking things off with one other bellwether and that's UPS. Shares of the shipping giant down over 6% despite the fact the company beat earnings estimates and raised its full year outlook.
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So what spooked Wall Street? Well, that outlook still raised underwhelmed investors looking for stronger signs of improvement. As the courier scales back its partnership with Amazon, UPS announced year it's moving away from lower margin customers like Amazon and focusing on higher value businesses like health care.
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Well, UPS has been investing in a global cold chain network that can handle deliveries of GLP1s and other temperature sensitive medicines. In the latest quarter, those deliveries brought in $3 billion for the company, an increase of 7% year over year. Investors looking to see if UPS can deliver on its turnaround plan in the second half. Shares though nevertheless up 6% this year.
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Well, let's stick with turnarounds and take it over to the digital payment. OG shares of PayPal are up over 1% after the company reported earnings that beat top and bottom line estimates. Plus the company now expects full year adjusted earnings to grow a turnaround from the decline they were forecasting just a few months ago.
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Well, on this show I've discussed the years of disappointment felt by PayPal shareholders, myself included. The company has had three CEOs in fewer than three three years. Well, that person, that's PayPal CEO Enrico Llores took over on March 1st with a specific mandate to simplify the business, cut costs and restore growth. And it looks like the turnaround may be taking hold.
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This also marks the company's first earnings report since Stripe and Advent International launched a takeover bid of PayPal 12 days ago. While management didn't address the offer directly on its earnings call, Lori's did say, quote, we remain open and objective in evaluating opportunities. Improving results could strengthen management's case for remaining independent or at least make it easier to argue that PayPal is worth more than the current offer.
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Well, sticking with earnings, but shifting over to the AI trade shares of Corning, that's ticker GLW falling more than 15% after. Yes, you guessed it, similar to UPS. It did beat on revenue and it beat on profit, but issued weaker than expected third quarter sales guidance. So here's what's unique to Corning though, and this is really a position of luxury. The demand for the company's optical fiber used in data centers definitely remains strong. The challenge here is that the company is hitting manufacturing limits and is racing to build out new capacity, which of course takes time.
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Corning has been riding the infrastructure boom, signing multibillion dollar supply agreements with companies including Nvidia and Meta. But simply put by the CEO Wendell Weeks, similar to what you said, and we continue to have the enviable position and if we could make more, we would sell more.
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Such a great name, Wendell Weeks. I always say that when we talk about Corning, but fantastic name. Well, that's the intent. In May, Corning did announce plan to build three new manufacturing plants in the United States. Even after today's sell off though, extraordinary story. Still the stock remaining up 120% year over year.
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And finally, a major update out of Johnson and Johnson. The health care giant has agreed to pay five and a half billion dollars to settle thousands of lawsuits tied to its talcum powder products. For more than a decade, J and J has fought allegations that its talc based baby powder caused ovarian cancer. Claims that the company has consistently denied. And previously, in an effort to settle the cases, Johnson and Johnson attempted a legal strategy in which shell company subsidiaries declared bankruptcy, though that proved unsuccessful.
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Well, shares of the company, that's ticker J and J initially rose 1 1/2% on the news, but settled back since down to about flat. The settlement does still need to be accepted by at least 95% of claimants. And just to give a sheer sense of the scale of that, the settlement covers about 76,000 ovarian cancer lawsuits globally.
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Chris Seeger, a lawyer representing some of those plaintiffs, called the settlement quote, a fair measure of long delayed justice.
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Well, it's Tuesday, which means it's time for our Money Mover segment. And today I'm welcoming to the studio David Schassler, head of Multi Asset Solutions at Vaneck. David serves as the primary portfolio manager for the company's flagship Real Assets ETF, which holds nearly $1.2 billion in total net assets and trades under Ticker Rax on the nasda. It's a wide ranging conversation. We talk about gold, China's position in the AI race and what David expects from this week's Fed meeting. Here it is. So we're welcoming to the show David Schassler to talk to us about the Vaneck Real Assets etf. That's Ticker Rax and. Well, first of all, David, welcome. Thank you for coming into the studio on a muggy, potentially rainy Tuesday afternoon.
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Thank you.
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Here in Manhattan. So I have in front of me your fact sheet. We're talking about $1.15 billion of total net year to date returns fairly healthy, clocking in at around 15%. Give us the overview of the key themes driving this particular ETF's construction.
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Yeah, so we are thematic investors. We believe very deeply you make most of your money from riding a trend for a really, really long time. We're in a new structural investment regime hallmarked by a bunch of different things, high inflation, but we've got a massive capex cycle. That capex cycle is driven from AI, which is quickly transitioned to global infrastructure cycle. So we buy everything from commodities, we own commodities, individual commodities, through an ETF that we invest within there, which is called pit. And we also own natural resource equities, infrastructure development infrastructure. We use a quantitatively driven approach, but really simply, if you hone this down, we have exposure to a broad, diversified set of real assets and we ride trends within those assets.
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So can we talk about actually picks? I do have a question for you on that. So you are a VanEck ETF. PIT is the largest position in the ETF, over 20% of your net assets. PIT is itself another VanEck ETF. It's the VanEck Commodity Strategy ETF. So just this is sort of a technical question. But one that our listeners focus on, your etf. ETF charges a fee of about half a percent. Are you then paying pit, another VanEck ETF their fee as well or do you get a waiver because you're part
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of the same family waiver on the PIT etf. So I also manage the PIT ETF as well, which is the same style of investing.
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So why have them separate then? Why have them? Why have two different ETFs if they're close cousins?
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So some people just want the commodity exposure, some people want the all income tax solution. So if I just break this down, when you think about real asset investing, a lot of people don't want to
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do it themselves and to find real assets for people because there's a little confusion sometimes around what that actually means. For some people it's just straight real estate and they're thinking commercial buildings. That's not really what you've got. In this specific etf we have real
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assets designed to benefit from global growth. So gain exposure to global growth. So if you're excited about AI, you're excited about the CapEx cycle from AI, how are we going to build it? If you're worried about how we're going to pay for it, if you're worried about debasement and you want all these real assets within your portfolio racks is really easy. It's easy button for real assets.
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So define real assets specifically. Give examples of what those tangible specific assets might be.
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Let's start with commodities. So commodities, we've got oil, Brent crude, WTI heating oil. From there we've got agriculture, commodities, we've got precious metals, we've got industrial based metals. That's the commodity future piece of it. Like you said, it's over 20%. Then we've got natural resource equities companies that benefit from their refinement distribution, extraction of commodities, they have operating leverage. You don't need oil to go to 200, 300, 400, 500 fees. Companies make money because they've got operating leverage within there. As long as they're making money from the refinement extraction, distribution of commodities, those historically have done well. In addition to that, we've got infrastructure in place and then we've got infrastructure development. So think of infrastructure development. Everybody's talking about AI and how are we going to build it? We're talking about data centers, we're talking about energy, we're talking about moving energy, creating energy infrastructure development. In addition to that, we use a lot of gold. So gold's been a core anchor within our portfolio for two reasons. First off, it's a highly differentiated asset. It zigs what other things zig and it provides you debasement from protection.
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Let's talk about gold actually, because we've had a couple of people come in here and say it no longer zigs when other things zags. And some people have even called it a meme stock. The way in which gold has gone up over recent years has been very much, frankly directly correlated to the overall equity market in a way that people have found a little surprising. Do you think that's going to continue or is this just a moment in time?
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Gold is, first off, gold's a highly differentiated asset. It's, it's its own thing. So I think a lot of times what happens is people hold it to a different standard. Gold's a differentiated asset by definition. It's a scarce asset. It historically benefits from debasement. It performs well during periods of inflation. It performs well when people are looking to protect themselves. So think about it as an opt out asset. When people are worried about debt, they're worried about deficit spending, they're worried about not a credible repayment platform path on the debt, on the deficits, you can opt out and you can go towards gold. It's a neutral reserve asset. It has scarcity.
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So what proportion of RACs is gold or gold exposed at the moment?
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We always have a lot. So right now we're over about 20%. So we've ranged anywhere from about 30% maybe down to 18%. But we generally have a lot because it is that core anchor within our portfolio is our risk diversifier. And let's hit on something. What you said before about the correlations, it's a zebra, always changing its stripes. Sometimes it looks like this and sometimes it looks like that. But because it's inherently unique asset, over time those correlations prove to be fleeting, they prove to be temporary and they go back to the first principles, which is it's truly unique asset. Gold went up a lot with other risk assets. That is true, but you also saw similar patterns in the 1970s when gold went up a lot. People expect gold to perform as they've historically expected it. Most people have been investing in a period of monetary dominance, benign inflation. That was the period from the 1980s up until 2020 when gold was relatively a muted asset. You go back and look at the previous decade from that, gold was effectively unhinged. It was very, very volatile. And that's what gold protection from debasement looks like. It becomes volatile it goes up more than people expect, it goes down more than people expect. It's a bumpy, bumpy ride. But if you hold on historically, you're well compensated for it. We believe you're going to continue to be.
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So currently you've got sort of 23% in pit, which is commodities. You've got just over 18% in gold.
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Correct.
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Let's talk about some of the rest of this because let's dig more into real assets defined as most of infrastructure plays. I'm having deja vu. I covered oil and gas for a long time. I'm having flashbacks of being in Midland, in Odessa, Kinder Morgan, what I'm familiar with, we owned it at Goldman Sachs and I was there. So you've got Kinder Morgan, you've got Valero, you've got Marathon Petroleum. I mean these are big, big energy and oil and gas infrastructure plays. You don't pick them per se based on fundamentals, you pick them on momentum and technicals. But they're representative of a big chunk of your thematic here.
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Exactly.
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So I think I've heard you say that the demand for AI is ultimately a driver for energy. Why else have these names made their way into your etf?
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Yeah. So we effectively look to have a, a strong representation of the universe of real assets. Now it could be natural resource equities, it could be infrastructure, it could be infrastructure development. We grab stocks based off two mechanisms, size and momentum. We want the leaders of today and hopefully the leaders of tomorrow. So what's driving the performance across these indices? So we use both momentum as well as we use size. So when you look in there, you're exactly right. What you see is the big blue chip style holdings as well as the companies that are driving up. Those are smaller weightings, but the companies that are becoming more prominent. So we will sample across the universe of natural resource equities, infrastructure, infrastructure development to gain that core exposure and define momentum.
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How are you defining that?
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Yeah, so what we are doing is we're looking at different look back windows and we're saying to ourselves which companies are continually and persistently outperforming. And if they are, there's more likely a reason why we are believers, very, very big believers, that the markets are very efficient, but not perfectly efficient. And what we will do is gain exposure to different individual secur in reasonable proportions and do it in a very, very diversified way. You did point out those stocks, but there's over 100 of them. Lots of positions, lots of diversification across all the different real assets. But if you think about it really simply, we're looking at what's performing over the last six months, 12 months, 18 months, 24 months, 36 months. And we will allow those to rise within our momentum rankings. It's the same thing we do with Pitt because we manage the commodity fund as well. We bias towards momentum and that's momentum
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defined over a three year period. Do you go back further than that or do you just stick to those more sort of narrow near term windows, short and medium?
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We don't really push back much further than that.
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Got it. And so what gives you confidence that the momentum of the last three years is a predictor of success in the next three years versus looking back over a longer term period and saying that there's something fundamental there like the management team or like the track record in return of investment that will carry forward. Particularly when we're talking about AI and we are talking about construction projects and energy infrastructure requirements that are going to take a decade in some cases to build out and perhaps see the return on.
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That is a really, really thoughtful question. So that was a good question. So this is the world that we live in. So what we do is we look at, to identify what are the leaders of today. Now if we go back and sample and I looked at something that was an outperformer, let's say 10 years ago or 15 years ago, the situation changes. You hit on it right off the bat. AI is really interesting because the situation on the ground is constantly changing and evolving. What we do is we look into the market to say what is driving performance now we will constantly resample that and we're always moving, we're not always owning the same stocks. Just to be clear, it's not just look at a three year window. We look at various, various, various windows to try and pick the ones that are continue to drive performance higher.
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Let's take a quick break and when we come back, more of my money movers conversation with David Schassler. John, have you ever captured anything in a bottle?
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I once tried to make one of those little ships in one While capturing
- [18:51]
A
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C
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18
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and now back to my money movers conversation with David Shastler, Head of Multi Asset Solutions at Bannock. So we are in a period right now. Let's just touch on inflation. We're waiting for the Fed to come out this week with the, you know, the group's perspectives on where inflation might be heading. So if I ask you to look in your crystal ball, look ahead for me 24 hours. What are we going to see coming out of Washington co tomorrow?
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All right, let me broaden out the, Let me broaden this out a little bit more. So what Warsh is saying things like we have very little tolerance for inflation, personal tolerances versus the situation on the ground. People have to adjust to the climate that they're in, the environment that they're in. At the end of the day, we are in a period of fiscal dominance where we've got lots of deficit spending, lots of debt. Eventually that's end up what's going to drive Fed policy. So what they can do and what they want to do are not necessarily aligned. They want to fight inflation. We want really low inflation. We're all universally aligned on that. The problem is there's lots of debt, there's lots of deficit spending. We've got now a war in Iran that's going to continue to push up spending. There's a lot of implications. There's a lot of things that they can't control. What I would say is just watch, watch the situation on the ground. Watch it continue to evolve. We've been in this period of elevated inflation for some time. If you study periods of historical inflation, you find two commonalities. First off, large global inflationary regimes, they last a long time. The second off, they present in waves. Pocket inflation, pocket disinflation. Right now in Iran, it's pushing up oil prices. I don't see this materializing into a secondary wave like we saw in 2022, which is what you saw in the 1970s. You saw these big waves without a monetary follow through. So unless the Fed were to rush to protect growth by easing conditions, I don't see this materializing into a second wave. I just think it's an inflationary bump. So that being said, I'm not wildly concerned about a secondary inflationary wave. Now, that being said, I don't think we're going to go to a 2% baseline and stick there for some time. So I think that the Fed is just going to have to remain nimble and they're going to have to operate within the confines that they have.
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Do you think we have a rate cut? Do we have a rate hike? Excuse me, in September? The market at one point has been pricing that in with a 40% probability. So do you think your crystal ball, 24 hours from now, do we get rate cut, nothing up, and then look ahead to September for us. What do you think? Rate cut, nothing up.
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Nothing.
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Nothing.
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I think nothing is the right path. I think there's too much risk to increasing right now.
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You think we're stuck for a bit?
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I think we're stuck. I think the war in Iran introduces a risk that's hard to contain. I think you're starting to see some slowdown and some concerns on the tech side. So right now would be a tricky time to raise. But I do understand the implications of it. So last and final stays the same.
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So when you think about the geopolitical shocks and given how much exposure you've got to commodity and commodity related stocks. Talk us through, if you don't mind. David Strait of Hormuz. Right. We see the blockades happen. We see the restrictions on the global flow of oil. Oil prices have not gone to places in terms of the lofty heights. People were panicked at one point that we would see a massive acceleration in oil price growth. We haven't seen it in the way that folks expected. What have you seen in the stocks in your etf, in terms of the way that they have reacted or not reacted to a geopolitical shock like the situation in Iran. Have you been surprised?
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I have personally been surprised.
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Explain that in which direction and why?
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Not necessarily on the stock side, but on the commodity side. So the equities are really good at looking forward and looking through this. So it makes sense to me why the equities haven't responded as much.
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But when I explain that, why does it make sense to you? That equities have not responded as much.
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Because if you look at the futures curves, you're seeing the same message over and over and over again, which is spike in energy prices, resolve. And we get that because there's not a big appetite for another Iraq for a long drawn out, long duration conflict in the Middle East. There's just not an appetite for that. The view is that this conflict was always going to be temporary. That's the view. Equity markets look past that and they're looking for well what's likely going to happen next which is a result because that's what's in the best interest of everybody. That being said, this has gone a lot longer than people expected. It was always two more weeks, two more weeks, two more weeks, two more weeks. And now we're sitting here in end of July going into August and we're effectively in the same spot. Troubling for sure. And a lot of people would have thought, myself included, that if you would have came to me in March and said at the end of July this is exactly where we're going to be. There's going to be very, very little traffic going through the strait and we're going to see an expansion of the conflict. Most people would have said energy prices are materially higher and that's what surprised me. And you've seen a lot of that has to do with China has reduced demand for energy. There's been a lot of toggles here and I've been surprised at energy prices, not necessarily the equities because the equities look through it but I would have expected a more sustained and more meaningful pop in the price of energy. We position for that quantitatively.
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A
How?
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C
Because we significantly increased our exposure to energy. But this has more to do with the process. Last year we were very within the commodity solution that we managed pit which is a large allocation within racks. We had a very large allocation to gold because we've been overweight gold quantitatively driven and we reduced the size of our gold overweight and reallocated towards energy. So we took our energy allocation from call it 35% with the price momentum that we received from energy we were up in the 50s. So we certainly benefited from that and made pick a couple top performer. That being said, if you'd asked me in March what's energy prices likely going to do given the conditions that we're facing right now, I would have been saying $150 plus plus on energy. Yeah. So we were right in that it was likely going to be a long Duration, conflict. When this first happened, our message was conflicts this magnitude, they always last longer than intended and they're always more expensive. And that was the narrative. So the idea of a quick resolve. Two more weeks. Two more weeks. We thought it was going to take a longer time. We just thought that energy prices were going to go materially higher in the near term, and they didn't.
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A
So that was very interesting to talk about your perspective on how geopolitics is impacting the composition of racks. Let's go back to the AI question because we're in the thick of earnings season. There's a lot of coffee being drunk around here trying to keep up as all these earnings results come out. And what's becoming clear is there is some nervousness now in the market around the feasibility of the level of capex that we're seeing continuing and the increasing sense. Sense that there's a trust me going on when it comes to looking at the ROI on CapEx, particularly from hyperscalers. What do you think it takes, David, for upward momentum to continue?
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C
The situation on the ground is changing so quickly. So quickly. So technology has never moved this fast. It's never going to move this slow again. And you're starting to. Those that are closest to it continue to be shocked because you make this massive investment and you seemingly have this moat and then that moat goes away. And that's effectively what you're seeing right now. So much competition, particularly on the model side. So it's really begging the obvious question, can we continue to invest in capex at the same level of rate, given the payoff is highly uncertain?
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Right. And the market's starting to say maybe not exactly.
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C
And the market's right to question that. From our perspective, whether the beneficiaries are focused on a few large tech companies or if it broadens out, the bigger idea is that this technology is real. We believe very deeply it's going to drive productivity, that productivity is going to drive global growth. And that's the end game for us. For this technology to scale, it's very much a real asset story. The world needs lots of infrastructure, it needs lots of energy, lots of minerals, lots of metals. So for us, if you focus on the bottlenecks and you concede the fact that within the technology side there's going to be lots of disruption. If you concede that, you can get really to a very comfortable spot where, all right, I'm going to get the productivity, I'm going to get the growth. And for this to scale, regardless of who the technology Beneficiaries are for this to scale it very much is a real asset story, which is how I started this conversation, which is AI driven capex cycle quickly transition to a global infrastructure cycle.
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A
So where are you from a thesis perspective then on things like utilities where there is a concern that there's a bottleneck there because the grid just cannot keep up with the demand that's going to hit it. So you can build as many data centers as you want, you can build as much transmission, you know, sort of power generation as you want, but the grid can't handle it. On the transmission side it gets tricky. How much exposure do you have to utilities? I couldn't see those listed in your top positions but perhaps you've got it somewhere in the tail.
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C
Yeah, it's sprinkled throughout because there's lots of overlap. I would say about 5% of the overall portfolio. So for us now we're hitting on the peanut butter approach towards asset allocation, towards disruption, where you want to have exposure to the entire theme and you want to play it in the most diversified way that you possibly can. So infrastructure in place. You're talking about utilities, right? Infrastructure development, commodities, MLPs. We've got a sizable allocation. MLPs probably around 10, 11%. So there is a significant allocation towards everything related to the build out and transmission of energy.
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How about nuclear? Where are you on nuclear?
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We've got about a 3% allocation. Yeah, yeah. So we've been allocated to nuclear. Nuclear stocks have not done as well this year. We think it's an essential part of the energy complex. We're not saying it's just nuclear, but we're saying it doesn't get omitted. Nuclear is a tricky thing. It's a proven viable energy source that we've effectively vilified for a long time. We had a leading edge. We decided to forego that for largely political reasons. China has now taken our lead position. We're catching back up. We think without a doubt that nuclear is part of the solution. That being said, you see some of these stocks get ahead of themselves and you start to see a bit of a pullback. And that's what we've seen for some time now. We continue to see it now.
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A
So final question for you, just touching on China, how much international exposure do you have in racks and why?
- [30:34]
C
We have about 10% exposure to international. A lot of that's from the natural resource equity side. So you're going to have exposure within Canada, et cetera. So it is a global investment framework. But what I would say largely is that commodities are global, gold is a global. So when you look at our portfolio, it very much is designed as a global real asset solution because our assets by nature are global as opposed to where the country is individually domiciled.
- [31:04]
A
Nevertheless, the country of domicile for much of your ETF looks as though it's US focused, correct?
- [31:11]
C
At least about 87, 88%.
- [31:14]
A
And I understand that it's because the composition of the ETF is technically momentum driven, but just given your seat, given you track so many of these names, where do you think that the Chinese domiciled and the European domiciled firms stand in their race to participate in the AI cycle?
- [31:33]
C
China is the biggest threat. It's effectively a two horse race. AI. If you just think about the AI theme, the world is viewing this as losing, as existential, where if you're not relevant in the new world, you're just not relevant. That's where growth comes from. CEOs globally. ChatGPT came out November 2022, kicked off one of the world's largest capex cycles. CEOs globally looked at this and looked at this as a pivotal technology that's going to change the world. Kicked off this massive capex cycle which is transitioning the global infrastructure cycle. China is proving to be a formidable competitor at every single step. And that's what you're seeing now, that's part of this. It was deep seek last year and now you're starting to see new models come out, continue to challenge. So without a doubt it is a challenge and they are competitive at every single metric.
- [32:23]
A
So with that in mind, why don't you have more direct exposure to the infrastructure plays that are more directly linked to China? Because when I take a look at for example the MLPs that you've got here, they are pretty North America focused, but there are companies out there that are more directly serving the Chinese market. If we believe it's a two horse race, where would you, if you were a retail investor, how would you get exposure to that?
- [32:49]
C
So the first thing I would say is we always have the ability to continue to broaden out and we are as momentum investors, we will continue to shift and move towards where the markets are going. So we don't try to say, all right, this is where the world's going to go next, let's try and position in front of it. What we do is we continue to ride the trend as it continues to evolve. So as China continues to offer opportunities, obviously we can invest in them. That being said, investing in China directly, it hasn't been the best place to put money for domestic investors for some time. The US Markets have continued to perform for some time. It's been a top performing market for a very, very long time. That's not an accident. The United States, the market in general, protects rewards capital investments. We continue to be across all of our strategy. We run broad asset allocation strategies. We've been overweight with the United States, we've been overweight technology, we've been overweight real assets. That being said, if you are concerned about debasement risk, if you're worried about the US Moving away from the US Dollar, moving away from Treasuries, that's where the gold allocation comes from. I would push back a little bit that this is largely a US Focused fund because in fact, it is a very, very much global fund and it benefits largely because of the large gold allocation from the de dollarization trend.
- [34:09]
A
David Chassler, Vaneck, thank you for joining. Big week coming up from the Fed and we'll see what they have to say about inflation. Appreciate your time.
- [34:16]
C
Thank you.
- [34:17]
A
Well, big thanks to David Schassler for joining me. It's 4pm on the east Coast. The markets have closed. There it is, the bell showing we're wrapping up for the day. We don't have a ticker tape so we'll throw it over to our human ticker, our producer, John.
- [34:29]
B
That's right. Starting with oil. A continued pause in attacks in the Middle east sent oil futures lower again today with international benchmark crude oil dropping 5% to just below $84 a barrel. Meanwhile, the S&P 500 finished up a quarter of a percent, the Dow is up a full percent and the Nasdaq bounced around in the red today due to the continued sell off in chips, finishing the day down a quarter of a percent.
- [34:52]
A
Well, it is going to be a busy evening for us for lots of reasons. Number one, of course, it is still earnings season. We're in the thick of it. Number two, just as importantly, today is the morning brew company outing day. So John and I are going to be in particular need of coffee tomorrow morning. Now one thing to tease you with. We are going to have a particularly fun conversation tomorrow because something has caught our eye that has been high profile CEOs, chairman and billionaires taking to X to some of their laundry, sometimes dirty laundry, sometimes just getting opinions out there. We're back with more on that tomorrow. That's it for today's Brew Markets Daily.
- [35:27]
B
Brew Markets Daily is hosted by Anne Barry and produced by John Curto, Tarkov, Della Teeth Avenue Leroy and Emily Millard. Our technical director is Uchenwa Ogu. Brittany To Taco is our audio engineer. And the president of Morning Brew, Inc. Is Devin Emery.
- [35:38]
A
Wake up tomorrow with the Morning Brew newsletter and tune in to Neil and Toby on Morning Brew daily the day after their company outing. See you back here tomorrow, same time, same place.