 Hello and welcome back to the trading floor and I feel like this is a bit of a prize fight of sorts combined the two heavyweights. The two contenders of the mid and end of week show have met now for the first time squaring off. So he's going to come out triumphant. And any word for me to have the contenders before we begin the the session today. Well, I mean, I think this is where I finally get found out isn't it. What we are the episode 100 and something and finally, this is where the tide goes out and everyone realizes I don't have my swimming trunks on. A horrible a horrible mental image and look, you know, we're an amplifier. We're all about quantitative assessments and numbers and data and analytics and things like that. So you maybe next episode you can you can tell us, you know, which of the two podcasts gets the higher viewership. I would expect Friday because you guys are the incumbents, but I want to see what my trajectory is. I want to see when when I if and when I might kind of crossover. You're only as good as your last race. So it's all about this conversation. And at the end, what we'll do is we'll ask the community to utilize their Q&A function on Spotify and past judgment. It's not up to me. Just to be clear, just to be clear, when when the midweek deal room podcast does rise above this end of week trading for podcasts, I do get to retire then. Right. Yeah, absolutely. Perfect. Friday show. I'll be next week. This is my big finale. And by the way, and you can't refuse yourself from the popularity contest. You've got to do a little LinkedIn poll and and choose your own choose your own numbers by just voting repeatedly for yourself. There's no more hotmail gmals yahoo. Well, let's let's jump straight in and let's talk about the main theme of this conversation, which is the first of the big bank earnings. They've literally just come out in the last hour or so, namely these being JP Morgan city, Wells Fargo, and the world's biggest asset manager black rock. And then perhaps at the end of that, we can talk about the broader picture because it's a buy everything type of week. I'm sure that the peers can shed some color on why that's occurred. But yeah, let's let's kick it off then let's talk about, I guess JP Morgan being the kind of beast that it is that maybe we could start with them. The revenue saw to a record in these Q2 numbers that we've just seen a lot of the press noting the boost coming from the Federal Reserve's interest rate hikes, and this acquisition of first Republic Bank, the EPS for 37 street was expecting about $4 revenues 41.3 billion above expectations of 38.96 so before we look at divisions anything from the top line kind of numbers and also this idea perhaps a bit more color about how interest rate hikes are impacting these results because I know it's not just for JP. Yeah, I think that there's three words that stand out here or that are important. Those are net interest income. So this is about interest rates, it's really the spread between short term rates and long term rates which is ultimately where the, the big lenders of this world, that's where they live. It's it's that spread that's their profit margin so it's the difference between short term deposit rates. So the interest rate you get on your deposit account that's how the bank. That's the source of capital for these banks they got to pay for that, but they're paying low short term rates to depositors and then of course they're taking that capital and they're lending it. For longer periods, a mortgage being the classic example and they're able to charge a lot higher interest rate on those long term loans and as interest rates from the central bank have been, you know, steeply climbing. Then this is get this is like perfect for these banks to exploit the growing gap between those short term and long term rates and that's called the net interest income. Next JP Morgan. That has climbed to 44% sorry it's grow it's up 44% year on year so they've now bagged $21.9 billion in the quarter. Just on their loan book, basically and that's the fifth here's the best bit. And this is all about because we're interested rates have been going up for. I don't even know 18 months no less 15 months is it anyway. This is the fifth straight quarter of double digit growth on that net interest income figure. So yeah 21.9 billion better than the expected 21 billion. I mean it's not a massive surprise but yeah that's the standout line on this report. Here's a bit of a question so this spread is obviously massive, and it's resulted in really really strong performance across all the banks is the spread largest when there are quick and repeated interest rate heights and does it settle down. Once everything flattens out even if that interest rate is at a very that central bank interest rate is at a very high level does that spread shorten and shorten as we you know we get more used to this higher interest rate environment. 100%. Yeah, I mean basically this is remember that this interest rate hiking cycle has been the steepest hiking cycle. Well and you'll correct me if I'm wrong but I believe since the 1980s. Yeah the more rapidly rates go up will then actually, this is where the banks. We talked about this I think a little bit on the last part they're quite sneaky in that they will. So the interest rate on their mortgage loans right as soon as the central bank raises rates like to the second, then the interest rate on your mortgage goes up. Okay so that they're charging more. So they're earning more on that on that loan side of the book but do they do the same for their savers and their depositors. No. So they're very slow to then see you know to tweak up their deposit rate so the faster the interest rate hiking cycle the more they can exploit that lag if you like. And I think actually on top of that I mean because we'll talk about, you can, well Stephen I'll let you dig into some of the the nitty gritty here but if with JP Morgan, one other stat, as an example was their low, sorry their deposits increased by 1% on the quarter to $2.4 trillion. Right now, what's gone on here is that obviously the Silicon Valley bank thing has generally speaking been one catalyst that's led to deposits coming out of the smaller banks where there's perceived higher risk and being moved to bigger banks where there's lower risk right. The other catalyst it for the banking system generally has been the fact that they're slow increasing the rates on savings accounts so you've seen some depositors go you know what screw you I'm not sitting here waiting until you decide to put your rate up whenever that might be I'm pulling my money out, and I'm going to put it into a money market fund, or you know and we'll talk about black rock later they've benefited from this actually but JP Morgan because they're the big boys, so therefore the perceived safest. They've actually seen deposits increase during this time. And I think they're being bullies I mean the smaller banks have they're having to raise their interest rates on their savings accounts to try and stem the outflow. Right so actually if you if you put your money in a smaller bank you're going to get a decent uptick on your savings rate. So if you put your money in a higher safety, then you give up that higher savings rate. And so JP Morgan have really benefited from this Silicon Valley bank shift and the perceived risk around depositors. So yeah this all feeds into that another big double digit growth on their net interest income. I was looking at the other main divisions then on the breakdown so the way that the results come out for JP it's that they've got markets and they've got banking. If you're looking at their like earnings presentation. So on the banking side, they had revenues of 12 and a half billion up 4% year on year. The IB revenue of one and a half billion was up 11% IB fees were down 6%. And to be expected, we're kind of aware of the climate at the moment was there anything in those numbers that surprised you Steven. I guess it's surprised to the upside. These are really not particularly bad numbers considering if you read the average article about deal making deal volumes IPOs investment bank fees. We're talking down 20 30 40% across the board in H1. So the fact that JP Morgan's even, even the cyclical nature even the volatile nature of this of this division. It's not struggling as much as its peers. So, you know, this is the earnings report where everything seems to be falling into place for JP Morgan, you know, it's, it's taking, as you said it's taking deposits from smaller banks and there's a flight to safety. There's massive massive uptick from net interest income, and the very volatile section is is not is not. It's not going down nearly as much as its peers. So you know, I think we're going to talk about city later on but I think it's investment banking fee revenue is down 44% So, you know, IV fees down 6% you can take that. And you just think you know I'm thinking to myself. Alright, what is the perfect conditions for a global bank to make money. Okay, a high interest rate environment without a recession. So there are lots of loan provisions we can talk about that. But there's not a lot of defaults at the moment. The IPO markets opening back up. The M&A markets opening back up. So we're kind of we're almost at this point where you think, Alright, if I was to create the perfect scenario under which JP Morgan can thrive, probably about today is as good as it gets. If they're missing earnings on today, then, you know, you've got you've got to be worrying, but obviously they didn't they smashed it. You got I mean, and also you got to throw in I saw they've benefited from a $1.8 billion gain relating to their first Republic deal. So this is the biggest being the biggest player in the last quarter. Yeah, as you say coupled with the macro scenario and the monetary policy backdrop. Yeah, this is optimum. We spoke about it on the pot of a few weeks ago that that first Republic deal could only go through JP Morgan are allowed to make bank acquisitions because they're too big. Unless there is a distress circumstance. So it's just like how lucky can you be, you know, you pick something up on the cheap and you get a $2 billion kind of kickback. That is going to boost your kind of unadjusted bottom line. So, yeah, look, just maybe just a step back. I was just looking at its price earnings. You know, you think double digit revenue growth over the last five quarters or whatever you said, that's income side. Yeah, income side. You're thinking that's kind of tech levels of growth, right, you know, whatever you had double digits, you're thinking price earnings multiples of 3040 times. And obviously banks are different, but the, you know, JP Morgan's price earnings is what 1112 times something like that. Yeah, it's, you know, it's still. Although we've got all of these amazing numbers, it's still a bank, and it's still cyclical, and it's still subject to so many different external forces that it's not going to ever kind of break out of that moderate price earnings level. So, so I've got a question for you. If you were Jamie Diamond. Surely this is where you, this is like the mic drop moment. You just walk out the door into the sunset, don't you and then still time to get in the race for the 2024. That would be the case. You heard it here first. Yeah, he I didn't know a comment that diamond did say he quote said consumer balance sheets remain healthy consumers are spending, albeit a little more slowly in terms of the pace labor markets has softened somewhat but the job growth remains strong. Yeah, I mean that sounds pretty positive to me with hearing him say that so one question then to wrap JP was on the markets side. When you're looking at these percentages, I guess pierce is this more case of, well you've got to look at the world and where we were this time last year. So when you hear market revenues are down 10% year on year fixed income market revenues are down 3% equity market revenues down 20% year on year. Is that because second quarter in the prior was so strong so it's just that it makes this look more difficult. Yeah, this is, this is about trade volumes. I mean, I didn't know the split out I knew that together the fixed income and equity trading divisions together were down 10% year on year. Still a cool $7 billion mine but I didn't realize when you split out the equity side was down 20%. Yeah, this is just, well, there's some kind of tricky year on year comps here because obviously if you go back to the first part of 2022 this is where you know we had some big, big volumes as markets were coming off and coming under pressure and the rate of making cycle had started to really ramp up and inflation was at control. And what that led to was a lot of, what just a lot of trading, right this is where asset managers are going well hang on a minute. We're having a real shift in the cycle here so I need to make major changes to my portfolios, which means selling a load of stuff and buying a load of other stuff and when these big asset managers are doing big kind of portfolio transactions then these big trades are being facilitated through the big investment banks. So this is trade flow. This is how the banks make money they facilitate these trades for their buy side institution clients. So when things settle down and they're calm, dare I say when things are a bit dull, you know, which is the case the last three months, I mean it's you check out the VIX, it is way down right that's a just a volatility index so it's just, it's like what we've been saying for the last what recession just hasn't just hasn't come and isn't coming. And so actually, people are just happy to just let this big tech rally just continue to grind higher and so there's been a lot less trade volumes which equals a lot less revenues for these trading floors so it's not surprising. No, and maybe just back to Steven's point about the banking side. Yeah, these numbers are down but it's like actually not too bad relative to others. So context is key, as ever. And I remember being in a restaurant with you, Piers, maybe about four months ago, maybe longer, maybe this has been all the SVB stuff was going on and I remember in between the main course and dessert there were a few murmurs of the VIX mentioned at the time. Have you seen that, did you see the VIX last night? And it was, it's the opposite scenario when it was exploding at the time. That was the off the Silicon Valley Bank news, that was the one big volatility pop of the year and it lasted. And that was the short moment. That's in a week. And then look, we've had, we've had, what, 26, 27 weeks of the year. And for one week, there was a little bit of action on the volatility side and then that's that's it. So when you said that in the restaurant, my point being that's when I went short VIX and now you've just said what you've just said that everything super calm now I'm out of my short so as soon as we're finished I'm out. So moving on to city, because Steven you said earlier there's some kind of parallels but I'd like to know what are the parallels with city and what are the differences. I did read a couple of things as well about them being the second largest credit card issuer and customers are still borrowing but elements in your mind where there's similarities and differences. I think you would probably, you probably look to city group and put them roughly in the same category as big global banks that are too big to fail. If we're going to be as kind of generic as as that but once you scratch beneath the surface I think the difference between JP Morgan and city group becomes really apparent. First things first post 2008 city group have had a really, really rough ride of it, and have been in the process of trying to straighten their strategy, straighten their cost base. And this earnings report is a real reflection of them still trying to figure it out, figure out who they want to be as a bank what they want to be as a bank, where they want to be focusing on. I think it's really important I was just looking at all of the earnings presentations before the call. It's really important to see, not necessarily what said, but the order in which it said for these different banks. And it's interesting that on the earnings presentation for city group. Each one was a bunch of high level financials page two was a load of commentary saying this is how we are working towards our strategic turnaround plan. We talked about things such as redundancies and reorganization and voluntary redundancies and things like that on page two. So they're obviously thinking to themselves all right the market wants to know that we are on track with the longer vision JP Morgan things are all singing, you know and all dancing. So it's in a very very different place. And it's also, you had a pretty bad earnings earnings reports, although it did be to expectations. So net income fell 6%. So net income fell above expectations, revenue fell, but again, above expectations expenses up 9%, driven by severance packages and the costly restructuring of the organization. The reasons you say on the on credit cards and on more of the retail side of banking, but from a investment banking perspective from a global banking and markets perspective, the numbers are way way off. So, if you think about the health and the strength and the certainty of these two big beasts, you've got to look at JP Morgan just crushing it, and city, still fishing around for a little bit of identity. It's not yet found its way post 2008, which is 15 years ago now. So it's a really interesting compare and contrast maybe to JP Morgan. There was an interesting comment from the city CEO who said that markets so commented on both markets and investment banking so on the market side, revenues were down from a strong second quarter last year as clients stood on the sidelines, starting in April while the US debt limit played out. The participants were sitting on the sidelines for a period and that was a lost amount of revenue, and in banking that the long awaited rebound in investment banking is yet to materialize making for a disappointing quarter. So she's on the glass half empty side, Stephen I'm afraid. I mean, CEOs tend to try and massage and maybe talk their own game and say, you know, and try and put those as positive a spin as possible so this is, this is pretty brutal and it's, it's fair that investment banking has been down, but not all investment banking has been down in the world. You know, so if you look to different parts of the world. I was looking at UBS in a pack, and it's deal volume in terms of M&A deal volumes up 172% this year. So, not everyone is feeling quite the pain so if you kind of, if you use the excuse of a, of a cyclical downturn as a reason to not, you know, to not try as an excuse to not perform better than, you know, maybe hard words need to be said in the teams. I don't think she's that well known yet. She has been, I thought she'd been in the job for less. She's been in the job for two years actually. Oh no, March 2021. I thought it had been a shorter period of time than that, but, but anyway, yeah, she's obviously, I think she's, I think I'm right in saying the first female CEO at the big, the big giant financials which is obviously great to see she's Scottish, did you know. But yeah, I mean, the only thing I remember about city like when you were talking about the financial crisis. I mean going back to that moment. I do remember 6th of March 2009, which is when the day that city, I mean literally almost went bankrupt. I mean their share price dropped below $1. And they literally almost ceased to exist. And so they clambered out of that black hole. Now during that period of course JP Morgan fared a lot better and were way stronger I mean they got forced to buy Bear Stearns which was a bit of a. Well, and so, so I guess my point is JP Morgan with the bank the government were going to to make sure other institutions weren't collapsing city group were not on that list because they were basically collapsing themselves. So, yeah, it's interesting that that that that is still impacting them, you know 15 years on. Yeah, she's actually been a city since 2004. So she would have been within the mix over that period. Yeah, 2019 she was named president of city group and CEO of its consumer banking division. And then she came in and set 2020 replacing Michael Corbat part of your alumni, Steven, you have to tap her up and get on the show she's Gertin College and then Harvard Business School. So I didn't I didn't get I didn't get as far as the latter. What CEO city group. Not yet still time. Yeah, just on that just on that point that's just a very it's just quite an interesting one in terms of where banks pick their successors, you know where banks pick their next leaders often says a lot about the direction that the banks board wants to take the business. And if that's ex CEO of the retail bank within city then I think that's a pretty clear move, pretty clear signal that that's where cities going to be focusing your strategic effort over the next few years. Yeah, and just final point in that report, their earnings report, it was their personal banking and their wealth management divisions that probably have everything performed the best both were up about 6% year on year. Coming in at about 6.4 billion. So, yeah. Let's go to, to Wells Fargo. And again you said earlier that, although we've just discussed how different the circumstances are for city to JP, but from a business and proposition I guess from the products the services they're doing fairly similar as well as different then. If someone could elaborate and I know in the mortgages market and so on. How are they different in terms of being a lender, I guess and it's their business more structured around the lending side. It's a bit more of a normal bank isn't it. It's a bit more of a commercial normal non investment bank where net interest income and products related to corporate and commercial banking rule the day. It's a it's a huge huge huge bank, in terms of deposit base in terms of loan book it's it's one of the largest in the world, but it probably doesn't get the headlines that the Goldman Sachs is, albeit smaller from a personnel perspective, but all the investments would get. But it is had Wells Fargo, mainly US based although you know increasingly international has been over the last 15 years. It's had another brilliant quarter. I think because it's so exposed to its loan book, you know net interest income 13.2 billion 29% jump, it's net income 57% up for the quarter. It's not bad is it. It's now 125 $1.25 versus $1.16 smashing earnings estimates 20.53 billion of revenue versus 20 billion expected, you know so this this is again we're talking about the sweet spot. I just want to I just want to call out the CEO's Charlie shafts common. The long net interest income continued to benefit from higher interest rates, and we focus on controlling expenses. As expected, net loan charge offs, or kind of loan write downs, increased in the first quarter, but consumer charge offs continued to deteriorate modestly, we expect commercial charge offs to increase but we haven't seen it yet. I feel like alright you want that situation where your net interest income is flying, but the pain, the pain that is supposed to be felt through rate rises through the economy has not yet happened. And as you, as you said on the pod over the net over the last few weeks, will it happen. So it seems to be again you're making you're making hay when the sun is shining, because these write downs that usually put a drag on your net interest income. Provisions are going up. I, there is the expectation that there will be more in the future, but they're not really getting tapped. So it's it's you know, it's an interesting one at the moment. I think I'm a bit more worried about the forward looking picture for well just because you know being being a more of a traditional bank they are more dependent on those. Well they got more exposure to let's say things like the commercial real estate market. And look, there is a San Francisco based bank. I don't know what they're obviously a global bank so I don't know what they're the proportion of their commercial real estate book is in the San Francisco area I imagine a small percentage but they've probably got a bigger exposure to San Francisco than any other bank. The reason I just say is San Francisco is thought to be right at the top of that sort of list of regions that most that risk of a like a commercial real estate sort of collapse and obviously there's to there's a double whammy with the commercial real estate side of things where you've got interest rates super high and jumping fast and then also of course the post hybrid working model just meaning naturally demand, you know is is softening as well so yeah I think the going forward with all of these banks really it's the loan provisions or the loan default provisions I should say that's the amount of money they're kind of setting aside now to pay for defaults on loans in the future, and obviously that's a forecast right they're predicting how many defaults they might see and I think what you're going to see is that's going to steadily rise, but back to the original point. Maybe it's not going to be as bad as we thought. And this seems you know some just looking at this quote you know we we have made an additional 949 million increase in the allowance for credit losses, primarily in the commercial real estate space that they're obviously they're obviously kind of factoring this in. Here's you obviously around in in in 08. Does this does this feel very very different in terms of, you know, a normal business cycle slow down and recession as opposed to oh my gosh, there's all of these things happening and we haven't factored them in there's no provisions and you know what I don't know if this feels very it's almost like in slow motion this one and I mean, I mean I guess going back to the crisis in 2008 2009 there was a decent interest rate hiking cycle going into that crisis so thinking about us rates if memory serves me right. US rates went from about 2% to 6% from 2004 to 2007. Okay, so decent increase, but it was much slower. But an increase nonetheless so these banks did have this uptick in net interest income but there was not, there was nothing on the horizon to start preparing for right we weren't back then we weren't going. Oh my God rates are so high and the inflation through the roof inflation wasn't high at all. And so we weren't thinking right let's prepare for recession. We were thinking there isn't going to be a recession and then bang it just we literally fell off a cliff. I think this time it's very much the opposite where we're preparing for a recession that's actually just not coming. So yeah, I think the differences are very stark. And yeah banks are certainly much better prepared. A recession that is not coming famous last words on the pod. We're talking us here. I just wanted to flag baby for you Stephen there was an article that came out in Bloomberg yesterday. And there's been quite a lot of headlines around Wells Fargo being quite aggressive in hiring in the IB space and the article yesterday on Bloomberg was saying that was Fargo hired a couple of M&A bankers from Barclays, and they're pinching them from a group of all places, as well maybe because of as you've described the situation there. But so Tom Drake is one of these people. He's joining the San Fran based bank was Fargo from Barclays as an MD focusing on healthcare services. I guess the sectors might be meaningful here for you healthcare and medical technology deals is what he specializes in. And then the other chap Chris Norman is joining as well for and that he comes from city groups technology M&A group. So it's tech and healthcare they're pinching at the moment. Is that is that meaningful or not. I guess it just makes sense doesn't it and and I think maybe you can tie that into peers is earlier comment if, if you feel like the going is good at the moment but you may be slightly overexposed to a particular part of, you know, a particular loan book within a particular market I commercial real estate, maybe, maybe this is the time to pick up some smart bankers. I mean they're San Francisco basic technology make sense healthcare probably make sense as well, pick up some smart bankers in the space. When other, when other organizations are the banks like Barclays and city which are very heavily exposed to the investment banking downturn need to shift and need to get rid of some people. It's a kind of classic trade, whether whether it works out whether Wells Fargo had the distribution, the network, the institutional expertise and the reputation to nab a bunch of bankers and then suddenly become the go to you know you've got to take on Morgan Stanley and JP Morgan and and Goldman Sachs if you're going to get that. Yeah, so so Drake and Norman they're going to report into a chat called David didn't see you. So they're going to report to him and a person called Jeff Hogan and these two are the co heads of global M&A at Wells Fargo. And whilst Fargo pinched Hogan from MS recently and Tom Lawler has also been hired from Credit Suisse, they picked him up in there in the whole debacle that's happened there, and he's going to focus on real estate gaming and lodging M&A. So it feels like they've been quite aggressive here in this space at the right time I guess. Didn't they move into the top 10 on deal volume. I can't remember was it in quarter one or maybe it was in 2022 overall which was that like the first time they've been in the top 10 of the IBD League. Since I can ever remember but just talking about Credit Suisse there was an article in the FT today actually about 120 Credit Suisse bankers of jump ship for obvious reasons and it's actually Deutsche Bank that have been picking up more than any 40 of the 120 of them to Deutsche Bank, 25 of them went to Jeffries 20 went to Santander fact. One of those 20 is a friend of mine. So I can definitely attest to that direction of travel. Yeah so Santander actually are another sky think in some ways similar to Wells Fargo where they're using this downturn in IBD plus specific cases like Credit Suisse where they're looking to try and pick up some bankers just increase that side of their business, maybe some sector specialization to bring a bit more diversity. What does a bankers in a senior senior part of their career. What does it tend to look like when they move like this. Is it quite common to jump and move from bank to bank what's like the normal time horizon of an of an MD and one of these senior positions. Yeah, I mean, I don't know whether there's a there's a kind of rule book for it, but I guess if you're thinking as these, as these people get more and more senior as they move into the MD realm. Again, the pyramid becomes shorter becomes steeper. There are less places that you can possibly move to, you've made a lot of money. So at this point it's kind of real time and non executive direct to ships. You're not going to kind of continue to move on up into that up into that into the top of the pyramid, making a lateral move but as we know, that's incredibly expensive. That can be incredibly expensive you know so Wells Fargo and not yet I would love to know what they're paying for some of these bankers because it won't be cheap. And also, if you've been at a bank, you know these banks, they have their own institutional memory and their own culture, if you've been and a lot of these bankers would have been with the same bank for 1520 years to take a shift and go from being, you know a belt and braces bank into a more tech focused bank or whatever it might be. It's going to be quite hard when you're relatively ingrained in an institution. So, you know, there's a number of things to consider. There's not as much movement obviously as there would be slightly further down. Okay, well then final one. Let's go to BlackRock markets actually are open now Wall Street so I was just trying to see if I can clock what the percentages are pre market. BlackRock were up about a percent comparative to JP which are up nearly 3%. So the blackrock numbers are always pretty big when you start talking about things like assets under management but from a quick scan of the initial numbers as they came out. Well, just going off the top, the Q2 adjusted EPS $9.28 far exceeded expectations at 846 revenues 4.46 billion that's broadly in line with expectations of 4.47 net inflows topped 80 billion however that was actually short estimates on the street for 81. And they did note that cash management products had inflows of $23 billion as investors flocking to take advantage of this interest rate environment so anything there that really stood out for either of you. I mean, I think it's a bit more straightforward with asset managers, you know, ultimately, their top line revenue really is a well is in large part a function of just how well markets are doing just and that's just because it's about fees generated from assets under management. And as the value of the assets under management change when obviously your fees change your revenues change right and we've obviously had a great first half of the year well. I know we talked about a narrow rally but obviously the big tech giants have just had a storm which has meant their assets under management has gone up and so it's up to 9.4 trillion. You see, they charge the dollar fees for that is more right so that that's one thing. I mean, I do think. And maybe just to add actually, so their revenue overall is still down on so on a year on your basis their revenues negative down 1%. And that's again just a function of where markets are. It's back 12 months and their assets under management was north of 10 trillion. It dropped sharply below 9 trillion and remember where we got to start this year when it kind of bottomed out but now we're back up to 9.4. So, you know, I think on the one hand, it's a bit easier to kind of decipher and forecast I would say these revenues. So, if I'm an investor, if I'm an investor in BlackRock or if I'm an investor in publicly listed asset managers, do I kind of just discount obviously revenue rises in line with assets under management or the increase in the value of the assets that are already under management Do I just discount that as just, you know, it's not it's not necessarily smart. It's not it's kind of it's not necessarily the edge that this asset manager has especially one that is so ETF focused right index focus right you know six and a half million of their 9 trillion celebrating an increase in AUM and fees resulting from that. There's just what they haven't done anything special right. Well, they've got the products for the masses. So you said I haven't done anything special but they've actually nailed the product that has generated the most amount of inflows of any other products on the planet for the last decade which is basically stock ETFs. So, I guess from a product point of view, they were first and they, that first mover advantage has always been in their back pocket. Yeah, yeah, I was just going to add just on that point there was a comment from Larry Fink, who's the CEO and he said specifically what you've just said, which is, because I know you and Larry are pals and so what you came out of the statement earlier today was that our platform as a service strategy, powered by strong performance is leading to clients consolidating more of their portfolios with BlackRock. So yeah, makes makes a lot of sense. I mean what I would say also is obviously on one level it's just all right stock index has gone up more assets under management more revenue, happy days but underneath that they do have this thing called they specifically talked about their Aladdin risk management system, which is then like this is different right these are these are other products and very tech orientated products that you know they've been working on for years and years and years and I'm really starting to build to become you know actually something a bit more meaningful in terms of the proportion of their revenue but that so the Aladdin risk management system revenues and from other technology services that was up 8%. So whilst net overall their revenues down 1%. That part of their business is up 8%. So that clocked in at 359 million. Now, you know which is starting to get pretty interesting. And yeah they said, Larry Fink said their 25 largest clients had given BlackRock a larger share of their spending. Over the last five years on these kind of tech, you know risk management type type products so that their technology arm is really has probably been best in class, because you've seen other asset managers really suffer a lot more, because they're that kind of tech product bit piece if you like just isn't isn't as strong. Yeah. And there was an equity analyst and the FT on the back of this you kind of encapsulated that that thinking. He wrote that they've built a better mouse trap in terms of having better technology and options across all the asset classes. Yeah, I mean, so calling it platform as a service, you know suggest that they are trying to get into the tech speak. I don't know if you've been to BlackRock offices in London recently. But it is it's like it's like a tech startup you know they're all wearing button dash shirts and sipping their lattes it doesn't feel like it doesn't feel like when you go into shoulders or something like that it feels like flatline. Sorry, sorry. Yeah. But, but yeah the last the last thing I want to say about these numbers is just in terms of those inflows of 80 billion you mentioned 23 billion in cash management, they're actually net outflows and equities. So even though fees from assets under management driven by the equity rally have increased. There's been 4.3 billion of outflows and 44 billion of inflows and fixed income. So just in terms of where you know where the money is going. That's quite a quite an interesting kind of signal as to where people see the future. Right and that that's why I mentioned earlier right this is where people with cash in deposit accounts at banks, earning no interest whatsoever. Well this is where it's going. Right they're pulling it out and so this goes back to the point about being the biggest and having a good set of products and a good platform it's easy to kind of just get on board it so yeah if you've got some cash you want to generate a return from, well I'll take it out of my account. Where am I going to put it? Well, BlackRock. Let's start with them. They're the number one and then obviously you start with them and then you probably just end with them as well and you just stick your money there. Very cool. Well let's look to just bring everything together and talk a little bit about the market right now. I mentioned earlier we've just gone through the open on the street. I'm not sure if either of you've got your charts up. But US equities have just popped to the upside through the open. The NASDAQ is. That's ripped. Feeling fine on a Friday here and actually I was just looking at the NASDAQ on a daily chart. I mean it's the highest going back to the beginning of 2022 right now and there's a really, I think Wednesday's just saw the price really break quite a key long level of resistance which was holding the price action for recent weeks but by de facto then this year 2023 and it was capping some of the price activity we had through March and a retest in late March April of last year. So technically looks quite bullish Piz. I mean perhaps we could just also layer in firstly the reasons why and obviously that inflation number was really important this week. Yeah, so this is markets and particularly tech, still leading, but it's about a reducing risk of a bad recession so a hard landing we talk about hard landing and soft landing right which is just a description of how bad a recession is when you're on that downward leg of the cycle. And what's happened because of Wednesday's inflation data, the risks of a hard landing have gone down, and the probability of therefore a soft landing has gone up and I guess you might even want to put in the category of a probability that a recession at all has gone up so this is about the inflation data which is of course has driven everything for the last two years and is the entire reason why the central banks have ramped up interest rates so quickly and the key reading was on the core inflation print for the month of June came in well below expectation and came in at 4.8%. That indicates that inflation not only because, well, I guess it's been trending down for a while right but that downtrends just sped up. So we are accelerating back towards 2% at a faster rate than we thought so it just means that the Fed I think if you look at rate probabilities I think it's still the case that markets are pricing in a rate hike from the last few weeks, 25 basis points, but actually beginning to look like that might be it. So we're like one more hike and done. So, so yeah, the peak of the interest rate hiking cycle being revised down, and then maybe rates don't stay as high for longer if inflation is going to return back to normal fast, then. This is a, this is quite a pivotal moment, perhaps in that whole debate about are we going to get a recession are we not are the Fed going to carry on hiking are they not. So yes add some percentages there so the probability of the hike on the 26th of July next FMC meeting is still 95%. So pretty much hasn't altered at all. However, the probability of end of year, which was priced for another step up as you said, that's now decreased to 18%. And just sitting at the then 25 extra which would take us to five and a quarter to five and a half federal funds rate that's at 62%. So yeah, it's this it's it's the one and done, as far as the market is concerned for now I would say now till December is a lifetime of course. In terms of percentages just just having a look in video is up 12% on the week. The letter is up eight Googles up five. These aren't small companies here so it's definitely got some decent pace to it one question then maybe to wrap the British pound peers. That's that's also well and above through 130 at this point in time, just because I want to talk in your mind about the contrast between some of the data we've seen this week we had GDP was a contraction of 0.1 against 0.3 expected. So the resilience resiliency despite the coronation of King Charles, God bless the King he the economy still going and wages are still going up. It was shown in the latest jobs data this week. So further fueling this idea of UK rates going even higher so anything there that you see with. We're actually signing off on a 6% pay deal for public sector you know all of this stuff feeds into the very clear evidence that the inflation problem in the UK is has definitely not gone away. Like it is doing in the US the US run a great trend here on inflation unfortunately the UK it's still not only is it not coming down it's still going up at a core inflation level. So basically the dollar charts quite extraordinary, like just in in two weeks, less than basically in one week. It's gone from 127 to one to above 131 I mean I can't describe how big a move that is in such a short space of time. Now, a lot of this is dollar related like the dollar is weakening rather than the pound strengthening. So the dollar is devaluing because of that inflation data, indicating the Fed are done. The bank of England they're going to have to carry on hiking for God knows how long here. So you've got all of a sudden quite a divergence again in the interest rate expectations between what the bank of England will do carry on hiking and what the federal do stop. And so that's leading to the pound appreciating and the dollar sort of devaluing so yeah quite an amazing move have to say. Cool, well look, just to wrap two things I wanted to say for one. Yeah, given the breakdown of what's being described for some people might have been quite a lot to absorb. So if you jump on the amplify me YouTube channel, Steven did an awesome series of explainers that are like two to three minute long videos with animations and slides that explains some of these things like, what's the difference between investment bank and a different divisions and so on. And when you see that visual queue, maybe it will help just pull the pieces of the puzzle together for what we've discussed for anyone where you know this is might be a new subject to you so do check that out. And then also what I'll do is I'll post myself on LinkedIn this weekend, some of the earning statements where we've gathered some of this information we've discussed. It's not that it's difficult to find you just got to know where to look. And so I'll give you a little walk through for any curious minded students or investors who want to know how to find these metrics. I'll give you some step by step advice on there as well so feel free to check out and find me and then feel free to connect with all three of us and LinkedIn would love to to speak with you. But thank you very much guys. Thank you. Take care.