Stocks Fall, Oil Rises as Shipping Crisis Worsens | Bloomberg Brief 3/12/2026

VONNIE: YOU SET UP FOR THE DAY. THE CRISIS WORSENING.

RAISING RISKS AROUND GLOBAL ENERGY SUPPLY.

BRENT IS HOVERING NEAR $100 A BARREL THIS MORNING.

SETTING THE STAGE FOR FRESH TARIFFS.

THE TRUMP ADMINISTRATION KICKS OFF ITS SWEEPING TRADE PROBES INTO CHINA AND THE EUROPEAN UNION. PRIVATE CREDIT ANXIETY.

MORGAN STANLEY AND CLIFF WATER CAP WITHDRAWALS FROM THEIR FUNDS AS REDEMPTION REQUESTS GROW.

LET'S LOOK AT THE MARKETS AS WE ARE GETTING HEADS FROM THE IEA, THEIR MONTHLY REPORT SAYING THAT THE IRAN WAR IS CAUSING THE BIGGEST EVER OIL MARKET DISRUPTION.

YOU CAN SEE THAT IN THE PRICE OF BRENT CRUDE.

WE GOT UP WE SAW OMAN HAD EVACUATED AS A PRECAUTIONARY MEASURE A WHOLE EXPORT TERMINAL. THEY HAVE STARTED TO EXPORT AGAIN FROM THAT TERMINAL. OIL HAS COME OFF OF ITS HIGHS BUT BRENT CRUDE TOUCHED $100 A BARREL ONCE AGAIN THIS MORNING, EVEN AFTER THE RELIEF WE SAW YESTERDAY.

YOU CAN SEE THE 10 YEAR YIELD CREEPING HIGHER.

4.23 PERCENT AS THIS CRISIS KEEPS DEEPENING.

GOLDMAN EXPECTING BRENT TO AVERAGE $98 A BARREL IN MARCH AND APRIL. IF THE FLOWS THROUGH THE STRAIT

AND APRIL. IF THE FLOWS THROUGH THE STRAIT OF HORMUZ ARE DISRUPTED FOR EVEN MORE THAN THAT, IT HAS A VERY ADVERSE SCENARIO FOR A CLOSURE OF 60 DAYS WHEN WE SEE OIL PRICES AT A PEAK OF $150 A BARREL.

YOU CAN SEE S&P FUTURES ARE REFLECTING THE SENTIMENT.

THE TARIFFS POINTED TO A LOWER OPEN.

THE YEN WAS ABOVE 159 FOR MUCH OF THE LAST FEW HOURS.

THE DOLLAR INDEX IS CLAIMING SOME OF THOSE RISK TRADES.

I WANT TO BRING YOU BACK TO THE IEA MONTHLY REPORT.

THE IEA SAYING THE IRAN WAR IS CAUSING THE BIGGEST EVER OIL MARKET DISRUPTION. THAT IS SOME COMMENT FROM THE

MARKET DISRUPTION. THAT IS SOME COMMENT FROM THE INTERNATIONAL ENERGY AGENCY, WHICH YESTERDAY DECIDED TO RELEASE 400 MILLION BARRELS INTO THIS MARKET.

LET'S GET INDIVIDUAL MOVERS. HERE IS ABEER ABU OMAR. ABEER:

WE ARE LOOKING AT BIG OIL ON THE BACK OF THE TENSIONS IN THE MIDDLE EAST THAT HAVE BEEN ESCALATING OVER THE PAST 24 TO 48 HOURS. BIG OIL COMPANIES IN THE

48 HOURS. BIG OIL COMPANIES IN THE PREMARKET TRADE ARE BENEFITING, MOVING UP AS MUCH AS NEARLY 1%.

OBVIOUSLY, THIS IS A SECTOR THAT IS ONE OF THE VERY FEW THAT ARE BENEFITING IN THE S&P, AS YOU HAVE ALLUDED TO EARLIER.

THE FUTURES PICTURE DOES NOT LOOK VERY GOOD WHEN IT COMES TO THE OVERALL INDEX. ENERGY BENEFITING ON THE BACK OF BRENT CRUDE CLOSING IN ON $100 A BARREL.

PARING SOME GAINS FROM EARLIER IN THE SESSION WHEN WE HEARD THEY ARE RE-EXPORTING FROM THE PORT THAT WAS HIT EARLIER ON.

THIS IS A SECTOR THAT WILL BE VERY MUCH IN FOCUS UNTIL THE STRAIT OF HORMUZ REOPENS. IT HAS BEEN EFFECTIVELY SHUT SINCE THE ON START OF THIS WAR IN THE MIDDLE EAST. WE MOVE ON TO ANOTHER SINGLE STOCK THAT IS NOT DOING GREAT THIS MORNING.

THIS IS UIPATH, A SOFTWARE COMPANY.

WE'VE SPOKEN A LOT ABOUT SOFTWARE STOCKS OVER THE PAST MONTH OR SO. SOFTWARE IS NOT A SECTOR THAT HAS DONE WELL SINCE THE START OF THE YEAR.

WE MIGHT BE SEEING A TURNAROUND STORY ACROSS THE MACRO SOFTWARE INDUSTRY. IT'S THE ONLY SECTOR DOING WELL.

INDUSTRY. IT'S THE ONLY SECTOR DOING WELL.

UP 4% SINCE THE BEGINNING OF THIS MONTH ACROSS THE S&P.

UIBACK TO SOME GROWTH PROSPECT CONCERNS BY BLOOMBERG BLOOMBERG INTELLIGENCE, DOWN BY 5%.

BUMBLE PROVIDED SOME EARNINGS YESTERDAY, GAINING 26% THIS MORNING. THE EARNINGS WERE A POSITIVE

MORNING. THE EARNINGS WERE A POSITIVE STORY BUT IT IS REALLY AN AI STORY. THEY PROVIDED A NEW AI ASSISTANT TO THEIR APP AND THAT IS SEEN FAVORABLY BY INVESTORS.

BUMBLE GAINING UP 26%. VONNIE: THAT IS ABEER ABU OMAR.

SHE WILL BE BACK LATER IN THE HOUR.

ALSO, MAX KETTNER OF HSBC JOINS US ON THIS MARKET VOLATILITY.

WE HAVE AN EXCLUSIVE INTERVIEW WITH THE CFO OF DEAL FROM THE CITY DISRUPTED CONFERENCE.

SHIPPING RIGHTS IS GETTING WORSE WITH THE LATEST FROM THE IRAQI WATERS WERE TWO OIL TANKERS WERE HIT, RAISING CONCERNS OVER GLOBAL ENERGY SUPPLY EVEN FURTHER.

LET'S GO TO OUR TEAM COVERAGE WITH JOUMANNA BERCETCHE AND ANTHONY DIPAOLA FROM DUBAI. THAT IS ONE OF THE DEVELOPMENTS RELATED TO OIL OVERNIGHT. WHAT OTHER EPISODES WILL BE CONCERNING TO THAT MARKET IN PARTICULAR THIS MORNING?

JOUMANNA: THERE HAVE BEEN A SIGNIFICANT NUMBER OF DEVELOPMENTS AROUND ENERGY INFRASTRUCTURE, BUT INCREASINGLY CIVILIAN INFRASTRUCTURE IN THE REGION, TOO. LET ME FLY GOING BACK TO WHAT

TOO. LET ME FLY GOING BACK TO WHAT YOU ARE SAYING -- FLAG GOING BACK TO WHAT YOU ARE SAYING, WHAT IS HAPPENING IS TANKERS ARE OUTSIDE THE STRAIT OF HORMUZ. WE WERE LOOKING AT IMAGES OF

HORMUZ. WE WERE LOOKING AT IMAGES OF TWO VESSELS OFF OF THE COAST OF IRAQ, THE NORTHERN PART OF THE PERSIAN GULF, ON FIRE. THEY WERE TARGETED FOLLOWING ON FROM YESTERDAY WHERE THREE VESSELS WERE ALSO SUBJECTED TO PROJECTILES THAT WERE SET ABLAZE THROUGHOUT THE COURSE OF THE DAY. FURTHER SOUTH OF THE STRATA

THE DAY. FURTHER SOUTH OF THE STRATA PERFORMANCE -- FROM THE STRAIT OF HORMUZ, TALKING ABOUT THE GULF OF OMAN, WE SAW STRIKES ON ESSENTIAL ENERGY INFRASTRUCTURE TARGETING OMAN. WHICH IS ANOTHER ESCALATORY

TARGETING OMAN. WHICH IS ANOTHER ESCALATORY DEVELOPMENT. OMAN PLAYED A KEY ROLE IN TERMS

DEVELOPMENT. OMAN PLAYED A KEY ROLE IN TERMS OF MEDIATION SO IT'S SURPRISING TO SEE THEM BECOME SUSCEPTIBLE TO ATTACKS. ONE OF THE KEY EXPORTS FOR THE

TO ATTACKS. ONE OF THE KEY EXPORTS FOR THE TERMINALS WERE HIT THERE. OTHER AN ABUNDANCE OF CAUTION WE SAW AN EVACUATION OF VESSELS FROM AROUND THAT EXPORT TERMINAL THIS MORNING. IT SEEMS THEY ARE BACK WITH OPERATIONAL ACTIVITY, BUT WE SAW ANOTHER FIRE ERUPT THERE.

NUMEROUS STRIKES AT ENERGY INFRASTRUCTURE PLANTS.

SAUDI ARABIA ALSO REPORTING THERE HAVE BEEN NUMEROUS ATTEMPTED NEW ATTACKS ON THE OIL FIELDS THAT HAVE BEEN INTERCEPTED.

DAY 13 OF THE WAR AND THERE ARE NO SIGNS THAT THINGS ARE LETTING UP. IF ANYTHING IRAN CONTINUES TO

LETTING UP. IF ANYTHING IRAN CONTINUES TO FIRE AND GO AFTER THESE KEY POINTS AROUND THE STRAIT OF HORMUZ IN THE PERSIAN GULF, THE GULF OF OMAN, AND THEY DON'T SEEM TO BE LETTING UP. VONNIE:

ANTHONY, BACK TO THE INTERNATIONAL ENERGY AGENCY MONTHLY REPORT, BECAUSE IT MENTIONS THE CONFLICT AND SAYS THE CONFLICT WILL SLASH SUPPLIES BITE 7.5% -- SUPPLIES BY 7.5%.

PUT THAT INTO CONTEXT THAT WE HAVE RELEASED 400 MILLION PLUS BARRELS. ANTHONY: THERE IS A LOT OF INTERESTING

BARRELS. ANTHONY: THERE IS A LOT OF INTERESTING INFORMATION IN THAT. THERE IS THE REDUCTION IN SUPPLY TO THE MARKET, WHICH WE CAN SEE HAPPENING ALREADY BECAUSE OF THE BLOCKAGE OF THE STRAIT OF HORMUZ.

THAT IS STOPPING ROUGHLY 1/5 OF THE WORLD'S DAILY OIL SUPPLY FROM GETTING OUT OF THE PERSIAN GULF TO MARKETS.

WE ARE LOSING THAT. WE ARE SEEING SOME EFFORTS TO COMPENSATE VIA GULF COUNTRIES USING ALTERNATIVE PIPELINES.

SAUDI ARABIA HAS A PIPELINE TO THE RED SEA COAST. ABU DHABI

HAS A PIPELINE. WE MENTIONED OMAN.

OMAN IS EXPORTING OUTSIDE THE GULF AND THOSE EXPORTS HAVE RESUMED. OF THE RELEASE BY IEA MEMBER

RESUMED. OF THE RELEASE BY IEA MEMBER STATES WILL BE LIMITED, BECAUSE IT IS LIMITED TO A CERTAIN AMOUNT OF OIL THEY CAN RELEASE EACH DAY.

THAT'S NOT GOING TO BE ENOUGH TO REALLY COVER THAT SHORTFALL IN THE MARKETS. WE ARE STILL GOING TO SEE SOME DEMAND GO UNMET. WE ARE SEEING THAT IN PRICES.

ANOTHER INTERESTING HEADLINE OUT OF THE IEA WAS THEY ARE FORECASTING A LOWER DEMAND GROWTH IN 2026.

ABOUT ONE MILLION BARRELS A DAY LESS OF DEMAND GROWTH.

WE ARE SEEING SOME DEMAND DESTRUCTION BASED ON PRICE AND PEOPLE NOT BEING ABLE TO GET THE OIL THEY NEED TO REFINE IT, TURNED IT INTO FUEL, TURN IT INTO CHEMICALS.

WE ARE SEEING THAT HAVING A KNOCK ON EFFECT ACCORDING TO THE IEA PREDICTIONS FOR THE OUTLOOK FOR THIS COMING YEAR.

VONNIE: WHAT CAN WE EXPECT NEXT? HAVE WE HEARD ANYTHING NEW FROM ANY OF THE ADMINISTRATIONS?

THE IRANIANS' SUPREME LEADER'S CAMP OR PRESIDENT TRUMP?

JOUMANNA: WE'VE HEARD FROM BOTH. LET ME START WITH A POST-IRANIAN PRESIDENT PUT UP OVERNIGHT SUGGESTING THREE CONDITIONS FOR THEM TO RETURN BACK TO THE NEGOTIATING TABLE.

ONE IS ASSURANCES THAT AN ATTACK ON IRAN WOULD NOT TAKE PLACE AGAIN. MANY PEOPLE ARE DISCARDING THIS

PLACE AGAIN. MANY PEOPLE ARE DISCARDING THIS AS DIPLOMATIC POSTURING. YOU WILL RECALL THERE WAS ANOTHER INCIDENT LAST SATURDAY WHEN THE PRESIDENT APOLOGIZED TO GULF NEIGHBORS AND SAID THAT THEY WERE NOT THE ACTUAL TARGETS FOR THEIR ATTACKS. THEY WERE TARGETING U.S. ASSETS.

THAT WAS LATER CONTRADICTED BY HARDLINER MEMBERS OF THE REVOLUTIONARY GUARD CORPS, INCLUDING THE NATIONAL SUPREME COUNCIL LEADER AND SPEAKER OF THE PARLIAMENT WHO CONTINUED TO STRESS THEY DON'T WANT TO GO FOR A CEASE-FIRE AND THEY DON'T WANT TO NEGOTIATE. EQUALLY, PRESIDENT TRUMP SAYING THEY WANT TO FINISH THE JOB AND THEY ARE NOT GOING TO STOP SHORT OF AN UNCONDITIONAL SURRENDER.

STILL A LOT OF DAYLIGHT BETWEEN THE TWO SIDES. VONNIE:

WE WILL BE BACK WITH YOU THROUGH THE AFTERNOON.

JOUMANNA BERCETCHE AND ANTHONY DIPAOLA. THE U.S.

INITIATING THE FIRST OF SEVERAL SWEEPING TRADE INVESTIGATIONS, SETTING THE STAGE FOR NEW LEVEES. MORE THAN A DOZEN MAJOR ECONOMIES ARE BEING INVESTIGATED, INCLUDING CHINA AND THE EUROPEAN UNION. THIS IS PRESIDENT TRUMP IS SET TO VISIT CHINA IN A FEW WEEKS. LET'S GET MORE FROM BLOOMBERG'S CHIEF EUROPE CORRESPONDENT, OLIVER CROOK.

THE LATEST TWIST IN THE ROAD TO SOME SORT OF STABLE TARIFF REGIME FROM THE USA. WILL IT STICK THIS TIME? OLIVER:

THAT IS THE QUESTION. WE LOOK AT WHAT THE TRUMP ADMINISTRATION IS TRYING TO DO, WHICH IS BRING TARIFF CONTINUITY FROM THEIR ORIGINAL REGIME THAT WAS STRUCK DOWN UNDER THE IEEPA TARIFFS AND BRING THAT INTO A NEW LEGAL FRAMEWORK. THEY ARE TRYING TO DO THAT WITH

FRAMEWORK. THEY ARE TRYING TO DO THAT WITH SECTION 31 TARIFFS OF THE TRADE ACT, A FOCUS ON A LEDGE IN EXCESS CAPACITY FROM OTHER NATIONS.

IT TARGETS ALL OF THE MAJOR TRADING PARTNERS FROM THE UNITED STATES. CHINA, THE EUROPEAN UNION,

UNITED STATES. CHINA, THE EUROPEAN UNION, MEXICO, JAPAN, SOUTH KOREA. THEY ARE BEING TARGETED BY NEW MEASURES TO TRY TO BASICALLY BRING THE POLICY FROM LAST YEAR INTO THIS YEAR. THE DIFFICULTY THEY HAVE TO HAVE IS THAT THIS IS SOMETHING THAT CAN TAKE MONTHS.

IT IS NOT AS QUICK OF A FIX AS IT HAS BEEN HISTORICALLY.

IT NEEDS TO BE LEGALLY BULLETPROOF TO SURVIVE ANY OTHER SCRUTINY BY THE SUPREME COURT OR OTHER COURTS.

THAT SAID, THEY ARE TARGETING SPECIFICALLY THE GERMANS AND IRISH IN THE CHEMICAL SECTOR, MACHINERY SECTOR, AND CARS.

ANY DELAY TO A FINAL TARIFF REGIME FROM THE UNITED STATES WILL CREATE UNCERTAINTY FOR COMPANIES AND UNCERTAINTY FOR TRADING PARTNERS. FOR EXAMPLE, IN THE EUROPEAN

TRADING PARTNERS. FOR EXAMPLE, IN THE EUROPEAN UNION THEY HAVE NOT YET RATIFIED THEIR OWN ACCORD WITH THE UNITED STATES. THAT CANNOT HAPPEN UNTIL THEY GET CLARITY FROM THE U.S. VONNIE:

HOW WILL COMPANIES REACT, HOW HAVE THEY BEEN REACTING THE PAST FEW HOURS? OLIVER: THINKING ABOUT THE DIRECT IMPACT FROM WHAT WE'VE SEEN FROM A NUMBER OF COMPANIES IN EUROPE.

OVER THE PAST COUPLE OF DAYS, THE AUTOMAKERS, VOLKSWAGEN SALES WERE DOWN IN THE UNITED STATES BY 12%.

PORSCHE, TARIFFS COST THEM 700 MILLION EUROS.

THAT IS SHAVING OFF 1.25% OFF OF THEIR MARGINS ON AN ANNUAL BASIS. THIS IS ALREADY HAVING A MAJOR

BASIS. THIS IS ALREADY HAVING A MAJOR IMPACT LAST YEAR INTO THIS YEAR. ONE OF THE POINTS OF THE BMW CEO SAID TO ME IS THAT THIS ISN'T JUST U.S. TRADE POLICY.

UNTIL THE EU CAN RATIFY THEIR OWN TRADE ACCORD WITH THE UNITED STATES, BMW AND EVERY EXPORTER FROM THE UNITED STATES IS PAYING 10% TARIFFS INTO THE EU AND THAT WILL STAY IN PLACE UNTIL YOU GET A FINAL POLICY FROM THE UNITED STATES.

A MATERIAL IMPACT FROM A LOT OF THE AUTO COMPANIES IN THE UNITED STATES.

VONNIE: NOW, TWO OF THE TOP STORIES ON THE TERMINAL. MORE SIGNS OF PRIVATE CREDIT

THE TERMINAL. MORE SIGNS OF PRIVATE CREDIT PRESSURE. MORGAN STANLEY AND CLIFF WATER

PRESSURE. MORGAN STANLEY AND CLIFF WATER CAP SUPPLIES. LIMITED TO 7% OF SHARES FROM

CAP SUPPLIES. LIMITED TO 7% OF SHARES FROM THE FLEXION VEHICLE. INVESTORS WERE LOOKING FOR 14%.

MORGAN STANLEY RETURNS 160 $9 MILLION, LESS THAN HALF OF INVESTOR'S TENDER REQUESTS. JP MORGAN SAYS THAT HEDGE FUNDS ARE SEEING THEIR BIGGEST DRAWDOWN SINCE THE SO-CALLED LIBERATION DAY TARIFF ANNOUNCEMENTS.

COMMODITY TRADING ADVISORS ARE SEEING THEIR WORST STRETCH IN ALMOST A YEAR. EQUITY LONG SHORT FUND POSTING HEAVY LOSSES DUE TO OVERWEIGHT POSITIONS IN EUROPEAN AND KOREAN MARKETS IN PARTICULAR. CHINESE OIL REFINERS ARE CANCELING REFINED FUEL EXPORT CARGOES AS THE IRAN WAR HITS THEIR OIL SUPPLY. THE COUNTRY'S LARGEST PROCESSORS OF DIESEL AND GASOLINE WERE TOLD TO STOP

SIGNING EXPORT CONTRACTS. A STEP UP FROM EARLIER GUIDANCE SEEN AS NONMANDATORY. HSBC'S MAX KETTNER JOINS US NEXT ON SOME OF THE POSITIONING THAT HE SEES FLASHING PANDEMIC-TYPE SIGNS. THIS IS BLOOMBERG. ♪

PANDEMIC-TYPE SIGNS. THIS IS BLOOMBERG. ♪

VONNIE: THIS IS BLOOMBERG BRIEF, AM VONNIE QUINN IN LONDON. INVESTORS ARE GRAPPLING WITH UNCERTAINTIES FROM THE CONFLICT IN THE MIDDLE EAST WITH OIL BRIEFLY JUMPING BACK TO $100 A BARREL.

JOINING US IS MAX KETTNER. HOW ARE YOU HANDLING THESE DAYS?

IT SEEMS LIKE IT'S NOT JUST HEADLINE RISK BUT EVERY NEXT PORT THAT GETS EVACUATED OR SHIP THAT GETS HIT.

IT COMPLETELY FLOW -- FLUMMOXES THIS MARKET. MAX:

YOU CAN EITHER TRADE THE INTRADAY, BUT I DON'T THINK IT HELPFUL TO SAY MY OIL PRICE TARGET BY THE END OF THE YEAR IS X DOLLARS. IT DEPENDS ABOUT THE PATH OF THE NEXT COUPLE OF DAYS AND WEEKS WHAT THAT MEANS FOR EQUITIES, CREDIT, RATES, AND SO ON. THAT IS PROBABLY MORE OF THE

DAY IN COME OF THE DAY OUT TRADING, THE INTRADAY TRADING.

THE OTHER STEP IS TO SAY DO I NEED TO LOOK AT THE INS AND OUTS OF WHAT'S HAPPENING ON THE GROUND, OR THERE IS SOME HISTORICAL PERSPECTIVE. DOES THAT HELP?

HISTORICAL PERSPECTIVE. DOES THAT HELP?

WHEN YOU LOOK AT HISTORY, YOU LOOK AT THINGS LIKE THE BIGGEST ESCALATIONS IN THE LAST 35 TO 40 YEARS, WHAT YOU CAN TELL IS THERE IS TYPICALLY AN AWFUL LOT OF HEDGING GOING ON STRAIGHT AFTER THESE EVENTS HAPPEN. WE HAVE SEEN THAT NOW AS WELL.

WE SAW THAT LAST WEEK, WE SAW THAT ON MONDAY, THINGS LIKE THAT VIX FUTURES CURVE AS INVERTED AS IT WAS IN MARCH 2020. DURING THE DEPTHS OF COVID.

2020. DURING THE DEPTHS OF COVID.

WHEN YOU LOOK AT THE FORWARD PERFORMANCE A MONTH OUT OF EQUITIES, IG, HIGH YIELD SPREADS, EMERGING MARKET CURRENCIES, YOU START TO SEE HIT RATIOS ARE TURNING QUITE POSITIVE. PEOPLE ARE STARTING TO FADE

POSITIVE. PEOPLE ARE STARTING TO FADE GEOPOLITICAL ESCALATIONS BECAUSE AFTER A CERTAIN TIME IT GETS BACK TO FOCUSING ON THE FUNDAMENTALS.

HOW DOES THAT AFFECT MY EARNINGS OUTLOOK AND TOP-DOWN GROWTH OUTLOOK AND SO ON AND SO ON. VONNIE:

WHICH WOULD BE GREAT NEWS, EXCEPT IF IT LASTS MORE THAN A COUPLE OF WEEKS WE ARE TALKING ABOUT A MONTH AND WE WILL SEE AN IMPACT ON GDP, FOR EXAMPLE, IN THE UNITED STATES AND ELSEWHERE. WHAT DO CENTRAL BANKS DO?

ELSEWHERE. WHAT DO CENTRAL BANKS DO?

10 OF THEM ARE MEETING NEXT WEEK. MAX:

IS PROBABLY TOO EARLY FOR THEM TO SAY WE WILL ENTIRELY CHANGE COURSE. FOR THE ECB TO SAY WE ARE NOW

COURSE. FOR THE ECB TO SAY WE ARE NOW IN A RATE HIKING MODE. WHAT HAPPENS IN A MONTH EVERYTHING IS OVER, THE OIL IS BACK AT $70, AND THE ECB HAS FREAKED OUT AND HIKED RATES INTO WHAT IS A TRANSITORY EVENT?

VONNIE: THEY ALSO CAN'T SAY WE ARE NOT WORRIED ABOUT THIS. MAX: THAT'S A COMPLICATION FROM CENTRAL BANKS ALREADY. THEY SAY THEY ARE MONITORING THIS. THERE MIGHT HAVE TO BE SOME

THIS. THERE MIGHT HAVE TO BE SOME COMMUNICATION AND DISCUSSION AROUND OF RATE HIKES.

WE SAW THAT YESTERDAY FROM THE ECB, A HAWK BUT CENTRAL BANKS ARE NOT GETTING WORRIED BUT THEY ARE SAYING IF THIS STICKS WE NEED TO TAKE THAT INTO ACCOUNT.

I THINK THE WORST DECISION WOULD BE TO SAY SOMETHING HAS BEEN HAPPENING NOW. WE DON'T CARE IF IT IS TRANSITORY OR NOT. WE ARE IMMEDIATELY REACTING AND IMMEDIATELY HIKING RATES. I DON'T THINK THAT IS LIKELY.

VONNIE: AND THE WORST SCENARIOS WE SEE THE LABOR MARKET FALL OFF IN THE UNITED STATES AT THE SAME TIME WE ARE GETTING IN INFLATION BOOST FROM THE OIL PRICE HIKE WHICH MAY OR MAY NOT LAST. IN THAT SITUATION, HOW DOES THE FED COME TO ANY CONSENSUS GIVEN THAT THEY ARE PREDISPOSED TO NOT BEING IN CONSENSUS? MAX: IT GETS TRICKY.

THE U.S. LABOR MARKET, I'M LESS CONCERNED ABOUT THE FEBRUARY PAYROLL DATA. WHEN YOU LOOK UNDER THE HOOD,

PAYROLL DATA. WHEN YOU LOOK UNDER THE HOOD, AT THE PAYROLL DIFFUSION INDEX OVER THE LAST MONTH, EVEN IN FEBRUARY DESPITE THE NEGATIVE PAYROLL PRINTS, THE NET NUMBER OF SECTORS HIRING IN PAYROLLS HAS STILL GONE UP IN FEBRUARY.

UNDER THE HOOD THERE IS THE DIFFUSION, THE NET NUMBER OF DISTRIBUTION WITHIN PAYROLLS IS STILL GETTING SLIGHTLY BETTER.

NUMBER TWO, WHEN YOU LOOK UNDER THE HOOD AT HIGH FREQUENCY DATA ON THE LABOR MARKET THERE IS VERY LITTLE WARNING SIGN.

ADVANCED FIRING NOTICES -- WE KNOW THAT THERE WAS A BIG JUMP IN JANUARY, BUT THAT WAS MOSTLY DUE TO FIRING IN THE MEGA CAPS.

WE KNOW THAT SOME LABOR MARKET STRESS INDICES ARE TURNING WAY LOWER. THINGS LIKE TEMPORARY WORKERS,

LOWER. THINGS LIKE TEMPORARY WORKERS, THAT IS STILL GOING UP. THAT'S THE SORT OF STUFF THAT TYPICALLY GOES UP ONLY IN EARLY STAGES OF THE CYCLE. VONNIE:

WHAT ARE YOU THE MOST CONCERNED WILL BREAK? MAX:

MOST CONCERNED ABOUT THE EARNINGS OUTLOOK TOWARDS THE THIRD AND FOURTH QUARTER BECAUSE THE EARNINGS EXPECTATIONS ARE SUPERHIGH. WE ARE TALKING IN Q1 VERSUS Q4 -5% SEQUENTIAL EARNINGS GROWTH. Q3 AND Q4, WE ARE GOING TO 84 DOLLARS EXPECTED. THAT IS THE SECOND HALF OF THE

DOLLARS EXPECTED. THAT IS THE SECOND HALF OF THE YEAR I WORRIED ABOUT. VONNIE: STAY TUNED. THIS IS BLOOMBERG.

♪ VONNIE: TIME FOR YOUR FRONT PAGE NEWS.

THE FINANCIAL TIMES REPORTING THAT A TOP GOLDMAN SACHS EXECUTIVE SAYING THAT PRIVATE CLIENTS ARE "GLAD" THE IRAN WAR IS PROVIDING A DISTRACTION FROM QUESTIONS OVER THIS SECTORS EXPOSURE TO SOFTWARE.

THE COMMENTS WERE MADE ON A CLIENT CALL WHEN HE WAS ASKED ABOUT WHAT HE WAS HEARING FROM CLIENTS AND SHARED HIS OBSERVATIONS FROM MULTIPLE POINTS OF VIEW.

THE WASHINGTON POST REPORTS THAT THE IRANIAN ELEMENTARY SCHOOL WHERE CHILDREN WERE KILLED WAS ON A U.S.

TARGET LIST BUT MAY HAVE BEEN MISTAKEN FOR A MILITARY SITE.

A PRELIMINARY PENTAGON INVESTIGATION FOUND THAT THE U.S. WAS AT FAULT. THE STRIKE RAISED QUESTIONS

U.S. WAS AT FAULT. THE STRIKE RAISED QUESTIONS ABOUT AI'S ROLE IN IRANIAN OPERATIONS.

ON THE WALL STREET JOURNAL, THE EFFORT TO BUY CAESARS ENTERTAINMENT FOR $7 BILLION. TOPPED A BID FROM CARL ICAHN'S FIRM. DISCUSSIONS ARE ONGOING. STAY TUNED. THIS IS BLOOMBERG.

FIRM. DISCUSSIONS ARE ONGOING. STAY TUNED. THIS IS BLOOMBERG.

VONNIE: 5:30 A.M. IN NEW YORK CITY, 9:30 A.M.

IN NEW YORK SIT -- IN LONDON. IRAN ESCALATES ATTACKS ON SHIPPING RAISING RISKS AROUND LOCAL ENERGY SUPPLY.

BRENT HOVERING CLOSE TO $100 A BARREL.

SETTING THE STAGE FOR FRESH TARIFFS, THE TRUMP ADMINISTRATION KICKS OFF SWEEPING TRADE PROBES INTO THE LIKES OF CHINA AND THE EUROPEAN UNION. PRIVATE CREDIT ANXIETY.

MORGAN STANLEY AND CLIFF WATER CAP WITHDRAWALS FROM THEIR FUNDS AS WITHDRAWAL REQUESTS GROW.

JUST A FEW HOURS AGO WE HAD A SCARE ON EVACUATING A PORT IN OMAN. IT'S NOW REPOPULATED THAT PORT.

OMAN. IT'S NOW REPOPULATED THAT PORT.

OIL PRICES ELEVATED ONCE AGAIN TODAY.

BRENT CRUDE TOPS $100 A BARREL A COUPLE OF TIMES THIS MORNING.

THAT 10 YEAR YIELD AS WELL IS CLIMBING EVER HIGHER.

CONCERNS CENTRAL BANKS AROUND THE WORLD MEETING NEXT WEEK.

LET'S LOOK AT SOME OTHER ASSET CLASSES.

EQUITY FUTURES POINTING TO LOWER IN THE UNITED STATES AND OF COURSE THE YEN AS WELL ALSO WEAKENING.

IT IS NOW JUST BELOW 159 BUT WAS ABOVE THAT FOR SEVERAL HOURS. THE BLOOMBERG DOLLAR INDEX ONE

HOURS. THE BLOOMBERG DOLLAR INDEX ONE OF THOSE SAFETY TRADES THAT CONTINUES TO BE IN PLAY.

GOLD HOVERING JUST BELOW $5,200 AN OUNCE. A FASCINATING WATCH.

LET'S GET IS SOME INDIVIDUAL MOVERS.

>> WE HAVE OIL STOCKS OR ENERGY STOCKS IN FOCUS ON THE BACK OF WHAT'S HAPPENING IN THE MIDDLE EAST AND THE ESCALATIONS THEY ARE NOW, BRENT COMING CLOSE TO $100 A BARREL, BEARING SOME OF THOSE GAINS. BUT WE HAVE THE LIKES OF EXXON,

THOSE GAINS. BUT WE HAVE THE LIKES OF EXXON, CHEVRON MOVING UP ALMOST 1% IN THE CASE OF EXXON AND THIS IS NET NEGATIVE NEWS FOR THE REST OF THE S&P BUT WHEN IT COMES TO ENERGY STOCKS ACROSS THE BOARD THIS IS POSITIVE NEWS.

BLOOMBERG ECONOMICS ESTIMATING IF THE STRAIT OF HORMUZ IS SHUT DOWN FOR THREE MONTHS, OIL PRICES COULD COME CLOSE TO $164 A BARREL IN ONE OF THEIR SCENARIOS.

BUT WE MOVE ON FROM ENERGY STOCKS TO IF WE FLOOD THE BOARD WE LOOK AT SOFTWARE STORY THAT IS MOVING UP 2% A LITTLE BIT OVER 2% ON THE BACK OF SOME JOB CUTS ON THE BACK OF AI.

SOFTWARE STOCKS HAVE NOT HAD A POSITIVE START TO THE YEAR BUT AS A MATTER OF FACT SINCE THE BEGINNING OF THE MONTH THEY ARE 4% UP SO DOING PRETTY WELL.

WE TAKE A LOOK AT BUMBLE PARING SOME GAINS AT THE TOP OF THE SESSION. 24% AN UPWARD TRAJECTORY.

SESSION. 24% AN UPWARD TRAJECTORY.

ALSO DOING WELL ON A NEW AI ASSISTANT THAT IS PERSONALIZED FOR PEOPLE USING THE DATING APP. BACK TO YOU.

>> THANK YOU SO MUCH. BACK TO OUR TOP STORY, IRAN RAMPING UP ATTACKS ON PARTS OF DUBAI AND SHIPPING ASSETS HEIGHTENING CONCERNS OVER OIL SUPPLY RISKS.

THIS IS PRESIDENT VOWS TO "FINISH THE JOB" IN IRAN.

JOINING US IS MIKA OF BLOOMBERG GOVERNMENT.

TAKE THE TEMPERATURE IN WASHINGTON.

WHAT IS PRESIDENT TRUMP'S CURRENT STATED VIEW?

WE WON'T ASK YOU WHAT IS STATE OF MIND IS BUT WHAT HIS HE SAID HE WANTS TO DO?

>> THE ADMINISTRATION IS TAKING CONCRETE STEPS TO TRY AND MITIGATE ANY SPIKE IN OIL PRICES WHICH WERE TRIGGERED ON THE GAS PRICES AND CONSUMERS OF THE PUMP.

WE SAW THE U.S. PARTNERS AND ALLIES ARE STARTING TO TAP INTO THESE EMERGENCY RESERVES THAT WERE CREATED IN THE 70'S UNDER THE ARAB OIL EMBARGO.

I THINK THE WHITE HOUSE IS VERY HOPEFUL THAT THEY CAN TRY TO CALM THESE MARKETS BUT SO FAR IT SEEMS LIKE THERE HAS BEEN A LITTLE -- LITTLE SHIFT IN THAT. THE PRESIDENT AND THOSE AROUND HIM IN HIS ORBIT ARE VERY COGNIZANT OF THE POTENTIAL CRISIS THIS MAY HAVE FOR CONSUMERS ULTIMATELY IF THIS WAR CONTINUES LONGER.

>> THOSE COMMENTS MADE ONLY A FEW HOURS AGO, IT SEEMED LIKE DAYS AGO THAT THIS WOULD BE OVER SOON IT DOES NOT SEEM TO BE THE CASE THAT THAT IS WHAT THE MARKET IS THINKING NOW AT LEAST. WE KNOW PRESIDENT PUTIN HAD AN ENVOY WHO SAID THEY

LEAST. WE KNOW PRESIDENT PUTIN HAD AN ENVOY WHO SAID THEY DISCUSSED THE ENERGY CRISIS WITH TRUMP OFFICIALS.

DO WE KNOW ANYTHING MORE ABOUT DETAILS THAT WERE DISCUSSED?

MICA: I THINK THE CONVERSATION HAS BEEN RELATIVELY QUIET WHEN IT COMES TO DETAILS, BUT THE -- RUSSIA HAS BEEN IN TALKS WITH U.S.

OFFICIALS AND I THINK THE WHITE HOUSE IS KEEPING THIS UNDER WRAPS. WE KNOW THIS COULD BE A HUGE

WRAPS. WE KNOW THIS COULD BE A HUGE POTENTIAL ECONOMIC WINNER FOR RUSSIA SO THEY ARE DEFINITELY GOING TO BE TAKING A BIG STAKE IN WHAT'S HAPPENING IN IRAN SO THIS IS A BIG MOVE IN TERMS OF LIFTING SANCTIONS. VONNIE:

THESE TRADE PROBES WE ARE TALKING ABOUT 16 OF THEM AND IT'S NOT JUST CHINA AND THE EU, BUT A LOT OF OTHER COUNTRIES THAT ARE FRIENDLY TO THE UNITED STATES.

SAYING TODAY WE COULD EXPECT THEM TO BE IMPLEMENTED BY JULY 24. HOW LONG WILL IT TAKE FOR THESE

24. HOW LONG WILL IT TAKE FOR THESE INVESTIGATIONS TO GET DONE?

MICA: THE ADMINISTRATION HELD A CALL YESTERDAY WITH REPORTERS AND THEY REALLY TRIED TO ESCALATE THESE INVESTIGATIONS AS SOON AS THEY CAN. THEY WANTED ON A QUICK TIMELINE. THIS IS A CONTINUATION OF

TIMELINE. THIS IS A CONTINUATION OF PRESIDENT TRUMP'S PUSH TO CONTINUE TRADE POLICIES THAT THEY HAD IN PLACE. WE ALL SAW THE SUPREME COURT STRIKES DOWN HIS INITIAL PUSH SO THIS IS JUST PUTTING THOSE CHECKS AND BALANCES IN PLACE. I KNOW THE WHITE HOUSE IS ADAMANT TO TRY AND ROOT OUT ANY KIND OF UNFAIR PRACTICES THAT

THESE -- THEY SEE FIT AND TRY TO CONTINUE WITH THEIR ORIGINAL PLAN WITH TARIFFS IN PLACE TO U.S. ALLIES.

VONNIE: ALSO CAUSING FEAR IN THE MARKETS TODAY, A JUMP IN PRIVATE CREDIT REDEMPTION REQUEST FORCING AS A MANAGER TO CAP WITHDRAWALS.

JOINING BLACK ROCK ON THE MOVE, REDEMPTION REQUESTS FROM THE FLAGSHIP PRIVATE CREDIT FUND HIT A RECORD 14%.

MORE INVESTORS PULLING THEIR MONEY FROM PRIVATE CREDIT FUNDS, JUST PUT THE LATEST MOVES INTO CONTEXT FOR US GIVEN THESE THINGS TEND TO BREEZE FAST. SINEAD:

THEY DO DEFINITELY IT'S BEEN QUITE A FORTNIGHT FOR PRIVATE CAPITAL. LAST WEEK THE STORY WAS ABOUT

CAPITAL. LAST WEEK THE STORY WAS ABOUT REDEMPTIONS EVERY DAY INVESTORS DECIDING THEY WERE WORRIED ENOUGH ABOUT THE SCALE OF PRIVATE CREDITS EXPOSURE TO SOFTWARE TO START PULLING THEIR MONEY OUT OF VARIOUS NUMBERS OF ENLISTED AND NONTRADED PRIVATE CREDIT FUNDS.

NOT JUST ANY FUNDS, FUNDS RUN BY THE BIGGEST MANAGERS IN THE MARKET. BLACKROCK, BLACKSTONE AND NOW

MARKET. BLACKROCK, BLACKSTONE AND NOW CLIFF WATER AND MORGAN STANLEY.

WHEN PEOPLE RUSH TO THE GATES LIKE THIS, IT THEN FORCES MANAGERS TO MAKE A DECISION. DO THEY CAP THE EXITS IN ORDER TO PROTECT THE INVESTORS WHO WANT TO STAY INVOLVED OR DO THEY LET THE INVESTORS TAKE THEIR MONEY OUT. VONNIE:

IT'S SUPPOSED TO BE LONG-TERM MONEY ANYWAY.

THEIRS WAS TO BE SHUTTING THEIR EYES LOOKING THE WAY FOR THE MOST PART BUT I GUESS THAT'S NOT HAPPENING.

WHAT ARE THESE FUNDS DOING TO PLACATE PEOPLE.

I GUESS SOME ARE ALLOWING THEM TO REDEEM THEIR MONEY BUT ARE THERE ANY OTHER TOOLS THEY HAVE IN THE TOOLBOX?

>> IT'S AN INTERESTING DEVELOP AND WE SAW YESTERDAY.

APOLLO'S MARK ROWAN WE HURT HIM FOR MANY MONTHS NOW DEFENDING THE ASSET CLASS AGAINST ALLEGATIONS OF OPACITY AND PROVIDING UNTIMELY INFORMATION TO INVESTORS ON VALUATIONS.

THEY ARE LOOKING TO CHANGE THAT. LOOKING TO PROVIDE MUCH MORE REGULAR UPDATES ON THEIR PRIVATE CREDIT EXPOSURES.

IT WILL START ON A MONTHLY BASIS AND PROGRESS TO DAILY PRICING. THAT SHOULD GO SOME WAY IN

PRICING. THAT SHOULD GO SOME WAY IN CALMING INVESTORS FEARS ABOUT THE QUALITY OF THE INVESTMENTS THAT THEY HAVE EXPOSURE TO. WHETHER THAT MEANS OTHER FIRMS WILL FOLLOW SUIT REMAINS TO BE SEEN. VONNIE:

SETTING THE BAR HIGH FOR OTHER FIRMS. HAVE TO GIVE THAT. HIS

NOTES TITLED BLACK AND BLUE OUT. SENIOR EDITOR OF BLOOMBERG GOING PRIVATE NEWSLETTER. YOU CAN SEE THAT NEWSLETTER WHICH IS PUBLISHED TWICE A WEEK. DO SUBSCRIBE.

IN THE WORLD OF HEDGE FUNDS JP MORGAN STRATEGIST SAYING THE INDUSTRY'S EXPERIENCE IN THE BIGGEST DRAWDOWN SINCE PRESIDENT TRUMP'S TARIFF KICKOFF BACK IN APRIL. FOR MORE.

WHAT -- THE HEAVY LOSSES FOR THE MOST PART HOW WERE HEDGE FUNDS CAUGHT OFF GUARD. NISHANT: WHAT YOU SAW LAST WEEK WAS A CLASSIC HEDGE FUND HEADACHE. EVERYTHING MOVED AT ONCE.

THEY MOVED TO BIG AND MOVED ON HEADLINES.

SO THE MARKET GOT RATTLED AND THE OIL MARKET HAD A WIDE SWING BRIEFLY SURGING TOWARDS 120 AND THEN REVERSING.

SO WHEN YOU GET THAT KIND OF VIOLENT CROSS ASSET VOLATILITY IT IS BRUTAL FOR HEDGE FUNDS INCLUDING AS WE'VE SEEN.

THEY ARE KNOWN FOR STEADY RETURNS BUT WHEN CORRELATIONS ARE HIGH, THEY GET WHIPSAWED AS WELL.

VOLATILITY RATES MARKET AND U.K. SHORT AND WAS VERY PAINFUL.

BUT ALSO COMMODITIES MARKET, THAT'S WHERE THESE TWO ASSET CLASSES PARTLY RESPONSIBLE FOR MOST OF THE LOSSES LAST WEEK.

>> IF THEY HOLD ON, COULD THOSE BE REVERSES OR ARE THESE HEDGE FUNDS OUT OF THESE POSITIONS THAT'S AFFECTING THEM NOW?

NISHANT: THERE IS RISK MANAGEMENT GOING ON SO SOME OF THE POSITIONS BY DESIGN HAVE TO BE CUT OR HEDGED.

SO WE NEED TO SEE IF THE MARKET OBVIOUSLY A LOT OF THE PAIN WILL GO AWAY WITH THEM AND REVERSE SOME OF THEIR LOSSES.

WE ARE SEEING SOME SIGNS OF THAT HAPPENING THIS WEEK.

LAST WEEK WAS A REALLY BRUTAL LEG. SOME OF THE LOSSES WERE HISTORIC EVEN FOR THE BIGGEST STRATEGY HEDGE FUNDS.

>> ON THE ONE HAND IT'S THESE TYPES OF EVENTS THAT HEDGE FUNDS LIVE FOR. ON THE OTHER HAND THEY ARE TERRIFYING. WHAT WERE SOME OF THE FUND MOST

TERRIFYING. WHAT WERE SOME OF THE FUND MOST AFFECTED?

>> THERE WERE SOME FUNDS WHO MADE MONEY AS WELL.

WE SEE COMMODITIES HEDGE FUND. BUT MOSTLY IT'S ON THE NEGATIVE SIDE THE BOTTOM HEDGE FUNDS ARE CITADELS GFI WHICH IS MACRO DRIVEN HEDGE FUND. AND EVEN AT SOME OF THE LARGEST

HEDGE FUNDS IT IS THE FIXED INCOME THAT'S THE MACRO TRADERS.

>> ABSOLUTELY. A REALLY BINARY TRADE.

THANK YOU SO MUCH.

COMING UP AN EXCLUSIVE INTERVIEW WITH THE PRESIDENT AND CFO OF DIO ON HOW AI IS RESHAPING THE WORKFORCE.

THIS IS BLOOMBERG. ♪

VONNIE: THIS IS BLOOMBERG BRIEF. COMING UP LATER TODAY AN EXCLUSIVE INTERVIEW WITH DELL CEO MICHAEL DELL AND THE U.S.

ENERGY UNDERSECRETARY FOR SCIENCE DARIO GILL.

THIS IS BLOOMBERG BRIEF. LET'S HEAD NOW TO THE CITY DISRUPT TECH CONFERENCE IN LONDON WHERE TOM MACKENZIE IS WITH JOE. TOM: THANK YOU VERY MUCH.

WITH JOE. TOM: THANK YOU VERY MUCH.

JOE KAUFMAN, CFO AND PRESIDENT JOINS US NOW.

YOU'VE GOT ABOUT 40,000 CLIENTS. ABOUT 50 DIFFERENT COUNTRIES THE PLATFORM THAT OFFERS THINGS LIKE HR AND COMPLIANCE AND PAYROLL. GIVEN ALL THE GLOBAL UNCERTAINTY WE ARE SEEING RIGHT

PAYROLL. GIVEN ALL THE GLOBAL UNCERTAINTY WE ARE SEEING RIGHT NOW WHETHER IT'S THE WAR IN THE MIDDLE EAST WHERE THE AI DISRUPTION, HOW MUCH DEMAND ARE YOU SEEING FROM THAT CLIENT BASE AT THIS POINT? JOE:

IT'S BEEN EXTREMELY ROBUST. WE'VE GROWN OVER 60% LAST YEAR AND RE-ACCELERATED IN Q4 SO WE ARE SPENDING -- SEEING EVEN MORE CUSTOMER ADOPTION AND FINDING IT IS A TAILWIND FOR OUR BUSINESS BECAUSE THE WAY TO THINK ABOUT OUR BUSINESS IS MANAGING FOR SUPPLY AND DEMAND ACROSS LABOR POOLS.

AND ESPECIALLY NOW IT'S EXTREMELY POSITIVE. TOM:

GLOBAL UNCERTAINTY IS A TAILWIND AS COMPANIES ADJUST OR THE CHANGES IN TERMS OF LABOR MARKET? JOE:

THE CHANGES IN TERMS OF THE LABOR MARKET.

I DON'T THINK UNCERTAINTY NECESSARILY HURTS US, BUT THE CHANGES IN THE LABOR MARKET ARE REALLY PROFOUNDLY HELPING OUR BUSINESS.

WE JUST RELEASED A GLOBAL WORK REPORT YESTERDAY.

WE HAD AN ECONOMIST ON STAFF WHO WAS LOOKING AT LABOR POOLS AROUND THE WORLD. AND OF COURSE AI SOFTWARE ENGINEERS IS A BIG AREA THAT'S AN OPPORTUNITY FOR US.

IF YOU THINK ABOUT THE VAST MAJORITY OF S&P AND SOME ENTER -- ENTERPRISE IT'S HARD TO COMPETE FOR AI TALENT WITH THE WHALES IN THE ROOM. IF THERE'S GREAT AI TALENT ALL OVER THE WORLD AND WE ARE ABLE TO CONNECT THOSE SOFTWARE DEVELOPERS TO THE BEST COMPANIES IN WAYS THAT ARE FLEXIBLE. THERE IS ALL THE OTHER AREAS

FLEXIBLE. THERE IS ALL THE OTHER AREAS AROUND AI DEVELOPERS SO AI TRAINERS IS A HUGE EXAMPLE OF GROWTH AND BUSINESS.

THERE ARE AREAS I THINK ARE MORE RESILIENT LIKE TECH SALES OR BUSINESS DEVELOPMENT, THOSE AREAS WHERE THERE'S LESS DISRUPTION FROM AI AND BECOMES MORE IMPORTANT TO HAVE LOCAL PEOPLE WHO KNOW THE CULTURE AND THE GEOGRAPHY.

IN THIS REPORT IT TALKS ABOUT SOME OF OUR FASTEST GROWING JOB PROFILES ACROSS AS YOU MENTIONED 40,000 CUSTOMERS, 1.5 BILLION -- 1.5 MILLION EMPLOYEES. AND THESE ARE AREAS THAT ARE

EMPLOYEES. AND THESE ARE AREAS THAT ARE GROWING FOR US.

TOM: THERE'S A LOT OF CONCERN ABOUT THE DISRUPTION OF LEGACY SOFTWARE.

ENTERPRISE NAMES AS A RESULT OF AI. HOW DEFENSIBLE GIVEN SOME OF THE AI INNOVATIONS? JOE: WE BELIEVE IT IS REALLY DEEP.

WE STARTED IN AN AREA OF THE EMPLOYEE RECORD BUSINESS WHICH IS ESSENTIALLY IF YOU'RE LOOKING TO FILL ONE OF THESE ROLES WE WERE TALKING ABOUT WE DON'T NECESSARILY HAVE BOOTS ON THE GROUND IN A LOCATION WHERE YOU FOUND IT.

WE HAVE LEGAL ENTITIES OVER 300 LEGAL ENTITIES ACROSS 120 COUNTRIES AND OUR GOAL IS TO GET THAT EMPLOYEE PAID COMPLIANTLY WITHIN THE JURISDICTION WITHOUT YOU HAVING TO GO THROUGH ALL OF THE HASSLE OF SETTING UP LEGAL ENTITIES SO IF YOU THINK ABOUT THAT BUSINESS, IT IS EXTREMELY DEFENSIBLE.

>> IS IT THAT COMPLEXITY THAT STOPS YOUR CLIENTS JUST FIND YOUR SOLUTIONS? JOE:

YOUR SOLUTIONS? JOE: UP TILL NOW I WILL SAY BUT I FEEL LIKE IN ORDER TO HAVE STATUTORY COMPLIANCE ENTITIES IN THESE JURISDICTIONS IT IS STILL PEOPLE ON THE GROUND GETTING SIGNATURES FROM LOCAL AUTHORITIES TO RED STAMP IN CERTAIN AREAS LIKE AI AGENTS WILL HAVE TROUBLE DOING THAT FOR THE FORESEEABLE FUTURE.

EVEN ROBOTS WILL HAVE TROUBLE DOING THAT IN THE FORESEEABLE FUTURE. THAT ASPECT OF THE BUSINESS I

FUTURE. THAT ASPECT OF THE BUSINESS I THINK IS INCREDIBLY DEFENSIBLE. AND THEN WE HAVE THIS OTHER ASPECT OF THE BUSINESS AROUND AS PEOPLE MOVE FROM THAT TO PAYROLL GENERALLY. THERE'S A LOT OF INFRASTRUCTURE

PAYROLL GENERALLY. THERE'S A LOT OF INFRASTRUCTURE IN THE PAYROLL THEMSELVES AND WE WILL ALLOW PEOPLE TO GET PAID IN WHATEVER CURRENCY OR JURISDICTION THEY WANT.

IF THEY ARE WORKING IN ESTONIA BUT WANT TO GET PAID IN STABLECOIN, WE WILL ALLOW THAT.

ALL OF THAT IS IN MY VIEW DEFENSIBLE.

THE QUESTION AROUND FIVE CODING. WE SEE THAT AS A PLUS OF OUR MODELS SO WE ARE VERY MODULAR IN OUR APPROACH.

WE DON'T TRY TO SELL YOU THE WHOLE PACK IT IN ONE.

IF YOU HAVE AN EXISTING HR THAT YOU ENJOY WHAT YOU WANT TO USE US FOR PAYROLL, GREAT. WE CAN PLUG AND PLAY THAT.

IF YOU WANT TO USE US FOR I.T. SERVICES, GREAT.

ON THE FIVE CODING POINT, IF YOU DON'T LIKE YOUR HRS, YOU DON'T WANT TO USE US. PUT IT INTO OUR PLATFORM, GREAT.

>> IT SOUNDS IT COULD CONSTRAIN MARGINS GOING FORWARD.

>> I'M TRYING TO GET A SENSE FOR WHY YOU MIGHT THINK THAT.

FROM MY LENS MARGINS WE ARE A HIGH GROSS MARGIN BUSINESS.

WE DON'T ACTUALLY SEE THAT.

FROM A CUSTOMER ADOPTION PERSPECTIVE, IT'S ACTUALLY MARGINALLY CREATIVE BECAUSE ONCE I ACQUIRE THAT CUSTOMER.

AS WE SAW ALL THESE OTHER PRODUCTS I DON'T HAVE TO GO THROUGH THAT INITIAL GO TO MARKET MOTION SO I THINK MAY BE WHERE YOU'RE GOING IS IF I ACQUIRE CUSTOMER THEY HAVE TO FIND CODE AND I DON'T GET THAT CROSS SELL.

BUT WHAT WE ARE SEEING IS A FIVE X INCREASE IN CUSTOMERS TAKING THREE OR MORE OF OUR PRODUCTS AND CUSTOMERS TAKING FOREX OF OUR PRODUCTS. WE ACTUALLY FIND THE FLEXIBILITY IN TERMS OF MOTION. ALLOWS US TO KIND OF SCALE THAT INITIAL SET ACROSS MULTIPLE PRODUCTS. TOM:

YOU ARE VALUED NORTH OF 17 BILLION U.S. DOLLARS.

IS AN IPO IN THE CARDS FOR 2026, WHAT ARE YOUR IPO AMBITIONS AT THIS POINT?

>> WE ARE REALLY LUCKY IN THAT NOT ONLY HAVE WE RAISED RECENTLY BUT WE'VE BEEN ABLE TO RAISE OVER TIME FROM A LOT OF REALLY CREDIBLE INVESTORS AND WE HAVE A GOOD AMOUNT OF MONEY ON THE BALANCE SHEET. YOU KNOW NOT ONLY ARE WE GROWING TOPLINE GROWTH OF 60% WE ARE HIGHLY PROFITABLE.

SO WE HAVE A GOOD AMOUNT OF FREE CASH FLOW GOING BACK TO THE BUSINESS AS WELL.

AS I THINK ABOUT IT, THERE'S NO FORCING FUNCTION IN TERMS OF IPO. I'M ONE OF THOSE CFOS THAT I

IPO. I'M ONE OF THOSE CFOS THAT I WANT TO DO IT RIGHT. I THINK EVERYBODY DOES.

BUT I'M EVEN MORE ORIENTED TOWARDS THAT SO THE KINDS OF EXERCISES WE ARE GOING THROUGH NOW IS HOW DO WE DO FOUR QUARTERS PLUS OF EARNINGS WITH OUR BOARD WHERE THERE'S NOT THESE HIGH STAKES AND MAKE SURE THAT WE HAVE THE BEAT AND RAISE MODEL IN PLACE. I'M THINKING ABOUT IT AS AN OPTION THAT'S DEFINITELY IN THE FUTURE, BUT NOT SOMETHING THAT

I HAVE A FUNCTION AROUND NOW BECAUSE OF CASH FLOW OR SHAREHOLDER NEEDS. WE ARE MUCH MORE ORIENTED

SHAREHOLDER NEEDS. WE ARE MUCH MORE ORIENTED ESPECIALLY GIVEN THE STRENGTH OF BUSINESS IN MAKING SURE ALL THOSE OTHER COMPONENTS OF GETTING IT RIGHT IN PUBLIC MARKETS GIVEN THE VOLATILITY WE HAVE IT RIGHT SO THAT WHEN WE DO GO OUT FOR A GENERATIONAL IPO TO REFLECT A GENERATIONAL COMPANY.

>> CFO AND PRESIDENT OF D.L.. THANK YOU FOR JOINING US.

VONNIE: THANK YOU. TOM TAKES IN A DEEP DIVE INTO SWEDEN'S TECH SEAT TO LOOK LIKE IT'S BEEN SUCH AN INNOVATION POWERHOUSE. BLOOMBERG TECH EUROPE AIRS

POWERHOUSE. BLOOMBERG TECH EUROPE AIRS FRIDAY AT 4:30 A.M. NEW YORK TIME.

YOU CAN ALSO WATCH ON THE TERMINAL, YOUTUBE AND ON OUR VIDEO HUB AT BLOOMBERG.COM/VIDEO.

THIS IS BLOOMBERG.

VONNIE: THIS IS BLOOMBERG BRIEF. NOW A LOOK AT WHAT'S AHEAD TODAY.

WE HAD SOME EARNINGS, RETAIL EARNINGS BEFORE THE BELL FROM DOLLAR GENERAL AND DICK’S SPORTING GOODS.

LES WE GET JOBLESS CLAIMS IN HOUSING STARTS AT 8:30 A.M.

EASTERN TIME. AFTER THE CLOSE WE GET EARNINGS FROM ADOBE. LET'S TAKE A LOOK. AT YOUR MACRO ENVIRONMENT INTO

FROM ADOBE. LET'S TAKE A LOOK. AT YOUR MACRO ENVIRONMENT INTO THE U.S. TRADING SESSION. THIS IS WERE ALL EYES WILL BE

THE U.S. TRADING SESSION. THIS IS WERE ALL EYES WILL BE TODAY. BRENT CRUDE TOP $100 A BARREL A

TODAY. BRENT CRUDE TOP $100 A BARREL A COUPLE TIMES ALREADY. IT'S BACK AND NOW JUST CALM HER.

THAT REPORT GETS PRODUCING AGAIN.

10 YEAR YIELDS IN THE FUTURES LOWER. SURVEILLANCE IS NEXT.

♪