Speaker 1:
From the New York Stock Exchange at the corner of Wall and Broad Streets in New York City, welcome Inside the ICE House. Our podcast from Intercontinental Exchange is your go-to for the latest on markets, leadership, vision, and business.
For over 230 years, the NYSE has been the beating heart of global growth. Each week, we bring you inspiring stories of innovators, job creators, and the movers and shakers of capitalism here at the NYSE and ISIS exchanges around the world. Now, let's go Inside the ICE House. Here's your host, Kristen Scholer.
Kristen Scholer:
In today's fast-moving world, providing timely financial news and insights is more crucial than ever, empowering readers to make smart, informed decisions. A publication focused on financial reporting has the power to guide businesses and individuals through market trends, investment strategies, and economic shifts, making it an invaluable resource.
But launching such a venture isn't without its challenges. From needing deep industry expertise to delivering clear, accurate, and unbiased content that readers can trust, our guest today, Phil Rosen took on that challenge along with Anthony Pompliano and has built his outlet, the Opening Bell Daily, into one that hits 200,000 inboxes each day.
Phil previously worked at Business Insider as a senior markets reporter. He's written two books that have both become number one bestsellers across multiple categories on Amazon, and his work can be found in Fortune Morning Brew, Yahoo Finance, Inc. Magazine, among other outlets. Phil, thanks so much for joining us Inside the ICE House.
Phil Rosen:
Thank you for having me, Kristen.
Kristen Scholer:
It's great to have you. Always a topical conversation to cover markets, and you co-founded Opening Bell Daily alongside Anthony Pompliano, leaving a senior reporter position at Business Insider to pursue this venture. Take us back to those early days. What inspired you to take the leap and how did the platform evolve from just an idea into one with now hundreds of thousands of readers?
Phil Rosen:
Yeah, that's a very nice intro. Thank you so much. So I was a reporter at Insider, as you mentioned, and I was writing the Markets Newsletter at the time, and I did that for several years, and that product was very popular, and I got pretty good at it. Met a lot of people through doing that, and eventually, that product was discontinued.
So then it sort of happened that I met Anthony, and then we decided, "Okay, we could sort of relaunch and revamp a similar style editorial product but build a whole media company around that." And that's what we've done, and it's been almost a year since we've launched, and we write to retail investors institutional.
We have people ranging from JPMorgan portfolio managers to the people using Robinhood in the basement of their homes. It's a very sort of mixed investor audience, but everyone, I would say, identifies as a self-directed investor, whether they're a professional or not.
Kristen Scholer:
Congratulations.
Phil Rosen:
Thank you. Thank you.
Kristen Scholer:
It's been fun to watch. Opening Bell Daily, as you referenced, has built notable partnerships, including collaborations with Inc., Business Media and Bloomberg. Your content covers a wide range of topics designed to educate both novice and experience investors, as you mentioned there. For those who might not yet be familiar with the publication, how would you describe the value and uniqueness that it offers?
Phil Rosen:
Well, if you read the newsletter every morning, you can go from not knowing anything about markets and investing to being pretty well-versed, at least is the pitch and the promise. And the other side of it is it's free. So I remember when I was at Business Insider, I would write all these stories, and my colleagues would write stories about markets and investing.
And we are in quite a consequential chapter in financial markets history over the last century. And I would get friends, they would text me and they'd say, "Hey, I can't read any of your work because there's a paywall." And then I'd always... I'd be happy to send them access to it. But for a while there I figured there was a better way to be producing and distributing this work.
And something I'm very proud of with Opening Bell Daily is that we do give away for free, and we make the newsletter, we make videos, podcasts, everything that's just available to find. And I think that makes it unique, and it's also still very premium, original, high-quality content. And that's... we plan to just keep making it better and better.
Kristen Scholer:
With this next question, I want to tap into something that you said earlier because I think people can look to you as a guide for their own career path. And you mentioned your decision to leave Business Insider to launch Opening Bell Daily.
So I want to hear more about that journey, the biggest uncertainties and challenges that you faced, at least in those early months, and what it was like betting on yourself to build something without necessarily a guaranteed path to success.
Phil Rosen:
Yeah, there are no guarantees. That's the excitement of it, I think. And even when you work in media at a big corporate newsroom, we see layoffs all the time. And that was certainly... that's been top of mind for years for me since I started my career. And I've known excellent reporters and editors, people have been around for decades, and they get laid off, and that's just sort of the business cycle of this job.
So I don't know if the risk was necessarily more or less than staying in corporate media because you just don't know, and it's not in your hands regardless of how talented you are. So something that I think is a broader trend that Opening Bell Daily is a bet on is the rise of independent media. And we see newsletters and podcasts that aren't tied to a Business Insider or even a Wall Street Journal or New York Times, and those are gaining so much momentum, and I don't expect that to slow down anytime soon, especially with YouTube and Twitter or X and Instagram.
Everything is so free and accessible to produce content now. And you have a lot of journalists that are trained and credible, and they have a lot of contacts that are suddenly pivoting into those free platforms. And that's pretty exciting to me. And even when I ask my friends, most of them get their news from non-traditional outlets and my friends are in their 20s and 30s, and most of them read newsletters and listen to podcasts that don't connect to mainstream outlets.
Kristen Scholer:
Interesting. So I want to move the conversation now to artificial intelligence. It has been the buzzword for the past few years. Earlier this month, you posted content asking the question, "Is the AI race really a tech revolution, or is it just the most expensive game of chicken in history?"
Big tech companies we know are investing billions of dollars in AI trying to outspend one another amid the arrival of DeepSeek, releasing an AI model at a fraction of the cost. With DeepSeek's arrival, do you foresee the spending habits of big tech toward AI changing, or will sheer spending still dictate the AI winner?
Phil Rosen:
Yeah, that's a great question, and there are people way smarter than me that are working to answer that. My guess, generally, without getting into a specific company, is that costs will have to come down because that's just how innovation moves, and the more people innovate, the cheaper things will get, and then the higher the demand for those things will get in the public.
And a very interesting question that I've been thinking about a lot is whether AI is fueling a bubble in the stock market. And people ask me that all the time. I write about it fairly frequently, and there are a few things in play that make some people believe, yes, it is a bubble.
And I read this book recently called Boom and Bust, and it's a history of financial bubbles, and the author has essentially laid out three ingredients to a bubble. It's marketability, money and credit. And what was the last one? It was, oh, policy sort of like... Oh, excuse me. It wasn't... It was marketability, money and credit, and geez, my mind is blanking here.
Kristen Scholer:
It's no worries. Money and credit maybe can be a two instead of one.
Phil Rosen:
Yeah, it's... Anyway, the point is with AI, a lot of people compare it to the dot-com time, and there's very high marketability right now because there's companies raising so much capital and spending so much capital and the inventions that are associated with AI, like ChatGPT, that's really changed everything for everyone. From the way we go to school and the way we go to work, that's all changing very rapidly, and investors have responded to that.
But the difference now between the AI sort of boom and dot-com is that these businesses are extremely, extremely profitable, and their balance sheets are like nothing we've ever seen ever. And in the dot-com era, there were so many businesses that didn't make any money, and those eventually all went to zero. But the interesting thing here is that the Fed is working to sort of limit the money and credit angle of this sort of bubble formula. And I'm going to remember that third piece, I hope, before the end of the conversation.
But the Fed hasn't quite seen the results that it's looking for, I think, because the stock market's right at an all-time high, and even though the interest rates are at near two-decade highs, people are still spending quite a bit. So there's something there that's not quite what the Fed is looking for, I think. So there's another story that I have from that book. I think this was in the 1890s or 1880s we saw a bicycle mania essentially tied to bicycle companies in the UK.
And at the time, bikes were built with a giant front wheel, and we still see memes and animations about this huge front wheel, tiny back wheel and that was how bikes were made. And then, suddenly, there was a technological revolution that made the modern bike that we know today, and that was in the late 1800s. And then you saw tons of bike companies effectively IPO the equivalent back then, and the share prices of bike companies went so high compared to the rest of the stock market in England, and they crashed so dramatically.
And I've seen some ties to sort of that to right now, and I don't think we're in a similar setup as that. However, we're seeing a very similar technological change that suddenly changes so many parts of society because the bikes, at the time, it sort of democratized transportation so people could suddenly get around, and it was much safer and accessible. And now we're having work and education and efficiency and productivity become accessible if you want to call it that.
Kristen Scholer:
Mm-hmm. Let's turn to the Fed because if it's not artificial, one of the biggest storylines certainly that investors are following is the Federal Reserve. And Chair Powell, in his latest congressional testimony, said, "That due to a strong jobs market and inflation that remains elevated, the independent body does not need to be in a rush to cut interest rates."
That, of course, impacts everyday Americans borrowing costs and for companies too. Well, the Federal Reserve is next set to meet in March at the end of the first quarter. What are you anticipating that we hear from Powell and his action on rates in March?
Phil Rosen:
So I think markets right now, based on CME data, shows a 98% shot of no cut in March, and it was about that for this most recent rate cut as well. So those expectations from the market have gotten pushed back over and over and over based on recent economic reports.
We had a hot inflation report this month, and then we had a hot jobs report in December, and the market has so far essentially shrugged off those hot economic reports because they, traders or investors, seem content to keep piling into stocks based on everything else happening outside the Fed I think, at least that's what the conversations I'm having. That's what I am being told.
So I think right now we'll see maybe one or two cuts before 2026. It's something like 31% odds based on market odds for a one cut this year, and I think it's like 32 or 33% for two cuts. So those probably won't come until second half of the year, if not last quarter of the year. But even if we get another hotter-than-expected inflation report, those will probably fluctuate again.
And now we're waiting for essentially how the market will react to that negative inflation data. And so far, as I said, it's pretty much been fine. Like the market hasn't been too reactive and it seems to be betting on a bunch of other tailwinds like big capital spending on AI so the AI trend will continue. And then Trump has all these pro-business initiatives that he's trying to push through.
And then there's also the tariff component, which, so far, I don't think markets have taken that seriously. Because I think increasingly markets have realized, "Okay, maybe these are just negotiating tactics, and the uncertainty that we were expecting isn't going to be that dramatic because material difference in tariffs maybe won't be that dramatic. It's just sort of a strong-arm negotiation play."
Kristen Scholer:
So it's interesting because since I last saw you, Phil, around the holidays, we obviously seen the inauguration take place. And so politicians in the past have hoped for lower rates to stimulate economic growth, makes the cost of money cheaper, and President Trump has outwardly called on the Fed Chair Powell to lower interest rates. He's made it clear, the president, that he wants rates lower. How do you see political pressure playing into the Fed's decision-making going forward?
Phil Rosen:
Powell has said it will not impact his and his team's decision-making. I don't know if we've seen a president as forward with his calls for changes in monetary policy, and Trump is obviously a pretty singular type of person in his negotiation and sort of public communications that he does because... And now we may have not seen a president with such a big platform that Trump has as well. So I think there's a chance the Fed responds to Trump's calls for lower rates, but they will never admit it because if they give ground on the perception of an independent Fed, well, it's all lost at that point.
So they're going to do everything they can to say, "Of course, Trump would never be able to influence us one way or the other." But Trump, I think, it's been two or three times now, he's said, "We're going to lower interest rates. This is what the economy needs. This is what markets needs." But the incentives of the White House and the Fed are not entirely on the same page because Trump, while he may want a strong economy, he is really someone historically who has looked to the stock market as his test score of how he's doing as president.
So if he can push asset prices to record highs for four years, he's going to do everything he can to do that. And part of that is keeping interest rates low or helping the Fed or influencing the Fed to bring them lower, and the Fed, they're focused on inflation, and that in many respects has nothing to do with the stock market because if the Fed wants to keep rates at four or 5% for the next four years, they could in theory and investors will probably respond negatively to that over time. And that's going to be the opposite of what Trump wants. So the incentives are not entirely equal for Trump and the Fed.
Kristen Scholer:
Mm-hmm. Of course, listeners may or may not remember that Trump, during his first term as president, actually appointed Jerome Powell to the role of Fed chair. And we've seen obviously many members of President Trump's cabinet be pro-markets as well. So President Trump has actively embraced the crypto community.
That's another storyline we should cover here, Phil. And that happened since he was reelected on November 6th. Since then, we've seen the price of Bitcoin jump from about 70,000 to above 100,000 a token. And considering this administration's crypto-friendly stance, are your expectations for Bitcoin during President Trump's second term?
Phil Rosen:
I don't think we've ever seen a stronger setup for Bitcoin to go higher. I don't make any price predictions or anything like that, but everything does seem to be falling in favor of Bitcoin right now. You have this administration, which is really the first-ever pro-crypto administration in history, and not that crypto has had that long of a history, but this is a clear change from sort of before and after. This is very much a turning point, I think.
And you have David Sacks in there in the White House with Trump's team leading this crypto research group or working group, whatever they're calling it. And that's a... it's sort of codifying that, "Okay, we are taking crypto seriously." And a lot of people thought during the campaign before November, Trump was sort of just pandering to the Crypto Voting Bloc.
But I think some of the things he's enacted since then, since he's taken office for a few weeks, he sort of followed through on those promises saying, "Look, it's going to be part of our policy direction and we're not going to just treat this as sort of something that goes away with the wind once the campaign is done." And I think what's interesting here, Trump doesn't have to do anything he promised because he doesn't have another term after this.
So, really, now that he's been elected, he could not follow through, let's say, on the crypto stuff, and there would really be no recourse for that because he's retiring after this term. But so far, he has said all the right things and put some very pro-crypto people in place. Howard Lutnick is another top official there now, and he is a huge holder of Bitcoin and various cryptocurrencies, so it's very hard to see the bear case right now, I think, for crypto.
There are these plans for a strategic crypto reserve, which I think one detail that's not been clarified, so as we're sitting here, what will be in that reserve? We don't know if it's going to be just Bitcoin or if it's going to be multiple other cryptocurrencies. And I think there are rumors that there are other people in the president's ear that are incentivized to get their tokens into this reserve because that obviously be very good for those tokens.
But a lot of the sort of long-term Bitcoin holders don't think that's the best possible path because there really only is an original cryptocurrency, which is Bitcoin. And once you start putting in these secondary currencies, which are not so deregulated, and there's companies behind them and individuals behind those companies, the whole idea, I think, becomes less and less core crypto philosophy because it's not so decentralized. So that'll be something that I'll be watching for sure. What goes into that strategic reserve.
Kristen Scholer:
Mm-hmm. So I want to talk more about that strategic reserve because it was in late January that President Trump ordered the creation of a cryptocurrency working group tasked with proposing, of course, regulations and exploring the creation of this national cryptocurrency stockpile.
So there's been a lot of discussion about the need for a strategic Bitcoin reserve. Do you think that that would be wise for the government to create a reserve? And how would it impact cryptocurrency?
Phil Rosen:
I think the question here might be it's not so much is it the right decision for the government, it's what are the consequences if they don't? And I think there are many, many company... or countries already that have been buying Bitcoin and other cryptocurrencies, mostly Bitcoin. And if the US doesn't do it, they're not even playing the same game. So I think just sort of game theory... the game theory of it, they have no choice but to participate.
And that's really... I'm sure Trump and his team realizes that. So it wouldn't surprise me also if they've already started buying to some capacity, and then they'll just announce it after the fact. Because in one sense, you don't want to tell everyone when you're buying because then the price will just go up when other countries start buying too. So it might be something worth doing sort of quietly.
Generally, if the US comes out and announces, "Hey, we're buying Bitcoin and maybe other cryptocurrencies," all of those will almost be very strong likelihood of going up because once the US government gets involved, it almost becomes an idea of too big to fail, which is sort of a dangerous idea to throw around these days. But it's very hard to bet against the US government, and buying what the government is buying is usually pretty solid returns.
Kristen Scholer:
So let's turn to fundamentals. We've talked a lot about obviously policy. We've talked about the Fed and artificial intelligence, but we know historically it is fundamentals, right, that drive returns earnings, and economic growth. So how would you characterize the current state of these fundamentals?
Phil Rosen:
So it's interesting because right now the S&P 500 is pretty much more expensive than it's been ever, maybe other than two to 5% of its history. And that's based on various valuation measures. But when you look at it, okay, it's only been more expensive than right now 5% of the time ever. That I think worries a lot of people. But then the flip side of that, the company is driving all these huge returns and huge valuations. We have never seen businesses like these. And even if you put aside the innovation and the technology that is fueling those businesses, these are some crazy balance sheets we're looking at.
The many, many billions and billions of dollars that the Magnificent Seven have and even their plans to spend hundreds of billions of dollars over the next several years, we haven't been in a time where we've seen companies come out publicly and say, "Okay, we're going to spend this many hundreds of billions of dollars over the next few years because we just have that capital on hand and we expect our business to perform well enough to be able to do that."
That's crazy. So I think the valuation in one sense, yes, things look expensive, but then on the other hand, these are different times, and it's not always... historical comparisons don't always make sense. And by the way, the third component of bubbles, which I'm just remembering right now, is a speculation, which is quite high right now, I think, because you have a lot of momentum trading, which is people just buying because markets are going up generally, and that leads to more and more speculation.
So if we go back to that equation of you need money and credit, marketability, and speculation, you pretty much have all three of those things at play right now, and the Fed is trying to moderate on the money and credit side, but so far it hasn't had that big of a difference as far as how asset prices have looked.
And the two sparks that typically ignite a bubble would be technology or government policy. And right now, we have the technology component of AI and an example of government policy. For example, in 2008, the housing bubble that was driven in large part because the government wanted to increase homeownership, but the consequences of that, they obviously didn't predict well enough.
So right now, if you look at what I don't think the government is doing... Well, if you take the deregulation angle, that's pretty interesting with Trump because that could increase speculation and increase credit, like the amount of people that are willing to borrow money because everything's getting deregulated in... from the Trump administration. So there could be some repercussions there.
Kristen Scholer:
What exactly do you mean by marketability? Can you flesh that out for our listeners?
Phil Rosen:
When you have a lot of IPOs all built around one technology, that generates a lot of buzz and excitement, and then reporters like us talk about it, write about it, and that generates more and more buzz. So something with the bicycle mania in the UK a hundred-something years ago, all the financial press were writing about these bike stocks when all the bike stocks were going up, and then people were just buying more and more.
So the marketability from the media was coming in. You had all these bike companies IPOing, and then you had people speculating on that marketability, and I think, double check me on this, I think interest rates were quite low at that time from the Bank of England. So you had easy money, marketability, and high speculation. So that's kind of the... And then the technology revolution of this modern bike, that was the spark that sort of made those three variables sufficient enough.
Kristen Scholer:
It sounds like what you've been explaining, Phil, going back to our earlier parts of our conversation though, is that even though these elements of a bubble can be seen as building, that the fundamentals still seem to be in place though, at least in the short term, to take the stock market higher. Is that right?
Phil Rosen:
I think the bull case is super strong, and I don't know... I'm not at all saying that there is a bubble right now. It's not super obvious to me that there is. And part of that is because the businesses are so robust and so big.
Yeah. It's very... If everyone could time bubbles, if I could time a bubble, I wouldn't be doing this. I wouldn't be a journalist. But it's very hard to tell when you're in it, and usually, it takes many years later to know when the bubble was happening, when it was popping, et cetera.
Kristen Scholer:
So let's turn the conversation to tariffs because we've covered a lot of ground as to describing this current market, and I think it's super helpful for listeners because there are a lot of elements at play, right. It is a very dynamic market at the moment.
Tariffs, of course, have been another element of conversation since President Trump was elected for a second time and in the weeks after his inauguration starting to implement some of those tariffs. What could be the impact on the market of tariffs?
Phil Rosen:
Yeah, the big question right now is, I think, whether the tariffs will happen or whether they're a negotiating tool, and Trump has said he's just going to use retaliatory tariffs on whoever puts tariffs on the US. And already, countries have come forward to negotiate and probably bring down those tariffs that they have on the US. So the uncertainty around markets is, okay, how soon will it take for every country to sort of bend the knee and agree to whatever Trump wants?
Is that one possible outcome? Sure. The other side is what if he doesn't get his way and suddenly we're in a very, very multi-front trade war with every single trade partner? That's not great for American businesses, and the S&P 500 has a ton of businesses that are reliant on American consumers. So if prices go up, could hurt earnings, could hurt the stock market.
But for me, what we've seen so far in the first few weeks of the Trump administration, I really don't expect tariffs to be that impactful on the stock market. I don't think that they will have the dramatic repercussions that a lot of the bears are saying right now. There are too many other positive tailwinds right now. And if these turn out to be just Trump sort of Art of the Deal stuff, then markets, I think, will just carry on as they have been.
Kristen Scholer:
So it sounds like what I'm hearing from you, Phil, is it's clear that President Trump is pro-market. He's built [inaudible 00:31:14] that way as we see. There are some elements of a bubble, but the fundamentals are still sound for now for these large-cap companies.
Is there a place within this economic cycle that you feel comfortable pinpointing in terms of where we're at? Because we know cycles can last 3, 5, 8 years, and at the end of a cycle can be a recession. And historically, we do see the market drop on average 20 to 30% during a recession. So for someone who's looking at it from an economic cycle perspective, what would you tell those listeners?
Phil Rosen:
First I would say I wouldn't ever know for sure. That's not my expertise, but it seems like we've avoided the recession pretty well that a lot of people had forecasted for several years. I think might've been 2022, Bloomberg Economics, they saw 100% chance of recession in the next 12 months, and now we're two maybe three years on from that, and we still haven't seen one. So that's a good thing generally. And I think the Fed in steering the economy right now, things aren't perfect, but they're in a super tough job.
I certainly wouldn't want that job modering... moderating financial policy around, "Okay, these are the livelihoods and the state of businesses in a whole country." That's really difficult. So I think, generally, the Fed could be applauded for how far we've come. Something that I saw from, I think it was Bespoke Investment Group, this is more about market cycle than economic cycle. We're about 550 days since ChatGPT launched trading days, and the Nasdaq is up like 82% since then. And that's a lot.
For context, that's way more than usual. And in the, I think it was 1994, Netscape launched the first internet browser, and in the 550 trading days after Netscape launched, the Nasdaq was up like 84%. So within one to 3% of what we've seen with ChatGPT today. And at the time, the internet bubble went on for another several years. So if we look at it from a market cycle perspective, and if we go on the assumption that there is enough comparison to draw between ChatGPT and the internet boom, we might have another few years of upside for stocks.
Obviously the internet boom [inaudible 00:33:54] the internet bust. I don't know if that's going to happen now. And as we said, the businesses today are way different, but the fact that we could even make that comparison of 82 to 85% gain in the Nasdaq in the exact number of trading days since these innovative technologies launched, that's probably worth at least revisiting in a year to see where we are.
Kristen Scholer:
So to wrap up, Phil, this has been a great conversation. There's so much to talk about in the markets these days, and we started by talking about your platform Opening Bell Daily, so still in its first year. Is that right?
Phil Rosen:
Yes. Almost to year anniversary.
Kristen Scholer:
Impressive. What can investors and readers anticipate ahead in terms of what you will feature in the weeks and months to come?
Phil Rosen:
So I think the most exciting thing is we launched our Best Ideas Club, and that's our first paid membership product, and that's had huge demand right out the gate, and that was only a few weeks ago we launched. But we sent one report per week based on one interview per week with a veteran on Wall Street, or someone who is extremely smart as an investor or trader.
I interview them, I get their best idea for 2025, and then we unpack the thesis, the risks, the financial data, the charts behind that single investment idea or trade idea, and that's a deep dive report we've been sending on Sundays. So the flagship newsletter is still free five days a week.
But now we are very excited about this Best Ideas Club, and I think the feedback so far has been overwhelmingly positive, as well as the demand for the product. So if... Yeah, I think that's definitely one to look out for because I'm sure we'll be pushing the boundaries of what we can do with that as far as how we can make it even better, make it more interactive with readers, things like that.
Kristen Scholer:
What a great conversation, Phil. Thank you.
Phil Rosen:
Thank you for having me.
Kristen Scholer:
Phil, thanks so much for joining us Inside the ICE House.
Speaker 1:
That's our conversation for this week. Remember to rate, review, and subscribe wherever you listen, and follow us on X @ICEHousepPodcast. From the New York Stock Exchange, we'll talk to you again next week Inside the ICE House.
Information contained in this podcast was obtained in part from publicly available sources and not independently verified. Neither ICE nor its affiliates make any representations or warranties expressed or implied as to the accuracy or completeness of the information and do not sponsor, approve, or endorse any of the content herein, all of which is presented solely for informational and educational purposes.
Nothing herein constitutes an offer to sell, a solicitation of an offer to buy any security, or a recommendation of any security or trading practice. Some portions of the preceding conversation may have been edited for the purpose of length or clarity.
