Jim Zelter, co-president at Apollo Asset Management, shares expert insights on the evolving U.S. economic landscape compared to Europe. He discusses the impact of rising interest rates on private credit as a savvy investment approach. Zelter also dives into labor market shifts, highlighting the growth of healthcare jobs versus a decline in manufacturing. Additionally, he examines how political dynamics in Washington are shaping market trends as 2025 unfolds.
Private credit is increasingly seen as a viable investment alternative amid high interest rates, showcasing the U.S. economy's resilience compared to lagging European markets.
A significant slowdown in the labor market signals reduced worker mobility and leverage, impacting small businesses amidst tighter financial conditions.
Deep dives
The Role of Private Credit in Investment Strategy
Private credit is becoming an attractive alternative for investors as interest rates remain high. Experts highlight that the U.S. economy has maintained its position as a beacon of opportunity, attracting global capital while European markets lag behind due to outdated financing systems. The discussion emphasizes embracing private capital as a critical component for U.S. economic growth, contrasting it with the structural challenges faced by companies in the UK and Europe. The strength of the U.S. market is underscored by its extensive financial services sector and the increasing preference for private credit solutions.
Evolving Dynamics of Labor Market and Pay
Recent data indicates a significant slowdown in the labor market, particularly in manufacturing, while health care continues to thrive. The falling pay growth for job stayers signifies that workers are losing leverage compared to the previous high demand environment during the great resignation. A marked decrease in job quits suggests a lack of mobility among workers, which together with declines in hours worked signifies a cooling job market. This scenario affects small businesses significantly, as they face tighter financial conditions due to elevated interest rates, which inhibit hiring and growth.
Impacts of Economic Policy on Public and Private Markets
The current economic landscape reveals a shift in how companies approach financing, as many find public offerings less necessary due to robust private capital markets. Former structures where IPOs were essential for liquidity are evolving, with businesses increasingly relying on private funding and debt solutions. This change foreshadows a potential blurring of lines between public and private markets, leading to a different dynamic in capital access. The emerging trend points towards a strategic focus on M&A activities and innovative financing structures that harness opportunities within the private sector.
- Jim Zelter, co-president at Apollo Asset Management - Nela Richardson, Chief Economist at ADP - Norman Roule, Senior Advisor: Transnational Threats Project at Center for Strategic & International Studies
Jim Zelter with Apollo Asset Management joins for an extended discussion on markets and the economy. Norman Roule, Senior Advisor at the Center for Strategic and International Studies, discusses pressing geopolitical issues for the incoming Trump administration. Nela Richardson with ADP previews the first nonfarm payrolls report in 2025.