voiceover:
From the library of the New York Stock Exchange at the corner of Wall and Broad Streets in New York City, you're Inside the ICE House, our podcast from Intercontinental Exchange on markets, leadership, and vision and global business, the dream drivers that have made the NYSE an indispensable institution of global growth for over 225 years. Each week, we feature stories of those who hatch plans, create jobs, and harness the engine of capitalism, right here, right now, at the NYSE and at ICE's exchanges and clearinghouses around the world. And now welcome, Inside the ICE House. Here's your host, Josh King of Intercontinental Exchange
Josh King:
World War I, known at the time as the Great War, officially ended when the Treaty of Versailles was signed in 1919. But fighting ended actually seven months earlier, when an armistice between the Allied Nations and Germany went into effect on the 11th hour of the 11th day of the 11th month, November 11th. It's now known as Veterans Day. It's time to honor the brave women and men who have served in our Armed Forces, and also to reflect during these polarized times about what binds us together as a nation. The New York Stock Exchange also shares in these guiding principles.
In this spirit, we're looking forward to an upcoming visit this week from the nation's top general, the chairman of the Joint Chiefs of Staff, Mark Milley. He'll take the stage for dialogue here at the NYSE to talk about his tenure and his work to lead and modernize our military, convened here under the auspices of the NYSE Institute.
The NYC Institute was established earlier this year to further support free enterprise here and across the globe. It's really a vessel to discuss, nurture, and advance the innovation and progress of our 2,400 listed companies, bridging the private sector and governments, working to develop free markets and prosperous economies.
The early work of the NYSE Institute has really been remarkable, led by our guest today and its president, John Tuttle, the vice chairman of the New York Stock Exchange. So far, John and his team here at the Exchange have welcomed heads of state, thought leaders, and policymakers like the Prime Minister of Japan, the President of the Philippines, the EU Commissioner for Financial Stability, Britain's Chancellor of the Exchequer, the Governor of the South African Reserve Bank, and many other engagements in just a few short months.
One moment that stands out from among all these is September 6th. That's when Ukraine's president, Volodymyr Zelenskyy, virtually rang our opening bell and brought with him a distinctive message. Moving forward means making sure there is investment in Ukraine, that the economy will support its people and its future. And, we're honored to provide that platform to the Ukrainian president. We'll be sharing excerpts from many of these moments, and discussing with the NYSE Institute's President, John Tuttle, why all of this matters now more than ever. Our conversation with John Tuttle on his visions for the NYSE Institute, its early successes and its future, is coming up right after this.
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Josh King:
Our guest today, my good friend John Tuttle, is vice chairman of the New York Stock Exchange, also serves as the president of the NYSE Institute, which the Exchange launched earlier this year to formalize, in a way, what we've always done across our 230-year history, to convene and foster dialogue among the world's most important voices across public policy, corporate governance, international diplomacy, and global financial services. John is the quintessential friend of the pod across our more than 325 episodes, one of its earliest and stalwart supporters and an important guest at key intervals in our five-season run, when major news is happening here at 11 Wall Street. Stopped in to address our microphones at episodes 15 and 119. And now he's back. John Tuttle, welcome Inside the ICE House.
John Tuttle:
Josh, great to be here in the library of the New York Stock Exchange and, therefore, inside the ICE House. Thank you for having me.
Josh King:
Here we are. How time flies? I mean, your first appearance on your favorite pod since all the way back in 2019. This library went dark for a while, as Inside the ICE House was really more like Inside the Zoom House. Beyond the thick soundproof doors of the library, does the building have its swagger back now, do you think?
John Tuttle:
Better than ever, Josh, and first of all, this is my favorite podcast. I tell you that every week when I listen to Inside the ICE House and a new episode drops, and I hope many others feel the same way about Inside the ICE House. This building's better than ever, Josh. It's an incredible place. You've heard me say it many times. There are four buildings that define America, the White House, the Capitol, the Supreme Court, and the New York Stock Exchange. This is a special place. And since we were last together, it's even gotten better. We undertook a massive renovation to, like I say, restore everything great about this place, renovate everything not so great about this place or that need of renovating, and then turn it over to our partners, so our listed companies, the leaders and the influencers that you just outlined as well.
And so, as I look at this place, it's more welcoming to guests. We've put a lot of resources into making sure that first site people see inside the New York Stock Exchange is a very warm, welcome and modern greeting. And then we continue with that hospitality and reception that has made this place so special to so many people.
Josh King:
And then, with your hat on as the vice chairman of the New York Stock Exchange, it's chief operating officer for a time, and also it's head of Capital Markets, I mean, the thought of where we were when we had to leave here for a time, 2020, it actually allowed, in addition to so many of the changes that have happened in the building, for us to sort of test the technology, the ability for it to go fully electronic and made much more robust. I mean, just the changes that you've seen since that day in March of 2020 when we all had to walk out the door.
John Tuttle:
We run north of a dozen exchanges around the world, across asset classes and geographies. Most of them run purely electronically. We have great technology here. We completely replatformed the New York Stock Exchange, just before we broke away for COVID. And now we have the lightest weight, most resilient, most deterministic, which means investors understand how the technology's going to interact with them. And it's very consistent, very tight tails, low variability.
So, when we experienced COVID, we were ready for it. We had built and tested our technology. But there's nothing like the real thing and being back here. And what we realized is that, while our trading still outperformed any other market in the world, it still wasn't as good as when we had this building and this floor open as well. So it's great to have it.
Now, since we've really reopened after COVID, that also reopened the market as well. And since we were last together in 2019, we experienced the two busiest years in the history of the New York Stock Exchange when it comes to new equity issuance or IPOs. And so as I look back over the past two years, really 2021 and 2022 in particular, I mean we listed over 450 companies. We helped companies raise over $200 billion that they're going to use to grow and expand their business, to launch new products, to create jobs and improve lives across this country and around the world, and it's something we're very proud of. Well, obviously, we've seen the market be under a bit of pressure these days, and obviously, the Fed increasing rates and other macro events taking place, whether geopolitical or macroeconomic events taking place, we'll be back and we'll continue to be better than ever.
Josh King:
This July marked your 15th anniversary, I think, at the New York Stock Exchange. Before we get into what you're doing at the NYSE Institute, can you reflect on how the business has changed over that time? I mean, you just talked about the last couple of years, but think about when you walked in the doors here. I mean, this room that we are actually in, I think used to be your very office.
John Tuttle:
More change, Josh, has happened in the last 15 years than the proceeding two centuries, and probably for the better in most cases. This was a very special place and played a very important role in American and global economic history. But we had to reposition this business for the future.
Back when I joined in 2007, which is sobering to think it's been that long, but it's been a wonderful journey, we had just become a public company. We had demutualized. We had 1,366 seat holders. That was your license to be on the Exchange. We were owned and operated by our seat holders and operated for their benefit as well. We realized that probably about 70% to 75% of them were retired and living in Arizona or Florida. And we thought, it's probably time to evolve the business model a bit. And the exchange industry is one where, at least in theory, economies of scale come in very quickly. You put two exchanges together, remove one fixed cost base and realize your costs and revenue synergies very, very quickly.
So I joined and we embarked on this journey to become this global multi-product kind of cutting edge exchange group. And so we quickly acquired the exchanges in Paris, Lisbon, Brussels, Amsterdam. We took equity stakes and other exchanges around the world. We're providing the technology to run other marketplaces, and all along the way, becoming more focused on our customers, on our stakeholders, on our investors, and really becoming a better, more durable business. I think one of the most important moments in that journey was obviously the combination of then NYSE Euronext and Intercontinental Exchange and ICE.
And, to Jeff's credit, you can't have two cultures when you're bringing companies together. And while NYSE had moved and evolved so much over that decade, preceding or few years preceding the deal, bringing that entrepreneurial spirit, bringing management close to the front lines of the business, really making it a meritocracy, has really positioned this business for incredible success. And, we're much more than a place where companies list and trade their stocks. We're a place where the good and the great convene to help solve and address some of the biggest challenges of our time.
Josh King:
For those who haven't listened to any of your prior episodes with us, in which I think you explained your backstory, but just remind our listeners how you got here in the first place in 2007.
John Tuttle:
Oh, I hope I don't regret saying this. I'm kind of the Forrest Gump of finance. I just kept on running and ended up where I am. So I'm a proud Detroit native as you know that, and spent a little bit of time down in DC in the Bush administration at the White House, and then over at the State Department. Went off to graduate school, and the day I graduated, I got a call from somebody who had worked for the president for 11 years, six years when he was governor and five when he was president, and said, "Hey, I need you to come to New York, and we're taking the New York Stock Exchange global." I thought, "I'm not from New York. I don't really have any interest in going there. I like where I am and maybe I'll go back to DC but not New York." And, he says, "Give me six months. Consider it another degree and I'll be your best reference if you don't like the place."And so here I am, 15 years later, I've had a great journey where I've gotten to work on global affairs and I was our chief operating officer. I led our capital markets and listings businesses, and now have the good fortune of launching the Institute.
Josh King:
Now, neither you nor I, thank God, were alive when Winston Churchill visited the New York Stock Exchange, before and after he's Prime Minister. And of course, we often make note of the time in 1992, when former Soviet president Mikhail Gorbachev came here on May 14th of that year. But, as a kid growing up in Michigan, what was your first sense of the role that the NYSE played in the promotion of global commerce and capitalism? Any idea of it when you were looking at it as a young man?
John Tuttle:
Yeah, it's a really interesting question. It's something I haven't really thought about that much. But, my first two distinct kind of memories of the New York Stock Exchange were... I mean, I obviously knew what it was and what it did and all that, but I remember, when I was a freshman in college, one of my friend's father was the CFO of a company listed on the New York Stock Exchange. We're visiting his family, having dinner, and he said, "Yeah. Next week I'll be in New York, ringing the bell of the New York Stock Exchange." And I thought, he might as well say he's going to meet the president of the United States or visit with the Pope. I mean, I thought that was the most interesting thing in the world.
And then, shortly after that, I think everybody recalls watching the market reopen just after 9/11 and seeing former chairman Dick Grasso lined with FDNY and NYPD and other first responders. And obviously, that made a very, very powerful impression. And then, you dig more and more and you think about how special this place is and the important role it's played in driving so many opportunities in this country and providing wealth to so many people. It's a special place.
Josh King:
I mean, in a broad sense, how do you think strong public markets really add to the quality of life?
John Tuttle:
In many ways. I mean, look, if I'm an entrepreneur or a company, I have a place where I can come to access capital, at market rates. And, I think it's important to say that because, as we saw during COVID, there is a big difference between being a public company and a private company. And, you heard too much and too long about why you never want to be public and all the benefits of being private. Well, when you saw the ability for public companies to access capital, at market rates, that they could use offensively or defensively to shore up their businesses during an uncertain time, make sure their employees were looked after, and then you contrasted that with what was happening in the private markets, where it was near luxurious rates being charged to companies, you saw one of the many reasons why the public markets, how they help serve our issuers, but also investors too. I mean, these are people...
You have your institutional investors, your pension funds, your asset managers that are looking after large groups of people, whether it be teachers, firefighters, police officers. But also, you have individuals who are saving for their children's education or retirement or even their own financial freedom. This is the only place in the world, in America, where you can allocate your capital how you see fit and determine your own destiny. And so, having a platform, a well-governed, well-regulated, transparent platform, where you can do that is important.
Josh King:
Now, I know you have become sort of your own historian of the New York Stock Exchange. In fact, you're talking about this time that you arrived here in 2007, but in fact, according to our records, your old boss, President George W. Bush, actually beat you here, January 31st, 2007, watching the then president and CEO of the Tokyo Stock Exchange, Taizo Nishimuro, ring the opening bell to announce a strategic alliances between the two exchanges. Did you see or do you have any recollection of that moment?
John Tuttle:
I sure do. I remember seeing President Bush here on TV. I wasn't working for him at that exact moment. But, I think one thing that's fascinating is, you've covered it here on Inside the ICE House, you talked to Peter Ash, our great archivist and historian, truly a national treasure, about the history of this place. And in my 15 years at the New York Stock Exchange, we've had approaching 150, 200 heads of state, heads of government, so president, prime minister level, come through here. In our entire history, in our history so closely intertwined with that of the country, only two US presidents have come while in office, Ronald Reagan and George W. Bush in 2007.
I also find it special that he came on that day to oversee the collaboration with the Tokyo Stock Exchange, because, number one, if you remember, President Bush's father was the youngest pilot shot down in World War II, and the relationship that President Bush built with then Japanese Prime Minister Koizumi was deep and showed how, in even a generation, the massive shift that could take place in geopolitical and even personal relations.
The second part of it is, just last month, I had the good fortune of overseeing a renewal of that MOU, signing an expansion of that MOU, signing with the Japanese Prime Minister Kishida here at the New York Stock Exchange. So, kind of full circle in a number of ways.
Josh King:
I mean, I was going to get to that next because, is past prologue here with what you're actually trying to do with the NYSE Institute?
John Tuttle:
You said it at the onset, there are some things we did really well in the past that we're just putting some new structure to and modernizing and really giving a strong tailwind. And we're also exploring some new opportunities as well. I mean, this company has changed so much over the past decade and, like I said, for the better. And if you think about how ICE more broadly can support countries and capital markets and financial infrastructure, there's a ton of opportunity to bring more opportunity to different countries around the world.
And, an example I would just give, not to talk about it too much, but the prime minister of Vietnam was here earlier this year. Here's a country of a hundred million people, fast growing, attracting a ton of investment. And he says to me, "John, I would love your support in helping advance our capital markets." Here's an opportunity for us to provide the data that the Central Bank governor is looking at on how their bonds are trading in the market. Here's our opportunity to tell them, "Hey, you want to transition to a green economy? Here's the metric. Here's the stats. Here's the benchmarking on how to do that. We're here to be your partner." Because, not only are we helping our business, we're going to be helping millions, tens, maybe hundreds of millions of people in some way indirectly along the way.
Josh King:
Whether it started with that visit from the Prime Minister of Vietnam or before, tell me about the genesis of the NYSE Institute, because you've actually now put a full structure around the idea that, as you say, we've kind of been doing for a while.
John Tuttle:
At the end of the day, we're a business and we're here to serve our customers, and that is the genesis of the NYSE Institute. I, along with Lynn Martin and others, have gone around speaking with a lot of our listed company CEOs. I mean that's one thing we're very focused on is hearing what's top of mind for them and making sure that we're being able to deliver solutions to help them manage better companies, run better companies, create more opportunity for more people.
And the feedback we were hearing was, they did not necessarily feel like some of the current organizations and individuals in Washington DC were really representing public markets, and specifically, public companies. And we realized this is an opportunity for us to fill that void. We don't want to be everything to everybody, but we thought, we have an incredible platform for that. Over two centuries has bridged public policy and commerce. Our NYSE listed company community is the greatest community of companies in the world, our 2,400, 2,500 companies from over 46 countries. But I think most importantly, they represent $40 trillion worth of market capitalization. They generate $20 trillion in revenue every year, and they employ 43 million people directly, and maybe multiples more indirectly. So that means they're in every congressional district. They're in every state. And, the logo and the name...
I always say, everybody over six years old knows what the New York Stock Exchange is. It turns everybody into a six year old when they're here. It's a very special place and it means a lot for all the reasons we spoke about earlier. So how can we leverage this platform to, number one, make sure policy makers in Washington DC and capitals around the world understand the important role that public markets and public companies play in driving inclusive economic growth? And we can dive deep into some of those issues if you want. And the second is, ensuring the long term competitiveness of the US capital markets. We cannot take our position as being the envy of the world when it comes to having the deepest pools of liquidity, the broadest investor bases, for granted. We have to make sure that policy makers understand, not only the first, but the first, second and third order effects of some of the policies they're making, and how ultimately that will impact the competitiveness of the US capital markets.
Josh King:
So you're getting more time on the asell, like going down to DC, walking up to Capitol Hill, meeting with members of Congress. CEOs do have their own individual visits. They have some of their own organizations that they belong to in the past, whether it's the Chamber of Commerce or other organizations. What's the niche that the NYSE fills? And on some of those initial visits that you've had as NYSE president, what's the reception been like?
John Tuttle:
It's been a very warm reception. I'll give you an example. We reached out to eight US senators. We're going down to Washington DC for a couple of days in September, reached out to eight US senators. All eight said yes. And all eight of them will say yes again. Because in those meetings, they listened to what we have to say because we represent that voice and the views of people who represent 43 million jobs. You can consider those jobs. You can consider those voters. But at the end of the day, they're people, and our businesses are looking out for people. They value those conversations because what they learn from the New York Stock Exchange and the New York Stock Exchange Institute helps them be better policy makers, helps them be better leaders, and is information that they cannot find anywhere else.
Josh King:
I mentioned Mark Milley's visit here later on this week, and we're going to talk about that more a little bit later. But there's an equally powerful effect when some of those members aren't visited by you in their lobbies in DC, but when they get on the asell and come up here and sort of can kick the tires on capitalism themselves.
John Tuttle:
I will tell you, of all the world leaders that come through here, all the policy makers from Washington DC, they will tell you, almost a hundred percent of the time that this was the best part of their trip to the United States or New York, visiting the New York Stock Exchange. It was the most productive and the most enjoyable.
Josh King:
The NYSE has always been mindful of expanding its company's reach into global markets. Every September, John, the world leaders convene here in New York for the United Nations General Assembly. And, whether the president at the time of the United States happens to be Republican or Democrat, there's this unifying force that we represent in our connection to the world. In that vein, I want to listen to a few years ago, in one of those bilaterals around UNGA, as it's known, between the president and international leaders. Here is President Barack Obama, meeting with Nigeria's president, Goodluck Jonathan, pointing out a key part of his visit to New York.
President Barack Obama:
Obviously, Nigeria's one of the most powerful and fastest growing countries in the world. I think that's testified by the fact that President Jonathan's going to have the opportunity to ring the bell at the New York Stock Exchange. I think it signifies how important Nigeria's becoming in the global economy.
Josh King:
So, John, you heard it from President Obama, but beyond the NYSE serving as a symbol for arriving on the stage of global finance, how do you see the Institute's role in capital formation across continents?
John Tuttle:
It's a really good point and, just like for entrepreneurs and business leaders, this is a moment, when you ring the bell and symbolizes what you've built or what you're building and leading, and that you're on the greatest stage in Earth for business, and you've met the highest standards, the highest bars that are out there. I think for presidents and prime ministers, this is a way to symbolize that they are focused on their people. They're focused on their economies. They're focused on growing and expanding and providing more opportunity to more people. Yes, that was former President Goodluck Jonathan meeting with President Obama during UNGA, and I'm sure there's many other clips that are like that, underscoring the importance of this platform.
But if you think about why this place is so special, for both business leaders and policy makers, world leaders, is that, look, every listed company on the New York Stock Exchange, or almost every listed company, is or aspires to be a multinational company. And as you look to execute your corporate strategy outside of the United States, if you can establish a relationship with the leader of that country, or that jurisdiction, or that territory in which you're operating, it's a lot easier to work your way down the food chain than up it. And, for those leaders, the ability to talk to people, and meet with leaders who are investing or considering investing in their countries and growing their economies, that doesn't happen anywhere else, or maybe at least to the scale and ability that we do it here.
Josh King:
As we look across the globe, it's clear, as we know, the world is pretty divided in a number of ways. Is there a role for the Institute to help bridge the divide in some manner? I ask because, for example, back in the 1980s, when tensions were also high between China and the United States, it was the Exchange's then chairman John Phelan, who traveled to Beijing to present Deng Xiaoping with this gold button, enabling him and entitling him to visit the Exchange floor anytime he wanted, an honor that had only been granted a couple of times to non-members in its 193 history at that point, most notably to President Reagan the same year. There's always a value in allowing people of different stripes just to see capitalism in action, isn't there?
John Tuttle:
100%, Josh. And, that's why we're so focused on advocating for our list of companies in Washington. There's a lot of division, domestically, let alone internationally, where we can step in and help bridge some of the views, the differing views that are down there and really making sure that everybody understands we're working towards this sheer goal of creating better outcomes for the most number of people. On an international standpoint, I think the stronger the relationship is, between our country or our businesses and another country, the stronger the relationships between our markets will be, the stronger relationship between our broader economies, the stronger between our people, and ultimately the stronger between our governments. So, there is a small role, but not insignificant, that we can play in helping ensure strong bilateral relationships between this country and others.
Josh King:
As recent episodes of this podcast, I'm thinking back to the conversation I had last week with Blackberry's CEO, John Chen, Dwight Chapin, who helped organize Nixon's trip to China, James Fok, who's a friend of yours, and others, they've all discussed relations between the US and China are as unpredictable now as they were 50 years ago when Nixon shook Zhou Enlai's hand on the tarmac in Beijing in 1972. With an increasing number of Chinese companies choosing to dual list, what are you hearing from our listed companies concerning their plans to grow or continue to operate in China?
John Tuttle:
Well, first of all, let me tackle it with a couple of approaches. The first is that, there has certainly been uncertainty with regard to the relationship between the United States and China, from a geopolitical standpoint, from a macroeconomic standpoint, and certainly, from a business standpoint. If you look outside the United States, the country with the most listings on the New York Stock Exchange is Canada, natural fit, neighbor to the north, a lot of regulatory harmonization between our marketplaces. The second is China.
And here's a country of 1.4 billion people, fast growing economy. And there are real companies there that investors, global investors, want to be able to access. And if they're going to access them, we want them to do it on our platform, the one that sets the highest bar, has the most transparency. So that's important. And so we're active in that discussion and dialogue. I mean, we were the first non-Chinese exchange to open a representative office in Beijing back in 2007. The largest IPO in the history of US capital markets was Alibaba, which is a Chinese company, or was founded in China and headquartered in Hong Kong. And so, there's an opportunity for us to step in there and make sure that both sides understand, as they work to resolve diplomatic issues, the importance of making sure the relationship between our markets remains.
Now, more broadly, there is uncertainty from our companies about where to deploy capital. They look around the world, and they look at a number of different factors, where they see growth, where they feel like the regulatory environment, the economic environment, is going to be most accommodating for them to grow and expand their businesses. They look to China and, frankly speaking, their view has evolved. It used to be, "That's where we need to be, and we're going to go in there through a joint venture. We're going to go in there. We're going to deploy a lot of capital, a lot of people there." And a lot of them retrenched and pulled back. It is a huge marketplace that's important, from Detroit for the Big Three, those type of companies and others as they look to grow globally. But everybody's being a bit more cautious right now because, again, there is uncertainty with regards to the global regulatory landscape.
Josh King:
So, uncertainty of where to deploy capital, certainly, in that target country that people have been looking at for so long, really for 50 years, John. And, those who've watched the evolution of Asian economies more broadly know that the US is expanding its economic relations with countries beyond China. You mentioned the visit that you hosted from the prime minister of Vietnam earlier this year, and in recent weeks, the NYSE has signed memorandums of understanding with exchanges in Singapore and Indonesia. Is there a parallel that you draw from diplomacy to finance?
John Tuttle:
This is about finding kind of a commonality and issues where you can relate to them. The leaders of these stock exchanges from around the world want to develop their marketplaces. They want to be a place where companies can, again, access capital that they can grow and expand their business. They want to be that place where investors from that country can be part of those companies' successes.
And so, having them learn the lessons we have over 230 years and tailor those to their marketplace is going to benefit them. And we want to be able to... Just as how, as you look at some of the emerging markets around the world or other countries around the world, the United States, I like to think, takes a leadership role in helping them think about governance, think about the right policies to put in place, to lead their broader countries to greater prosperity.
Josh King:
I mentioned it a little bit earlier, John, but at the end of the day, capital fuels investment and growth, even during the most challenging circumstances. President Volodymyr Zelenskyy was here, virtually, a couple of weeks ago, to ring our opening bell. His message was, as I said earlier, invest in Ukraine, and that Ukraine is open for business. I just want to hear an excerpt of his remarks before he rang the bell that day.
President Volodymyr Zelenskyy:
In Ukraine, we are fighting for everything that you have. We stand so that every Ukrainian would enjoy all the manifestations of freedom available to a free person in the democratic society. We have achieved significant results. We have united the whole world around our struggle for freedom. We are liberating Ukrainian territory from the Russian army. We have already started renovating everything that was destroyed by the Russian terror. We are rebuilding our economy. We are giving you and your companies the opportunity to work together with us, for the benefit of all us. Ukraine is a story of a future victory, and a chance for you to invest now in projects worth of hundreds of billions of dollars to share the victory with us.
Josh King:
What were your impressions of that day back in September? And, tell us the significance of Zelenskyy coming here to deliver that message.
John Tuttle:
Yeah, think about that, Josh, think about that. He's in the middle of a war. He's in the middle of a war, where he has millions of people that are fleeing their homes. Countless numbers have been killed in these actions here. And, as you look towards solutions and bringing peace back to Ukraine, he's managing the military option. But he also realizes, one path to victory involves the markets, involves people. It involves investment. And so being able to deliver a message to our listed company community, that Ukraine is open for business, that he'll work with them, and his administration will work with them to put the risk controls in place and the safeguards to help backstop their investment or make sure that they de-risk as much as possible and create the opportunity for the company to invest is pretty powerful. And so, it shows that, this is the platform where leaders like them come when they're looking to solve, again, some of the world's largest challenges. This is where they come to get support.
But I think is also interesting is that, he also looked to this community as the type of community and the type of companies that would step in and step up. And it takes one company to take the lead in doing that. And I'm sure you'll see a handful of companies strengthen their investment in Ukraine. And I think, if you take that to one more layer, that's an opportunity for investors to say, "You know what? I may be sitting in Michigan where I'm from, or I may be in California, somewhere else around the world, how can I support Ukraine in this situation? Or how can I support any country or jurisdictions that has its own challenges?" And one way is through the markets. You can vote with your wallet. You can deploy your capital and invest in those companies that are investing in Ukraine.
Josh King:
John, another poignant moment was when the NYSE Institute hosted Japan's Prime Minister Fumio Kishida, who rang the closing bell during UNGA this year. It came just a few weeks after the assassination of former Prime Minister Shinzo Abe, who made a similar visit to the NYSE during his time in office in 2017. Let's hear some of the current Prime Minister's remarks in the boardroom that day.
Prime Minister Fumio Kishida:
Japan is the largest investor in the US, and the US is the largest investor in Japan. The number of American jobs created by Japanese companies is second, out of all voting countries. When Japanese companies prosper, so too does the US economy. We intend to further deepen this strategic relationship. When I met with President Biden in May, we agreed to strengthen corporation on semiconductor manufacturing, which is key to our economic growth and security.
Josh King:
Semiconductor manufacturing is so important to so many of our listed companies, John. The Prime Minister was honest about Japan's current economic challenges, but it has built and maintained one of the most dynamic economies in the world. Is that part of both Mr. Abe's legacy and what Mr. Kishida is trying to do?
John Tuttle:
Absolutely. I mean, look, here is the world's third largest economy, the leader of the world's third largest economy, coming to the United States to deepen collaboration, to unveil his economic platform. He did it from the boardroom of the New York Stock Exchange. You mentioned Prime Minister Abe, the late Prime Minister Abe, he visited us twice here at the Exchange to do something similar. And to see that now tradition carried forward by Prime Minister Kishida was pretty special.
And I hope I'm not sharing too much, but this was important to the Japanese government and to Prime Minister Kishida, to get this right, to deliver the right message, while here in New York at the UN General Assembly. And here's a prime minister of a G7 country, he's in town for three days. On the front end, there was a typhoon, so they had to shorten his trip, condense it in there. And he was delivering a speech, at three o'clock on September 22nd. He came in September 21st, for an hour and a half, the night before. He left a meeting with President Biden to come down and rehearse his speech at the New York Stock Exchange, because he wanted to get it right. He came here the next day at noon to practice it again. And when he was here, we introduced him to leaders of our listed companies who are doing business in Japan. The feedback was overwhelmingly positive from them, as you can imagine, but also from the Prime Minister and us being able to convene this for him.
And then he delivered his speech in English, clearly not his native language. So, this was a great opportunity for Japan and the world's third largest economy, a resilient and diverse and dynamic economy, one where, I think, we have 12 of the leading and largest Japanese companies listed here on the New York Stock Exchange, to deliver his message to the world about his country, and to even address some of the more difficult questions around aging population and diversity and kind of the increasing number of women in the workforce, the need to increase the number of women in the Japanese workforce. So, it was very open and candid conversation, and something we're proud that happened here.
Josh King:
Flipping from the sea of Japan to the English channel, John, a couple of days ago, Nadhim Zahawi was appointed chairman of the Conservative Party in the United Kingdom. Earlier in the summer, he had a different job, a chancellor of the Exchequer, and you hosted him here on the floor of the Exchange. Despite the political upheaval in the UK that now finds Rishi Sunak at Number 10 Downing Street, talk about the special relationship that the NYSE has with Great Britain and the firms that are listed there.
John Tuttle:
I mean, that relationship goes back a long time. I'm sure Pete Ash, our archivist, could tell you about the London, Newfoundland, New York Telegraph company that listed here well over a century ago. But it's been strengthened and fortified over the years. Obviously, we have very large operations over in London. We operate the former London International Financial Futures Exchange, LIFFE, as it was called. It's now ICE Futures Europe. The former International Petroleum Exchange, which is home to the Brent Oil contract, that's part of ICE Futures Europe as well. And we have very significant operations over in the country. But, if you look at our listed company community, we have several dozen of the leading and largest UK-based companies. The majority of them are also listed on the London Stock Exchange, but understand the value of also being listed here on the New York Stock Exchange.
When it comes to the relationship between the government of the United Kingdom and the NYSE, I mean, we've had some great interactions and friendships and relationships that have been built over time, everybody from Prince Edward, one of the Queen's sons was here, I guess that had been May of 2010, I had the opportunity to host him here, to, you mentioned, Nadhim Zahawi, the chancellor of the Exchequer, we look forward to further strengthening what was truly a great relationship that had been built with him in his role of chancellor of the Exchequer.
But I will tell you, the relationship between the UK and the NYSE underscores what we've talked about this whole time, and I hope you're not sick of me saying it now, Josh, but this is a special place and a special platform. When David Cameron, then prime minister of the UK, wanted to roll out the UK government's global branding campaign, if you're in any UK airport, if you go around the city and you'll see it says, "Great. Great universities, great countryside, great innovation, Great Britain.", he didn't do it from London. He didn't do it from Midtown. He did it from the boardroom of the New York Stock Exchange. And what was meant to be a two-year branding campaign leading into the Olympics continues on today, well over a decade later. So that was announced there.
When Mayor Sadiq Khan of London, just after Brexit, wanted to deliver a message that London was open for business, I love our friends at the London Stock Exchange, he didn't do it from there. He did it from the bell podium of the New York Stock Exchange. So it's a special relationship, even a financial center many would consider a rival to New York understands where you go if you want to deliver a message.
Josh King:
We've spent some time in Asia. We've gone over to Europe. Now let's head down to South America, John, because elections have consequences. This week, we saw Luiz Inácio Lula da Silva emerge victorious in Brazil over Jair Bolsonaro. This May, Ferdinand "Bongbong" Marcos Jr. became 17th president of the Philippines, and he too made the NYSE one of his first stops outside of Manila. Now, Lula has been president before, and of course, we have many Brazilian companies listed on the Exchange. Do you expect to have Lula here on a future trip to New York?
John Tuttle:
Well, he is always welcome, and most of the leaders around the world are welcome to come here. Obviously, some, it's a bit more challenging. We have a deep relationship with Brazil. And as we look at our own business and say, "Where is the opportunity around the world?", we look at a number of different variables. But if you look at Brazil, you have a growing middle class that's there. You have large population. You have the benefits of being in the same time zone. You have a lot of exciting companies that are being sprouted because of regulatory changes that are down there. You have large established companies, many of the Brazilian banks, the miners and energy companies, the CEMIGs, the Vales, the Petrobrases. But you also have a lot of exciting companies. Nubank, which was one of the largest IPOs of last year, was a kind of neobank or a new bank that was digital first and meant to provide more access to more opportunity for more people in Brazil. So we certainly want to engage with Brazilian policy makers as they look to continue to evolve their economies.
I mean, President Bolsonaro was viewed as good for business and worked to implement a number of regulatory reforms, particularly pension reforms in Brazil. But you have to remember that despite the political rhetoric around Lula, he oversaw the Brazilian economy during a time of massive growth and expansion. And of course, this did coincide with the commodity supercycle where China was continuing to get a lot of raw materials and Brazil being a country rich in natural resources benefited from that. But, despite the political rhetoric that's out there, I think you can expect President Lula to know the important role that business will play in driving Brazil forward.
Josh King:
Turning, as we wrap up, to events back here, finally, to the United States, John, which is where we started with our conversation, we are recording and releasing this episode just days before the midterm elections. If there's one thing that markets don't like, as you talked about earlier, it is uncertainty. I want to go back to 2016 and listen to CNBC's Bob Pisani and Bill Griffeth talking on the New York Stock Exchange floor about the immediate aftermath of Donald Trump's victory.
Bob Pisani:
Would mark at that time of day. So Monday, over the last three days, Monday and Tuesday was a Hillary rally, okay? Then we thought we were having a Trump sell-off overnight. But today, we're having a Trump rally, so we're up 250 points today. That's this week for the industrial average.
Bob Griffeth:
And we're just shy of the high, we should know, just shy of the historic highs.
Bob Pisani:
Where does the money come from? The bond market, apparently. As they sell treasuries, a breathtaking rise in yields, especially for the 10-year, which went from a low of 172 overnight, now at 206, 207.
Bob Griffeth:
Sell bonds to pay for infrastructure.
Bob Pisani:
I guess.
Bob Griffeth:
That's one part of this game.
Bob Pisani:
And look at the VIX. Volatility index started the week above 22, and today, we're at 14.
Bob Griffeth:
I had people telling me last night, when the Dow's down 800 points at midnight, the VIX is going to open up 50.
Bob Pisani:
Right?
Bob Griffeth:
At this point. You know what's incredible? How long the consensus has been for so many things this year. Remember that swoon in January and February? We're going to have a recession. Wrong. Brexit was going to be a disaster. Wrong. Trump could not possibly win on the electoral. Wrong.
Josh King:
22 to 14 on the VIX. No matter what happens on Tuesday in the midterm elections, how do you think markets will react, at least to the end of months of uncertainty about who might control Congress?
John Tuttle:
We've been around for 230 years. Markets go up, markets go down. We've seen world wars, as you started off, World War I, World War II, Vietnam, Korea, all these geopolitical macroeconomic events. We'll be here to make sure the markets are open, rain or shine.
I think that clip reminded me of a couple of things. Number one is that, oftentimes, the people you think are the smartest in the world get it wrong. I remember us being at a dinner with CEOs of our listed companies before the election, and we said, we polled them, "Who's going to be the Republican nominee? Who's going to be the Democratic nominee? And who's ultimately going to win the presidency?" And, of the 60 or so CEOs that were in the audience, zero predicted Donald Trump. So these are the people that are "the smartest" in the world. And sometimes, they don't see what's actually happening.
The second is that, I remember that election night very well. The Dow futures were indicating that the market would be down over 800 points that next day, and we have these market wide circuit breakers, where if the S&P moves X amount in Y amount of time, we halt the market for Z period. I remember, it was two in the morning, I was watching the election results come in. I was drafting an email that was going to go to all of our listed company CEOs to tell them what would happen if we hit these market wide circuit breakers. I sent it off to our general council. I went to bed about 2:30 in the morning. I woke up the next day, the futures were rising. I came into the office, they continued up a little bit more. We went down for the opening bell. The market opened up and it never looked back for a number of years. So, there's some important lessons. I think chief among them is, don't try to predict the market post a political event.
Josh King:
Regardless of the outcome, there are going to be a number of newly elected officials in Washington to interact with. What'll be the NYSE Institute's first steps in terms of planning to reach out and meet what must be a new crop of committee chairs? And, what's going to be our message?
John Tuttle:
You're exactly right. We're going to be down there. We're going to be down there day one, meeting with these folks, talking about what the Institute is doing and our mission and what we're focused on, but also telling them we're here to be a resource. If you have questions, if you want our perspective on anything, we have a great network of individuals whose views we can tap into, and we have a very interesting perch from which we see the world and we want to provide you that perspective.
The other thing is, we have some really interesting ideas we're working on as well. And, for those listeners that have stuck around this long, maybe it'll be worth it. A lot of the legislation and the pieces of the JOBS Act, or the JOBS Act 2.0 or 3.0, or now 4.0 that's being out there and is essentially an amalgamation of 26 different bills, that are focused on strengthening our markets and the US economy. A lot of those are focused on, how do we make life easier for public companies? How do we make sure that regulation evolves to match market dynamics? But there's not anything good out there that says, how can we help companies? How can we help incentivize companies to be built to be public companies? And this is a long game. And it's not about us. It may sound self-serving. Yeah, of course, we want more public companies. Of course, we want more investors out there. But we realize, this is good for America in the long term, in the long term.
So we have some very interesting policy ideas that we're putting the finishing touches on, that we want to be able to present to existing and newly elected members that we hope will make their way through Washington, and eventually, help, again, secure the important role that capital markets play in driving inclusive economic growth, and making sure that US capital markets remain the envy of the world.
Josh King:
We know that it's been a slower year in terms of IPOs and that may continue into next year. We know that the prior SEC chair, Jay Clayton, wanted more companies to go public. We know that Gary Gensler wants more companies to go public. So, if you can peel the onion back on any kind of those plans or thoughts about how more companies can go public, or how they can be built to be more public ready at the right moment, your listeners are ready to hear it.
John Tuttle:
First of all, you can't flip the switch overnight and say we want to have double the number of public companies next year. I mean, I think the spack, boom and craze of the past few years saw that when companies aren't ready to be public companies, the companies get damaged and the investors get hurt along the way, or can, and we don't want that to happen. We want companies to be built for the long term. And from when entrepreneurs found companies or scaling companies, they're putting the right structures and incentives in place that will position them to be great public companies.
And those incentives involve making sure that the company is built to provide the most opportunity to the most people. And at that point in time, it's very likely their employees bring them along for the journey. I've worked very closely with Pete Stavros from KKR, who I consider to be-
Josh King:
A guest on this show.
John Tuttle:
A guest on this show and whom I consider to be a friend in the program. He's launched with Ownership Works to provide more ownership or share ownership to employees. And then also, what are some of the tax reforms or suggestions we can make that really align the incentives of the market, of the employer and of the employees, that it's ultimately going to create companies purpose built for the public markets.
Josh King:
I mentioned General Milley's visit coming up in the introduction, where he will address a room of Exchange officials. But, these events are really about creating a dialogue. What do the military and other organizations get from engaging with the NYSE community?
John Tuttle:
It's two ways. What do we get from them and what do they get from us? I mean, we get so much about leadership, about how they run massive operations. I mean, Josh, you joined me with General Daly, four-star general in charge of all logistics for the military in understanding how they operate around the world, and it's amazing. And so we can learn a lot from them. And what they like to learn from us, or most often the questions that come up, are really understanding that there is another tool. There's hard power, soft power, all that. There's diplomacy and kind of soft power. There's hard power with military and the Department of Defense. But also there's this other lever, economic power. And you've seen it be moved a little bit with regard to Russia and sanctions and others. You've seen it with regard to, in DC, even with some of the regulations that have imposed on companies and the Holding Foreign Companies Accountable Act and others, understanding how the markets can help also drive a country's foreign policy.
So, having that two-way dialogue is really beneficial. And, we said at the onset, this is a special place. Our history is inextricably intertwined with that of the country. It's not lost on us for a moment, that part of the reason why we get to do what we do and talk about everything we've talked about in the show is because we live in a free, safe, and secure country. And so honoring the women and men of our Armed Forces is just a small way for us to say thank you.
Josh King:
I've got my handy two-page schedule of NYSE Institute 2022 Agenda of upcoming events, and looks packed in November and December. What are you most excited about as you look forward to the future of the NYSE Institute?
John Tuttle:
I feel like Tom Brady, in the next game, the next Super Bowl, which one's the best one? The next one. So, we have a lot of exciting things going on, from the military standpoint, obviously, in Washington, DC, on the Hill and with regulators, and then welcoming some of the greatest guests in the world to the New York Stock Exchange. So, we have a great mix of those coming up, and looking forward personally to watching the Institute really fulfill its mission to make sure that capital markets continue to be that important driver, continue to be that horse that pulls the cart of the global economy.
Josh King:
The horse that pulls the cart of the global economy. John Tuttle, vice chairman of the New York Stock Exchange, friend of the pod, and now president of the NYSE Institute. Thanks so much for coming back for another visit Inside the ICE House.
John Tuttle:
Such a treat. Thank you, Josh.
Josh King:
And that's our conversation for this week. Our guest was John Tuttle, president of the NYSE Institute, vice chairman of the New York Stock Exchange.
If you like what you heard, please rate us on iTunes, so other folks know where to find us. And if you've got a comment or a question, or you'd like to hear one of our experts like John Tuttle on a future show, email us at [email protected], or tweet at us, @icehousepodcast. Our show is produced by Marina Stanley and Pete Ash, with production assistance and engineering from Ken Abel and Ian Wolff. I'm Josh King, your host, signing off from the library of the New York Stock Exchange. Thanks for listening. Talk to you next week.
voiceover:
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.
