Nasdaq CEO Adena Friedman Talks Heightened Volatility
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The outlook for corporates gets harder. American Airlines and Pepsi joining a growing list of companies trimming or pulling forecasts due to trade uncertainty. NASDAQ hoping to provide stability in this volatile environment. And the NASDAQ CEO, Adina Friedman, joins us now for more. Adina, good morning. Good to see you. It's great to see you. Great to be here. Can you describe the last month for us, if you can? Just how busy have things been? Describe the volume, the activity going through your business. Well, thanks for having me. First of all, we just announced earnings yesterday, so I think that shows a little bit of the

what we've been working with. We had 12.5% revenue growth. We had double-digit growth in each of our three divisions. And a couple highlights. One is within our Capital Access Platforms division, our index business grew 26% in the first quarter because of inflows, and we had $27 billion of inflows in the quarter. Very strong futures volumes as well in our NASDAQ 100 franchise.

And then we look at our fintech division that grew 10 percent. And one of the highlights there is our anti-financial crime business grew 21 percent. And that's an important key grower for us. And then within our market services division, which is our trading business, that grew 19 percent in the first quarter because of record volumes in the first quarter. And we continue to see those volumes persist and actually grow continuously.

into April. The first 10 days of April, we had five of the top six trading days ever in U.S. equities, four of the top six trading days ever in options. And in one of the days, we also measured message traffic because that's how many messages our system's handling during a given day. On the peak day, which was April 7th, we had 550 billion messages flow through our systems on that single day. So it has been an incredible period of time from a trading perspective. And

And the one thing to note, because we talked about this earlier, you don't get necessarily credit for this, but the fact is that the plumbing within all of the markets has done really, really well.

hyper resilient. I think we've all been able to manage this volume extraordinarily well. We're very proud of that at Nasdaq and I can tell you that our markets have done quite well in this period of heightened volatility. We don't thank you when it goes right, but we'd be very quick to criticize you when it goes wrong, that's for sure. You've handled a lot of volume, volatility good. When does volatility become bad?

Well, I think the one thing to recognize is volatility and short-term volatility that then can resolve itself. I think that's something that we've seen, frankly, multiple times over the last five years. I think the concern is, of course, is if we cannot have some certainty in the markets. You know, investors like certainty, and right now it's a very uncertain environment. So they tend to take a risk-off attitude about that.

And as we know, we are hoping to see more companies go public this year. We did have 45 IPOs in the first quarter, raising $5 billion. One little side fact also is we had seven companies switch from New York to NASDAQ in the first quarter. And we crossed $3 trillion threshold of companies that have switched to NASDAQ since we started our switch program 20 years ago.

But I also would say, though, we have a lot of companies that are looking to go public this year. And right now, of course, investors are not really in a mode of underwriting a lot of risks. So we're seeing them take a wait-and-see attitude in terms of how to tap the public markets and when to tap the public markets this year. That was a very subtle but well-placed shot over at the New York Stock Exchange. I'm sure that they will...

be listening. I am curious about what that pipeline looks like now and how much smaller it is now in terms of IPOs than it was earlier in the year. You know, there's this big question, how much of deals been sort of put on hold and how much have they just been scrapped altogether? Do you have a sense of that? I think

I think they're more being put on hold. I mean, we have not seen companies suddenly decide they're not going to go public. It's really a matter of they've gotten themselves ready there. They've gotten approval, all the approvals they need. It's really now a matter of just having a wait and see attitude. And they should be, you know, in terms of thinking about how can they maximize value for their shareholders? How can they make sure that they're entering the markets in an environment that's welcoming?

And that could be, you could find windows and pockets of time throughout the year to be able to do that. And we did, as I said, still have 45 IPOs in the first quarter. So it wasn't like the markets are shut. It's just a matter of finding those windows of opportunity within a more volatile environment. Do you see companies trying to decide or having a harder time deciding whether to IPO in New York or in the United States in the deepest markets of the world versus somewhere else based on the turmoil that we've seen?

Well, we are really the home to global companies as well as American companies. The conversations continue to be very constructive, robust. They're very interested in coming and tapping the American investor and, frankly, the global investor base. I mean, in the United States, we are the most liquid markets in the world. We have the most value.

variety of investors. We have the deepest pools of liquidity. I think those things are constant attractions in terms of companies who want to go public. Again, it's really more a matter of timing. It's more a matter of when than if they want to come and tap the public markets here in the United States.

I was here during Trump's inauguration while you were speaking to John and Lisa over in Davos and you were very constructive on the incoming administration when it came to the excitement around IPOs, also deregulation. You were pushing for this regulation overhaul. Are you seeing what you were expecting back in Davos from this administration now in their first 100 days? From a regulatory perspective, we are very excited about the fact that we can work constructively with the regulators that are coming in with the positions.

with with chair Atkins coming into the SEC he has deep understanding of the markets is a deep understanding of US capital markets and also the need for companies to have a good public company experience and how important that is terms of giving citizens access to the growth of our economy so we are we are looking forward to engaging with him we just put out a white paper on

on the need for reform in the regulatory landscape for public companies to have to be able to have a life as a public company, not have it be a, oh gosh, moment, but more a I can't wait moment. And so I think that that's something that we're really looking forward to engaging Chair Atkins on. How big is the tone shift from the Biden administration and Gary Gensler to Chair Atkins? Well, he just came into office, so we are going to

introduce ourselves to him. We actually do know him from when he was a commissioner many years ago, but reintroduce ourselves to him and we'll look forward to engaging with him as he gets going in his new seat. You've been through a lot of different market regimes. How would you describe this one? How unique is it? Well, you know, it's funny. I have actually been part of

many many market events I've been at Nasdaq started Nasdaq 32 years ago so I've seen a lot and this is every single one of them is different I have to say there's no two situations where you see a lot of volatility that are exactly the same in terms of the causes of volatility what we've seen in terms of the reactions from investors is pretty consistent you know when they you know the thing as I mentioned before is that they the thing that they like the least

is uncertainty and in any period of time where you suddenly have a big moment of uncertainty they take the same attitude which is a risk-off attitude I'm going to take take some on positions out of the market I'm gonna sit and wait and understand what's happening and then I'm gonna re-engage in a smart way that's a very consistent reaction but the causes of every single period of market volatility have been different actually over the last 32 years certainly feels unique this moment that's for sure. Adina thanks for dropping by

Thank you. Appreciate your time. Thanks for being with us. Dana Friedman there, the chair and CEO of NASDAQ.

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