Blackstone’s Chief Operating Officer, Jonathan Gray, appeared on CNBC this morning to reassure investors of the company’s continued confidence in its business model despite recent market volatility. According to Gray, Blackstone’s credit is “fine,” and the company is seeing a rally in alternative assets off the lows. However, there are concerns about liquidity in the market, particularly when it comes to ETFs, which now account for 45% of trading volume on the tape – the highest level in over five years.

While Gray acknowledged that liquidity is poor, he noted that the top of book depth is currently sitting at just $3 million, which is around levels last seen during the Liberation Day period. This suggests that there may be limited buying power in the market, particularly for larger trades. As a result, the company’s medium-term momentum trigger level for CTAs is now in play at 6750, where demand is expected to flip to supply.

The current elevated market volumes are also worth noting, with volumes up by over 30% compared to the 20-day moving average. While this could be a sign of increased investor activity, it may also indicate that the recent rally in alternative assets is not yet sustainable. As such, investors may want to exercise caution when considering new positions in these markets.

Overall, while Blackstone’s COO remains confident in the company’s business model, the current market conditions highlight the importance of careful risk management and a thorough understanding of market dynamics. As always, it is essential to stay informed and adapt to changing market conditions to ensure successful investment outcomes.