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Speaker 2: It's often running the holiday shopping season, Adobe saying US
Speaker 2: shoppers are going to span up to twelve point four
Speaker 2: billion online today Cyber Monday, after justin its initial forecast
Speaker 2: of about twelve billion upward, based on stronger than expected
Speaker 2: spending on Black Friday and the popularity by now Pay
Speaker 2: Later features that let choppers stretch their budgets with credit.
Speaker 2: So let's get more to it and see what she's
Speaker 2: hearing and seeing when it comes to our own retail checks.
Speaker 2: Bloomberg Intelligence Senior alis for e Commerce ath Leisia off
Speaker 2: price retail here in our Bloomberg Interactive Broker's studio. Hello, Hello,
Speaker 2: were you out in full force over the weekend? I was.
Speaker 4: I was in stores and I was surprised to see
Speaker 4: how crowded they were.
Speaker 2: It's so funny because I feel like on Black Friday
Speaker 2: we were all here watching in it and they were
Speaker 2: showing like empty parking lots. Macy's was closed for Thanksgiving,
Speaker 2: so there weren't didn't feel like there were those doorbusters
Speaker 2: where everybody was lining up really really early. But all right,
Speaker 2: you've seen it firsthand. Tell us what's going on.
Speaker 4: So Thursday, stores don't open, and I'm thankful for that meet.
Speaker 4: I don't know, hellow you there, but on Friday, you know,
Speaker 4: we were out in stores, the whole team across coast
Speaker 4: to coast, and they were packed. And they weren't just
Speaker 4: packed in the morning. They got incrementally busier as the
Speaker 4: day progress. And I think that's really because you don't
Speaker 4: have those doorbusters that ended at eleven. Like if you
Speaker 4: remember a pre pandemic crazy, you know we were watching
Speaker 4: for are they extending the doorbuster? The deals are on
Speaker 4: all day, the deals, some of the deals were actually
Speaker 4: even there before Black Friday. It was for the whole week,
Speaker 4: and they've continued into Cyber Monday. So I think the
Speaker 4: retailers are adding deals. The consumers know that the deals
Speaker 4: are here and they want to shop the deals.
Speaker 5: Well, with that, how do deals change? I know that
Speaker 5: when I went shopping on Prime Day, that was my
Speaker 5: big focus, and it seems like the exact same deals
Speaker 5: are on Amazon right now that I saw last month.
Speaker 4: Yeah, I mean that's the whole point, right. They want
Speaker 4: to bring you the deal, try to get you to
Speaker 4: shop earlier, and if you didn't get a chance to
Speaker 4: catch the deal, you can come now to get them.
Speaker 4: But I will tell you that these deals exist on
Speaker 4: these key shopping days, so they do tend to go away.
Speaker 4: Like there were deals that I saw on Friday that
Speaker 4: I couldn't get on Saturday, and there were deals that
Speaker 4: I saw on Black Friday that are the same today,
Speaker 4: so it really varies by retailer. In fact, some have
Speaker 4: added more deals, like Vans, for example, they're forty percent
Speaker 4: off site wide today and in the stores on Friday
Speaker 4: it was thirty percent off apparel and buy one, get
Speaker 4: one half off on the footwear. So it really depends
Speaker 4: on the retailer.
Speaker 2: What does it say that deals are back?
Speaker 4: Deals are back?
Speaker 2: But when did they ever really really go away?
Speaker 4: They they've ebbed and flowed, and even though they're back,
Speaker 4: I would tell you that the deals are overall probably comparable.
Speaker 2: To last year.
Speaker 4: Okay, they're not that much deeper, but this is probably
Speaker 4: the best that you'll get given the inventory position that
Speaker 4: we're in. Remember we were way over inventoried earlier this year,
Speaker 4: and retailers have really brought that level down so they
Speaker 4: don't have to discount as aggressively, but they still do
Speaker 4: have to offer discounts.
Speaker 5: Let's talk about buy now, pay later, because is that
Speaker 5: just a big trend for big ticket items? Is that
Speaker 5: smaller like you mentioned Vans. If I'm buying a forty
Speaker 5: dollars pair of shoes, am I spreading that out over
Speaker 5: six months? Or is it really buy now, pay later
Speaker 5: focused on your TVs, your Xbox or PlayStations, bigger tickets.
Speaker 4: It's everything. I mean, the retailers that have buy now
Speaker 4: Pay Later, are some of the retailers with like twenty
Speaker 4: thirty dollars tickets, whether it's some of the apparel retailers.
Speaker 4: Even Amazon has buy now Pay Later this year, which
Speaker 4: is new. So it doesn't matter what the ticket prices.
Speaker 4: It just matters on your credit to the extent, how
Speaker 4: much buy now pay Later do you want to take on,
Speaker 4: because you do have to make those payments within two
Speaker 4: months of time, otherwise you start there for interest.
Speaker 2: It's interesting. I feel like growing up it was like
Speaker 2: lay away. You would put things on lay away and
Speaker 2: you can make payments, but you had to like finish
Speaker 2: paying it off by a certain amount. What does it
Speaker 2: say though, Does it say the consumer is stressed that
Speaker 2: if we're seeing a lot more of buy now Pay Later,
Speaker 2: I mean, are we seeing that number go up incrementally?
Speaker 4: We are seeing that number go up. In fact, I
Speaker 4: have the number right in front of me. Buy Now
Speaker 4: pay Later from November first through the twenty six was
Speaker 4: up fourteen percent year every year, and that's Adobe's numbers.
Speaker 4: And on Cyber Monday today it's expected to be up
Speaker 4: more than eighteen percent. So people are using BNPL to
Speaker 4: make their purchases, but people are also traveling, and.
Speaker 2: You can do that with travel too.
Speaker 4: Yeah, but if you're not making choices where you're not
Speaker 4: having to give up something, are you really under that
Speaker 4: much strain? Is what I question?
Speaker 5: Well, how much of that jump in use of buy Now,
Speaker 5: Pay Later is that just people knowing that it's an option,
Speaker 5: Because I feel like a year ago, I would go
Speaker 5: into a store and they would throw it out there
Speaker 5: as an idea, but I wouldn't even consider it FIRSUS.
Speaker 5: Now it's everywhere.
Speaker 4: Yeah, I think they know so definitely the knowing that
Speaker 4: it exists helps. But people have also been using it, right,
Speaker 4: so they're getting more comfortable with how it works and
Speaker 4: they're able to use it, and the teenagers are using it.
Speaker 4: I mean, if you ask me who was at the
Speaker 4: malls on Friday, it was the busiest section in the
Speaker 4: mall was near Abercrombie Hollister, Victoria's Secrets, Aphora. I mean,
Speaker 4: those were the stories that were mobbed.
Speaker 2: Well, what's interesting too is in terms of buy now,
Speaker 2: pay let later, is it cheaper to do that than
Speaker 2: throw something on a credit card, like I always hear
Speaker 2: somebody talking maybe it was on TV earlier that right now,
Speaker 2: credit cards, if you're doing anything in credit card, it's
Speaker 2: like the highest it's ever been in terms of So
Speaker 2: I do wonder if there's some thinking of like, all right,
Speaker 2: I can't pay it all right now, but I can
Speaker 2: over the next couple of months, rather than putting on
Speaker 2: a credit card and you start paying right away.
Speaker 4: Well, I guess it depends if you are not looking
Speaker 4: to pay off your credit card statement at the end
Speaker 4: of the month, yes, BNPL is a better option, but
Speaker 4: if you are looking to pay it off, I'd get
Speaker 4: my credit card points in yeah.
Speaker 2: Yeah.
Speaker 5: Who's winning right now based on cyber Monday looking at
Speaker 5: the data that you're seeing, are their individual companies, individual
Speaker 5: stores that are seeing a larger kind of pull forward
Speaker 5: and demand or jump intomand.
Speaker 4: So it's hard to say who will win because we
Speaker 4: don't have data. But what I can tell you is
Speaker 4: Amazon has clearly been a leader in online sales, and
Speaker 4: cyber Monday is about online shopping, so we expect them
Speaker 4: to really take their share of the fair pie. Now,
Speaker 4: if you think about the department stores, the Macy's, the
Speaker 4: Bloomingdale's and nord Storm's. You know, they've been losing share,
Speaker 4: but this is the time when people want to shop
Speaker 4: department stores, so they're probably pulling in some more share.
Speaker 4: And the retailers with the deals, if you have the deal,
Speaker 4: can suomers are coming because they have been putting a
Speaker 4: list together and now they're ready to execute on that list.
Speaker 2: When were you surprised by what you've been saying.
Speaker 4: I am, actually, you know, I didn't expect stores to
Speaker 4: be as busy as they were. I went into the
Speaker 4: mall thinking there won't be that many people out. I'll
Speaker 4: probably be busy early on and then maybe later in
Speaker 4: the evening, but kind of you know, soften up during
Speaker 4: the day. That wasn't the case, and people weren't just
Speaker 4: window shopping. They had bags in their hands. So there
Speaker 4: were lines at some of these stores wrapped around the store,
Speaker 4: which was encouraging to see because the same deals were
Speaker 4: available online, so you didn't have to go to the
Speaker 4: store to get the deal. I mean, I walked in
Speaker 4: stores where I looked at what I wanted and I
Speaker 4: placed the order on my mobile phone because I didn't
Speaker 4: want to carry the bag, so it was just interesting
Speaker 4: to see that the stores stayed pretty full throughout the day.
Speaker 4: I mean, I was surprised to see that.
Speaker 5: Yeah, and how does this continue to play out through
Speaker 5: the rest of the week, through December into holidays.
Speaker 4: I think that's a wait and watch situation. So did
Speaker 4: consumers really just make that list and go full out
Speaker 4: this weekend to do their shopping and are they done?
Speaker 6: So?
Speaker 4: How much of your shopping is done and how much
Speaker 4: is yet to remain is a question.
Speaker 5: How many people are using Cyber Monday and Black Friday
Speaker 5: to buy for others versus themselves because I don't even
Speaker 5: know what I'm getting people for Christmas or the holidays yet,
Speaker 5: but I'm more than happy to go spend it on
Speaker 5: my credit.
Speaker 2: Card, which you did.
Speaker 5: Yes, exactly.
Speaker 4: I think it's always been you know, it's not everyone,
Speaker 4: of course, it's a mixed batch. And there will be
Speaker 4: those people that will be going out the weekend before
Speaker 4: Christmas because they forgot to get a gift, or something
Speaker 4: didn't show up, or someone wants something different on their
Speaker 4: list today. So that'll happen. But a Cyber Monday, Black
Speaker 4: Friday is a time when you shop for gifts, and
Speaker 4: you shop for yourself because you have the deals. Now,
Speaker 4: the next two weeks you may see a lull, but
Speaker 4: that's normal, right, and retailers will come back to you
Speaker 4: with more deals getting closer to Christmas. But then as
Speaker 4: you near Christmas, the deals will likely go away because
Speaker 4: at that time you're crunched to buy. And this year
Speaker 4: we have a Christmas falling on a Monday, which means
Speaker 4: you have a full weekend to shut it all done.
Speaker 2: Yes, I was surprised walking through World Trade on my
Speaker 2: way home, and I guess it was around five thirty,
Speaker 2: six o'clock, six thirty, and it was packed and you write,
Speaker 2: people had bags and I don't think it was just
Speaker 2: tourists or anything like that, but it felt like it
Speaker 2: was a pretty pretty kind of busy retail trade. Put
Speaker 2: him thank you so much. Looking forward to your research
Speaker 2: over the next few weeks to see whether or not
Speaker 2: this all continues. Putim Goil, of course, Bloomberg Intelligence senior
Speaker 2: analysts for e commerce, ath, leisure, off price Retail. Joining
Speaker 2: us in our Bloomberg Interactive Broker Studio.
Speaker 3: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 3: live weekday afternoons from three to six Eastern Listen on
Speaker 3: Bloomberg dot Com, the iHeartRadio app and the Bloomberg Business app,
Speaker 3: or watch us live on YouTube.
Speaker 2: Not quiet. When it comes to the conflict in the
Speaker 2: Middle East, we talked about Elon Musk. He's been over
Speaker 2: there in Israel saying he'd like to help rebuild Gaza
Speaker 2: after the war in a conversation with Prime Minister Benjamin
Speaker 2: Nett and Yahoo. He's been doing this on his social
Speaker 2: media platform X. Meantime, more importantly, perhaps or no doubt,
Speaker 2: Israel and Hamasa green to extend a ceasefire which was
Speaker 2: initially due to end tomorrow morning in that war, following
Speaker 2: some tense negotiations over the release of more hostages held
Speaker 2: by the militant group in Gaza. So let's get to
Speaker 2: it with some analysis. We welcome Aril Cohen, a non
Speaker 2: resident Senior Fellow at the Atlanta Council's Eurasia Center. Member
Speaker 2: of the Council of Foreign Relations, he focuses on international security,
Speaker 2: energy policy, also with particular expertise in Russia, Eurasia, and
Speaker 2: the Middle East. He's also the founding principle of International
Speaker 2: Market Analysis. It's a boutique political risk advisory firm and
Speaker 2: for over twenty years he served as a senior Research
Speaker 2: fellow in Russian and Eurasian studies in International energy policy
Speaker 2: at the Heritage Foundation. He is on Zoom in Washington,
Speaker 2: doctor Cohen, Nice to have you here with Bally in myself.
Speaker 2: The developments today, the significance of this extension, how do
Speaker 2: you see it?
Speaker 7: Well, the israellies are driven by domestic political pressure to
Speaker 7: get as many hostage is back home as they possibly can.
Speaker 7: There is an old saying in the Holy Books that
Speaker 7: one who saves one human life as if he's saved
Speaker 7: or she saved the whole world. But the question is
Speaker 7: when you saved that one life or two or fifty,
Speaker 7: and that extends the lifeline to the worst terrorist organization
Speaker 7: in the Middle East right now, maybe with the exception
Speaker 7: of Kibola, and prepares them for more rocket attacks, more kidnappings,
Speaker 7: and more torture and murder. Are you really saving that life? So?
Speaker 2: Do you think it is wrong to extend this truth?
Speaker 7: No? I do not think so, and I don't want
Speaker 7: to second guest people whose political jobs are on the line.
Speaker 7: I think Natanyao is a goner politically after this disaster
Speaker 7: of October seventh, I do not envy it wouldn't to
Speaker 7: be in the shoes of the Israeli Chief of Military Staff,
Speaker 7: Israeli Head of the Army Staff, the chief of Staff
Speaker 7: of the military and other people who will be under
Speaker 7: judicial committee review and investigation. But having said that, the
Speaker 7: main goal for Israel, as was articulated by Nathan Yao
Speaker 7: with the support of the United States, is to eradicate
Speaker 7: CAAMAS as long as CAMAS is destroyed and eradicated, because
Speaker 7: the people of Gaza, the Palestinians, both in the West
Speaker 7: Bank and Gaza, deserve better than the murderous cult that
Speaker 7: raped and tortured and killed children, women and old people
Speaker 7: on the seventh of October.
Speaker 2: But we are also our understanding is that it's not
Speaker 2: just TAMAS holding hostages. So it becomes much more complicated,
Speaker 2: as you know. So what do we need to understand
Speaker 2: about that If it's not just Hamas, we.
Speaker 7: Need to understand that the terrorist organizations in Gaza and
Speaker 7: sometimes in the West Bank treat hostages, or we start
Speaker 7: with ISIS by the way, as well, they treat hostages
Speaker 7: as a commodity. They buy them and sell them their
Speaker 7: criminal gangs and clans that take these hostages and resell them,
Speaker 7: and it's a tragedy for these people. Absolutely, it demoralizes
Speaker 7: the Israeli population. People have nightmares, people have essentially PTSD,
Speaker 7: hundreds of thousands and millions of them. Having said that,
Speaker 7: it's a job of the Israeli security to track down
Speaker 7: these hostages and those who hold them and put as
Speaker 7: much pressure as possible, negotiate if you can, or put
Speaker 7: other pressure if you need to, in order to bring
Speaker 7: the hostages back.
Speaker 5: Doc con what's next? Do we see the truth continue
Speaker 5: to be extended every few days? Kind of what can
Speaker 5: help end the conflict or what happens on the path
Speaker 5: to ending the conflict.
Speaker 7: The number of hostages left, I think is around two hundred,
Speaker 7: and they agreed that in the exchanges they're good to
Speaker 7: release ten, so ten hostages a day, two hundred, so
Speaker 7: it's twenty days, three weeks after that, it will be
Speaker 7: the decision of the Israelis whether to continue the military action.
Speaker 7: We see already that the United States is undermining its
Speaker 7: own credibility by grabbing Israel by the hand and saying, oh,
Speaker 7: you cannot do this, you cannot do that. We are
Speaker 7: undermining our credibility vs. Taiwan vsv Ukraine and others.
Speaker 2: Well, just for a little clarification, we are seeing to
Speaker 2: make stick pressure here in the US. Senator Chris Murphy
Speaker 2: of the state of Connecticut has said that the US
Speaker 2: should consider touching strings to future aid to Israel and
Speaker 2: its compliance with international humanitarian law. So that's what you're
Speaker 2: addressing at this point, and this is and so this
Speaker 2: is you think that doesn't make sense.
Speaker 7: I think that job one as was agreed between the
Speaker 7: Israeli government, democratically elected Israeli government. And I'm not a
Speaker 7: fan of Nathan Yao. Please let let be very clear.
Speaker 7: I think the man utterly failed. Even before the attack
Speaker 7: of October seventh, he split the country, he split the people.
Speaker 7: He tried for a power grab that should never have
Speaker 7: been allowed. But right now Job one is destroying Hamas.
Speaker 7: And if Chris Murphy, whom I respect, I testified more
Speaker 7: than once before him he is a decent man, but
Speaker 7: he is either misled or playing politics. This is not
Speaker 7: the time to have an academic discussion about humanitarian international law.
Speaker 7: For a simple reason, we did not have strings attached
Speaker 7: when our military went to Muscle, when women went to Raka,
Speaker 7: and when we went to Fallujah. We cannot fight terrorism
Speaker 7: and these are murderous, murderous people. We cannot fight them
Speaker 7: with two hands behind our back.
Speaker 5: And one of the things that's making headlines is Elon
Speaker 5: Musk making a trip to Israel. How does that, in
Speaker 5: your view, just given what he brings to the table
Speaker 5: with Starlink, impact the path forward and how this conflict
Speaker 5: can continue to evolve.
Speaker 7: Elon Musk has an anti semitism problem, not himself hopefully,
Speaker 7: but the x Twitter. For example, according to cyber Well Monitoring,
Speaker 7: monitoring organization that monitors Jew hatred online, the reports of
Speaker 7: anti semitism in Twitter, only ten percent of antisemitic tweets
Speaker 7: are removed, whereas Meta and even TikTok has ninety one
Speaker 7: and ninety eight removal rates, respectively. So until Elon Musk
Speaker 7: demonstrates conclusively that he keeps jew haters out, and he
Speaker 7: is trying, because just today the trending whatever it's called,
Speaker 7: the trending message the halfback hitler was right, was removed
Speaker 7: by Twitter, and thank him for that, But he needs
Speaker 7: to understand that to be a credible social platform, he
Speaker 7: cannot and should not allow how racism and hate on
Speaker 7: his platform.
Speaker 2: And many would agree no doubt about that, Doctor Cohen,
Speaker 2: thank you so much. Doctor Errel Cohen, a non resident
Speaker 2: Senior Fellow at the Atlanta Council's Eurasia Center, and as
Speaker 2: we said, also the founding partner of principal excuse me,
Speaker 2: of International Market Analysis, which is a political risk advisory.
Speaker 2: From joining us on Zoom in Washington, DC.
Speaker 3: You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 3: just Say Alexa playing Bloomberg eleven thirty.
Speaker 2: We wanted to take a look at the environment for
Speaker 2: startups when it comes to the venture capital market. It's
Speaker 2: been pretty tough. Nearly one in five investments was a
Speaker 2: down round. We're talking about recent fundraises in terms of
Speaker 2: dollars raised. Total VC funding has now declined in six
Speaker 2: of the past seven courses coming from Karda, which try
Speaker 2: this stuff. So let's head to Stockholm, Sweden, where we
Speaker 2: find on Zoom Unconventional Ventures co founder and general partner
Speaker 2: Nurah Baby Naurah, nice to have you here. With Bailey
Speaker 2: and myself, we said it's been a slow IPO market
Speaker 2: and they're not necessarily doing well once they go public.
Speaker 2: Talk to us about the VC market and what you
Speaker 2: guys have been seeing.
Speaker 6: Thank you so much for having me, And yes, it's
Speaker 6: definitely slow. But when it comes to progress in terms
Speaker 6: of investing in the best business businesses, in terms of
Speaker 6: also acknowledging the best type of founders behind the solutions,
Speaker 6: we're really not seeing any progress. So I'm the co
Speaker 6: founder and general partner of Unconventional Ventures, which is considered
Speaker 6: to be Europe's first impact fund with a diversity lens,
Speaker 6: and we've been doing these funding gap reports for the
Speaker 6: last five years, looking into what the ecosystem has been
Speaker 6: looking at, not only for the last twenty years, but
Speaker 6: particularly since twenty seventeen, where we see incredible changes happening
Speaker 6: in the ecosystem, and unfortunately we keep coming back to
Speaker 6: this same numbers over and over again. Funding for all
Speaker 6: female founding teams are literally on a slippery slow slate
Speaker 6: in terms of the numbers, sticking at around one percent
Speaker 6: in the Nordics, and that's being considered one of the
Speaker 6: most gender ecoregions in the world. Now, if we look
Speaker 6: at Northern Europe, that number shifts between an approximately around
Speaker 6: two percent, even that minimizing down to zero point nine
Speaker 6: percent in some markets. And if we compare to global numbers,
Speaker 6: we're looking at the typical two percent that is definitely
Speaker 6: not changing. And what is really astonishing at this year's
Speaker 6: report is that when we look at mixed teams, because
Speaker 6: in general we see a lot of excuses being made
Speaker 6: for well, you know, when female founders are part of
Speaker 6: a mixed team, we do know that they get funded.
Speaker 6: But when we look at the North and Europe as
Speaker 6: a market, what we see as that is actually even
Speaker 6: becoming smaller in terms of share of capital versus percentage
Speaker 6: of realms. And then all in all, when we look
Speaker 6: at the amounts, we see that even coming down as
Speaker 6: little as four point four percent, so.
Speaker 2: Net net in terms of and you guys, sounds like
Speaker 2: you looked at Northern Europe in terms of the survey base,
Speaker 2: if you will, that when it comes to female teams,
Speaker 2: they're getting nothing. When it comes to VC funding, it
Speaker 2: really isn't changing much. And even if you have a
Speaker 2: mixed team that includes someone like a female founder of
Speaker 2: female individual it's still not great and it's actually coming down.
Speaker 2: Why is it not getting better?
Speaker 6: Well, I wish that we were talking about, you know,
Speaker 6: why are we seeing too little progress? The problem is
Speaker 6: we're not seeing any progress. And I think we come
Speaker 6: down to the same kind of conclusion over and over again.
Speaker 6: Representation matters, and if you do not think that it matters,
Speaker 6: then you're probably well represented. So I think we need
Speaker 6: to go back and who are the checkwriters? Because we
Speaker 6: do know that there is a very clear correlation between
Speaker 6: who writes the check and who receives the check. And
Speaker 6: when it comes to this incident makers being more diverse
Speaker 6: meeting beyond white men, that is not changing at all.
Speaker 6: And even that being we see more women coming into
Speaker 6: the financial industry. Something is also happening at senior levels
Speaker 6: because more and more women are actually leaving senior positions
Speaker 6: in the last couple of years as well.
Speaker 5: Nora, How does this play out though in a year
Speaker 5: that has been pretty difficult for VC investors and going
Speaker 5: into twenty twenty four where everything we talk about is
Speaker 5: how difficult it is for anyone to get funding, let
Speaker 5: alone investors in management teams that aren't well known and aren't,
Speaker 5: as you mentioned, looking like that, don't look like the
Speaker 5: investors at their courting.
Speaker 6: Well, I think we need to create this bottom line,
Speaker 6: meaning if we're really about making great business decisions, then
Speaker 6: we're clearly and not making the best kind of investments
Speaker 6: because they are secured and biased towards a particular community
Speaker 6: and group. With that being said, when we talk about
Speaker 6: what type of founders are getting funded, what we need
Speaker 6: to also acknowledge what kind of problems are they really solving?
Speaker 6: Is it nice too or is there a need to?
Speaker 6: And if we look at the global challenges now really
Speaker 6: you know, accelerating in the unpersistent time and pace, what
Speaker 6: we know with that is that we're really not targeting
Speaker 6: depth of the problems that need and then going back
Speaker 6: to representation, that's why we need to fund more diverse
Speaker 6: founders insights to the polem.
Speaker 2: We only have about a minute left here forgive me,
Speaker 2: but I could go back two years, I could go
Speaker 2: back five years, and I would have the exact same conversation.
Speaker 2: So I'm trying to understand why the needle isn't moving.
Speaker 2: What's the problem? Is it the pipeline? Because we've also
Speaker 2: done the stories about female led VC firms where they
Speaker 2: don't aren't necessarily more inclined to give my two women
Speaker 2: you know backed or women created businesses. So I'm not
Speaker 2: quite sure what's the problem and only got about forty
Speaker 2: seconds left here.
Speaker 5: Why isn't this sorta chicken?
Speaker 6: I would say venture capitalism isn't the problem. Venture capitalists
Speaker 6: are the problem. And I think all the unconscious bias
Speaker 6: training that everyone is in acting in is not working.
Speaker 6: And I think in terms of conversation, yes, we've been
Speaker 6: talking about this problem, but that's exactly the problem. We
Speaker 6: keep on talking, but we're not funding. So we're over
Speaker 6: mentoring these founders, but we're not investing, and that is
Speaker 6: the final thing that is moving the needle.
Speaker 7: Right.
Speaker 2: Mentoring isn't money. Mentoring is just hey, here's what you
Speaker 2: need to do, but ultimately people need the money to
Speaker 2: kind of move ahead. Nah, really appreciate some time with you,
Speaker 2: Nora baby. She is Unconventional Ventures co founder and general
Speaker 2: partner joining us on Zoom from Stockholm. Now, the numbers,
Speaker 2: you know, Bailey, are jarring, but I do feel like
Speaker 2: we had this conversation throughout the pandemic that a lot
Speaker 2: of things would change in terms of the importance of diversity,
Speaker 2: uh and inclusion, had a lot of important conversations, and
Speaker 2: yet here we.
Speaker 5: Are exactly and you mentioned this goes back to years.
Speaker 5: This is not a new phenomenon by any stretch.
Speaker 2: Yeah, so I'm wondering why isn't it changing? All right, everybody,
Speaker 2: you're listening and watching Blueberg.
Speaker 6: I'm brother Marc a.
Speaker 3: Journal How about you let me drive?
Speaker 1: Oh no, no, no, no, he's gone and drive.
Speaker 3: Honey, please, I'll do the riding gravel.
Speaker 7: Let's wat, I want to dry.
Speaker 3: It's good question. This is the drive to the globe.
Speaker 3: Tim thing well, byeld on Bluemberg Radio.
Speaker 2: All right, everybody just got just under eighteen minutes left
Speaker 2: in today's trading session. Carol Master along a Bailey Lipsheltz.
Speaker 2: He is in for Tim Stenovic on this Monday. And
Speaker 2: you know, Bailey, our next guest says consumers are growing
Speaker 2: gloomy air, which is kind of interesting considering we just
Speaker 2: talked with Koonam who said she was shocked by how
Speaker 2: many shoppers were out there and they were shopping big
Speaker 2: time at retail throughout the weekend.
Speaker 5: And a lot of that data showing up showing that
Speaker 5: consumer's spent up not only a Black Friday, but it
Speaker 5: does seem like Cyber Monday still driving further sales.
Speaker 2: Yeah, they're out there spending, right, So it's interesting. We'll
Speaker 2: see what he has to say, and it does make
Speaker 2: me wonder about consumers just discretionary stocks kind of what's
Speaker 2: the outlook if he thinks the consumers are getting gloomier.
Speaker 2: Let's get to it the Drive to the Close with
Speaker 2: Mace MacLean. He is chief investment officer at Frost Investment Advisors,
Speaker 2: a wholly owned subsidiary Frost Bank, and they serve institutional
Speaker 2: and high net worth individual's. Firm, by the way, has
Speaker 2: about five point one billion in assets under management. Mace
Speaker 2: joining us on Zoom from San Antonio, Texas. Mace, he
Speaker 2: good to have you here with Billy and myself. How
Speaker 2: is Texas?
Speaker 8: Oh, it's doing very well. We still have a lot
Speaker 8: of in migration from California and other places, and the
Speaker 8: economy is booming. It's doing very well here.
Speaker 2: The economy's booming. So how do you then kind of
Speaker 2: cross that with this idea that consumers are growing gloomier
Speaker 2: and our own B I or B economics team Bloomery
Speaker 2: economics team. We're talking about session next year, So give
Speaker 2: us an idea. Your economy booming, but you're a little
Speaker 2: worried about consumers.
Speaker 8: It sounds like I am worried about the consumers. So
Speaker 8: you know, consumer income is falling on a real basis,
Speaker 8: or it did last quarter. So I think the consumers
Speaker 8: getting more and more stretched, and so I don't think
Speaker 8: that looks great there. And the thing that's been holding
Speaker 8: them up, probably the most employment, employment started weakening, and
Speaker 8: so I think that the consumer spending side to us
Speaker 8: is becoming more cautionary.
Speaker 5: That means, why are we seeing consumers showing up and
Speaker 5: spending Black Friday, Cyber Monday. It still seems like, at
Speaker 5: least according to the data, the consumer looks stronger.
Speaker 2: Underneath.
Speaker 8: They're continuing to expand their credit. We're seeing credit card
Speaker 8: balances increase and so and the saving rates is falling.
Speaker 8: We're seeing saving rate has fallen precipitously, and so they're
Speaker 8: increasing their leverage. I think also the discounting is drawing
Speaker 8: that I think that which has long term effects on
Speaker 8: corporate earnings. But I think that you know, companies are
Speaker 8: drawing them with greater discounting.
Speaker 2: Help me understand though. You know, we were just talking
Speaker 2: with our Punam Gooel of our Bloomberg Intelligence team who
Speaker 2: tracks all the retail sector, and she said this, you know,
Speaker 2: this increase in the use of buy now, pay later,
Speaker 2: that it's in some ways that consumers feel confident enough
Speaker 2: to do it and that they'll be able to pay
Speaker 2: it back in a couple of months before they've got
Speaker 2: to start paying interest on it. That that's a sign
Speaker 2: of some confidence. Do you at all see it that way?
Speaker 6: Yes.
Speaker 8: The other odd thing we've seen this year in consumer
Speaker 8: surveys is consumer has been very negative, but then they
Speaker 8: continue to spend, and so they're saying one thing, but
Speaker 8: they're acting another way. And they've been doing that through
Speaker 8: most of the years. So that's just been a consistent THEMA.
Speaker 8: All the surveys shows consumers being very negative, but you know,
Speaker 8: we had a very strong growth in consumer spending in
Speaker 8: the third quarter, so they continue to spend in spite
Speaker 8: of being very negative.
Speaker 5: And MACE. If that's the case, where should investors be
Speaker 5: putting money to work?
Speaker 8: You know, I don't want to get away in front
Speaker 8: of the year end rally. You know, seasonally, it's great
Speaker 8: that we're going into the fourth quarter, and I think
Speaker 8: that I just want to enjoy the polishness of the
Speaker 8: market for the fourth quarter. Now, on the bond market,
Speaker 8: we're kind of backed off a little bit. We've been
Speaker 8: buying bonds basically with both hands and with enthusiasm until
Speaker 8: a month or so ago, and with these current rates,
Speaker 8: I think that we probably overshot on the downside on
Speaker 8: rates in the near term.
Speaker 5: And when you look at kind of expectations, very much
Speaker 5: a fed driven market, very much a magnificent seven and
Speaker 5: then a handful of stocks driving the market. Do you
Speaker 5: expect us to get three rate cuts in twenty twenty
Speaker 5: four like the swap market is implying.
Speaker 8: I think that that's the key. I think you put
Speaker 8: your finger right on it. We don't expect three rate cuts.
Speaker 8: I don't think that's why. I think we've overcorrected and
Speaker 8: had two big of a rally in the rates market.
Speaker 8: You know, we're down forty to fifty basis points on rates,
Speaker 8: and I think that people aren't listening to higher prolonger
Speaker 8: or believing again they then resolved, and I just don't
Speaker 8: see us seeing that sort of rate rally, And I
Speaker 8: think that that brings a lot of risk to the
Speaker 8: stock market in the next year. So I want to
Speaker 8: enjoy this Christmas rally, but I think that as reality
Speaker 8: hits and we start looking at those rates rate cuts
Speaker 8: not materializing, that we have an adjustment coming in the market.
Speaker 2: So why do you think or why do you not
Speaker 2: think that maybe the expectations about possibly a recession next
Speaker 2: year is not already kind of baked into the equity market.
Speaker 2: You know, basically where we are in the s and
Speaker 2: P five hundred is back where we were right in July,
Speaker 2: kind of late July, and then we saw, of course
Speaker 2: a pullback, and then we've bounced off the October lows.
Speaker 2: But why do you think that some of the expectations
Speaker 2: right market is a discounting mechanism? Why do you think
Speaker 2: some of that expectation isn't maybe already priced, and especially
Speaker 2: if it's kind of a mellow recession, maybe even a
Speaker 2: soft landing.
Speaker 8: Well, yeah, we do believe, we don't. I personally very
Speaker 8: skeptical about a soft landing. They're so rare, and just
Speaker 8: to believe that it's going to happen after a five
Speaker 8: hundred basis point increase, a historically very abrupt and very
Speaker 8: high rate increases to believe that that brings about a
Speaker 8: soft landing, it's just to be very difficult to get
Speaker 8: there or at least sign a high probability. So we're
Speaker 8: very skeptical of that. And so we do think that
Speaker 8: the economy a weekend. But I think if you look
Speaker 8: back into what happened in the seventies, that that we're
Speaker 8: not going to see rapid in large rate cuts. Probably
Speaker 8: this BED is really avowed not to make the same mistakes. Oh,
Speaker 8: go ahead, Okay, I don't see that the FED making
Speaker 8: the same mistakes and being aggressive on cuts.
Speaker 2: Mace McCain, chief investment officer at Frost Investment Advisors, joining
Speaker 2: us on Zoom from San Antonio, Texas.
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