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This is Bloomberg Intelligence 2 00:00:11,400 --> 00:00:13,440 Speaker 1: with Scarletfoo and Paul Sweeney. 3 00:00:13,560 --> 00:00:15,680 Speaker 2: How do you think the FED is looking at tariffs? 4 00:00:15,800 --> 00:00:17,040 Speaker 2: The uncertainty of terriffs. 5 00:00:17,079 --> 00:00:19,200 Speaker 3: Let's take a look at the sectors and how they. 6 00:00:19,160 --> 00:00:22,160 Speaker 2: Performed a lot of investors getting whipsaled every day by news. 7 00:00:21,960 --> 00:00:26,079 Speaker 1: Events, breaking market headlines, and corporate news from across the globe. 8 00:00:26,120 --> 00:00:28,680 Speaker 3: Could we see a market disruption of market events? 9 00:00:28,800 --> 00:00:30,840 Speaker 2: So people just too exuberant out there? 10 00:00:30,920 --> 00:00:33,479 Speaker 3: You see some so called low quality stocks driving this 11 00:00:33,560 --> 00:00:34,360 Speaker 3: short term rally. 12 00:00:34,400 --> 00:00:39,880 Speaker 1: Bloomberg Intelligence with Scarletfoo and Paul Sweeney on Bloomberg Radio, YouTube, 13 00:00:39,920 --> 00:00:41,240 Speaker 1: and Bloomberg Originals. 14 00:00:41,680 --> 00:00:43,919 Speaker 2: On today's Bloomberg Intelligence Show, we dig inside the big 15 00:00:43,960 --> 00:00:46,240 Speaker 2: business story is impacting Wall Street and the global markets. 16 00:00:46,479 --> 00:00:48,720 Speaker 3: Each and every week we provide in depth research and 17 00:00:48,800 --> 00:00:50,640 Speaker 3: data on some of the two thousand companies and one 18 00:00:50,720 --> 00:00:53,240 Speaker 3: hundred and thirty industries are analysts covered worldwide. 19 00:00:53,280 --> 00:00:55,360 Speaker 2: Today, we'll look at the outlook for US oil and 20 00:00:55,440 --> 00:00:58,280 Speaker 2: natural guests heading into the twenty twenty six and why 21 00:00:58,560 --> 00:01:00,880 Speaker 2: it's well positioned to benefit from SAR structural demand. 22 00:01:00,960 --> 00:01:03,600 Speaker 3: Plus, we speak with award winning journalist Connie Chung on 23 00:01:03,640 --> 00:01:05,960 Speaker 3: the changes she is seeing in the media landscape. 24 00:01:06,040 --> 00:01:08,800 Speaker 2: The first perspective, homeowners in twenty twenty five were boxed 25 00:01:08,800 --> 00:01:12,319 Speaker 2: out by high borring cost and limited inventory, keeping affordability 26 00:01:12,600 --> 00:01:15,520 Speaker 2: near record lows. That's according to the latest research from 27 00:01:15,520 --> 00:01:16,959 Speaker 2: Bloomberg Intelligence. 28 00:01:16,520 --> 00:01:19,640 Speaker 3: That pressure is now reshaping twenty twenty six as builders 29 00:01:19,640 --> 00:01:22,080 Speaker 3: look to ramp up construction to meet pent up demand 30 00:01:22,400 --> 00:01:25,800 Speaker 3: while still moving cautiously because of financing costs, labor shortages, 31 00:01:26,040 --> 00:01:27,759 Speaker 3: and of course, uncertain economic growth. 32 00:01:27,880 --> 00:01:30,440 Speaker 2: For more, I spoke with Drew reading Bloomberg Intelligence US 33 00:01:30,480 --> 00:01:33,240 Speaker 2: home building analyst. I first asked Drew if lower interest 34 00:01:33,280 --> 00:01:35,160 Speaker 2: rates will help the home building sector. 35 00:01:35,560 --> 00:01:38,000 Speaker 4: So we actually think that twenty twenty six is going 36 00:01:38,040 --> 00:01:42,319 Speaker 4: to be another challenging year from a fundamental perspective for 37 00:01:42,319 --> 00:01:44,320 Speaker 4: the builders. If you think about the weakness that we've 38 00:01:44,319 --> 00:01:47,720 Speaker 4: had in demand over the last several quarters, it leaves 39 00:01:48,080 --> 00:01:50,720 Speaker 4: much of the group coming into the year with backlogs 40 00:01:50,720 --> 00:01:53,040 Speaker 4: that are down anywhere from ten to forty percent, and 41 00:01:53,080 --> 00:01:56,880 Speaker 4: that's ultimately what translates into revenue over the next called 42 00:01:56,880 --> 00:01:59,760 Speaker 4: it three to nine months. In addition, I think you're 43 00:01:59,760 --> 00:02:02,480 Speaker 4: going to see further pricing pressure as builders look to 44 00:02:02,480 --> 00:02:04,680 Speaker 4: adjust prices to meet market demand. So we're going to 45 00:02:04,720 --> 00:02:07,880 Speaker 4: have further base price reductions, and I think builders are 46 00:02:07,920 --> 00:02:11,080 Speaker 4: going to have to continue to lean on incentives because 47 00:02:11,080 --> 00:02:13,720 Speaker 4: it's something that home shoppers have become accustomed to, and 48 00:02:14,080 --> 00:02:15,680 Speaker 4: you know, they're looking for deals when they're out there 49 00:02:15,720 --> 00:02:18,720 Speaker 4: in the market. So, you know, slow top line growth, 50 00:02:18,760 --> 00:02:21,160 Speaker 4: and I think that incentive dynamic is also going to 51 00:02:21,160 --> 00:02:24,800 Speaker 4: continue to pressure gross margins as we get into next year. 52 00:02:25,200 --> 00:02:26,000 Speaker 5: You know, on the on the. 53 00:02:25,960 --> 00:02:29,160 Speaker 4: Positive side, we do have lower rates, so I do 54 00:02:29,200 --> 00:02:33,320 Speaker 4: think that orders can grow next year. You know, we're 55 00:02:33,320 --> 00:02:35,880 Speaker 4: looking at a six and a quarter rate call it 56 00:02:36,000 --> 00:02:38,320 Speaker 4: right now last year, room as one hundred basis points 57 00:02:38,400 --> 00:02:41,919 Speaker 4: higher heading into the spring. So lower rates and community 58 00:02:42,000 --> 00:02:45,120 Speaker 4: count growth could support orders, but I think that revenue 59 00:02:45,120 --> 00:02:46,560 Speaker 4: and margins are going to be down this year. 60 00:02:47,240 --> 00:02:51,680 Speaker 2: What's the relationship historically drew between new housing and existing 61 00:02:51,680 --> 00:02:52,280 Speaker 2: home sales. 62 00:02:54,120 --> 00:02:58,280 Speaker 4: So the new home market is historically about fifteen percent 63 00:02:58,320 --> 00:03:01,520 Speaker 4: of overall housing trands action, so a much smaller piece 64 00:03:01,520 --> 00:03:05,320 Speaker 4: of the market. You know, they've they've performed vastly differently 65 00:03:05,360 --> 00:03:06,880 Speaker 4: over the last couple of years. If you look at 66 00:03:06,919 --> 00:03:09,760 Speaker 4: the existing home market, we've been bumping along a four 67 00:03:09,800 --> 00:03:13,079 Speaker 4: million annualized run rate of home sales for about three 68 00:03:13,160 --> 00:03:16,840 Speaker 4: years now, and that's about twenty percent below normalized levels. 69 00:03:17,480 --> 00:03:19,280 Speaker 4: So there's been a lot of pressure because the mortgage 70 00:03:19,360 --> 00:03:23,360 Speaker 4: rate lock in effect affordability. We have seen an improvement 71 00:03:23,360 --> 00:03:26,040 Speaker 4: in demand in the resale market as rates have come down. 72 00:03:27,000 --> 00:03:29,800 Speaker 4: You know, we're looking at purchase applications, which is the 73 00:03:29,800 --> 00:03:32,600 Speaker 4: most high frequency data point that we have. So we 74 00:03:32,639 --> 00:03:34,520 Speaker 4: have seen some improvement and we think, you know, looking 75 00:03:34,520 --> 00:03:37,240 Speaker 4: into twenty twenty six, you could see growth in the 76 00:03:37,280 --> 00:03:40,440 Speaker 4: resale market anywhere from five to ten percent call it, 77 00:03:41,240 --> 00:03:43,560 Speaker 4: but keep in mind that's off a historically low level. 78 00:03:45,120 --> 00:03:49,560 Speaker 2: What's the Has the tariffs impacted the new home building market? 79 00:03:49,600 --> 00:03:52,040 Speaker 2: I'm thinking lumber and all the other materials used in 80 00:03:52,440 --> 00:03:55,280 Speaker 2: building a home. Is that god an impact on the profitability? 81 00:03:56,120 --> 00:03:58,800 Speaker 5: Yeah, good question. To this point, it really hasn't. 82 00:03:59,080 --> 00:04:02,080 Speaker 4: We've heard from a number of builders who haven't seen 83 00:04:02,160 --> 00:04:04,880 Speaker 4: much of a increase in twenty twenty five. I think 84 00:04:04,920 --> 00:04:06,920 Speaker 4: you could see as you get into twenty twenty six 85 00:04:06,960 --> 00:04:09,480 Speaker 4: that become more of a problem. You know, we did 86 00:04:09,480 --> 00:04:12,080 Speaker 4: an analysis that looked at all the tariffs that have 87 00:04:12,120 --> 00:04:14,200 Speaker 4: come through in it and you know, it shows that 88 00:04:14,240 --> 00:04:17,080 Speaker 4: there could be a ten thousand dollars cost increase per 89 00:04:17,200 --> 00:04:20,520 Speaker 4: home as it relates to tariffs. Now, when you think 90 00:04:20,520 --> 00:04:23,039 Speaker 4: about who's likely to feel that the most, it probably 91 00:04:23,120 --> 00:04:26,880 Speaker 4: won't be the large single family production builders. They've got 92 00:04:26,920 --> 00:04:28,680 Speaker 4: a lot of scale, they've got a lot of leverage, 93 00:04:28,680 --> 00:04:31,800 Speaker 4: and they've had success in pushing back against their suppliers. 94 00:04:32,440 --> 00:04:34,760 Speaker 4: I think you're more likely to see the pinch among 95 00:04:34,880 --> 00:04:37,520 Speaker 4: smaller private home builders who just don't have that scale 96 00:04:37,560 --> 00:04:40,560 Speaker 4: and ability to push back. So to this point it 97 00:04:40,640 --> 00:04:42,640 Speaker 4: hasn't had a bigger impact, but I think that's something 98 00:04:42,680 --> 00:04:44,320 Speaker 4: you need to watch as we look in the next year. 99 00:04:44,640 --> 00:04:47,480 Speaker 2: Are they still building like crazy down there in Florida 100 00:04:47,560 --> 00:04:50,480 Speaker 2: and Texas and Tennessee and those kinds of states. 101 00:04:50,960 --> 00:04:52,240 Speaker 5: Yeah, that's a good question. 102 00:04:52,279 --> 00:04:54,400 Speaker 4: I mean, during the pandemic, that's where a lot of 103 00:04:54,400 --> 00:04:56,800 Speaker 4: people were flocking to there was a lot of construction 104 00:04:56,920 --> 00:04:59,520 Speaker 4: down there. If you look at inventory levels now in 105 00:04:59,560 --> 00:05:02,719 Speaker 4: the South, they're actually at the highest level on record. 106 00:05:03,880 --> 00:05:05,839 Speaker 4: So that's where we're seeing a lot of the weakness 107 00:05:05,839 --> 00:05:08,520 Speaker 4: in the new home market. There's so much inventory, builders 108 00:05:08,600 --> 00:05:12,840 Speaker 4: have had to get increasingly aggressive on prices, you know, 109 00:05:12,880 --> 00:05:16,360 Speaker 4: to move inventory. A lot of incentives in the market, 110 00:05:16,400 --> 00:05:18,440 Speaker 4: a lot of base price reduction. So that's really where 111 00:05:18,480 --> 00:05:20,880 Speaker 4: we've seen the weakness, and if you can trast that 112 00:05:20,960 --> 00:05:23,200 Speaker 4: to some of the stronger markets, it's really a tale 113 00:05:23,200 --> 00:05:25,640 Speaker 4: of a couple of regions. You have the Midwest and 114 00:05:25,680 --> 00:05:28,719 Speaker 4: the Northeast, which tend not to be boom markets. We 115 00:05:28,760 --> 00:05:31,520 Speaker 4: didn't see the same type of inventory growth there, and 116 00:05:31,560 --> 00:05:34,680 Speaker 4: you're seeing a lot more price stability. On the other hand, 117 00:05:34,720 --> 00:05:36,599 Speaker 4: you mentioned the South, but you also have the West 118 00:05:36,640 --> 00:05:38,920 Speaker 4: where there was a lot of inventory growth and we're 119 00:05:38,920 --> 00:05:40,359 Speaker 4: seeing similar price and pressure. 120 00:05:41,320 --> 00:05:44,000 Speaker 2: So is there still a housing shortage in this country? 121 00:05:44,040 --> 00:05:46,360 Speaker 2: And if so, how does it right itself? 122 00:05:47,120 --> 00:05:50,520 Speaker 4: Yeah, another good question and the one that's frequently debated. 123 00:05:50,680 --> 00:05:53,039 Speaker 4: Just to take a step back, you'll hear estimates of 124 00:05:53,040 --> 00:05:55,960 Speaker 4: anywhere to you know, a million to five million unit 125 00:05:56,000 --> 00:05:58,280 Speaker 4: housing shortage. But I think, you know, I think it's 126 00:05:58,279 --> 00:06:02,400 Speaker 4: a more complex answer that the shortage, so called shortage, 127 00:06:02,400 --> 00:06:05,159 Speaker 4: is probably more at lower price points. So there's a 128 00:06:05,200 --> 00:06:09,680 Speaker 4: mismatch between where there's theoretically demand, which would be at 129 00:06:09,680 --> 00:06:12,880 Speaker 4: lower price points, and what's available out there in the market. 130 00:06:12,920 --> 00:06:17,200 Speaker 4: So it's really a affordability problem that's holding things back 131 00:06:17,240 --> 00:06:19,280 Speaker 4: and how do we get I mean, the government has 132 00:06:19,320 --> 00:06:21,760 Speaker 4: talked of about all sorts of things in order to 133 00:06:22,040 --> 00:06:25,480 Speaker 4: boost production and help builders to build more homes at 134 00:06:25,560 --> 00:06:29,640 Speaker 4: reasonable prices. Whether it's you know, dangling carrots in front 135 00:06:29,640 --> 00:06:33,280 Speaker 4: of local municipalities to get them to reduce their regulations, 136 00:06:35,000 --> 00:06:36,839 Speaker 4: you know, whether it's trying to knock down the price 137 00:06:36,880 --> 00:06:38,000 Speaker 4: of building materials. 138 00:06:38,000 --> 00:06:39,240 Speaker 5: There's a lot of different things. 139 00:06:39,240 --> 00:06:42,159 Speaker 4: But I don't really think that there's necessarily any one 140 00:06:42,279 --> 00:06:44,719 Speaker 4: single silver bullet that's going to solve this problem. I 141 00:06:44,720 --> 00:06:46,719 Speaker 4: think at the end of the day, you have home 142 00:06:46,720 --> 00:06:48,719 Speaker 4: prices that are up, you know, more than fifty percent 143 00:06:48,760 --> 00:06:51,320 Speaker 4: since twenty nineteen, and I think we need to let 144 00:06:51,560 --> 00:06:54,279 Speaker 4: kind of the basic laws of supply demands kind of 145 00:06:54,279 --> 00:06:56,480 Speaker 4: take course in order to write that our. 146 00:06:56,440 --> 00:06:59,280 Speaker 2: Thanks to Drew Writing, Bloomberg Intelligence, US home building analyst. 147 00:06:59,600 --> 00:07:02,160 Speaker 2: We move next to the consumer hardline space, focusing on 148 00:07:02,200 --> 00:07:06,760 Speaker 2: the retail sector for durable, non consumable goods like electronics, appliances, tools, 149 00:07:06,800 --> 00:07:07,599 Speaker 2: and sporting goods. 150 00:07:07,680 --> 00:07:10,679 Speaker 3: Bloomberg Intelligence recently put out its twenty twenty six outlook 151 00:07:10,680 --> 00:07:13,800 Speaker 3: for consumer hardlines in North America, and according to BI 152 00:07:13,960 --> 00:07:16,680 Speaker 3: revenue gains should extend into twenty twenty six for most 153 00:07:16,680 --> 00:07:18,120 Speaker 3: consumer hardlines retailers. 154 00:07:18,600 --> 00:07:18,920 Speaker 5: For more. 155 00:07:19,040 --> 00:07:21,000 Speaker 2: Guest hosts Isabelle, Leah and I were joined by Lindsay 156 00:07:21,040 --> 00:07:24,800 Speaker 2: Dutch Bloomberg Intelligence Consumer hardline senior analysts. We first asked 157 00:07:24,800 --> 00:07:28,120 Speaker 2: Lindsay to talk to us about her expectations for hardline 158 00:07:28,160 --> 00:07:29,480 Speaker 2: retailers in twenty twenty six. 159 00:07:29,800 --> 00:07:32,480 Speaker 6: I think if you look at, you know, the guidance 160 00:07:32,520 --> 00:07:34,560 Speaker 6: for the rest of the year, I think a lot 161 00:07:34,640 --> 00:07:37,080 Speaker 6: of these big hardline companies are baking in a lot 162 00:07:37,120 --> 00:07:40,440 Speaker 6: of uncertainty with the consumer. But the reality is that 163 00:07:40,480 --> 00:07:43,560 Speaker 6: if we look back, you know, to performance to date 164 00:07:43,640 --> 00:07:47,000 Speaker 6: and results to date, results have you know, largely been 165 00:07:47,280 --> 00:07:50,360 Speaker 6: better than expected, and a lot of these retailers are 166 00:07:50,360 --> 00:07:54,480 Speaker 6: sort of tracking to the upper half of their guidance 167 00:07:54,560 --> 00:07:57,240 Speaker 6: range for the year because that consumer has stayed pretty 168 00:07:57,560 --> 00:08:00,760 Speaker 6: pretty resilient. You know, we see strength, you know, continuing 169 00:08:00,800 --> 00:08:03,640 Speaker 6: to come from that higher income consumer, while the lower 170 00:08:03,640 --> 00:08:05,920 Speaker 6: income might be you know, continuing to pull back a 171 00:08:05,920 --> 00:08:08,880 Speaker 6: little bit. And if you think about companies like Best Buy, 172 00:08:09,320 --> 00:08:13,000 Speaker 6: All To Beauty, Williams, Sonoma, dick Sboarding Goods, you know 173 00:08:13,120 --> 00:08:17,000 Speaker 6: they are bringing you know, premium products, new products, exclusive 174 00:08:17,000 --> 00:08:20,080 Speaker 6: products to that consumer and the consumers are willing to 175 00:08:20,240 --> 00:08:20,920 Speaker 6: pay up for that. 176 00:08:21,760 --> 00:08:23,720 Speaker 7: What was the one trend that shocked you this year? 177 00:08:23,760 --> 00:08:24,880 Speaker 7: Now that you look back. 178 00:08:26,000 --> 00:08:27,520 Speaker 6: I think a lot of the trends have been a 179 00:08:27,560 --> 00:08:31,360 Speaker 6: continuation of what we've been seeing. I think, you know, 180 00:08:31,400 --> 00:08:33,640 Speaker 6: if we go back to late twenty twenty two, that 181 00:08:33,800 --> 00:08:37,720 Speaker 6: is when the first pullback in that discretionary spend has been. 182 00:08:38,200 --> 00:08:42,000 Speaker 6: But this is the first year that we've seen more newness, 183 00:08:42,040 --> 00:08:46,840 Speaker 6: and newness is really a key driver to getting consumers 184 00:08:46,840 --> 00:08:50,559 Speaker 6: in the store and to fueling transactions. So the best 185 00:08:50,600 --> 00:08:54,720 Speaker 6: retailers are getting both transaction and ticket growth. But I 186 00:08:54,760 --> 00:08:59,640 Speaker 6: think those innovation pipelines that maybe we're you know, settled 187 00:08:59,640 --> 00:09:02,640 Speaker 6: down a bit during COVID, they've picked up again and 188 00:09:02,960 --> 00:09:05,800 Speaker 6: bring more newness is driving those transactions. 189 00:09:06,240 --> 00:09:10,600 Speaker 2: How promotional do you think retailers will be in twenty 190 00:09:10,640 --> 00:09:13,440 Speaker 2: twenty six to kind of drive the consumer to the 191 00:09:13,480 --> 00:09:15,400 Speaker 2: store or to the mouse to click. 192 00:09:16,760 --> 00:09:21,640 Speaker 6: So promotions are very important to bring shoppers to the store, 193 00:09:22,080 --> 00:09:24,800 Speaker 6: you know, especially for someone like a best Buy. You know, 194 00:09:24,840 --> 00:09:29,280 Speaker 6: promotions are very key, especially around holiday. We seen that 195 00:09:29,320 --> 00:09:32,720 Speaker 6: promotions are about flat, you know, in twenty five versus 196 00:09:32,720 --> 00:09:35,800 Speaker 6: twenty four, and I would sort of expect a continuation 197 00:09:35,920 --> 00:09:39,600 Speaker 6: of that in twenty six unless we see a huge 198 00:09:39,640 --> 00:09:41,719 Speaker 6: spike in demand, in which case the retailers might be 199 00:09:41,760 --> 00:09:44,640 Speaker 6: able to pull back on that promotional lever a little bit. 200 00:09:44,760 --> 00:09:47,800 Speaker 6: But this year so far it's been about flat. You 201 00:09:47,840 --> 00:09:52,559 Speaker 6: do see companies like a William's Sonoma very select promotions. 202 00:09:52,600 --> 00:09:54,679 Speaker 6: This has been a strategy coming out of COVID. They 203 00:09:54,720 --> 00:09:58,040 Speaker 6: sort of have stuck with it. They're even sticking with it, 204 00:09:58,320 --> 00:10:01,079 Speaker 6: you know, through this season going into next year. Pottery 205 00:10:01,120 --> 00:10:03,760 Speaker 6: Barn was a big focus for them. You know, they 206 00:10:03,800 --> 00:10:06,600 Speaker 6: need a rebound in that brand and growth is slowly 207 00:10:06,679 --> 00:10:10,240 Speaker 6: coming back, but they are staying steadfast in keeping those 208 00:10:10,240 --> 00:10:11,760 Speaker 6: promotions very limited. 209 00:10:12,520 --> 00:10:14,360 Speaker 7: I was going through your notes and then I read 210 00:10:14,360 --> 00:10:17,520 Speaker 7: that many retailers are resuming or accelerating brick and mortar 211 00:10:17,559 --> 00:10:21,560 Speaker 7: expansion plants because this leads to installing online sales. And 212 00:10:21,600 --> 00:10:24,319 Speaker 7: that's just kind of the reverse trend that I was expecting. 213 00:10:24,400 --> 00:10:26,360 Speaker 7: But you made a point that gen Z shows a 214 00:10:26,400 --> 00:10:28,959 Speaker 7: strong preference for in person shopping. Can you talk to 215 00:10:29,040 --> 00:10:31,840 Speaker 7: us more about that and how each generation is different. 216 00:10:33,480 --> 00:10:37,560 Speaker 6: Sure, Yeah, in store shopping is definitely back, and just 217 00:10:37,640 --> 00:10:41,640 Speaker 6: meeting the consumer where they are so retailers I think 218 00:10:41,720 --> 00:10:46,520 Speaker 6: are more focused on all channels, whether I'd said whether 219 00:10:46,559 --> 00:10:49,360 Speaker 6: they have an app, they're online site, their brick and 220 00:10:49,360 --> 00:10:52,920 Speaker 6: mortar stores, but brick and mortar as a whole. You know, 221 00:10:52,960 --> 00:10:56,199 Speaker 6: we are seeing more openings than closings, and that has 222 00:10:56,200 --> 00:10:58,800 Speaker 6: been a trend for the past couple of years. But 223 00:10:58,880 --> 00:11:01,320 Speaker 6: when we think about sort of the retail real estate market, 224 00:11:01,440 --> 00:11:04,160 Speaker 6: the demand has been solid coming out of COVID and 225 00:11:04,200 --> 00:11:06,880 Speaker 6: so vacancy is starting to get low and there's really 226 00:11:06,960 --> 00:11:10,160 Speaker 6: no new properties being built. So these retail are looking 227 00:11:10,200 --> 00:11:13,439 Speaker 6: to expand, which is great for their businesses. You know, 228 00:11:13,679 --> 00:11:16,080 Speaker 6: they really have to work hard to do so and 229 00:11:16,160 --> 00:11:18,680 Speaker 6: find good space to open stores because there's just not 230 00:11:19,160 --> 00:11:22,000 Speaker 6: that much of it. But best Buy has talked about 231 00:11:22,120 --> 00:11:25,760 Speaker 6: gen Z's preference for instore shopping, so has Alta Beauty, 232 00:11:26,679 --> 00:11:29,840 Speaker 6: and so we're definitely seeing that across the board, but 233 00:11:29,960 --> 00:11:31,360 Speaker 6: especially that younger generation. 234 00:11:31,520 --> 00:11:34,240 Speaker 2: There's plenty of retail space on Lexington Avenue and fifty 235 00:11:34,240 --> 00:11:38,080 Speaker 2: eighth Street. Man hen Lindsay John from the Highlands rights 236 00:11:38,120 --> 00:11:40,920 Speaker 2: in and you want to ask about Alta Beauty, ELF Beauty, 237 00:11:41,040 --> 00:11:42,880 Speaker 2: So for how does that category look. 238 00:11:42,800 --> 00:11:48,360 Speaker 6: For twenty twenty six, So demand has showed a strengthening 239 00:11:48,520 --> 00:11:51,400 Speaker 6: sort of in the back half of twenty five. I 240 00:11:51,480 --> 00:11:54,320 Speaker 6: think that momentum can continue into twenty six. I think 241 00:11:54,400 --> 00:11:57,360 Speaker 6: for Alta in particular, they have done a great job, 242 00:11:57,920 --> 00:12:00,960 Speaker 6: you know, bringing elevating their assort and bringing on. 243 00:12:01,200 --> 00:12:03,960 Speaker 7: Exclusives and that has really helped them. 244 00:12:05,160 --> 00:12:07,640 Speaker 6: Comps are going to get tougher next year and they 245 00:12:07,760 --> 00:12:10,840 Speaker 6: need to continue to drive growth and I think for them, 246 00:12:10,920 --> 00:12:13,319 Speaker 6: you know, leaning into their salon services could be a 247 00:12:13,400 --> 00:12:15,880 Speaker 6: key way to do that. Leaning into wellness is a 248 00:12:15,960 --> 00:12:18,480 Speaker 6: key way to do that. There's multiple levers that they 249 00:12:18,559 --> 00:12:21,520 Speaker 6: can pull. The categories that are showing the most strength 250 00:12:21,800 --> 00:12:25,280 Speaker 6: is really fragrance and skincare, and we would expect that 251 00:12:25,800 --> 00:12:27,720 Speaker 6: demand to continue into next year. 252 00:12:28,200 --> 00:12:31,760 Speaker 2: Our thanks to Lindsay Dutch, Bloomberg Intelligence Consumer Hardline Senior Analyst. 253 00:12:32,000 --> 00:12:34,240 Speaker 3: Coming up, twenty twenty six should be a big year 254 00:12:34,320 --> 00:12:37,000 Speaker 3: for natural guest producers. We'll explain why you're. 255 00:12:36,880 --> 00:12:39,719 Speaker 2: Listening to Bloomberg Intelligence on Bloomberg Radio, providing in depth 256 00:12:39,760 --> 00:12:42,079 Speaker 2: research and data on two thousand companies and one hundred 257 00:12:42,080 --> 00:12:42,840 Speaker 2: and thirty industries. 258 00:12:43,000 --> 00:12:46,000 Speaker 3: You can access Bloomberg Intelligence via bi go on the terminal. 259 00:12:46,120 --> 00:12:47,520 Speaker 3: I'm Scarlet Foo and I'm. 260 00:12:47,360 --> 00:12:49,200 Speaker 2: Paul Sweeney, and this is Bloomberg. 261 00:12:54,240 --> 00:12:58,640 Speaker 1: This is Bloomberg Intelligence with Scarlet Foo and Paul Sweeney 262 00:12:59,080 --> 00:13:00,360 Speaker 1: on Bloomberg Radio. 263 00:13:01,040 --> 00:13:03,199 Speaker 2: The US continued to strong oil and gas production in 264 00:13:03,280 --> 00:13:06,240 Speaker 2: twenty twenty five, with crude output near record levels and 265 00:13:06,360 --> 00:13:07,040 Speaker 2: export growth. 266 00:13:07,360 --> 00:13:10,800 Speaker 3: One sector that performed particularly well is liquefied natural gas, 267 00:13:10,960 --> 00:13:13,120 Speaker 3: and that is set to continue into twenty twenty six. 268 00:13:13,440 --> 00:13:17,080 Speaker 3: According to BI natural Gas Exposed, E andp's financial performance 269 00:13:17,120 --> 00:13:20,160 Speaker 3: will gain momentum next year as winter fully kicks in 270 00:13:20,320 --> 00:13:22,000 Speaker 3: and raises US gas benchmarks. 271 00:13:22,080 --> 00:13:24,040 Speaker 2: For more on this, we were joined by Vincent Piazza, 272 00:13:24,160 --> 00:13:27,760 Speaker 2: Bloomberg Intelligence senior equity research analyst. First ask Vincent what 273 00:13:27,920 --> 00:13:30,600 Speaker 2: the outlook is for natural guests demand in twenty twenty six. 274 00:13:30,920 --> 00:13:36,400 Speaker 8: From our perspective, we are definitely more constructive on natural 275 00:13:36,480 --> 00:13:40,199 Speaker 8: gas commodity relative to oil, and there are three key 276 00:13:40,480 --> 00:13:45,160 Speaker 8: drivers for natural gas in twenty twenty six. Number One, 277 00:13:45,360 --> 00:13:50,319 Speaker 8: we have structural demand growth and that's from LNG exports 278 00:13:50,360 --> 00:13:54,480 Speaker 8: and also pipeline exports down into Mexico. We have what 279 00:13:54,640 --> 00:13:59,040 Speaker 8: the other presenter hinted at was AI demand growth. That's 280 00:13:59,080 --> 00:14:03,760 Speaker 8: also a strong structural a growth driver for twenty twenty six. 281 00:14:04,080 --> 00:14:07,160 Speaker 8: The demand side is really quite clear. It's really the 282 00:14:07,280 --> 00:14:09,760 Speaker 8: production side that is running a little hotter this year 283 00:14:09,880 --> 00:14:13,199 Speaker 8: versus last year, and that is our biggest risk to 284 00:14:13,600 --> 00:14:16,720 Speaker 8: our twenty twenty six call. That's the first key driver. 285 00:14:16,920 --> 00:14:20,800 Speaker 8: The second key driver is relatively robust free cash flow 286 00:14:20,880 --> 00:14:24,880 Speaker 8: yields as balances tightened. So there is a great deal 287 00:14:24,920 --> 00:14:29,560 Speaker 8: of cash flow sloshing around for this group. That gives 288 00:14:29,640 --> 00:14:33,560 Speaker 8: them a great deal of optionality. And where we think 289 00:14:33,640 --> 00:14:37,640 Speaker 8: that optionality is going to be targeted, aside from base 290 00:14:38,040 --> 00:14:42,600 Speaker 8: and supplemental dividends, is really and a natural gas m 291 00:14:42,640 --> 00:14:45,120 Speaker 8: and a lagged oil M and A. We think that 292 00:14:45,400 --> 00:14:48,720 Speaker 8: turns in twenty twenty six. We saw the first real 293 00:14:48,960 --> 00:14:52,920 Speaker 8: big hint of that in twenty twenty four and twenty 294 00:14:53,040 --> 00:14:58,040 Speaker 8: twenty five when Expand Energy was created via the Seminal 295 00:14:58,160 --> 00:15:05,479 Speaker 8: Acquisition Company between Chesapeak and Southwestern Energy. That created a goliath, 296 00:15:05,680 --> 00:15:10,880 Speaker 8: the largest natural gas operator, natural gas producer, independent producer 297 00:15:11,000 --> 00:15:15,520 Speaker 8: in the lower forty eight. We think that'll drive incremental 298 00:15:16,440 --> 00:15:19,280 Speaker 8: M and A. Because the biggest central theme for us 299 00:15:19,360 --> 00:15:24,480 Speaker 8: in twenty twenty six is concentration via consolidation, we think 300 00:15:24,600 --> 00:15:28,680 Speaker 8: that continues for the natural gas operators as it did 301 00:15:29,240 --> 00:15:31,560 Speaker 8: for the oil centric names in twenty twenty five. 302 00:15:32,360 --> 00:15:35,240 Speaker 2: What are the folks down there in domestic production? What 303 00:15:35,320 --> 00:15:37,760 Speaker 2: do they do with oil around these prices here? 304 00:15:38,680 --> 00:15:39,320 Speaker 5: They don't grow. 305 00:15:39,920 --> 00:15:43,440 Speaker 8: We think production has peaked. We think you will see 306 00:15:43,720 --> 00:15:47,400 Speaker 8: a change in sentiment as we see more focus on 307 00:15:47,600 --> 00:15:50,920 Speaker 8: natural gas relative to oil. What is interesting for the 308 00:15:51,000 --> 00:15:56,200 Speaker 8: natural gas producers. As you produce less liquids, so less crude, 309 00:15:56,280 --> 00:16:01,480 Speaker 8: you also produce a fewer molecules of what's called associated gas. 310 00:16:02,000 --> 00:16:04,720 Speaker 8: That's great for the natural gas guys because that means 311 00:16:04,880 --> 00:16:08,120 Speaker 8: balance is titaned. So when you think about relative prices, 312 00:16:08,520 --> 00:16:11,800 Speaker 8: that's a net benefit for the natural gas producers relative 313 00:16:11,840 --> 00:16:15,720 Speaker 8: to the oil producers. Since associated gases roughly call it 314 00:16:15,880 --> 00:16:20,160 Speaker 8: one third of total production of natural gas, So lower 315 00:16:20,280 --> 00:16:23,080 Speaker 8: oil actually good for natural gas. 316 00:16:23,560 --> 00:16:26,480 Speaker 3: Which nat gas players are best positioned. I know Bloomberg 317 00:16:26,520 --> 00:16:29,520 Speaker 3: Intelligence doesn't do by holed sell on individual companies, but 318 00:16:29,640 --> 00:16:32,440 Speaker 3: surely there are some that are more attractive than others. 319 00:16:33,160 --> 00:16:37,840 Speaker 8: Yeah, absolutely so. Again on this central theme of concentration 320 00:16:38,120 --> 00:16:44,040 Speaker 8: via consolidation, expand has really gone out there and created 321 00:16:44,280 --> 00:16:50,360 Speaker 8: a dominant player into the central basins EQT as well. 322 00:16:51,560 --> 00:16:54,760 Speaker 8: Those are the two key names for twenty twenty six, 323 00:16:54,920 --> 00:16:58,280 Speaker 8: given their size and relative importance in the market, not 324 00:16:58,480 --> 00:17:03,600 Speaker 8: only in the lowerst Basin of Appalachia in the northeast, 325 00:17:03,920 --> 00:17:09,679 Speaker 8: but also near Seaborn export markets around the Gulf around 326 00:17:09,800 --> 00:17:13,720 Speaker 8: Haynesville as well. So expand EQT those are two names 327 00:17:13,760 --> 00:17:16,720 Speaker 8: that we have focus ideas out for twenty twenty six. 328 00:17:17,119 --> 00:17:19,720 Speaker 8: You can take a look at that on the terminal 329 00:17:19,960 --> 00:17:21,440 Speaker 8: within the Bloomberg ecosystem. 330 00:17:21,920 --> 00:17:24,280 Speaker 2: Nice, what's the OPEC plus do in these days? Do 331 00:17:24,359 --> 00:17:26,440 Speaker 2: we really how much do we care about those folks? 332 00:17:26,520 --> 00:17:28,280 Speaker 2: If we're a net exporter. 333 00:17:28,080 --> 00:17:32,760 Speaker 8: These days, they are still the dominant player, the dominant 334 00:17:33,119 --> 00:17:40,639 Speaker 8: governor of oil markets. They will still drive twenty twenty 335 00:17:40,720 --> 00:17:45,639 Speaker 8: six supply balances. From the demand side, we think we 336 00:17:46,160 --> 00:17:49,600 Speaker 8: are past that peak peak growth of demand here in 337 00:17:49,640 --> 00:17:54,040 Speaker 8: the US, we pumped out roughly thirteen point six million 338 00:17:54,119 --> 00:17:56,440 Speaker 8: barrels per day. We think we're past a peak there 339 00:17:56,600 --> 00:18:01,000 Speaker 8: as well. In fact, the other central theme that we 340 00:18:01,160 --> 00:18:05,840 Speaker 8: talked about for the oil players is really capital discipline. 341 00:18:05,880 --> 00:18:08,480 Speaker 8: You're going to hear a lot more of that, similar 342 00:18:08,520 --> 00:18:10,600 Speaker 8: to what we talked about in twenty twenty four and 343 00:18:10,680 --> 00:18:15,200 Speaker 8: twenty twenty five. Investors, what your guys are telling people, 344 00:18:15,640 --> 00:18:18,240 Speaker 8: Paul Scarlett is we don't want to see the production. 345 00:18:18,720 --> 00:18:22,600 Speaker 8: We don't want to see a higher spending. What we 346 00:18:22,760 --> 00:18:26,240 Speaker 8: really want to see is that free cashload coming back 347 00:18:26,359 --> 00:18:29,520 Speaker 8: to the investor base. All that sung capital during the 348 00:18:29,640 --> 00:18:33,719 Speaker 8: initial stage of the growth in shale. We are now 349 00:18:33,800 --> 00:18:37,280 Speaker 8: at a maturity phase. We want to see those higher dividends. 350 00:18:37,359 --> 00:18:39,480 Speaker 8: We want to see the based dividends. We want to 351 00:18:39,560 --> 00:18:43,560 Speaker 8: see supplemental growth in dividends with buybacks taking a little 352 00:18:43,640 --> 00:18:46,520 Speaker 8: more of a backseat. In order to clean up any 353 00:18:47,000 --> 00:18:49,359 Speaker 8: equity issues via m and A market our. 354 00:18:49,280 --> 00:18:52,479 Speaker 2: Thanks to Vincent Piazza, Bloomberg Intelligence senior equity research analyst. 355 00:18:52,840 --> 00:18:55,280 Speaker 2: Staying with energy, we now look at how one of 356 00:18:55,320 --> 00:18:57,359 Speaker 2: the nation's largest utility companies is faring. 357 00:18:57,600 --> 00:19:01,560 Speaker 3: Excellent Corporation primarily engages in the generation of electricity from nuclear, 358 00:19:01,680 --> 00:19:04,720 Speaker 3: fossil fuels, hydro electric and renewables. For one of the 359 00:19:04,760 --> 00:19:07,480 Speaker 3: company's recent data center boom and some of the challenges 360 00:19:07,560 --> 00:19:10,600 Speaker 3: in managing a large energy grid, we spoke to Callan Butler, 361 00:19:10,720 --> 00:19:11,640 Speaker 3: CEO of Excellent. 362 00:19:12,280 --> 00:19:19,000 Speaker 9: We're critical to the development of AI data centers and 363 00:19:19,280 --> 00:19:23,760 Speaker 9: large load quantum and we take that responsibility very serious. 364 00:19:24,160 --> 00:19:28,879 Speaker 9: And from a standpoint of building that infrastructure, protecting that grid, 365 00:19:29,160 --> 00:19:30,879 Speaker 9: it's going to be the backbone of all this. We 366 00:19:31,000 --> 00:19:34,720 Speaker 9: always say that the energy sector is five percent of 367 00:19:34,800 --> 00:19:37,359 Speaker 9: the GDP, but we power the next ninety five and 368 00:19:37,480 --> 00:19:38,960 Speaker 9: we take that very seriously. 369 00:19:39,880 --> 00:19:41,520 Speaker 3: You take it seriously. So walk us through some of 370 00:19:41,560 --> 00:19:45,280 Speaker 3: the plans you're making, how you're preparing for this transition, 371 00:19:45,480 --> 00:19:47,399 Speaker 3: for this increase in demand. 372 00:19:48,520 --> 00:19:51,120 Speaker 9: Yeah, thank you, Scarlett. What we have done, We've done 373 00:19:51,160 --> 00:19:55,800 Speaker 9: a few things. Is one understanding for your listener's excellent. 374 00:19:56,359 --> 00:20:00,359 Speaker 9: We are truly a transmission and distribution company, you know, 375 00:20:00,680 --> 00:20:04,240 Speaker 9: proud to have six utilities operating the electric gas side 376 00:20:04,440 --> 00:20:07,280 Speaker 9: through the pipes and wires. So, having said that, being 377 00:20:07,320 --> 00:20:11,159 Speaker 9: the backbone of that, we're encouraging those data centers and 378 00:20:11,240 --> 00:20:14,520 Speaker 9: large developers to come into the states in which we operate, 379 00:20:14,920 --> 00:20:18,840 Speaker 9: and we put together a comprehensive plan to get them online, 380 00:20:19,040 --> 00:20:22,960 Speaker 9: up and running sooner rather than later. Speed is everything 381 00:20:23,040 --> 00:20:27,159 Speaker 9: for them, and so what it takes is a coordinated effort, 382 00:20:27,440 --> 00:20:31,240 Speaker 9: and we've worked very hard to move upstream to get 383 00:20:31,280 --> 00:20:33,800 Speaker 9: them online so they can do what they do, which 384 00:20:33,880 --> 00:20:37,080 Speaker 9: is on the technology side. Now, as we do that, 385 00:20:37,680 --> 00:20:40,200 Speaker 9: we have to keep in mind, first and foremost the 386 00:20:40,320 --> 00:20:43,840 Speaker 9: affordability factor for all of our communities, and that's where 387 00:20:43,880 --> 00:20:48,480 Speaker 9: we're working with them to identify sites that are more 388 00:20:48,640 --> 00:20:52,160 Speaker 9: ready to put their equipment and their technology in place. 389 00:20:53,040 --> 00:20:56,560 Speaker 2: We had a couple of governor races in New Jersey 390 00:20:56,760 --> 00:20:59,359 Speaker 2: and in Virginia and affordability was one of the big issues. 391 00:20:59,400 --> 00:21:02,520 Speaker 2: And in New Jersey, see the governor elect who actually won, 392 00:21:02,800 --> 00:21:05,920 Speaker 2: one of our number one issues was bringing down electric 393 00:21:06,040 --> 00:21:09,159 Speaker 2: utility bills. So this is an issue I we got 394 00:21:09,240 --> 00:21:12,679 Speaker 2: to fund, we got to I guess, create and develop 395 00:21:12,720 --> 00:21:14,480 Speaker 2: these data centers, but we've got to do it in 396 00:21:14,560 --> 00:21:17,720 Speaker 2: a way that it doesn't cause everybody's power bills to 397 00:21:17,800 --> 00:21:21,120 Speaker 2: go up. How do you think about that transition, Paul. 398 00:21:21,000 --> 00:21:24,520 Speaker 9: You're absolutely right. It was a race in both New 399 00:21:24,680 --> 00:21:28,719 Speaker 9: Jersey and Virginia an issue, and we believe it's going 400 00:21:28,760 --> 00:21:31,080 Speaker 9: to be an issue in the twenty twenty six elections 401 00:21:31,160 --> 00:21:34,760 Speaker 9: because of affordability, pocketbook issues are going to be key. 402 00:21:35,080 --> 00:21:38,160 Speaker 9: So let me tell you what we're doing from excellent perspective. 403 00:21:38,720 --> 00:21:41,520 Speaker 9: We are protecting our residential customers. You know, we serve 404 00:21:41,600 --> 00:21:44,800 Speaker 9: almost eleven million customers. So as as important as it 405 00:21:44,920 --> 00:21:48,200 Speaker 9: is for data center development, it's more important for me 406 00:21:48,280 --> 00:21:51,720 Speaker 9: to protect the other customers in this process. So we've 407 00:21:51,800 --> 00:21:54,320 Speaker 9: come up with what we consider a rather innovative solution 408 00:21:54,800 --> 00:21:58,680 Speaker 9: in creating a tear up a transmission security agreement. So 409 00:21:58,800 --> 00:22:02,080 Speaker 9: what that does is we require a letter of credit 410 00:22:02,800 --> 00:22:06,399 Speaker 9: or a cash deposit from these large developers speculating are 411 00:22:06,480 --> 00:22:10,760 Speaker 9: identifying what thir ten year revenue projections or cost projections 412 00:22:10,960 --> 00:22:14,800 Speaker 9: coming back to our utility is, and anytime that they 413 00:22:14,840 --> 00:22:18,840 Speaker 9: do not meet eighty percent of that load projections or 414 00:22:18,880 --> 00:22:22,800 Speaker 9: cash projections, we draw down from that deposit. And what 415 00:22:23,000 --> 00:22:26,320 Speaker 9: it does it protects the other customers on the systems 416 00:22:26,560 --> 00:22:30,160 Speaker 9: for the investments that we're making. So we're being very 417 00:22:30,359 --> 00:22:34,320 Speaker 9: intentional about protecting the other users on the system because 418 00:22:34,400 --> 00:22:38,320 Speaker 9: when it's done right, it should reduce the costs for everyone, 419 00:22:38,680 --> 00:22:42,960 Speaker 9: but when it's done haphazardly or piecemeal, it can have 420 00:22:43,320 --> 00:22:47,520 Speaker 9: ramifications that everyone else has impacted. But what you're seeing 421 00:22:47,960 --> 00:22:51,000 Speaker 9: not just from the capital investment, you're seeing the supply 422 00:22:51,240 --> 00:22:54,960 Speaker 9: costs go up. Supply costs are going up because of 423 00:22:55,080 --> 00:22:58,639 Speaker 9: the increased demand, and we have inadequate generation on the 424 00:22:58,760 --> 00:23:01,840 Speaker 9: system to do that. You use New Jersey as an example. 425 00:23:02,160 --> 00:23:04,280 Speaker 9: Let me give you a real example of what happened 426 00:23:04,280 --> 00:23:05,920 Speaker 9: to New Jersey customers. 427 00:23:06,000 --> 00:23:06,440 Speaker 5: Last year. 428 00:23:07,480 --> 00:23:11,400 Speaker 9: New Jersey customers average residential customers bill rose thirty four 429 00:23:11,440 --> 00:23:16,160 Speaker 9: dollars because they were reconciling our bill, our bill, our cost, 430 00:23:16,440 --> 00:23:19,919 Speaker 9: the demand. The transmission and distribution part went down four dollars, 431 00:23:20,160 --> 00:23:23,479 Speaker 9: but the bill still went up thirty four. That's how 432 00:23:23,600 --> 00:23:26,800 Speaker 9: important it is to get this supply stack right to 433 00:23:26,880 --> 00:23:28,760 Speaker 9: help lower all customers bills. 434 00:23:29,359 --> 00:23:31,520 Speaker 3: Kelvin, let me ask you about nuclear, because the government 435 00:23:31,560 --> 00:23:33,560 Speaker 3: announced it plans to buy and own up to ten 436 00:23:33,800 --> 00:23:37,160 Speaker 3: large new nuclear reactors that could be paid for using 437 00:23:37,480 --> 00:23:40,960 Speaker 3: Japan's pledge to fund five hundred and fifty billion dollars 438 00:23:41,000 --> 00:23:43,160 Speaker 3: of investments in the US. Of course, this is part 439 00:23:43,200 --> 00:23:45,680 Speaker 3: of a push to meet surging demand for electricity, and 440 00:23:46,080 --> 00:23:49,000 Speaker 3: nuclear is increasingly seen as a solution to this need. 441 00:23:49,400 --> 00:23:50,040 Speaker 7: What's your take. 442 00:23:51,080 --> 00:23:54,560 Speaker 9: I think it's critical. I truly believe in a all 443 00:23:54,640 --> 00:23:58,080 Speaker 9: of the above approach and that nuclear base load generation 444 00:23:58,359 --> 00:24:01,359 Speaker 9: is going to be critical to us meeting this effort. 445 00:24:02,359 --> 00:24:06,280 Speaker 9: As you know, again, we've always taken an approach that 446 00:24:06,440 --> 00:24:10,640 Speaker 9: every electron matters to help on affordability, and that's why 447 00:24:10,720 --> 00:24:14,080 Speaker 9: it's so critical. I use an example, the Crane Center 448 00:24:14,160 --> 00:24:19,680 Speaker 9: that's coming back online in Pennsylvania. That's critical because it's 449 00:24:19,760 --> 00:24:23,800 Speaker 9: new generation coming back online. Microsoft is paying for it, 450 00:24:23,880 --> 00:24:27,040 Speaker 9: and that billion dollar loan is exactly what we need 451 00:24:27,680 --> 00:24:32,600 Speaker 9: to encourage reopening of these former facilities to get more 452 00:24:32,640 --> 00:24:35,280 Speaker 9: electrons back on. And that was one of the best 453 00:24:35,480 --> 00:24:37,840 Speaker 9: operating nuclear plants prior to its shuttering. 454 00:24:38,560 --> 00:24:41,560 Speaker 3: Thanks to Calvin Butler, CEO of Excellent Coming Up, we 455 00:24:41,640 --> 00:24:45,040 Speaker 3: go inside Walmart's masterclass and reputation rehab plus an honest 456 00:24:45,080 --> 00:24:47,560 Speaker 3: conversation with renowned news journalist Connie Chung. 457 00:24:47,760 --> 00:24:50,600 Speaker 2: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in 458 00:24:50,880 --> 00:24:53,160 Speaker 2: research and data on two thousand companies and one hundred 459 00:24:53,160 --> 00:24:53,880 Speaker 2: and thirty industries. 460 00:24:54,040 --> 00:24:57,080 Speaker 3: You can access Bloomberg Intelligence via bi go on the terminal. 461 00:24:57,200 --> 00:24:59,320 Speaker 3: I'm Scarlett Foo and I'm Paul Sweeney and this. 462 00:24:59,640 --> 00:25:11,640 Speaker 1: Is This is Bloomberg Intelligence with Scarlet Foo and Paul 463 00:25:11,720 --> 00:25:13,840 Speaker 1: Sweeney on Bloomberg Radio. 464 00:25:14,600 --> 00:25:17,119 Speaker 2: Walmart was once criticized for its treatment of workers as 465 00:25:17,200 --> 00:25:20,280 Speaker 2: well as its negative impact on communities, but its reputation 466 00:25:20,400 --> 00:25:23,320 Speaker 2: has been rehabilitated under CEO Doug McMillan. 467 00:25:23,600 --> 00:25:26,200 Speaker 3: That's the subject of a recent Bloomberg opinion piece titled 468 00:25:26,320 --> 00:25:30,400 Speaker 3: Inside Walmart's Masterclass and reputation Rehab. For more, we're joined 469 00:25:30,400 --> 00:25:33,200 Speaker 3: by the author of the piece, Bloomberg Opinion Colmus Beth Kohen. 470 00:25:33,320 --> 00:25:35,200 Speaker 10: It's hard to think about this now, but a decade ago, 471 00:25:35,840 --> 00:25:38,800 Speaker 10: Walmart was one of the most reviled companies in America. 472 00:25:38,880 --> 00:25:39,000 Speaker 5: Right. 473 00:25:39,040 --> 00:25:41,680 Speaker 10: It was being criticized for paying its employees low wages, 474 00:25:42,480 --> 00:25:46,919 Speaker 10: for wiping out mom and pop retailers, for basically creating 475 00:25:47,000 --> 00:25:50,840 Speaker 10: a culture of disposable consumerism. So it really was getting 476 00:25:50,880 --> 00:25:53,200 Speaker 10: hit from a lot of different angles. And rather than 477 00:25:53,880 --> 00:25:57,639 Speaker 10: just ignore the bad press or hire an army of 478 00:25:57,680 --> 00:25:59,560 Speaker 10: pr people, it decided to do something about it. And 479 00:26:00,040 --> 00:26:02,960 Speaker 10: Doug McMillan decided, we're going to invest in our people 480 00:26:03,160 --> 00:26:05,879 Speaker 10: and two point seven billion dollars over a couple of years, 481 00:26:05,960 --> 00:26:08,000 Speaker 10: and we now know this really paid off. 482 00:26:09,119 --> 00:26:11,760 Speaker 2: So I mean, for Doug McMillan, I mean to me, 483 00:26:12,040 --> 00:26:13,760 Speaker 2: after reading your article, this could be one of his 484 00:26:14,320 --> 00:26:16,760 Speaker 2: as he's stepping down, could be one of his lasting 485 00:26:16,880 --> 00:26:17,800 Speaker 2: legacies at the company. 486 00:26:17,840 --> 00:26:20,120 Speaker 10: I really think so. I think that you know, he's 487 00:26:20,160 --> 00:26:21,960 Speaker 10: been at the company now more than a decade. I 488 00:26:22,040 --> 00:26:25,320 Speaker 10: think this will be amongst the most enduring things that 489 00:26:25,440 --> 00:26:26,040 Speaker 10: he has done. 490 00:26:26,280 --> 00:26:26,639 Speaker 5: I think this. 491 00:26:27,160 --> 00:26:30,000 Speaker 10: I'm not sure that the company would be in the 492 00:26:30,080 --> 00:26:32,280 Speaker 10: place it's at today if he had not really addressed this. 493 00:26:32,680 --> 00:26:35,080 Speaker 3: And let's be clear about what exactly he did with 494 00:26:35,160 --> 00:26:38,359 Speaker 3: that two point seven sharing dollars. Pay increases, there is training, 495 00:26:39,320 --> 00:26:43,119 Speaker 3: and really just attracting a better quality worker. 496 00:26:43,440 --> 00:26:45,359 Speaker 10: Yeah, and the way he did this was right. It 497 00:26:45,440 --> 00:26:47,680 Speaker 10: was pay increases, but more than anything else, it was 498 00:26:47,880 --> 00:26:51,399 Speaker 10: creating not low paying jobs, but a career. 499 00:26:51,640 --> 00:26:51,760 Speaker 4: Right. 500 00:26:52,240 --> 00:26:54,199 Speaker 10: There was now a path for people who started at 501 00:26:54,200 --> 00:26:57,200 Speaker 10: Walmart to move up the ranks and that was really important, 502 00:26:57,440 --> 00:27:02,040 Speaker 10: right to attracting more ambitious and employees to getting them 503 00:27:02,080 --> 00:27:05,280 Speaker 10: to stay. And I think that that shifted the whole 504 00:27:05,359 --> 00:27:06,760 Speaker 10: culture of the company. 505 00:27:07,720 --> 00:27:11,440 Speaker 2: So what's the company saying about AI? Because there's a 506 00:27:11,520 --> 00:27:14,040 Speaker 2: lot of answer just in the overall economy about what 507 00:27:14,200 --> 00:27:17,080 Speaker 2: the impact AI will have upon jobs. One could look 508 00:27:17,080 --> 00:27:19,680 Speaker 2: at big box stores as an industry that might be 509 00:27:19,680 --> 00:27:22,000 Speaker 2: at risk because they do employ so many People's what 510 00:27:22,080 --> 00:27:22,760 Speaker 2: does Walmart say. 511 00:27:22,880 --> 00:27:25,320 Speaker 10: Walmart's taken a very different approach, I think than some 512 00:27:25,440 --> 00:27:29,240 Speaker 10: other big employers, and it has embraced ay. Let's be clear, 513 00:27:29,320 --> 00:27:32,639 Speaker 10: like there's a AI is through embedded throughout the company, 514 00:27:33,080 --> 00:27:35,680 Speaker 10: but it has not used AIE to have some of 515 00:27:35,720 --> 00:27:38,360 Speaker 10: these mass layoffs that were justify some of these mass 516 00:27:38,440 --> 00:27:40,840 Speaker 10: layoffs that we've seen at other companies. And I think 517 00:27:40,920 --> 00:27:43,800 Speaker 10: part of that is this history, Like it knows how 518 00:27:43,880 --> 00:27:49,160 Speaker 10: important these entry level workers are and that they need 519 00:27:49,280 --> 00:27:52,320 Speaker 10: a path, they need this workforce to sort of grow 520 00:27:52,480 --> 00:27:56,760 Speaker 10: the company. So it said AI will change every job. 521 00:27:57,400 --> 00:28:00,840 Speaker 10: It knows that, but it is trying to get every 522 00:28:00,960 --> 00:28:04,080 Speaker 10: worker through to the other side, so whether that's retraining, 523 00:28:04,400 --> 00:28:06,960 Speaker 10: finding new rules, rules for them. So it's just a 524 00:28:07,160 --> 00:28:09,880 Speaker 10: very different outlook, I think than what we're hearing from others. 525 00:28:10,520 --> 00:28:12,720 Speaker 3: And you've noted as well that the last ten years 526 00:28:12,760 --> 00:28:15,879 Speaker 3: at Walmart has led to tremendous return for shareholders, but 527 00:28:16,040 --> 00:28:19,760 Speaker 3: also it's become a case study at Harvard Business School 528 00:28:20,160 --> 00:28:23,959 Speaker 3: on how to on how an experiment on paying your 529 00:28:24,000 --> 00:28:26,160 Speaker 3: workers war or investing your workers can pay off. 530 00:28:26,320 --> 00:28:29,000 Speaker 10: Absolutely. I mean, we you mentioned this at the beginning, 531 00:28:29,040 --> 00:28:32,520 Speaker 10: but Wall Street hated this plant. I mean, the company 532 00:28:32,600 --> 00:28:37,040 Speaker 10: lost tremendous value, tremendous value when they announced it, and 533 00:28:37,680 --> 00:28:40,040 Speaker 10: now you know, we have the receipts a decade later, 534 00:28:40,200 --> 00:28:43,680 Speaker 10: and the I think the market gap has tripled. The 535 00:28:43,760 --> 00:28:46,960 Speaker 10: stock has returned more than four hundred percent. So they 536 00:28:47,040 --> 00:28:49,120 Speaker 10: really took a gamble on this and stuck with it, 537 00:28:49,360 --> 00:28:52,040 Speaker 10: and it really it has paid off for them. 538 00:28:52,440 --> 00:28:54,720 Speaker 2: I mean every time I look at the dees screen 539 00:28:54,760 --> 00:28:57,240 Speaker 2: for on the Bloomberg terminal for Walmart had just blown 540 00:28:57,280 --> 00:28:59,200 Speaker 2: away by the fact that they have two point one 541 00:28:59,480 --> 00:29:04,480 Speaker 2: million employees. What's the retention of those employees. I'm wondering 542 00:29:04,520 --> 00:29:06,400 Speaker 2: if there's like I would think in the warehouses that 543 00:29:06,480 --> 00:29:08,560 Speaker 2: might be really really high. I'm not sure about the stores. 544 00:29:08,600 --> 00:29:09,560 Speaker 2: How is retention sure? 545 00:29:09,600 --> 00:29:12,600 Speaker 10: So they've actually increased retention by ten percent since twenty 546 00:29:12,680 --> 00:29:16,080 Speaker 10: fifteen when they started this plan. And another thing is 547 00:29:16,120 --> 00:29:20,920 Speaker 10: that they've some of the more management level roles. Seventy 548 00:29:21,000 --> 00:29:23,960 Speaker 10: five percent of those are hired from with it. So 549 00:29:24,120 --> 00:29:27,080 Speaker 10: this pipeline is really critical for them. And so that's 550 00:29:27,080 --> 00:29:29,520 Speaker 10: why I think that they are so focused on creating 551 00:29:29,560 --> 00:29:30,640 Speaker 10: a place where people stay. 552 00:29:32,120 --> 00:29:32,560 Speaker 5: That's key. 553 00:29:32,840 --> 00:29:34,760 Speaker 3: And you only have to look at the outgoing CEO 554 00:29:34,840 --> 00:29:37,880 Speaker 3: and the NTO, right, Both Doug McMillan and John Ferner, 555 00:29:38,280 --> 00:29:42,840 Speaker 3: the successor, are Walmart lifers. They started off as hourly workers. 556 00:29:42,560 --> 00:29:44,600 Speaker 10: There, right, they know the importance of that and having 557 00:29:44,680 --> 00:29:47,240 Speaker 10: worked their way up. That needs to be something that continues. 558 00:29:47,280 --> 00:29:50,400 Speaker 2: There is this something that you think the new CEO 559 00:29:50,600 --> 00:29:52,719 Speaker 2: is as committed to as the prior CEO. 560 00:29:53,080 --> 00:29:55,640 Speaker 10: I would think so because he has the same background. 561 00:29:55,720 --> 00:29:59,040 Speaker 10: I mean, I think he knows the importance of emerging technologies. 562 00:29:59,240 --> 00:30:02,200 Speaker 10: He's really focused on that. But I think because of 563 00:30:02,320 --> 00:30:06,280 Speaker 10: his history and he's worked very closely with McMillan for 564 00:30:06,320 --> 00:30:08,680 Speaker 10: a long time, so they must be aligned on this. 565 00:30:09,400 --> 00:30:12,640 Speaker 2: Our thanks to Beth Kwitt Bloomberg Opinion Calmness. We move 566 00:30:12,720 --> 00:30:15,240 Speaker 2: next to the interview we had this year with award 567 00:30:15,280 --> 00:30:17,200 Speaker 2: winning journalist and news anchor Connie Chung. 568 00:30:17,480 --> 00:30:19,560 Speaker 3: Connie was a first woman to co anchor the CBS 569 00:30:19,680 --> 00:30:22,560 Speaker 3: Evening News, the flagship news broadcast on CBS. She was 570 00:30:22,600 --> 00:30:25,040 Speaker 3: also the first Asian American to anchor any news program 571 00:30:25,160 --> 00:30:29,000 Speaker 3: on CBS, NBC, and ABC. Both were milestones and broadcast 572 00:30:29,080 --> 00:30:31,640 Speaker 3: television history. Connie Chung was also out with a memoir 573 00:30:31,720 --> 00:30:32,880 Speaker 3: this year titled Connie. 574 00:30:33,120 --> 00:30:35,560 Speaker 2: We began our conversation with the changing landscape of the 575 00:30:35,600 --> 00:30:38,040 Speaker 2: news business and whether journalism should be treated more like 576 00:30:38,120 --> 00:30:41,360 Speaker 2: a public good rather than a profit driven business. 577 00:30:41,520 --> 00:30:45,800 Speaker 11: With a question when I first started at CBS News 578 00:30:45,880 --> 00:30:49,960 Speaker 11: in nineteen seventy one. It was owned by William Paley yep, 579 00:30:50,200 --> 00:30:54,840 Speaker 11: and he believed so strongly that the news division should 580 00:30:54,880 --> 00:30:59,560 Speaker 11: be autonomous. We could spend as much money as it 581 00:30:59,720 --> 00:31:04,360 Speaker 11: took to cover the news, and it was for the 582 00:31:04,480 --> 00:31:09,719 Speaker 11: public good. But then what happened at CBS equally happened 583 00:31:09,760 --> 00:31:15,440 Speaker 11: at NBC and ABC. Greedy owners took over, bought the companies, 584 00:31:15,960 --> 00:31:20,200 Speaker 11: and made the bottom line the ultimate goal. We lost 585 00:31:20,480 --> 00:31:27,840 Speaker 11: all our obligation to be objective and be truthful, and 586 00:31:28,640 --> 00:31:34,080 Speaker 11: all they wanted was money. And I am just mortified 587 00:31:34,480 --> 00:31:40,520 Speaker 11: that to this day I see it at CBS, money drove, 588 00:31:40,880 --> 00:31:45,080 Speaker 11: the greed drove the fact that it was sold to 589 00:31:46,200 --> 00:31:51,440 Speaker 11: David Ellison and Larry Ellison and they're unattention. I mean, 590 00:31:51,640 --> 00:31:55,480 Speaker 11: they're not paying any attention to the old rules of journalism. 591 00:31:55,880 --> 00:31:58,800 Speaker 2: Well is one could argue just over the last twenty 592 00:31:58,880 --> 00:32:01,000 Speaker 2: twenty five years that the divide in this country and 593 00:32:01,040 --> 00:32:03,600 Speaker 2: the the divide in the in the media coverage has 594 00:32:04,040 --> 00:32:06,800 Speaker 2: been so stark and become maybe maybe even more stark. 595 00:32:07,400 --> 00:32:08,920 Speaker 2: How do you make what do you make of that? 596 00:32:09,400 --> 00:32:12,040 Speaker 2: The bias that may or may not be in the 597 00:32:12,160 --> 00:32:17,440 Speaker 2: news business these days? Who that it is Okay, how 598 00:32:17,480 --> 00:32:17,920 Speaker 2: do you view it? 599 00:32:18,000 --> 00:32:18,600 Speaker 4: How do you help? 600 00:32:18,840 --> 00:32:19,560 Speaker 2: How's it changed? 601 00:32:19,600 --> 00:32:25,480 Speaker 11: Maybe I'm horrified, horrified with anyone who says on television, 602 00:32:25,960 --> 00:32:30,200 Speaker 11: who purports to be an anchor or a news reporter, say, 603 00:32:30,760 --> 00:32:34,400 Speaker 11: I think I don't care what you think. All I 604 00:32:34,560 --> 00:32:37,720 Speaker 11: want is the facts. And I think everyone out there, 605 00:32:38,240 --> 00:32:42,000 Speaker 11: because I've been across the country just in this last year, 606 00:32:42,680 --> 00:32:46,440 Speaker 11: and people just want the facts. I think the only 607 00:32:46,600 --> 00:32:51,800 Speaker 11: saving grace is actually local news. Local news still just 608 00:32:52,760 --> 00:32:55,440 Speaker 11: primarily provides the facts and. 609 00:32:55,520 --> 00:32:59,800 Speaker 3: The weather right and sports. With big tech comes, of course, 610 00:33:00,040 --> 00:33:02,680 Speaker 3: artificial intelligence. How do you make the case for why 611 00:33:03,080 --> 00:33:07,200 Speaker 3: companies should not replace news reporters news anchors with AI 612 00:33:07,360 --> 00:33:10,360 Speaker 3: generated and presented news where they could focus on presumably 613 00:33:10,520 --> 00:33:11,000 Speaker 3: the facts. 614 00:33:11,920 --> 00:33:16,080 Speaker 11: It's fake two, it's all fake news and we cannot 615 00:33:16,160 --> 00:33:21,240 Speaker 11: depend on it. The social media has truly destroyed our 616 00:33:21,800 --> 00:33:28,040 Speaker 11: reporting ability in many ways because nothing is fact checked, 617 00:33:28,720 --> 00:33:32,600 Speaker 11: and I fear that AI would not be fact checked. 618 00:33:33,880 --> 00:33:36,680 Speaker 11: We can't depend on it. I can see the value 619 00:33:36,760 --> 00:33:41,440 Speaker 11: of AI. For instance, if a doctor wants to look 620 00:33:41,520 --> 00:33:45,680 Speaker 11: up research and figure out what a person's ailment is, 621 00:33:46,400 --> 00:33:49,800 Speaker 11: he or she no longer has to go through volumes 622 00:33:49,920 --> 00:33:56,080 Speaker 11: and volumes of medical literature. AI can find it in 623 00:33:56,200 --> 00:33:59,600 Speaker 11: a second, and there are so many good benefits. But 624 00:33:59,800 --> 00:34:04,120 Speaker 11: I think AI has no place in news. 625 00:34:04,320 --> 00:34:05,280 Speaker 1: It just doesn't. 626 00:34:06,200 --> 00:34:10,160 Speaker 11: I mean, I don't know what happened to truth. I 627 00:34:10,280 --> 00:34:15,120 Speaker 11: believe that truth ruled when I was working in television. 628 00:34:15,200 --> 00:34:17,720 Speaker 11: News was ancient, an ancient. 629 00:34:19,200 --> 00:34:21,240 Speaker 2: How about even though you have white hair palms? 630 00:34:21,760 --> 00:34:24,880 Speaker 11: You know I have white hair too, Just color it right. 631 00:34:24,920 --> 00:34:28,759 Speaker 2: I understand. I understand what's also changed. It seems like 632 00:34:29,280 --> 00:34:33,360 Speaker 2: initiatives not just in media, but across corporate America, in society, 633 00:34:33,480 --> 00:34:39,239 Speaker 2: the diversity, equality, inclusion, those that movement, if you will, 634 00:34:39,480 --> 00:34:42,680 Speaker 2: or that that seems to have lost its momentum. And 635 00:34:42,840 --> 00:34:44,280 Speaker 2: is that a concern for the newsroom? 636 00:34:44,360 --> 00:34:49,480 Speaker 11: Do you think it died with this administration? It's become 637 00:34:50,280 --> 00:34:54,480 Speaker 11: non existent and forced upon us. I would not have 638 00:34:54,640 --> 00:34:57,760 Speaker 11: had a career had it not been for the nineteen 639 00:34:57,800 --> 00:35:02,320 Speaker 11: sixty four civil rights law which created the Equal Employment 640 00:35:02,400 --> 00:35:08,040 Speaker 11: Opportunities Commission. My sister in law, Lynpovich, who was a 641 00:35:08,400 --> 00:35:13,520 Speaker 11: researcher at Newsweek, filed a class action lawsuit with the 642 00:35:13,640 --> 00:35:18,240 Speaker 11: other women. Because they were not allowed to move beyond 643 00:35:18,760 --> 00:35:23,319 Speaker 11: the research stage, they could not be reporters, they could 644 00:35:23,400 --> 00:35:28,440 Speaker 11: not be writers. They could not be editors period, full stop. 645 00:35:29,040 --> 00:35:34,480 Speaker 11: And I was thanks to Lynn and the women's movement 646 00:35:35,000 --> 00:35:37,680 Speaker 11: and the black movement at the time in the sixties 647 00:35:37,760 --> 00:35:40,879 Speaker 11: and seventies when I started, I would not have had 648 00:35:41,360 --> 00:35:46,640 Speaker 11: my first job at CBS News covering Watergate, covering a 649 00:35:46,760 --> 00:35:51,760 Speaker 11: presidential campaign, the losing campaign of George mcgovernor in nineteen 650 00:35:51,880 --> 00:35:56,480 Speaker 11: seventy two, And I would not have covered Nelson Rockefeller 651 00:35:56,520 --> 00:36:00,400 Speaker 11: when he was vice president after he took over Ford 652 00:36:00,480 --> 00:36:04,880 Speaker 11: took over from Nixon. We are seeing a replay of 653 00:36:05,200 --> 00:36:11,440 Speaker 11: Nixon and Watergate. But during Watergate, at least Congress had 654 00:36:11,480 --> 00:36:17,680 Speaker 11: a backbone. Members of Congress like Center Barry Goldwater went 655 00:36:17,800 --> 00:36:22,760 Speaker 11: to Nixon and said, You're not gonna You're not gonna survive. 656 00:36:22,600 --> 00:36:24,719 Speaker 3: Right, Yeah. No, It's a clear contrast to what we 657 00:36:24,840 --> 00:36:27,320 Speaker 3: have on Capitol Hill today. Speaking of water eight, Connie, 658 00:36:27,360 --> 00:36:29,560 Speaker 3: there is a famous photo of you at a House 659 00:36:29,800 --> 00:36:32,919 Speaker 3: Judiciary Committee hearing on Watergate, and it's you, a young 660 00:36:32,960 --> 00:36:36,239 Speaker 3: Asian woman in a sea of white men. Do you 661 00:36:36,400 --> 00:36:39,520 Speaker 3: think female news reporters in twenty twenty five case the 662 00:36:39,680 --> 00:36:42,400 Speaker 3: same challenges that you did in the seventies through nineties. 663 00:36:42,640 --> 00:36:46,640 Speaker 11: It really hasn't changed that's surpressing. No, I know, I'm sorry, 664 00:36:47,040 --> 00:36:52,000 Speaker 11: but it hasn't changed for men who still dominate. Not 665 00:36:52,120 --> 00:36:54,919 Speaker 11: that not that there's anything wrong with being a man, Paul. 666 00:36:55,760 --> 00:36:58,560 Speaker 2: You know, so far, so good, so far, so good, 667 00:36:58,640 --> 00:37:01,640 Speaker 2: So far, so good. You mean what, just you know, 668 00:37:02,560 --> 00:37:04,320 Speaker 2: we all work together, we'll all get along happy in 669 00:37:04,360 --> 00:37:05,200 Speaker 2: here in this little studio. 670 00:37:05,239 --> 00:37:06,640 Speaker 11: Okay, Well, that's good. 671 00:37:07,160 --> 00:37:09,160 Speaker 3: We control what we can control, right, that's right. 672 00:37:09,239 --> 00:37:18,160 Speaker 11: Yeah, well despite management. But yeah, it was in the 673 00:37:18,320 --> 00:37:25,439 Speaker 11: nineteen seventies. But even today there's a dominance of white males. 674 00:37:26,600 --> 00:37:27,000 Speaker 5: And the. 675 00:37:28,760 --> 00:37:31,600 Speaker 11: It's not a level of parody we do. We are 676 00:37:31,719 --> 00:37:35,279 Speaker 11: not seeing that. And in terms of this administration and 677 00:37:35,400 --> 00:37:42,239 Speaker 11: its determination to kill DEI I'm I'm hoping that we 678 00:37:42,680 --> 00:37:44,640 Speaker 11: the people will not stand for it. 679 00:37:44,960 --> 00:37:47,719 Speaker 2: Our thanks to award winning journalists and news anchor Connie Chunk. 680 00:37:47,960 --> 00:37:50,600 Speaker 2: That's this week's edition of Bloomberg Intelligence on Bloomberg Radio, 681 00:37:50,719 --> 00:37:53,160 Speaker 2: providing in depth research and data on two thousand companies 682 00:37:53,200 --> 00:37:54,520 Speaker 2: and one hundred and thirty industries. 683 00:37:54,640 --> 00:37:57,400 Speaker 3: And remember you can access Bloomberg Intelligence b I go 684 00:37:57,640 --> 00:37:59,440 Speaker 3: on the terminal. I'm Scarlett Foo. 685 00:37:59,360 --> 00:38:01,520 Speaker 2: And I'm Paul Switt. Me stay with us today's top 686 00:38:01,520 --> 00:38:03,920 Speaker 2: stories and global business headlines are coming up right now.