WEBVTT - Walmart and Home Depot Earnings, China Tariffs 0:00:02.960 --> 0:00:10.840 Bloomberg Audio Studios, podcasts, radio news. You're listening to the 0:00:10.880 --> 0:00:15.040 Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 0:00:15.080 --> 0:00:18.079 Eastern on Apple Car playing Android Auto with the Bloomberg 0:00:18.120 --> 0:00:21.440 Business App. Listen on demand wherever you get your podcasts, 0:00:21.640 --> 0:00:24.520 or watch us live on YouTube. 0:00:25.040 --> 0:00:28.120 Billy Lipteltz joining us. Obviously, the memestocks. This was all 0:00:28.160 --> 0:00:30.720 the rage but GameStop today, so they came out with 0:00:30.760 --> 0:00:33.120 earnings kind of unexpectedly. They also were in the market 0:00:33.159 --> 0:00:35.080 issuing shares. I feel like it took them a minute 0:00:35.560 --> 0:00:36.320 to get it together. 0:00:36.479 --> 0:00:38.519 No did, and that's really been the thing we've been 0:00:38.600 --> 0:00:40.519 writing about it this week. We wrote I Believe on 0:00:40.600 --> 0:00:43.919 Wednesday basically saying the window to capitalize was narrowing, if 0:00:43.960 --> 0:00:48.480 not closing, because GameStop their quarter ended a few weeks ago, 0:00:48.560 --> 0:00:51.920 so they needed preliminary results before they could file to 0:00:51.960 --> 0:00:54.880 potentially sell shares. They did all of that this morning, 0:00:55.120 --> 0:00:57.360 but Alex, as you point out, the stock was trading 0:00:57.880 --> 0:01:00.240 north of fifty bucks on Tuesday. Before the even got 0:01:00.240 --> 0:01:02.720 a chance to sell, it crashed back below twenty eight. 0:01:02.800 --> 0:01:05.679 So now we're seeing selling pressure down twenty seven percent. 0:01:05.840 --> 0:01:09.479 Fifty five million shares have traded so far. Again, an 0:01:09.480 --> 0:01:12.440 ATM allows them and allows their bank to sell up 0:01:12.520 --> 0:01:15.040 to forty five million chairs, not necessarily a sign that 0:01:15.080 --> 0:01:18.160 they have, but reading between the lines would mean that 0:01:18.280 --> 0:01:19.160 they probably are. 0:01:19.520 --> 0:01:22.640 Do we have any better idea here? Who any of 0:01:22.680 --> 0:01:24.440 these fifty five million share people are? 0:01:24.680 --> 0:01:24.720 Like? 0:01:24.760 --> 0:01:26.640 Who's trading this stuff? Again? Is it going to go 0:01:26.680 --> 0:01:29.240 back to your thoughts about that the quant hedge funds 0:01:29.280 --> 0:01:31.399 that are kind of really generating the activity. 0:01:31.480 --> 0:01:34.240 Yeah, and we're still not seeing really the volume that 0:01:34.280 --> 0:01:37.600 we saw on Fidelity, on interactive brokers, on some of 0:01:37.600 --> 0:01:40.080 the retail platforms that we did see back in twenty 0:01:40.120 --> 0:01:40.600 twenty one. 0:01:40.640 --> 0:01:43.240 And that's that's data. You guys can see the publican see. 0:01:43.319 --> 0:01:44.959 You can see it if you have an account, so 0:01:45.000 --> 0:01:46.440 like I had to create a Fidelity it used to 0:01:46.480 --> 0:01:47.360 not be behind the paywall. 0:01:47.400 --> 0:01:48.480 They put it behind the paywall. 0:01:48.480 --> 0:01:49.840 But like, if you have an account, you can see 0:01:49.840 --> 0:01:51.840 what on a given day people are buying and selling. 0:01:51.920 --> 0:01:55.760 It's just the orders, but it's mixed at SPENSA. I 0:01:55.880 --> 0:01:57.400 do not want a personal account. 0:01:57.440 --> 0:01:59.280 Oh, I thought you were just did it for reporting? 0:01:59.480 --> 0:02:03.040 No, I do now expense a premium exitcount, though that 0:02:03.080 --> 0:02:05.000 was a recent edition nice, good small ones. 0:02:05.480 --> 0:02:09.400 CRETA won't mind the big the small ones matter. Do 0:02:09.520 --> 0:02:11.880 we know why it didn't last longer? Is this just 0:02:11.960 --> 0:02:14.920 basically there's weren't as many shorts out there? Is that 0:02:15.000 --> 0:02:16.880 why the Memestock rally was a hot minute. 0:02:16.960 --> 0:02:19.280 It's a really different backdrop. 0:02:19.400 --> 0:02:21.360 So not only do you not have people stuck at 0:02:21.360 --> 0:02:26.519 home looking for entertainment, flush with stimulus checks, short interest 0:02:26.639 --> 0:02:29.000 is about twenty five percent. It used to be north 0:02:29.000 --> 0:02:31.320 of one hundred back in the peak mania. A lot 0:02:31.320 --> 0:02:33.560 of Again, the buying and selling that we saw Monday 0:02:33.600 --> 0:02:37.200 and Tuesday seemed to have Wall Street's fingerprints, so it 0:02:37.280 --> 0:02:40.240 never really got retail traders back in like back in 0:02:40.240 --> 0:02:44.320 twenty twenty one. And also you had a quiet Monday 0:02:44.320 --> 0:02:46.799 and Tuesday session ahead of the inflation data on Wednesday. 0:02:46.919 --> 0:02:49.760 And then you add in the fact that investors, retail 0:02:49.760 --> 0:02:52.680 traders probably bought in and were sitting on big paper losses, 0:02:52.760 --> 0:02:54.639 so you provide an exit rant for them. 0:02:54.680 --> 0:02:55.800 Why would they not take advantage? 0:02:55.880 --> 0:02:58.320 Did Bill Gross make money on this with his straddle? 0:02:58.360 --> 0:03:00.079 He still is those expired today. 0:03:00.160 --> 0:03:02.280 I haven't talked to him since he told you he 0:03:02.360 --> 0:03:04.440 laid out the initial trade, so he might have closed 0:03:04.440 --> 0:03:06.960 it or tapered it down, but that straddle still is 0:03:07.040 --> 0:03:09.000 very much in played in the in the money, assuming 0:03:09.120 --> 0:03:09.880 shares don't. 0:03:10.200 --> 0:03:15.280 So he bought calls and puts at forty dollars, right. 0:03:15.160 --> 0:03:18.000 He sold you logged in, So now I'm off the terminal. 0:03:18.080 --> 0:03:22.040 Oh but you were using my log I sat down 0:03:22.040 --> 0:03:22.400 where you. 0:03:22.320 --> 0:03:24.639 Were marriage off. 0:03:24.680 --> 0:03:24.880 Though. 0:03:25.080 --> 0:03:28.519 There's a certain person, a morning anchor that leaves his 0:03:28.560 --> 0:03:29.400 Twitter account open. 0:03:29.639 --> 0:03:31.040 Does I find that helpful? 0:03:31.160 --> 0:03:31.359 Yes? 0:03:33.440 --> 0:03:34.080 I know. 0:03:34.400 --> 0:03:35.000 Let me. 0:03:35.040 --> 0:03:36.280 I want to go to another area here. But we 0:03:36.320 --> 0:03:38.600 were just talking about Reddit and how that was such 0:03:38.600 --> 0:03:40.640 a great ipo and they had some good news today, 0:03:40.840 --> 0:03:44.080 pop on the stock up again. Here we have a 0:03:44.160 --> 0:03:46.720 number of really good IPOs performing over the last couple 0:03:46.760 --> 0:03:49.240 of months. I got David Solomon up on stages saying, 0:03:49.240 --> 0:03:51.600 the backlogs building. We're all my IPOs. 0:03:51.720 --> 0:03:53.600 I need to see five or six a week. The 0:03:53.680 --> 0:03:55.840 backlog has been building for three years. 0:03:55.840 --> 0:03:58.960 Of every banker you talked to is like, the backlog's 0:03:58.960 --> 0:03:59.840 been better than it's ever been. 0:04:00.320 --> 0:04:02.080 I want to see days when we have four printing, 0:04:02.200 --> 0:04:03.120 like on a Thursday. 0:04:03.400 --> 0:04:04.960 Yeah, well, don't hold your breath. 0:04:05.120 --> 0:04:07.280 So what are we waiting for here? At this point? 0:04:07.360 --> 0:04:11.960 Well, the real thought is is drawing back investors. 0:04:11.960 --> 0:04:13.280 So you have read it performing well. 0:04:13.320 --> 0:04:16.960 You have a stera of labs, Viking, Bougie cruises for 0:04:17.040 --> 0:04:20.159 lack of a better frame, all performing well. 0:04:20.360 --> 0:04:22.120 But you have to get deals that are priced well. 0:04:22.160 --> 0:04:25.680 To Paul's point, make the investors money, make the sponsors happy, 0:04:25.920 --> 0:04:28.159 and perform well. And that's really still kind of weaning 0:04:28.200 --> 0:04:30.919 back into the system. There is still uncertainty around how 0:04:31.000 --> 0:04:32.560 much of a slowdown what we have in the summer, 0:04:32.600 --> 0:04:35.279 just because bankers and investors are on vacation. We do 0:04:35.400 --> 0:04:38.360 have an election in November. It seems like we will 0:04:38.360 --> 0:04:43.560 have a more active than usual June July than historically speaking. 0:04:43.920 --> 0:04:45.839 But the big focus still is on that post Labor 0:04:45.880 --> 0:04:48.720 Day window, which will be kind of compressed because you 0:04:48.760 --> 0:04:51.920 want to get out before the election, but also when 0:04:51.960 --> 0:04:53.640 people are actually at their desks and you can go 0:04:53.760 --> 0:04:56.200 visit t Row and Fidelity and have a real pitche. 0:04:56.080 --> 0:04:59.400 There are days back in the day when Morgan Stanley 0:04:59.480 --> 0:05:02.360 Goldman's as a credit Swisser song, we do have to 0:05:02.360 --> 0:05:04.400 get on the phone and say, all right, guys, we're 0:05:04.400 --> 0:05:05.880 all going to be in New York on Thursday. We 0:05:05.920 --> 0:05:07.560 got to coordinate this are you do your lunch at 0:05:07.560 --> 0:05:10.240 the Four Seasons eleven, I'll do mine at the Intercontinental twelve? 0:05:10.240 --> 0:05:12.280 You do years. That's how busy it was, you know. 0:05:12.320 --> 0:05:14.760 And and because you get those those windows, I. 0:05:14.680 --> 0:05:16.840 Feel like I haven't this window. 0:05:17.360 --> 0:05:21.159 Well that's and when I talk to investors in bankers, 0:05:21.200 --> 0:05:23.320 the big argument that they make is the window has 0:05:23.360 --> 0:05:26.440 always been open for good companies. It's just that good 0:05:26.440 --> 0:05:29.480 companies who have access to the private markets maybe don't 0:05:29.520 --> 0:05:30.800 want to go out just yet and be. 0:05:30.760 --> 0:05:31.680 The first here. 0:05:31.720 --> 0:05:34.480 I mean, these Pea guys whining. They've been sitting in 0:05:34.520 --> 0:05:36.479 these things for five, six, seven, eight, ten years. 0:05:36.560 --> 0:05:37.400 They're looking for an exit. 0:05:37.440 --> 0:05:41.200 Well, like, okay, if you don't want to like you know, 0:05:41.400 --> 0:05:44.400 if you don't want to take the streets mark, then 0:05:44.680 --> 0:05:45.520 let's hit it. Let's go. 0:05:45.640 --> 0:05:47.560 Well, that's the big issue on a down round. You 0:05:47.600 --> 0:05:48.960 have to call it a down round. 0:05:49.040 --> 0:05:51.839 You have to cave a little bit on valuation, especially 0:05:51.839 --> 0:05:53.159 because a lot of to your point, a lot of 0:05:53.160 --> 0:05:56.920 these pe assets are heavily straddled with debt, and investors 0:05:56.960 --> 0:05:59.960 don't want debt right now. They want clean uh stories 0:06:00.040 --> 0:06:02.000 they can be sold to them. Viking was one that's 0:06:02.000 --> 0:06:04.200 interesting that has a large detlog, but it's viewed as 0:06:04.240 --> 0:06:06.920 kind of being recession proof because it's wealthy people, older 0:06:06.960 --> 0:06:08.240 people taking cruises. 0:06:08.640 --> 0:06:11.800 Interesting, you just did a flux there. He called it 0:06:11.839 --> 0:06:16.479 a flex before wealthy people taking cruises. All right, Bailey, 0:06:16.480 --> 0:06:17.680 thanks a lot, super appreciated. 0:06:17.680 --> 0:06:18.200 Happy weekend. 0:06:18.240 --> 0:06:20.680 Billy Lipschaltz joining us Ipo market as well as the 0:06:20.680 --> 0:06:21.240 Meme stocks. 0:06:22.720 --> 0:06:26.600 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:06:26.680 --> 0:06:29.720 weekdays at ten am Eastern on Apple car Play and 0:06:29.720 --> 0:06:33.000 Android Auto with the Bloomberg Business. You can also listen 0:06:33.120 --> 0:06:36.239 live on Amazon Alexa from our flagship New York station 0:06:36.600 --> 0:06:39.359 just say Alexa playing Bloomberg eleven thirty. 0:06:41.400 --> 0:06:45.360 It has been definitely a week. We had some nice records. 0:06:45.800 --> 0:06:47.719 We haven't seen this kind of move in months for 0:06:47.800 --> 0:06:48.320 the S and P. 0:06:48.720 --> 0:06:49.440 So what do you do? 0:06:49.480 --> 0:06:51.120 On a headline level, we may continue to be a 0:06:51.120 --> 0:06:54.120 little bit boring, but underneath there's some really individual stock 0:06:54.200 --> 0:06:56.800 moves that are gaining a lot of traction here. So 0:06:56.880 --> 0:06:59.919 let's get more with Shelby McFadden, investment analyst at Motley 0:07:00.080 --> 0:07:03.840 Full Asset Management. She is joining us. So, Shelby, are 0:07:03.839 --> 0:07:05.960 we in a world where like the headline level is 0:07:06.000 --> 0:07:07.840 going to continue to grind higher, but it's going to 0:07:07.880 --> 0:07:11.840 be those individual names where you get the action, you know. 0:07:11.880 --> 0:07:13.360 I think that's absolutely possible. 0:07:13.480 --> 0:07:15.160 And part of it is we've seen the evidence of 0:07:15.200 --> 0:07:17.600 that happening for not just one year, but two years, right. 0:07:18.080 --> 0:07:19.720 We've seen it go from the S and P five 0:07:19.800 --> 0:07:21.960 hundred to sort of the S and P seven to 0:07:22.000 --> 0:07:26.040 the SMP four, And so it's not completely unreasonable to 0:07:26.120 --> 0:07:29.240 have to pop the hood and really see, breaking into 0:07:29.280 --> 0:07:32.239 sectors and industries, what's really going on in the market. 0:07:32.720 --> 0:07:34.760 And so if you're sort of just interesting in owning 0:07:34.800 --> 0:07:37.920 the overall market and being okay with it being driven 0:07:38.000 --> 0:07:41.680 by fewer than ten stocks, sure, but the inverse is 0:07:41.680 --> 0:07:44.800 not necessarily true that how those top ten are doing 0:07:45.400 --> 0:07:47.840 is necessarily representative of the overall market. 0:07:48.480 --> 0:07:51.280 Shelby, we had a I guess a weaker than expected 0:07:51.320 --> 0:07:55.400 retail sales number yesterday, yet combined with some pretty strong 0:07:55.440 --> 0:07:57.440 sales numbers out of Walmart. How do you square those 0:07:57.440 --> 0:07:59.360 two things? How do you view the consumer out there? 0:08:00.720 --> 0:08:02.400 I think when we sort of look at those two things, 0:08:02.520 --> 0:08:05.280 we see the fact that consumers are looking for value. 0:08:05.600 --> 0:08:07.360 And so when we do look at Walmart. We consider 0:08:07.400 --> 0:08:10.880 the fact that general merchandise for that retailer is still 0:08:11.000 --> 0:08:13.920 weaker than they would like to see, and a lot 0:08:13.960 --> 0:08:17.280 of the performance comes from the necessities like food and 0:08:17.360 --> 0:08:18.200 different staples. 0:08:18.720 --> 0:08:19.800 So when we see those. 0:08:19.600 --> 0:08:23.720 Weaker retail sales, we're realizing that discretionary income is still 0:08:23.720 --> 0:08:26.800 being pressured quite a bit, and that when people are 0:08:26.840 --> 0:08:29.920 looking to spend what discretionary income they have, they're looking 0:08:29.960 --> 0:08:32.240 to get value. So in the past they may have 0:08:32.280 --> 0:08:34.280 been a little bit indifferent about saying, let's just go 0:08:34.280 --> 0:08:36.920 ahead and order the TV from this online retailer or 0:08:36.920 --> 0:08:39.480 pick it up from this standard big box retailer. Now 0:08:39.480 --> 0:08:41.880 they're considering, you know what, let's check out Walmart. I 0:08:41.920 --> 0:08:43.280 think they actually have a lot of value that they 0:08:43.320 --> 0:08:43.959 can offer us. 0:08:44.320 --> 0:08:46.440 For those of you who didn't hear yesterday's show, Paul 0:08:46.559 --> 0:08:47.959 is going to a Walmart for the first time in 0:08:48.000 --> 0:08:48.400 a long time. 0:08:48.559 --> 0:08:49.800 Is going to some channel checks. 0:08:49.600 --> 0:08:52.360 Tomorrow, right, Yep, it's going to be huge. So Walmart 0:08:52.440 --> 0:08:54.800 stock at a fifty two week high today. Is this 0:08:54.880 --> 0:08:56.800 priced in? Or is there more upside here? You think 0:08:56.800 --> 0:08:57.679 to Walmart? 0:08:58.480 --> 0:09:00.720 I think part of what we're also seeing in the 0:09:00.760 --> 0:09:02.839 sort of little Walmart run up is the fact that 0:09:03.440 --> 0:09:05.760 they've made that decision i think within the last couple 0:09:05.800 --> 0:09:07.520 of weeks to close a lot of their health clinics. 0:09:08.080 --> 0:09:10.640 And they're also having some staff reduction and they're cracking 0:09:10.679 --> 0:09:13.880 down on folks working remotely, so they're doing some of 0:09:13.920 --> 0:09:16.640 that op X as well. So what we're seeing now 0:09:16.760 --> 0:09:20.600 is the effect of the bottom line boost. So at 0:09:20.600 --> 0:09:22.559 first Walmart was able to sort of hold onto their 0:09:22.559 --> 0:09:24.120 top line for a bit longer than others. 0:09:24.320 --> 0:09:25.480 I think what's being priced. 0:09:25.280 --> 0:09:27.760 In now is the fact that they are leaning out 0:09:28.200 --> 0:09:31.760 in ways that they don't usually take on. They traditionally 0:09:31.840 --> 0:09:34.280 just kind of cut their hourly workforce, but now they're 0:09:34.320 --> 0:09:36.280 really looking at the big picture of investment, and I 0:09:36.280 --> 0:09:37.800 think that's the sort of pop in the stock we 0:09:37.840 --> 0:09:38.560 saw yesterday. 0:09:39.200 --> 0:09:42.040 So Shelby, I guess one of the questions here is, 0:09:42.520 --> 0:09:45.000 I guess the lower end of consumer, how are they 0:09:45.040 --> 0:09:47.080 dealing with? Where are they going with their dollars? Is 0:09:47.120 --> 0:09:49.959 it to are they staying with Walmart target, They're going 0:09:50.000 --> 0:09:52.760 down to the dollar stores? How is the lower end 0:09:52.800 --> 0:09:55.240 consumer how are they spending their discretionary income. 0:09:56.720 --> 0:09:59.320 I think what we've seen in a combination of between 0:09:59.360 --> 0:10:03.440 Walmart and they're sort of not retailers but manufacturers that 0:10:03.480 --> 0:10:07.280 have branded material. Is that consumers are choosing brands even 0:10:07.280 --> 0:10:10.640 at the lower end where there is the most premiumization 0:10:10.760 --> 0:10:14.520 that they require, But then they are choosing more of 0:10:14.520 --> 0:10:17.280 a Walmart over a Target at the lower end because 0:10:17.320 --> 0:10:20.040 at this point you can't really stop how much food 0:10:20.080 --> 0:10:23.000 you're going to need. You can try and make your 0:10:23.240 --> 0:10:26.080 clothing and other sort of discretionary items last a little 0:10:26.120 --> 0:10:28.400 bit longer, stretch them a bit longer, but food is 0:10:28.440 --> 0:10:31.680 just such a requirement. And so when we then combine 0:10:31.720 --> 0:10:34.360 that with what we saw from the financials companies, we're 0:10:34.400 --> 0:10:37.240 seeing that at the lower end they are just using 0:10:37.360 --> 0:10:40.360 less credit, trying to get paid off what they can, 0:10:40.679 --> 0:10:42.920 and so if they're just working with cash, it's going 0:10:43.000 --> 0:10:45.880 to be all right, let's get all the discretionary stuff 0:10:45.880 --> 0:10:48.040 that we have to get on top of the staples 0:10:48.040 --> 0:10:50.480 we need at a place like Walmart. And I'm not 0:10:50.559 --> 0:10:53.680 quite sure that we're seeing that absolute trade down into say, 0:10:53.720 --> 0:10:57.040 food shopping at dollar stores quite yet. I don't think 0:10:57.080 --> 0:10:58.160 we're there just yet. 0:10:58.440 --> 0:10:58.680 I don't. 0:10:58.720 --> 0:11:01.040 No, man, food shopping a dollar stores feels like you 0:11:01.080 --> 0:11:02.880 are asking for expired stuff. 0:11:03.160 --> 0:11:05.120 Uh, it's a tough. 0:11:06.840 --> 0:11:10.240 Read and the person at the checkout because you don't 0:11:10.280 --> 0:11:11.559 want that, sir, like. 0:11:11.520 --> 0:11:14.320 It's green, Why do you fund something that's green. To 0:11:14.400 --> 0:11:18.199 that point, Shelby, there's tons of retail action next week, right, 0:11:18.280 --> 0:11:21.240 get Macy's, Target, you do, get the dollar stores, Ross stores, like, 0:11:21.280 --> 0:11:22.400 get the specialty guys. 0:11:23.080 --> 0:11:25.040 What's going to be a macro signal. 0:11:24.720 --> 0:11:28.480 For you here? To me, I think it's actually going 0:11:28.520 --> 0:11:31.120 to be these sort of the sort of middle to 0:11:31.160 --> 0:11:34.880 lower end, the Ross, the Burlington, the Dollar stores, letting 0:11:34.960 --> 0:11:37.680 us know how much of a higher income customer share 0:11:37.720 --> 0:11:41.679 they're picking up, because it's been very obvious that they 0:11:41.679 --> 0:11:43.959 were going to get more of the middle to lower end. 0:11:44.040 --> 0:11:47.520 That's the whole point of their of their retail premise. 0:11:47.640 --> 0:11:47.840 Right. 0:11:48.000 --> 0:11:50.319 So the question now is how much of the upper 0:11:50.440 --> 0:11:53.560 end consumer are you raining in for Ross? Are you 0:11:54.120 --> 0:11:56.559 capturing some of the consumer that was going to Marshals 0:11:56.640 --> 0:11:59.720 or even Nordstrom Rack? Similar for Burlington? And then when 0:11:59.760 --> 0:12:02.680 we look at Target, are they able to capture or 0:12:02.760 --> 0:12:05.760 hold on to any middle income to lower income share 0:12:05.800 --> 0:12:07.200 because we do know that they have a little bit 0:12:07.240 --> 0:12:08.280 more of a premium product. 0:12:08.440 --> 0:12:10.440 Just so we're clear here in the journal, today, there 0:12:10.440 --> 0:12:14.360 was an article about Tjmax and why it's awesome because 0:12:14.360 --> 0:12:17.439 they were like anyone who's anyone can now go and 0:12:17.480 --> 0:12:20.440 buy like super high designers for like a third of 0:12:20.440 --> 0:12:22.600 the price. I love TJ Max. It's like in my blood. 0:12:23.440 --> 0:12:25.760 But I mean it was in the journal. I'm just saying, 0:12:26.080 --> 0:12:28.640 so now it's already happening. But now, like you know, 0:12:28.720 --> 0:12:31.760 real people with like serious money, like real housewives people 0:12:31.800 --> 0:12:33.160 are doing it, but them out of the year. 0:12:33.360 --> 0:12:34.240 Know that according from the. 0:12:34.240 --> 0:12:36.120 Journal, very good what the journal has it? Yeah, I'm 0:12:36.160 --> 0:12:38.079 going with it a Shelby And in some of your 0:12:38.200 --> 0:12:40.800 stock picks here, one of them is ken View. Just 0:12:40.880 --> 0:12:43.680 remind her that was to spin out from Johnson and 0:12:43.720 --> 0:12:45.560 Johnson I guess talk to us about Kenview. 0:12:46.720 --> 0:12:46.880 Yeah. 0:12:46.920 --> 0:12:49.480 What's interesting about ken View is they sort of followed 0:12:49.480 --> 0:12:51.360 in a trend that a lot of pharmaceutical companies were 0:12:51.360 --> 0:12:54.319 doing where they went ahead and separated their consumer brands. 0:12:54.320 --> 0:12:56.000 So we're talking about, you know, the tail and alls 0:12:56.000 --> 0:12:59.080 of the world into a completely separate company. And what 0:12:59.200 --> 0:13:02.280 interested me about that going into earning season was whether 0:13:02.400 --> 0:13:04.760 or not they would be able to sort of maintain 0:13:04.880 --> 0:13:08.120 that demand on premiumization when we think about the fact 0:13:08.160 --> 0:13:09.760 that if I need tile at all, I could just 0:13:09.800 --> 0:13:12.200 buy a seat of minifit and it's cheaper. And what 0:13:12.240 --> 0:13:14.480 they showed us in earnings is that they've been able 0:13:14.480 --> 0:13:16.880 to do it. So the brands that they've cultivated have 0:13:17.000 --> 0:13:19.640 held onto people to spend that extra dollar or dollar 0:13:19.720 --> 0:13:24.440 fifty on baby wipes, on feminine products, on pain and 0:13:24.520 --> 0:13:27.440 other healthcare. So that was a great signal to us 0:13:27.559 --> 0:13:30.280 that to some degree, with the right mix of pricing, 0:13:30.520 --> 0:13:34.040 you're able to hold onto people for even brand named staples, 0:13:34.040 --> 0:13:35.520 And I think that is really important. 0:13:36.320 --> 0:13:38.720 Your last pick here that you have on the notes 0:13:38.720 --> 0:13:41.760 here is master Card. Why do you like this dog 0:13:41.840 --> 0:13:42.839 versus some of the other guys. 0:13:44.120 --> 0:13:44.320 Yeah. 0:13:44.360 --> 0:13:46.360 One of the things we love about MasterCard really in 0:13:46.360 --> 0:13:48.680 general is that they're really just a toll taker, right, 0:13:48.760 --> 0:13:52.280 so even in a sort of downturn, the rails still 0:13:52.320 --> 0:13:54.640 have to be used to process payment. The other thing 0:13:54.720 --> 0:13:57.679 is really their weight to credit compared to debit. So 0:13:57.760 --> 0:13:59.480 we do know that a while ago we had that 0:13:59.559 --> 0:14:02.720 legislation that really compressed on debit fees. So when we 0:14:02.760 --> 0:14:05.120 look at their competitor, we see that they've got that 0:14:05.280 --> 0:14:09.440 better mix to that sort of higher fee for using 0:14:09.480 --> 0:14:12.640 the credit rails, and also knowing that consumers leaning a 0:14:12.640 --> 0:14:14.680 little bit more on credit in these types of times, 0:14:14.760 --> 0:14:17.880 at least in the middle to upper end, generates more 0:14:17.880 --> 0:14:20.960 fees for MasterCards. So when we think about the credit 0:14:21.000 --> 0:14:24.480 to debit mix, plus their international opportunities, we feel that 0:14:24.480 --> 0:14:26.360 they're really well positioned when it comes to the payment 0:14:26.360 --> 0:14:27.000 network space. 0:14:27.560 --> 0:14:29.400 All right, Shelby, thank you so much for joining us. 0:14:29.440 --> 0:14:33.160 Shelby McFadden Investment analys that Motley Fool Asset Management joining 0:14:33.200 --> 0:14:36.880 us from Alexandria, Virginia via zoom. You may show you 0:14:36.920 --> 0:14:39.680 how cutting edge I am on fintech. When I go 0:14:39.720 --> 0:14:42.240 buy my salad today for lunch, you can use Apple pay. 0:14:42.640 --> 0:14:46.040 Hey, look at you. What happens to the water cash 0:14:46.080 --> 0:14:46.560 in your pocket? 0:14:46.560 --> 0:14:48.520 I still have the water cash. It just it lasts 0:14:48.520 --> 0:14:50.960 a lot longer. Like when I was growing up, even 0:14:51.000 --> 0:14:53.320 as a young adult, I would only use credit cards 0:14:53.360 --> 0:14:57.520 for big purchase and special one off type of things, 0:14:57.560 --> 0:15:00.280 not for day to day I use cash cut now. 0:15:00.320 --> 0:15:03.400 It's it's the exact I think after in society. It's 0:15:03.440 --> 0:15:04.360 just used it for everything. 0:15:04.680 --> 0:15:05.280 I'm sorry. 0:15:05.920 --> 0:15:08.280 Michael Bar Michael Bar, Oh my god. 0:15:08.600 --> 0:15:10.800 First of all, he pulls out a lot of cash, 0:15:10.960 --> 0:15:13.800 A couple of one hundred dollars bills. Absolutely, you know, 0:15:14.000 --> 0:15:17.280 not the deed the boardwalk like I have in mind, 0:15:17.640 --> 0:15:19.960 but wow, what happened to cash? 0:15:20.360 --> 0:15:20.560 You know? 0:15:20.960 --> 0:15:22.560 The only reason I have cash? And John Tucker can 0:15:22.600 --> 0:15:23.920 back me up on this. You go down to the 0:15:24.000 --> 0:15:26.640 Jersey Shore. That's a cash economy down. Do you walk 0:15:26.680 --> 0:15:29.920 up to a Jersey Shore bar, you don't apple pay, 0:15:30.120 --> 0:15:32.400 You throw a fifty or hondy on the bar and 0:15:32.440 --> 0:15:33.880 that's how you announce your uh. 0:15:34.240 --> 0:15:35.720 I also love the use a hundy because I say 0:15:35.760 --> 0:15:37.880 that at home. My husband like refuses to talk to me. 0:15:38.040 --> 0:15:40.280 But to that point, but actually, tipping is the problem. 0:15:40.360 --> 0:15:42.640 Like if you don't have cash, I never carry cash anymore, 0:15:42.680 --> 0:15:44.840 and then tipping is huge. Like if you go get 0:15:44.840 --> 0:15:47.640 a Manny petty, it's like, oh god, you guys have 0:15:47.720 --> 0:15:50.359 venmo and then you're like scrambling and it's stressful. 0:15:50.760 --> 0:15:52.840 It's a changing world out there in terms of world. 0:15:52.840 --> 0:15:55.040 You have to be on top of this fintech And 0:15:55.040 --> 0:15:56.920 a lot of people say it's just by Master Carter 0:15:57.040 --> 0:15:59.560 resent that gets your exposure to fintech because it's all 0:15:59.600 --> 0:16:02.600 got a over their systems. And remember take care of 0:16:02.640 --> 0:16:05.040 your brant tenders, ladies and gentlemen. Exactly right. 0:16:07.720 --> 0:16:11.600 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:16:11.680 --> 0:16:14.320 weekdays at ten am Eastern on Apple car Play and 0:16:14.320 --> 0:16:17.400 Android Auto with the Bloomberg Business App. Listen on demand 0:16:17.440 --> 0:16:22.240 wherever you get your podcasts, or watch us live on YouTube. 0:16:23.160 --> 0:16:25.640 Just get to tech. There's been some fun news. I 0:16:25.680 --> 0:16:27.680 was taking a look at this Reddit open ai thing. 0:16:27.760 --> 0:16:32.040 So apparently the deal between the two helps display Reddit 0:16:32.040 --> 0:16:36.680 its content and also train open ai systems on its 0:16:36.760 --> 0:16:39.720 partners data. So this is kind of what they promised 0:16:39.720 --> 0:16:42.240 when the iPod and then maybe a little extra. Man 0:16:42.280 --> 0:16:44.760 Deep Singh joins us now he is a Bloomberg Senior 0:16:44.800 --> 0:16:48.480 technology analyst, mandeep give me some of the particulars here. 0:16:49.760 --> 0:16:53.600 Well, they haven't told us who is paying whom. It's 0:16:53.680 --> 0:16:58.960 just that I mean, look, man, we know Google pays 0:16:59.120 --> 0:17:03.560 Reddit almost sixty million a year for its content, and 0:17:04.080 --> 0:17:08.760 in return, I think Reddit benefits more in the sense that, yes, 0:17:08.800 --> 0:17:12.280 they get paid, and they also get traffic from Google. 0:17:12.520 --> 0:17:15.480 You know Google displaying reddits links on its search. But 0:17:15.560 --> 0:17:19.439 in this case, I think open ai probably needs Reddit 0:17:19.520 --> 0:17:25.639 data more simply because you have to constantly train these llms. 0:17:26.080 --> 0:17:29.720 I mean, Reddit has almost one billion posts a year. 0:17:30.200 --> 0:17:34.119 Look at the magnitude of the user generated content. So yes, 0:17:34.160 --> 0:17:38.840