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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the

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Speaker 1: Bloomberg Intelligence podcast. Catch us live weekdays at ten am

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Speaker 1: Eastern on fo car Playing and broyd Outo with the

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Speaker 1: Bloomberg Business app. Listen on demand wherever you get your podcasts,

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Speaker 1: or watch us live on YouTube.

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Speaker 2: US payrolls marked down by most since two thousand and

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Speaker 2: nine in preliminary data.

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Speaker 3: It sounds important to me.

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Speaker 2: Let's go to Ira Jersey. He's the bond guy. He

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Speaker 2: covers yours an interest rate strategy for Bloomberg Intelligence. He's

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Speaker 2: down and oh, I'm going to guess Princeton, New New Jersey.

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Speaker 2: Why come to the world's financial market? God forbid?

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Speaker 3: Hira.

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Speaker 2: Thanks so much for joining us. You're the expert on

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Speaker 2: this stuff. I love to talk to you about this

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Speaker 2: US payroll data and about Jackson Hole. How are you

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Speaker 2: kind of writing about this in your bi research.

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Speaker 4: Yeah, the data I think Paul is was more or

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Speaker 4: less what a lot of people that expect, did you know.

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Speaker 5: Kudos to our colleagues.

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Speaker 4: Over at Bloomberg Economics who saw a number very similar

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Speaker 4: to this negative eight hundred and eighteen thousand for the revisions.

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Speaker 5: Keep in mind this is old, this is going to

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Speaker 5: be revised.

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Speaker 4: Again, and also it's not information that's new, right, So

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Speaker 4: if we think about all that this means is that, yes,

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Speaker 4: the data was weaker in the economy was weaker between

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Speaker 4: April of twenty twenty three and March of twenty twenty four.

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Speaker 5: That doesn't necessarily tell us.

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Speaker 4: Where we are now or where we're going over the

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Speaker 4: next couple of a couple of quarters, but it does

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Speaker 4: show that maybe things weren't quite as rosy as the

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Speaker 4: preliminary data suggested.

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Speaker 6: And Hira, I'm glad you brought that up because Paul

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Speaker 6: and I were talking about a story I wrote ahead

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Speaker 6: of that data, and it was just to that point

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Speaker 6: where options traders weren't pricing at a big swing because

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Speaker 6: they really saw this as backward looking, as basically a

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Speaker 6: non event for the stock market when we're seeing the

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Speaker 6: S and P five hundred still higher this morning. But

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Speaker 6: when it comes to the bond side of things, that

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Speaker 6: you focus on, what is speculative positioning telling us in

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Speaker 6: the bond market? Ahead of speaking at Jackson Hole on Friday.

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Speaker 5: Yeah, I don't think the positioning.

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Speaker 4: The position really hasn't changed a whole ton over the

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Speaker 4: last couple of months, and you know, speculators are still

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Speaker 4: relatively you know, less short than they used to be,

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Speaker 4: but there's still generally short rates. But that's because you know,

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Speaker 4: real money investors are long, right, So for every long

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Speaker 4: there's a short in futures positioning, so you have to

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Speaker 4: keep that in mind. And a lot of those shorts

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Speaker 4: are going to be against other things, right, so people

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Speaker 4: are long credit or people who are trying to del

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Speaker 4: to hedge options positions for example, So all of those

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Speaker 4: things go into some of that futures positioning.

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Speaker 5: So you can't take as.

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Speaker 4: Much away from that one data set as you can

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Speaker 4: from say, just the incoming data that we get, you know,

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Speaker 4: in terms of Jackson Hole, you know, I think that

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Speaker 4: one thing that this data that we received just a

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Speaker 4: couple of minutes ago does suggest is that that the

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Speaker 4: FED is more ammunition to cut interest rates. You know,

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Speaker 4: people who are worried about them cutting twenty five or fifty,

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Speaker 4: you know, the market kind of is now back in

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Speaker 4: in terms of the first cut being maybe twenty five

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Speaker 4: basis points, but this does give them some ammunition because

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Speaker 4: they can say, oh, well, you know the economy is

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Speaker 4: not as strong as we had thought, and because of that,

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Speaker 4: you know, that gives us at least a little bit

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Speaker 4: of comfort in the fact that we can slowly start

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Speaker 4: to reduce the amount of monetary tightening that we've done.

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Speaker 2: All right, Jackson Hole, Wyoming. Is it better for Truman J.

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Speaker 2: Powe to just keep it short and sweet and just

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Speaker 2: let things keep moving.

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Speaker 4: Well, you know, it's yeah, that's that's a good question.

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Speaker 4: You know, we get the minutes today at two o'clock,

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Speaker 4: so I think that he's going to stick to almost

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Speaker 4: whatever is said in the minutes.

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Speaker 5: So I think it's gonna be very important to kind.

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Speaker 4: Of read what a majority or most of the members

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Speaker 4: of the Federal Reserve had said at the last meeting.

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Speaker 4: But he I suspect that he is going to hint

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Speaker 4: that the Federal Reserve is on a path the cutting

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Speaker 4: interest rates. But he's going to remain and I think

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Speaker 4: if you recall from his post meeting press conference, he

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Speaker 4: still said like, look, you know, we haven't made any decisions.

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Speaker 5: We're doing everything. But we're doing everything meeting to meeting.

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Speaker 4: But when you look at a preponderance of the data,

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Speaker 4: I know, the retail sales data last week was pretty decent,

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Speaker 4: but a lot of the other data that we're getting

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Speaker 4: is mixed to somewhat lower, and certainly today's employment data

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Speaker 4: suggests that that, you know, things aren't as rosy as

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Speaker 4: we had thought. And because of that, I think that

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Speaker 4: he's going to hint that a cut is on the tape.

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Speaker 6: Looking at the ten year treasury yield, creating just below

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Speaker 6: three eighty what's the key levels when you're looking at

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Speaker 6: the ten year or the two year right now?

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Speaker 4: Yeah, so three seventy eight, so not too far from

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Speaker 4: where we are right now is a reasonably important technical

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Speaker 4: level on the ten year yield, and below that you're

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Speaker 4: talking about somewhere in the three sixties kind of area.

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Speaker 4: Three sixty four I think is the next big level. Interestingly,

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Speaker 4: we've kind of over the last couple of weeks since

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Speaker 4: I left on holiday, we've been in a more or

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Speaker 4: lesser range. And because of that range, you've seen momentum

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Speaker 4: indicators suggests that maybe we're going to stay in that

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Speaker 4: range until we got something, you know, big that's gonna

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Speaker 4: knock us out.

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Speaker 2: It all right, Ira, thanks so much for joining us

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Speaker 2: our Jersey. He's a chief US interest rate strategist for

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Speaker 2: Bloomberg Intelligence.

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Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on applecar Play and Android

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Speaker 1: Auto with the Bloomberg Business app. You can also listen

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Speaker 1: live on Amazon Alexa from our flagship New York station

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Speaker 1: Just say Alexa playing Bloomberg eleven thirty.

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Speaker 2: I tell you one of the stocks today again really

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Speaker 2: jumps out at you is Target. Our friends at Tarje

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Speaker 2: put up a solid quarter here and the market loves it.

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Speaker 2: Stocks up thirteen percent, which again for a retailer, that's

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Speaker 2: right size to have that kind of a move in

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Speaker 2: a stock really kind of jumps out at you.

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Speaker 6: And another one I'd point out too TJX YEP up

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Speaker 6: five percent, trading at an all time high, also on

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Speaker 6: the back of strong results.

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Speaker 2: Let's check in with an expert on this stuff, Jen Bartasha.

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Speaker 2: She's Bloomberg Intelligence senior analyst. She covers all that retail stuff.

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Speaker 2: I'm not really sure what's going on there, but she's

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Speaker 2: the expert. So Jen, talk to us about Target. What

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Speaker 2: are they doing right there?

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Speaker 7: Good morning, thanks for having me. And with Target, what

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Speaker 7: we're really seeing is that they sort of reaffirmed their

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Speaker 7: strategy around creating newness reducing prices and enhancing the value

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Speaker 7: perception they have with customers. And this second quarter results,

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Speaker 7: we really see that that is starting to resonate, especially

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Speaker 7: because they're seeing traffic going back into stores as well

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Speaker 7: as online. So really, you know, positive early signs from

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Speaker 7: Target that this momentum might be able to continue.

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Speaker 6: What about when it comes to consumer package good companies,

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Speaker 6: because you and I have talked in the past, and

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Speaker 6: we know that Richmond FED President Tom Barkin watches a

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Speaker 6: price to mix very closely, and that's a lot of

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Speaker 6: the data that you crunch over at Bloomberg Intelligence as

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Speaker 6: far as what that means for inflation and also the

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Speaker 6: direction potentially for FED policy. What are you seeing on

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Speaker 6: there as we begin to get more consumer package good

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Speaker 6: companies reporting as well.

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Speaker 7: Well. What we're seeing is obviously there's political pressure with

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Speaker 7: a lot of rhetoric going on right now about the

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Speaker 7: need to lower prices. We're seeing retailers like Walmart, like Target,

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Speaker 7: like Krger, like Albertson's pushing back on package food companies.

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Speaker 7: Who are you know, in some instances still looking to

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Speaker 7: push through some selective price increases. So there is that

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Speaker 7: tension that's happening kind of behind the scenes, but overall,

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Speaker 7: we are seeing prices on the shelf starting to come down,

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Speaker 7: and that spells relief for consumers. It's just a matter

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Speaker 7: of how long it takes for them to actually recognize

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Speaker 7: it and appreciate it and reward it with higher volumes

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Speaker 7: that they're buying.

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Speaker 3: What is or I.

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Speaker 2: Guess, what's Target saying about the consumer? What are the

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Speaker 2: other retailers that you talk to, Jenny, you follow, what

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Speaker 2: are they saying about the consumer today? Because I'm I

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Speaker 2: think as investors we kind of feel like we're getting

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Speaker 2: mixed messages about the consumer.

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Speaker 7: Yeah, I think when you're talking about the staple space,

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Speaker 7: which is you know where these companies that I follow fall,

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Speaker 7: it's that the consumer is not getting worse, they're not

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Speaker 7: necessarily getting better, but they're sort of holding study. And

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Speaker 7: you know, part of that is that we've had some

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Speaker 7: consumers you kind of trade down into those middle tier

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Speaker 7: stores or even to some of the discount stores in

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Speaker 7: order to save a little bit of money. So the

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Speaker 7: companies in this space are pretty well positioned because they

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Speaker 7: do well no matter what the economic circumstances are, and

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Speaker 7: I think that's showing through with the results. But they're saying,

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Speaker 7: you know, consumers are spending, but it's still very thoughtfully

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Speaker 7: and so the things that will attract them to spending

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Speaker 7: is your merchandise mix, your newness, your convenience, the quality

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Speaker 7: things that will then tempt them into into spending the

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Speaker 7: dollars that they're managing very carefully.

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Speaker 6: We only have about a minute left here, but you've

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Speaker 6: talked a lot about how you're expecting more consumer packaged

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Speaker 6: good companies to roll out promotions in the second half

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Speaker 6: of the year, like buy one, get one free, buy one,

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Speaker 6: get one fifty percent off. What are you seeing so

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Speaker 6: far with that as far as what companies are saying

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Speaker 6: on these earnings calls.

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Speaker 7: Yeah, promotions have definitely accelerated, and we are back at

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Speaker 7: sort of the levels that we were at before the pandemic.

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Speaker 7: What's interesting is most of these companies say that they're

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Speaker 7: able to be more precise so that it's not just

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Speaker 7: a blanket offer like you used to see on the

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Speaker 7: front of an insert or a mailer, but they're sort

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Speaker 7: of targeting promotions to customers based on what they buy,

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Speaker 7: so they're able to preserve a little bit of profitability

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Speaker 7: and still offer higher discounts and so I think that's

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Speaker 7: a pattern that we're expecting to continue through the second

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Speaker 7: half and probably into twenty twenty five as well.

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Speaker 2: A Jen, thanks so much for joining us, as I

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Speaker 2: always really appreciate getting a few minutes of your time.

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Speaker 2: Jen Bartashis, she's a senior analyst of Bloomberg Intelligence covering

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Speaker 2: all the retail space, one of the real leaders on

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Speaker 2: Wall Street providing research analysis on.

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Speaker 3: The retail space.

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Speaker 2: Talking about Tarje Today.

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Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on Apple car Playing and

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Speaker 1: Broud Auto with the Bloomberg Business app. Listen on demand

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Speaker 1: wherever you get your podcasts, or watch us live on YouTube.

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Speaker 2: Jess Meant sitting in for Alex Deale on Paul Sweeney.

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Speaker 2: You're live here in the Bloomberg Interact Broker Studio, streaming

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Speaker 2: live on YouTube as well. Jess, you know someplace I

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Speaker 2: really want to go that is way off the beaten trail,

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Speaker 2: and I probably couldn't even get anybody to go with me.

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Speaker 3: Santa Fe, New Mexico.

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Speaker 6: Oh, I think very very cool, and he's finding people

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Speaker 6: from there, little Bloomberg Intelligence trip.

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Speaker 2: Think so, But now I think I might have a reason.

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Speaker 2: Our next guest is from Santa Fe, so we'll go

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Speaker 2: out and visited our good friends at Thornberg Investment Management,

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Speaker 2: Emily Level, she's a portfolio manager. How she ever got

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Speaker 2: to Santa Fe, New Mexico. I'm sure there's a story there, Emily.

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Speaker 2: Thanks so much for joining us from Santa Fe, New Mexico.

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Speaker 2: What do you make in of this market here, Emily?

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Speaker 2: I mean, boy, we started two weeks ago Monday, a crazy,

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Speaker 2: crazy day, a big sell off of the market. Maybe

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Speaker 2: some panic in the market, I guess, but boy, we

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Speaker 2: seem to have found our sea legs since then, What

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Speaker 2: do you make of this market?

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Speaker 8: It's it's been really interesting, hasn't it. I mean, yeah,

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Speaker 8: two two and a half weeks ago, it felt like

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Speaker 8: the bottom was falling out, and you know, we've really

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Speaker 8: seen a recovery in the strength of the market in

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Speaker 8: the last couple weeks in return of that momentum factor,

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Speaker 8: you know, which I think is a really important indicator

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Speaker 8: of you know, where the market goes from here, and

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Speaker 8: and some pretty decent data as well. I mean, I

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Speaker 8: remember part of that weakness was some of the data

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Speaker 8: that came out, and then since then we've had, you know,

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Speaker 8: pretty decent data on retail figures, some better data on

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Speaker 8: jobs numbers, and I think now everyone's looking ahead to

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Speaker 8: the FED and then obviously what's going to happen in September,

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Speaker 8: and I think it's just really going to be data

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Speaker 8: dependent from here.

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Speaker 6: And we were just talking about Emily how some of

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Speaker 6: that BLS data on the annual revisions through the year

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Speaker 6: into through March were delayed. But if you look at this,

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Speaker 6: US employment rose about one point three percent in the

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Speaker 6: year through March of this year, BLS is saying as well.

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Speaker 6: And then also I was looking at Goldman Sachs was

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Speaker 6: talking about how the release so far points to a

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Speaker 6: downward revision in the realm of about seventy thousand jobs

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Speaker 6: per month. So waiting for that full release here, but

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Speaker 6: wanted to pick your brain because this is obviously backward

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Speaker 6: looking type data. Also Goldman Sacks, their economic desk, was

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Speaker 6: pointing out how when it comes to because they're looking

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Speaker 6: at wages and claims data, so it won't include undocumented workers.

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Speaker 6: So there's about potentially up to a million of them

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Speaker 6: that wouldn't be included in this data. So when there's

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Speaker 6: a lot of jitters about say the July slowdown in payrolls,

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Speaker 6: which is obviously just one month of data. We haven't

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Speaker 6: seen a trend yet, and looking at how the market's

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Speaker 6: reacting s and P five hundred is still hired, it

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Speaker 6: seems like options market wasn't really pricing in a big

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Speaker 6: move here. So what's your kind of view here when

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Speaker 6: you're looking at obviously more backward looking data and does

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Speaker 6: really shape anything? And how much does it really tell

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Speaker 6: us about the labor market?

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Speaker 8: Well, I think, you know, from memory, seventy thousand a

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Speaker 8: monthly revision of about seventy thousand jobs is a little

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Speaker 8: bit on the lower end of or sorry, on the

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Speaker 8: higher end of what the market was expecting. I had

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Speaker 8: in my mind something between thirty and fifty thousand, you know,

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Speaker 8: based on some of the estimates from the cell side.

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Speaker 8: So a little bit weaker, I think, and you know,

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Speaker 8: probably one of the larger revisions we've had in the

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Speaker 8: last decade. So, you know, we definitely think that we're

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Speaker 8: in the later stages of an economic slowdown. I think

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Speaker 8: this data probably confirms that, you know, we're seeing employment

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Speaker 8: growth slow in the US. I think that's normal considering

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Speaker 8: the big moves in rates that we've had over the

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Speaker 8: last two and a half years. I think it's unrealistic

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Speaker 8: that you go from zero percent to five and a

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Speaker 8: half percent rates without any changes in the labor market

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Speaker 8: and you know, sort of aggregate demand figures. So I

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Speaker 8: think it's reasonable. I think we're in the later stages

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Speaker 8: of a cycle. We see that in some of the

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Speaker 8: mixed consumer data that's coming out as well. I don't

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Speaker 8: know that it's going to change anything about, you know,

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Speaker 8: how the FED acts. I think they have to thread

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Speaker 8: this needle between you know, being proactive and data dependent

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Speaker 8: but not seeming to panic. And so I think it

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Speaker 8: probably you know, we still get twenty five basis points

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Speaker 8: of cuts in September. Probably we get a couple more

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Speaker 8: through the end of the year. But I don't know

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Speaker 8: that this data really changes dramatically what Powell is going

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Speaker 8: to say on Friday.

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Speaker 2: Emily, you are the portfolio manager of the Thornburg International

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Speaker 2: Growth Fund. Where do you guys erect internationally? Where do

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Speaker 2: you see opportunities outside of Santa.

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Speaker 8: Fe Well, well, it's so introgused. You say that we're

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Speaker 8: almost international here. We used to be part of Mexico,

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Speaker 8: but one of the things that that we've noticed in

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Speaker 8: the selloff is, you know, while the SMP is just

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Speaker 8: a touch off of all time highs, international markets haven't

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Speaker 8: recovered quite as significantly from the selloffs. So the Nike,

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Speaker 8: you know, still off about ten percent from its all

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Speaker 8: time highs. Some of the markets in Europe as well,

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Speaker 8: and as growth investors were really focused on finding the

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Speaker 8: opportunities that are going to be able to grow earning's

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Speaker 8: power throughout an economic cycle. So we actually see some

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Speaker 8: pretty interesting opportunities that have been provided to us by

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Speaker 8: the recent volatility. So we still like the AI theme.

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Speaker 8: We get a ton of exposure and high quality businesses

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Speaker 8: that are key to this infrastructure build out outside of

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Speaker 8: the United States, so companies like ASML in the Netherlands,

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Speaker 8: like Disco in Japan, there are a number of these

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Speaker 8: semi cop TSMC as well in Taiwan. You know, these

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Speaker 8: semiconductor and semicap equipment companies are core to this build out.

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Speaker 8: Another area that we really like and where we see

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Speaker 8: some strong long term winners in international markets is in

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Speaker 8: the healthcare space. So we have Novo Nordisk, we have Astrozenica.

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Speaker 8: You know, these are really best in class high quality

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Speaker 8: businesses that are now trading you know, well off their

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Speaker 8: their all time highs, particularly in the tech space. And

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Speaker 8: then the other thing that's kind of interesting about what's

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Speaker 8: what we've seen in the last few weeks with you know,

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Speaker 8: the recent moves and the pricing and at the FED

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Speaker 8: cut is a weakening of the US dollar. And what

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Speaker 8: we like to tell our clients, especially as international investors,

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Speaker 8: as you know, you really might want to think about

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Speaker 8: diversification outside of the US. The MAG seven has dominated, obviously,

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Speaker 8: you know, in everybody's minds, and MAG seven's up thirty

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Speaker 8: eight forty percent year to date. But we've got companies

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Speaker 8: outside of the US investors diversification that are up even

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Speaker 8: more than the MAG seven this year. We affectionately dub

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Speaker 8: two companies in Latin America New and Melli the MAG

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Speaker 8: two of Latin America, and they're up a combined fifty

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Speaker 8: one percent in US dollar terms here today.

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Speaker 6: And you were mentioning the s and P five hundred

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Speaker 6: being a whisker away from that all time high if

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Speaker 6: you look great right now, Paul, the SMP's about nine

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Speaker 6: tenths of away from that July sixteenth closing high after

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Speaker 6: falling as much as eight and a half percent after

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Speaker 6: that drawdown, and we sell earlier this month. Suddenly I'm

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Speaker 6: curious because I know you were mentioning how you were

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Speaker 6: managing this growth fund. What are you advising clients to buy?

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Speaker 6: What are you basically suggesting them to sell after we

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Speaker 6: saw such a big drawdown but then a huge bounce back.

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Speaker 8: Yeah, you know, it's been it's been a wild ride.

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Speaker 8: As as we were commenting at the beginning of the show,

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Speaker 8: we really focus on building a diversified portfolio. So we

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Speaker 8: talk about, you know, diversifying those sources of growth, and

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Speaker 8: definitely what we're looking for right now are what are

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Speaker 8: the businesses that can grow earning's power regardless of what's

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Speaker 8: happening with GDP. So we talked a little bit about

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Speaker 8: AI and that copex build out. We think that's going

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Speaker 8: to be pretty resilient and insulated, not totally immune, but

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Speaker 8: pretty insulated from you know, what's going on in the

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Speaker 8: broader macroeconomy. We also think healthcare and some specific areas

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Speaker 8: of healthcare. So you know, we're big holders of Nobonordisk.

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Speaker 8: We think GLP ones have a tremendous runway for growth.

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Speaker 8: There are almost a billion people suffering from obesity today,

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Speaker 8: and when you look at the number of people that

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Speaker 8: have been treated by GLP ones for obesity at this point,

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Speaker 8: we're in the tens of millions. So you know that's

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Speaker 8: going to grow. That demand is going to grow regardless

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Speaker 8: of GDP. Another area that we really like within healthcare

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Speaker 8: is ocular health cataract surgery. A company Alcon that just

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Speaker 8: reported yesterday. You know, they're the leaders in cataract surgery

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Speaker 8: and contact lenses globally, and again, demand for cataract surgery

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Speaker 8: that just grows with an aging population. So inasmuch as

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Speaker 8: investors can get diversification of growth and earnings power that

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Speaker 8: is dependent not on on GDP, we think that that

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Speaker 8: is sort of a wise area to be focusing on

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Speaker 8: at all times, but particularly now when you know there's

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Speaker 8: a lot of mixed messages. I mean, we were talking

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Speaker 8: earlier about the consumer in the United States. You've had

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Speaker 8: pretty mixed data from companies in the consumer space in general,

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Speaker 8: I think pointing to a consumer trading down looking for

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Speaker 8: value for money, and so you know, we're really being

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Speaker 8: cautious in the consumer space and focusing on those areas

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Speaker 8: of growth where we find businesses that can continue to

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Speaker 8: go their earnings power through a cycle.

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Speaker 2: Hey, Emily, thanks so much for joining us. Really appreciate

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Speaker 2: getting your thoughts this morning.

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Speaker 3: Emily Levelle.

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Speaker 2: She's a portfolio manager Thornburg Investment Management, joining us from

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Speaker 2: Santa Fe, New Mexico.

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Speaker 3: I'm putting that on the bucket list. I'm going there,

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Speaker 3: let's do it. I'm going to add, really, it looks cool.

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Speaker 3: I was while you were talking to Emily.

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Speaker 2: I was googling all through about Santa Fe, New Mexic what,

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Speaker 2: not paying attention at all.

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Speaker 3: It looks very very cool out there in the desert.

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Speaker 3: It's got a big arts community and so on.

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Speaker 9: But wait till it gets a little bit cooler.

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Speaker 2: Maybe yes, because it is in the middle of the desert,

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Speaker 2: it seems like a pretty cool place to be. And

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Speaker 2: I don't know any money management firms out there other

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Speaker 2: than Thornburg Investment Management. I know there probably are, but

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Speaker 2: that's the reason enough itself to go check it out.

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Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on applecar Play and Android

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Speaker 1: Auto with the Bloomberg Business app. You can also listen

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Speaker 1: just say Alexa playing Bloomberg eleven thirty.

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Speaker 2: Let's get back to those earnings coming out of the retailers, Macy's, TJX, Tarja,

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Speaker 2: a whole bunch of stuff coming out there.

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Speaker 3: Mary Ross Gilbert she joined us.

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Speaker 2: She's a senior analyst for Bloomberg Intelligence covering retail. She's

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Speaker 2: based in Los Angeles. So Mary's let's start with Macy's here.

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Speaker 2: It just seems like, you know, maybe one or two

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Speaker 2: steps forward, one step back. What'd you take away from

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Speaker 2: Macy's earnings here?

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Speaker 10: Yeah, So, as with any turnaround, and here we are

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Speaker 10: in another iteration of trying to get growth back for this.

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Speaker 10: It's the largest department store, Macy's. They did show traction

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Speaker 10: in the first fifty stores. The comps were up one percent,

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Speaker 10: and that was an improvement from the first quarter, which

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Speaker 10: was up just less than one percent. But the fact

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Speaker 10: is that the rest of the go forward stores were

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Speaker 10: down three point seven percent. This is on a comparable

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Speaker 10: basis and its owned plus license, so it includes license

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Speaker 10: brands that they'll have, you know, within the mix there.

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Speaker 10: So they're showing traction in those little stores. But with

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Speaker 10: the rest of the base, you know, being very weak

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Speaker 10: and as they pointed out, they weren't really getting the conversion.

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Speaker 10: What they're finding is you bring in sales people. Wow,

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Speaker 10: that's really what if you think about department stores and

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Speaker 10: where they came from, that's what they were known for

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Speaker 10: in the past was service. But over the last couple

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Speaker 10: of decades, the service and the salespeople have sort of

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Speaker 10: left the stores. Now they're finding if they bring them

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Speaker 10: back and they bring back the relevant brands, because one

437
00:21:03,080 --> 00:21:05,720
Speaker 10: of the things that Tony Spring, CEO of the company,

438
00:21:06,119 --> 00:21:10,600
Speaker 10: indicated is having newness and having the relevant brands that

439
00:21:10,640 --> 00:21:14,960
Speaker 10: consumers care about. That's where you can get the impulse purchases.

440
00:21:15,440 --> 00:21:18,240
Speaker 10: And so they're finding bringing in like a Carl wager

441
00:21:18,359 --> 00:21:25,000
Speaker 10: Field or a Veclove Fee, which is it's like a Parisian,

442
00:21:25,320 --> 00:21:29,600
Speaker 10: a chic Parisian type brand. It's a US brand, but

443
00:21:29,680 --> 00:21:34,120
Speaker 10: it has that Paris streetwear aesthetic and that's resonating really

444
00:21:34,160 --> 00:21:36,159
Speaker 10: well and they're getting very strong conversion.

445
00:21:36,560 --> 00:21:37,600
Speaker 9: So bringing back.

446
00:21:37,400 --> 00:21:41,679
Speaker 10: Service levels, bringing back the relative relevant, relevant brands is

447
00:21:41,760 --> 00:21:45,120
Speaker 10: really making a difference in those fifty stores. So they're

448
00:21:45,119 --> 00:21:47,199
Speaker 10: going to add another one hundred stores where they're going

449
00:21:47,240 --> 00:21:50,040
Speaker 10: to bring in service and handbags. They did see some

450
00:21:50,160 --> 00:21:52,840
Speaker 10: strong sales with handbags again in those stores with the

451
00:21:52,920 --> 00:21:58,400
Speaker 10: Lauren Ralph Lauren brand. So that's where I think you're

452
00:21:58,440 --> 00:22:03,320
Speaker 10: going to see some improvements. Is just really better signage,

453
00:22:03,440 --> 00:22:06,679
Speaker 10: cleaner stores. We've been seeing those improvements in the store

454
00:22:06,720 --> 00:22:07,960
Speaker 10: that we frequent.

455
00:22:08,640 --> 00:22:10,399
Speaker 9: They just need to take it across the rest of

456
00:22:10,440 --> 00:22:10,800
Speaker 9: the base.

457
00:22:11,760 --> 00:22:14,120
Speaker 6: And it seems like an about face because justin May,

458
00:22:14,160 --> 00:22:17,159
Speaker 6: when we had heard from Macy's previously, in their prior

459
00:22:17,560 --> 00:22:21,080
Speaker 6: earnings report, they had beat estimates also raised the company's

460
00:22:21,080 --> 00:22:22,840
Speaker 6: outlook for the remainder of the year. But as you know,

461
00:22:22,960 --> 00:22:26,119
Speaker 6: this leadist report comes on the heels of the company

462
00:22:26,119 --> 00:22:28,920
Speaker 6: turning down that close to seven billion dollars buyout to

463
00:22:28,960 --> 00:22:31,080
Speaker 6: offer from one of its shareholders, our Coals and of

464
00:22:31,080 --> 00:22:33,920
Speaker 6: course it's partner Bridgegade Capital Management. Do we have any

465
00:22:33,920 --> 00:22:36,480
Speaker 6: indication of whether or not that could be back on

466
00:22:36,560 --> 00:22:37,720
Speaker 6: the table at some point.

467
00:22:39,560 --> 00:22:41,439
Speaker 9: I don't know if that'll be back on the table.

468
00:22:42,119 --> 00:22:46,600
Speaker 10: I really think that they weren't able to demonstrate financing.

469
00:22:47,240 --> 00:22:50,119
Speaker 10: I think that was the problem with that, and I

470
00:22:50,160 --> 00:22:52,800
Speaker 10: also think that the price was low because even though

471
00:22:52,840 --> 00:22:56,199
Speaker 10: Macy's is showing very weak results right now, and the

472
00:22:56,240 --> 00:22:59,520
Speaker 10: market is showing investors don't really like what they're seeing

473
00:22:59,560 --> 00:23:03,320
Speaker 10: in the court. It's one quarter and it's going to

474
00:23:03,400 --> 00:23:05,680
Speaker 10: take time before we see real traction.

475
00:23:05,920 --> 00:23:07,919
Speaker 9: So a year from now the story could.

476
00:23:07,800 --> 00:23:11,199
Speaker 10: Look very different if they're really able to execute on

477
00:23:11,240 --> 00:23:14,960
Speaker 10: this plan closing the stores. They haven't closed the stores yet.

478
00:23:14,960 --> 00:23:17,800
Speaker 10: They're going to close the first fifty five. It was

479
00:23:17,840 --> 00:23:20,520
Speaker 10: going to be fifty. They up to another five stores

480
00:23:21,640 --> 00:23:23,120
Speaker 10: are going to close at the end of the year.

481
00:23:23,240 --> 00:23:26,120
Speaker 10: They always wait until after the holidays because that's when

482
00:23:26,119 --> 00:23:28,640
Speaker 10: they generate the most cash. And then of course they're

483
00:23:28,640 --> 00:23:31,160
Speaker 10: going to close another one hundred stores over the next

484
00:23:31,200 --> 00:23:31,960
Speaker 10: couple of years.

485
00:23:32,000 --> 00:23:35,480
Speaker 9: But again they might accelerate that, so it's going to

486
00:23:35,560 --> 00:23:36,840
Speaker 9: take time to show traction.

487
00:23:37,680 --> 00:23:40,439
Speaker 10: So we'll see how the third quarter and fourth quorder go,

488
00:23:40,640 --> 00:23:42,480
Speaker 10: especially with some of the changes that they're making to

489
00:23:42,480 --> 00:23:46,320
Speaker 10: these incremental stores. But nonetheless, you can see who's gaining,

490
00:23:46,520 --> 00:23:49,880
Speaker 10: and it's on the off price side. That's where, of course,

491
00:23:49,880 --> 00:23:53,359
Speaker 10: we have TGX numbers out today and of course they beat.

492
00:23:54,080 --> 00:23:56,520
Speaker 2: Yeah, let's go to t TJX, owner of TJ max.

493
00:23:56,520 --> 00:23:58,840
Speaker 2: Stock's hit an all time high today.

494
00:23:59,119 --> 00:24:00,880
Speaker 3: What's TJX. What are they getting right?

495
00:24:02,200 --> 00:24:04,439
Speaker 9: What they're getting right is they have all those brands.

496
00:24:04,480 --> 00:24:05,680
Speaker 9: They have the Treasure Hunt.

497
00:24:05,920 --> 00:24:10,159
Speaker 10: There's fresh merchandise in those stores every week, and the

498
00:24:10,240 --> 00:24:13,600
Speaker 10: brands range from the very high end, so they'll have

499
00:24:14,320 --> 00:24:17,879
Speaker 10: Gucci and Chloe handbags, and then they'll also have like

500
00:24:18,080 --> 00:24:21,640
Speaker 10: a Klin. So they're sort of covering all of the

501
00:24:21,640 --> 00:24:26,639
Speaker 10: demographics with their assortments and they're making it relevant by store.

502
00:24:27,080 --> 00:24:27,440
Speaker 7: They have.

503
00:24:29,160 --> 00:24:30,800
Speaker 9: They have the winning formula.

504
00:24:31,240 --> 00:24:33,760
Speaker 10: This is an expertise that they have built up for

505
00:24:33,880 --> 00:24:35,480
Speaker 10: years and they're the largest out there.

506
00:24:35,480 --> 00:24:39,280
Speaker 9: It's a fifty six billion dollars in sales company.

507
00:24:39,640 --> 00:24:42,119
Speaker 10: And so in their quarter, of course, they beat with

508
00:24:42,320 --> 00:24:45,320
Speaker 10: four percent comp sales and the consensus with two point

509
00:24:45,480 --> 00:24:48,479
Speaker 10: seven and guidance two point you know, sort of in

510
00:24:48,480 --> 00:24:51,400
Speaker 10: that one to two percent or low single digit range,

511
00:24:51,400 --> 00:24:53,960
Speaker 10: and of course they raise their guidance. They're now expecting

512
00:24:54,000 --> 00:24:56,080
Speaker 10: comp sales to be sort of in that three to

513
00:24:56,160 --> 00:24:59,800
Speaker 10: four percent range, and they raise their EPs by about six.

514
00:25:00,040 --> 00:25:00,159
Speaker 8: Yes.

515
00:25:00,800 --> 00:25:04,160
Speaker 2: Interest, Yeah, really solid results, all time high for the stock.

516
00:25:04,240 --> 00:25:06,720
Speaker 2: As you mentioned, Mary, that really got it right. Mary

517
00:25:06,800 --> 00:25:09,200
Speaker 2: Ross Gilbert, thank you so much for joining us. Mary

518
00:25:09,280 --> 00:25:11,560
Speaker 2: Ross Gilbert is a senior ecuady analyst. He covers retail

519
00:25:11,800 --> 00:25:15,800
Speaker 2: for Bloomberg. Intelligency is located in Los Angeles, California, joining

520
00:25:15,840 --> 00:25:17,600
Speaker 2: us via that zoom thing.

521
00:25:17,680 --> 00:25:21,639
Speaker 3: So good news for TJX. Not so much for Macy's.

522
00:25:21,720 --> 00:25:24,480
Speaker 6: No still on pace. It holds these losses, worst day

523
00:25:24,760 --> 00:25:25,480
Speaker 6: in about a year.

524
00:25:25,600 --> 00:25:27,359
Speaker 3: Okay, very good, we'll keep on top of that.

525
00:25:28,800 --> 00:25:32,680
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

526
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530
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531
00:25:49,560 --> 00:25:52,600
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Speaker 3: Live on YouTube. So head over to YouTube dot com.

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Speaker 2: And search Bloomberg Podcast and that's where you will find us. Boy,

534
00:25:58,560 --> 00:26:02,639
Speaker 2: the auto industry is pulling back big time from the

535
00:26:02,840 --> 00:26:05,680
Speaker 2: s the EV business. I mean the latest news today,

536
00:26:05,720 --> 00:26:10,000
Speaker 2: Ford Motor Company scraps electric suv and a one point

537
00:26:10,119 --> 00:26:14,320
Speaker 2: nine billion dollar hit to its EV ambitions, canceling the

538
00:26:14,320 --> 00:26:18,480
Speaker 2: fully electric three row utility vehicle Spending on EV's will

539
00:26:18,520 --> 00:26:20,919
Speaker 2: drop to about thirty percent of CAPEX from forty percent.

540
00:26:20,960 --> 00:26:23,760
Speaker 2: Steve Man joins is here. He's the global autos analyst

541
00:26:23,880 --> 00:26:27,240
Speaker 2: for Bloomberg Intelligence. He's done in Princeton, New Jersey. Steve,

542
00:26:27,280 --> 00:26:31,160
Speaker 2: what's going on with the legacy auto companies and their

543
00:26:31,280 --> 00:26:35,360
Speaker 2: transition if there is one to EV's, what's going on?

544
00:26:36,320 --> 00:26:41,000
Speaker 11: Yeah, it's a huge kind of one eighty turn for Ford. Remember,

545
00:26:41,119 --> 00:26:44,320
Speaker 11: you know, they were probably one of the first Western

546
00:26:44,359 --> 00:26:48,440
Speaker 11: automakers to actually introduce evs. You're the Mustang mach Ee,

547
00:26:49,119 --> 00:26:52,840
Speaker 11: the Ford one fifty Lightning and you know they're still

548
00:26:52,840 --> 00:26:55,920
Speaker 11: selling well. But I think it's they're actually bleeding quite

549
00:26:55,920 --> 00:26:58,280
Speaker 11: a bit of money in the last twelve months. They've

550
00:26:58,320 --> 00:27:02,960
Speaker 11: lost five billion on ev So, you know, I think,

551
00:27:03,080 --> 00:27:05,919
Speaker 11: you know, they need to revisit and see, uh, instead

552
00:27:05,920 --> 00:27:08,919
Speaker 11: of a market leader in evs, they probably needs to,

553
00:27:09,480 --> 00:27:12,200
Speaker 11: you know, step back and maybe become a follower until

554
00:27:12,240 --> 00:27:13,520
Speaker 11: the market recovers.

555
00:27:13,920 --> 00:27:15,960
Speaker 6: And just looking at it stock Paul and I were

556
00:27:15,960 --> 00:27:19,480
Speaker 6: talking about this earlier. The taker symbol is f for Ford.

557
00:27:19,520 --> 00:27:22,080
Speaker 6: When you see the draw down that it had from

558
00:27:22,080 --> 00:27:24,480
Speaker 6: that peak that we did see earlier, in July dropped

559
00:27:24,520 --> 00:27:27,359
Speaker 6: as much as actually thirty three percent. Now it's about

560
00:27:27,920 --> 00:27:30,840
Speaker 6: still ways from that peak that we did see. But

561
00:27:30,920 --> 00:27:33,879
Speaker 6: what is it that shareholders really need to hear in

562
00:27:33,920 --> 00:27:36,760
Speaker 6: the messaging from Ford in order to turn that stock around.

563
00:27:37,760 --> 00:27:42,720
Speaker 11: Yeah, a couple things. So, you know, today the stock

564
00:27:42,920 --> 00:27:47,040
Speaker 11: is really not reacting to to this news. You know,

565
00:27:47,080 --> 00:27:50,119
Speaker 11: I think what the investors are looking for is really

566
00:27:50,560 --> 00:27:53,919
Speaker 11: similar to what GM and Stillentis has done, which is

567
00:27:54,000 --> 00:27:57,520
Speaker 11: buy backstock. You know, they want to hear that they're

568
00:27:57,760 --> 00:28:00,560
Speaker 11: you know, they're gonna you know, spend, use the cash,

569
00:28:01,040 --> 00:28:04,240
Speaker 11: use some of that cash that they're conserving from cutting

570
00:28:04,280 --> 00:28:07,119
Speaker 11: back R and D, and buy back some stock, return

571
00:28:07,240 --> 00:28:10,840
Speaker 11: some to the shareholder. So, you know, I think that's

572
00:28:11,240 --> 00:28:14,959
Speaker 11: why the stock hasn't moved that much today in reaction

573
00:28:15,040 --> 00:28:15,920
Speaker 11: to this news.

574
00:28:16,480 --> 00:28:18,480
Speaker 2: All Right, Steve, this kind of goes to the heart

575
00:28:18,520 --> 00:28:21,399
Speaker 2: of the matter. I think for me and probably a

576
00:28:21,400 --> 00:28:26,119
Speaker 2: lot of investors in this auto industry is what really,

577
00:28:26,359 --> 00:28:30,159
Speaker 2: at the end of the day, is consumer demand for evs.

578
00:28:30,840 --> 00:28:33,760
Speaker 2: Is it fair to say it's not as much today

579
00:28:33,800 --> 00:28:36,240
Speaker 2: as maybe the industry thought two three years ago.

580
00:28:37,440 --> 00:28:40,520
Speaker 11: Yeah, I think the estimates out there in the past

581
00:28:40,600 --> 00:28:43,880
Speaker 11: were probably a little bit frothy, like we're actually expecting,

582
00:28:44,440 --> 00:28:48,480
Speaker 11: you know, penetration to be around twenty five maybe thirty

583
00:28:48,520 --> 00:28:52,320
Speaker 11: percent by twenty thirty, but other estimates out there were

584
00:28:52,520 --> 00:28:56,600
Speaker 11: like fifty seventy five percent penetration rate by twenty thirty.

585
00:28:57,000 --> 00:28:59,600
Speaker 11: It's a little bit too aggressive. I think we're just

586
00:28:59,640 --> 00:29:03,280
Speaker 11: coming back through reality from the hype we have. But

587
00:29:03,320 --> 00:29:06,040
Speaker 11: the other thing is there's a lot of competition out

588
00:29:06,040 --> 00:29:10,200
Speaker 11: there right. The Chinese are really looking to you know,

589
00:29:10,280 --> 00:29:15,400
Speaker 11: compete with the legacy auto makers on cost, on technology,

590
00:29:16,120 --> 00:29:19,600
Speaker 11: and you know, that brings up another question that I

591
00:29:19,640 --> 00:29:22,400
Speaker 11: think investors have in their mind is, you know, is

592
00:29:22,440 --> 00:29:25,480
Speaker 11: this the right strategy for Ford really to step back

593
00:29:25,560 --> 00:29:28,600
Speaker 11: at this moment? Should they Should they be doubling down right,

594
00:29:28,760 --> 00:29:32,680
Speaker 11: investing more and really compete on a global level. So,

595
00:29:33,960 --> 00:29:36,800
Speaker 11: you know, so hopefully that answers questions and.

596
00:29:36,720 --> 00:29:39,000
Speaker 6: You've written about too when it comes to Ford and

597
00:29:39,080 --> 00:29:42,840
Speaker 6: the rising inventories as well as the increasing price competition

598
00:29:43,160 --> 00:29:46,800
Speaker 6: when it comes to a profitability headwind here, what as

599
00:29:47,000 --> 00:29:48,840
Speaker 6: we know as far as what the rest of the

600
00:29:48,960 --> 00:29:51,040
Speaker 6: year could look like when it comes to those earnings

601
00:29:51,080 --> 00:29:53,240
Speaker 6: calls that executives have talked about.

602
00:29:53,760 --> 00:29:56,000
Speaker 11: Oh, there's a lot of risk in the second half.

603
00:29:56,880 --> 00:30:00,440
Speaker 11: I think we're heading back to pre COVID levels, you know,

604
00:30:00,600 --> 00:30:05,000
Speaker 11: with the supply chains, booths out, you know, every you know,

605
00:30:05,080 --> 00:30:07,760
Speaker 11: they're they're they're ramping up, they've been ramping up production.

606
00:30:08,280 --> 00:30:10,680
Speaker 11: And at the same time, interest rate is still high. Right,

607
00:30:10,760 --> 00:30:14,440
Speaker 11: there are talks about cutting interest rates to help out

608
00:30:14,440 --> 00:30:17,440
Speaker 11: the consumers, but you know, we haven't seen that yet,

609
00:30:17,480 --> 00:30:19,920
Speaker 11: and you know we you know, it probably needs more

610
00:30:19,960 --> 00:30:21,920
Speaker 11: than a few a couple of cuts before we get

611
00:30:22,000 --> 00:30:25,360
Speaker 11: to a point where consumer gets more excited about buying.

612
00:30:25,480 --> 00:30:29,280
Speaker 11: You know, a much more expensive vehicle today than it

613
00:30:29,480 --> 00:30:32,080
Speaker 11: was three years ago. You know, average price for vehicles

614
00:30:32,120 --> 00:30:35,680
Speaker 11: fifty thousand dollars now is not thirty five, it's not forty,

615
00:30:35,720 --> 00:30:38,720
Speaker 11: it's fifty thousand. So you know, monthly cost is a

616
00:30:38,760 --> 00:30:42,080
Speaker 11: lot higher for consumer, the cost of acquisition, the cost

617
00:30:42,120 --> 00:30:44,240
Speaker 11: of ownership is much higher today than before.

618
00:30:44,640 --> 00:30:46,400
Speaker 3: All right, Steve Man, thanks so much for joining us.

619
00:30:46,400 --> 00:30:47,200
Speaker 3: Really appreciate it.

620
00:30:47,560 --> 00:30:50,520
Speaker 2: Steve Man, Global autos analyst for Bloomberg Intelligence. He's done

621
00:30:50,520 --> 00:30:52,280
Speaker 2: at Prince in New Jersey. Appreciate getting a few minutes

622
00:30:52,280 --> 00:30:55,120
Speaker 2: of his time. They're on forward kind of backing away

623
00:30:55,120 --> 00:30:57,040
Speaker 2: to some degree, from its ev ambitions.

624
00:30:57,360 --> 00:31:01,880
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625
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626
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627
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628
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629
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