Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along
Speaker 2: with Lisa Bromwitz and Amrie Hordern. Join us each day
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Speaker 2: Terminal and the Bloomberg Business App. Julian Emmanuel of Evercore
Speaker 2: saying the bullmarket isn't over, but there will be volatility ahead.
Speaker 2: The relief that the election was clear and uncontested has
Speaker 2: given way to a correction that acknowledges the geopolitical policy
Speaker 2: and interest rate driven strategies head in twenty twenty five.
Speaker 2: Julian joins us now for more. Julink of Monitor, Good morning,
Speaker 2: Let's talk about some price targets. Femo sixty seven hundred,
Speaker 2: twenty twenty five year Rent Goldmant's sixty five, Morgan Stanley
Speaker 2: sixty five hundred, You Think mid twenty twenty five sixty
Speaker 2: six hundred what's behind that.
Speaker 3: So we think there's a lot of parallels in the
Speaker 3: way the market has digested the election and moving beyond
Speaker 3: to not President Trump's first year in the first term,
Speaker 3: but the second year of the first term. Think about
Speaker 3: that twenty eighteen, the year of tax cuts, the year
Speaker 3: of tariff and trade wars, and the year of gently
Speaker 3: rising interest rates until they rose a bit too far
Speaker 3: at the.
Speaker 4: End of the year.
Speaker 3: That's what really makes sense to us. And then, of
Speaker 3: course the other part of it is a FED that
Speaker 3: would like not to be at loggerheads with the president,
Speaker 3: but the data and the policy where inflation and growth
Speaker 3: may be going may cause them to have to sort
Speaker 3: of ease up on the rate cutting as opposed to
Speaker 3: the counterpoint where they were hiking in twenty eighteen in.
Speaker 2: The days after the election in the media after mouth
Speaker 2: you speculated on the prospect of inequities, the running is
Speaker 2: instilled somewhat. What's your view on that now.
Speaker 3: I think there's a digestion phase going on processing all
Speaker 3: the change. Look, the American people voted for change. We
Speaker 3: are getting change fast and furious, and there's clearly a
Speaker 3: bit of it. I think the other aspect of it
Speaker 3: is is that going into the vote, the very clear
Speaker 3: preference among our clients.
Speaker 4: Was to see a divided government.
Speaker 3: So but you have the unified government. The mandate is
Speaker 3: to move fast and that means more volatility, and again
Speaker 3: there's a lot of uncertainty about how policy.
Speaker 4: Is going to be implemented.
Speaker 3: We talked about those dynamics and there's a recognition that
Speaker 3: the bond market is going to call the tune for
Speaker 3: the next year.
Speaker 5: At least that's what.
Speaker 6: I wanted to pick up on. That was the expectation
Speaker 6: that essentially you can say whatever you want, try to
Speaker 6: find whatever loopholes, but ultimately the big check is going
Speaker 6: to be the ten year yield going to come in
Speaker 6: and rule the roost. We haven't seen it rule the roost.
Speaker 6: In fact, the rise that we've seen in Healds has
Speaker 6: not impeded at all the rally that we saw posts election.
Speaker 6: At what point does it actually start to exert its pressure.
Speaker 3: So if you look the last week or two, the
Speaker 3: bond market has been a bit better behave as we're
Speaker 3: trying to digest this soul, and we've stalled out a
Speaker 3: below four and a half on the ten year yield
Speaker 3: for now we think if you start moving towards four
Speaker 3: and three quarters and then of course the cycle high
Speaker 3: is it five percent? And that isn't our base case
Speaker 3: at this point because frankly, what we think when the
Speaker 3: Treasury Secretary has announced, whoever that person is, it will
Speaker 3: likely be a person who understands the dynamics of the
Speaker 3: bond market and the need to project policy and concern
Speaker 3: there because frankly, as the bond market is moving, that
Speaker 3: tells you how far you can go, as it did
Speaker 3: in twenty eighteen.
Speaker 6: Is this a paradox somebody who is going to be
Speaker 6: a Treasury Secretary that gets some of these policies across
Speaker 6: that also is sensitive to the bond market.
Speaker 3: There's a lot of constituencies to please, and the main
Speaker 3: constituency is going to be the occupant of the White
Speaker 3: House starting January twentieth. It's a very difficult dance, made
Speaker 3: even more challenging by the fact that as good as
Speaker 3: this bull market is, we have to acknowledge that at
Speaker 3: twenty five times earnings, stocks are expensive, which is why
Speaker 3: we see in the volatility of late because any news
Speaker 3: that sort of disrupts the narrative can cause volatility.
Speaker 7: Well Juliana and John mentioned it my reporting overnight with
Speaker 7: Slea Moo'sen. Nancy Cook is at Kevin Walsh and Mark
Speaker 7: Rowan will be done in Palm Beach today for interviews.
Speaker 7: Scott Bessen is also still in the running, and then
Speaker 7: Center Hankrity is kind of in the mix, maybe a
Speaker 7: dark horse canon those four men. Will they be sympathetic
Speaker 7: to what you're talking about? Will they understand the market dynamics?
Speaker 3: I think the market interprets the answer to that to
Speaker 3: be yes at this point, and I think the reason
Speaker 3: that this has taken longer than expected is to fully
Speaker 3: appreciate the difficulty of the dynamic and the importance of
Speaker 3: making sure the bond market doesn't run away, so the
Speaker 3: policy initiatives aren't limited and we get the change that
Speaker 3: the country voted for.
Speaker 7: When you're talking about though the sixty three sixty six
Speaker 7: hundred end of June twenty twenty five for the s
Speaker 7: and P five hundred, at some point are teriffs going
Speaker 7: to bite into that.
Speaker 3: It depends how it unfolds. If you think about twenty
Speaker 3: eighteen and look the numbers that have been put out there,
Speaker 3: I think most people would acknowledge our sort of bid
Speaker 3: offer type spreads, and what you're likely to get is
Speaker 3: not necessarily those extreme numbers. And it was much that
Speaker 3: way in twenty eighteen. At a certain point, again, I
Speaker 3: go back to the bond market. The president likes to
Speaker 3: keep score with the stock market, for sure, but the
Speaker 3: bond market will call the tune for the stock market
Speaker 3: as well. And we'll tell you how much tariffs will
Speaker 3: end up biting.
Speaker 2: Let's talk about this market in video, which ultimately is
Speaker 2: the market on the S and P five hundred. It
Speaker 2: makes up about nine percent of the SMP, about nine
Speaker 2: percent of the that's that one hundred, rather than about
Speaker 2: seven percent of the S and P five hundred. Should
Speaker 2: I be comfortable with that or uncomfortable with that? That
Speaker 2: does want to bring you comfidence or anxiety.
Speaker 3: Both, okay, because you can't get away from the fact
Speaker 3: that the mag seven has been the driver of this
Speaker 3: bull market in the last.
Speaker 5: Couple of years.
Speaker 3: And you can't get away from the fact that the
Speaker 3: concentration of the top five or the top seven stocks is,
Speaker 3: you know, so far surpassed the bubble two thousand peaks
Speaker 3: that it's almost not even a benchmark anymore. It's just
Speaker 3: the way the index and investing have.
Speaker 2: Evolved really really mixed few months for Semis. You can
Speaker 2: see that the index it's pretty messy, to be honest
Speaker 2: with you, and hideousic cly a winner at the Yes
Speaker 2: so far does the town of Story compromise.
Speaker 4: That it could? Okay?
Speaker 3: But I think what's going to happen is you're going
Speaker 3: to figure out as part of the negotiation a way
Speaker 3: to work around that. And if you think about that
Speaker 3: company in particular, any of the friction that we've had
Speaker 3: that's essentially been building for the last several years with
Speaker 3: China hasn't really been a major impediment to the progress
Speaker 3: and the AI revolution itself, which we think has a
Speaker 3: lot more to go.
Speaker 6: There's a larger question here. Is Donald Trump going to
Speaker 6: celebrate the biggest company sort of the American champions, and
Speaker 6: have carve outs for them and enable their growth and expansion,
Speaker 6: or will there be an effort to break up some
Speaker 6: of the big tech cater some of the more populous
Speaker 6: aspects the JD. Van's kind of approach to a lot
Speaker 6: of these industries that have been the main drivers of
Speaker 6: profitability and stock returns.
Speaker 3: I think again it's going to see, let's see how
Speaker 3: it evolves. I would say our baseline view is that
Speaker 3: you are going to get deregulation, which is actually going
Speaker 3: to spur capital markets and m and A. But in fact,
Speaker 3: what you might see is smaller cap companies, particularly those
Speaker 3: that don't have international exposure, that don't need to worry
Speaker 3: about regulatory regimes in either Europe or China, you know,
Speaker 3: blocking any type of transaction. That's probably where which informs
Speaker 3: our view of liking small cap stocks. I think that's
Speaker 3: where that's going.
Speaker 2: Jadian, You're hopeful that we get a trust repick before
Speaker 2: the end of the week.
Speaker 3: It would be nice.
Speaker 2: Yeah, we don't have to talk about this anymore without
Speaker 2: the col jongus around the tablest David Malpass, the former
Speaker 2: president of the World Bank. David, Good morning to you, sir.
Speaker 2: Question got to address it. Have you been down Tomaro
Speaker 2: Langa to interview?
Speaker 1: I was down there last week and met with people.
Speaker 1: You know, Trump has the opportunity to put in really
Speaker 1: good people across the government, and I think that's the
Speaker 1: process and it's happening quickly, much faster than in twenty sixteen,
Speaker 1: so I.
Speaker 4: Think that's great.
Speaker 7: Well, you down there for anything specific? You were part
Speaker 7: of the Trump administration. The first iteration started at Treasury,
Speaker 7: ended at the World Bank. What potentially could you see
Speaker 7: your role in Trump two point zero that.
Speaker 1: I want to be helpful and doing that as I can.
Speaker 1: As I say, there's huge problems that need to be solved.
Speaker 1: If you think about where the US has been left
Speaker 1: here at the end of the Biden administration, it's weak
Speaker 1: on foreign policy, it's got the economy still suffering from
Speaker 1: the inflation, the persistent inflation, the bank regulatory policy is
Speaker 1: really mixed up. Energy is not doing what it could be.
Speaker 1: So there's all these problems to fix, and I think
Speaker 1: there needs to be lots of people to do it.
Speaker 4: So you're in the mix.
Speaker 7: When it comes to the direction of policy. Can you
Speaker 7: talk to us about how do you see the direction
Speaker 7: of policy in Trump two point zero when it comes
Speaker 7: to things like tariffs. Given the fact that if personnel's policy,
Speaker 7: he put what we've envisioned over the course of the campaign,
Speaker 7: a tariff hawk in charge of Commerce, that individual did
Speaker 7: not get the nod for Treasury that he wanted, Howard Lutnik,
Speaker 7: But with this Commerce appointment, the statements that he'll have
Speaker 7: more of a role in USTR as well.
Speaker 1: We have to look to how the President phrases it
Speaker 1: and what he wants done as far as who's pushing
Speaker 1: forward the agendas. This idea of Commerce and USTR being
Speaker 1: attached is a long standing one. I worked for Senator
Speaker 1: Roth in nineteen ninety when there were the actual proposals
Speaker 1: to merge them because of their overlapping roles on tariffs,
Speaker 1: and so that's not new.
Speaker 4: But there's so much to the whole agenda.
Speaker 1: Think of what has to be built out in terms
Speaker 1: of downsizing the overreach of Washington, all these people that
Speaker 1: are employed to write regulations that slow the economy. There
Speaker 1: are better ways to do that, and that's one of
Speaker 1: the major initiatives. Another one is on energy. Think of
Speaker 1: the strength of the team that's been put in place
Speaker 1: with Chris Wright, with Burnham, Governor Burnham, and with even
Speaker 1: Lee Zelden. EPA is going to be an important part
Speaker 1: of it. And so you've got the core of the
Speaker 1: team that can really create energy growth for the US
Speaker 1: and that's good for everybody in terms of affordability.
Speaker 7: Okay, maybe the core, but the nucleus of this team
Speaker 7: we are missing. As a Treasury Secretary and right now
Speaker 7: there's four names. Maybe we would even say it's coalescing
Speaker 7: around three Scott Bess and Kevin Walsh, Mark Rowan. Two
Speaker 7: of them will be in Palm Beach today for interviews.
Speaker 7: Do you have an idea of what the President is
Speaker 7: looking for when it comes to his Treasury secretary.
Speaker 4: No, I don't have insight on that.
Speaker 1: He wants really good people that are going to get
Speaker 1: the job done and get it done fast, and that's
Speaker 1: pretty reasonable.
Speaker 7: Do you think of these three individuals we're showing right
Speaker 7: there are.
Speaker 1: Good people that can get the job done, get it
Speaker 1: done fast. You know, the tax bill is going to
Speaker 1: be needed right off the bat, so you as you
Speaker 1: look into twenty twenty five, I did that Wall Street
Speaker 1: Journal article on the fiscal train wreck or the you know,
Speaker 1: it's really a perfect storm coming together. You've got to
Speaker 1: get the tax bill done, You've.
Speaker 4: Got to get a budget out really fast.
Speaker 1: You've got the debt limit coming at you, and it's
Speaker 1: a very difficult one because you've got to get your
Speaker 1: party to vote for increase in the national debt. That's
Speaker 1: always a sticky one, has been for thirty years. The
Speaker 1: reconciliation bills will be challenging, and all of that has
Speaker 1: to come together with the clock ticking in.
Speaker 4: Terms of market confidence.
Speaker 1: You want to build the confidence in markets as you
Speaker 1: go forward.
Speaker 6: So this is the reason why a lot of people
Speaker 6: are saying that in the first administration for Donald Trump,
Speaker 6: the stock market was the ultimate check. In this administration,
Speaker 6: it's going to be the bond market. How do you
Speaker 6: create both the growth that the stock market is expecting
Speaker 6: and the fiscal discipline or at least lack of complete
Speaker 6: irresponsibility that the bond market is looking for with that
Speaker 6: kind of sequencing deadline and the different internacy politics in DC.
Speaker 4: I think it can be done. But that goes to
Speaker 4: this core of the models.
Speaker 1: You know, if you use a Keynesian model, you say, well,
Speaker 1: if you shrink the fiscal deficit, it will slow the
Speaker 1: growth rate of the economy. You've got to really break
Speaker 1: out of that and say no, if we're shrinking the
Speaker 1: size of government spending, that frees up the money for
Speaker 1: the private sector, so you get faster growth. And so
Speaker 1: it's almost the opposite of a Kinesian model. And it's
Speaker 1: the same way the Phillips curve. You know, the FED
Speaker 1: is so dependent on this idea of the offset between
Speaker 1: employment and inflation.
Speaker 4: But it doesn't work that way.
Speaker 1: If you've got if you've got confidence in the dollar
Speaker 1: as the reserve currency, you can get low inflation and
Speaker 1: that price stability. That's your mandate, and then you get
Speaker 1: full employment out of that. So the various tools or
Speaker 1: levers work together, not against each other.
Speaker 6: What's fascinating to me is to hear your perspective on
Speaker 6: this at a time when you used to be the
Speaker 6: President of the World Bank, and so you had a
Speaker 6: very clear sense of the international perspective. And back in
Speaker 6: the APEX, in the G twenty in South America, there
Speaker 6: was this feeling of who cares what's going to happen here?
Speaker 6: Because it doesn't really matter. Everything's going to change. Do
Speaker 6: you get the sense that this president is going to
Speaker 6: care about kind of where the US lands and the
Speaker 6: geopolitical landscape here?
Speaker 4: I hope.
Speaker 1: So the US has gone way too far into globalism,
Speaker 1: and you saw that on display over this last week
Speaker 1: where you were in South America. You see these giant
Speaker 1: conferences going on where there's no useful outcome and where
Speaker 1: the US is embarrassed by its position.
Speaker 4: Within the world.
Speaker 1: China is dominating in those international conferences. So I think
Speaker 1: there has to be you're real rethinking by the new
Speaker 1: administration of how do you want to interact with the world,
Speaker 1: that applies to trade, that applies to how how do
Speaker 1: you work with the IMF when the programs aren't working.
Speaker 1: You know, look at the Argentina debacle and on down
Speaker 1: the list, and that means the US looking for its
Speaker 1: national interests more clearly than what we've been doing. There's
Speaker 1: almost been this view and action to say we want
Speaker 1: to give power to institutions that are headquartered in Europe
Speaker 1: because they're going to be socialists, and that I think
Speaker 1: really has to stop.
Speaker 2: Do you think it can change?
Speaker 4: Yes, certainly.
Speaker 1: Again, the US is, you know, the dominant world economy.
Speaker 1: People forget that twenty five percent of world GDP totally powerful.
Speaker 1: It's just been absent, you know. So there's the vacuum
Speaker 1: in the world. Look at it in Africa with the
Speaker 1: weapons flowing down from the North. Russia is putting weapons
Speaker 1: not only into North Africa, but into Gaza, into everywhere.
Speaker 1: You can look into Syria and China then is building
Speaker 1: the infrastructure in the pipelines and putting on the debt.
Speaker 1: So it's dominating in the US. You know, France is
Speaker 1: long gone and the US is getting pushed aside.
Speaker 4: That's the base.
Speaker 1: Closings in Niger, the loss of Sudan, and on the
Speaker 1: Whodi's not being able to be controlled. So the weakness
Speaker 1: of the US is on full display to the world.
Speaker 1: That was particularly apparent in Lima with the with the.
Speaker 2: Conference there, David, We've got to go to see you,
Speaker 2: so thank you. David Moultpass, the former World Bank president,
Speaker 2: with some very important points tents A shaz of target
Speaker 2: plunging this morning. The company kind of gets earnings out
Speaker 2: look for the year as Sharpers spent less on non
Speaker 2: essential items. That stock is down eighteen percent in early training.
Speaker 2: Chuck Grom of Gordon Hasker, you on just now for more, Chuck,
Speaker 2: this was a shell cower. What went wrong over a target?
Speaker 8: Yeah, I mean it is a shocker, but it's more
Speaker 8: below the top line. That was a surprise. The top
Speaker 8: line comps up zero point three percent. That was pretty
Speaker 8: much with the by side and ourselves we were modeling
Speaker 8: zero point five percent.
Speaker 5: Of an increase came in.
Speaker 8: Traffic was strong, digital volume was strong. It's really on
Speaker 8: a gross margin line for them. And it appears to
Speaker 8: be inventory related, supply chain related. In other words, it
Speaker 8: seems more company specific than industry related. And we'll find
Speaker 8: out over the next couple of days.
Speaker 5: We're going to get a lot of reports. We just
Speaker 5: got TGX that that just hit.
Speaker 8: What numbers were actually very strong, more in line with
Speaker 8: what we heard from Walmart. But don't get me wrong,
Speaker 8: I mean company guiding down nine percent, stock indicated down
Speaker 8: sixteen seventeen percent. My gut, that looks like a little
Speaker 8: bit of an overreaction.
Speaker 5: Don't get me wrong.
Speaker 8: Stock needs to be down today, But we'll find out
Speaker 8: on the eight o'clock call what's really going on here
Speaker 8: and zooming out like it's important to keep in mind
Speaker 8: that that targets had issues that are very company specific
Speaker 8: in the past. They tend to have issues with inventory management,
Speaker 8: supply chain. My initial reaction is it looks like something
Speaker 8: like that that we've seen in the past from them.
Speaker 2: Chuckie took me back to May twenty twenty two. I'm
Speaker 2: sure you remember that. Wow the stuff prices on that
Speaker 2: earnings report as well. Chuck, what's the difference between the
Speaker 2: challenges they face now and the problems they have back then?
Speaker 2: Coming out of the pandemic.
Speaker 8: Well, first of all, you have a great memory. Second
Speaker 8: of all, I think what's going on here with Target
Speaker 8: is you think about Target, it's about expect More, Hey less.
Speaker 8: I don't think they're focusing enough on the expect more
Speaker 8: side of the equation. And I think they're focused too
Speaker 8: much on price. It's hard to battle with Walmart and
Speaker 8: Amazon and Costco on price. They're known for their fun
Speaker 8: merchandise to differentiate in apparel and in home, and I
Speaker 8: don't think they're doing a really good.
Speaker 5: Job with that right now.
Speaker 8: And that's evidence of a zero point three percent increase
Speaker 8: in their comp relative to Walmart, who just printed a
Speaker 8: a five point three percent yesterday.
Speaker 6: So expect More is doing a lot of heavy lifting here.
Speaker 6: Are you talking about a product mix that they need
Speaker 6: to have higher end goods? Are they talking about what
Speaker 6: areas they're trying to target, because that's what it's sort
Speaker 6: of is screaming to me when you say maybe less
Speaker 6: on the price.
Speaker 8: Yeah, I just think that they're known for their exciting
Speaker 8: product and whether it be private brands.
Speaker 5: Or whether it be national brands.
Speaker 8: They've got great partnerships with Disney, with Alta on black Friday,
Speaker 8: They're going to have a big tailor swift offering. They
Speaker 8: just I just don't think they're doing enough of that.
Speaker 8: And that's where you know, if you look at their
Speaker 8: comp their their general merchandise business has been soft, and
Speaker 8: that's the area that tends to be margin to create
Speaker 8: it for them.
Speaker 6: At this point, Chuck, I just to wonder how much
Speaker 6: we can extrapolate a larger story here of Walmart gaining
Speaker 6: share or pressuring all other retailers that are the same
Speaker 6: kind of bucket due to their multifaceted business strategy, the
Speaker 6: fact that they have the offsets of advertising, of their media,
Speaker 6: of their marketplace, of their online unit that can allow
Speaker 6: them to win on price, and then it forces everybody
Speaker 6: else to scramble. Are we going to be seeing that
Speaker 6: in all the results from all the retailers.
Speaker 8: I think I think that's going to be the case
Speaker 8: when you look at the results at the low end
Speaker 8: for Dollar General and Dollar Tree, I think in particularly,
Speaker 8: they're under a lot of stress from Walmart's second P
Speaker 8: and L, which is, to your point, is funding a
Speaker 8: ton of price investments. And if you think about it
Speaker 8: in a baseball game analogy, we're like in the first
Speaker 8: inning of that, so that's not going to get easy.
Speaker 8: I think when you zoom out, a one percent comp
Speaker 8: move at Walmart is roughly one point two billion dollars.
Speaker 8: A one percent comp move at Target is two hundred
Speaker 8: million dollars, A one percent comp move at Dollars General
Speaker 8: is one hundred million dollars.
Speaker 5: So it's just a comp number for Walmart.
Speaker 8: But the market share when the pie is not growing,
Speaker 8: it's just simply simply magnificent what.
Speaker 5: They're doing right now. And we're birated on them. We
Speaker 5: like them.
Speaker 8: We've had a buy rating on Target. Obviously, today hurts.
Speaker 8: It's a cheap stock. Again, I think the issues are
Speaker 8: more company specific than they are sector.
Speaker 5: Specific, Chuck.
Speaker 7: When it comes to this sector. Though, we have the
Speaker 7: workers union suspending that strike until January fifteenth, then of
Speaker 7: course we have this lingering potential for tariffs. How are
Speaker 7: the retailers going to be preparing for those two events?
Speaker 7: Considering the fact that Target potentially overshot here when I
Speaker 7: looked at their stockpiling, and given the fact that that
Speaker 7: port strike was relatively short.
Speaker 8: Yeah, I mean, most of the companies we talked to
Speaker 8: you back in October, we're thankful that it only lasted
Speaker 8: a couple of days, and I think the rule of
Speaker 8: thumb was every day of a strike was about a
Speaker 8: week of backlog and inventory.
Speaker 5: So we'll see what happens on that front.
Speaker 8: And with regards to tariffs, I mean, most of the
Speaker 8: companies are better prepared today than they were six or
Speaker 8: seven years ago.
Speaker 5: That's not to say if it's a.
Speaker 8: Meaningful increase in tariff prices, you know how they're going
Speaker 8: to deal with that.
Speaker 5: Will be interesting.
Speaker 8: It just seemed very inflationary to me, and President Trump
Speaker 8: elect wants to be mindful of that and raising.
Speaker 5: Tariff prices across the board. There has to be an offset.
Speaker 8: So more to come and we'll obviously learn more over
Speaker 8: than over the next week.
Speaker 5: With a lot of earnings here in retail.
Speaker 7: But do you see those retailers preparing now for things
Speaker 7: like tariffs down the road.
Speaker 8: Well, I think the one area you will see companies
Speaker 8: prepare for potentially is accelerating inventory receipts in quicker and earlier,
Speaker 8: and so I think that's something.
Speaker 5: That retailers will prepare for, and as a.
Speaker 8: Result, working capital will be deprived here in the fourth
Speaker 8: quarter because inventory balances will be higher at the end
Speaker 8: of the year.
Speaker 2: We've asked a few guests about this. I'd love your
Speaker 2: recollection of what happened maybe eight years ago, seven years ago,
Speaker 2: when we had that first trade war between China and
Speaker 2: the United States led by Donald Trump. What changed for
Speaker 2: many of these retailers if they changed where they source,
Speaker 2: where they get products from. How much has changed?
Speaker 8: Oh, A lot's changed. I mean a lot of companies
Speaker 8: we cover. You know, floor in the Core just comes
Speaker 8: to mind. Who you know eight years ago they were
Speaker 8: resourcing fifty percent of their inventory from China. Last year
Speaker 8: it was twenty five percent. This year is probably closer
Speaker 8: to fifteen percent. So companies are moving everywhere they can,
Speaker 8: and I would anticipate that we'll.
Speaker 5: Accelerate next year.
Speaker 2: Battle hardened, Chuck, appreciate it, sir. Thanks for joining us
Speaker 2: this morning. Chuck Graum, There, Gordon Hasker. This is the
Speaker 2: Bloomberg Surveillance podcast, bringing you the best in markets, economics,
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