WEBVTT - The Fed Decides amid Consumer Uncertainty 0:00:02.520 --> 0:00:07.000 Bloomberg Audio Studios, podcasts, radio news. 0:00:12.560 --> 0:00:13.240 This is the. 0:00:13.200 --> 0:00:17.440 Bloomberg Surveillance Podcast. Catch us live weekdays at seven am 0:00:17.480 --> 0:00:21.240 Eastern on Apple CarPlay or Android Auto with the Bloomberg 0:00:21.320 --> 0:00:24.880 Business App. Listen on demand wherever you get your podcasts, 0:00:25.280 --> 0:00:26.960 or watch us live on YouTube. 0:00:27.480 --> 0:00:32.320 Lingen with US Now with BMO Capital Marcus Ian on 0:00:32.479 --> 0:00:34.920 full faith and Credit. You have had a vector of 0:00:35.040 --> 0:00:39.160 lower interest rates, price up, yield down. Have you been 0:00:39.200 --> 0:00:41.440 tripped by tariffs? 0:00:42.840 --> 0:00:46.040 I do think tariffs complicate the calculus for lower rates. 0:00:46.120 --> 0:00:48.960 But I do think that the Fed is ultimately going 0:00:49.040 --> 0:00:52.480 to start the process of normalization again, but not until 0:00:52.479 --> 0:00:55.120 we've got greater clarity on what the trade war really means. 0:00:55.160 --> 0:00:57.560 And I do think tenure yields in this year at 0:00:57.560 --> 0:00:59.880 three sixty five, and I'm holding that call for now. 0:01:01.240 --> 0:01:03.959 That's extraordinary to go to a three sixty five right now, 0:01:04.000 --> 0:01:07.360 the ten year yield, Folks, if my eyes won't fail me, 0:01:07.760 --> 0:01:11.760 here's a four thirty rather four point three zero. I 0:01:12.520 --> 0:01:16.479 justin Wolfer's of Michigan, just out with the massive trade 0:01:16.520 --> 0:01:20.800 surplus of movies. If mister Trump goes after services, that's 0:01:20.880 --> 0:01:22.080 more instability. 0:01:22.560 --> 0:01:24.080 Are you able to make an. 0:01:23.920 --> 0:01:27.520 Intelligent forecast out three hours or three months. 0:01:29.800 --> 0:01:34.240 Well implicitly, because the president keeps changing the rules or 0:01:34.400 --> 0:01:37.440 changing the trade dynamics, it's very difficult to estimate what 0:01:37.520 --> 0:01:40.520 this all means for core PCE and therefore the FED 0:01:40.640 --> 0:01:42.800 and the trajectory of the economy. I think the one 0:01:42.840 --> 0:01:46.880 clear takeaway is that there has been a concern raised 0:01:46.880 --> 0:01:49.520 about the dollars status as a reserve currency and whether 0:01:49.560 --> 0:01:54.360 treasuries are still flight to quality assets. And the recent 0:01:54.400 --> 0:01:56.960 price action suggests that those two still hold for the 0:01:57.000 --> 0:01:59.040 time being. But that's going to be the major question 0:01:59.120 --> 0:02:00.000 for the next several months. 0:02:00.800 --> 0:02:03.520 Ian Tom has been drawing our attention to what's happening 0:02:03.560 --> 0:02:06.640 with Taiwan's dollar serving as much as five percent today. 0:02:07.720 --> 0:02:11.320 How do you look at what's happening in other countries 0:02:11.360 --> 0:02:14.960 with their currencies with regard to the dollar, but also 0:02:15.000 --> 0:02:17.200 to the treasury market here in the US. It does 0:02:17.240 --> 0:02:18.160 it send you a signal. 0:02:19.880 --> 0:02:22.000 So there are two aspects of that. First is what's 0:02:22.040 --> 0:02:25.320 going on with the dollar is almost by design for 0:02:25.440 --> 0:02:28.840 a president who is attempting to make US exports more 0:02:28.840 --> 0:02:32.280 attractive by cheapening them on the global stage. As that 0:02:32.320 --> 0:02:36.720 relates to the treasury market. That also makes treasuries comparatively 0:02:37.160 --> 0:02:39.919 cheaper than they might have otherwise been, but only if 0:02:39.960 --> 0:02:43.120 the dollar remains the go to currency, and that's what 0:02:43.200 --> 0:02:45.600 has been focused on this week's auctions. We have the 0:02:45.680 --> 0:02:48.480 ten year tomorrow and the thirty year on Thursday. 0:02:48.440 --> 0:02:53.000 So demand there, What do you anticipate and is it 0:02:53.040 --> 0:02:55.079 going to send you a signal about this whole idea 0:02:55.160 --> 0:02:58.240 of whether or not the US continues to be this 0:02:58.320 --> 0:02:59.240 global safe haven. 0:03:00.960 --> 0:03:03.680 The tenure will be the most important auction of the week. 0:03:03.840 --> 0:03:08.720 We're expecting reasonably solid demand across all the major bidding groups, 0:03:09.080 --> 0:03:11.880 but the market will be focused on the indirect awards. 0:03:12.000 --> 0:03:15.160 They tend to use that as a proxy for overseas demand, 0:03:15.520 --> 0:03:18.240 and that will define how the market reacts and whether 0:03:18.360 --> 0:03:20.440 or not we find ourselves back in a narrative where 0:03:20.440 --> 0:03:24.960 we're worried about the collective buyer strike on US treasures. 0:03:25.120 --> 0:03:28.160 The solution andling in for a lot of governments is 0:03:28.200 --> 0:03:33.440 to extenderation to initiate thirty year, fifty year even farther 0:03:33.520 --> 0:03:38.000 out paper. Is that efficacious? I mean, who wins with 0:03:38.160 --> 0:03:41.840 fifty year paper? Well? 0:03:42.000 --> 0:03:45.000 I don't think that it's been particularly successful at least 0:03:45.040 --> 0:03:48.360 not historically, and so the idea of pushing out the 0:03:48.440 --> 0:03:52.200 average maturity of treasuries borrowing, for example, for the time being, 0:03:52.440 --> 0:03:55.720 is off the table. The only argument that that starts 0:03:55.760 --> 0:03:59.440 to make sense would be in a significant reprice into 0:03:59.480 --> 0:04:02.440 a lower rate environment, where Bessett would choose to lock 0:04:02.520 --> 0:04:04.360 in attractive financing. 0:04:04.480 --> 0:04:06.720 Inanling and thank you so much, greatly appreciate with being 0:04:06.760 --> 0:04:09.320 my capital market this morning. In the stunning call, he 0:04:09.440 --> 0:04:14.600 reaffirms from a ten year yield price up yield down 0:04:15.240 --> 0:04:17.920 a four point three zero to a three point six 0:04:18.120 --> 0:04:21.360 five ish yield. That's a brave call right now out. 0:04:21.360 --> 0:04:23.680 They're not that many people on board that ian. Thank 0:04:23.680 --> 0:04:25.360 you so much. 0:04:25.640 --> 0:04:29.520 This is the Bloomberg Surveillance Podcast. Listen live each weekday 0:04:29.560 --> 0:04:32.880 starting at seven am Eastern on Applecarplay and Android Auto 0:04:33.000 --> 0:04:35.920 with the Bloomberg Business App. You can also listen live 0:04:36.040 --> 0:04:39.599 on Amazon Alexa from our flagship New York station, Just 0:04:39.640 --> 0:04:43.200 say Alexa play Bloomberg eleven thirty Now. 0:04:43.200 --> 0:04:47.120 Specialties, Alicia Levigne would be and ymelth Wealth to get 0:04:47.200 --> 0:04:51.280 us through the market opening and beyond. Alicia, I want 0:04:51.360 --> 0:04:54.200 you to talk to people whose heads are spinning and 0:04:54.400 --> 0:04:59.120 they're in cash, how do they deploy into the markets? 0:05:00.760 --> 0:05:04.479 Well, thanks for having me today. You know, we also 0:05:04.720 --> 0:05:06.840 like to look at markers about when to deploy. We 0:05:06.920 --> 0:05:10.720 try to tell our clients you can't ever time the market, 0:05:11.160 --> 0:05:13.880 but after that nine days, which as you know you've 0:05:13.960 --> 0:05:17.480 all noted, is the best nine days since two thousand 0:05:17.520 --> 0:05:19.480 and four, I think we're going to do a little 0:05:19.480 --> 0:05:22.520 bit of backing and filling here. What we tell our 0:05:22.600 --> 0:05:26.400 clients is, you know, if you're fresh capital, it's always 0:05:26.480 --> 0:05:31.799 good to dust dollar cost average in, meaning you allocate 0:05:32.480 --> 0:05:35.320 some percentage I would say over three months, you know, 0:05:35.480 --> 0:05:39.520 one third, one third, one third, So you don't, you know, 0:05:39.880 --> 0:05:43.840 have all your assets that are that are coming in 0:05:43.960 --> 0:05:46.159 all at the same time. Because markets move around, they're 0:05:46.200 --> 0:05:49.360 two way. It just seems like a better risk adjusted 0:05:49.400 --> 0:05:53.000 way to getting into markets here, and so that's what 0:05:53.240 --> 0:05:56.000 that's what we would that's what we would advise. I 0:05:56.240 --> 0:06:02.159 think with the last four weeks has reiterated to market 0:06:02.240 --> 0:06:05.400 participants who have been in these markets for decades or 0:06:05.520 --> 0:06:09.280 to new ones, is that markets can recover a lot 0:06:09.360 --> 0:06:13.200 more quickly than the real economy, and at times bottom 0:06:13.600 --> 0:06:17.160 on really horrible news, even as the headlines are swirling 0:06:17.279 --> 0:06:19.880 around us, and I think it was just another reminder 0:06:19.920 --> 0:06:22.239 of that the last four weeks really really amazing. 0:06:22.320 --> 0:06:23.720 How the market ended April. 0:06:24.040 --> 0:06:24.440 Yeah, it is. 0:06:24.560 --> 0:06:26.200 It's like I was saying earlier, if you went to 0:06:26.240 --> 0:06:27.839 sleep at the beginning of April and you woke up 0:06:27.960 --> 0:06:31.400 kind of nothing actually happened, and it masked really the 0:06:31.880 --> 0:06:35.680 volatility that we saw. You said bottomed. So my question 0:06:35.800 --> 0:06:37.880 to you was that the bottom at least for this cycle. 0:06:39.440 --> 0:06:42.720 So for the tariff tantrum, are we're calling this the 0:06:42.800 --> 0:06:46.080 tariff tantrum? For the tariff tantrum, we think that forty 0:06:46.120 --> 0:06:48.640 eight to thirty five is likely the bottom, but with 0:06:48.760 --> 0:06:52.160 a huge caveat. And the caveat is, you know, is 0:06:52.240 --> 0:06:57.480 there a credit crisis coming that reverberates throughout the economy 0:06:58.000 --> 0:07:01.480 and then could it be undercut? But I think that 0:07:01.680 --> 0:07:07.320 ultimately the conversation that we've had, every single economist has 0:07:07.400 --> 0:07:12.520 talked about sagflation. A US recession has become the base 0:07:12.640 --> 0:07:16.280 case scenario. We've heard about empty container ships from China, 0:07:16.640 --> 0:07:20.800 We've heard about empty shelves in the US. Christmas is gone, 0:07:20.920 --> 0:07:24.760 Halloween is gone. These are some pretty nasty headlines and 0:07:24.760 --> 0:07:26.600 I don't want to make light of it, because I 0:07:26.680 --> 0:07:29.080 actually do think the US is going to slow down 0:07:29.640 --> 0:07:32.960 and hit an air pocket in the next few months. 0:07:33.280 --> 0:07:35.560 But I think the market already priced it in when 0:07:35.600 --> 0:07:39.120 it dropped almost twenty percent in about a week. And 0:07:39.520 --> 0:07:42.240 what we know when the market drops to that extent, 0:07:43.560 --> 0:07:47.160 it tends to have positive forward returns. And whether you 0:07:47.240 --> 0:07:50.440 measure by the elevated fix or whether you measure by 0:07:50.520 --> 0:07:53.480 the drop down in twenty percent, or whether you measure 0:07:53.560 --> 0:07:58.280 by rock bottom consumer and investor sentiment. And in a sense, 0:07:58.720 --> 0:08:00.920 the market did what it always done, which is, you know, 0:08:01.120 --> 0:08:03.960 it recovered when things look the bleakst and it looked 0:08:04.120 --> 0:08:04.760 the bleakest. 0:08:05.400 --> 0:08:07.720 I love your bottom fishing here the idea that when 0:08:07.760 --> 0:08:11.200 there's the catharsis there very quickly or Alesia, we've got 0:08:11.240 --> 0:08:12.360 to get to the market opening. 0:08:12.680 --> 0:08:15.520 But have you witnessed Catharsis yet? I haven't seen it. 0:08:16.880 --> 0:08:19.560 So I think we had Catharsis. You know that that 0:08:19.760 --> 0:08:23.920 Thursday and Friday after after Liberation Day, so that the 0:08:24.040 --> 0:08:26.320 third and the fourth of April was I mean that 0:08:26.480 --> 0:08:29.200 dropped was about twelve drop in the I think we 0:08:29.320 --> 0:08:29.520 had it. 0:08:29.720 --> 0:08:31.840 A Lesha. I want you to talk to people about 0:08:31.920 --> 0:08:34.679 meg seven. I got Apple with a bond offering this 0:08:34.880 --> 0:08:39.120 morning at Microsoft and other cloud types doing better than good. 0:08:39.600 --> 0:08:43.480 Was there a reinformation in April of ownership of the 0:08:43.559 --> 0:08:44.200 mag seven. 0:08:44.640 --> 0:08:47.839 So look, the conversation we've had for the last few 0:08:47.920 --> 0:08:52.160 months is that American exceptionalism is over, that the rest 0:08:52.200 --> 0:08:54.880 of the world is a better place to invest, that 0:08:55.160 --> 0:08:57.800 Europe is going to far outperform the US this year, 0:08:57.880 --> 0:09:00.920 and by the way, it might, but over a cycle 0:09:01.080 --> 0:09:03.880 we have to discuss. And I think, you know, there 0:09:04.040 --> 0:09:08.840 was a talk of you know, international investors fleeing US markets, 0:09:08.880 --> 0:09:11.839 whether it was the dollar, or the bond market or 0:09:11.880 --> 0:09:14.280 the US equity market. Now there's some truth in that, 0:09:14.880 --> 0:09:18.199 but I think what we saw from earning season was 0:09:18.480 --> 0:09:23.840 what made US markets so compelling. Are the triple beats, right, 0:09:23.920 --> 0:09:27.600 triple beats beat on the top line, beat on the margins, 0:09:27.679 --> 0:09:31.240 and therefore beat on the bottom line. I find it 0:09:31.440 --> 0:09:34.520 hard to find companies in the rest of the world 0:09:34.920 --> 0:09:39.240 that can deliver this kind of outcome quarter after quarter. 0:09:39.520 --> 0:09:42.480 Now there will be a day where this doesn't happen, 0:09:42.960 --> 0:09:46.559 and the thirty percent concentration of the Magnificent seven in 0:09:46.640 --> 0:09:50.200 the SMP is going to be the thirty percent concentration 0:09:50.360 --> 0:09:53.000 is going to be a problem, but it's not today. 0:09:53.760 --> 0:09:57.120 And I think it's just a reminder that you know, 0:09:57.280 --> 0:10:01.960 you're not buying a political situation situation, you're buying companies 0:10:02.400 --> 0:10:05.240 with earnings. And I know there's been an aversion for 0:10:05.679 --> 0:10:09.120 international investors coming into US market, but the US and 0:10:09.320 --> 0:10:13.600 market has sold US and particularly let's call it individual investors. 0:10:13.960 --> 0:10:16.720 They're all in Nope, they didn't sell and they were 0:10:16.760 --> 0:10:19.160 buying more. And I think it's a great example when 0:10:19.200 --> 0:10:22.520 you shed risk, when you shed length, when you know 0:10:22.760 --> 0:10:26.480 longs have to be discarded in favor of shorts, it's 0:10:26.559 --> 0:10:28.800 sort of a right opportunity for the pain trade to 0:10:28.840 --> 0:10:29.760 be the other way. 0:10:29.800 --> 0:10:33.640 Right, which is Alicia, Thank you so much, Alicia Levine 0:10:33.840 --> 0:10:36.840 be and win wealth this morning greatly. I appreciate that. 0:10:42.240 --> 0:10:45.800 You're listening to the Bloomberg Surveillance Podcast. Catch US live 0:10:45.920 --> 0:10:49.040 weekday afternoons from seven to ten am Eastern Listen on 0:10:49.160 --> 0:10:52.760 Applecarplay and Android Otto with the Bloomberg Business app, or 0:10:52.960 --> 0:10:54.440 watch US Live on YouTube. 0:10:54.840 --> 0:10:59.080 Hugely anticipated with the Joy of Luxury Road from Madison 0:10:59.480 --> 0:11:02.400 down to the Avenue of the Joy of Costco adapting 0:11:02.480 --> 0:11:06.760 each day to the trade war. Dana Telsey joins us 0:11:07.120 --> 0:11:10.400 this morning with a Telsey Advisory group. Will there be 0:11:11.160 --> 0:11:12.040 empty shelves? 0:11:12.559 --> 0:11:16.080 It certainly feels like it. Consumers, well, the retailers. First 0:11:16.080 --> 0:11:18.280 of all, thank you for having me. The retailers need 0:11:18.360 --> 0:11:21.160 to place their orders within the next few weeks for holiday. 0:11:21.440 --> 0:11:25.040 We're hearing retailers starting to market and advertise back to school. 0:11:25.280 --> 0:11:28.120 They're going to start on June first. Some kids aren't 0:11:28.120 --> 0:11:30.640 even out of school by June first, and yet they're 0:11:30.640 --> 0:11:33.559 going to start marketing and advertising on June first. That's 0:11:33.640 --> 0:11:36.040 because they want to have the goods available for the parents. 0:11:36.440 --> 0:11:39.840 And overall, when you think about this, we have companies 0:11:39.960 --> 0:11:43.480 that whether it's low end or high end, price increases. 0:11:43.559 --> 0:11:45.079 There's a third to third a third of what you 0:11:45.160 --> 0:11:48.040 can do to combat this. You can diversify your sourcing, 0:11:48.400 --> 0:11:51.319 but that takes time. It doesn't just happen overnight. You 0:11:51.480 --> 0:11:54.040 share the cost of the manufacturers, and I think that's 0:11:54.080 --> 0:11:58.120 something that's being negotiated almost on a daily basis, depending 0:11:58.160 --> 0:12:00.319 on what the tariff may look like. And at the 0:12:00.440 --> 0:12:02.400 end of the day, you raise prices to the consumer. 0:12:02.559 --> 0:12:04.319 You have a roll of dex like no one in 0:12:04.400 --> 0:12:07.599 the business back to your childhood and your affiliation with 0:12:07.720 --> 0:12:11.040 the good people at BERGDRF. Goodman. Which company do you 0:12:11.160 --> 0:12:14.360 want to call right now to find out the pulse 0:12:14.600 --> 0:12:15.719 of the Trump trade war? 0:12:16.360 --> 0:12:18.120 I mean overall, I want to hear about all a 0:12:18.200 --> 0:12:20.800 lot of the apparel retails and the footwear companies. The 0:12:20.880 --> 0:12:25.400 footwear companies overall have some the biggest exposure to China 0:12:25.559 --> 0:12:28.680 and to Asia. Steve Madden, you want to call Steve 0:12:28.679 --> 0:12:30.880 Madden fifty eight percent of their sourcing. 0:12:31.800 --> 0:12:34.000 Steve Madden, My walls lighter, pick it up. 0:12:35.000 --> 0:12:36.719 You mentioned empty shelves, and I think a lot of 0:12:36.800 --> 0:12:38.600 people over the past couple of weeks have been sort 0:12:38.600 --> 0:12:42.079 of sounding the alarm here about empty shelves and higher prices. 0:12:42.400 --> 0:12:44.959 Yet we haven't seen that yet will we see it? 0:12:45.320 --> 0:12:48.640 So you're exactly right. Basically, it's week by week that 0:12:48.720 --> 0:12:51.360 we're watching things. You heard all the retail real estate 0:12:51.480 --> 0:12:55.760 landlords report last week resilient consumer, good traffic. When would 0:12:55.800 --> 0:12:57.920 you see it? Probably sometime during the summertime. 0:12:58.760 --> 0:13:01.080 That's too soon. I think a lot of people would say, 0:13:01.120 --> 0:13:03.040 how close there are you watching? What's happening with shipping? 0:13:03.360 --> 0:13:06.559 Port of Los Angeles, Port of Long Beach, we heard, 0:13:06.880 --> 0:13:09.760 We've heard analysts who track the ships that are coming in. 0:13:10.360 --> 0:13:12.040 We're hearing around thirty sixty percent. 0:13:12.200 --> 0:13:14.319 Yeah, when you're down one third, two thirds, that's a 0:13:14.400 --> 0:13:16.559 very big deal. When does the consumer start to see that? 0:13:17.160 --> 0:13:20.559 So overall, everything we've heard is retail is inventory levels. 0:13:20.720 --> 0:13:22.360 They were up at the end of the fourth quarter. 0:13:22.760 --> 0:13:24.880 First quarter is still first going to be reported. You 0:13:24.920 --> 0:13:26.920 have a big day this Thursday coming up. Then we'll 0:13:26.960 --> 0:13:29.800 go from there. I think you'll continue to see inventories 0:13:29.840 --> 0:13:32.880 being up. But when you're going to see empty shelves, 0:13:33.120 --> 0:13:35.880 it's going to take a little while, is it. Some 0:13:36.520 --> 0:13:39.160 empty items in midsummer could look like that? 0:13:39.800 --> 0:13:43.520 Okay, Steve Madden shoe sho How cute, Lisa, you get 0:13:43.520 --> 0:13:48.560 that there's symbols shoe Shooh. They're down fifty seven percent 0:13:49.520 --> 0:13:54.240 from the shocking success back ten years of Steve Madden. 0:13:54.520 --> 0:13:58.320 What is Steve Madden actually doing in May? 0:13:59.120 --> 0:14:01.319 Overall? In May, and we're going to hear exactly what 0:14:01.400 --> 0:14:03.680 they're saying, because they're going to report their earnings this week. 0:14:04.080 --> 0:14:06.000 I think they have more newness in their product. I 0:14:06.040 --> 0:14:08.319 think we're going to hear that fifty eight percent is 0:14:08.440 --> 0:14:10.920 coming down hopefully by the end of the year to 0:14:11.120 --> 0:14:14.319 forty percent of sourcing coming from China or even a 0:14:14.360 --> 0:14:16.439 little bit less than that. And look what they just 0:14:16.559 --> 0:14:20.280 announced a couple months ago they bought Kurt Geiger, which 0:14:20.400 --> 0:14:24.760 is a more more fashion forward women's brand that's based overseas. 0:14:25.040 --> 0:14:27.280 Look what it was just announced a half hour ago. 0:14:27.800 --> 0:14:30.720 Sketchers is being bought for sixty three dollars a share 0:14:31.360 --> 0:14:34.960 by three G Capital. So you're seeing some combinations begin 0:14:35.040 --> 0:14:36.040 to happen, even. 0:14:35.880 --> 0:14:39.120 Sketches taking it interesting. Dan Chelsea with its encyclopedic and 0:14:39.200 --> 0:14:42.640 retail we all come all here across the country on 0:14:42.720 --> 0:14:45.880 your morning commute on YouTube. Good morning as well, Tim 0:14:45.960 --> 0:14:47.560 Stenovik in for Paul Suni. 0:14:47.640 --> 0:14:50.880 Tim, Hey, Dana, your top pick for apparelin footwear is Perkinstock. 0:14:51.200 --> 0:14:54.160 Why is that don't have sourcing in Asia? You were 0:14:54.160 --> 0:14:56.360 going to say that as the end Germany and Portugal 0:14:56.600 --> 0:14:58.480 take a look at the pricing power that they have 0:14:58.640 --> 0:15:00.240 with the newness. They don't have a lot lot of 0:15:00.320 --> 0:15:04.520 stores and from women's to men's to kids, you name it, 0:15:04.640 --> 0:15:06.200 the age group, there's appeal. 0:15:06.040 --> 0:15:07.760 Still the how big of a business is the US 0:15:07.840 --> 0:15:09.840 for them? Because they're still importing so that's going to 0:15:09.880 --> 0:15:11.720 be an issue if it's not made in the US. 0:15:12.320 --> 0:15:14.400 President Trump's not happy, right, But it's still a. 0:15:14.440 --> 0:15:17.200 Lower tariff than what yeah from Asia. It's a continuing 0:15:17.280 --> 0:15:20.520 growing business for them, and it's becoming even bigger. 0:15:20.920 --> 0:15:25.880 Okay, Hailey Biber, Hailey Bieber is Hailey Bieber Biber. 0:15:26.000 --> 0:15:27.440 I heard it's Bieber. I heard it's Bieber. 0:15:27.520 --> 0:15:31.600 Okay, Hailey showed up. Hailey Bieber invintaged Guccie at the 0:15:31.680 --> 0:15:32.920 met Gala last year. 0:15:33.960 --> 0:15:34.760 Are you going today? 0:15:34.880 --> 0:15:35.400 I'm not a you. 0:15:35.800 --> 0:15:37.920 No, I think the most fits for you to go 0:15:38.160 --> 0:15:39.720 no more. 0:15:39.800 --> 0:15:41.920 I said, we're going, and she was, She's just going 0:15:41.960 --> 0:15:44.760 to offendy for the Pope, the new Pope. But but 0:15:45.120 --> 0:15:48.320 the met Gala is definitive. Can Gucci begin to salvage 0:15:48.400 --> 0:15:49.760 their brand at the Met Gala? 0:15:50.240 --> 0:15:52.680 Very hard. I think you could more likely see life 0:15:52.720 --> 0:15:55.640 at Gap at the Met Gala rather than Gucci, given 0:15:55.680 --> 0:15:56.920 what you have in the storage right now. 0:15:57.520 --> 0:16:02.640 Discuss within all your heritage here, Discuss the collapse of 0:16:02.760 --> 0:16:05.120 what everybody had to have five years ago. 0:16:05.440 --> 0:16:07.920 Compared to five years ago when Gucci was the biggest 0:16:07.960 --> 0:16:11.280 thing was mixed match patterns and prints. That was all 0:16:11.360 --> 0:16:14.400 the rage at Gucci. Now it is who is Gucci? 0:16:14.640 --> 0:16:18.400 Is it relevant anymore? Where's the newness? Who's taken the place? 0:16:18.440 --> 0:16:22.160 And where there's increases Memeu from Prada, that's where all 0:16:22.200 --> 0:16:24.640 the increases are coming from. And that's where you've seen, you've. 0:16:24.560 --> 0:16:28.400 Been, we've seen a collapse ever like carrying Gucci. 0:16:28.840 --> 0:16:31.880 You know we've seen collapses before. You look at Burbery, 0:16:32.160 --> 0:16:36.000 Burbery went way by the wayside, Look at Ferragamo which 0:16:36.080 --> 0:16:39.000 still hasn't come back, and there's a lot of work 0:16:39.040 --> 0:16:41.240 to be done. So we've seen things. And one of 0:16:41.280 --> 0:16:45.160 the things with luxury brands, you have iconic items that 0:16:45.320 --> 0:16:49.680 have heritage and authenticity. It's easier to reinvent than create 0:16:49.720 --> 0:16:50.120 on a tee? 0:16:50.160 --> 0:16:50.600 Can they be. 0:16:50.680 --> 0:16:53.480 Reinvented under lvmh is mister Arnauld chopped? 0:16:53.520 --> 0:16:55.160 It's a bit to take out Gucci or something. 0:16:55.200 --> 0:16:58.760 I'm not hearing that I'm hearing Bernard Arnault is focused 0:16:58.760 --> 0:17:00.960 on La Loouis Vauton brand and the Christian. 0:17:01.720 --> 0:17:03.800 Now, I mean, come on, Tiffany's a struggle. 0:17:04.119 --> 0:17:07.119 Tiffany's has done a great job. The Louis Vauton brand 0:17:07.320 --> 0:17:10.399 and the Christian Dura brand are what the works are 0:17:10.440 --> 0:17:13.160 in progress. Look at all the designer changes that you've 0:17:13.200 --> 0:17:16.560 had at LVMH. A designer needs to get the feel 0:17:16.600 --> 0:17:18.600 of the brand and then introduce the newness. 0:17:18.920 --> 0:17:20.600 So who's your top pic for luxury right now? 0:17:20.960 --> 0:17:23.680 On the luxury side, I think Tapestry. I think Coach 0:17:23.840 --> 0:17:26.880 is continuing to take share from Michael Cores and they'll 0:17:26.920 --> 0:17:28.360 report this Thursday, Okay. 0:17:28.160 --> 0:17:30.920 So we'll get more details then. I'm thinking about this 0:17:31.240 --> 0:17:35.320 in the context of the I don't know, bigger stuff 0:17:35.320 --> 0:17:37.399 that we see each and every day. So not the 0:17:37.480 --> 0:17:40.639 Louis Vauton's not the LVMH's what we see at the 0:17:40.680 --> 0:17:43.640 grocery store, the expensive eggs that Tom Keene is still 0:17:43.680 --> 0:17:48.600 talking about, right, how are you seeing those prices moderate 0:17:49.000 --> 0:17:50.560 come down or not come down? 0:17:50.920 --> 0:17:53.960 So Primark Primark, which is the value retail, they have 0:17:54.080 --> 0:17:56.360 nearly thirty stores in the US. They're from the UK. 0:17:56.840 --> 0:17:59.040 They reported their numbers last week and they said, with 0:17:59.080 --> 0:18:02.000 the tariffs in the US now and their prices are 0:18:02.000 --> 0:18:05.080 below ten dollars for the most part. They said, going forward, 0:18:05.440 --> 0:18:07.240 and what it looks like if these tariffs at one 0:18:07.320 --> 0:18:10.119 hundred and forty five percent really are the name of 0:18:10.160 --> 0:18:13.080 the game, your prices will be up forty to fifty percent. 0:18:13.520 --> 0:18:15.520 That's significant for the low income consumer. 0:18:15.720 --> 0:18:18.959 Steve Madden creators you brought up, Thank you so much, 0:18:19.080 --> 0:18:22.600 Dana Telsey. TJX, which you and I can agree, are 0:18:22.680 --> 0:18:27.760 the best execution out there. What's the pixie dust at TJX? 0:18:28.119 --> 0:18:32.399 The curing and Steve Madden and Costco Egg department have 0:18:32.560 --> 0:18:32.920 to learn. 0:18:33.320 --> 0:18:35.840 Keep in mind TJX is very different from the others. 0:18:36.080 --> 0:18:38.959 The others are brand designers and creators that have their 0:18:39.000 --> 0:18:43.320 own branded product. TJX has an assortment of branded product 0:18:43.359 --> 0:18:45.160 for the most part, but they make their own Also, 0:18:45.720 --> 0:18:48.919 they're buying a lot of it for discounts or less 0:18:49.040 --> 0:18:51.720 than what the full price is. That's what's so exciting 0:18:51.760 --> 0:18:53.400 about tj It's a treasure hunt. 0:18:53.560 --> 0:18:55.600 Talk about what you were readingow as a child at 0:18:55.640 --> 0:19:01.640 fifty seventh and fifth Avenue. Scarcity. Scarcity is still out 0:19:01.760 --> 0:19:04.200 there like a target, is there? Scarcity? 0:19:04.640 --> 0:19:08.040 You have limited edition and collaborations that are scarcity. Look 0:19:08.080 --> 0:19:11.040 what Alto just announced for seven tours. They're going to 0:19:11.080 --> 0:19:16.520 be the beauty destination for Beyonce for Beyonce's Cowboy Carter Tour. 0:19:17.040 --> 0:19:20.320 That's interesting. That's what scarcity is doing in order to 0:19:20.400 --> 0:19:22.919 drive newness and innovation at mass price levels. 0:19:23.280 --> 0:19:27.600 I've seen some pictures of concerts not fully attended. Can 0:19:27.640 --> 0:19:29.520 you believe I'm saying that a Beyonce concert that's not 0:19:29.600 --> 0:19:31.240 sold out that's surprising? 0:19:31.560 --> 0:19:32.240 Is that an issue? 0:19:32.359 --> 0:19:32.479 Right? 0:19:32.800 --> 0:19:35.199 I've not heard that's an issue. It's just starting now 0:19:35.280 --> 0:19:37.359 for them. It's seven concerts that they'll be involved with. 0:19:37.600 --> 0:19:40.320 One more question, Dana, single best buy right now. 0:19:40.640 --> 0:19:44.239 Single best buy right now. I like Birkenstock. I think 0:19:44.280 --> 0:19:48.720 with Joe Feldman, he's talking about Costco's. 0:19:47.680 --> 0:19:50.359 Okay, what's it come on? This is I know you 0:19:50.560 --> 0:19:53.680 listen every day at Lisa's got Costco on the brain. 0:19:54.119 --> 0:19:57.520 Everyone process that others have to replicate. 0:19:57.920 --> 0:20:02.240 Their private label is quality, their assortment and pricing is competitive. 0:20:02.760 --> 0:20:06.320 They can they can solve a vost business and also 0:20:06.480 --> 0:20:10.280 offer for home, and their prices and the service levels, 0:20:10.400 --> 0:20:14.160 the in stock levels are differentiated versus everyone else. They've 0:20:14.200 --> 0:20:15.320 got quality and value. 0:20:15.640 --> 0:20:18.200 Dana TELCEA, thank you so much, Chelsea Advisory Group. The 0:20:18.320 --> 0:20:21.200 spirit of New York City. I really can't say enough 0:20:21.240 --> 0:20:23.320 about the vibrancy, even in these troubling times. 0:20:23.359 --> 0:20:25.360 What's your birkinstock of choices at the Arizona. 0:20:25.840 --> 0:20:28.879 At the Boston Birkenstocks. There's a few floating around the house. 0:20:28.960 --> 0:20:30.560 I try to give them to the dogs to chew. 0:20:31.119 --> 0:20:34.280 I hear that I don't. I don't. I do the 0:20:34.359 --> 0:20:35.800 clause Dana Telsea, goodbye. 0:20:36.119 --> 0:20:40.000 This is the Bloomberg Surveillance Podcast. Listen live each weekday 0:20:40.040 --> 0:20:43.040 starting at seven am Eastern on Apple Corplay and Android 0:20:43.080 --> 0:20:46.080 Auto with the Bloomberg Business app. You can also listen 0:20:46.200 --> 0:20:49.440 live on Amazon Alexa from our flagship New York station. 0:20:50.040 --> 0:20:53.440 Just say Alexa, play Bloomberg eleven thirty joining. 0:20:53.480 --> 0:20:56.359 It's now a huge value at first always Henrietta Treys 0:20:56.400 --> 0:20:59.639 the Veda Partners and you're Washington, Henriette. I look at 0:20:59.680 --> 0:21:02.840 my phone from a distance at home, It'll be three 0:21:02.920 --> 0:21:04.960 feet away, seven feet away. I don't want to pick 0:21:05.000 --> 0:21:07.159 it up and look at the news flows. So I 0:21:07.240 --> 0:21:10.119 look at the Hill just as an example of a 0:21:10.400 --> 0:21:14.040