1 00:00:00,080 --> 00:00:12,879 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. This is the Bloomberg 2 00:00:12,960 --> 00:00:16,960 Speaker 1: Surveillance Podcast. I'm Tom Keene along with Paul Sweeney. Join 3 00:00:17,079 --> 00:00:20,960 Speaker 1: us each day for insight from the best in economics, finance, investment, 4 00:00:21,200 --> 00:00:24,840 Speaker 1: and international relations. You can also watch the show live 5 00:00:25,079 --> 00:00:29,400 Speaker 1: on YouTube. Visit the Bloomberg Podcast channel on YouTube to 6 00:00:29,520 --> 00:00:32,920 Speaker 1: see the show weekday mornings from seven to ten am 7 00:00:32,960 --> 00:00:36,960 Speaker 1: Eastern from our global headquarters in New York City. Subscribe 8 00:00:37,000 --> 00:00:40,360 Speaker 1: to the podcast on Apple, Spotify, or anywhere else you 9 00:00:40,440 --> 00:00:44,600 Speaker 1: listen and always I'm Bloomberg Radio, the Bloomberg Terminal, and 10 00:00:44,640 --> 00:00:47,400 Speaker 1: the Bloomberg Business App. We're going to dive into the 11 00:00:47,400 --> 00:00:50,320 Speaker 1: economic data right now. We've given Tiffany wild Over at 12 00:00:50,320 --> 00:00:55,120 Speaker 1: PIMCO Newport Beach, California, time to do it. But Tiffany, 13 00:00:55,240 --> 00:00:58,120 Speaker 1: I gotta rip up the script right now. The new 14 00:00:58,240 --> 00:01:02,560 Speaker 1: CEO at Starbucks is going to stay in Newport Beach 15 00:01:02,680 --> 00:01:06,600 Speaker 1: instead of commute to Smarts. I mean, Tiffany, what is 16 00:01:06,640 --> 00:01:11,160 Speaker 1: the attraction, the allure of beach versus him and the 17 00:01:11,280 --> 00:01:13,320 Speaker 1: fam moving up to Seattle. 18 00:01:15,240 --> 00:01:17,600 Speaker 2: Well, I think it's your it's your favorite restaurant, Malarkey's 19 00:01:18,360 --> 00:01:21,600 Speaker 2: Bye Bye by Fashion Island. But to be fair, the 20 00:01:21,640 --> 00:01:24,080 Speaker 2: beaches here are are very gorgeous. It's like living in 21 00:01:24,120 --> 00:01:27,119 Speaker 2: a resort community. It's it's very different than New York City. 22 00:01:27,520 --> 00:01:29,640 Speaker 2: It's a very nice place to life, for sure. I'm 23 00:01:29,640 --> 00:01:32,319 Speaker 2: not surprised they're killing me. 24 00:01:32,880 --> 00:01:35,560 Speaker 1: That's migrate to retail sales right now. It's just such 25 00:01:35,600 --> 00:01:39,560 Speaker 1: a tough life for Tiffany. Wow, I got a nominal 26 00:01:39,640 --> 00:01:42,360 Speaker 1: number here port and Tiffany as I got some revisions 27 00:01:42,360 --> 00:01:46,160 Speaker 1: that are actually pretty quiescent. This is a constructive set 28 00:01:46,200 --> 00:01:47,240 Speaker 1: of data, isn't it. 29 00:01:48,640 --> 00:01:48,880 Speaker 3: Yeah. 30 00:01:48,960 --> 00:01:51,080 Speaker 2: I mean, I think the bottom line is I'm just 31 00:01:51,120 --> 00:01:54,240 Speaker 2: looking through this is is this completely confirms that the 32 00:01:54,360 --> 00:01:57,840 Speaker 2: US was not in recession in July. And obviously the 33 00:01:58,320 --> 00:02:01,040 Speaker 2: risks of that, or at least the the market's focus 34 00:02:01,080 --> 00:02:03,040 Speaker 2: on the risks of that, were increased because of the 35 00:02:03,080 --> 00:02:07,120 Speaker 2: unemployment report, and specifically the increase in the unemployment rate, 36 00:02:07,160 --> 00:02:10,560 Speaker 2: which has triggered the so called SAM rule. Historically, this 37 00:02:10,639 --> 00:02:12,560 Speaker 2: sm rule has been a good indicator that we are 38 00:02:12,560 --> 00:02:15,840 Speaker 2: in recession right now. But you know, as we've been discussing, 39 00:02:15,840 --> 00:02:18,520 Speaker 2: there's good reasons to believe why this time is actually 40 00:02:18,520 --> 00:02:21,600 Speaker 2: different with that rule. We've had pretty big supply side 41 00:02:21,639 --> 00:02:23,959 Speaker 2: gains in the labor market over the last few years 42 00:02:23,960 --> 00:02:26,799 Speaker 2: as a result of immigration and just folks coming back 43 00:02:26,880 --> 00:02:30,280 Speaker 2: post pandemic, and that's not the markings of an economy 44 00:02:30,280 --> 00:02:33,320 Speaker 2: that's in recession. This retail sales report just completely confirm that. 45 00:02:33,800 --> 00:02:36,120 Speaker 3: So on the retail sales at Tiffany again, I'm going 46 00:02:36,160 --> 00:02:38,000 Speaker 3: to look at the control group. I'm not sure what's 47 00:02:38,200 --> 00:02:40,520 Speaker 3: all excluded, but let's go with it. The control group 48 00:02:40,960 --> 00:02:43,840 Speaker 3: positive zero point three percent. The consensus was a zero 49 00:02:43,880 --> 00:02:46,760 Speaker 3: point one percent. What do you make of the US 50 00:02:46,800 --> 00:02:48,040 Speaker 3: consumer these days? 51 00:02:49,680 --> 00:02:52,720 Speaker 2: Yeah, I mean, I think overall the consumer is still strong, 52 00:02:53,280 --> 00:02:56,040 Speaker 2: you know, I do think that it's you have seen 53 00:02:56,120 --> 00:03:00,960 Speaker 2: some deceleration in consumption at but that's okay. 54 00:03:01,400 --> 00:03:02,280 Speaker 4: We we were. 55 00:03:02,160 --> 00:03:04,640 Speaker 2: Living in an economy where you had a lot of 56 00:03:04,680 --> 00:03:07,760 Speaker 2: above trend growth. Some of that was due to immigration, 57 00:03:07,840 --> 00:03:09,320 Speaker 2: but some of that was due to just the fact 58 00:03:09,360 --> 00:03:12,360 Speaker 2: that we had a lot of stimulus post pandemic. As 59 00:03:12,400 --> 00:03:15,960 Speaker 2: that is wearing off, you're seeing things just normalized. So 60 00:03:16,040 --> 00:03:19,720 Speaker 2: I would argue it's just a healthier environment for consumers. 61 00:03:19,960 --> 00:03:23,200 Speaker 2: You're seeing them more picky, you know, with pricing. Obviously, 62 00:03:23,200 --> 00:03:25,640 Speaker 2: we had the Amazon Prime Day and related promotions that 63 00:03:25,800 --> 00:03:30,560 Speaker 2: probably boosted nominal retail sales in July. But overall, I 64 00:03:30,560 --> 00:03:32,560 Speaker 2: would say that we're getting back to normal for the consumer. 65 00:03:32,600 --> 00:03:35,000 Speaker 1: Okay, My problem is Tiffany, and it was the number 66 00:03:35,040 --> 00:03:38,280 Speaker 1: one fight I had with a wonderful Alan Meltzer Cardegie Mellon. 67 00:03:38,960 --> 00:03:44,240 Speaker 1: The average Newport Beach, California home price is three point 68 00:03:44,400 --> 00:03:49,080 Speaker 1: three nine three million dollars. That's the average price wow 69 00:03:49,120 --> 00:03:53,640 Speaker 1: off Zillow for the Tiffany wildhood three point ninety three 70 00:03:53,680 --> 00:03:58,560 Speaker 1: million dollars. Tiffany, that's not America. How much of the 71 00:03:58,600 --> 00:04:03,000 Speaker 1: buoyancy and retails sales is coming from ten percent of 72 00:04:03,040 --> 00:04:03,600 Speaker 1: the public. 73 00:04:05,120 --> 00:04:08,720 Speaker 2: Yeah, No, you're you're absolutely right on the distribution of 74 00:04:09,240 --> 00:04:13,240 Speaker 2: outcomes given wealth level, and we very clearly see that 75 00:04:13,280 --> 00:04:14,920 Speaker 2: in the data. So you know, when we look at 76 00:04:14,920 --> 00:04:17,840 Speaker 2: the retail sales number, that's the average consumer, and that 77 00:04:18,040 --> 00:04:20,840 Speaker 2: hides a lot of you know, a lot of differentiation 78 00:04:21,000 --> 00:04:23,960 Speaker 2: under the surface. And you're absolutely right. What we're seeing 79 00:04:24,040 --> 00:04:27,680 Speaker 2: is that lower income consumers, you know, they they are struggling. 80 00:04:28,279 --> 00:04:31,440 Speaker 2: You know, we are seeing more delinquencies on credit cards, 81 00:04:31,480 --> 00:04:35,120 Speaker 2: on auto loans and things like that. You know, but 82 00:04:35,120 --> 00:04:37,920 Speaker 2: but you know, overall, you know, the consumer is doing 83 00:04:38,000 --> 00:04:41,119 Speaker 2: quite well. The consumer in terms of its balance sheet. 84 00:04:41,200 --> 00:04:44,680 Speaker 2: We came out of this recession, the pandemic related recession, 85 00:04:44,720 --> 00:04:47,640 Speaker 2: with actually consumer balance sheets being stronger than where they 86 00:04:47,640 --> 00:04:49,800 Speaker 2: were when we came in. That's something that never happens 87 00:04:49,839 --> 00:04:53,359 Speaker 2: in a recession. Consumers are also enjoying a lot of 88 00:04:53,440 --> 00:04:56,159 Speaker 2: wealth that's been created in their the largest asset that 89 00:04:56,200 --> 00:04:59,919 Speaker 2: they have their homes as a result of home prices increasing, 90 00:05:00,279 --> 00:05:01,920 Speaker 2: you know, and a lot of them also have low 91 00:05:01,920 --> 00:05:04,839 Speaker 2: mortgage rates still, so you know, I would say, you know, yes, 92 00:05:04,920 --> 00:05:08,640 Speaker 2: there is some you know, differences you know, by income level, 93 00:05:08,760 --> 00:05:11,360 Speaker 2: but overall, the consumers is doing quite well. 94 00:05:11,520 --> 00:05:14,320 Speaker 3: All right, the consumers doing quite well in general. We've 95 00:05:14,360 --> 00:05:17,920 Speaker 3: got I guess inflation coming down moderating as we continue 96 00:05:17,920 --> 00:05:20,839 Speaker 3: to see that in both the PPI and the CPI data. 97 00:05:21,160 --> 00:05:22,919 Speaker 3: So what does that set up the Fed to do 98 00:05:23,040 --> 00:05:25,000 Speaker 3: in September? Do you believe, Tiffany? 99 00:05:26,360 --> 00:05:28,440 Speaker 2: Yeah, I mean, I think I think there's when you 100 00:05:28,480 --> 00:05:31,640 Speaker 2: have an economy that's getting back to normal, you need 101 00:05:31,640 --> 00:05:34,400 Speaker 2: to have monetary policy that's also getting back to normal. 102 00:05:34,920 --> 00:05:38,080 Speaker 2: And I think I think FED officials would argue that 103 00:05:38,160 --> 00:05:41,120 Speaker 2: they think policy is in restrictive territory, you know, we 104 00:05:41,160 --> 00:05:42,960 Speaker 2: would agree with them, you know, we do think it. 105 00:05:43,480 --> 00:05:46,360 Speaker 2: Higher interest rates are restricting the economy to some degree, 106 00:05:46,680 --> 00:05:50,000 Speaker 2: and just bringing that back to normal also makes sense. 107 00:05:50,040 --> 00:05:51,520 Speaker 2: And we think that's what they're going to start to 108 00:05:51,520 --> 00:05:54,960 Speaker 2: do in September, you know, and they're you know, probably 109 00:05:54,960 --> 00:05:56,760 Speaker 2: going to do that. You know, they could do it 110 00:05:56,880 --> 00:05:59,640 Speaker 2: at varying degrees. You know, the market's obviously pricing in 111 00:05:59,640 --> 00:06:03,120 Speaker 2: some chain they cut rates by fifty basis points. You know, 112 00:06:03,160 --> 00:06:05,600 Speaker 2: we we definitely we think twenty five is more likely, 113 00:06:05,640 --> 00:06:09,000 Speaker 2: just because the economy is not going into recession, you know, 114 00:06:09,040 --> 00:06:10,800 Speaker 2: so they can kind of do this in a you know, 115 00:06:11,040 --> 00:06:13,839 Speaker 2: a measured paced way and get the economy back to 116 00:06:14,000 --> 00:06:14,680 Speaker 2: back to normal. 117 00:06:15,640 --> 00:06:18,240 Speaker 1: And Tiffany, if you're sitting with the animals like Jerome 118 00:06:18,320 --> 00:06:21,960 Speaker 1: Schneider and they're just snirling and they're angry, it's miserable 119 00:06:22,000 --> 00:06:25,680 Speaker 1: out there at Pimco, Tiffan, You're you're talking to Jerome Schneider, 120 00:06:26,200 --> 00:06:29,160 Speaker 1: and he goes, what's your GDP call quickly? Here? What's 121 00:06:29,160 --> 00:06:30,360 Speaker 1: your real GDP call? 122 00:06:30,480 --> 00:06:30,600 Speaker 2: Up? 123 00:06:30,600 --> 00:06:31,279 Speaker 1: Twelve months? 124 00:06:33,320 --> 00:06:35,120 Speaker 2: Yeah, I mean so, so we're still looking for an 125 00:06:35,120 --> 00:06:37,520 Speaker 2: economy that's doing quite well, you know, maybe not as 126 00:06:37,520 --> 00:06:39,960 Speaker 2: well as last year. When it clocked three percent growth, 127 00:06:39,960 --> 00:06:42,320 Speaker 2: but our forecast for this year is around two and 128 00:06:42,360 --> 00:06:44,720 Speaker 2: a little bit below that, you know, in twenty twenty five. 129 00:06:44,760 --> 00:06:47,960 Speaker 1: Okay, so let's it's it's grim two point two percent. 130 00:06:48,480 --> 00:06:54,520 Speaker 1: What portion of America is living Laurence Summer's stagflation beneath 131 00:06:54,560 --> 00:06:59,840 Speaker 1: two percent or even feeling a recession when you're aggregating 132 00:06:59,839 --> 00:07:02,480 Speaker 1: it two point x percent real GDP. 133 00:07:04,120 --> 00:07:06,360 Speaker 2: Well, I think that you know, the thing to remember 134 00:07:06,480 --> 00:07:08,640 Speaker 2: is is that you know, looking back at the labor 135 00:07:08,680 --> 00:07:12,520 Speaker 2: market statistics, the unemployment rate has been going up, not 136 00:07:12,600 --> 00:07:16,840 Speaker 2: because people have been losing jobs on aggregate. We've actually 137 00:07:16,880 --> 00:07:20,200 Speaker 2: had job growth over the time period that we've seen 138 00:07:20,200 --> 00:07:23,400 Speaker 2: the unemployment rate rise. So you're seeing people that are 139 00:07:23,640 --> 00:07:26,800 Speaker 2: coming back to the labor market, and folks that have 140 00:07:26,920 --> 00:07:29,920 Speaker 2: entered the country entering the labor market, and the folks 141 00:07:30,000 --> 00:07:32,760 Speaker 2: that have jobs are keeping them. So that's not really 142 00:07:32,800 --> 00:07:35,600 Speaker 2: the marketings of an economy that is stressed. 143 00:07:36,440 --> 00:07:38,480 Speaker 1: Tiffany, thank you. This is the Interview of the day 144 00:07:38,480 --> 00:07:42,680 Speaker 1: from Newport Beach, California. She's a thousand miles from where 145 00:07:42,720 --> 00:07:46,160 Speaker 1: she wants to be. Tiffany Wildly of PIMCO greatly appreciated 146 00:07:46,400 --> 00:08:00,640 Speaker 1: in retail sales. Dana Telsea joins us right now. And 147 00:08:00,720 --> 00:08:05,200 Speaker 1: for Lisa Matteo and Tom Keane who have children in 148 00:08:05,320 --> 00:08:10,520 Speaker 1: All to Beauty, Why, Dana Telsey, you have an outperform 149 00:08:10,640 --> 00:08:14,440 Speaker 1: on All to Beauty, Warren Buffet, listen to you. Why 150 00:08:14,560 --> 00:08:18,040 Speaker 1: is alta beauty the future of my paycheck going out 151 00:08:18,040 --> 00:08:18,400 Speaker 1: the door? 152 00:08:19,760 --> 00:08:22,400 Speaker 5: Because look what? First of all, thank you for having me. Tom. 153 00:08:22,440 --> 00:08:24,720 Speaker 5: Great to hear and see you. I think, first of all, 154 00:08:24,720 --> 00:08:27,840 Speaker 5: when you think about ALTI beauty in the beauty category, 155 00:08:28,880 --> 00:08:31,840 Speaker 5: it basically appeals to so many different ages. You look 156 00:08:31,880 --> 00:08:36,360 Speaker 5: at the categories within it, whether it's skincare, whether it's makeup, 157 00:08:36,400 --> 00:08:39,600 Speaker 5: whether it's hair care. A lot of innovation. You see 158 00:08:39,640 --> 00:08:43,680 Speaker 5: that your daughters, they're basically being attracted by all the 159 00:08:43,760 --> 00:08:46,800 Speaker 5: new initiatives, all the new brands that are out there. 160 00:08:47,040 --> 00:08:50,920 Speaker 5: There's a sustainable, clean emphasis on it also, and people 161 00:08:50,960 --> 00:08:54,199 Speaker 5: have fun with beauty, especially today given that we live 162 00:08:54,360 --> 00:08:57,400 Speaker 5: more in a zoom society than we do a pre pandemic. 163 00:08:57,640 --> 00:09:00,280 Speaker 5: So whether you're seeing people in person, whether you're seeing 164 00:09:00,320 --> 00:09:03,440 Speaker 5: them on zoom, all the beauty gives the opportunity to 165 00:09:03,520 --> 00:09:06,199 Speaker 5: look good with all different brands and all different categories. 166 00:09:06,240 --> 00:09:08,640 Speaker 1: I'm glad we have hair routines. You'll love their best 167 00:09:08,760 --> 00:09:12,200 Speaker 1: back to school hairstyle. Great. What are they doing? Why 168 00:09:12,240 --> 00:09:16,240 Speaker 1: are they distinctive versus Sephora to mister Buffett? 169 00:09:17,640 --> 00:09:19,719 Speaker 5: A couple things. First of all, the stocks come down 170 00:09:19,760 --> 00:09:22,679 Speaker 5: a lot. It used to be trading it around forty times. 171 00:09:22,920 --> 00:09:26,560 Speaker 5: Now it's trading below twenty times. You think about their 172 00:09:26,600 --> 00:09:30,600 Speaker 5: customer base. They offer from mass to prestige, so a 173 00:09:30,679 --> 00:09:34,360 Speaker 5: wide income span. They have hair salons, so people go 174 00:09:34,440 --> 00:09:37,480 Speaker 5: there for services too. When you go for service, there's 175 00:09:37,480 --> 00:09:40,000 Speaker 5: an attachment sale that rings up with it. When you 176 00:09:40,080 --> 00:09:44,080 Speaker 5: look at their locations, they have very close destinations and 177 00:09:44,120 --> 00:09:46,120 Speaker 5: there a lot of them are outside of them all 178 00:09:46,320 --> 00:09:49,280 Speaker 5: so they're convenient. And now with a new five thousand 179 00:09:49,280 --> 00:09:52,560 Speaker 5: square foot box that they're testing, there's even potential to 180 00:09:52,559 --> 00:09:56,439 Speaker 5: go into some smaller areas. So you've got breadth of categories. 181 00:09:56,480 --> 00:09:59,960 Speaker 5: You've got closeness and convenience, and you have massd to prestige. 182 00:10:00,480 --> 00:10:03,160 Speaker 5: And with that, the grandmother, the mom, and the daughter. 183 00:10:04,520 --> 00:10:07,400 Speaker 3: Hey Dan, I'm looking at Walmart here. They reported numbers 184 00:10:07,640 --> 00:10:11,840 Speaker 3: here this morning, beating estimates. They raised their sale guidance 185 00:10:12,200 --> 00:10:14,720 Speaker 3: for the full year. The stocks up nine percent pre market. 186 00:10:15,360 --> 00:10:17,160 Speaker 3: What did you take away from our friends in Mettenville. 187 00:10:18,320 --> 00:10:22,000 Speaker 5: I thought, overall, excellent execution and look what they're doing. 188 00:10:22,040 --> 00:10:24,880 Speaker 5: They're gaining share. If they can say they've gotten a 189 00:10:24,920 --> 00:10:28,520 Speaker 5: bigger share of the wealthier consumer and they haven't seen 190 00:10:28,679 --> 00:10:31,520 Speaker 5: any weakness in some of their core customers. What does 191 00:10:31,559 --> 00:10:34,560 Speaker 5: that mean to me? The dollars that the consumer has 192 00:10:34,760 --> 00:10:38,600 Speaker 5: they're allocating to Walmart, and their more effectiveness in their 193 00:10:38,640 --> 00:10:41,920 Speaker 5: category offering and their price offering and the meaning of 194 00:10:42,000 --> 00:10:44,400 Speaker 5: value their share gainer. 195 00:10:45,200 --> 00:10:47,320 Speaker 1: Dan, I want to talk about luxury here because there's 196 00:10:47,320 --> 00:10:49,240 Speaker 1: a lot of negative talk about it, and there's other 197 00:10:49,320 --> 00:10:54,480 Speaker 1: things doing well, different companies, selective, but I'm witnessing some 198 00:10:54,679 --> 00:10:58,800 Speaker 1: a name I didn't even know, Roger Vivier. Basically, folks, 199 00:10:58,880 --> 00:11:02,280 Speaker 1: i've been editorial is on fire. They've got a thing 200 00:11:02,320 --> 00:11:06,280 Speaker 1: where Laura Dern they're doing with their daughter, and their 201 00:11:06,720 --> 00:11:13,040 Speaker 1: internet exposure of shoes nobody can afford is like unbelievable, Dana, 202 00:11:13,200 --> 00:11:16,440 Speaker 1: tell us, just give us one vignette about how a 203 00:11:16,480 --> 00:11:21,000 Speaker 1: brand like Roger Vivier gets a moonshot in the summer 204 00:11:21,040 --> 00:11:22,480 Speaker 1: of twenty twenty four. 205 00:11:23,800 --> 00:11:26,079 Speaker 5: I think what you said a little bit of collaborations 206 00:11:26,080 --> 00:11:28,800 Speaker 5: of who's wearing it like Laura Dern. Check out their 207 00:11:28,840 --> 00:11:33,440 Speaker 5: store on Madison Avenue which they recently reopened, renovated, and 208 00:11:33,480 --> 00:11:36,720 Speaker 5: you have a very iconic offering in terms of what 209 00:11:36,880 --> 00:11:40,839 Speaker 5: their shoes are and certainly the emblem that's attached to it, 210 00:11:41,200 --> 00:11:45,200 Speaker 5: and they've modernized it. This is an example of intentional buying. 211 00:11:45,400 --> 00:11:49,280 Speaker 5: Brands is driving demand and you have intention there. It's 212 00:11:49,280 --> 00:11:52,240 Speaker 5: an iconic offering and it's back in vogue again. 213 00:11:52,320 --> 00:11:55,520 Speaker 1: How can our listeners and viewers profit from things like 214 00:11:55,640 --> 00:11:56,400 Speaker 1: Roger Vivier. 215 00:11:57,840 --> 00:11:59,640 Speaker 5: I think overall, when you think about some of the 216 00:11:59,720 --> 00:12:03,280 Speaker 5: lux brands, you take a look today, Tapestries results were 217 00:12:03,400 --> 00:12:07,400 Speaker 5: very very good, high gross margin, new customers are transacting 218 00:12:07,800 --> 00:12:10,839 Speaker 5: at a higher average unit retail selling price. So when 219 00:12:10,840 --> 00:12:14,160 Speaker 5: you think of brands that have they say what they do, 220 00:12:14,200 --> 00:12:16,160 Speaker 5: they do what they say, and they stand for something 221 00:12:16,720 --> 00:12:19,360 Speaker 5: I think you have, whether it's LVMH, I don't think 222 00:12:19,400 --> 00:12:22,640 Speaker 5: that while their sales growth may have slowed, the brands 223 00:12:22,640 --> 00:12:26,480 Speaker 5: and how they innovate and create demand, it's something that's 224 00:12:26,520 --> 00:12:28,040 Speaker 5: so unusual and compelling. 225 00:12:28,280 --> 00:12:30,760 Speaker 1: Dana is such a retail animal. Did you hear what 226 00:12:30,800 --> 00:12:34,720 Speaker 1: she just said? She said customers are transacting. That's Dana 227 00:12:34,800 --> 00:12:36,839 Speaker 1: Telsey talk for spending. 228 00:12:36,520 --> 00:12:39,240 Speaker 3: Months clear and Dana, I have no idea how Tom 229 00:12:39,320 --> 00:12:42,560 Speaker 3: Kean knows about Roger Viva shoes. But the Vi skate 230 00:12:42,920 --> 00:12:47,319 Speaker 3: metal bucket sneakers in soft leather and white retail one thousand, 231 00:12:47,400 --> 00:12:50,760 Speaker 3: seventy five dollars. Yes, there you go, sneakers, one thousand dollars. 232 00:12:50,840 --> 00:12:51,240 Speaker 1: There you go. 233 00:12:51,520 --> 00:12:54,400 Speaker 3: So talk to us about data about in the in 234 00:12:54,440 --> 00:12:58,440 Speaker 3: the luxury category, where's China? Where the Chinese consumers? 235 00:12:58,480 --> 00:13:02,400 Speaker 5: They say slowing down. The Chinese consumers are slowing down. 236 00:13:02,440 --> 00:13:05,200 Speaker 5: They're spending within China, They're not traveling as much as 237 00:13:05,240 --> 00:13:07,600 Speaker 5: they had a lot of them are buying some local 238 00:13:07,720 --> 00:13:11,800 Speaker 5: Chinese brands and companies are having to work harder with 239 00:13:11,840 --> 00:13:14,920 Speaker 5: their marketing dollars in order to win business from the 240 00:13:15,000 --> 00:13:18,520 Speaker 5: Chinese customer. And you've seen it among many different brands 241 00:13:18,559 --> 00:13:22,679 Speaker 5: out there. There's still opportunity going forward in China, and 242 00:13:22,760 --> 00:13:26,960 Speaker 5: I think the specific marketing to that core consumer within 243 00:13:27,200 --> 00:13:29,800 Speaker 5: China is really what's going to win the day, and 244 00:13:29,840 --> 00:13:31,760 Speaker 5: we're seeing companies refocus on that. 245 00:13:32,480 --> 00:13:35,080 Speaker 3: Are companies still I mean again, China's a huge market 246 00:13:35,120 --> 00:13:39,560 Speaker 3: has been a huge driver of the luxury space. How 247 00:13:39,559 --> 00:13:42,880 Speaker 3: do luxury companies how do they operate in China? Are 248 00:13:42,880 --> 00:13:45,960 Speaker 3: they still investing in China because a lot of industries 249 00:13:46,360 --> 00:13:48,360 Speaker 3: away from retail are really concerned about that. 250 00:13:49,480 --> 00:13:51,960 Speaker 5: They are concerned about it, but yes, they are still investing. 251 00:13:52,160 --> 00:13:55,520 Speaker 5: The ability to have a physical footprint basically provides the 252 00:13:55,520 --> 00:13:58,720 Speaker 5: brand awareness. Have goods that are exclusive to China is 253 00:13:58,800 --> 00:14:02,640 Speaker 5: key because when these are traveling outside of China, they 254 00:14:02,720 --> 00:14:05,600 Speaker 5: have to know that they're getting exactly what it looks 255 00:14:05,679 --> 00:14:09,760 Speaker 5: like in China and its authenticity. So being able to 256 00:14:09,840 --> 00:14:13,160 Speaker 5: show what that brand aesthetic means is key for getting 257 00:14:13,240 --> 00:14:15,880 Speaker 5: them to transact in other places when they travel. 258 00:14:16,080 --> 00:14:20,680 Speaker 1: Dana Telsea Advisor your thoughts on walmart It's future out five. 259 00:14:20,520 --> 00:14:25,520 Speaker 5: Years, stronger and bigger and being able to capture a 260 00:14:25,520 --> 00:14:29,520 Speaker 5: wider consumer base. The physical footprint will be even more 261 00:14:29,560 --> 00:14:33,000 Speaker 5: omni channel than what it is today, and I think 262 00:14:33,080 --> 00:14:37,560 Speaker 5: the marketplaces area and the whole omni channel initiatives are 263 00:14:37,600 --> 00:14:40,960 Speaker 5: going to be made easier. I think the seamless ability 264 00:14:41,000 --> 00:14:45,600 Speaker 5: of Walmart to capture more households what you're seeing now 265 00:14:45,640 --> 00:14:49,400 Speaker 5: with even wealthier consumers buying from Walmart makes it easier. 266 00:14:49,680 --> 00:14:53,680 Speaker 5: It's value and convenience that's the synonym for Walmart. 267 00:14:53,440 --> 00:14:56,160 Speaker 1: Dana Telsea. Thank you so much, just brilliant there. Particularly, 268 00:14:56,680 --> 00:15:00,880 Speaker 1: I really appreciate the altered conversation. Lisa and I commiserate 269 00:15:01,040 --> 00:15:16,400 Speaker 1: over that. Thank you for the international response to our 270 00:15:16,480 --> 00:15:23,160 Speaker 1: covers of the Mars transaction with Kellogg's over their snack foods. 271 00:15:23,640 --> 00:15:26,200 Speaker 1: We wanted to go out across Wall Street to the 272 00:15:26,240 --> 00:15:28,840 Speaker 1: east side, not the cell side of the byside, but 273 00:15:28,920 --> 00:15:31,800 Speaker 1: people that actually try the product, joining us now with 274 00:15:31,960 --> 00:15:35,000 Speaker 1: their full teen coverage of cheese its amand align them 275 00:15:35,400 --> 00:15:37,520 Speaker 1: for blackrock as well. 276 00:15:37,560 --> 00:15:41,080 Speaker 4: So jalapino is the way to. 277 00:15:41,520 --> 00:15:44,000 Speaker 1: Should I go with the duos where that I split 278 00:15:44,040 --> 00:15:46,760 Speaker 1: it between a jalopino and the traditional. 279 00:15:47,920 --> 00:15:49,680 Speaker 4: But you do have to you do have to try 280 00:15:49,720 --> 00:15:49,960 Speaker 4: the house. 281 00:15:50,000 --> 00:15:52,760 Speaker 1: Okay, we will try that at our house. Not for me, 282 00:15:52,880 --> 00:15:55,960 Speaker 1: but howipinos is very big. I swear, folks. This is 283 00:15:56,000 --> 00:16:00,080 Speaker 1: our final discussion of Jesus, other than congratulations to the 284 00:16:00,120 --> 00:16:04,680 Speaker 1: Mars people, the Mars family thirty twenty nine billion dollar transaction, 285 00:16:04,840 --> 00:16:08,480 Speaker 1: six billion dollars of debt, Good luck with that on 286 00:16:08,520 --> 00:16:12,000 Speaker 1: the bond market is showing a new message off the 287 00:16:12,040 --> 00:16:15,480 Speaker 1: equity panic of eight days ago? Is there a new 288 00:16:15,560 --> 00:16:18,440 Speaker 1: tone to your fixed income space at Blackrock. 289 00:16:18,560 --> 00:16:20,560 Speaker 6: So actually, in good morning, thank you for having me. 290 00:16:21,200 --> 00:16:24,680 Speaker 6: The credit markets resilience was probably the big takeaway over 291 00:16:24,720 --> 00:16:27,960 Speaker 6: the volatility of the past two weeks. You saw markets, 292 00:16:28,000 --> 00:16:31,360 Speaker 6: the volatility index, the VVIX, certain parts of global equity 293 00:16:31,400 --> 00:16:35,600 Speaker 6: markets set new post financial crisis records or even pre 294 00:16:35,640 --> 00:16:39,160 Speaker 6: financial crisis records. Actually credit spreads didn't even come close 295 00:16:39,240 --> 00:16:42,720 Speaker 6: to their median or the average over the post financial 296 00:16:42,760 --> 00:16:45,120 Speaker 6: crisis period. So I would say the takeaway is that 297 00:16:45,200 --> 00:16:49,200 Speaker 6: credit held in better than other asset classes all things considered, 298 00:16:49,680 --> 00:16:53,360 Speaker 6: and actually we saw better buying on the little bit 299 00:16:53,360 --> 00:16:55,440 Speaker 6: of widening that we did have, and we've at this 300 00:16:55,560 --> 00:16:58,280 Speaker 6: point retraced depending on the asset class and the rating, 301 00:16:58,320 --> 00:17:01,400 Speaker 6: around fifty to seventy five percent of the widening that 302 00:17:01,440 --> 00:17:03,600 Speaker 6: we saw. I think there's a lot of kind of 303 00:17:03,960 --> 00:17:07,840 Speaker 6: uh focus on the resilience of credit spreads and kind 304 00:17:07,880 --> 00:17:11,040 Speaker 6: of why this is happening. Obviously, lots of well telegraphed 305 00:17:11,040 --> 00:17:13,520 Speaker 6: reasons for that in terms of sector shifts, in the 306 00:17:13,520 --> 00:17:15,760 Speaker 6: composition of the index, rating shifts, but one of the 307 00:17:15,800 --> 00:17:18,320 Speaker 6: points I think that's actually not discussed enough is that 308 00:17:18,560 --> 00:17:21,399 Speaker 6: just companies are staying private for longer in this new cycle, 309 00:17:21,480 --> 00:17:24,280 Speaker 6: and by the time they actually issue into the public markets, 310 00:17:24,440 --> 00:17:25,879 Speaker 6: they're larger and more diversified. 311 00:17:25,920 --> 00:17:28,359 Speaker 4: And so that's why credit, we believe is holding in better. 312 00:17:28,680 --> 00:17:30,520 Speaker 3: How much credit risks do you want to take? I mean, 313 00:17:30,320 --> 00:17:33,240 Speaker 3: I mean I considered it to your treasury where I'm 314 00:17:33,240 --> 00:17:35,400 Speaker 3: happy to hang out at four percent here, how much 315 00:17:35,400 --> 00:17:36,400 Speaker 3: creditists do I want to take? 316 00:17:36,400 --> 00:17:38,640 Speaker 6: We like owning, we like taking credit risk. I think 317 00:17:38,640 --> 00:17:40,760 Speaker 6: one of the actual interesting things. And you can see 318 00:17:40,760 --> 00:17:43,040 Speaker 6: this on the Bloomberg Intelligence data. Actually on the terminal, 319 00:17:43,320 --> 00:17:46,439 Speaker 6: margins for high old credit have been improving over the 320 00:17:46,480 --> 00:17:50,000 Speaker 6: past few quarters, which is a bit of a counterintuitive results. 321 00:17:49,760 --> 00:17:52,600 Speaker 1: What mean what does margins for credit? 322 00:17:52,760 --> 00:17:55,400 Speaker 6: So margins for your highield index you have the LF 323 00:17:55,520 --> 00:17:58,720 Speaker 6: nine eight Highield Index l uac IG index. Actually in 324 00:17:59,000 --> 00:18:01,679 Speaker 6: n aggregate, the margins for the high old universe have 325 00:18:01,720 --> 00:18:05,280 Speaker 6: actually been improving. So in this in this kind of era, 326 00:18:05,480 --> 00:18:07,760 Speaker 6: focusing on a higher cost of capital, a slow down 327 00:18:07,800 --> 00:18:10,400 Speaker 6: in the economy, you would not expect ebit on margin. 328 00:18:10,480 --> 00:18:13,159 Speaker 1: How many basis points? How many percentage points do you 329 00:18:13,240 --> 00:18:15,360 Speaker 1: pick up on a high yield Amanda. 330 00:18:14,960 --> 00:18:16,480 Speaker 4: Line M piece yes. 331 00:18:16,320 --> 00:18:20,000 Speaker 1: Versus full faith and credit or some triple A Microsoft. 332 00:18:20,080 --> 00:18:22,840 Speaker 6: So the spread, the actual spread on the highled indexes 333 00:18:22,840 --> 00:18:26,840 Speaker 6: around three hundred and thirty eight basis points over treasuries. Yes, yes, 334 00:18:27,520 --> 00:18:30,480 Speaker 6: but actually when high old investors are deploying, they're focusing 335 00:18:30,520 --> 00:18:32,600 Speaker 6: more on the dollar price in the yield. The yield 336 00:18:32,600 --> 00:18:34,680 Speaker 6: on the high old indexes around seven point five to 337 00:18:34,760 --> 00:18:38,960 Speaker 6: five percent, so that's a meaningful cushion in terms of 338 00:18:39,000 --> 00:18:42,520 Speaker 6: when you're actually deploying capital in this credit market that 339 00:18:42,520 --> 00:18:44,400 Speaker 6: you're at, you're able to earn a pretty attractive on 340 00:18:44,480 --> 00:18:48,520 Speaker 6: yield in IG for comparison, that's around five percent. We've 341 00:18:48,520 --> 00:18:51,119 Speaker 6: seen significant demand for IG at five and a half 342 00:18:51,200 --> 00:18:54,200 Speaker 6: percent yield, so we're slightly below that given the rate move. 343 00:18:54,840 --> 00:18:57,600 Speaker 6: But in general, I think so long as you expect 344 00:18:57,840 --> 00:19:01,560 Speaker 6: trend or ideally above trend and growth and we're actually there, 345 00:19:01,720 --> 00:19:04,640 Speaker 6: we're at above trend now, that's actually a pretty supportive 346 00:19:04,640 --> 00:19:05,320 Speaker 6: outcome for credit. 347 00:19:07,880 --> 00:19:11,879 Speaker 3: For these credit people argus them, I understood that, I 348 00:19:11,920 --> 00:19:15,320 Speaker 3: think Tom. I think if you're a salesman on Wall Street, 349 00:19:15,400 --> 00:19:17,400 Speaker 3: you know, credit salesman, and you got a new issue, 350 00:19:17,600 --> 00:19:19,840 Speaker 3: is the first company called black Rock? 351 00:19:20,160 --> 00:19:22,919 Speaker 1: Yeah it used to be, but you know, Larry's been 352 00:19:22,960 --> 00:19:23,520 Speaker 1: working so you. 353 00:19:24,480 --> 00:19:27,920 Speaker 3: So you called black rock. What's your interest in new issues? 354 00:19:27,960 --> 00:19:30,560 Speaker 3: When when Wall Street calls you with a new issue? 355 00:19:30,880 --> 00:19:32,359 Speaker 3: What are the things you look at? 356 00:19:32,600 --> 00:19:35,160 Speaker 6: So, in general, new issues have been an attractive way 357 00:19:35,200 --> 00:19:37,920 Speaker 6: to deploy capital because they often come at a discount 358 00:19:37,920 --> 00:19:38,760 Speaker 6: to the existing debt. 359 00:19:38,800 --> 00:19:39,919 Speaker 4: We call that a concession. 360 00:19:40,200 --> 00:19:43,639 Speaker 6: Sometimes those concessions are large. More recently they've been quite modest, 361 00:19:43,680 --> 00:19:46,240 Speaker 6: but still it's an attractive way to deploy capital. The 362 00:19:46,320 --> 00:19:49,359 Speaker 6: really interesting thing, and we're actually writing about this this week, 363 00:19:49,440 --> 00:19:53,240 Speaker 6: is that supply in the IG market has outpaced the 364 00:19:53,280 --> 00:19:56,600 Speaker 6: monthly average every month so far this year, despite the 365 00:19:56,680 --> 00:20:00,639 Speaker 6: higher rate environment. Right in high yield, it's outpaced most months. 366 00:20:00,680 --> 00:20:02,800 Speaker 6: So what that tells you is that corporates are not 367 00:20:03,119 --> 00:20:04,440 Speaker 6: being sidelined by high rates. 368 00:20:04,520 --> 00:20:06,119 Speaker 4: They're moving forward with what they need to do. 369 00:20:06,359 --> 00:20:09,960 Speaker 6: The other interesting point, strategic M and A acquisition activity 370 00:20:10,040 --> 00:20:12,240 Speaker 6: is actually tracking well above the twenty twenty two and 371 00:20:12,280 --> 00:20:14,840 Speaker 6: twenty twenty three pace, and it's actually only six percent 372 00:20:14,920 --> 00:20:18,359 Speaker 6: below the tenure average. So there too, like the news 373 00:20:18,400 --> 00:20:21,600 Speaker 6: that we've seen recently, corporates are moving forward with strategic 374 00:20:21,640 --> 00:20:24,439 Speaker 6: plans despite the higher rate environment. But I think the 375 00:20:24,440 --> 00:20:26,640 Speaker 6: one point on supply that I would make. It does 376 00:20:26,680 --> 00:20:28,320 Speaker 6: feel like this is a bit of a pull forward 377 00:20:28,359 --> 00:20:30,439 Speaker 6: towards late in the year. We're running well above what 378 00:20:30,480 --> 00:20:32,960 Speaker 6: would typically be implied for the summer, so I would 379 00:20:32,960 --> 00:20:34,879 Speaker 6: expect to slow down, but we haven't seen it yet. 380 00:20:35,040 --> 00:20:36,960 Speaker 1: Okay, fine, But to get to the real world where 381 00:20:36,960 --> 00:20:40,320 Speaker 1: Mars is a private company takes out holipedo cheese, it's yeah, 382 00:20:40,640 --> 00:20:42,760 Speaker 1: I get that, and forget it. You know, Mars has 383 00:20:42,760 --> 00:20:46,440 Speaker 1: their own way. How do people finance those large transactions? 384 00:20:46,440 --> 00:20:47,520 Speaker 1: The big munk's out. 385 00:20:47,359 --> 00:20:51,720 Speaker 6: There, yes, yes, So it depends in aggregate. We've seen 386 00:20:51,920 --> 00:20:54,960 Speaker 6: cash only deals represent fifty two percent of the year 387 00:20:54,960 --> 00:20:58,280 Speaker 6: to date volume, which is actually slightly above the longer 388 00:20:58,359 --> 00:20:58,919 Speaker 6: term trend. 389 00:20:59,480 --> 00:21:02,760 Speaker 4: Stock only deals are actually also. 390 00:21:02,920 --> 00:21:05,719 Speaker 6: Above the longer term trend, so that what's actually narrowed 391 00:21:05,760 --> 00:21:09,800 Speaker 6: is the mix of cash and equity transactions. It's a 392 00:21:09,840 --> 00:21:12,400 Speaker 6: little bit misleading to call it cash in debt though, 393 00:21:12,440 --> 00:21:15,480 Speaker 6: because for a bondholder, when an acquisition is funded with cash, 394 00:21:15,920 --> 00:21:18,680 Speaker 6: that can either deplete the excess liquidity on the balance 395 00:21:18,720 --> 00:21:21,959 Speaker 6: sheet or ultimately it gets replaced with debt. So so 396 00:21:22,119 --> 00:21:24,359 Speaker 6: from the perspective of a bondholder, we care how this 397 00:21:24,480 --> 00:21:24,959 Speaker 6: is funded. 398 00:21:25,200 --> 00:21:29,439 Speaker 1: We're taking I'm taking here. Everybody in the room is 399 00:21:29,520 --> 00:21:33,200 Speaker 1: just staring across the Javit Center and amand alne them going, 400 00:21:33,480 --> 00:21:37,679 Speaker 1: it's not fair curve, Amandon, You're going to ruin the curve. 401 00:21:38,480 --> 00:21:40,480 Speaker 3: How about the private credit? How do you guys think 402 00:21:40,480 --> 00:21:43,919 Speaker 3: about private credit? I mean, how does that impact your business? 403 00:21:43,920 --> 00:21:47,000 Speaker 6: So we actually think about private credit as this third 404 00:21:47,040 --> 00:21:50,080 Speaker 6: and viable funding option for a wide range of corporates 405 00:21:50,119 --> 00:21:52,560 Speaker 6: in addition to the traditional bank lending channel and the 406 00:21:52,560 --> 00:21:53,560 Speaker 6: public debt markets. 407 00:21:53,680 --> 00:21:55,280 Speaker 4: That wasn't the case several years ago. 408 00:21:55,920 --> 00:21:58,760 Speaker 6: That's because private credit has now grown into a sizable 409 00:21:58,800 --> 00:22:00,960 Speaker 6: and scalable asset class on its own right, so it 410 00:22:00,960 --> 00:22:03,800 Speaker 6: can compete in areas where it previously could not. We 411 00:22:03,840 --> 00:22:06,600 Speaker 6: think that that kind of ability to coexist peacefully with 412 00:22:06,640 --> 00:22:09,160 Speaker 6: the public debt markets is here to stay. We expect 413 00:22:09,160 --> 00:22:12,320 Speaker 6: the mixshift between the two markets to EBB and flow 414 00:22:12,359 --> 00:22:15,359 Speaker 6: over time, depending on market conditions. Probably the most notable 415 00:22:15,400 --> 00:22:18,240 Speaker 6: thing that I've seen is that companies with demonstrated access 416 00:22:18,280 --> 00:22:20,240 Speaker 6: to the public markets, either high old or loan, are 417 00:22:20,280 --> 00:22:23,800 Speaker 6: actually choosing in some instances to refine in the sul Mars. 418 00:22:23,800 --> 00:22:26,040 Speaker 3: As Thomas just talking about the Mars transaction they're going 419 00:22:26,080 --> 00:22:28,280 Speaker 3: to finance this, they said, with cash on hand and 420 00:22:28,320 --> 00:22:30,359 Speaker 3: then with new borrowing. So presumably they're going to go 421 00:22:30,400 --> 00:22:32,719 Speaker 3: to I think it's JP Morgan and City are their 422 00:22:32,800 --> 00:22:35,879 Speaker 3: bankers on this transaction. They'll see what kind of I 423 00:22:35,880 --> 00:22:38,959 Speaker 3: guess credit terms they get from them, maybe the public 424 00:22:39,000 --> 00:22:40,879 Speaker 3: markets as well. They'll hear from their bankers about what 425 00:22:40,880 --> 00:22:42,800 Speaker 3: they can do in the public markets. Will they also 426 00:22:42,800 --> 00:22:45,040 Speaker 3: go out and put bids out for private credit use? 427 00:22:45,119 --> 00:22:48,000 Speaker 6: So leaving that transaction aside, it is common to see 428 00:22:48,040 --> 00:22:51,440 Speaker 6: what we call dual track processes where corporates cfo's treasures 429 00:22:51,440 --> 00:22:54,680 Speaker 6: evaluate their funding options in both markets, just like anyone 430 00:22:54,680 --> 00:22:56,360 Speaker 6: would do in terms of do I issue a high 431 00:22:56,359 --> 00:22:58,360 Speaker 6: old bond or a leverage loan? Right, that whole kind 432 00:22:58,359 --> 00:23:01,840 Speaker 6: of slate of financing opportunities isailable similar time to your 433 00:23:01,840 --> 00:23:04,480 Speaker 6: point on the M and A funding mix, that's a 434 00:23:04,520 --> 00:23:07,359 Speaker 6: decision that corporates make depending on what is the balance 435 00:23:07,359 --> 00:23:09,560 Speaker 6: sheet capacity that they have to add debt at the 436 00:23:09,680 --> 00:23:13,120 Speaker 6: ratings where they're comfortable, where is their stock price in aggregate, 437 00:23:13,160 --> 00:23:15,200 Speaker 6: I would say that that funding mix for M and 438 00:23:15,280 --> 00:23:18,440 Speaker 6: A is tracking in a fairly kind of benign way 439 00:23:18,480 --> 00:23:22,080 Speaker 6: for bondholders, meaning not skewed super strongly to debt, but 440 00:23:22,160 --> 00:23:24,639 Speaker 6: it does matter a lot under the surface depending on 441 00:23:24,680 --> 00:23:26,760 Speaker 6: the sector. And as you can imagine, there are certain 442 00:23:26,800 --> 00:23:28,800 Speaker 6: kind of cash rich sectors like tech. 443 00:23:28,640 --> 00:23:31,000 Speaker 4: And pharma that are leaning more heavily on cash and debt. 444 00:23:31,040 --> 00:23:34,159 Speaker 1: What will mag seven do. I find it, from a 445 00:23:34,320 --> 00:23:38,880 Speaker 1: z body at Boston University's standpoint, almost immoral that they 446 00:23:38,880 --> 00:23:40,919 Speaker 1: haven't popped out to ten or twelve percent. 447 00:23:41,119 --> 00:23:44,080 Speaker 6: Yeah, Well, in general in the credit market, as you know, 448 00:23:44,200 --> 00:23:46,520 Speaker 6: that's a much smaller section of the credit market relative 449 00:23:46,560 --> 00:23:49,479 Speaker 6: equities leverage, net leverage is still really low for that 450 00:23:49,520 --> 00:23:52,480 Speaker 6: sector in aggregate, So I think it's reasonable to assume 451 00:23:52,560 --> 00:23:54,399 Speaker 6: that when they're adding debt, they're just moving closer to 452 00:23:54,440 --> 00:23:56,359 Speaker 6: their leverage target as they build that up over time. 453 00:23:56,480 --> 00:23:58,439 Speaker 1: Amanda, thank you so much. I'm n aligning with us 454 00:23:58,440 --> 00:24:11,359 Speaker 1: at black Reck just to clinic there, darn. Look at 455 00:24:11,400 --> 00:24:14,639 Speaker 1: the front page is a Lisa matteo our What do 456 00:24:14,680 --> 00:24:14,960 Speaker 1: you have? 457 00:24:15,400 --> 00:24:15,719 Speaker 3: All right? 458 00:24:15,800 --> 00:24:18,400 Speaker 7: So we just talked about you know, Starbucks new ceo 459 00:24:18,720 --> 00:24:22,800 Speaker 7: not working in you know, Seattle. Google's x CEO. He's 460 00:24:22,840 --> 00:24:25,440 Speaker 7: talking about the work from home. He's actually blaming it 461 00:24:26,480 --> 00:24:29,800 Speaker 7: in the company's losing battle in the AI race, so 462 00:24:29,920 --> 00:24:32,600 Speaker 7: he's saying, Eric Schmid, he's also the former executive chairman. 463 00:24:32,840 --> 00:24:35,720 Speaker 7: He said this during a talk at Stanford University. He 464 00:24:35,800 --> 00:24:38,520 Speaker 7: was responding to a question about Google competing with Open Ai, 465 00:24:38,920 --> 00:24:41,720 Speaker 7: and he said Google deciding that work life balance and 466 00:24:41,760 --> 00:24:45,840 Speaker 7: going home early, working from home was more important than winning. 467 00:24:46,200 --> 00:24:47,640 Speaker 4: So that was a shot right there. 468 00:24:47,880 --> 00:24:51,200 Speaker 7: He also said startup work is important because people work 469 00:24:51,320 --> 00:24:54,800 Speaker 7: like heck to get those startups going. 470 00:24:55,040 --> 00:24:56,040 Speaker 5: Yes, you gave me. 471 00:24:56,920 --> 00:24:58,119 Speaker 4: I did give it before you. 472 00:24:58,160 --> 00:25:01,200 Speaker 3: Know, but you're right. I mean, Lisa, I mean the startups. 473 00:25:01,200 --> 00:25:03,600 Speaker 3: I mean he's right on that. I mean you talk 474 00:25:03,640 --> 00:25:06,560 Speaker 3: to folks that work in the startup business. That's their 475 00:25:06,720 --> 00:25:09,440 Speaker 3: entire life. They sues them day and night, and they're 476 00:25:09,520 --> 00:25:12,560 Speaker 3: just it because it's make or break. You either make 477 00:25:12,600 --> 00:25:15,720 Speaker 3: it or you go bust, and so they work like crazy. 478 00:25:15,560 --> 00:25:17,680 Speaker 1: To disclose a loop on this. To The Wall Street 479 00:25:17,760 --> 00:25:22,040 Speaker 1: Journal yesterday, mister Schmidt said, quote, I misspoke about Google 480 00:25:22,119 --> 00:25:25,879 Speaker 1: and their work hours. Schmid said wednesday in an email quote, 481 00:25:25,960 --> 00:25:31,640 Speaker 1: I regret my error. They'll push back. Must have been something, yep. 482 00:25:32,280 --> 00:25:34,720 Speaker 3: But he joins a long list of corporate leaders including 483 00:25:34,800 --> 00:25:37,640 Speaker 3: JP Morgan, Chase CEO, Jamie Diamond and testa CEO Elon Musk, 484 00:25:37,760 --> 00:25:40,800 Speaker 3: who have complained about work from home policies, saying they 485 00:25:40,920 --> 00:25:42,960 Speaker 3: make companies less efficient and less. 486 00:25:42,600 --> 00:25:44,639 Speaker 1: You know what it needs to do out Stanford Pellow 487 00:25:44,680 --> 00:25:49,600 Speaker 1: alto go see you. Professor Booth Nicholas Booth has really 488 00:25:49,680 --> 00:25:54,600 Speaker 1: led on this and actually studying the issue. In a 489 00:25:54,600 --> 00:25:59,400 Speaker 1: lot of tycoons like Eric Schmidt will say I really 490 00:25:59,480 --> 00:26:02,520 Speaker 1: don't care or I don't believe. But the answer is, 491 00:26:02,960 --> 00:26:05,679 Speaker 1: at the minimum, it's raging debate. Ly's I see it 492 00:26:05,720 --> 00:26:08,000 Speaker 1: in the streets of New York. I mean, I'm a 493 00:26:08,080 --> 00:26:12,520 Speaker 1: thunderstruck at Lexington and Park Avenue. I mean, I know 494 00:26:12,720 --> 00:26:15,159 Speaker 1: there's a summer slowdown. I get it, sure, but it 495 00:26:15,200 --> 00:26:17,000 Speaker 1: was more Now work from home? 496 00:26:17,200 --> 00:26:17,480 Speaker 5: Next? 497 00:26:17,520 --> 00:26:17,960 Speaker 1: What do you have? 498 00:26:18,520 --> 00:26:21,639 Speaker 7: This new study shows gen Z voters don't want social 499 00:26:21,680 --> 00:26:26,400 Speaker 7: media restrictions. Shocker here, gen Z voters they don't because 500 00:26:26,520 --> 00:26:29,160 Speaker 7: there's all these talk about regulators trying to cut back 501 00:26:29,200 --> 00:26:32,000 Speaker 7: and get some tough regulations on these social media apps 502 00:26:32,040 --> 00:26:35,040 Speaker 7: to protect kids. But these kids gen Z, you know, 503 00:26:35,080 --> 00:26:37,200 Speaker 7: I'm twelve to twenty seven, They're saying they don't want 504 00:26:37,200 --> 00:26:40,200 Speaker 7: the restrictions. There was a sety out more than sixty 505 00:26:40,280 --> 00:26:44,200 Speaker 7: percent new voters oppose requiring kids under sixteen to ask 506 00:26:44,240 --> 00:26:48,639 Speaker 7: for their parents permission to use social media. The reason 507 00:26:48,640 --> 00:26:51,600 Speaker 7: why this is important, though, is because gen Zers more 508 00:26:51,640 --> 00:26:54,000 Speaker 7: than are getting closer to that voting age, so they're 509 00:26:54,040 --> 00:26:56,160 Speaker 7: starting to have a say in this. And there's such 510 00:26:56,200 --> 00:26:59,119 Speaker 7: a huge proponent of social media. I mean, most of 511 00:26:59,160 --> 00:27:02,080 Speaker 7: the gen z is the most active people on isn't the. 512 00:27:02,000 --> 00:27:04,639 Speaker 1: Biggest debate here on August fifteenth or whatever it is? 513 00:27:05,160 --> 00:27:07,520 Speaker 1: This whole idea. A lot of schools now are saying 514 00:27:07,640 --> 00:27:09,840 Speaker 1: leave your cell phone at the door. Yeah, to me, 515 00:27:09,920 --> 00:27:11,160 Speaker 1: this is a lot bigger deal. 516 00:27:11,359 --> 00:27:14,360 Speaker 3: Yeah, yeah, exactly. I mean I think that's a lot 517 00:27:14,359 --> 00:27:16,760 Speaker 3: of schools in a lot of states, but actually not 518 00:27:16,800 --> 00:27:18,280 Speaker 3: a lot of states. I think there's about eight or 519 00:27:18,359 --> 00:27:20,560 Speaker 3: nine states that have had some legislation saying, you know, 520 00:27:20,600 --> 00:27:24,160 Speaker 3: you got to put your phone here in a secure place. 521 00:27:24,359 --> 00:27:25,880 Speaker 3: You're not taking into the classroom. 522 00:27:25,560 --> 00:27:29,480 Speaker 7: Right like my daughter, Yeah for dinner, Yes, we do 523 00:27:29,560 --> 00:27:29,920 Speaker 7: that too. 524 00:27:30,320 --> 00:27:33,480 Speaker 3: No cell phones, phones, households. 525 00:27:34,160 --> 00:27:39,400 Speaker 1: It is bill, all of you misskiing my phone. All 526 00:27:39,400 --> 00:27:41,200 Speaker 1: of them get lined up good, but then we all 527 00:27:41,280 --> 00:27:43,200 Speaker 1: dash for them afterwards. 528 00:27:43,560 --> 00:27:46,120 Speaker 4: I don't want to serve you go for the phone. 529 00:27:46,240 --> 00:27:47,880 Speaker 7: No, but it's true a lot of them, like even 530 00:27:47,960 --> 00:27:49,800 Speaker 7: my daughters school. You got to keep it in the backpack. 531 00:27:50,119 --> 00:27:52,960 Speaker 7: But there is notifications too, Like the kids turn on 532 00:27:53,000 --> 00:27:56,320 Speaker 7: notifications for social media, so their phone's constantly dinging, you 533 00:27:56,359 --> 00:27:58,280 Speaker 7: know when they get like some kind of posts or 534 00:27:58,280 --> 00:28:02,480 Speaker 7: someone responds to them. So it's distraction. Okay, we've been 535 00:28:02,480 --> 00:28:06,040 Speaker 7: talking about, you know, grocery stores, a growing grocery built well, 536 00:28:06,320 --> 00:28:09,359 Speaker 7: grocery stores are now getting selective about their shelf space. 537 00:28:09,440 --> 00:28:12,040 Speaker 7: We talked about them leaving more space for the store 538 00:28:12,080 --> 00:28:15,760 Speaker 7: brands because people are switching to the store brands that 539 00:28:15,960 --> 00:28:18,600 Speaker 7: see you've done it, I've done it too. So you 540 00:28:18,720 --> 00:28:20,879 Speaker 7: see the grocery aisles starting to change. 541 00:28:20,920 --> 00:28:21,080 Speaker 2: Now. 542 00:28:21,119 --> 00:28:22,280 Speaker 4: These major food. 543 00:28:22,040 --> 00:28:24,840 Speaker 7: Companies they're fighting for the shelf space. You know that 544 00:28:24,920 --> 00:28:27,360 Speaker 7: they once had that major part of it, and now 545 00:28:27,400 --> 00:28:29,679 Speaker 7: they're fighting for it for the store brands who are 546 00:28:29,720 --> 00:28:32,400 Speaker 7: getting you know, some more greater competition there. They're trying 547 00:28:32,400 --> 00:28:34,400 Speaker 7: new things, they're trying new products, they're trying to work 548 00:28:34,440 --> 00:28:38,200 Speaker 7: to ensure they're packaging prices appeal to shoppers. But the 549 00:28:38,240 --> 00:28:40,800 Speaker 7: thing is, yesterday. 550 00:28:40,480 --> 00:28:42,760 Speaker 3: I learned a new term that I had not heard before. 551 00:28:42,800 --> 00:28:47,360 Speaker 3: It's called inner store. Jen Bartash to cover supermarkets grocery 552 00:28:47,360 --> 00:28:50,400 Speaker 3: stores for Bloomberg Intelligence, just throughout this term innerstore, and 553 00:28:50,480 --> 00:28:53,080 Speaker 3: like what's inner store. That's the stuff that's like in 554 00:28:53,120 --> 00:28:56,720 Speaker 3: the core of the supermarket, and that's like the basics, 555 00:28:57,000 --> 00:29:00,880 Speaker 3: soups and things like that. The outer of the store, 556 00:29:00,920 --> 00:29:03,040 Speaker 3: the edges of the aisles, the ends of the aisles 557 00:29:03,080 --> 00:29:06,320 Speaker 3: are the higher margin stuff and where they tend to 558 00:29:06,320 --> 00:29:09,480 Speaker 3: have maybe some promotions and things like that. Where the 559 00:29:09,560 --> 00:29:11,880 Speaker 3: basics the stuff you just have to get every time 560 00:29:12,080 --> 00:29:13,680 Speaker 3: that you don't need to promote, you don't need to 561 00:29:13,840 --> 00:29:16,040 Speaker 3: do anything that's in there. I don't. 562 00:29:16,400 --> 00:29:18,720 Speaker 1: I'm in the camp that everybody's buying the same thirty 563 00:29:18,760 --> 00:29:21,640 Speaker 1: seven products. Try to get a court or a half 564 00:29:21,680 --> 00:29:25,320 Speaker 1: gallon of one percent milk. Good luck with that, all 565 00:29:25,360 --> 00:29:29,920 Speaker 1: sold out. Butter gone. Everybody wants the same. It's an 566 00:29:29,920 --> 00:29:32,960 Speaker 1: Irish butter yes, but. 567 00:29:34,600 --> 00:29:35,440 Speaker 4: More Yes. 568 00:29:35,480 --> 00:29:40,560 Speaker 7: Your favorite topic break dancing in the Olympics. So there's 569 00:29:40,600 --> 00:29:45,440 Speaker 7: actually some controversy around it now because there's a breaker 570 00:29:45,440 --> 00:29:48,480 Speaker 7: from Australia. Her name is Rachel Gunn her aka raygun 571 00:29:48,720 --> 00:29:51,600 Speaker 7: She's from Sydney. She's a Sydney University professor. She did 572 00:29:51,640 --> 00:29:54,720 Speaker 7: this dance it was called like the Kangaroo dance. She 573 00:29:54,760 --> 00:29:58,120 Speaker 7: did some other weird moves, but she scored zero points. 574 00:29:58,360 --> 00:29:59,680 Speaker 7: And the thing is that a lot of people are 575 00:29:59,720 --> 00:30:03,680 Speaker 7: making zero a lot of people making fun of her. 576 00:30:03,960 --> 00:30:06,400 Speaker 7: They went to the late night talk shows. But there's 577 00:30:06,440 --> 00:30:10,640 Speaker 7: actually an online petition that's criticizing her. So now you 578 00:30:10,640 --> 00:30:14,080 Speaker 7: have the Australian Olympic Committee getting in the middle and saying, hey, 579 00:30:14,320 --> 00:30:16,960 Speaker 7: leave this one alone, like she you know, we represent 580 00:30:17,080 --> 00:30:19,480 Speaker 7: you know, we're we're behind her. They support her, But 581 00:30:19,640 --> 00:30:21,320 Speaker 7: the question is will it come back to. 582 00:30:21,240 --> 00:30:25,600 Speaker 3: The elete some Olympic sports? How does something get approved 583 00:30:25,640 --> 00:30:26,720 Speaker 3: of be an Olympic sports? 584 00:30:26,720 --> 00:30:30,280 Speaker 1: A lot of politics? I guess I don't know. 585 00:30:30,480 --> 00:30:32,920 Speaker 3: I mean, did Rich Truman agreed to say breakdancing? 586 00:30:33,200 --> 00:30:35,040 Speaker 7: I mean, I don't get how you have breakdancing you 587 00:30:35,040 --> 00:30:37,800 Speaker 7: don't have like softball or basically, yes. 588 00:30:38,160 --> 00:30:43,000 Speaker 1: Potaged Lisa's hair in glam Rock, Yes, totally. Lisa is 589 00:30:43,040 --> 00:30:47,240 Speaker 1: out on Long Island jon Jets playing Thursday Night. She's 590 00:30:47,280 --> 00:30:50,080 Speaker 1: got the five inch platform, you know, the shoes on 591 00:30:50,640 --> 00:30:54,800 Speaker 1: the glam Rock hare. We did boy bands yesterday. Although 592 00:30:55,520 --> 00:30:59,800 Speaker 1: the emails are so kind. 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