WEBVTT - Retail Sales, AI Investing, EVs, And Adobe (Podcast) 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day, we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.520 --> 0:00:15.600 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.600 --> 0:00:18.439 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:23.239 at Bloomberg dot com slash podcast. The consumer, despite this 0:00:23.400 --> 0:00:25.800 rampant inflation that's hitting all of us, whether the gas 0:00:25.840 --> 0:00:29.280 pumper in the supermarket, the consumers kind of hanging in there, 0:00:29.320 --> 0:00:31.320 you know. I mean, we got some retail sales today 0:00:31.560 --> 0:00:33.120 kind of came in a little bit better than expect 0:00:33.200 --> 0:00:35.440 to look. Under the hood, there's definitely some concern there, 0:00:35.479 --> 0:00:37.720 but you know, the headline number was pretty decent. I 0:00:37.760 --> 0:00:40.600 want to break it down with Angie Solanki, National director 0:00:40.600 --> 0:00:44.080 of Retail Services in the United States for Colliers. Colliers 0:00:44.280 --> 0:00:48.479 is a publicly traded company uh NASDACS c I G 0:00:48.720 --> 0:00:51.040 I is a took her to put into your Bloomberg 0:00:51.120 --> 0:00:55.080 terminal and you what you make of the August retail 0:00:55.360 --> 0:00:59.279 sales numbers. It was great to see that we had, 0:00:59.360 --> 0:01:01.600 even though it was a slight rise, that there is 0:01:01.640 --> 0:01:05.640 still confidence. Uh spend is still occurring, but it's occurring 0:01:06.440 --> 0:01:10.600 more so where they're focused on value oriented because there's 0:01:10.640 --> 0:01:14.720 still the inconsistency. Right there may be still a little 0:01:15.240 --> 0:01:20.119 bit of concern as we see inflation still continuing to occur, 0:01:20.720 --> 0:01:24.280 but overall there's still some confidence. I think retailers were 0:01:24.840 --> 0:01:30.880 pleasantly surprised. So the headline number onto was again of 0:01:30.959 --> 0:01:34.720 three tenths of one per cent, and I'm wondering what 0:01:34.840 --> 0:01:37.360 that looks like when you adjusted for inflation, because these 0:01:37.440 --> 0:01:41.679 numbers are not adjusted for inflation, right, correct? Correct? Um, 0:01:41.800 --> 0:01:44.120 They definitely are not. I think that what we should 0:01:44.160 --> 0:01:46.679 look at is if we look at, you know, the 0:01:46.760 --> 0:01:50.880 last time we've seen inflation hit as as high as 0:01:50.920 --> 0:01:54.640 it is right now this year, it was many many 0:01:54.680 --> 0:01:57.680 moons ago. So yes, it's hurting us in terms of 0:01:57.680 --> 0:02:02.040 the pocketbook, but overall, the drag we're seeing is still 0:02:02.240 --> 0:02:06.240 isn't it's it's not as significant. People still understand that 0:02:06.320 --> 0:02:09.760 there's an increase that they need to be mindful, um, 0:02:09.800 --> 0:02:12.079 but they're still you know, they still need to look 0:02:12.120 --> 0:02:17.120 at staple products, groceres spend um we're seeing from retailers 0:02:17.200 --> 0:02:21.920 right now, though, is this really interesting kind of juxtaposition 0:02:22.040 --> 0:02:25.679 in terms of they are starting to push out more 0:02:25.840 --> 0:02:29.320 private labeled brands. So they're they're pushing out their more 0:02:29.400 --> 0:02:36.480 their own brands and other brands good stuff. So it's September, 0:02:37.240 --> 0:02:41.400 but I know retailers they're thinking holiday season already. UM, 0:02:41.480 --> 0:02:43.320 what's the expectation when you talk to some of the 0:02:43.320 --> 0:02:49.000 retailers out there about how this holiday season may shape up. Well, 0:02:49.040 --> 0:02:51.639 there's still quite a bit of product in inventory out there, 0:02:51.800 --> 0:02:55.160 so you know, the concern right now is how much 0:02:55.320 --> 0:03:00.000 discounting really is required, So retailers are preparing for that. Um, 0:03:00.040 --> 0:03:02.840 it's still going to be, you know, a fairly busy 0:03:03.000 --> 0:03:06.400 holiday season. If they start to discount the product to 0:03:06.639 --> 0:03:10.960 lure you know, the inflation worried shopper in UM, that 0:03:11.040 --> 0:03:15.200 will start to show spend an increase in spend. But 0:03:15.240 --> 0:03:17.320 I think it's really more that there's a quite a 0:03:17.320 --> 0:03:21.120 bit of inventory be concerns still around discounting. You know, 0:03:21.160 --> 0:03:24.919 this is the first holiday season that we're seeing where 0:03:24.919 --> 0:03:27.760 consumers are going to most likely slow down due to 0:03:27.760 --> 0:03:31.360 the high inflation UM in many many years. So we 0:03:31.400 --> 0:03:34.399 don't really have any learnings from this since it's been 0:03:34.480 --> 0:03:38.880 so long. UM, there's been talk about third party sellers 0:03:38.920 --> 0:03:42.720 over at Amazon looking to potentially cut prices even further 0:03:42.920 --> 0:03:45.920 to move these you know, this inventory that they're sitting on, 0:03:46.080 --> 0:03:49.240 So that will be interesting for us to watch. In 0:03:49.360 --> 0:03:52.880 terms of the gasoline component, we've seen prices at the 0:03:52.880 --> 0:03:56.760 pump come down. Paul checks the regular unloaded up gas 0:03:56.800 --> 0:04:02.320 average every day, um, and you know, the sales figures 0:04:02.320 --> 0:04:06.120 excluding gas we're up zero eight percent, So I'm pretty strong. 0:04:06.280 --> 0:04:11.320 Do you see people taking the savings essentially that they're 0:04:11.320 --> 0:04:16.279 getting from the drop in pump prices and putting it elsewhere? Yeah. Actually, 0:04:16.440 --> 0:04:20.159 we're seeing, um, you know, roughly a one percent rise 0:04:20.360 --> 0:04:23.560 in spend at restaurants and bars. And this was in 0:04:23.640 --> 0:04:26.560 the month of August. So even though food costs have 0:04:26.720 --> 0:04:29.160 you know, have been hit pretty hard, you know, there's 0:04:29.240 --> 0:04:33.200 still this you know, need to go out to be 0:04:33.360 --> 0:04:37.120 out socialized. So it's a small percentage increase, but I 0:04:37.240 --> 0:04:39.679 think people are saying, hey, if I'm going to spend 0:04:40.240 --> 0:04:42.120 you know, call it a hundred and fifty dollars for 0:04:42.400 --> 0:04:46.080 a meal for two people at home groceries I have 0:04:46.240 --> 0:04:47.960 to buy, then I have to cook, and then I 0:04:48.040 --> 0:04:50.200 have to clean. Why not just go out and have 0:04:50.279 --> 0:04:53.919 a little fun. So, Um, I think that people are 0:04:54.000 --> 0:04:57.720 really thinking where should they spend their time and if 0:04:57.800 --> 0:05:02.120 it's a cost versus time versus value there they're spending 0:05:02.160 --> 0:05:05.039 it in the restaurants, which is great for for definitely 0:05:05.120 --> 0:05:09.119 our our restaurants and bars. Well, my household, I clean. 0:05:09.480 --> 0:05:11.760 I'm the cleaner guy. I take care of it. Yet 0:05:11.880 --> 0:05:13.840 I love doing that. Just leave me alone in the kitchen, 0:05:14.320 --> 0:05:18.120 glass of wine. I'll clean up all day long. So, Angie, 0:05:18.480 --> 0:05:20.799 and you're going out and spending money at restaurants and bars, 0:05:20.960 --> 0:05:23.480 I am absolutely that that that's kind of my thing, Angie. Um, 0:05:24.200 --> 0:05:26.400 for these retailers, can they are they gonna have enough 0:05:26.480 --> 0:05:28.560 labor here for this holiday season? It just seems to 0:05:28.640 --> 0:05:33.560 be a persistent problem across many industries. Yes, that is 0:05:33.720 --> 0:05:37.160 the one worry, right, um, because you're it's a combination 0:05:37.480 --> 0:05:42.520 of just resources human resources people. Um. But the second 0:05:42.600 --> 0:05:46.480 piece of this, right is the uh, the cost. So 0:05:47.400 --> 0:05:50.720 wages continue to be a concern for many retailers. Um, 0:05:51.080 --> 0:05:55.040 they continue to increase wages. So that's going to be 0:05:55.279 --> 0:05:57.080 really something that they're gonna have to focus on. It 0:05:57.160 --> 0:05:59.840 is it relates to Okay, if we need to push product, 0:06:00.080 --> 0:06:02.000 need to bring in volume of people. We want to 0:06:02.120 --> 0:06:06.479 increase our sales. We need people to to have that movement. 0:06:06.839 --> 0:06:09.480 But the other thing we're also seeing is technology. Right, 0:06:09.560 --> 0:06:12.320 so technology continued to be a big play. I don't 0:06:12.360 --> 0:06:14.440 know if you've read, like Starbucks is coming out with 0:06:14.520 --> 0:06:17.560 this what they're calling their reinvention strategy to kind of 0:06:17.760 --> 0:06:21.360 offset some of that labor concern and labor issues. And 0:06:21.480 --> 0:06:24.760 so they're looking at automating more so over the next 0:06:24.800 --> 0:06:27.120 several years where you can just get your food and 0:06:27.200 --> 0:06:29.760 drink orders very quickly and and it cuts down on 0:06:29.880 --> 0:06:34.159 that employee labor shortage and or cost issue. Alright, Angie, 0:06:34.240 --> 0:06:37.120 Great Great stuff has always Anti Slanki, national director of 0:06:37.160 --> 0:06:40.800 Retail Services for Colliers, talking about retail sales came in 0:06:40.839 --> 0:06:43.000 a little bit better than expected for the month of August. 0:06:47.920 --> 0:06:50.599 Let's get over speaking of driving across this beautiful country. 0:06:50.640 --> 0:06:52.920 Let's get over to Brent Shooty right now. He's a 0:06:52.960 --> 0:06:58.320 chief investment strategist at Northwestern Mutual. Brent, are you in Chicago. 0:06:59.279 --> 0:07:01.440 I'm in Milwaukee. Know I was in Chicago earlier in 0:07:01.440 --> 0:07:03.400 my career, but I moved to the beautiful city of Milwaukee. 0:07:03.560 --> 0:07:05.240 Got it, Well, I just knew that you did your 0:07:05.320 --> 0:07:07.920 MBA at the University of Chicago. They do numbers there 0:07:08.000 --> 0:07:11.880 at the university. Highly respected by this program. UM. I'm 0:07:11.920 --> 0:07:14.680 glad to have you on because I have been having 0:07:15.200 --> 0:07:19.239 discussions with investors here in New York and and yesterday 0:07:19.320 --> 0:07:22.880 we heard from Ray Dalio that he's on the bare side. 0:07:23.280 --> 0:07:25.720 He says if the FED raises rates to four and 0:07:25.760 --> 0:07:28.720 a half percent or more, which looks highly likely they'll do, 0:07:29.440 --> 0:07:33.920 stocks could fall. On the other hand, UM. David Rubinstein 0:07:34.520 --> 0:07:37.640 UM yesterday of Carlisle Fame, who also has a television 0:07:37.680 --> 0:07:41.960 program here on Bloomberg Television, said he thinks that professional 0:07:42.040 --> 0:07:44.480 investors are looking for bargains right now. This is when 0:07:44.480 --> 0:07:48.120 you should be buying. Um. Do you side with one 0:07:48.240 --> 0:07:50.960 or the other? I think it comes down to your 0:07:50.960 --> 0:07:54.160 out look on inflation. And certainly, as I look at charts, 0:07:54.320 --> 0:07:57.600 graphs and mosaics of ford looking indicators of inflation, I 0:07:57.720 --> 0:08:00.520 find it very hard to see any reason and why 0:08:00.720 --> 0:08:03.120 inflation is permanent or here to stay, and why the 0:08:03.160 --> 0:08:05.680 fudge should actually raise rates above four and a half percent. 0:08:06.320 --> 0:08:08.840 The only thing that people can point to is the 0:08:08.920 --> 0:08:12.400 actual backward looking number itself. You're gonna hear chair Pal 0:08:12.480 --> 0:08:16.680 again talk about inflation being broad and being sticky. Let 0:08:16.760 --> 0:08:19.360 me take those two things apart really quickly to explain 0:08:19.440 --> 0:08:21.560 why I don't think either one of them is relevant. 0:08:22.000 --> 0:08:24.200 So the broadside people look at the medium or the 0:08:24.240 --> 0:08:27.760 trimmed mean PC, and they're all elevated. The odd thing 0:08:27.880 --> 0:08:30.920 this time reflecting the economy is that the good side 0:08:31.120 --> 0:08:33.840 was at twelve percent it's now coming down to seven 0:08:33.880 --> 0:08:36.000 point one percent on a year of your basis. The 0:08:36.120 --> 0:08:38.959 services side is actually going up. And so yes, the 0:08:39.040 --> 0:08:41.600 meeting is high, but this is really odd. They usually 0:08:41.640 --> 0:08:43.880 move in the same direction. They're moving in the opposite 0:08:43.920 --> 0:08:46.560 direction because goods was favored early and now it's moving 0:08:46.600 --> 0:08:50.200 to services. That's that's going to resolve itself. That's one 0:08:50.240 --> 0:08:54.319 thing about because rent has been a real thorn in 0:08:54.400 --> 0:08:56.400 the fed side as well as you know my kid 0:08:56.440 --> 0:08:58.200 brother trying to find an apartment in New York. Sure, 0:08:58.200 --> 0:09:01.199 I mean sticky reflects housing and and housing unfortunately comes 0:09:01.240 --> 0:09:03.760 in with lag. Tell me who on Wall Street doesn't 0:09:03.800 --> 0:09:05.959 know that that owner's equivalent rent of that shelter has 0:09:06.000 --> 0:09:07.800 a twelve to sixteen month leg And where do you 0:09:07.880 --> 0:09:10.240 think home prices are going next? Take a look at 0:09:10.280 --> 0:09:12.360 housing demanded look at the mortgage demand this week. It 0:09:12.400 --> 0:09:15.559 was done year over year. The housing market has gone 0:09:15.600 --> 0:09:18.040 from boom to bust. And so as I look forward, 0:09:18.080 --> 0:09:21.120 I think inflation is still set to slow. The CPI 0:09:21.240 --> 0:09:24.240 data is backward looking, and I have trouble finding anything 0:09:24.280 --> 0:09:26.360 other than the labor market right now, which tells me 0:09:26.440 --> 0:09:31.160 that inflation is going to be permanent. So given that backdrop, Brent, 0:09:31.480 --> 0:09:34.000 have have we seen the lows in these equity markets? 0:09:34.040 --> 0:09:36.360 Do you think we'll retest that low back? And I 0:09:36.400 --> 0:09:40.560 guess late June, I'm not for sure that we won't 0:09:40.600 --> 0:09:42.840 retest it. I mean you just mentioned to smart people 0:09:42.920 --> 0:09:44.760 having different outlooks, and that usually has AT's a war 0:09:44.840 --> 0:09:47.120 until we resolve it. On one side, I do think 0:09:47.160 --> 0:09:49.280 the bottom is in. I think if you look back 0:09:49.320 --> 0:09:51.880 to the sixties eighty two time period when inflation was 0:09:51.960 --> 0:09:54.160 the economic problem like it is today. So I don't 0:09:54.200 --> 0:09:56.079 ignore the recent time trades, but I look back to 0:09:56.160 --> 0:10:00.439 that one when cp I peaked, the market bottomed. That's 0:10:00.480 --> 0:10:02.880 what happened in every one of those sixty six, seventy, 0:10:03.120 --> 0:10:06.480 seventy four eight and then Volker did Voker did um. 0:10:06.520 --> 0:10:08.559 I don't think that's going to happen this time. But 0:10:08.720 --> 0:10:11.240 those times where when CPI peaked the market bottom, that's 0:10:11.280 --> 0:10:14.599 point number one. Two. Sentiment is already awful. People have 0:10:14.720 --> 0:10:17.760 sold already. The AI sentiment has been below twenty nine 0:10:17.840 --> 0:10:20.400 times this year. It only been below thirty eight. Are 0:10:20.520 --> 0:10:23.280 only been below that thirty times in the prior thirty 0:10:23.360 --> 0:10:25.600 forty years. Each one of those times except one lead 0:10:25.600 --> 0:10:29.360 to four looking positive returns, throwing a positive throwing the 0:10:29.400 --> 0:10:31.679 fifty percent retracement of blows that we had, which has 0:10:31.720 --> 0:10:35.199 a nearly perfect record going back to and I think 0:10:35.240 --> 0:10:36.920 you have the basis for the market having put in 0:10:36.960 --> 0:10:38.920 the bottom. That doesn't mean it won't be a grinding 0:10:38.960 --> 0:10:40.640 back and forth advance, but I don't think we're going 0:10:40.679 --> 0:10:43.079 to go below those tune sixteenth lows. Alright. So with 0:10:43.200 --> 0:10:47.000 that outlook, Brent, if you have UM cash to put 0:10:47.040 --> 0:10:49.360 to work here, what do you do with it? Where 0:10:49.400 --> 0:10:52.839 do you put it? Do you like equities? UM? Have 0:10:53.000 --> 0:10:56.040 bonds taken a big enough beating, our yields high enough? 0:10:56.440 --> 0:10:58.920 Do you like commodities that they're still room to run 0:10:59.040 --> 0:11:01.199 there or they rolling over? I mean, what do you 0:11:01.280 --> 0:11:04.440 do with money? Sure? And so this is where We've 0:11:04.480 --> 0:11:07.480 been expressing our belief for the past here two years 0:11:07.520 --> 0:11:09.800 that you need to invest in things that are cheap UM. 0:11:09.880 --> 0:11:12.440 You need to invest in value, not the technology favorites 0:11:12.480 --> 0:11:13.960 of the past and the growth favorites of the past, 0:11:14.040 --> 0:11:16.679 the hope streams and themes hope them dreams, teams and 0:11:16.720 --> 0:11:19.199 mean stocks I talked about before. You need to invest 0:11:19.240 --> 0:11:21.160 across the board, I stage should say, but we do 0:11:21.280 --> 0:11:23.599 like on a marginal basis value type stocks and the 0:11:23.679 --> 0:11:26.280 SMP five hundred, We like the SMP six hundred, which 0:11:26.320 --> 0:11:29.920 is UH the small cap area of the market, higher 0:11:30.080 --> 0:11:32.440 quality small cap UM. And I do think bonds right 0:11:32.440 --> 0:11:35.480 now are going to once again hedge stocks. They certainly 0:11:35.520 --> 0:11:38.080 haven't this year, but I think at current yields right 0:11:38.120 --> 0:11:40.800 now really yields UM they do provide a hedge and 0:11:40.840 --> 0:11:42.800 so I would I would make sure that people UM 0:11:43.080 --> 0:11:45.199 don't be don't start selling your bonds right now like 0:11:45.280 --> 0:11:47.400 I think many people want to do. UH. And so 0:11:47.480 --> 0:11:49.640 that's kind of where we're position. We still do own commodities, 0:11:49.640 --> 0:11:52.199 albeit we are underweight our normal benchmark. And by the way, 0:11:52.240 --> 0:11:54.959 that's a that's a position that we have owned historically. 0:11:55.200 --> 0:11:57.240 We weren't the people who believe that inflation was dead. 0:11:57.559 --> 0:11:59.200 Now it's here. And I'm kind of on the other 0:11:59.200 --> 0:12:00.640 side of that argument right now. I think that the 0:12:00.880 --> 0:12:03.280 inflation that we're having right now will come back because 0:12:03.320 --> 0:12:06.360 it is mostly related to what happened post COVID. All right, Brent, 0:12:06.440 --> 0:12:08.480 you said you're in Milwaukee. Milwaukee is one of my 0:12:08.640 --> 0:12:12.600 favorite towns. Vernon it is. Um, it's a great town. 0:12:13.040 --> 0:12:15.079 Talk to how is the market there? How is Milwaukee? 0:12:15.120 --> 0:12:17.800 Because I think, you know, how's the economy how are 0:12:17.920 --> 0:12:21.559 people kind of feeling about things in general? Just kind 0:12:21.600 --> 0:12:23.319 of what's going on in mama real estate? What's the 0:12:23.360 --> 0:12:26.080 real estate? Looks like we're all feeling pretty good right 0:12:26.080 --> 0:12:27.760 now because the weather is still nice. Come visit me 0:12:27.840 --> 0:12:29.599 in a month or two much and people will be 0:12:29.600 --> 0:12:32.400 a little tour um. In general, I think the Milwaukee 0:12:32.440 --> 0:12:34.480 economy is doing just fine. I mean, you know, certainly, 0:12:34.480 --> 0:12:36.640 I think as you look around the country, people are 0:12:36.920 --> 0:12:39.480 doing good. I mean, the unemployment rate is low. The 0:12:39.600 --> 0:12:41.520 one big thing that sticks out that is the thing 0:12:41.600 --> 0:12:43.400 that we have to fix. And if you fix that thing, 0:12:43.480 --> 0:12:45.719 you fix the market is inflation. And that's where I 0:12:45.760 --> 0:12:48.160 think there's good news because I do believe the Ford 0:12:48.200 --> 0:12:51.680 indicators point to lower inflation. Yeah, you know, um, somebody 0:12:51.720 --> 0:12:55.320 who was telling me yesterday she didn't think we're gonna 0:12:55.400 --> 0:12:58.280 come down to four or five percent by May June 0:12:58.320 --> 0:13:00.480 of next year, and I reminded her of the cops. 0:13:00.920 --> 0:13:05.360 I mean, surely for that reason. It would be insane 0:13:05.559 --> 0:13:08.160 if we were still over five percent after a nine 0:13:08.280 --> 0:13:11.640 point one percent in June of this year. Yeah. I mean, 0:13:11.720 --> 0:13:13.040 you look at it, supply and demand. I mean, the 0:13:13.080 --> 0:13:15.400 said talks about that all the time. Demand has moderated. 0:13:15.760 --> 0:13:18.920 Um PC is running a PC, Consumptions running two point 0:13:18.960 --> 0:13:21.000 two percent year every year. UM it was running six 0:13:21.040 --> 0:13:23.719 and a half percent before the Fed started hiking. The 0:13:23.760 --> 0:13:26.880 housing market has slowed, inventories have rebuilt, and so I 0:13:27.120 --> 0:13:29.160 do think it will begin to push back. I think 0:13:29.200 --> 0:13:31.800 the big risk is that the Federal Reserve doesn't feel 0:13:31.840 --> 0:13:34.040 they can have a forward outlook because they see, I 0:13:34.200 --> 0:13:36.160 assume some of those things that many of us in 0:13:36.200 --> 0:13:39.200 the market see. The question that I have is are 0:13:39.240 --> 0:13:42.319 they so hot haunted by what happened in eighty that 0:13:42.400 --> 0:13:45.320 they feel the need to keep ongoing Because inflation right 0:13:45.320 --> 0:13:47.280 now is still high and there are lots of screaming 0:13:47.280 --> 0:13:49.880 about it. Are they able to actually pause, because I 0:13:49.960 --> 0:13:52.920 think they've accomplished in six months a lot already. I 0:13:53.040 --> 0:13:54.720 just think it hasn't completely shot up in the numbers. 0:13:55.160 --> 0:13:57.800 All right, Brent, great stuff as always, appreciate getting some 0:13:57.920 --> 0:14:01.720 of your valuable time. Brent Shooty, Chief investments Strategist, Northwestern 0:14:01.800 --> 0:14:06.360 Mutual located in beautiful Milwaukee, Wisconsin. We're talking beer. I 0:14:06.440 --> 0:14:08.120 think they do that there. They do brought worst, they 0:14:08.160 --> 0:14:10.600 do cheese. Uh. They get a lot of good money 0:14:10.640 --> 0:14:14.760 management institutional investor money in Milwaukee. Believe it or not. 0:14:14.920 --> 0:14:21.400 It punches way above its weight. Francis O joined us 0:14:21.480 --> 0:14:25.800 Craft Technologies. I think they do artificial intelligence for investing. 0:14:25.840 --> 0:14:27.800 I don't know. When I started on the block trading 0:14:27.840 --> 0:14:31.480 Nescar Payne eight six. Every morning, my boss, Johnny coglan 0:14:31.520 --> 0:14:34.000 would just run by and screaming my ear by them low, 0:14:34.760 --> 0:14:37.080 sell them high. That's all I had to do. But 0:14:37.200 --> 0:14:40.080 now you can use artificial intelligence. Francis, thanks so much 0:14:40.080 --> 0:14:41.960 for joining us here. Tell us what you guys are 0:14:42.040 --> 0:14:46.800 doing a Craft Technologies, Thank you, thank you for inviting me. Um. Yeah, 0:14:47.280 --> 0:14:50.680 the Fiow and sale high we tried to do something 0:14:50.760 --> 0:14:53.480 so like that as well. So the Craft clons. We 0:14:53.600 --> 0:14:57.880 very the artficture Intelligent investment tech company providing the services 0:14:57.960 --> 0:15:02.000 to us A management companies from the S location Signal 0:15:02.000 --> 0:15:06.440 MONGST the signal security selections. We provide a cater solution 0:15:06.480 --> 0:15:09.560 to our plan. Also the sponsor of the an units 0:15:09.640 --> 0:15:12.360 et F as well. So first of all, I want 0:15:12.360 --> 0:15:15.520 to point out that Craft is not like the macaroni 0:15:15.520 --> 0:15:19.000 and cheese that's spelled q R A F T craft technology. 0:15:20.720 --> 0:15:24.920 And um, you said you have an AI E t F. 0:15:25.240 --> 0:15:27.040 So how does that work? It's an active e t 0:15:27.240 --> 0:15:32.440 F and you use your algorithm to trade it. Yes, exactly, 0:15:32.520 --> 0:15:36.840 we are using the artificial intelligence, specifically the deeplonging model 0:15:36.960 --> 0:15:40.920 to trying to predict relative strengths of the stocks among 0:15:41.000 --> 0:15:44.520 the universe. So you apply the uh DAT technology into 0:15:44.600 --> 0:15:47.640 the activity manager of the ETF of the world. So 0:15:47.760 --> 0:15:50.040 we're calling me the listing four et FC and n 0:15:50.120 --> 0:15:53.040 I S right now. But so hang on, you trade 0:15:53.160 --> 0:15:55.560 E t F with your algorithm or you offer an 0:15:55.600 --> 0:16:00.080 e t F that's actively traded. Yes, later one we 0:16:00.200 --> 0:16:04.320 offer on EPO. So what's the ticker. The ticker we 0:16:04.440 --> 0:16:08.520 have the mb q UM, the quality A moment h 0:16:08.640 --> 0:16:12.080 d IV, the one of most performing beast performing ETF 0:16:12.160 --> 0:16:15.960 this series MVQ. Nice alright, I go on e t F, 0:16:16.080 --> 0:16:18.760 go on my Bloomberg and um, it's pretty cool. You 0:16:18.800 --> 0:16:21.720 can put in craft there and then you can define 0:16:21.880 --> 0:16:25.120 exactly the family of francis. How does how does your 0:16:25.160 --> 0:16:29.360 technology the use of artificial intelligence? How does that or 0:16:29.440 --> 0:16:31.640 how has it been doing this year when we've had 0:16:31.680 --> 0:16:36.480 a tremendous underperformance of both equities and fixed income, lots 0:16:36.520 --> 0:16:40.760 of volatility, the fixed pushing higher? How has your process 0:16:40.800 --> 0:16:47.000 worked well? So you're utilizing a the diploming model, which 0:16:47.080 --> 0:16:50.400 is training the am L don't to liplicate the well 0:16:50.480 --> 0:16:53.720 framed human perform management there. This is a making process 0:16:54.160 --> 0:16:57.720 but without human emotional bience risk. So processing from the 0:16:57.800 --> 0:17:01.440 mental data, price data, and macmak data to be our 0:17:01.520 --> 0:17:05.400 model is trying to the maker scores and the foecust 0:17:05.480 --> 0:17:08.480 relative performance at the stack amongst the universe. But the 0:17:09.000 --> 0:17:11.639 EATP that I mentioned m v Q, the next value 0:17:11.680 --> 0:17:17.280 et which is applying the ai WA m AIM methodology 0:17:17.320 --> 0:17:20.800 into the value invest in the world, UMDAB each are 0:17:20.800 --> 0:17:24.560 actually performing value well this year uh year today. As 0:17:24.600 --> 0:17:28.760 of today NVQUE is only full person below the full 0:17:28.840 --> 0:17:32.919 person losses, which is almost eleven percent point of performance 0:17:33.119 --> 0:17:36.800 even against the widely used nscr U s A and 0:17:36.920 --> 0:17:40.040 as value index UM show and even for the last 0:17:40.119 --> 0:17:42.960 long year period NVC is even more possibly tend close 0:17:43.040 --> 0:17:45.399 to percent. All right, I want to point out that 0:17:45.800 --> 0:17:51.919 is n v Q as in Victor, Nancy Veronica. Okay, Um, 0:17:52.400 --> 0:17:56.159 what's Q in the craft craft? Yes, exactly, n v Q. No. 0:17:56.320 --> 0:17:58.600 I I was thinking in the military alphabet. If I 0:17:58.640 --> 0:18:01.080 had Greg Jarrett here, he would do me right away. 0:18:01.400 --> 0:18:04.800 Q looks like Quebec. So it's actually in the military 0:18:04.840 --> 0:18:09.560 alphabet November Victor Quebec. Really que is a taker? Okay, 0:18:09.800 --> 0:18:13.200 very good? All right, So francis, what's kind of what 0:18:13.320 --> 0:18:14.919 do you guys as you look at the market here? 0:18:14.960 --> 0:18:17.320 What what's what are you thinking about here as you 0:18:17.440 --> 0:18:22.280 talk to your clients? Right? The carom back environment is 0:18:22.359 --> 0:18:24.879 definitely not so multi papab between investors at all, Like 0:18:25.000 --> 0:18:28.080 you're there are a lot of risk um that we 0:18:28.240 --> 0:18:34.160 haven't seen this year, from being the heightened inflated inflation 0:18:34.280 --> 0:18:36.960 environments and then the fact the hike is also not 0:18:37.080 --> 0:18:41.560 favorable poetical risk and also be pretty much like the 0:18:41.720 --> 0:18:46.119 perfect storm is hitting the financial market right now. And 0:18:46.560 --> 0:18:49.560 if someone who still wants to have a position into 0:18:49.600 --> 0:18:52.880 active market a letter I think about the lever wants 0:18:52.960 --> 0:18:56.720 to say, let's think about the value investments. UM could 0:18:56.760 --> 0:18:59.159 be the way to play for the next six to 0:18:59.240 --> 0:19:03.240 twelve months on until there was a clear trajectory of 0:19:03.280 --> 0:19:09.400 decidities are deciding to any sign on deluring there interested 0:19:09.600 --> 0:19:14.760 UMU the legend back to the normal area shop for 0:19:15.000 --> 0:19:18.600 now the gross act mark had it won't be so 0:19:18.720 --> 0:19:22.840 much the value. The values that delated relate to play 0:19:23.320 --> 0:19:27.320 relatively safer than the other mechandescent classes. All right, francis 0:19:27.359 --> 0:19:31.640 good stuff. We appreciate it. Francis Oh, CEO of Craft Technologies, 0:19:32.119 --> 0:19:34.000 UH talking to us about the e t F. He 0:19:34.160 --> 0:19:42.560 uses artificial intelligence there in the investment process. Where is 0:19:42.720 --> 0:19:46.159 Kevin Tyn I am so pumped for him. He's at 0:19:46.160 --> 0:19:49.159 the Detroit Auto Show. UM. For a number of reasons. 0:19:49.280 --> 0:19:52.560 This is spend a lot of time in Detroit. I 0:19:52.920 --> 0:19:54.520 used to spend a ton of time in Detroit, and 0:19:54.560 --> 0:19:57.119 the Auto show was typically in January, like the worst 0:19:57.200 --> 0:20:00.840 time in the year to visit Detroit, but everybody went 0:20:00.880 --> 0:20:05.040 because the super Bowl of UM, the automotive industry. Now 0:20:05.640 --> 0:20:09.000 they have it in a more reasonable season, but I 0:20:09.040 --> 0:20:11.639 don't think as many people are there. Well, the ce 0:20:11.880 --> 0:20:13.520 S Show, I think is an auto show with a 0:20:13.560 --> 0:20:16.320 couple of computers around it. Yeah, that's what the Toyot 0:20:16.400 --> 0:20:18.840 president was saying yesterday as well. Kevin tell us first 0:20:18.880 --> 0:20:21.200 of all about what the auto show is like. I mean, 0:20:21.880 --> 0:20:24.960 it just wasn't the hype um this year that there 0:20:25.080 --> 0:20:27.760 used to be, you know, pre pandemic back in the 0:20:27.880 --> 0:20:30.720 day when Detroit was all about it. Yeah, it is 0:20:31.000 --> 0:20:35.480 very very different. Um, I would say for the most part, 0:20:35.600 --> 0:20:40.920 full displays are only General Motors, Ford and Statlantis. There's 0:20:40.960 --> 0:20:45.920 a small Toyota booths and even smaller Subaru booth, and 0:20:46.080 --> 0:20:49.119 that is it's what is it. Yeah, So there's a 0:20:49.320 --> 0:20:53.480 couple of you know, there's a couple of like drone 0:20:53.680 --> 0:20:59.920 and see plane companies showing stuff and electric truck plot 0:21:00.080 --> 0:21:02.600 forms that so they they went out of the way 0:21:02.680 --> 0:21:05.199 to fill the space with non automotive stuff. And then 0:21:05.240 --> 0:21:10.879 there's this thing called automobility which is charging companies and 0:21:11.680 --> 0:21:14.920 light ar and so it's and even the media center, 0:21:15.000 --> 0:21:17.560 you know, we would come in here and media center 0:21:17.600 --> 0:21:21.959 would take up this entire ballroom and Bloomberg and our 0:21:22.080 --> 0:21:24.680 our team from Southfield here would just have a whole 0:21:24.800 --> 0:21:29.800 table editors, reporters running from scrum to scrum and uh, 0:21:29.920 --> 0:21:33.639 it's it's it's like a closet now. And there was 0:21:33.680 --> 0:21:35.639 five people in the entire media it used to be. 0:21:36.600 --> 0:21:40.280 It used to cover bill multiple halls and multiple floors. 0:21:40.520 --> 0:21:44.359 And well, I think it reflects I mean, you guys 0:21:44.520 --> 0:21:47.800 know Kevin and Matt. I mean it reflects auto companies 0:21:47.840 --> 0:21:50.720 are technology companies today. I mean, and I guess that 0:21:50.800 --> 0:21:53.879 makes more sense to be in Vegas, you know, in 0:21:54.200 --> 0:21:56.720 for the ce S show, because man, that's what the 0:21:56.840 --> 0:21:59.760 cars today are. I mean, we saw all these micro 0:22:00.400 --> 0:22:03.240 talk to us about just the general buzz there as 0:22:03.280 --> 0:22:09.680 it relates to the transition to electric vehicles. Um, you know, 0:22:09.720 --> 0:22:11.440