1 00:00:02,400 --> 00:00:06,760 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. 2 00:00:11,680 --> 00:00:15,480 Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 3 00:00:15,520 --> 00:00:18,720 Speaker 2: with Lisa Bromwitz and Amerie Hordern. Join us each day 4 00:00:18,760 --> 00:00:22,280 Speaker 2: for insight from the best in markets, economics, and geopolitics 5 00:00:22,440 --> 00:00:24,880 Speaker 2: from our global headquarters in New York City. We are 6 00:00:24,960 --> 00:00:27,680 Speaker 2: live on Bloomberg Television weekday mornings from six to nine 7 00:00:27,720 --> 00:00:31,319 Speaker 2: am Eastern. Subscribe to the podcast on Apple, Spotify or 8 00:00:31,320 --> 00:00:33,960 Speaker 2: anywhere else you listen, and as always on the Bloomberg 9 00:00:34,040 --> 00:00:35,880 Speaker 2: Terminal and the Bloomberg Business app. 10 00:00:36,320 --> 00:00:39,000 Speaker 3: Cameron Dawson of New Edge Wealth writing, the biggest question 11 00:00:39,040 --> 00:00:41,640 Speaker 3: for twenty twenty six is whether or not everything else 12 00:00:41,920 --> 00:00:44,320 Speaker 3: can strike back and deliver the earnings growth that is 13 00:00:44,400 --> 00:00:47,960 Speaker 3: necessary to unseat the narrow mag seven leadership next year. Cameron, 14 00:00:48,000 --> 00:00:50,120 Speaker 3: I am so pleased to say joins us now. Cameron, 15 00:00:50,120 --> 00:00:52,839 Speaker 3: thank you so much for being with us, and happy holidays. 16 00:00:53,159 --> 00:00:55,760 Speaker 3: Great to see you. This broadening out trade and the 17 00:00:55,800 --> 00:00:58,480 Speaker 3: real question behind it, when will we get the data 18 00:00:58,560 --> 00:01:01,720 Speaker 3: and the information to understand stand whether it really is valid? 19 00:01:02,560 --> 00:01:05,000 Speaker 4: It really is a show me story in twenty twenty 20 00:01:05,040 --> 00:01:07,560 Speaker 4: six as to whether or not the equal weight s 21 00:01:07,640 --> 00:01:10,600 Speaker 4: and P five hundred can deliver on what are some 22 00:01:10,720 --> 00:01:13,559 Speaker 4: pretty high expectations for earnings growth next year. 23 00:01:13,920 --> 00:01:16,000 Speaker 5: If you look over the last three years. 24 00:01:15,680 --> 00:01:18,800 Speaker 4: You've been in an environment where the largest parts of 25 00:01:18,840 --> 00:01:21,920 Speaker 4: the market have driven the vast majority of the earnings growth, 26 00:01:21,959 --> 00:01:24,880 Speaker 4: which is why you've had the vast majority of returns 27 00:01:25,280 --> 00:01:29,200 Speaker 4: come from these MAG seven names. But that's expected to narrow, 28 00:01:29,200 --> 00:01:32,040 Speaker 4: not quite flip, but narrow in twenty twenty six. So 29 00:01:32,080 --> 00:01:34,040 Speaker 4: you can see it in something like the equal Weight 30 00:01:34,080 --> 00:01:37,880 Speaker 4: sm P five hundred having expectations for revenue growth to 31 00:01:38,000 --> 00:01:40,839 Speaker 4: accelerate from one and a half percent and twenty five 32 00:01:41,080 --> 00:01:44,200 Speaker 4: up to five percent in twenty twenty six. So a 33 00:01:44,200 --> 00:01:47,880 Speaker 4: lot is writing on this idea of EPs delivering, and 34 00:01:47,920 --> 00:01:50,040 Speaker 4: of course that will be a show me story as 35 00:01:50,080 --> 00:01:52,200 Speaker 4: we move through the year to see if there is 36 00:01:52,360 --> 00:01:55,080 Speaker 4: upside to those numbers or if yet again we'll be 37 00:01:55,120 --> 00:01:58,280 Speaker 4: in an environment where MAG seven gets revised higher and 38 00:01:58,360 --> 00:01:59,960 Speaker 4: equal Weight gets revised lower. 39 00:02:00,200 --> 00:02:02,880 Speaker 3: So you add to this story something that happened last week. 40 00:02:02,920 --> 00:02:05,080 Speaker 3: There actually was a big piece of news last week 41 00:02:05,120 --> 00:02:08,280 Speaker 3: and Nvidia had this agreement with Grock, which is a 42 00:02:08,400 --> 00:02:11,640 Speaker 3: chip designer. Some twenty billion dollar valuation of this company 43 00:02:11,680 --> 00:02:14,400 Speaker 3: doubling it over the past couple of months and raising 44 00:02:14,480 --> 00:02:18,639 Speaker 3: questions about the dominance of Nvidia, but also whether there 45 00:02:18,720 --> 00:02:21,760 Speaker 3: is a shift in narrative around the AI story to 46 00:02:21,800 --> 00:02:25,360 Speaker 3: one that is more efficient, more useful, and cheaper for 47 00:02:25,400 --> 00:02:26,480 Speaker 3: some of the end users. 48 00:02:27,520 --> 00:02:31,320 Speaker 4: I think no better way encapsulates this idea of potentially 49 00:02:31,360 --> 00:02:33,800 Speaker 4: a narrative shift is looking at some of the non 50 00:02:33,919 --> 00:02:38,040 Speaker 4: profitable AI related names. They of course, were leaders coming 51 00:02:38,120 --> 00:02:41,560 Speaker 4: out of the April lows and saw an absolute frenzy 52 00:02:41,680 --> 00:02:44,640 Speaker 4: as we moved into the fall, with September and October 53 00:02:44,760 --> 00:02:49,080 Speaker 4: rallies that were truly eyewatering. But what's been fascinating is 54 00:02:49,120 --> 00:02:52,320 Speaker 4: that they have not participated in this latest move higher. 55 00:02:52,560 --> 00:02:55,240 Speaker 4: If you look at something like the Golden Sachs Nonprofitable 56 00:02:55,280 --> 00:02:59,120 Speaker 4: Tech Index, or look at something like ARC, those indices 57 00:02:59,240 --> 00:03:02,720 Speaker 4: have not made new highs, which just suggests that maybe, 58 00:03:03,040 --> 00:03:06,760 Speaker 4: just maybe there's some rationality entering into this market, which 59 00:03:06,800 --> 00:03:09,000 Speaker 4: we would welcome and see is a good thing, because 60 00:03:09,040 --> 00:03:12,800 Speaker 4: that kind of rally in unsustainable, unprofitable names is not 61 00:03:12,880 --> 00:03:15,000 Speaker 4: something that we would see as healthy for the market. 62 00:03:15,280 --> 00:03:18,359 Speaker 6: What do you expect from M and A in I 63 00:03:18,400 --> 00:03:21,000 Speaker 6: mean not just the mag seven, but in AI. I 64 00:03:21,080 --> 00:03:24,880 Speaker 6: was pretty stunned after seeing that Grock deal when I 65 00:03:24,960 --> 00:03:29,160 Speaker 6: looked on the FA function on the Bloomberg terminal to 66 00:03:29,200 --> 00:03:32,640 Speaker 6: see free cash flow at Nvidia is just gone parabolic. 67 00:03:32,720 --> 00:03:35,119 Speaker 6: Right last year it was twenty seven billion. This year 68 00:03:35,120 --> 00:03:37,640 Speaker 6: it's sixty billion. Next year it's expected to be ninety 69 00:03:37,640 --> 00:03:42,280 Speaker 6: five billion. I mean, they are just raking in cash 70 00:03:42,320 --> 00:03:45,320 Speaker 6: and are able to deploy twenty thirty forty billion dollars 71 00:03:45,360 --> 00:03:46,520 Speaker 6: without even thinking about it. 72 00:03:46,960 --> 00:03:47,360 Speaker 5: Yeah. 73 00:03:47,520 --> 00:03:49,800 Speaker 4: I think it's a really good question, and it raises 74 00:03:49,840 --> 00:03:52,840 Speaker 4: the question of where we sit in the semiconductor cycle, 75 00:03:52,920 --> 00:03:55,280 Speaker 4: because we do know that the end of the day, 76 00:03:55,400 --> 00:03:59,240 Speaker 4: semiconductors are a cyclical business, and if you go back 77 00:03:59,280 --> 00:04:03,360 Speaker 4: to prior siteles, you typically do see earnings grow by 78 00:04:03,400 --> 00:04:06,920 Speaker 4: one hundred, one hundred and twenty percent plus in up cycles. 79 00:04:07,080 --> 00:04:09,880 Speaker 4: Then of course you do hit an inevitable down cycle, 80 00:04:10,000 --> 00:04:11,880 Speaker 4: and we're now in an environment if you look at 81 00:04:11,880 --> 00:04:15,200 Speaker 4: the overall Socks index that earnings are up about one 82 00:04:15,280 --> 00:04:18,400 Speaker 4: hundred and fifty percent off of the late twenty twenty 83 00:04:18,440 --> 00:04:22,560 Speaker 4: two lows, which just suggests that possibly we are closer 84 00:04:22,560 --> 00:04:24,800 Speaker 4: to the end of the semi cycle than we are 85 00:04:24,800 --> 00:04:27,400 Speaker 4: to the beginning. But I think it's also very arguable 86 00:04:27,440 --> 00:04:30,680 Speaker 4: that this semicycle will go further and last longer than 87 00:04:30,800 --> 00:04:34,640 Speaker 4: fire ones, simply because of the secular tailwinds of something 88 00:04:34,680 --> 00:04:37,880 Speaker 4: like AI. But it's important to remember that it's always 89 00:04:37,920 --> 00:04:40,760 Speaker 4: this time. It's different with cyclical areas. If you remember 90 00:04:41,000 --> 00:04:43,120 Speaker 4: last time, it was the Internet of Things and we 91 00:04:43,120 --> 00:04:45,320 Speaker 4: were putting chips in everything, and that's why we weren't 92 00:04:45,360 --> 00:04:48,599 Speaker 4: going to have semicycles anymore. I think the real question 93 00:04:48,640 --> 00:04:50,839 Speaker 4: will be is how much further can this go? And 94 00:04:51,080 --> 00:04:54,200 Speaker 4: is that free cashualw that Nvidia's generating today something that 95 00:04:54,240 --> 00:04:57,760 Speaker 4: we can extrapolate into perpetuity. Possibly not? 96 00:04:58,040 --> 00:05:02,719 Speaker 6: Well, what happened Cameron to the the terror of Liberation Day? 97 00:05:02,880 --> 00:05:05,880 Speaker 6: I mean the economic uncertainty that we're all wringing our 98 00:05:05,920 --> 00:05:10,680 Speaker 6: hands about, right these tariffs that admittedly have been muted 99 00:05:10,720 --> 00:05:13,080 Speaker 6: a bit by the drop and the dollar almost ten 100 00:05:13,120 --> 00:05:16,359 Speaker 6: percent year to date. Is that is any of that 101 00:05:16,400 --> 00:05:19,440 Speaker 6: a concern next year? Or have we realized that it's 102 00:05:19,520 --> 00:05:20,520 Speaker 6: actually no big deal. 103 00:05:21,520 --> 00:05:23,799 Speaker 4: I think that if we were to see the tariffs 104 00:05:23,839 --> 00:05:27,120 Speaker 4: as a concern, it's really captured in this conflicting kind 105 00:05:27,120 --> 00:05:30,080 Speaker 4: of headline. We got a headline over the weekend saying 106 00:05:30,120 --> 00:05:33,560 Speaker 4: that bankruptcies are at their highest level since twenty ten. 107 00:05:33,800 --> 00:05:36,520 Speaker 4: And then you pull up corporate profits in overall you 108 00:05:36,600 --> 00:05:39,200 Speaker 4: in the US and they're at new highs. And so 109 00:05:39,320 --> 00:05:43,680 Speaker 4: this suggests that tariffs are hitting things like smaller businesses harder. 110 00:05:43,880 --> 00:05:46,920 Speaker 4: They're also hitting smaller consumers harder, who have a higher 111 00:05:47,000 --> 00:05:50,080 Speaker 4: propensity to spend of their overall incomes. 112 00:05:50,400 --> 00:05:51,240 Speaker 5: So when you put that. 113 00:05:51,279 --> 00:05:55,040 Speaker 4: Together, it really encapsulates this idea that tariffs exacerbate the 114 00:05:55,120 --> 00:05:59,080 Speaker 4: K shaped economy. They hurt lower income consumers, they hurt 115 00:05:59,120 --> 00:06:03,160 Speaker 4: smaller businesses, is much more than they larger businesses and 116 00:06:03,240 --> 00:06:04,400 Speaker 4: higher income consumers. 117 00:06:04,480 --> 00:06:06,320 Speaker 3: I just wonder, Cameron, how well you can see this 118 00:06:06,440 --> 00:06:10,279 Speaker 3: rally continue unless you get participation that does broaden out 119 00:06:10,400 --> 00:06:13,040 Speaker 3: this idea that you can see an economy that's growing 120 00:06:13,040 --> 00:06:16,679 Speaker 3: at the fastest pace in two years. On headline GDP, Yes, 121 00:06:16,760 --> 00:06:19,320 Speaker 3: it's noisy, but a lot of its data centers. It's 122 00:06:19,360 --> 00:06:22,200 Speaker 3: not actually the mom and pop stores that are declaring bankruptcy. 123 00:06:23,520 --> 00:06:25,840 Speaker 4: The one thing that does give us a little bit 124 00:06:25,839 --> 00:06:28,640 Speaker 4: of solace in thinking about this broadening out is contrasting 125 00:06:28,760 --> 00:06:32,000 Speaker 4: where we are today in breadth measures versus where we 126 00:06:32,000 --> 00:06:35,120 Speaker 4: were last year. Last year at this time, you only 127 00:06:35,120 --> 00:06:37,640 Speaker 4: had about twenty percent of names trading above their fifty 128 00:06:37,680 --> 00:06:40,760 Speaker 4: day moving average. It was an incredibly narrow market, which 129 00:06:40,800 --> 00:06:43,479 Speaker 4: we thought made it more fragile. If you look today, 130 00:06:43,520 --> 00:06:47,320 Speaker 4: that status at sixty four percent. So it doesn't necessarily 131 00:06:47,360 --> 00:06:49,960 Speaker 4: mean that we are immune to everything, but it is 132 00:06:50,120 --> 00:06:53,880 Speaker 4: encouraging that we are seeing broader participation in the rally, 133 00:06:53,920 --> 00:06:57,440 Speaker 4: that it's not resting on just a small handful of names. So, 134 00:06:57,640 --> 00:07:00,840 Speaker 4: using the banks as example, if the economy was really 135 00:07:00,839 --> 00:07:02,920 Speaker 4: falling off a cliff, we don't think that we would 136 00:07:02,920 --> 00:07:05,600 Speaker 4: be seeing bank earnings revised higher nearly as much as 137 00:07:05,640 --> 00:07:08,120 Speaker 4: they are and banks hitting new all time highs. Some 138 00:07:08,200 --> 00:07:10,600 Speaker 4: of that rally might be a little bit extended, but 139 00:07:10,680 --> 00:07:12,800 Speaker 4: I think it's important to note that there are still 140 00:07:12,840 --> 00:07:15,800 Speaker 4: some signs that cyclicality is being well bid in the 141 00:07:15,840 --> 00:07:18,600 Speaker 4: equity market, which just give us a little bit more 142 00:07:18,600 --> 00:07:21,440 Speaker 4: comfort that things aren't his extend or maybe broadening out 143 00:07:21,440 --> 00:07:22,120 Speaker 4: in a better way. 144 00:07:24,040 --> 00:07:26,720 Speaker 2: Stay with us more Bloomberg Savannah's coming. 145 00:07:26,560 --> 00:07:38,600 Speaker 3: Up after this, Debbie Cuttingham, a federated Hermey, is writing, 146 00:07:38,600 --> 00:07:42,200 Speaker 3: although Trump administration attacks in the Committee have intensified worry 147 00:07:42,200 --> 00:07:44,880 Speaker 3: in the financial markets, we believe the FED will prevail. 148 00:07:44,960 --> 00:07:48,000 Speaker 3: This does seem to be the preeminent belief right now 149 00:07:48,000 --> 00:07:50,480 Speaker 3: in markets. Debbie joins us now from more Debbie, why 150 00:07:50,560 --> 00:07:52,920 Speaker 3: do you think that the idea of FED independence is 151 00:07:53,000 --> 00:07:55,120 Speaker 3: kind of behind us and that people have sort of 152 00:07:55,160 --> 00:07:58,040 Speaker 3: closed that story out in twenty twenty five and looked 153 00:07:58,040 --> 00:08:01,320 Speaker 3: to a sort of more normal said in twenty twenty six. 154 00:08:02,760 --> 00:08:05,200 Speaker 1: Well, I think what we saw in twenty twenty five 155 00:08:05,560 --> 00:08:11,840 Speaker 1: was a surprise and then ultimately a divided said, you know, 156 00:08:11,880 --> 00:08:15,560 Speaker 1: we still don't know the full ending to the Lisa 157 00:08:15,600 --> 00:08:20,640 Speaker 1: Cook story. We do know the ending to what the 158 00:08:20,680 --> 00:08:24,920 Speaker 1: Supreme Court has thought about has FED independence and a 159 00:08:25,040 --> 00:08:30,160 Speaker 1: different type of body compared to some of the other ones. 160 00:08:31,320 --> 00:08:35,960 Speaker 1: We saw President Trump go from you know, supporting Chair 161 00:08:36,080 --> 00:08:40,040 Speaker 1: Poal to trying to fire Chair Poal, to being told 162 00:08:40,080 --> 00:08:44,160 Speaker 1: he can't fire Chair Poal, to submitting, to trying to 163 00:08:44,240 --> 00:08:50,439 Speaker 1: find other replacements for him, interviewing replacement candidates for him, 164 00:08:50,960 --> 00:08:55,800 Speaker 1: for you know, his exploration of his share term in 165 00:08:55,880 --> 00:08:58,719 Speaker 1: twenty twenty six. So I just feel like what we've 166 00:08:58,800 --> 00:09:02,520 Speaker 1: seen so far has been a bit of a you know, 167 00:09:03,200 --> 00:09:07,280 Speaker 1: upheaval and turmoil within the FED that now that the 168 00:09:07,400 --> 00:09:11,360 Speaker 1: independence has been you know, solidified. I think that will 169 00:09:12,000 --> 00:09:14,360 Speaker 1: not be the case going into twenty twenty six. However, 170 00:09:14,840 --> 00:09:17,839 Speaker 1: what I do think will be the case is that 171 00:09:18,000 --> 00:09:18,760 Speaker 1: we see. 172 00:09:21,520 --> 00:09:24,280 Speaker 7: Less voting that. 173 00:09:24,559 --> 00:09:27,840 Speaker 1: Is all in alignment. I think we will see more descents. 174 00:09:28,000 --> 00:09:31,600 Speaker 1: We've already started to see them in the last three meetings, 175 00:09:32,240 --> 00:09:36,280 Speaker 1: and I think that will probably continue. And you know 176 00:09:36,440 --> 00:09:41,920 Speaker 1: what we've seen historically as hawks, Centrists and doves will 177 00:09:41,960 --> 00:09:45,640 Speaker 1: become even a little bit more pronounced in their voting. 178 00:09:46,040 --> 00:09:47,880 Speaker 3: So do you think, Debbie, that people are overpricing with 179 00:09:48,000 --> 00:09:49,160 Speaker 3: chance of ray cuts next year? 180 00:09:51,080 --> 00:09:52,720 Speaker 1: I think they are, at least from what the Fed 181 00:09:52,840 --> 00:09:56,120 Speaker 1: is telling us with their you know, their plot, their 182 00:09:56,160 --> 00:09:59,880 Speaker 1: syrians of economic projections. You know they are looking for one. 183 00:10:00,200 --> 00:10:01,360 Speaker 5: Our official call right. 184 00:10:01,280 --> 00:10:04,560 Speaker 1: Now as we as we you know, transport into twenty 185 00:10:04,720 --> 00:10:07,319 Speaker 1: twenty six is for two one in the first half, 186 00:10:07,360 --> 00:10:10,199 Speaker 1: one in the second half. But I think ultimately, although 187 00:10:10,280 --> 00:10:15,640 Speaker 1: the pace of lowering rates has modified from where it 188 00:10:15,960 --> 00:10:19,400 Speaker 1: was when we started twenty twenty five, the ultimate terminal 189 00:10:19,520 --> 00:10:21,440 Speaker 1: rate leases seems to be the same. I mean, it's 190 00:10:21,480 --> 00:10:26,200 Speaker 1: not going below three percent, and that's where I think 191 00:10:26,280 --> 00:10:28,560 Speaker 1: the bond market is settling in. That's why you see 192 00:10:28,760 --> 00:10:32,640 Speaker 1: you know, the ten year rallying at various points. That's 193 00:10:32,720 --> 00:10:36,439 Speaker 1: why you see a range trade that is really more 194 00:10:36,480 --> 00:10:40,440 Speaker 1: indicative of actual technicals and market conditions. You know, as 195 00:10:40,480 --> 00:10:44,360 Speaker 1: we head into year end, supply and demand, reco market, 196 00:10:46,600 --> 00:10:49,120 Speaker 1: you know, issues all seem to have more of a 197 00:10:49,760 --> 00:10:52,360 Speaker 1: influence on rates on a day to day basis for this, 198 00:10:52,720 --> 00:10:55,560 Speaker 1: you know, last trading week of the year. But ultimately, 199 00:10:55,600 --> 00:10:58,160 Speaker 1: when you look at the terminal rate for the FED 200 00:10:59,320 --> 00:11:01,679 Speaker 1: over time still at three percent, it's just three percent 201 00:11:01,720 --> 00:11:02,360 Speaker 1: a year earlier. 202 00:11:03,120 --> 00:11:07,800 Speaker 6: I wonder how you view liquidity right now, given your position, 203 00:11:08,160 --> 00:11:13,360 Speaker 6: and given that we're now have eclipped eight trillion dollars 204 00:11:13,520 --> 00:11:16,040 Speaker 6: in money markets, it seems like there's a lot of 205 00:11:16,120 --> 00:11:20,839 Speaker 6: cash slashing around the system, and we have pretty decent growth, 206 00:11:20,960 --> 00:11:23,400 Speaker 6: right even though even though it's hard to look at 207 00:11:23,480 --> 00:11:27,560 Speaker 6: these economic data points three point eight percent GDP, maybe 208 00:11:27,640 --> 00:11:29,240 Speaker 6: only two point six percent inflation. 209 00:11:29,480 --> 00:11:31,720 Speaker 7: What's your view on a sort of the macro picture, 210 00:11:33,120 --> 00:11:33,440 Speaker 7: you know, I. 211 00:11:33,440 --> 00:11:35,400 Speaker 1: Think the macro picture at this point is that the 212 00:11:35,440 --> 00:11:38,200 Speaker 1: worst is behind us. We really when we went into 213 00:11:38,240 --> 00:11:42,360 Speaker 1: twenty twenty five word toying with the potential for some 214 00:11:42,600 --> 00:11:46,240 Speaker 1: sort of a you know, substantial growth slowdown into a 215 00:11:46,280 --> 00:11:49,680 Speaker 1: potential recession. That's behind us now though at this point 216 00:11:49,720 --> 00:11:52,079 Speaker 1: we think the worst quarter you know, obviously was the 217 00:11:52,120 --> 00:11:56,079 Speaker 1: first quarter of twenty twenty five. And the consumer continues 218 00:11:56,120 --> 00:11:58,719 Speaker 1: to be employed, so the consumer continues to spend. The 219 00:11:59,280 --> 00:12:03,480 Speaker 1: consumer is the one driving the economy in this in 220 00:12:03,640 --> 00:12:07,439 Speaker 1: this you know, recovery that we have been experiencing. So 221 00:12:08,040 --> 00:12:11,480 Speaker 1: I think slow growth will be the case. I nobody, 222 00:12:11,720 --> 00:12:14,160 Speaker 1: I know, not a lot of people like that. From 223 00:12:14,400 --> 00:12:19,160 Speaker 1: an equity market standpoint, it doesn't get the same you know, 224 00:12:19,240 --> 00:12:24,400 Speaker 1: sort of splashy results that faster growth economy do does. 225 00:12:24,559 --> 00:12:26,839 Speaker 1: But but I but I believe that when you look 226 00:12:26,960 --> 00:12:31,079 Speaker 1: at liquidity markets, when you look at broader term fixed income, 227 00:12:31,160 --> 00:12:33,560 Speaker 1: slow growth is not a bad not a bad place 228 00:12:33,640 --> 00:12:36,280 Speaker 1: to be. And we've seen that certainly in the gathering 229 00:12:36,320 --> 00:12:39,240 Speaker 1: of assets in the in the liquidity market, as you said, 230 00:12:39,640 --> 00:12:42,319 Speaker 1: you know, recently passing the eight trillion dollar market. 231 00:12:43,520 --> 00:12:46,960 Speaker 2: Stay with us, multilanbag Savannah's coming up off to this. 232 00:12:55,760 --> 00:12:57,160 Speaker 5: Bronical sark of City writing. 233 00:12:57,400 --> 00:13:00,960 Speaker 3: We continue to expect another slight increase the unemployment rate 234 00:13:01,080 --> 00:13:03,920 Speaker 3: to four point seven percent in December. 235 00:13:04,080 --> 00:13:06,480 Speaker 5: Veronica joins us. Now, Veronica, thank. 236 00:13:06,320 --> 00:13:07,800 Speaker 8: You so much, for being here, thanks for having me 237 00:13:08,280 --> 00:13:09,440 Speaker 8: holiday holiday. 238 00:13:09,559 --> 00:13:12,800 Speaker 3: Wondering from your perspective how much the data that we 239 00:13:12,880 --> 00:13:15,720 Speaker 3: got earlier this month was actually valid and that people 240 00:13:15,720 --> 00:13:16,760 Speaker 3: are discounting it too much. 241 00:13:16,880 --> 00:13:18,439 Speaker 8: Yeah, I think there's a lot of that going on. 242 00:13:18,600 --> 00:13:21,520 Speaker 8: And if we saw the unemployment rate next Friday, the 243 00:13:22,120 --> 00:13:24,880 Speaker 8: first week back back to work, if we saw that 244 00:13:24,960 --> 00:13:26,640 Speaker 8: at something like four point seven, I think people will 245 00:13:26,640 --> 00:13:28,560 Speaker 8: believe it a lot more. Because, yeah, there's a lot 246 00:13:28,600 --> 00:13:31,040 Speaker 8: of issues with the November October data. We don't know 247 00:13:31,080 --> 00:13:33,559 Speaker 8: how much the government shut down affected new measurement of 248 00:13:33,760 --> 00:13:36,600 Speaker 8: those months, but December should be relatively clean, and if 249 00:13:36,640 --> 00:13:38,760 Speaker 8: it stays pretty high, I think that's a more concerning 250 00:13:38,800 --> 00:13:39,400 Speaker 8: sign for people. 251 00:13:39,840 --> 00:13:42,960 Speaker 7: How come this labor market is weak? 252 00:13:43,080 --> 00:13:48,280 Speaker 6: I don't get it, because you've got incredible earnings growth, right, 253 00:13:48,440 --> 00:13:52,880 Speaker 6: so corporate America is doing very well, and there are 254 00:13:53,080 --> 00:13:56,280 Speaker 6: no new people coming into this country, right, there's no 255 00:13:56,480 --> 00:14:01,079 Speaker 6: immigration the demographics trend like everyone old, there are no 256 00:14:01,559 --> 00:14:02,880 Speaker 6: people like it should be. 257 00:14:03,679 --> 00:14:05,600 Speaker 7: Companies are fighting for employees. 258 00:14:05,840 --> 00:14:08,439 Speaker 8: Yeah, yeah, I mean there's been this issue of you know, 259 00:14:08,559 --> 00:14:10,640 Speaker 8: is it labor supply, is it labor demand. We've been 260 00:14:10,679 --> 00:14:12,920 Speaker 8: dealing with us for a couple of years now. You know, 261 00:14:13,000 --> 00:14:14,840 Speaker 8: back in twenty twenty four, when we saw the unemployment 262 00:14:14,920 --> 00:14:18,040 Speaker 8: rate increase, the excuse was also it's more immigration. I 263 00:14:18,080 --> 00:14:21,080 Speaker 8: don't think we can use immigration to explain the bad data. 264 00:14:21,080 --> 00:14:23,640 Speaker 8: You know, different sides of immigration to explain bad data. 265 00:14:24,320 --> 00:14:26,600 Speaker 8: But I think what's happened is that labor demand has 266 00:14:26,640 --> 00:14:28,800 Speaker 8: just weakened more than labor supply, and that's why you've 267 00:14:28,800 --> 00:14:32,080 Speaker 8: seen the unemployment rate rising. It's this low hiring still 268 00:14:32,120 --> 00:14:35,320 Speaker 8: low firing dynamic. But I would be worried that low 269 00:14:35,400 --> 00:14:37,480 Speaker 8: hiring can only last for so long before maybe you 270 00:14:37,560 --> 00:14:38,360 Speaker 8: do see some layoffs. 271 00:14:38,720 --> 00:14:43,760 Speaker 6: Is that because technology and AI have made the few 272 00:14:43,880 --> 00:14:46,840 Speaker 6: employees that companies hold on to more productive. 273 00:14:47,120 --> 00:14:50,240 Speaker 8: I'm a little hesitant to conclude that that's what's happening now. 274 00:14:50,680 --> 00:14:52,720 Speaker 8: That might be part of the story, absolutely, and we 275 00:14:52,760 --> 00:14:55,080 Speaker 8: could see larger productivity gains from. 276 00:14:55,000 --> 00:14:55,920 Speaker 5: AI longer run. 277 00:14:56,000 --> 00:14:58,160 Speaker 8: But this really started a couple of years ago. This 278 00:14:58,280 --> 00:15:01,160 Speaker 8: really started maybe summer of twenty twenty three when we 279 00:15:01,200 --> 00:15:03,480 Speaker 8: saw this pullback and hiring, and I do worry that 280 00:15:04,120 --> 00:15:08,560 Speaker 8: it started in more rate sensitive sectors like manufacturing, small businesses. 281 00:15:08,640 --> 00:15:10,280 Speaker 8: The pullback has really been there, and so yeah, it 282 00:15:10,280 --> 00:15:13,120 Speaker 8: doesn't necessarily matter if you know equities are doing well 283 00:15:13,160 --> 00:15:15,360 Speaker 8: in earnings or find small businesses are going to be 284 00:15:15,440 --> 00:15:16,960 Speaker 8: more rate sensitively bringing. 285 00:15:16,720 --> 00:15:19,680 Speaker 6: Manufacturers I thought we're bringing manufacturing back, right. 286 00:15:20,000 --> 00:15:22,400 Speaker 8: We have been losing manufacturing jobs I think every month 287 00:15:22,480 --> 00:15:24,960 Speaker 8: this year, but that predates this year also, and it 288 00:15:25,080 --> 00:15:26,160 Speaker 8: is a rate sensitive sector. 289 00:15:26,280 --> 00:15:28,560 Speaker 3: Well, this sort of speaks to the question of is 290 00:15:28,600 --> 00:15:31,200 Speaker 3: the FED restrictive and this is the big debate restrictive 291 00:15:31,240 --> 00:15:33,480 Speaker 3: for who? Because on on one hand, you do see 292 00:15:33,600 --> 00:15:36,720 Speaker 3: companies filing for bankruptcy at the fastest clip going back 293 00:15:36,760 --> 00:15:40,240 Speaker 3: to twenty twenty. On the flip side, you see AI 294 00:15:40,400 --> 00:15:43,320 Speaker 3: companies screaming ahead, digital Bridge being purchased for four. 295 00:15:43,320 --> 00:15:45,160 Speaker 5: Billion dollars out of fifteen percent Bingham. 296 00:15:45,200 --> 00:15:46,400 Speaker 7: So can you square that? 297 00:15:46,680 --> 00:15:49,320 Speaker 8: Yeah, I mean there's this fifurcation across all parts of 298 00:15:49,360 --> 00:15:51,160 Speaker 8: the economy, and I think there's a lot you know 299 00:15:51,200 --> 00:15:53,280 Speaker 8: that has already been said about the k shape economy 300 00:15:53,320 --> 00:15:56,080 Speaker 8: for consumers. You know, higher income consumers are spending, but 301 00:15:56,120 --> 00:15:58,520 Speaker 8: we definitely see that in sectors also, and you know, 302 00:15:58,560 --> 00:16:01,080 Speaker 8: the smaller businesses who are more sensitive. I think rates 303 00:16:01,120 --> 00:16:03,440 Speaker 8: are restrictive here, so you expect. 304 00:16:03,280 --> 00:16:04,800 Speaker 5: A significant number of rate cuts. 305 00:16:04,840 --> 00:16:08,600 Speaker 3: Let's just postulate that we do see an increase further 306 00:16:08,880 --> 00:16:10,880 Speaker 3: in the unemployment rate to four point seven percent as 307 00:16:10,920 --> 00:16:11,440 Speaker 3: you expect. 308 00:16:11,840 --> 00:16:13,640 Speaker 5: What does that mean for January twenty eighth. 309 00:16:14,040 --> 00:16:16,640 Speaker 8: Yeah, I think they're going to be cutting really Yeah, 310 00:16:16,720 --> 00:16:19,480 Speaker 8: So we are penciling in another cut in January, another 311 00:16:19,560 --> 00:16:21,720 Speaker 8: one in March. And it's just this kind of idea 312 00:16:21,800 --> 00:16:24,640 Speaker 8: that you've clearly gotten more concerned on the labor market 313 00:16:24,760 --> 00:16:26,960 Speaker 8: side of your mandate. If the unemployment rate is something 314 00:16:27,000 --> 00:16:29,440 Speaker 8: like four to seven that we think we'll see in December, 315 00:16:30,080 --> 00:16:33,200 Speaker 8: we will have hopefully more inflation data by March that 316 00:16:33,320 --> 00:16:36,120 Speaker 8: we trust again, you know, early twenty twenty six data. 317 00:16:36,960 --> 00:16:40,520 Speaker 8: If you're seeing inflation slowing and data that you believe again, 318 00:16:40,680 --> 00:16:43,440 Speaker 8: and you're less concerned on the inflation side of the mandate, 319 00:16:43,520 --> 00:16:46,560 Speaker 8: you're more concerned on employment, why wouldn't you be at 320 00:16:46,960 --> 00:16:49,640 Speaker 8: the midpoint of neutral, which would be cuts in January 321 00:16:49,680 --> 00:16:50,560 Speaker 8: and March to get you there. 322 00:16:50,720 --> 00:16:53,640 Speaker 3: The counter argument is, if you get rate cuts potentially 323 00:16:53,720 --> 00:16:55,960 Speaker 3: two by the end of March, at the same time 324 00:16:56,040 --> 00:16:58,600 Speaker 3: that you have the one big beautiful bill, the tax refunds, 325 00:16:58,640 --> 00:17:01,520 Speaker 3: and potentially an additional two dollars stimulus or whatever else 326 00:17:01,600 --> 00:17:02,600 Speaker 3: might be coming down the pike. 327 00:17:03,120 --> 00:17:05,720 Speaker 5: Don't you risk reigniting inflation that never died. 328 00:17:05,960 --> 00:17:08,520 Speaker 8: Yeah, I'm not so concerned about that right now. You know, 329 00:17:08,600 --> 00:17:13,479 Speaker 8: the inflation driven by lower rates, more stimulative monetary policy, 330 00:17:13,920 --> 00:17:16,159 Speaker 8: you'd expect to see it first in a sector like housing, 331 00:17:16,240 --> 00:17:18,160 Speaker 8: and you definitely don't see that yet. You don't see 332 00:17:18,160 --> 00:17:21,080 Speaker 8: those signs yet. Home prices have been slowing, new rents 333 00:17:21,119 --> 00:17:23,639 Speaker 8: have been slowing a lot. We already know that in 334 00:17:23,720 --> 00:17:26,200 Speaker 8: the inflation data. There is this lag issue of shelter 335 00:17:26,359 --> 00:17:28,480 Speaker 8: inflation that's going to I think, be slowing all of 336 00:17:28,560 --> 00:17:32,240 Speaker 8: next year. All of the potential fiscal stimulus, you know, 337 00:17:32,440 --> 00:17:35,680 Speaker 8: maybe larger tax refunds of the business tax incentives that 338 00:17:35,720 --> 00:17:38,600 Speaker 8: were part of the bill from the summer. Those can 339 00:17:38,640 --> 00:17:42,120 Speaker 8: help support growth, But I would worry that the main 340 00:17:42,240 --> 00:17:44,760 Speaker 8: determinant of if people are spending or not is if 341 00:17:44,800 --> 00:17:46,720 Speaker 8: they have a job and what their labor income is, 342 00:17:47,400 --> 00:17:49,400 Speaker 8: and that we have seen slowing already, and you would 343 00:17:49,400 --> 00:17:50,679 Speaker 8: think consumption would slow them too. 344 00:17:51,800 --> 00:17:55,240 Speaker 2: Stay with us multile impag Savannah's coming up after this. 345 00:18:03,880 --> 00:18:06,359 Speaker 3: Let's stick with the consumer as focus shifts toward the 346 00:18:06,440 --> 00:18:09,680 Speaker 3: new year data. Telseia with Telsey Advisory Group, writing heading 347 00:18:09,720 --> 00:18:13,960 Speaker 3: into twenty twenty six. We expect events hire, REEF tax refunds, 348 00:18:14,040 --> 00:18:17,680 Speaker 3: and more accommodative interest rates to drive a continued recovery 349 00:18:17,720 --> 00:18:21,280 Speaker 3: and discretionary spending, especially among younger consumers. 350 00:18:21,400 --> 00:18:24,000 Speaker 5: Data joins us now in person, thank you so much 351 00:18:24,040 --> 00:18:26,119 Speaker 5: for being here. Thank you for having me. It's wonderful 352 00:18:26,160 --> 00:18:27,040 Speaker 5: to get your insights. 353 00:18:27,080 --> 00:18:29,760 Speaker 3: As we all look at our gifts from the holidays, 354 00:18:29,840 --> 00:18:32,400 Speaker 3: decide which ones we need to return. What's to read 355 00:18:32,600 --> 00:18:36,560 Speaker 3: on how well this season really did perform for retailers 356 00:18:36,720 --> 00:18:37,960 Speaker 3: broadly across the sphere. 357 00:18:38,240 --> 00:18:39,760 Speaker 5: I think holiday season was solid. 358 00:18:40,000 --> 00:18:42,760 Speaker 9: I think those increases three point nine four point two 359 00:18:42,840 --> 00:18:47,000 Speaker 9: percent very much in line with expectations. These ten days 360 00:18:47,160 --> 00:18:50,840 Speaker 9: after Christmas are very important too, whether for returns, for 361 00:18:51,000 --> 00:18:53,720 Speaker 9: gift card redemptions, all very important to see what it 362 00:18:53,800 --> 00:18:56,960 Speaker 9: looks like. But the product newness drove demand. With the 363 00:18:57,040 --> 00:18:59,840 Speaker 9: case shaped economy that we have, you're definitely seeing it 364 00:19:00,119 --> 00:19:03,200 Speaker 9: higher end and the lower end looking for value. And 365 00:19:03,359 --> 00:19:05,560 Speaker 9: that's where you saw some of the traffic. Whether it's 366 00:19:05,600 --> 00:19:08,879 Speaker 9: the Walmart's, whether it's the tjx's. They were there the 367 00:19:09,040 --> 00:19:12,720 Speaker 9: last ten days before Christmas, as always, is where you 368 00:19:12,840 --> 00:19:15,040 Speaker 9: got the real bump up in terms of top line. 369 00:19:15,359 --> 00:19:20,520 Speaker 6: I'm fascinated by the bifurcation between Walmart and Target because 370 00:19:20,560 --> 00:19:24,080 Speaker 6: I had seen them previously in kind of the same box. 371 00:19:24,440 --> 00:19:27,520 Speaker 6: But Walmart has done so well this year and Target 372 00:19:27,680 --> 00:19:29,320 Speaker 6: has disappointed. 373 00:19:29,720 --> 00:19:29,880 Speaker 1: Why. 374 00:19:30,359 --> 00:19:33,200 Speaker 9: I think overall what you've seen from Walmart and Target 375 00:19:33,280 --> 00:19:36,480 Speaker 9: store standards have fallen. You haven't seen the same innovation 376 00:19:36,640 --> 00:19:40,320 Speaker 9: and product newness. You haven't seen the same forward momentum 377 00:19:40,359 --> 00:19:44,920 Speaker 9: of movement, particularly with technology, where Walmart is anticipating what 378 00:19:45,040 --> 00:19:48,120 Speaker 9: the customer needs and they really have modernized their whole 379 00:19:48,160 --> 00:19:51,680 Speaker 9: store format. The Walmart of today is not the Walmart 380 00:19:51,760 --> 00:19:53,200 Speaker 9: of five or even ten years ago. 381 00:19:53,680 --> 00:19:58,720 Speaker 6: If we see a K shaped economy, do we get 382 00:19:58,960 --> 00:20:04,280 Speaker 6: Dollar Tree? You know, these family dollar kind of discount 383 00:20:04,320 --> 00:20:08,720 Speaker 6: stores doing well, because if I look at the stock performance, 384 00:20:09,160 --> 00:20:11,920 Speaker 6: I don't see Dollar Tree taking off. 385 00:20:12,359 --> 00:20:15,359 Speaker 9: I think overall you will see those dollar stores perform. 386 00:20:15,760 --> 00:20:18,240 Speaker 9: Keep in mind that in twenty twenty five, the focus 387 00:20:18,359 --> 00:20:22,479 Speaker 9: on tariffs who imports goods from China was impactful certainly 388 00:20:22,560 --> 00:20:25,520 Speaker 9: to the dollar stores, and now lapping tariffs should be 389 00:20:25,560 --> 00:20:28,000 Speaker 9: a benefit to them. Over time, who you saw as 390 00:20:28,040 --> 00:20:31,040 Speaker 9: share gainers, it was all the off pricers. I mean, 391 00:20:31,119 --> 00:20:34,159 Speaker 9: whether it was Burlington Ross Stores or TJ Max. With 392 00:20:34,320 --> 00:20:38,120 Speaker 9: the diversification of the assortment that they have, they captured customers. 393 00:20:38,240 --> 00:20:40,000 Speaker 3: What's fascinating to me is you're talking about how this 394 00:20:40,119 --> 00:20:42,480 Speaker 3: was a solid holiday season, and yet we're talking about 395 00:20:42,480 --> 00:20:44,879 Speaker 3: a bankruptcy potentially at the end of this month of 396 00:20:44,960 --> 00:20:47,760 Speaker 3: one of the biggest retailers, of saxophth Avenue, which faces 397 00:20:48,040 --> 00:20:49,920 Speaker 3: more than one hundred million dollars of a debt payment. 398 00:20:50,000 --> 00:20:52,280 Speaker 5: A lot of people are wondering whether that will actually happen. 399 00:20:52,720 --> 00:20:54,920 Speaker 3: Can you square this story the idea that we're talking 400 00:20:54,920 --> 00:20:58,560 Speaker 3: about robust sales, a steady consumer i'llbeit picky or choosy 401 00:20:58,680 --> 00:21:00,920 Speaker 3: or whatever you want to say, at the same time 402 00:21:01,000 --> 00:21:02,440 Speaker 3: that we could see a bankruptcy of one of the 403 00:21:02,440 --> 00:21:03,560 Speaker 3: biggest retailers out there. 404 00:21:03,840 --> 00:21:05,760 Speaker 9: Well, when you think of who's gaining share from that, 405 00:21:06,160 --> 00:21:08,760 Speaker 9: you look at the new brands that both Bloomingdale's and 406 00:21:08,920 --> 00:21:12,119 Speaker 9: Nordstrom are putting on their shelves stocking in their stores, 407 00:21:12,480 --> 00:21:15,600 Speaker 9: they're gaining share. Just across the street on fifty ninth Street, 408 00:21:15,640 --> 00:21:19,359 Speaker 9: Bloomingdale's just opened a new extension to their fourth floor 409 00:21:19,680 --> 00:21:23,359 Speaker 9: with newer brands. Whether it's Victoria Beckham, whether it's Valentino 410 00:21:23,760 --> 00:21:26,280 Speaker 9: to tem They have a whole new assortment of goods 411 00:21:26,320 --> 00:21:29,720 Speaker 9: out there that frankly, perhaps if not for this change, 412 00:21:30,040 --> 00:21:33,120 Speaker 9: you would not see those brands in Bloomingdale's. And you're 413 00:21:33,119 --> 00:21:35,040 Speaker 9: seeing it in Bloomingdale's and in Nordstrom. 414 00:21:35,200 --> 00:21:36,840 Speaker 3: How much is this a pattern that you expect to 415 00:21:36,840 --> 00:21:39,840 Speaker 3: be repeated, that we're going to see wholesale bankruptcies of 416 00:21:39,920 --> 00:21:42,280 Speaker 3: some retailers that are not keeping up with a new product, 417 00:21:42,680 --> 00:21:44,960 Speaker 3: while others I'm thinking of Walmart or I'm thinking of 418 00:21:45,000 --> 00:21:48,359 Speaker 3: Bloomingdale's continue to gain share. Sort of the big get bigger, 419 00:21:48,600 --> 00:21:51,560 Speaker 3: can invest in technology, and you see wholesale bankruptcies. 420 00:21:51,560 --> 00:21:54,440 Speaker 9: On the other side, financial leverage is very important in 421 00:21:54,560 --> 00:21:57,640 Speaker 9: order to keep the operations of a retailer running smoothly. 422 00:21:57,920 --> 00:22:01,480 Speaker 9: You get into trouble with financial leverage, that's an issue. 423 00:22:01,840 --> 00:22:04,679 Speaker 9: It always takes a lot to kill a retailer. They 424 00:22:04,720 --> 00:22:07,639 Speaker 9: don't just die overnight. Take a look, for example at 425 00:22:07,760 --> 00:22:10,960 Speaker 9: Blockbuster from many years ago, and certainly we'll have to 426 00:22:11,000 --> 00:22:13,920 Speaker 9: see what happens with that debt payment of Sacks that's 427 00:22:14,000 --> 00:22:18,000 Speaker 9: coming to very shortly. But certainly, when one is weak, 428 00:22:18,320 --> 00:22:20,720 Speaker 9: others can gain strength, and that's what you're seeing in 429 00:22:20,760 --> 00:22:21,960 Speaker 9: Bloomingdale's and Nordstrom. 430 00:22:22,119 --> 00:22:23,560 Speaker 7: We talk about Bloomingdale's. 431 00:22:24,040 --> 00:22:27,880 Speaker 6: Obviously it's a great store, it's an iconic department store 432 00:22:27,920 --> 00:22:32,080 Speaker 6: across the street here, but it's owned by Macy's and 433 00:22:32,320 --> 00:22:37,440 Speaker 6: that stock is down thirty percent this year. What's Macy's 434 00:22:37,560 --> 00:22:40,640 Speaker 6: doing wrong that it's Bloomingdale's is doing right. 435 00:22:41,040 --> 00:22:43,600 Speaker 9: I think overall, the bold news chapter strategy that the 436 00:22:43,720 --> 00:22:46,640 Speaker 9: CEO of Macy's, Tony Spring, is put in place, they're 437 00:22:46,720 --> 00:22:49,840 Speaker 9: making advancements and you're seeing some change in Macy's. 438 00:22:49,840 --> 00:22:50,119 Speaker 5: Also. 439 00:22:50,600 --> 00:22:52,880 Speaker 9: You look this year at Macy's and what they've done, 440 00:22:52,920 --> 00:22:55,800 Speaker 9: whether it's backstage with the off price in their assortment, 441 00:22:56,080 --> 00:22:58,760 Speaker 9: whether it's what they're doing with luxury, whether it's what 442 00:22:58,880 --> 00:23:02,320 Speaker 9: they're doing with their own brands, and frankly, the store experience. 443 00:23:02,640 --> 00:23:06,160 Speaker 9: The investments that they've made into the top one hundred 444 00:23:06,200 --> 00:23:09,320 Speaker 9: and twenty five one hundred and fifty stores is outperforming 445 00:23:09,400 --> 00:23:11,560 Speaker 9: the core and I think you're going to continue to 446 00:23:11,600 --> 00:23:15,000 Speaker 9: see the assessment of the footprint of Macy's continue to 447 00:23:15,080 --> 00:23:18,280 Speaker 9: be architected towards their best performing stores over time. 448 00:23:18,320 --> 00:23:20,120 Speaker 7: So you like Macy's, I mean, is this a buying 449 00:23:20,160 --> 00:23:21,240 Speaker 7: opportunity than this dip. 450 00:23:21,400 --> 00:23:23,720 Speaker 9: I think Macy's is an opportunity. I think when you 451 00:23:23,800 --> 00:23:26,520 Speaker 9: think about next year and you frankly think about the 452 00:23:26,680 --> 00:23:30,360 Speaker 9: enhancements that they've made to assortment, both in Macy's and Bloomingdale's, 453 00:23:30,560 --> 00:23:33,080 Speaker 9: it's not expensive for where it is, and you look 454 00:23:33,119 --> 00:23:35,800 Speaker 9: at the landscape of department stores that are public companies, 455 00:23:36,200 --> 00:23:39,960 Speaker 9: it's Macy's, Coals, and Dillard's. Macy's has an opportunity on 456 00:23:40,119 --> 00:23:41,320 Speaker 9: valuation to move higher. 457 00:23:41,800 --> 00:23:43,080 Speaker 3: Do you think that early next year we're going to 458 00:23:43,080 --> 00:23:45,880 Speaker 3: see pretty big price increases across the board for retail goods. 459 00:23:45,960 --> 00:23:48,680 Speaker 9: You're going to see more price increases coming. But keep 460 00:23:48,720 --> 00:23:51,320 Speaker 9: in mind this innovation and newness that we have, you 461 00:23:51,400 --> 00:23:53,840 Speaker 9: don't have a comparative, so we'll have to see what 462 00:23:53,920 --> 00:23:57,800 Speaker 9: those prices look like. Consumers are cautious and discerning, but 463 00:23:57,920 --> 00:23:59,000 Speaker 9: they'll buy what they don't have. 464 00:24:00,520 --> 00:24:04,040 Speaker 2: This is the Bloomberg Surveillance podcast, bringing you the best 465 00:24:04,119 --> 00:24:07,159 Speaker 2: in markets, economics, a gior politics. You can watch the 466 00:24:07,200 --> 00:24:10,160 Speaker 2: show live on Bloomberg TV weekday mornings from six am 467 00:24:10,320 --> 00:24:13,480 Speaker 2: to nine am Eastern. Subscribe to the podcast on Apple, 468 00:24:13,760 --> 00:24:16,600 Speaker 2: Spotify or anywhere else you listen, and as always on 469 00:24:16,640 --> 00:24:19,080 Speaker 2: the Bloomberg Terminal and the Bloomberg Business app