1 00:00:02,400 --> 00:00:06,720 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. 2 00:00:09,039 --> 00:00:12,840 Speaker 2: This is Bloomberg Intelligence with Alex Steel and Paul'sweeny. 3 00:00:12,960 --> 00:00:16,200 Speaker 3: The real app performance has been the US corporate high yield. 4 00:00:16,320 --> 00:00:18,720 Speaker 4: Are the companies lean enough? Have they trimmed all the fats? 5 00:00:18,760 --> 00:00:22,560 Speaker 3: The semiconductor business is a really cyclical business. 6 00:00:22,040 --> 00:00:25,639 Speaker 2: Breaking market headlines and corporate news from across the globe. 7 00:00:25,680 --> 00:00:28,319 Speaker 4: Do investors like the M and A that we've seen? 8 00:00:28,560 --> 00:00:31,600 Speaker 3: These are two big time blue chip companies. 9 00:00:31,760 --> 00:00:35,360 Speaker 4: The window between the peak and cut changing super fast. 10 00:00:35,520 --> 00:00:40,160 Speaker 2: Bloomberg Intelligence with Alex Steel and Paul'sweeny on Bloomberg Radio. 11 00:00:43,000 --> 00:00:45,720 Speaker 3: On Today's Bloomberg Intelligence Show, we dig inside the big 12 00:00:45,760 --> 00:00:49,280 Speaker 3: business stories impacting Wall Street and the global markets. Each 13 00:00:49,280 --> 00:00:51,400 Speaker 3: and every week we provide in depth research and data 14 00:00:51,440 --> 00:00:53,320 Speaker 3: on some of the two thousand companies in one hundred 15 00:00:53,360 --> 00:00:56,760 Speaker 3: and thirty industries our analysts cover worldwide. Today will take 16 00:00:56,760 --> 00:00:58,600 Speaker 3: a look at the federal reserves rate path for twenty 17 00:00:58,640 --> 00:01:01,760 Speaker 3: twenty five and how the income Trump administration could affect 18 00:01:01,800 --> 00:01:03,960 Speaker 3: the economy. Plus we'll take a look at some of 19 00:01:04,000 --> 00:01:06,480 Speaker 3: the companies our analysts are keeping an eye on in 20 00:01:06,520 --> 00:01:09,400 Speaker 3: the new year. But first we dive into the health 21 00:01:09,480 --> 00:01:12,560 Speaker 3: of the retail industry in a price sensitive climate. I 22 00:01:12,640 --> 00:01:14,880 Speaker 3: guess host Caroline Hyde and I sat down with Bloomberg 23 00:01:14,880 --> 00:01:18,919 Speaker 3: Intelligence senior retail analyst Jennifer Partashis for a look ahead 24 00:01:19,000 --> 00:01:21,399 Speaker 3: at the retail space heading into the new year. Here's 25 00:01:21,400 --> 00:01:22,679 Speaker 3: a portion of our conversation. 26 00:01:23,280 --> 00:01:25,360 Speaker 5: One of the things that we're looking at is really 27 00:01:25,480 --> 00:01:27,960 Speaker 5: the consumer is doing well, but it's about where is 28 00:01:27,959 --> 00:01:31,040 Speaker 5: their focus. And the focus is on value. And so 29 00:01:31,120 --> 00:01:33,520 Speaker 5: what we're seeing is across the entire industry a lot 30 00:01:33,520 --> 00:01:37,200 Speaker 5: of retailers trying to re orient them their operations in 31 00:01:37,240 --> 00:01:39,800 Speaker 5: a way that presents a value. However that might mean 32 00:01:39,840 --> 00:01:42,280 Speaker 5: to their core consumer. So for Nord's dream, you may 33 00:01:42,280 --> 00:01:45,039 Speaker 5: see that pivoting in terms of the way they do 34 00:01:45,080 --> 00:01:48,280 Speaker 5: their assortment. But for retailers like Walmart and Target, it's 35 00:01:48,320 --> 00:01:49,800 Speaker 5: about price and it's about selection. 36 00:01:50,760 --> 00:01:52,720 Speaker 3: And there's a great story on that general in the 37 00:01:52,720 --> 00:01:55,960 Speaker 3: Bloomberg terminal, Leslie Patton and Jay Won Kang have this story. 38 00:01:56,200 --> 00:02:00,000 Speaker 3: The headline is just a great headline Kirkland for Christmas shoppers, 39 00:02:00,080 --> 00:02:03,840 Speaker 3: itch logos for store brands. That kind of goes to 40 00:02:03,920 --> 00:02:08,080 Speaker 3: your value argument. How do you see that with the 41 00:02:08,120 --> 00:02:08,799 Speaker 3: stores you cover? 42 00:02:09,840 --> 00:02:13,200 Speaker 5: Yeah, value is as I said, it's of utmost importance. 43 00:02:13,240 --> 00:02:16,360 Speaker 5: But private label had a great year in twenty twenty four, 44 00:02:16,760 --> 00:02:19,400 Speaker 5: and we actually see that momentum just continuing in twenty 45 00:02:19,480 --> 00:02:23,120 Speaker 5: twenty five. So Kirkland is Costco's own brand. It is 46 00:02:23,480 --> 00:02:26,280 Speaker 5: over thirty percent, almost thirty five percent of their sales, 47 00:02:27,000 --> 00:02:29,160 Speaker 5: and it is just a trusted brand to the point 48 00:02:29,160 --> 00:02:31,639 Speaker 5: where consumers no longer think of it as a private 49 00:02:31,680 --> 00:02:34,440 Speaker 5: label alternative to national brands. They just see it as 50 00:02:34,440 --> 00:02:39,600 Speaker 5: a brand in and of itself. Walmart, Target, Kroger, Albertson's, 51 00:02:39,639 --> 00:02:42,359 Speaker 5: these companies have all invested in private label in the 52 00:02:42,440 --> 00:02:45,680 Speaker 5: last year couple like the last several years, and it's 53 00:02:45,720 --> 00:02:48,920 Speaker 5: really starting to pay dividends because it's value, it's novelty, 54 00:02:49,200 --> 00:02:51,480 Speaker 5: and it's something that consumers are really resonating with. 55 00:02:53,080 --> 00:02:55,360 Speaker 6: To get that data to understand that it's resonating with 56 00:02:55,400 --> 00:02:58,080 Speaker 6: a consumer, they're having to be leaning into all the 57 00:02:58,160 --> 00:03:01,120 Speaker 6: data points, largely through digital invest I'm sure, and through 58 00:03:01,160 --> 00:03:04,080 Speaker 6: aultificial intelligence. How is that something that they're not just 59 00:03:04,120 --> 00:03:06,720 Speaker 6: plowing money in by getting the realwards back. 60 00:03:07,600 --> 00:03:10,440 Speaker 5: Yeah, the rise of retail media is really the answer 61 00:03:10,440 --> 00:03:13,120 Speaker 5: to that question. And when we look at the industry, 62 00:03:13,280 --> 00:03:16,440 Speaker 5: actually last year we made a prediction that retail media 63 00:03:16,840 --> 00:03:19,680 Speaker 5: would be up by over twenty percent the revenue associated 64 00:03:19,720 --> 00:03:21,640 Speaker 5: with it for twenty twenty four, and it looks like 65 00:03:21,680 --> 00:03:25,000 Speaker 5: we're going to exceed that and it's on pace to 66 00:03:25,160 --> 00:03:28,080 Speaker 5: continue that kind of momentum into twenty twenty five. So 67 00:03:28,240 --> 00:03:32,080 Speaker 5: retail media is really advertising, and it's the selling of 68 00:03:32,560 --> 00:03:35,680 Speaker 5: ad space, it's the selling of search results, and it's 69 00:03:35,720 --> 00:03:38,720 Speaker 5: the digital products such as you see online as well 70 00:03:38,720 --> 00:03:41,920 Speaker 5: as digital screens that you see in stores. And so 71 00:03:42,120 --> 00:03:44,880 Speaker 5: retailers have really been unlocking the value of that and 72 00:03:44,920 --> 00:03:48,600 Speaker 5: are finding that it's a way to bring a high margin, 73 00:03:48,960 --> 00:03:52,400 Speaker 5: very low overhead business into their mainstream core. 74 00:03:52,960 --> 00:03:55,960 Speaker 3: You know, Jen, that's a business for better or worse, 75 00:03:56,000 --> 00:03:58,520 Speaker 3: I have experienced with Back in my banking days. We 76 00:03:58,560 --> 00:04:00,840 Speaker 3: tried to finance a bunch of those companies because we 77 00:04:00,880 --> 00:04:04,360 Speaker 3: felt like, you know, just like you said, they're captured customers, 78 00:04:04,400 --> 00:04:06,560 Speaker 3: they're at the point of buying. What a great time 79 00:04:06,720 --> 00:04:10,480 Speaker 3: for video to be introduced there in terms of advertising. 80 00:04:10,680 --> 00:04:13,320 Speaker 3: What does it mean for the big retailers? What are 81 00:04:13,360 --> 00:04:15,720 Speaker 3: the economics to the big retailers for this media. 82 00:04:16,760 --> 00:04:19,320 Speaker 5: So this media carries a margin of eighty percent and 83 00:04:19,360 --> 00:04:23,320 Speaker 5: when you think about when you think about retail staples, 84 00:04:23,360 --> 00:04:26,120 Speaker 5: you're talking about operating margins in the three to five 85 00:04:26,160 --> 00:04:29,000 Speaker 5: percent range, right, You're talking about gross margins in the 86 00:04:29,440 --> 00:04:32,760 Speaker 5: high teens, low twenties. So the ability to have a 87 00:04:32,839 --> 00:04:35,839 Speaker 5: revenue stream with such a high margin is very appealing 88 00:04:35,839 --> 00:04:39,080 Speaker 5: to these companies. And they have the data. They have 89 00:04:39,120 --> 00:04:42,159 Speaker 5: all this first party data that they can monetize, and 90 00:04:42,240 --> 00:04:45,800 Speaker 5: so it really is a very effective partnering. And one 91 00:04:45,839 --> 00:04:48,200 Speaker 5: of the interesting things that we're finding is that there's 92 00:04:48,240 --> 00:04:52,240 Speaker 5: always been historically investment from say, packaged food companies into 93 00:04:52,480 --> 00:04:56,000 Speaker 5: retailers for placement on shelves and things like that, but 94 00:04:56,040 --> 00:05:00,240 Speaker 5: we're finding that retail media is actually incremental spend that's 95 00:05:00,279 --> 00:05:03,200 Speaker 5: actually an even bigger tailwind for these retailers as they 96 00:05:03,200 --> 00:05:06,000 Speaker 5: get deeper into this new revenue stream. 97 00:05:06,560 --> 00:05:08,880 Speaker 6: In many ways, everyone takes a leaf out of Amazon's book. 98 00:05:08,880 --> 00:05:11,120 Speaker 6: In the end, I'm interested in Jan a little bit 99 00:05:11,200 --> 00:05:14,240 Speaker 6: more about the pure data side of it and the 100 00:05:14,240 --> 00:05:16,800 Speaker 6: forecasting side of it. We go to you to help 101 00:05:16,880 --> 00:05:19,000 Speaker 6: us full cost, what the retail looks like. How are 102 00:05:19,000 --> 00:05:21,920 Speaker 6: the companies themselves full casting in twenty twenty five. 103 00:05:23,080 --> 00:05:26,239 Speaker 5: Well, it's been interesting because what we've really seen were 104 00:05:26,680 --> 00:05:28,880 Speaker 5: in twenty twenty three and twenty twenty four, we saw 105 00:05:28,960 --> 00:05:33,080 Speaker 5: some initial pilot cases of the use of AI, for example, 106 00:05:33,400 --> 00:05:36,920 Speaker 5: to help with demand forecasting. And we're seeing that those 107 00:05:36,960 --> 00:05:40,200 Speaker 5: pilot programs have been successful and are being more widely 108 00:05:40,279 --> 00:05:44,200 Speaker 5: rolled out across organizations at places like Kroger and Walmart 109 00:05:44,200 --> 00:05:44,719 Speaker 5: and Target. 110 00:05:46,000 --> 00:05:47,760 Speaker 1: And you know what that really. 111 00:05:47,480 --> 00:05:50,320 Speaker 5: Means is that they're getting more efficient and smarter about 112 00:05:50,440 --> 00:05:53,359 Speaker 5: understanding when they need product and where they need product. 113 00:05:53,720 --> 00:05:55,720 Speaker 5: That then goes all the way back up to supply 114 00:05:55,839 --> 00:05:59,039 Speaker 5: chain and makes them more efficient as an organization. And so, 115 00:05:59,400 --> 00:06:03,119 Speaker 5: you know, the kind of cost cutting initiative is good 116 00:06:03,279 --> 00:06:06,640 Speaker 5: from a operational perspective, but it's also good for customers 117 00:06:06,680 --> 00:06:09,000 Speaker 5: because that means that what they want will be in 118 00:06:09,040 --> 00:06:12,040 Speaker 5: the stores or online available at the time they want it. 119 00:06:12,200 --> 00:06:15,640 Speaker 3: Our thanks to Jennifer bartashis Bloomberg Intelligence Senior retail analyst. 120 00:06:15,960 --> 00:06:18,960 Speaker 3: She spoke with me and Guess host Caroline Hyde. Now 121 00:06:19,000 --> 00:06:21,840 Speaker 3: we pivot to how mortgage rates will impact the health 122 00:06:21,880 --> 00:06:24,560 Speaker 3: of the housing market. Alex Steel and I spoke with 123 00:06:24,600 --> 00:06:28,440 Speaker 3: your reading Bloomberg Intelligence US home building analysts starting with 124 00:06:28,480 --> 00:06:31,200 Speaker 3: his prediction for the housing market in twenty twenty five. 125 00:06:31,560 --> 00:06:34,520 Speaker 7: Yeah, so as you can imagine, the direction of mortgage 126 00:06:34,600 --> 00:06:37,640 Speaker 7: rates obviously is going to be key in determining how 127 00:06:37,680 --> 00:06:41,120 Speaker 7: the spring selling season unfolds and how housing ultimately fares 128 00:06:41,200 --> 00:06:43,520 Speaker 7: in twenty twenty five. I mean, if we go back 129 00:06:43,560 --> 00:06:46,160 Speaker 7: to September, we were looking at a rate at around 130 00:06:46,360 --> 00:06:48,640 Speaker 7: six point one percent. There was a lot of optimism 131 00:06:48,680 --> 00:06:52,640 Speaker 7: heading into next year, you know, but that quickly unwound. 132 00:06:52,640 --> 00:06:55,400 Speaker 7: We're now looking at rates at about seven zero point 133 00:06:55,440 --> 00:06:58,120 Speaker 7: one percent, So monthly payments are that much higher for 134 00:06:58,120 --> 00:07:00,479 Speaker 7: buyers out there. So we think it's going to be 135 00:07:00,480 --> 00:07:02,720 Speaker 7: hard to build a lot of momentum with the affordability 136 00:07:02,800 --> 00:07:05,120 Speaker 7: challenges that are still out there in the market. That 137 00:07:05,200 --> 00:07:07,840 Speaker 7: being said, we think that the broader housing space can 138 00:07:07,880 --> 00:07:11,720 Speaker 7: still grind higher in twenty twenty five, you know, with 139 00:07:11,800 --> 00:07:14,280 Speaker 7: the existing market returning to growth maybe in the low 140 00:07:14,320 --> 00:07:17,960 Speaker 7: to mid single digit range, often extremely depressed base. Remember 141 00:07:18,000 --> 00:07:20,400 Speaker 7: we're coming off back to back years at around a 142 00:07:20,520 --> 00:07:23,360 Speaker 7: four million annualized rate, which is the lowest in more 143 00:07:23,400 --> 00:07:26,160 Speaker 7: than a decade, So off of a low base for sure. 144 00:07:26,240 --> 00:07:29,160 Speaker 7: In the new home market, we think you'll see similar growth, 145 00:07:29,160 --> 00:07:31,960 Speaker 7: but we think the backdrop will continue to favor the large, 146 00:07:32,480 --> 00:07:36,520 Speaker 7: well capitalized, publicly traded builders who have access to financing, 147 00:07:37,160 --> 00:07:40,520 Speaker 7: access to land, access to the trades, compared to their 148 00:07:40,560 --> 00:07:44,640 Speaker 7: smaller private peers who tend to rely on that regional 149 00:07:45,360 --> 00:07:49,320 Speaker 7: and local banking for financing. So they've really struggled struggled 150 00:07:49,360 --> 00:07:51,960 Speaker 7: with the cost and availability of that capital. So we 151 00:07:51,960 --> 00:07:54,600 Speaker 7: think you'll see a bifurcation growth continue to play out. 152 00:07:55,120 --> 00:07:57,120 Speaker 3: Drew, I'm going to ask you a thirty thousand foot 153 00:07:57,240 --> 00:08:00,440 Speaker 3: question about housing market here in the United States. We're 154 00:08:00,480 --> 00:08:04,360 Speaker 3: told that there's a housing shortage. A. Is that true? B? 155 00:08:04,520 --> 00:08:07,960 Speaker 3: How did we get there? And what are your building 156 00:08:08,040 --> 00:08:09,200 Speaker 3: companies going to do about it? 157 00:08:10,600 --> 00:08:12,760 Speaker 7: Yeah? So, I think the issue right now is that 158 00:08:12,800 --> 00:08:16,440 Speaker 7: there's a shortage of homes on the market. A lot 159 00:08:16,440 --> 00:08:18,040 Speaker 7: of that has to do with the fact that people 160 00:08:18,040 --> 00:08:20,480 Speaker 7: are locked into a much lower mortgage rate, so they're 161 00:08:20,480 --> 00:08:23,240 Speaker 7: disincentivized to put their house on the market and trade 162 00:08:23,320 --> 00:08:25,920 Speaker 7: up to a new home and take on a much 163 00:08:26,000 --> 00:08:28,440 Speaker 7: higher rate. At the same time, you have to remember 164 00:08:28,480 --> 00:08:31,440 Speaker 7: back in twenty twenty, twenty twenty one, when money was cheap, 165 00:08:31,480 --> 00:08:34,040 Speaker 7: you had a lot of people going out buying second 166 00:08:34,040 --> 00:08:36,640 Speaker 7: and third homes. You saw the boom in the airbnb market. 167 00:08:36,640 --> 00:08:39,679 Speaker 7: So I think, you know, the housing stock has been 168 00:08:39,720 --> 00:08:42,760 Speaker 7: allocated in a different way than we've seen historically, which 169 00:08:42,840 --> 00:08:45,840 Speaker 7: is contributing to that shortage. Now in terms of what 170 00:08:45,920 --> 00:08:48,360 Speaker 7: the builders are doing, you know, it's going to be 171 00:08:48,400 --> 00:08:50,320 Speaker 7: hard for them to put a lot of new supply 172 00:08:50,600 --> 00:08:54,079 Speaker 7: onto the market, particularly as supplying the resale market starts 173 00:08:54,080 --> 00:08:57,160 Speaker 7: to heat up. So we think you'll see new home 174 00:08:57,200 --> 00:08:59,520 Speaker 7: production maybe increase in the load to mid single digit 175 00:08:59,640 --> 00:09:02,760 Speaker 7: range kind of corresponds to what they're seeing from the 176 00:09:02,800 --> 00:09:04,920 Speaker 7: demand side. But you know, we don't. We don't see 177 00:09:05,120 --> 00:09:08,400 Speaker 7: the issue with housing being solved anytime soon. 178 00:09:10,000 --> 00:09:12,040 Speaker 8: I love how we talked about low rates, thanks a lot, 179 00:09:12,080 --> 00:09:14,240 Speaker 8: this is my moment where this is your moment. 180 00:09:13,960 --> 00:09:16,760 Speaker 4: Two seventy five thirty or fix and then Paul complains 181 00:09:16,800 --> 00:09:18,800 Speaker 4: about not being able to refine, and then all those 182 00:09:18,840 --> 00:09:21,720 Speaker 4: the really cool conversations. So then we can, you know, 183 00:09:22,240 --> 00:09:25,400 Speaker 4: move forward on that convo. The problem is with your builders, 184 00:09:25,480 --> 00:09:28,440 Speaker 4: as Paul calls them, is that they wind up building, 185 00:09:28,520 --> 00:09:30,760 Speaker 4: but it's still too expensive for people to buy it, 186 00:09:30,880 --> 00:09:33,800 Speaker 4: and then they wind up having to give incentives, and 187 00:09:33,840 --> 00:09:36,719 Speaker 4: then that winds up hurting their profitability. How long does 188 00:09:36,760 --> 00:09:38,520 Speaker 4: that's part of the cycle last for. 189 00:09:39,679 --> 00:09:41,839 Speaker 7: That's a great point, Alex. That's actually one of the 190 00:09:41,880 --> 00:09:44,080 Speaker 7: key themes for twenty twenty five. Well, we think that 191 00:09:44,600 --> 00:09:47,000 Speaker 7: volumes will continue to rebound, it's going to come at 192 00:09:47,000 --> 00:09:50,080 Speaker 7: a cost for the builders. The use of sales incentives 193 00:09:50,120 --> 00:09:52,720 Speaker 7: is at a multi year high. You know, a couple 194 00:09:52,800 --> 00:09:54,600 Speaker 7: months ago, when we were looking out to twenty twenty 195 00:09:54,600 --> 00:09:56,319 Speaker 7: five and we had mortgage rates coming down to the 196 00:09:56,360 --> 00:09:59,119 Speaker 7: six percent range, I think there's a lot of optimism 197 00:09:59,160 --> 00:10:01,600 Speaker 7: that builders were going to be able to pool back 198 00:10:01,640 --> 00:10:04,040 Speaker 7: on that use of incentives, which would support margins into 199 00:10:04,080 --> 00:10:07,840 Speaker 7: next year. But it's been exactly the opposite. So you know, 200 00:10:08,040 --> 00:10:10,280 Speaker 7: we think sales incentives are going to remain elevate it 201 00:10:10,320 --> 00:10:13,520 Speaker 7: we think margins will come under pressure next year. And 202 00:10:13,600 --> 00:10:16,120 Speaker 7: it's not just incentives. I mean, you have higher cost 203 00:10:16,200 --> 00:10:17,960 Speaker 7: land running through the P and L, and you have 204 00:10:18,040 --> 00:10:21,800 Speaker 7: the potential for Paris and some immigration policy to add 205 00:10:21,840 --> 00:10:23,840 Speaker 7: to the to the margin pressures that these guys are 206 00:10:23,840 --> 00:10:24,800 Speaker 7: going to face next year. 207 00:10:25,040 --> 00:10:28,160 Speaker 3: All Right, So a home was just constructed right next 208 00:10:28,200 --> 00:10:30,680 Speaker 3: to me down at the Jersey Shore. It's being constructed 209 00:10:30,679 --> 00:10:35,560 Speaker 3: as we speak, and I'm guessing swarming with workers there. 210 00:10:35,600 --> 00:10:38,160 Speaker 3: I'm guessing some percentage of them are illegal immigrants. 211 00:10:38,200 --> 00:10:39,960 Speaker 1: What are the what are. 212 00:10:39,840 --> 00:10:43,520 Speaker 3: The builders telling you guys about a tighter immigration policy 213 00:10:43,600 --> 00:10:46,760 Speaker 3: might mean on the ability to actually get these things built. 214 00:10:48,000 --> 00:10:51,440 Speaker 7: Yeah, there's some estimates out there that immigrants comprise about 215 00:10:51,440 --> 00:10:55,319 Speaker 7: thirty percent of the entire US construction force, and as 216 00:10:55,360 --> 00:10:58,640 Speaker 7: you mentioned, a large portion of those are undocumented. So 217 00:10:59,040 --> 00:11:00,760 Speaker 7: in the event that they that we do get some 218 00:11:00,880 --> 00:11:04,200 Speaker 7: policy coming through next year that puts a strain on 219 00:11:04,240 --> 00:11:06,160 Speaker 7: that labor force. I think what you're going to see 220 00:11:06,200 --> 00:11:09,560 Speaker 7: is a pullback in production. I think builders closings could 221 00:11:09,559 --> 00:11:11,920 Speaker 7: be impacted because you're going to see cycle times, which is, 222 00:11:12,120 --> 00:11:13,920 Speaker 7: you know, the amount of time from start to completion. 223 00:11:14,520 --> 00:11:17,280 Speaker 7: You'll see them start to elongate, and I could pressure closings. 224 00:11:17,840 --> 00:11:20,400 Speaker 7: At the same time, you know, builders are going to 225 00:11:20,559 --> 00:11:22,720 Speaker 7: have to start to fight more to attract that labor. 226 00:11:22,720 --> 00:11:24,960 Speaker 7: So you're going to see cost strives as well. 227 00:11:24,600 --> 00:11:26,719 Speaker 4: Right, So that says a profitability squeeze. It feels like 228 00:11:26,760 --> 00:11:29,680 Speaker 4: on lots of different ends, which companies in your coverage 229 00:11:29,760 --> 00:11:31,920 Speaker 4: universe do you feel like are best equipped to manage that. 230 00:11:32,240 --> 00:11:34,120 Speaker 7: So there's a couple of things that we're looking at. 231 00:11:34,360 --> 00:11:36,760 Speaker 7: One from a geographic perspective, we think that's going to 232 00:11:36,760 --> 00:11:40,200 Speaker 7: become increasingly important in twenty twenty five. Some of the 233 00:11:40,240 --> 00:11:43,280 Speaker 7: markets that are struggling a little bit, think of Texas 234 00:11:43,320 --> 00:11:46,280 Speaker 7: and Florida, where you're seeing a lot more competitive supply. 235 00:11:47,200 --> 00:11:49,360 Speaker 7: We think builders in those markets are maybe going to 236 00:11:49,400 --> 00:11:53,120 Speaker 7: have to adjust prices or continue with the elevated incentives. 237 00:11:53,120 --> 00:11:55,520 Speaker 7: So we think from a geographic perspective, you're likely to 238 00:11:55,520 --> 00:11:59,079 Speaker 7: see relative strength in the Midwest, in the Northeast, and 239 00:11:59,120 --> 00:12:04,520 Speaker 7: maybe park Its pockets of California. From a product perspective, 240 00:12:05,040 --> 00:12:07,080 Speaker 7: you know, with rates rising, you have to think about 241 00:12:07,080 --> 00:12:09,240 Speaker 7: who's most impacted by that, and as you would expect, 242 00:12:09,280 --> 00:12:11,480 Speaker 7: it's the lower end of the entry level home buyer. 243 00:12:11,760 --> 00:12:13,920 Speaker 7: So we think that they could remain under pressure into 244 00:12:13,920 --> 00:12:17,320 Speaker 7: twenty twenty five with relative strength and that move up 245 00:12:18,040 --> 00:12:20,400 Speaker 7: and luxury segment. So some builders that come to mind 246 00:12:20,400 --> 00:12:23,040 Speaker 7: would be a Toll Brothers or a Teller Morrison. 247 00:12:23,559 --> 00:12:27,400 Speaker 3: Our thanks to you're reading Bloomberg Intelligence US home Building Analyst. 248 00:12:27,720 --> 00:12:30,360 Speaker 3: Coming up, we turned to the fed's rate path for 249 00:12:30,440 --> 00:12:34,079 Speaker 3: twenty twenty five. You're listening to Bloomberg Intelligence on Bloomberg Radio, 250 00:12:34,360 --> 00:12:37,000 Speaker 3: providing in depth research and data on two thousand companies 251 00:12:37,000 --> 00:12:39,679 Speaker 3: and one hundred and thirty industries. You can access Bloomberg 252 00:12:39,720 --> 00:12:42,800 Speaker 3: Intelligence via bi Go on the terminal for my colleague 253 00:12:42,800 --> 00:12:54,360 Speaker 3: Alex Steele. I'm Paul Sweeney. This is Bloomberg. 254 00:12:58,520 --> 00:13:02,840 Speaker 2: This is Bloomberg Intelligence with Alex Steele and Paul Sweeney 255 00:13:03,240 --> 00:13:04,480 Speaker 2: on Bloomberg Radio. 256 00:13:06,000 --> 00:13:08,160 Speaker 3: We look next at the macro environment. After the Fed 257 00:13:08,240 --> 00:13:11,079 Speaker 3: lowerd it's benchmark policy rate by a quarter percentage point 258 00:13:11,160 --> 00:13:14,760 Speaker 3: earlier this month and signaled just two reductions for twenty 259 00:13:14,800 --> 00:13:18,360 Speaker 3: twenty five, San Francisco FED President Mary Daly said she 260 00:13:18,480 --> 00:13:21,000 Speaker 3: was very comfortable with two rate cuts in twenty twenty five. 261 00:13:21,480 --> 00:13:24,160 Speaker 3: She spoke about the Fed's rate path on Bloomberg recently 262 00:13:24,520 --> 00:13:27,920 Speaker 3: with hosts Jonathan Farrell, Lisa Bromwitz, and Michael mckeeth. There's 263 00:13:27,960 --> 00:13:29,319 Speaker 3: a little bit of their conversation. 264 00:13:29,559 --> 00:13:30,880 Speaker 9: We have to remain agile. 265 00:13:30,920 --> 00:13:32,959 Speaker 10: I mean, you know, the thing that's got us here 266 00:13:33,520 --> 00:13:37,280 Speaker 10: is being resolute to achieve our dual mandate goals. Price 267 00:13:37,280 --> 00:13:40,600 Speaker 10: stability was our focus when inflation was very high. The 268 00:13:40,800 --> 00:13:43,560 Speaker 10: employment has come into the frame so that we're focused 269 00:13:43,559 --> 00:13:44,040 Speaker 10: on both. 270 00:13:44,200 --> 00:13:45,600 Speaker 9: But then we also have to be agile. 271 00:13:45,920 --> 00:13:48,400 Speaker 10: You know the world is uncertain, so we pencil into 272 00:13:49,000 --> 00:13:53,040 Speaker 10: and you know, as that estimate or that projection gets 273 00:13:53,080 --> 00:13:55,680 Speaker 10: further from when we made it, the accuracy of it 274 00:13:55,720 --> 00:13:58,240 Speaker 10: probably falls. And so we're just going to continually take 275 00:13:58,320 --> 00:14:03,200 Speaker 10: in more information consumer and every meeting your listeners should 276 00:14:03,240 --> 00:14:06,600 Speaker 10: think about this. Every meeting is live from the standpoint 277 00:14:06,600 --> 00:14:09,400 Speaker 10: that you're debating, you're discussing, you're thinking what's the right 278 00:14:09,480 --> 00:14:13,680 Speaker 10: level of policy. But my projection is that it will 279 00:14:13,679 --> 00:14:16,959 Speaker 10: take many fewer rate cuts next year than we thought. 280 00:14:17,160 --> 00:14:19,520 Speaker 10: But I'll watch the economy and see if that works out. 281 00:14:19,800 --> 00:14:22,560 Speaker 11: When we went into the cutting cycle, you were out 282 00:14:22,600 --> 00:14:25,000 Speaker 11: front and saying you were concerned about the labor market 283 00:14:25,240 --> 00:14:27,400 Speaker 11: and that we needed to make sure that we didn't 284 00:14:27,400 --> 00:14:31,680 Speaker 11: lose the gains that we had. Now, at least coming 285 00:14:31,680 --> 00:14:34,880 Speaker 11: out of Chairman Powell's press conference, it sounds like the 286 00:14:34,920 --> 00:14:39,120 Speaker 11: focus has shifted to inflation again. Are you comfortable with 287 00:14:39,160 --> 00:14:41,880 Speaker 11: that as this new phase that he's talking about. 288 00:14:41,960 --> 00:14:43,760 Speaker 10: Well, I think of it as a new phase as well, 289 00:14:44,000 --> 00:14:46,640 Speaker 10: and I characterize it slightly differently. I would say that 290 00:14:47,160 --> 00:14:51,320 Speaker 10: for a long time, a persistent amount of time protracted, 291 00:14:51,600 --> 00:14:54,640 Speaker 10: we were focused almost entirely on inflation. That's because the 292 00:14:54,720 --> 00:14:58,120 Speaker 10: labor market was quite robust and inflation was seven six ' five. 293 00:14:58,480 --> 00:15:01,200 Speaker 10: That was the right way to focus. Then the labor 294 00:15:01,200 --> 00:15:03,880 Speaker 10: market came into the frame. That didn't mean we turned 295 00:15:03,920 --> 00:15:06,360 Speaker 10: our focus totally to it. It just meant that after 296 00:15:06,400 --> 00:15:09,120 Speaker 10: a long period of focusing only on inflation, we were 297 00:15:09,120 --> 00:15:10,160 Speaker 10: now focused on both. 298 00:15:10,480 --> 00:15:11,960 Speaker 9: I think that is still the case. 299 00:15:12,120 --> 00:15:15,040 Speaker 3: That's Mary Daily, president of the San Francisco FED, talking 300 00:15:15,080 --> 00:15:18,440 Speaker 3: with Jonathan Ferrell, Lisa Bromwoos, and Michael McKee for more 301 00:15:18,480 --> 00:15:20,880 Speaker 3: on the Fed's path forward and how the new Trump 302 00:15:20,880 --> 00:15:24,120 Speaker 3: administration might impact the economy. Caroline Hyde and I spoke 303 00:15:24,160 --> 00:15:27,880 Speaker 3: with Macro Perspectives founder and president and Julia Coronado. Here's 304 00:15:27,880 --> 00:15:31,240 Speaker 3: a portion of our conversation, starting on her thoughts on 305 00:15:31,280 --> 00:15:33,400 Speaker 3: the messaging at the December meeting. 306 00:15:33,560 --> 00:15:36,600 Speaker 12: Their messaging that we got at the December meeting was 307 00:15:36,720 --> 00:15:40,320 Speaker 12: a lot sterner than expected, with only two cuts and 308 00:15:40,480 --> 00:15:44,360 Speaker 12: just a general tone of concern about inflation. And I think, 309 00:15:44,400 --> 00:15:46,800 Speaker 12: you know, when we look at the data that's come in, 310 00:15:46,840 --> 00:15:50,120 Speaker 12: it's fair for President Daily to say that, you know, 311 00:15:50,160 --> 00:15:53,480 Speaker 12: it's the data have been disappointing on the inflation front. 312 00:15:53,840 --> 00:15:56,040 Speaker 12: But this wouldn't have really happened if it weren't for 313 00:15:56,040 --> 00:15:58,480 Speaker 12: the risks to inflation in the outlook, and they can't 314 00:15:58,480 --> 00:16:00,960 Speaker 12: really pinpoint them or put two find a point on 315 00:16:01,080 --> 00:16:05,200 Speaker 12: what's likely to happen. But every major policy prong of 316 00:16:05,240 --> 00:16:09,840 Speaker 12: the incoming Trump administration could potentially be inflationary. So you 317 00:16:09,920 --> 00:16:14,760 Speaker 12: can see they released their assessment of risks to inflation 318 00:16:14,960 --> 00:16:19,400 Speaker 12: and unemployment, and the change in upside risks to inflation 319 00:16:19,680 --> 00:16:23,080 Speaker 12: really moved at the December meeting. So we don't know 320 00:16:23,120 --> 00:16:25,560 Speaker 12: the specifics on policy. Yes, we have to wait and 321 00:16:25,600 --> 00:16:29,280 Speaker 12: see what materializes and how that feeds into the data. 322 00:16:29,320 --> 00:16:32,760 Speaker 8: But there's a direction of travel here that's of concern 323 00:16:32,880 --> 00:16:33,920 Speaker 8: to the f MC. 324 00:16:34,120 --> 00:16:37,320 Speaker 12: Broadly speaking, this was a big move across a lot 325 00:16:37,360 --> 00:16:41,360 Speaker 12: of participants and so you know they want us to 326 00:16:41,400 --> 00:16:42,320 Speaker 12: be on watch for that. 327 00:16:43,440 --> 00:16:45,600 Speaker 6: Have you been running the numbers and with the best case, 328 00:16:45,600 --> 00:16:49,320 Speaker 6: worst case scenario. Yes, we don't know the direction exactly 329 00:16:49,760 --> 00:16:50,920 Speaker 6: of where policy will go. 330 00:16:51,120 --> 00:16:52,640 Speaker 9: But we've been on this rodeo. 331 00:16:52,400 --> 00:16:54,840 Speaker 6: Before, and there's been tough talk about taris in the past. 332 00:16:55,800 --> 00:16:58,280 Speaker 12: Yes, and we got tariffs in the past and we 333 00:16:58,360 --> 00:17:03,480 Speaker 12: did see them flow through into goods prices. The difference 334 00:17:03,640 --> 00:17:06,240 Speaker 12: was that we were in an environment in the Trump 335 00:17:06,320 --> 00:17:09,520 Speaker 12: the first Trump administration where inflation was running low and 336 00:17:09,560 --> 00:17:12,679 Speaker 12: in fact below the Fed's target, so they could be 337 00:17:12,840 --> 00:17:17,400 Speaker 12: very sanguine and patient and sort of accommodate the increase 338 00:17:17,440 --> 00:17:20,359 Speaker 12: in goods prices that came with the trade war. This 339 00:17:20,480 --> 00:17:22,960 Speaker 12: time around, we're in a different environment. They've just re 340 00:17:23,200 --> 00:17:27,240 Speaker 12: established credibility, They've just brought inflation back down, not even 341 00:17:27,280 --> 00:17:31,480 Speaker 12: to their target yet, and so you know, the threat 342 00:17:31,600 --> 00:17:34,560 Speaker 12: of a round of tariffs and an impulse into goods 343 00:17:34,600 --> 00:17:36,960 Speaker 12: prices is more meaningful now. 344 00:17:37,000 --> 00:17:38,280 Speaker 8: The thing that they're going to have to. 345 00:17:38,280 --> 00:17:41,920 Speaker 12: Grapple with, and we saw that also in last trade 346 00:17:41,920 --> 00:17:45,520 Speaker 12: war is trade wars also destroyed demand. That spike in 347 00:17:45,640 --> 00:17:50,679 Speaker 12: prices isn't good for consumer purchasing power, and it's unlikely 348 00:17:50,760 --> 00:17:54,159 Speaker 12: to be accommodated like it was during the pandemic with 349 00:17:54,240 --> 00:17:58,280 Speaker 12: a lot of fiscal support to households directly to households, 350 00:17:58,600 --> 00:18:03,359 Speaker 12: which helped the economy whether the inflationary shock during the 351 00:18:03,400 --> 00:18:07,200 Speaker 12: pandemic and sort of stay on track. In the first 352 00:18:07,200 --> 00:18:10,000 Speaker 12: Strump administration, we actually saw the trade war damp and 353 00:18:10,080 --> 00:18:15,000 Speaker 12: economic activity put the global manufacturing sector into a recession, 354 00:18:15,000 --> 00:18:17,399 Speaker 12: and the FED actually ended up cutting rates in twenty 355 00:18:17,480 --> 00:18:22,440 Speaker 12: nineteen to take out some insurance against that manufacturing recession 356 00:18:22,480 --> 00:18:27,360 Speaker 12: broadening into the service sector. So you know, very different circumstances. 357 00:18:27,480 --> 00:18:31,439 Speaker 12: This could weaken the economy, it could cause inflation, It 358 00:18:31,480 --> 00:18:33,639 Speaker 12: could do both, and then the Fed's mandates go in 359 00:18:33,680 --> 00:18:35,480 Speaker 12: different directions and they have to make. 360 00:18:35,400 --> 00:18:40,000 Speaker 3: A judgment, Julia. So you know, tariffs are clearly an issue. 361 00:18:40,040 --> 00:18:42,440 Speaker 3: What I've heard from a lot of folks is restrictive 362 00:18:42,520 --> 00:18:47,720 Speaker 3: immigration policies, perhaps forced deportations that impact on the labor 363 00:18:47,720 --> 00:18:51,840 Speaker 3: market that might even be even more inflationary going forward. 364 00:18:51,840 --> 00:18:53,040 Speaker 1: How do you view that risk? 365 00:18:53,520 --> 00:18:58,439 Speaker 12: Yeah, no, absolutely, and I think that is definitely something 366 00:18:58,480 --> 00:19:02,560 Speaker 12: we are likely to see. That is one of the 367 00:19:02,800 --> 00:19:07,000 Speaker 12: main promises of the campaign, and we can already see 368 00:19:07,040 --> 00:19:10,960 Speaker 12: the appointees and the plans being put in place to 369 00:19:11,080 --> 00:19:15,399 Speaker 12: implement this policy. And let's not forget that immigration, that 370 00:19:15,600 --> 00:19:19,840 Speaker 12: plentiful flow of immigration. While it became a political hot 371 00:19:19,880 --> 00:19:25,680 Speaker 12: potato during the election, it's unambiguously positive from a macroeconomic standpoint. 372 00:19:25,720 --> 00:19:31,400 Speaker 12: We had abundant labor supply, it helped growth, it helped demand. 373 00:19:32,320 --> 00:19:34,600 Speaker 8: So immigration is good for the economy. 374 00:19:34,840 --> 00:19:38,760 Speaker 12: And to even just turn off the spigot, let alone 375 00:19:39,680 --> 00:19:43,800 Speaker 12: turn around and cast a shadow over the labor market 376 00:19:43,840 --> 00:19:45,919 Speaker 12: and deport some workers. 377 00:19:46,480 --> 00:19:48,600 Speaker 8: It's going to change the macro environment. 378 00:19:48,640 --> 00:19:52,960 Speaker 12: And yes, in areas where the most targeted population, the 379 00:19:53,040 --> 00:19:59,560 Speaker 12: undocumented workers are employed, food services, construction. I have conversations 380 00:19:59,560 --> 00:20:02,879 Speaker 12: with people here in Texas, people in the real estate 381 00:20:03,280 --> 00:20:08,560 Speaker 12: industry that are pretty worried about the availability of workers 382 00:20:08,200 --> 00:20:10,840 Speaker 12: as as early as next year, as early as the 383 00:20:10,880 --> 00:20:15,359 Speaker 12: spring building season. So this could be very material. It 384 00:20:15,400 --> 00:20:18,720 Speaker 12: could bring higher prices. It could also just slow down 385 00:20:18,760 --> 00:20:21,240 Speaker 12: building activity because you just don't have the people that 386 00:20:21,280 --> 00:20:25,680 Speaker 12: you need. Similarly, for food, availability of certain crops and 387 00:20:26,040 --> 00:20:30,080 Speaker 12: the prices of those would likely spike. So leisure and 388 00:20:30,160 --> 00:20:34,959 Speaker 12: hospitality another industry that relies heavily on an immigrant workforce. 389 00:20:35,960 --> 00:20:39,080 Speaker 12: So yeah, we could see that ripple across numerous sectors 390 00:20:39,080 --> 00:20:41,800 Speaker 12: in the economy, and it could be you know, by 391 00:20:41,920 --> 00:20:45,080 Speaker 12: mid year, we're seeing some material constraints and some price 392 00:20:45,200 --> 00:20:46,560 Speaker 12: increases on the back of that. 393 00:20:47,320 --> 00:20:48,919 Speaker 3: You know, and Julie, it kind of goes to that 394 00:20:49,320 --> 00:20:52,159 Speaker 3: consumer confidence number we got today came in, you know, 395 00:20:52,520 --> 00:20:56,320 Speaker 3: weaker than expected, and the expectations looking forward were weaker 396 00:20:56,359 --> 00:20:59,280 Speaker 3: than expected. That actually surprised me because I've been talking 397 00:20:59,280 --> 00:21:02,320 Speaker 3: to a lot of our guests since the election about 398 00:21:02,359 --> 00:21:06,119 Speaker 3: a palpable sense of optimism in this country since the election, 399 00:21:06,800 --> 00:21:11,080 Speaker 3: particularly as it relates to economic outlook, reduced taxes and 400 00:21:11,160 --> 00:21:13,600 Speaker 3: so on and so forth. How do you think about 401 00:21:13,640 --> 00:21:16,439 Speaker 3: the consumer consumer confidence? And that data surprise you today. 402 00:21:17,359 --> 00:21:19,679 Speaker 12: So I was just digging through those details. And of 403 00:21:19,720 --> 00:21:23,520 Speaker 12: course the optimism depends on who you ask. So you're 404 00:21:23,520 --> 00:21:27,560 Speaker 12: probably talking to a lot of market participants who have 405 00:21:27,760 --> 00:21:31,880 Speaker 12: experienced the rally and are looking forward to maybe reduced 406 00:21:32,440 --> 00:21:37,320 Speaker 12: regulation in the finance industry, maybe some corporate tax cuts. 407 00:21:37,640 --> 00:21:38,560 Speaker 8: But when you look at. 408 00:21:38,480 --> 00:21:41,400 Speaker 12: Consumers, well, there's a lot of uncertainty as to how 409 00:21:41,560 --> 00:21:45,040 Speaker 12: this mix of tariffs and immigration and is going to 410 00:21:45,080 --> 00:21:49,040 Speaker 12: affect more the average consumer. And when I looked at 411 00:21:49,080 --> 00:21:51,119 Speaker 12: actually what was interesting you could see a little bit 412 00:21:51,160 --> 00:21:54,040 Speaker 12: of a political footprint here when you look at it 413 00:21:54,080 --> 00:21:54,679 Speaker 12: by region. 414 00:21:55,080 --> 00:21:56,720 Speaker 8: The Conference Board doesn't. 415 00:21:56,720 --> 00:21:59,800 Speaker 12: Have the breakdown by political party like the Michigan sent 416 00:21:59,840 --> 00:22:03,199 Speaker 12: to measure does, but you can clearly see sort of 417 00:22:03,240 --> 00:22:06,719 Speaker 12: the South confidence going up, but in the West and 418 00:22:06,760 --> 00:22:09,040 Speaker 12: the Northeast the confidence going down. 419 00:22:09,240 --> 00:22:12,920 Speaker 8: So you know, we are a fifty to fifty country. 420 00:22:12,960 --> 00:22:13,760 Speaker 8: We always have been. 421 00:22:13,840 --> 00:22:16,080 Speaker 12: Some people are feeling better, some people are feeling a 422 00:22:16,119 --> 00:22:16,639 Speaker 12: lot worse. 423 00:22:16,680 --> 00:22:18,200 Speaker 8: And it really depends on who you ask. 424 00:22:19,560 --> 00:22:23,359 Speaker 6: What about stockholders, because boy, twenty twenty four should have 425 00:22:23,440 --> 00:22:25,680 Speaker 6: been the year that made everyone feel pretty good. It's 426 00:22:25,720 --> 00:22:27,960 Speaker 6: if you've been long AI, if you've been long S 427 00:22:28,000 --> 00:22:30,959 Speaker 6: and p as that bigger benchmarks, and then it just 428 00:22:31,040 --> 00:22:33,119 Speaker 6: tails off in the last couple of weeks. So how 429 00:22:33,160 --> 00:22:36,040 Speaker 6: does sentiment around being an asset holder right now feel? 430 00:22:36,520 --> 00:22:39,399 Speaker 12: Yeah, yeah, well that's what was interesting about the numbers, 431 00:22:39,440 --> 00:22:42,600 Speaker 12: right it was the expectations component, not the present situation. 432 00:22:43,720 --> 00:22:46,520 Speaker 12: We have been on quite a tear in the stock market, 433 00:22:46,800 --> 00:22:49,440 Speaker 12: and of course you all know that it's been very, 434 00:22:49,520 --> 00:22:52,680 Speaker 12: very concentrated in a handful of names that are related 435 00:22:52,720 --> 00:22:57,879 Speaker 12: to the AI, you know, sort of euphoria. But you know, 436 00:22:58,040 --> 00:23:02,879 Speaker 12: now we're moving into the the expectations meets reality phase 437 00:23:03,040 --> 00:23:04,879 Speaker 12: of change in administration. 438 00:23:05,119 --> 00:23:07,840 Speaker 8: So by the end of January, we're going to know a. 439 00:23:07,800 --> 00:23:10,800 Speaker 12: Lot more about this mix of policies and yeah, some 440 00:23:10,880 --> 00:23:14,760 Speaker 12: are growth positive and some are growth negative, and so 441 00:23:15,520 --> 00:23:18,119 Speaker 12: different industries are going to experience that differently. 442 00:23:18,960 --> 00:23:19,800 Speaker 8: The tax cuts. 443 00:23:19,840 --> 00:23:21,600 Speaker 12: I think one of the things that we just saw 444 00:23:21,680 --> 00:23:27,080 Speaker 12: with the budget dog fight is that it's a lot 445 00:23:27,160 --> 00:23:30,480 Speaker 12: easier to talk about tax cuts on a campaign trail, 446 00:23:30,560 --> 00:23:35,040 Speaker 12: the implement them in a very closely divided Congress, and 447 00:23:35,080 --> 00:23:38,399 Speaker 12: even within the Republican Party. While they hold majorities in 448 00:23:38,480 --> 00:23:42,359 Speaker 12: both houses, there's a lot of different views on the 449 00:23:42,520 --> 00:23:47,000 Speaker 12: right the correct direction of fiscal policy. So we sort 450 00:23:47,040 --> 00:23:49,359 Speaker 12: of imagine it's going to take most of the year 451 00:23:49,400 --> 00:23:53,160 Speaker 12: to legislate anything meaningful on the fiscal front. They want 452 00:23:53,160 --> 00:23:56,159 Speaker 12: to push forward a border a package early. 453 00:23:56,640 --> 00:23:58,880 Speaker 8: We'll see how that plays out. I'm sure. 454 00:23:59,080 --> 00:24:00,680 Speaker 12: I assume they're going to be able to get a 455 00:24:00,720 --> 00:24:05,119 Speaker 12: lot done. But remember, like again, very different from last time. 456 00:24:05,680 --> 00:24:09,840 Speaker 12: Budget wise, the US fiscal position is a lot worse 457 00:24:09,880 --> 00:24:14,119 Speaker 12: than last time, and so that room for maneuvering is 458 00:24:14,160 --> 00:24:17,240 Speaker 12: a little tighter, and their ability to enact something that's 459 00:24:17,280 --> 00:24:20,480 Speaker 12: really going to change the backdrop is more limited. 460 00:24:20,760 --> 00:24:22,879 Speaker 3: Enjoy about a minute left. How do you put in 461 00:24:23,080 --> 00:24:24,880 Speaker 3: Elon Musk into your calculus here? 462 00:24:25,960 --> 00:24:27,120 Speaker 8: Elon Musk is going to. 463 00:24:27,080 --> 00:24:30,760 Speaker 12: Be a noise generator at a minimum, and certainly will 464 00:24:30,760 --> 00:24:33,719 Speaker 12: be as we saw with his budget fight, fighting for 465 00:24:33,760 --> 00:24:37,200 Speaker 12: things that are good for his companies. But I think 466 00:24:37,200 --> 00:24:39,880 Speaker 12: what we also saw in the last week is that 467 00:24:40,200 --> 00:24:42,280 Speaker 12: he's not going to just get his way. He's going 468 00:24:42,359 --> 00:24:45,080 Speaker 12: to talk a lot. Do I think he's actually going 469 00:24:45,160 --> 00:24:49,480 Speaker 12: to be successful eliminating the VA health care system? No, 470 00:24:49,600 --> 00:24:54,200 Speaker 12: I do not, So you know he's going to run 471 00:24:54,200 --> 00:24:57,400 Speaker 12: into constraints. He's not an elected official. He actually doesn't 472 00:24:57,440 --> 00:25:00,919 Speaker 12: have any sort of direct lever that he can pull. 473 00:25:01,280 --> 00:25:03,800 Speaker 12: And these elected officials have a lot of views about 474 00:25:03,840 --> 00:25:08,119 Speaker 12: the programs that they want to protect and their constituents 475 00:25:08,200 --> 00:25:11,239 Speaker 12: that they want to serve. So I think it's going 476 00:25:11,280 --> 00:25:16,240 Speaker 12: to be messy and loud and harder to extract the 477 00:25:16,280 --> 00:25:17,399 Speaker 12: signal from the noise. 478 00:25:17,800 --> 00:25:21,520 Speaker 3: That's Juia CORNATDO She's president and founder of Macro Perspectives, 479 00:25:21,600 --> 00:25:24,239 Speaker 3: speaking with me and guest host Caroline Hyde. Coming up 480 00:25:24,320 --> 00:25:26,680 Speaker 3: next on the program, we look at the company's analysts 481 00:25:26,680 --> 00:25:29,359 Speaker 3: at Bloomberg Intelligence expect to do well in the new year. 482 00:25:29,680 --> 00:25:32,960 Speaker 3: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in 483 00:25:33,000 --> 00:25:35,199 Speaker 3: depth research and data on two thousand companies and one 484 00:25:35,280 --> 00:25:38,360 Speaker 3: hundred and thirty industries. You can access Bloomberg Intelligence via 485 00:25:38,400 --> 00:25:41,040 Speaker 3: b Igo on the terminal. I'm Paul Sweeney, and this 486 00:25:41,440 --> 00:25:42,040 Speaker 3: is Bloomberg. 487 00:25:50,640 --> 00:25:55,040 Speaker 2: This is Bloomberg Intelligence with Alex Steele and Paul Sweeney 488 00:25:55,359 --> 00:25:56,960 Speaker 2: on Bloomberg Radio. 489 00:25:57,359 --> 00:25:59,520 Speaker 3: As we wrap up twenty twenty four and look ahead 490 00:25:59,560 --> 00:26:01,359 Speaker 3: to twenty two twenty five, we wanted to bring in 491 00:26:01,359 --> 00:26:05,919 Speaker 3: Bloomberg Intelligence Research Director for Content, Tim Craighead. His latest 492 00:26:05,920 --> 00:26:08,720 Speaker 3: piece covers the fifty companies to watch this coming year 493 00:26:09,000 --> 00:26:12,640 Speaker 3: using analysis from Bloomberg Intelligence. Let's dive into our conversation 494 00:26:12,720 --> 00:26:15,600 Speaker 3: with Tim, starting with how he and his team started 495 00:26:15,640 --> 00:26:18,639 Speaker 3: work on picking companies and sectors they think will do 496 00:26:18,720 --> 00:26:19,600 Speaker 3: well in the new year. 497 00:26:19,920 --> 00:26:24,200 Speaker 1: Across our team, we are thinking both on a bottom 498 00:26:24,280 --> 00:26:27,399 Speaker 1: up and a top down perspective about this topic. On 499 00:26:27,480 --> 00:26:30,440 Speaker 1: a bottom up perspective, we encourage all of our analysts 500 00:26:30,440 --> 00:26:34,440 Speaker 1: to step up with their high conviction ideas where they 501 00:26:34,520 --> 00:26:37,240 Speaker 1: feel like they've got something that's out of consensus, are 502 00:26:37,359 --> 00:26:41,680 Speaker 1: different from what the market's thinking, and make a focus idea. 503 00:26:41,800 --> 00:26:43,720 Speaker 1: And we have a list of focus ideas. There are 504 00:26:43,720 --> 00:26:46,640 Speaker 1: about ninety of them right now that are these high 505 00:26:46,720 --> 00:26:50,480 Speaker 1: conviction differentiated ideas where we see catalyst ahead that can 506 00:26:50,520 --> 00:26:53,320 Speaker 1: bring the market around to our point of view from 507 00:26:53,320 --> 00:26:59,600 Speaker 1: a top down perspective looking across those those groups of companies, Yeah, 508 00:26:59,680 --> 00:27:02,720 Speaker 1: you can think about it, is that US or European 509 00:27:02,840 --> 00:27:07,520 Speaker 1: or Asian oriented and actually this year it's pretty well balanced. 510 00:27:08,200 --> 00:27:10,600 Speaker 1: From the standpoint of yes, you'd think the US is 511 00:27:10,800 --> 00:27:13,879 Speaker 1: close to fifty percent, and then Europe and Asia are 512 00:27:14,400 --> 00:27:19,359 Speaker 1: roughly about the same. And you think about where the 513 00:27:19,520 --> 00:27:22,400 Speaker 1: ideas that are positive versus negative, and you know this 514 00:27:22,480 --> 00:27:30,400 Speaker 1: is roughly eighty percent positive, twenty percent negative to coalesce 515 00:27:30,480 --> 00:27:37,000 Speaker 1: into fifty that are really driven towards twenty twenty five 516 00:27:37,280 --> 00:27:40,680 Speaker 1: as we see catalysts play out. And you have to say, 517 00:27:40,720 --> 00:27:44,680 Speaker 1: it's really interesting because you compare versus last year, where 518 00:27:45,200 --> 00:27:50,000 Speaker 1: there were there were big AI ideas and there was 519 00:27:50,040 --> 00:27:53,000 Speaker 1: a lot of focus on negative China, especially with the 520 00:27:53,040 --> 00:27:58,480 Speaker 1: property market. This year there's much more orientation towards ideas 521 00:27:58,520 --> 00:28:02,399 Speaker 1: about cyclical recovery with a change in interest rates and 522 00:28:02,520 --> 00:28:07,240 Speaker 1: sort of clarity on elections, and the China side of 523 00:28:07,280 --> 00:28:10,399 Speaker 1: things is also more much more recovery orient and not 524 00:28:10,480 --> 00:28:13,240 Speaker 1: so much worried about the property crisis. So we still 525 00:28:13,280 --> 00:28:15,880 Speaker 1: get into some of the details, but that's a backdrop. 526 00:28:15,560 --> 00:28:19,840 Speaker 4: So we still have AI is still a thing, China, recovery, cycle, goal, recovery. 527 00:28:20,119 --> 00:28:23,840 Speaker 4: What are some other buckets or themes that were reflected 528 00:28:23,880 --> 00:28:24,560 Speaker 4: throughout the picks. 529 00:28:25,600 --> 00:28:28,560 Speaker 1: Now, it's interesting thinking about it this way. There is, 530 00:28:28,920 --> 00:28:33,359 Speaker 1: there's definitely an innovation, new product flavor that we should 531 00:28:33,359 --> 00:28:38,640 Speaker 1: talk about and get into. There's four new CEOs, but 532 00:28:39,000 --> 00:28:41,360 Speaker 1: with those we see a couple that are positive, a 533 00:28:41,440 --> 00:28:45,240 Speaker 1: couple that we've got some concerns about, not the CEO themselves, 534 00:28:45,320 --> 00:28:47,560 Speaker 1: but the situation of the company that they're in that 535 00:28:47,840 --> 00:28:49,719 Speaker 1: you know, maybe there's more work to be done than 536 00:28:49,720 --> 00:28:53,800 Speaker 1: the market's thinking about. And you know there there's energy 537 00:28:53,800 --> 00:28:59,400 Speaker 1: transition related ideas as well that I cross the globe 538 00:28:59,520 --> 00:29:05,200 Speaker 1: not with and policies and whatnot coming from new governments. 539 00:29:05,640 --> 00:29:07,920 Speaker 1: So yeah, those are some of the bigger buckets. So 540 00:29:08,280 --> 00:29:11,840 Speaker 1: what's the call here on the energy transition? It feels 541 00:29:11,840 --> 00:29:13,760 Speaker 1: like here in the States team it's kind of losing 542 00:29:13,800 --> 00:29:16,360 Speaker 1: a little bit of a steam, but I know it's 543 00:29:16,560 --> 00:29:19,280 Speaker 1: still going strong in other parts of the world. How 544 00:29:19,280 --> 00:29:22,440 Speaker 1: do you guys kind of think about that? So a 545 00:29:22,480 --> 00:29:27,120 Speaker 1: couple of things here. Number one, AIH we talk about 546 00:29:27,160 --> 00:29:29,040 Speaker 1: this too, because we have a little different take this 547 00:29:29,160 --> 00:29:33,479 Speaker 1: year than last. But AI is driving energy demand and 548 00:29:33,520 --> 00:29:38,080 Speaker 1: there is simply no way that we can we can 549 00:29:38,160 --> 00:29:41,120 Speaker 1: fulfill the demand that is going to be required or 550 00:29:41,120 --> 00:29:45,959 Speaker 1: even is required today with good old fashioned carbon based energy. 551 00:29:46,080 --> 00:29:49,440 Speaker 1: And so If you look at RWE, it's a European utility, 552 00:29:49,880 --> 00:29:54,000 Speaker 1: but they've bought Constellation in the US and a lot 553 00:29:54,040 --> 00:29:59,560 Speaker 1: of that is oriented towards clean energy growth and demand 554 00:29:59,600 --> 00:30:04,960 Speaker 1: that's AI driven. The same thing is true with SUBC seven, 555 00:30:05,080 --> 00:30:10,360 Speaker 1: which you know they do. They do construction on offshore 556 00:30:10,520 --> 00:30:14,480 Speaker 1: energy projects and instead of good old fashioned drilling for oil, 557 00:30:14,600 --> 00:30:16,920 Speaker 1: a lot of the stuff now is oriented towards all 558 00:30:17,000 --> 00:30:22,680 Speaker 1: shore wind and even some solar. In TEPCO, Tokyo Electric 559 00:30:22,800 --> 00:30:27,840 Speaker 1: Power is a nuclear story where Japan is now turning 560 00:30:27,960 --> 00:30:30,560 Speaker 1: nuclear back on and that's going to drive earnings. 561 00:30:30,680 --> 00:30:33,120 Speaker 3: Hey, Tim, a lot of great names, and here a 562 00:30:33,200 --> 00:30:35,920 Speaker 3: lot of great themes that you guys have held out. 563 00:30:35,960 --> 00:30:38,480 Speaker 3: I think one of the stocks that's getting investors' attentions 564 00:30:38,560 --> 00:30:42,680 Speaker 3: is Broadcommon. They're calling out their AI exposure. How do 565 00:30:42,720 --> 00:30:46,200 Speaker 3: you guys at Bloomberg Intelligence think about AI? What companies 566 00:30:46,240 --> 00:30:49,320 Speaker 3: are you highlighting for Bloomberg clients as relates to AI. 567 00:30:49,920 --> 00:30:53,320 Speaker 1: AI has five names on our list of fifty, so 568 00:30:53,520 --> 00:30:55,640 Speaker 1: you think about it, it's ten percent of the list. 569 00:30:55,640 --> 00:30:59,760 Speaker 1: That's a pretty big deal. And it's also interesting in 570 00:30:59,800 --> 00:31:02,280 Speaker 1: that it's a different set of names than what we 571 00:31:02,440 --> 00:31:04,880 Speaker 1: had last year, where we also had a good bit 572 00:31:04,920 --> 00:31:09,400 Speaker 1: of exposure that was bigger sort of core AI names 573 00:31:09,400 --> 00:31:12,520 Speaker 1: that you think about with large language models and whatnot, 574 00:31:13,160 --> 00:31:17,600 Speaker 1: and some software companies. This year it's much more about 575 00:31:17,720 --> 00:31:20,680 Speaker 1: some of the enabling technologies, and primarily in the world 576 00:31:20,680 --> 00:31:24,200 Speaker 1: of Simiti inductors, and that's exactly where Broadcom sets. I've 577 00:31:24,680 --> 00:31:27,840 Speaker 1: heard you talk to Kunjin a few minutes ago, a 578 00:31:27,920 --> 00:31:31,400 Speaker 1: really interesting combination of semi and software in that company 579 00:31:31,480 --> 00:31:36,880 Speaker 1: that is providing you know, enabling chips. But Cadence Design 580 00:31:37,080 --> 00:31:41,360 Speaker 1: is the software company behind the design of SIMA inductors. 581 00:31:42,000 --> 00:31:46,560 Speaker 1: Kla makes test and measurement tools that you can't do 582 00:31:46,640 --> 00:31:51,200 Speaker 1: this high end sinitat inductor stuff without Micron is making 583 00:31:52,000 --> 00:31:55,680 Speaker 1: high bandwidth memory chips, which again you have to have 584 00:31:55,760 --> 00:31:59,400 Speaker 1: to make AI work. And then there's the odd one 585 00:31:59,560 --> 00:32:02,920 Speaker 1: out is a company called Vat Group. They make vacuums 586 00:32:03,000 --> 00:32:05,880 Speaker 1: and it's like super high end vacuums that create the 587 00:32:05,960 --> 00:32:09,600 Speaker 1: vacuum in which you make semic conductors. So lots of 588 00:32:09,640 --> 00:32:11,720 Speaker 1: interesting different kinds of plays. 589 00:32:12,000 --> 00:32:14,880 Speaker 4: I did not know that either. What about the innovation parts, 590 00:32:14,880 --> 00:32:18,160 Speaker 4: So I appreciate that AI dovetails with innovation, But aside 591 00:32:18,160 --> 00:32:20,480 Speaker 4: from AI, what are some companies that can really fit 592 00:32:20,560 --> 00:32:21,120 Speaker 4: that bucket. 593 00:32:22,280 --> 00:32:25,160 Speaker 1: Well, i' tell you there are some really interesting wins there. 594 00:32:26,320 --> 00:32:30,240 Speaker 1: You know, we can't talk about innovation without talking about 595 00:32:30,280 --> 00:32:34,440 Speaker 1: something in biopharma. You know, last year we had Lily 596 00:32:34,520 --> 00:32:38,240 Speaker 1: and we had Noble Anortis. This year we've put Astrozenica forward. 597 00:32:38,320 --> 00:32:42,320 Speaker 1: They got a host of new data sets coming out 598 00:32:42,440 --> 00:32:46,440 Speaker 1: in cancer and in respiratory REZI disease. You can tell 599 00:32:46,480 --> 00:32:48,840 Speaker 1: I've been here in London so long. I say respiratory 600 00:32:48,880 --> 00:32:57,240 Speaker 1: as host or respiratory, Yeah, exactly. There's another healthcare win, Insulent. 601 00:32:57,600 --> 00:33:01,920 Speaker 1: They have what's becoming the standard of care and wearable 602 00:33:02,040 --> 00:33:06,600 Speaker 1: insulin patches, the Omnipod five, And you know that's a 603 00:33:06,600 --> 00:33:10,080 Speaker 1: pretty cool story that's growing gangbusters. You got a couple 604 00:33:10,080 --> 00:33:12,760 Speaker 1: of car companies and it's because of new products. Call 605 00:33:12,840 --> 00:33:15,880 Speaker 1: it innovation because it is. Tesla is going to launch 606 00:33:15,920 --> 00:33:18,760 Speaker 1: their low price car at some point in the first 607 00:33:18,840 --> 00:33:21,520 Speaker 1: half of the year that we think makes sense. And 608 00:33:22,040 --> 00:33:26,200 Speaker 1: Orsia has five cars that are in process, a couple 609 00:33:26,240 --> 00:33:29,640 Speaker 1: have been announced, a couple are coming, but importantly they're 610 00:33:30,360 --> 00:33:33,320 Speaker 1: hybrid nine to eleven and you know those are gonna 611 00:33:33,560 --> 00:33:37,720 Speaker 1: pardon upon drive really important revenue growth, and folks, just 612 00:33:38,040 --> 00:33:40,000 Speaker 1: one last thing I would throw out to you. Guys. 613 00:33:40,040 --> 00:33:43,440 Speaker 1: We were talking about the business yesterday, the banking businesses 614 00:33:43,440 --> 00:33:48,000 Speaker 1: and now the other imax. We all like movies. This 615 00:33:48,240 --> 00:33:50,960 Speaker 1: is the theater that you're gonna go and actually see 616 00:33:51,000 --> 00:33:54,360 Speaker 1: a real movie at because you've got the monster screens 617 00:33:55,040 --> 00:33:59,000 Speaker 1: and there's more American theaters installing them. But they're also 618 00:33:59,040 --> 00:34:03,280 Speaker 1: going abroad and talking about dating ourselves in yesterday's conversation. 619 00:34:03,840 --> 00:34:08,000 Speaker 1: Actually worked on that back at Goldman in a ninety 620 00:34:08,200 --> 00:34:11,400 Speaker 1: four I think when we took them public. So you 621 00:34:11,480 --> 00:34:14,440 Speaker 1: know it's been around a while, but there's accelerating story. 622 00:34:14,560 --> 00:34:16,560 Speaker 4: So let's start with the cycle gold recovery, because if 623 00:34:16,600 --> 00:34:18,879 Speaker 4: I look at the list that you guys have, that's 624 00:34:18,880 --> 00:34:20,800 Speaker 4: really the bucket where you're seeing a lot of the 625 00:34:20,840 --> 00:34:24,520 Speaker 4: stocks highlighted. Give me an example of what kind of 626 00:34:24,560 --> 00:34:28,359 Speaker 4: company would work in this theme of cycle gold recovery. 627 00:34:28,440 --> 00:34:33,440 Speaker 1: There's a broad view here of elections are over in 628 00:34:33,520 --> 00:34:37,279 Speaker 1: the US and in Europe. There's some clarity central banks 629 00:34:37,280 --> 00:34:39,759 Speaker 1: are cutting interest rates at least a little bit for 630 00:34:39,800 --> 00:34:42,399 Speaker 1: a while. We'll see how long it lasts. And all 631 00:34:42,440 --> 00:34:46,719 Speaker 1: of that should provide some better backdrop in terms of sentiment, 632 00:34:47,120 --> 00:34:50,920 Speaker 1: and with that you could see labor markets improve a 633 00:34:50,920 --> 00:34:56,840 Speaker 1: bit which plays into Workday which is a human resources 634 00:34:56,880 --> 00:35:01,960 Speaker 1: software provider, and a Deco which is one of the 635 00:35:02,480 --> 00:35:08,040 Speaker 1: larger placement recruiting companies. So that's an example. There's also 636 00:35:08,400 --> 00:35:11,200 Speaker 1: home building that plays into this. So one of the 637 00:35:11,239 --> 00:35:16,160 Speaker 1: big UK homebuilders is a company called per Simon. And 638 00:35:16,200 --> 00:35:19,840 Speaker 1: then you've got you know, retail and other consumer product 639 00:35:19,880 --> 00:35:24,360 Speaker 1: related companies, Saint Tapestry. You know, Tapestry makes coach, you know, 640 00:35:24,440 --> 00:35:29,200 Speaker 1: the the great you know, handbag and and other clothes. 641 00:35:29,360 --> 00:35:32,800 Speaker 1: And they've also got Kate Spade. And if we start 642 00:35:32,800 --> 00:35:36,239 Speaker 1: to see some improvement in the consumer space, then that 643 00:35:36,360 --> 00:35:39,880 Speaker 1: plays into you know, a cyclical story in addition to 644 00:35:39,920 --> 00:35:44,000 Speaker 1: what Tapestry is doing specifically, so things like that. 645 00:35:44,520 --> 00:35:46,920 Speaker 3: Hey Tim, you know, as you well know during your 646 00:35:46,960 --> 00:35:49,920 Speaker 3: long career on Wall Street, a lot of what investors 647 00:35:49,920 --> 00:35:51,719 Speaker 3: and traders do is try to figure out where the 648 00:35:51,760 --> 00:35:55,279 Speaker 3: consensus is and do I have a different view to 649 00:35:55,280 --> 00:35:57,759 Speaker 3: than consensus. If I do, then I'll buy the stock 650 00:35:57,840 --> 00:35:59,760 Speaker 3: or sell the stock short and so on and so forth. 651 00:36:00,160 --> 00:36:03,040 Speaker 3: You've identified some of companies where you think there might 652 00:36:03,080 --> 00:36:06,279 Speaker 3: be risk to that consensus. Give us a name or 653 00:36:06,280 --> 00:36:06,600 Speaker 3: two there. 654 00:36:07,840 --> 00:36:12,920 Speaker 1: Yeah, so this this plays across regions, that plays across sectors. 655 00:36:13,280 --> 00:36:16,160 Speaker 1: You know, we just talked about some consumer ideas that 656 00:36:16,200 --> 00:36:19,799 Speaker 1: we think can can do better. You've got You've got 657 00:36:19,920 --> 00:36:23,520 Speaker 1: estae Lauder, however, that we think is still misfiring in 658 00:36:23,680 --> 00:36:29,799 Speaker 1: some of its core brands. So that's on the cautionary front. Nintendo. 659 00:36:30,280 --> 00:36:33,680 Speaker 1: You know, I think pretty much everybody knows who they are. 660 00:36:34,840 --> 00:36:37,880 Speaker 1: They're supposed to be in the midst of an upgrade 661 00:36:37,880 --> 00:36:41,400 Speaker 1: cycle with a new console, the switch to that's been 662 00:36:41,520 --> 00:36:44,239 Speaker 1: long delayed. We think the delays continue, and we think 663 00:36:44,280 --> 00:36:48,520 Speaker 1: you've got earnings disappointments there that will happen. You know, 664 00:36:48,560 --> 00:36:53,240 Speaker 1: there's a lot of AI hype and expectations are huge, 665 00:36:53,280 --> 00:36:55,680 Speaker 1: and you know clearly we have AI related names on 666 00:36:55,719 --> 00:37:00,160 Speaker 1: this list, but allan Teer is one of those that's 667 00:37:00,200 --> 00:37:03,800 Speaker 1: smaller in scale. When it comes to larger language models 668 00:37:03,800 --> 00:37:06,920 Speaker 1: and really high expectations. We think the company is very 669 00:37:06,920 --> 00:37:09,960 Speaker 1: well placed, but we think expectations are probably too aggressive, 670 00:37:09,960 --> 00:37:13,239 Speaker 1: and so we've actually got concerns on that sort of 671 00:37:14,160 --> 00:37:18,520 Speaker 1: consensus front. As you rightfully point out, Paul, those are 672 00:37:18,560 --> 00:37:21,879 Speaker 1: a couple that come to mind. It's interesting we've got 673 00:37:21,880 --> 00:37:25,400 Speaker 1: a lot of China stimulus ideas going on here, and 674 00:37:25,440 --> 00:37:27,759 Speaker 1: this might be a little far fetched for some of 675 00:37:27,800 --> 00:37:31,279 Speaker 1: the US listeners, but we also have a negative view 676 00:37:31,400 --> 00:37:35,279 Speaker 1: on Shanghai airport traffic is coming back. There is a 677 00:37:35,320 --> 00:37:38,240 Speaker 1: lot of traffic, but a lot of their earnings actually 678 00:37:38,280 --> 00:37:41,160 Speaker 1: come from the duty free sales that happen in the 679 00:37:41,239 --> 00:37:43,160 Speaker 1: airports and the rent that they get off of that. 680 00:37:43,800 --> 00:37:47,200 Speaker 1: And people just aren't buying as much when they travel 681 00:37:47,239 --> 00:37:50,160 Speaker 1: as they used to, especially Chinese. They're buying it online 682 00:37:50,320 --> 00:37:53,120 Speaker 1: or they're going to stores, not necessarily in the airports. 683 00:37:53,239 --> 00:37:55,040 Speaker 1: So there's a lot of different ways to think about this. 684 00:37:55,640 --> 00:37:58,520 Speaker 3: Our thanks to Bloomberg Intelligence Research Director for Content Tim 685 00:37:58,560 --> 00:38:02,760 Speaker 3: Craikid for joining us. Find his latest work, Fifty Companies 686 00:38:02,800 --> 00:38:05,439 Speaker 3: to Watch in twenty twenty five online at Bloomberg dot 687 00:38:05,480 --> 00:38:08,360 Speaker 3: com and on the terminal. That's this week's edition of 688 00:38:08,360 --> 00:38:11,759 Speaker 3: Bloomberg Intelligence on Bloomberg Radio, providing in depth research and 689 00:38:11,840 --> 00:38:14,600 Speaker 3: data on two thousand companies and one hundred and thirty industries. 690 00:38:14,840 --> 00:38:17,880 Speaker 3: And remember you can access Bloomberg Intelligence via Bigo on 691 00:38:17,920 --> 00:38:20,760 Speaker 3: the terminal. From my colleague Alex Steele, I'm Paul Sweeney. 692 00:38:21,160 --> 00:38:24,160 Speaker 3: Stay with us today's top stories and global business headlines 693 00:38:24,200 --> 00:38:29,279 Speaker 3: are coming up right now.