WEBVTT - Supply Chain Concerns, Consumer Strength and the Fed 0:00:00.840 --> 0:00:04.000 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 0:00:04.040 --> 0:00:05.240 my co host Matt Miller. 0:00:05.640 --> 0:00:09.600 Every business day we bring you interviews from CEOs, market pros, 0:00:09.720 --> 0:00:13.640 and Bloomberg experts, along with essential market moving news. 0:00:14.160 --> 0:00:17.279 Find the Bloomberg Markets podcast called Apple Podcasts or wherever 0:00:17.400 --> 0:00:20.520 you listen to podcasts, and at Bloomberg dot com slash podcast. 0:00:21.280 --> 0:00:22.880 This has been a week with so much going on 0:00:23.000 --> 0:00:25.640 again with the central bankers, but better to bring in 0:00:25.840 --> 0:00:27.760 I know exactly in the last couple of weeks has 0:00:27.760 --> 0:00:30.000 really been a lot of economic data as well here 0:00:30.040 --> 0:00:32.839 which has been very influential for the Fed. We want 0:00:32.840 --> 0:00:35.559 to bring on our next guest, Claudia Sam, founder and 0:00:35.760 --> 0:00:39.080 independent economist at Some Consulting. Claudia, thanks so much for 0:00:39.200 --> 0:00:42.680 joining us here again, a lot of economic data for 0:00:43.080 --> 0:00:46.559 this market to digest. What for you are you focusing 0:00:46.600 --> 0:00:47.480 on right now? 0:00:48.880 --> 0:00:53.040 Well, obviously the game in town is inflation, the consumer inflation, 0:00:53.159 --> 0:00:55.920 and we really got by getting the consumer inflation and 0:00:56.000 --> 0:00:57.720 the next day the producer inflation. 0:00:58.720 --> 0:01:01.440 You had kind of a signal between the two. 0:01:01.560 --> 0:01:05.800 But we still see a lot of disinflation in the pipeline. 0:01:06.400 --> 0:01:08.440 It's just it's not there yet so. 0:01:09.120 --> 0:01:11.120 And like you said, there was a whole wealth of 0:01:11.240 --> 0:01:13.760 data that came in the last two weeks, and it's 0:01:13.840 --> 0:01:16.559 I think it's caused the FEDS and problems that we've 0:01:16.600 --> 0:01:19.839 seen multiple times, a lot of data come in during 0:01:20.000 --> 0:01:23.520 their blackout period, so you don't have reserve bank presence, 0:01:23.560 --> 0:01:26.360 you don't have chair Powel out there interpreting the data, 0:01:26.800 --> 0:01:28.800 and I think they get a little stuck with where 0:01:28.840 --> 0:01:32.240 the consensus and markets was before they had to go 0:01:32.920 --> 0:01:33.640 dark for a while. 0:01:33.880 --> 0:01:36.000 And I have to point out how Claudia is the 0:01:36.040 --> 0:01:38.760 creator of the Psalm rule, which is that recession indicator 0:01:38.760 --> 0:01:40.960 that is used by the FED. What do you think 0:01:41.040 --> 0:01:43.720 that is telling us at this point amidst all of 0:01:43.720 --> 0:01:46.240 this debate about where the economy is headed right now. 0:01:47.160 --> 0:01:49.200 So we're not in a recession right now. I mean, 0:01:49.240 --> 0:01:52.320 the Sam rule is a recession indicator, it doesn't forecast 0:01:52.320 --> 0:01:55.960 a recession, and I think it's just a way to summarize. 0:01:55.440 --> 0:01:57.960 When you look at all of the labor market data, 0:01:58.680 --> 0:01:59.960 it's really good. 0:02:00.040 --> 0:02:01.560 I mean, if you told us a year ago the 0:02:01.600 --> 0:02:04.760 Fed's going to raise five percentage points and the labor 0:02:04.840 --> 0:02:07.800 market is going to be well below four in unemployment. 0:02:07.840 --> 0:02:10.600 I mean, it just it almost doesn't make sense except 0:02:10.960 --> 0:02:13.560 the labor market is strong, it is able to buffer 0:02:13.600 --> 0:02:15.800 what the Fed is doing to a large extent. 0:02:16.440 --> 0:02:20.240 So cloudy. I mean, A big part of the pushback 0:02:20.280 --> 0:02:22.320 on a recession call, or certainly one that would call 0:02:22.360 --> 0:02:25.960 for a longer, deeper recession call, is that the consumer's 0:02:25.960 --> 0:02:28.000 in pretty good shape. As you mentioned, you know, most 0:02:28.120 --> 0:02:30.800 folks want a job, have a job. Retail sales still 0:02:30.800 --> 0:02:33.720 remain pretty strong. How do you kind of put all 0:02:33.720 --> 0:02:34.200 that together? 0:02:35.560 --> 0:02:39.040 What we knew coming into this this year, late last year, 0:02:39.160 --> 0:02:43.600 the consumer up and down the income distribution, had a 0:02:43.639 --> 0:02:47.880 lot of money on the side, a lot to buffer. Now, 0:02:47.960 --> 0:02:50.680 this money will run out. It's not like it's forever, 0:02:51.160 --> 0:02:55.440 but that's something that US consumers, a big group of families, 0:02:55.480 --> 0:02:57.920 have never gone into a recession with this kind of 0:02:57.919 --> 0:03:03.120 a buffer. So you really watching physical policy versus monetary 0:03:03.200 --> 0:03:06.680 policy play out. And I do think at some point 0:03:06.720 --> 0:03:08.560 the Fed's going to get the upper hand. It's a 0:03:08.560 --> 0:03:11.760 big question if they've done too much. But as of 0:03:11.840 --> 0:03:16.160 right now, things are good, especially for consumers, which are 0:03:16.240 --> 0:03:18.519 seventy percent of the economy. 0:03:18.520 --> 0:03:20.839 Have we gotten to a point where the FED has 0:03:20.919 --> 0:03:24.880 been too aggressive to try to lower inflation, or do 0:03:24.960 --> 0:03:28.400 you think where they are pausing or potential skip the 0:03:28.480 --> 0:03:30.840 debate here, this is the proper point to do it. 0:03:32.400 --> 0:03:35.200 So I think a pause at this point was appropriate. 0:03:35.400 --> 0:03:37.640 Just they've gone really fast and really hard. 0:03:37.680 --> 0:03:40.200 It's an opportunity for the rest of the economy to 0:03:40.320 --> 0:03:44.320 catch up and then assess. What I found very puzzling 0:03:44.840 --> 0:03:48.840 in the statement this last meeting and share pilot the 0:03:48.840 --> 0:03:51.920 press conference is they're like, we're going to pause here, 0:03:52.320 --> 0:03:55.200 but almost all the participants think we're going to have 0:03:55.240 --> 0:03:56.040 to raise later. 0:03:56.520 --> 0:03:57.880 And it's like, if you really. 0:03:57.640 --> 0:03:59.960 Think that, why are you pausing right now? 0:04:00.560 --> 0:04:00.680 Right? 0:04:00.720 --> 0:04:02.520 It didn't quite hang together. 0:04:02.760 --> 0:04:04.880 That was a hawkish pause, but I think they kind 0:04:04.880 --> 0:04:06.840 of pushed it past what was It was kind of 0:04:06.840 --> 0:04:08.640 a confusing hawkish pause. 0:04:08.840 --> 0:04:12.200 When you looked at the dots, dots go also in 0:04:12.240 --> 0:04:16.200 the terminal and to see the wide divergence there between members. 0:04:16.680 --> 0:04:19.080 Was that surprising to you or is that something that 0:04:19.120 --> 0:04:21.640 you typically would see in the midst of when you 0:04:21.680 --> 0:04:25.240 are getting to a point toward rate hiking cycles ending. 0:04:26.520 --> 0:04:30.480 Or it is heartening to see that the FMC participants 0:04:30.480 --> 0:04:35.200 are having a robust debate both externally and particularly internally, 0:04:35.520 --> 0:04:38.360 and these dots, particularly you go out in the out years. 0:04:38.880 --> 0:04:39.840 I mean, if we. 0:04:39.880 --> 0:04:42.640 Didn't see some dispersion, it would be a problem. 0:04:42.839 --> 0:04:43.000 Right. 0:04:43.040 --> 0:04:46.800 They are being very clear that maybe they've done enough, 0:04:46.800 --> 0:04:49.440 maybe they've done too much, maybe they haven't done enough. 0:04:49.480 --> 0:04:52.919 So I the dispersion in the dots, I think, especially 0:04:53.440 --> 0:04:55.760 as you go out over the forecast, makes a lot 0:04:55.800 --> 0:04:58.960 of sense to me. We are going to end up 0:04:59.040 --> 0:05:01.719 higher than five percent this year. Like I said, I 0:05:01.760 --> 0:05:04.000 find that a little bit harder to get how the 0:05:04.040 --> 0:05:06.240 decision and the messaging hang together. 0:05:06.960 --> 0:05:08.800 Hey, Claudia, just for me, I feel like one of 0:05:08.800 --> 0:05:12.040 the limits to my analysis of kind of economic conditions 0:05:12.080 --> 0:05:14.039 is I just spend way too much time in the 0:05:14.040 --> 0:05:16.359 greater New York area. I don't get out much, and 0:05:16.400 --> 0:05:18.400 when I do, I tendify myself on the West Coast. 0:05:18.520 --> 0:05:21.040 So am I really out there seeing what's going on? 0:05:21.600 --> 0:05:23.479 Do you get it? Are you ever concerned that the 0:05:23.480 --> 0:05:26.800 macroeconomic data we get from the government isn't really representing 0:05:27.920 --> 0:05:29.480 kind of what it's like out there day to day 0:05:29.520 --> 0:05:30.359 for the average American? 0:05:31.160 --> 0:05:34.200 Well, in fact, we do have official data that looks 0:05:34.240 --> 0:05:38.880 at states, even looks at counties, through the labor market 0:05:38.920 --> 0:05:42.880 area unemployment statistics. Now, the problem is these come out 0:05:42.920 --> 0:05:46.000 a couple weeks after Jobs Day, you know, and we've 0:05:46.000 --> 0:05:49.320 all moved on and at CPI and for some reason 0:05:49.440 --> 0:05:52.640 analysis from one of my Bloomberg opinion columns, I looked 0:05:52.640 --> 0:05:55.360 at these differences and it was actually inspired by talking 0:05:55.360 --> 0:05:58.359 to a journalist who covers New York and was like, 0:05:58.760 --> 0:06:02.600 the dispairit. He's pretty the right. Racial disparities haven't closed 0:06:02.640 --> 0:06:04.040 in that way in New York. 0:06:03.839 --> 0:06:05.680 As they have in the country. 0:06:06.160 --> 0:06:08.919 And looking at you know, the places you go to visit, 0:06:09.200 --> 0:06:12.080 I mean, California is another one that actually has seen 0:06:12.120 --> 0:06:16.160 their unemployment rate creep up in a way that you know, 0:06:16.320 --> 0:06:19.320 if they were getting the some rule, you know, as 0:06:19.320 --> 0:06:22.120 they were the whole country, really they would be in 0:06:22.200 --> 0:06:22.880 a recession. 0:06:23.279 --> 0:06:24.120 Not to say they are. 0:06:24.200 --> 0:06:26.000 There's a lot of things happening regionally. 0:06:26.080 --> 0:06:27.400 We have to be very careful. 0:06:27.640 --> 0:06:32.839 Often the problems in a regional economy don't spread to 0:06:32.920 --> 0:06:36.280 the rest, but sometimes they do. So it's important, I think, 0:06:36.320 --> 0:06:38.120 to look at those And frankly, it's just because the 0:06:38.200 --> 0:06:40.600 data comes out a little later that I think it 0:06:40.680 --> 0:06:42.919 doesn't get it's due attention. 0:06:43.520 --> 0:06:47.279 We did hear from FED Governor Christopher Waller earlier this morning. 0:06:47.320 --> 0:06:49.760 He's a voting member, as you know, and talking about 0:06:49.760 --> 0:06:52.919 how fears over a few banks shouldn't alter their policy. 0:06:53.120 --> 0:06:55.280 Was bet your Jerome pal forced to have to have 0:06:55.320 --> 0:06:58.640 that hawkish rhetoric after the decision on Wednesday in order 0:06:58.680 --> 0:07:01.720 to keep the FEDS options more flexible in case there 0:07:01.800 --> 0:07:04.680 is so unforeseen issue when it comes to the economy, 0:07:04.800 --> 0:07:06.360 or when it comes to some of these bank stresses 0:07:06.360 --> 0:07:08.200 that we saw earlier this year with the regionals. 0:07:09.000 --> 0:07:13.320 So they hiked twice right after bank failures, and so 0:07:13.920 --> 0:07:16.120 I don't feel like that was playing a big role 0:07:16.160 --> 0:07:18.680 in the pause. They've only got a month between now 0:07:18.720 --> 0:07:20.920 in July in terms of data, so I don't know 0:07:20.960 --> 0:07:24.800 exactly how they think what was appropriate this this month, 0:07:25.040 --> 0:07:28.080 you know, won't be appropriate next month. But we'll see 0:07:28.120 --> 0:07:32.800 when they do those those extra hikes. Yeah, so I 0:07:32.840 --> 0:07:35.680 think that's I guess that's the thing that I would emphasize. 0:07:35.880 --> 0:07:38.200 So, Claudia, as fast forward as a little bit to 0:07:38.240 --> 0:07:40.200 the July meeting, what do you think the FED does here? 0:07:42.520 --> 0:07:45.360 I think it'll lean heavily on what happens in the 0:07:45.400 --> 0:07:49.560 consumer prices. They did in this last data release, they 0:07:49.640 --> 0:07:52.840 got some relief on this super core their you know, 0:07:53.080 --> 0:07:55.080 core services without housing. 0:07:56.120 --> 0:07:57.120 They need to see it. 0:07:57.200 --> 0:07:59.480 Overall in core core has been very sticky. 0:07:59.520 --> 0:08:00.360 It's been very, very. 0:08:00.240 --> 0:08:02.760 Painful to watch it just move along. 0:08:03.120 --> 0:08:03.240 Now. 0:08:03.240 --> 0:08:05.600 They're not going to take one month of good data 0:08:05.640 --> 0:08:08.880 and hang their hat on it. So I think they 0:08:08.920 --> 0:08:10.360 are looking in the banking sector. 0:08:10.360 --> 0:08:11.240 They're looking not. 0:08:11.280 --> 0:08:14.760 To look for another failure, but to look for the 0:08:14.800 --> 0:08:17.120 credit tightening. 0:08:17.840 --> 0:08:20.560 Enough, so all right, Claudia, thanks so much for joining us. 0:08:20.600 --> 0:08:24.360 Claudi Sam, She's founder and independent economists with some consulting. 0:08:25.400 --> 0:08:29.239 You're listening to the team Ken's live program Bloomberg Markets 0:08:29.280 --> 0:08:32.360 weekdays at ten am eastering on Bloomberg dot Com, the 0:08:32.440 --> 0:08:35.600 iHeartRadio app, and the Bloomberg Business App, or listen on 0:08:35.640 --> 0:08:37.640 demand wherever you get your podcasts. 0:08:40.080 --> 0:08:43.080 Paul, I feel like, because we are we had the 0:08:43.080 --> 0:08:46.600 FED meeting earlier this week, we had retail sales yesterday 0:08:46.600 --> 0:08:50.160 coming in stronger than what people were expecting. I feel 0:08:50.160 --> 0:08:52.760 like we have to unpack that with our next guest, 0:08:52.800 --> 0:08:54.800 and who better to do it with than Mari Shore, 0:08:54.880 --> 0:08:58.680 senior equity analyst at Columbia thread Needle Investments, who's going 0:08:58.720 --> 0:09:01.720 to talk to us about that retail sales report. Obviously 0:09:01.720 --> 0:09:06.280 the consumer strength and inflation. Mari, break it down for us. 0:09:06.400 --> 0:09:09.360 What is your take on the latest round of data 0:09:09.360 --> 0:09:10.720 when it's related to the consumer. 0:09:12.320 --> 0:09:13.960 Yes, thanks again for having me. 0:09:14.400 --> 0:09:19.080 The May data was definitely encouraging given the tougher compare, 0:09:19.720 --> 0:09:23.920 and it does reflect the underlying resiliency of the consumer. 0:09:24.320 --> 0:09:27.280 But I also think we did see the benefit from 0:09:27.400 --> 0:09:33.040 warmer weather following a cooler April, and also additional holidays, 0:09:33.160 --> 0:09:36.319 and we know that the consumer is showing up around 0:09:36.400 --> 0:09:41.000 holidays and key events. But as we do look forward, 0:09:41.240 --> 0:09:44.680 I would say the outlook is still more cautious, as 0:09:44.760 --> 0:09:48.120 temperatures are expected to be cooler in the early summer, 0:09:48.520 --> 0:09:53.720 and we continue to see the consumer shifts spending towards 0:09:53.880 --> 0:09:57.880 needs from wants and towards services away from goods. 0:09:58.760 --> 0:10:02.559 So we talk about temperature is supposed to be cooler 0:10:02.559 --> 0:10:05.600 in June and July. Wait a minute, that's not good. 0:10:06.000 --> 0:10:09.960 I'm a beach person. I need to get the side compound. Yeah, exactly, So, 0:10:10.080 --> 0:10:13.800 I mean, Mari, what it's interesting thing when you think 0:10:13.800 --> 0:10:16.280 about spending out there, is it across the board or 0:10:16.280 --> 0:10:19.840 are there pockets of depending upon income levels, stronger weaker 0:10:19.880 --> 0:10:22.400 than the others, or is there just do some of 0:10:22.400 --> 0:10:25.319 these macro trend levels Are they pretty representative across the board? 0:10:26.480 --> 0:10:31.200 Well, we are definitely seeing a broad divergence between categories. 0:10:31.280 --> 0:10:34.800 So I would say the weakest categories remain some of 0:10:34.840 --> 0:10:38.640 the big ticket categories that were strongest during the pandemic, 0:10:38.840 --> 0:10:44.600 like home related items consumer electronics, while the strongest categories 0:10:44.679 --> 0:10:49.280 remain health and wellness, e commerce which has recently picked 0:10:49.360 --> 0:10:52.960 up again, and also eating out, which really plays into 0:10:53.120 --> 0:10:58.480 the strength in experiences. When we think about different income demographics, 0:10:58.600 --> 0:11:02.800 I would say we've really seen a broad slowing across 0:11:02.840 --> 0:11:06.200 the spectrum. We know that the low income consumer is 0:11:06.280 --> 0:11:10.640 still under pressure from higher food inflation, but even at 0:11:10.679 --> 0:11:14.200 the higher income levels we have seen a slowdown, which 0:11:14.240 --> 0:11:17.600 is likely related to the market volatility. 0:11:17.720 --> 0:11:20.480 We've seen the weakness and the. 0:11:20.440 --> 0:11:24.840 Housing market, and also some questions as to the jobs outlook. 0:11:25.280 --> 0:11:29.000 So how does this alter your projections when it comes 0:11:29.040 --> 0:11:30.600 to earnings growth moving forward? 0:11:32.160 --> 0:11:33.120 It doesn't really. 0:11:33.280 --> 0:11:36.240 It really supports I think what I've been saying for 0:11:36.360 --> 0:11:41.680 some time, and that is that the consumer in aggregate 0:11:42.000 --> 0:11:45.000 still looks strong. But again, when you dig a little deeper. 0:11:45.400 --> 0:11:49.200 You continue to see that shift towards goods from service 0:11:49.480 --> 0:11:54.880 I'm sorry, towards services from goods and towards needs from wants, 0:11:55.280 --> 0:11:58.440 and so as we move through the year, especially with 0:11:58.520 --> 0:12:01.200 the rising risk of recession, as I know some of 0:12:01.240 --> 0:12:04.480 your prior guests have discussed, I think it really does 0:12:04.640 --> 0:12:09.120 place risk on the company's guidance for the year, which 0:12:09.200 --> 0:12:12.760 is very much back half weighted, And as we think 0:12:12.800 --> 0:12:17.600 about what the key driver of sales could be going forward, 0:12:17.760 --> 0:12:20.439 it is a little bit more difficult to identify. 0:12:20.840 --> 0:12:22.400 If you think about during the. 0:12:22.360 --> 0:12:27.000 Pandemic, most of the companies drove sales growth through pricing, 0:12:27.400 --> 0:12:30.640 and that is no longer a lever that the retailers 0:12:30.720 --> 0:12:33.520 can pull. And so now you really need to see 0:12:33.640 --> 0:12:38.600 unit demand accelerate to see stronger sales growth. And I 0:12:38.640 --> 0:12:42.080 think it is hard to identify a catalyst for that 0:12:42.240 --> 0:12:45.760 stronger unit demand into the back half the year given 0:12:45.800 --> 0:12:48.640 the macro pressures that we've discussed. 0:12:48.400 --> 0:12:50.920 And to your point, you were talking about those price 0:12:51.000 --> 0:12:53.560 hikes that have gone on for multiple quarters now maybe 0:12:53.600 --> 0:12:56.360 not being able to see that continue. Campbell, super instance, 0:12:56.400 --> 0:12:59.680 signaled that recently that consumers might be less willing to 0:12:59.679 --> 0:13:02.920 put a but those price increases. General Mills actually flagged 0:13:02.960 --> 0:13:06.160 that similarly in an investor day as well. When it 0:13:06.200 --> 0:13:08.360 comes to the margin pain that a lot of household 0:13:08.360 --> 0:13:12.320 products companies, packaged goods, beverage stocks have been under. Is 0:13:12.360 --> 0:13:14.440 most of that pain passed yet or is more to 0:13:14.480 --> 0:13:15.719 come on the margin front. 0:13:16.840 --> 0:13:19.800 It's a great question. There's lots of moving pieces on margin. 0:13:19.840 --> 0:13:23.680 I would say from a input cost standpoint, given the 0:13:23.760 --> 0:13:27.679 disinflation we've seen and a lot of the key commodities, 0:13:28.040 --> 0:13:32.480 they will see less pressure on the margin line from that. However, 0:13:33.559 --> 0:13:38.920 promotions are normalizing normalizing, which will be a headwind. And 0:13:39.160 --> 0:13:43.720 in addition, we've heard retailers talk about issues like shrink 0:13:44.200 --> 0:13:47.280 or theft, which is a huge headwind. 0:13:46.840 --> 0:13:47.640 For them this year. 0:13:48.000 --> 0:13:51.480 And also for retailers like Target and Walmart and the 0:13:51.480 --> 0:13:55.680 warehouse clubs, they are seeing unfavorable category mix. 0:13:55.559 --> 0:13:56.840 Pressure their margins. 0:13:57.320 --> 0:14:00.000 So this year was setting up to be a pretty 0:14:00.200 --> 0:14:05.040 easy year from a margin standpoint, just due to easy comparisons. 0:14:05.400 --> 0:14:06.800 But as it's played. 0:14:06.520 --> 0:14:10.440 Out, I think we've seen that the headwinds are now 0:14:10.559 --> 0:14:14.480 seemingly more than offsetting the tailwinds on the margin line. 0:14:14.720 --> 0:14:17.640 Mario, I know it's only June. But let's start thinking 0:14:17.679 --> 0:14:20.640 a little bit ahead here, first back to school and 0:14:20.840 --> 0:14:24.240 second holiday season. What are the retailers saying at this 0:14:24.440 --> 0:14:25.840 point as to expectations. 0:14:26.880 --> 0:14:29.960 Yeah, I think for the retailers this year into holiday, 0:14:30.520 --> 0:14:36.040 given the macro headwinds and the demand normalization in some 0:14:36.120 --> 0:14:40.320 of these discretionary categories, their real focus is just on 0:14:40.560 --> 0:14:45.160 planning conservatively so that they are able to keep inventory 0:14:45.240 --> 0:14:49.040 as closely aligned with sales as possible so they do 0:14:49.200 --> 0:14:52.200 not face the kind of markdown risk that they saw 0:14:52.360 --> 0:14:54.920 last year and last holiday season. 0:14:55.400 --> 0:14:56.200 I think there's. 0:14:56.080 --> 0:15:00.960 Also maybe a couple select opportunities, like, for instance, with 0:15:01.080 --> 0:15:04.240 the bed bath and beyond bankruptcy, you've heard a couple 0:15:04.400 --> 0:15:08.600 retailers talking about going after the home category in a 0:15:08.600 --> 0:15:09.360 bigger way. 0:15:09.200 --> 0:15:11.120 To try to pick up some of that share. 0:15:11.600 --> 0:15:15.240 But I think in general, the retailers are very mindful 0:15:15.680 --> 0:15:19.040 of the more cautious macro backdrop, and they're really just 0:15:19.200 --> 0:15:23.960 trying to plan their business as conservatively as possible so 0:15:24.000 --> 0:15:27.920 that they can try to protect their margin rate even 0:15:27.960 --> 0:15:30.120 if sales come in a little bit slower. 0:15:30.560 --> 0:15:33.680 We only have about forty five seconds left. You mentioned 0:15:33.760 --> 0:15:35.600 theft picking up. Why is that. 0:15:37.760 --> 0:15:38.880 It's a great question. 0:15:38.920 --> 0:15:41.560 You know, some of the retail executives that we've spoken 0:15:41.640 --> 0:15:45.560 about have said that in their decades of experience, they 0:15:45.560 --> 0:15:50.360 have never seen such a broad based pickup in theft. Again, 0:15:50.440 --> 0:15:54.600 that's across the country, across store type, whether. 0:15:54.360 --> 0:15:57.280 It's rural versus urban. I think it. 0:15:57.280 --> 0:16:02.000 Really reflects the macro draft backdrop that we find ourselves 0:16:02.040 --> 0:16:06.640 in and maybe some of the legal changes in terms 0:16:06.720 --> 0:16:10.120 of what it takes to prosecute some of these fats 0:16:10.360 --> 0:16:13.800 as felonies versus maybe more minor charges. 0:16:14.120 --> 0:16:16.080 But you've really heard all. 0:16:15.960 --> 0:16:18.520 Of the retailers talk about it, whether it be a 0:16:18.560 --> 0:16:22.680 grocery store, a target, a home depot, an alta. And 0:16:22.720 --> 0:16:25.400 it's something that they're all really working hard on, but 0:16:25.480 --> 0:16:30.040 they are also trying to prevent theft, theft and not 0:16:30.280 --> 0:16:31.360 sacrifice sales. 0:16:31.480 --> 0:16:33.080 All right, Mari, thank you so much for joining us. 0:16:33.080 --> 0:16:35.840 Always appreciate speaking with you, getting your perspective on the 0:16:35.920 --> 0:16:40.160 retail space. Maris Share, senior equity analysts at Columbia thread Needle. 0:16:40.520 --> 0:16:41.560 You're listening to the. 0:16:41.480 --> 0:16:45.000 Tape cans Are Live program Bloomberg Markets weekdays at ten 0:16:45.040 --> 0:16:48.480 am Eastern on Bloomberg Radio. The tune in app Bloomberg 0:16:48.560 --> 0:16:51.160 dot Com and the Bloomberg Business App. You can also 0:16:51.200 --> 0:16:54.720 listen live on Amazon Alexa from our flagship New York station. 0:16:55.080 --> 0:16:58.479 Just say Alexa play Bloomberg eleven thirty. 0:16:59.200 --> 0:17:01.360 We're going to switch things up do more of a 0:17:01.400 --> 0:17:05.520 C suite conversation tool, and this is a really important conversation. 0:17:06.200 --> 0:17:09.399 I'm looking forward to our next guest, Daniella Gilboa, the 0:17:09.400 --> 0:17:13.159 co founder and CEO of AIVF, an AI healthcare company. 0:17:13.200 --> 0:17:17.760 She's joining us to discuss healthcare tech and IVF technology 0:17:17.800 --> 0:17:21.080 is an important conversation for many. Danielle, thank you so 0:17:21.160 --> 0:17:22.399 much for joining us. How are you? 0:17:23.840 --> 0:17:25.440 I'm great, Thank you for having me. 0:17:25.760 --> 0:17:28.600 Well, tell us about your company and what you do. 0:17:31.240 --> 0:17:33.320 Sorry I missed that for a second. Can you reput 0:17:33.320 --> 0:17:34.000 the question. 0:17:34.400 --> 0:17:36.600 Tell us about your company and your mission. 0:17:38.720 --> 0:17:43.560 Yeah. So we're here to democratize and optimized if the 0:17:43.600 --> 0:17:47.840 IVF journey and what we do is we developed an 0:17:47.960 --> 0:17:55.400 AI model that understands and analyze embryos better than any 0:17:55.480 --> 0:17:59.760 human being. And the million dollar question of which a 0:18:00.240 --> 0:18:03.879 will become a baby? We have an ancestors, so our 0:18:03.960 --> 0:18:08.919 models analyze the embryos and are able to detect and 0:18:08.960 --> 0:18:15.720 recognize different features, so with different outcomes, and so we 0:18:15.760 --> 0:18:19.200 are uh, this is the way of optimizing IVF. 0:18:20.240 --> 0:18:23.720 So, Gabrielle, I've have some experience with us, and I'm 0:18:23.840 --> 0:18:26.439 a big fan of IVF and thank you Medical College 0:18:26.480 --> 0:18:29.800 of Virginia MCV. How does your technology work? How does 0:18:29.880 --> 0:18:33.480 artificial intelligence which is the buzzword for every industry out there? 0:18:33.560 --> 0:18:35.120 Now I have another one to add to it, which 0:18:35.160 --> 0:18:38.880 is in vitrio fertilization. How does it work? How does 0:18:38.920 --> 0:18:39.600 it work. 0:18:41.560 --> 0:18:41.919 Well? 0:18:42.160 --> 0:18:45.800 Before any AI development? What we we do in IVF 0:18:45.920 --> 0:18:50.040 clinics is we would analyze embryos based on morphology or 0:18:50.080 --> 0:18:54.879 the way that the embryo looks or looks under the microscope. 0:18:54.920 --> 0:18:58.880 So this is very subjective human analysis. This is very guestimation. 0:18:59.160 --> 0:19:02.320 Like what we do with AI is that we train 0:19:02.440 --> 0:19:06.920 the model on huge amounts of data images of embryos 0:19:06.920 --> 0:19:10.840 and videos of embryos and patients backwards. And so the 0:19:10.920 --> 0:19:14.640 AI could again I said before, I detect different features 0:19:14.640 --> 0:19:18.400 that the human eye cannot see and come up with 0:19:18.640 --> 0:19:23.760 a score that's much more accurate than any embryologist or 0:19:23.840 --> 0:19:29.359 physician could realize. And this is really the way of 0:19:29.400 --> 0:19:32.119 democratizing our Yeah, what I mean is that the million 0:19:32.119 --> 0:19:34.439 dollar question of which embryo will become a baby and 0:19:34.480 --> 0:19:38.760 which embryo we select to transfort back to mummy's uterists. 0:19:39.000 --> 0:19:41.760 Instead of having it as a tilent error. Now you 0:19:41.840 --> 0:19:46.440 have an accurate way of doing it. And ai as 0:19:46.560 --> 0:19:48.399 ai sauld you know, because. 0:19:49.840 --> 0:19:54.080 So that Danielle has your tech, has your technology? Has 0:19:54.119 --> 0:19:56.800 your technology been deployed in the marketplace? And if so, 0:19:57.280 --> 0:19:59.600 kind of what's the efficacy here or the success right? 0:20:00.160 --> 0:20:01.480 H Yeah? 0:20:01.560 --> 0:20:06.160 So the technologies is deployed in across Europe and Southeast 0:20:06.160 --> 0:20:10.920 Asia and South America and the US very soon. 0:20:11.359 --> 0:20:11.479 Uh. 0:20:11.760 --> 0:20:14.880 And yes we have h and we have reports from 0:20:15.000 --> 0:20:19.919 you know, from clinics uh saying that they have in 0:20:20.040 --> 0:20:25.959 pressed success rates and they're actually changing their pricing model. 0:20:26.080 --> 0:20:30.600 Instead of pricing its pair treatment, they price it pair 0:20:31.359 --> 0:20:34.119 baby because they now have a system that they can 0:20:34.200 --> 0:20:38.439 trust and it's reliable and it's accurate, and it's just 0:20:38.560 --> 0:20:44.920 the impact is so amazing that you know, we're we're 0:20:45.040 --> 0:20:47.520 very honored to be doing it. 0:20:48.000 --> 0:20:49.280 How does the regulation work? 0:20:51.480 --> 0:20:54.879 It's uh, well, you know, ai as ai is something 0:20:54.960 --> 0:21:03.600 that regulatory organizations study. It's not yet uh confirmed, but 0:21:03.600 --> 0:21:07.840 but it's fully regulated. We have the ce Mark and 0:21:08.040 --> 0:21:12.000 the FDA very soon. So it needs to be regulated. 0:21:12.160 --> 0:21:13.120 You know, it's something that. 0:21:13.040 --> 0:21:16.480 We push when you say, you say how soon regulated 0:21:16.760 --> 0:21:18.120 when you say soon, how soon? 0:21:19.480 --> 0:21:22.760 As soon as in a few months, So. 0:21:23.800 --> 0:21:25.399 Talk to us about it. Just kind of the US 0:21:25.400 --> 0:21:29.200 market here, what are what what are the opportunities here 0:21:29.240 --> 0:21:32.159 in the US market relative to or compared with some 0:21:32.200 --> 0:21:34.080 of the existing technologies. 0:21:35.720 --> 0:21:39.600 Well, the US market is an interesting market in terms 0:21:39.640 --> 0:21:44.080 of IVS because fertilities is the global problem. And the 0:21:44.119 --> 0:21:47.399 problem is that you have huge demands for IVF and 0:21:47.480 --> 0:21:53.120 it's growing and very limited capacity. The clinics cannot scale 0:21:54.359 --> 0:21:57.359 so and and the demand is huge because we can 0:21:57.480 --> 0:22:00.320 freeze their eggs and we delay childbirth and you want 0:22:00.320 --> 0:22:04.640 to force the career and then new families and thoreography 0:22:04.880 --> 0:22:11.399