WEBVTT - Markets, Hiring, And Retail Spending 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.560 --> 0:00:15.560 with essential market moving news. Find the Bloomberg Markets podcast 0:00:15.560 --> 0:00:18.479 called Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:22.560 at Bloomberg dot com slash podcast. We're gonna get into 0:00:22.600 --> 0:00:25.360 it now. At Dave Harden, the founder and president of 0:00:25.480 --> 0:00:28.520 Summit Global Investments, we're gonna look at his market outlook 0:00:28.520 --> 0:00:32.680 for two inflation, FED tapering. Dave, thank you for joining us. 0:00:32.720 --> 0:00:37.360 When we think about how are you positioning yourself? Well, 0:00:37.360 --> 0:00:38.800 thank you for having to me. Glad to be on 0:00:38.840 --> 0:00:41.920 again today. UM, I think you want to be positioned 0:00:42.360 --> 0:00:45.440 for choppy and more volt markets ahead. We've got a 0:00:45.479 --> 0:00:48.199 lot with the FED. Everybody's talked about their combination going 0:00:48.240 --> 0:00:50.400 away and what's going to have. We also have Congress 0:00:50.440 --> 0:00:53.840 actively involved, COVID nineteens, you have political events. I think 0:00:53.880 --> 0:00:58.040 it's a lot more choppy in the next year. Yield hire, 0:00:58.440 --> 0:01:00.720 I think it's positive, but just not as big of 0:01:00.720 --> 0:01:03.840 a return over the whole year as one would expect. 0:01:03.880 --> 0:01:05.560 There's going to be periods though we're it's up a 0:01:05.560 --> 0:01:06.960 lot and down a lot. I think we're gonna have 0:01:07.000 --> 0:01:10.240 some choppy trading. So what do I do there? Do 0:01:10.319 --> 0:01:14.080 I stick with maybe the big top line growth stories tech, 0:01:14.120 --> 0:01:16.960 for example, healthcare, or do I go a little bit 0:01:16.959 --> 0:01:19.680 more cyclical and try to play what should be some 0:01:19.760 --> 0:01:24.039 type of reopening or continued reopening next year. I think 0:01:24.040 --> 0:01:26.400 that's a really good question, Paul. I think one of 0:01:26.440 --> 0:01:29.520 the things this creates is a higher awareness for the 0:01:29.560 --> 0:01:32.479 desire for risk management. And the more you, as an 0:01:32.520 --> 0:01:36.959 investor understand your risk management that's inside your portfolio, it's essential. 0:01:37.360 --> 0:01:40.639 The better you understand it, the better your portfolio perform 0:01:40.720 --> 0:01:42.600 as you hope. So I think the biggest thing you 0:01:42.640 --> 0:01:45.400 need to do is understand the risks within your protfolio. Now, 0:01:45.440 --> 0:01:48.360 saying that, I do think you want to have a 0:01:48.400 --> 0:01:52.320 more value tilt, and probably a bigger company tilt over 0:01:52.800 --> 0:01:57.080 over overall, but small companies will probably in my estimation, 0:01:57.240 --> 0:02:00.640 outperform large companies as a whole. But I think the 0:02:00.680 --> 0:02:03.080 core of your portfolio needs to be in some of 0:02:03.080 --> 0:02:06.640 these companies you really really trust. Um so companies that 0:02:06.680 --> 0:02:09.040 I've been talking about more more recently, and I know 0:02:09.120 --> 0:02:12.320 it's up over a hundred percent year today. Is Ford. 0:02:12.560 --> 0:02:14.720 Um Ford I think is a really really good company. 0:02:14.760 --> 0:02:16.960 It's a great play. They have a ton of momentum 0:02:17.040 --> 0:02:19.320 in the number of buys that they have and sells 0:02:19.840 --> 0:02:23.880 companies selling cars um and and a great opportunity with 0:02:24.040 --> 0:02:26.560 electric vehicles. They haven't even gotten started yet, just the 0:02:26.680 --> 0:02:29.639 f one fifty. Their Mustang is really not even the Mustang, 0:02:29.760 --> 0:02:31.680 so they I think they have a lot of opportunity 0:02:31.720 --> 0:02:36.600 to grow there. Less eccentric than Elon, but really good 0:02:36.639 --> 0:02:38.840 management and forward So that's one of the core holdings 0:02:38.880 --> 0:02:41.480 I would look. So you mentioned this small cap idea. 0:02:42.080 --> 0:02:44.560 We're going to speak to Liz Young later. She loves 0:02:44.720 --> 0:02:48.960 them to How does inflation, though, throw a wrench in 0:02:49.040 --> 0:02:52.440 the ability for smaller companies to navigate a choppy environment 0:02:52.480 --> 0:02:55.960 next year? It's going to be difficult, and so you 0:02:56.080 --> 0:02:58.560 want to look I think if you're going into small cap, 0:02:58.880 --> 0:03:00.920 you want to look for company needs that have the 0:03:00.960 --> 0:03:05.000 opportunity either to combat inflation with their growth, so that's 0:03:05.000 --> 0:03:08.120 really really important, or they have some type of unique 0:03:08.120 --> 0:03:12.280 technology that I think or a position in their um 0:03:12.280 --> 0:03:15.280 peer group that really makes a difference. So the other 0:03:15.320 --> 0:03:17.040 thing that I think that's really important is I don't 0:03:17.040 --> 0:03:19.840 think you want to have all the risk on the table. 0:03:20.160 --> 0:03:21.840 And in other words, if you looked at the beta 0:03:21.919 --> 0:03:24.440 of your small cap portfolio to the Russell to or 0:03:24.480 --> 0:03:27.000 the S and P six, your beta I think needs 0:03:27.000 --> 0:03:29.560 to be a little bit smaller. Our small cap beta 0:03:29.639 --> 0:03:33.040 is about point eight right now. It's about fi year 0:03:33.080 --> 0:03:35.840 to day versus the Russell to about ten. So I 0:03:35.880 --> 0:03:39.320 think you can do a lot better with um less 0:03:39.440 --> 0:03:43.440 volatile companies, but stay in that small cap space. David, 0:03:43.680 --> 0:03:45.760 how do you think about valuation here? There's a lot 0:03:45.800 --> 0:03:48.160 of folks that are concerned about evaluation. But on the 0:03:48.160 --> 0:03:50.520 other hand, people saye g. But that given where interest 0:03:50.600 --> 0:03:54.920 rates are, don't worry. Earnings have been very good over 0:03:54.960 --> 0:03:56.920 the past several quarters, but likely to slow. How do 0:03:57.000 --> 0:04:00.720 you think about evaluation in this market? Now? Well, there's 0:04:00.720 --> 0:04:03.200 no doubt it's high. Right you look at any type 0:04:03.240 --> 0:04:05.360 of chart you want to look at across the market, 0:04:05.440 --> 0:04:09.320 valuation is extremely high. It's a very narrow market, and 0:04:09.360 --> 0:04:12.680 so that is concerning. The problem is is I think, well, 0:04:12.720 --> 0:04:16.120 not the problem, but the opportunity is is that valuations 0:04:16.160 --> 0:04:19.760 never really created a burst of the bubble so I 0:04:19.800 --> 0:04:22.960 don't think you worry about valuation. You more worry about 0:04:23.160 --> 0:04:26.800 what are the downside risks with my individual names in 0:04:26.880 --> 0:04:30.520 my portfolio and what causes the bubble to burst. So 0:04:30.640 --> 0:04:33.400 I would set valuation aside a little bit and look 0:04:33.400 --> 0:04:36.240 at the FED, look at the COVID, which I think 0:04:36.680 --> 0:04:38.880 you know we've talked about a million times over, and 0:04:38.920 --> 0:04:41.200 look at what events are going on with Congress and 0:04:41.240 --> 0:04:43.520 how that's going to affect the downside risk of my nature. 0:04:43.640 --> 0:04:47.080 Is there a paradigm shift, a move away from chasing 0:04:47.160 --> 0:04:51.400 yield into protecting your capital? I think there there There 0:04:51.440 --> 0:04:54.159 has to be for at least a portion of everyone's portfolio, 0:04:54.680 --> 0:04:59.040 so yields are higher. Um, you can't just chasing yield 0:04:59.080 --> 0:05:00.520 is not going to give you the actually I think 0:05:00.520 --> 0:05:02.800 that you need, and so you need to look at 0:05:03.040 --> 0:05:07.200 how does your portfolio fit together and what is the 0:05:07.240 --> 0:05:09.920 potential risk to your portfolio losing money? And if you 0:05:10.000 --> 0:05:12.560 do it that way and you start talking about risk, 0:05:12.600 --> 0:05:14.159 I think your profolio is going to perform as you 0:05:14.200 --> 0:05:18.080 want um throughout the year. All right, David, thank you 0:05:18.120 --> 0:05:21.360 so much for joining us. Really appreciate getting your thoughts 0:05:21.400 --> 0:05:31.400 and perspective. David Harden, founder, president of Summit Global Investments. 0:05:31.400 --> 0:05:35.839 One of the interesting economic fallouts from this pandemic has 0:05:35.880 --> 0:05:39.680 been a large number of people have simply left the workforce, 0:05:39.720 --> 0:05:42.200 maybe four to five million of them here in the US. 0:05:42.240 --> 0:05:43.800 And of course we see the help on it signs 0:05:44.080 --> 0:05:47.400 in just about every restaurant and retail establishment, but it's 0:05:47.440 --> 0:05:51.679 also impacting larger companies like Micron Technology has a hundred 0:05:51.720 --> 0:05:55.640 billion dollar market capp chip company. April Arnston joins us. 0:05:55.640 --> 0:05:59.400 She's a chief people officer at Micron Technology. April talked 0:05:59.440 --> 0:06:02.760 to us about the labor market for again, a big 0:06:02.800 --> 0:06:07.680 tech company like Micron Technologies, what are you guys dealing with? Hi, 0:06:07.800 --> 0:06:11.039 good morning, Thanks for having me. Yeah. So, while the 0:06:11.160 --> 0:06:14.960 labor shortage is real, you know, we also believe it 0:06:15.000 --> 0:06:19.200 presents opportunities that can create retention challenges for sure, but 0:06:19.320 --> 0:06:23.000 we've also found that it has created hiring opportunities and 0:06:23.120 --> 0:06:26.640 it it really hasn't stalled our efforts, that hasn't stalled 0:06:26.640 --> 0:06:31.040 our innovation efforts, that hasn't stalled our diversity efforts. In fact, 0:06:31.400 --> 0:06:36.040 we believe that our focus on things like the ei UM, 0:06:36.080 --> 0:06:39.240 things like our company success and our innovation, it's given 0:06:39.320 --> 0:06:43.880 us a competitive advantage in the talent marketplace. People are 0:06:44.080 --> 0:06:47.640 rethinking where they want to work. They want fulfilling work, 0:06:47.880 --> 0:06:51.920 they want flexibility, and they want companies to share their values. 0:06:51.960 --> 0:06:55.760 So now is the time for companies to really double 0:06:55.880 --> 0:06:59.480 down on those efforts and UM make sure that they 0:06:59.560 --> 0:07:04.440 are seeing keen about what they offer to employees, both 0:07:04.480 --> 0:07:08.560 in terms of the work and the environment that they create, 0:07:09.040 --> 0:07:12.360 so that people can find a purpose in the work 0:07:12.520 --> 0:07:15.720 and they feel valued and they feel like they're contributing 0:07:15.800 --> 0:07:19.160 to success. You know, I'm curious about the most compelling ways, 0:07:19.240 --> 0:07:27.040 the most compelling examples of how the workplace is really changing. Yeah, 0:07:27.080 --> 0:07:30.160 you know, at Micron, I think there's a few things that, 0:07:30.400 --> 0:07:33.080 you know, we are looking at to make sure that 0:07:33.200 --> 0:07:37.920 we provide a modern work experience. I think number one 0:07:38.160 --> 0:07:42.160 I just mentioned people want a place where they feel fulfilled, 0:07:42.560 --> 0:07:46.960 UM that they are doing work that impacts UM, impacts 0:07:47.120 --> 0:07:52.960 greater society, and impacts their community. They want flexibility. They 0:07:53.000 --> 0:07:55.320 want to work UM the way they want to work 0:07:55.320 --> 0:07:58.880 and the way that they best work, whether that's working 0:07:58.880 --> 0:08:02.920 from home or or whether that's you know, leveraging technology 0:08:03.000 --> 0:08:06.920 to be engaged in different ways. They also want you know, 0:08:06.920 --> 0:08:09.360 they want to be socially connected, so when they come 0:08:09.400 --> 0:08:12.640 to work, you know, we're finding that people still want 0:08:12.680 --> 0:08:15.559 to connect and when they come to work, they want 0:08:15.640 --> 0:08:18.120 a unique experience. They want to still be able to 0:08:18.120 --> 0:08:22.360 connect with our colleagues UM and and work in an 0:08:22.440 --> 0:08:25.320 environment where you know, they feel like they're they're making 0:08:25.320 --> 0:08:28.000 a difference and and they want to feel respected and valued. 0:08:28.040 --> 0:08:30.560 And this is why Micron's d I efforts are so 0:08:30.600 --> 0:08:34.600 incredibly important UM to make sure that we're providing a 0:08:34.720 --> 0:08:38.880 culture of inclusion where people feel like they can thrive. 0:08:39.160 --> 0:08:41.520 We believe it's the right thing to do, and talent 0:08:41.720 --> 0:08:45.280 is demanding it. April, how do how are you guys 0:08:45.320 --> 0:08:48.719 what thinking about this? You know work from home phenomena 0:08:48.760 --> 0:08:52.160 that's really just gained so much momentum during this pandemic 0:08:52.160 --> 0:08:56.440 and many employees saying I'm just not coming back. What's 0:08:56.480 --> 0:08:57.920 your policy right now and how do you think it 0:08:58.000 --> 0:09:03.360 might evolve? Yeah, So from Micron, we UM we're your manufacturer, 0:09:03.440 --> 0:09:07.800 so we design, develop, and manufacture memory and storage products. 0:09:07.840 --> 0:09:11.040 So as you can imagine, we have a pretty diverse workforce. 0:09:11.520 --> 0:09:15.079 We do have a population that has to be working 0:09:15.200 --> 0:09:19.760 at a physical Micron location to manufacture our products. Uh. 0:09:19.920 --> 0:09:24.599 We have a population of technical folks, research and development 0:09:25.000 --> 0:09:28.640 team members who have to occasionally access the site. They 0:09:28.679 --> 0:09:31.160 have to be in labs, they have to be testing 0:09:31.200 --> 0:09:34.120 the product. They can do some of their work remotely, 0:09:34.320 --> 0:09:36.679 but by and large they need to be on site. 0:09:36.720 --> 0:09:39.440 And then we have a third population at Micron where 0:09:39.480 --> 0:09:42.160 a lot of their work can be done flexibly. So 0:09:42.240 --> 0:09:46.640 we've devised the strategy that really addresses all three populations 0:09:46.679 --> 0:09:50.880 and allows the most flexibility for those different populations. You 0:09:50.920 --> 0:09:54.080 do have to base it on the role on the work, UM, 0:09:54.200 --> 0:09:57.640 and that's exactly what we've done. And and as I've mentioned, 0:09:57.960 --> 0:10:00.720 you know, certainly there is a population, although I would 0:10:00.720 --> 0:10:03.880 say it's a smaller population that wants to work fully 0:10:03.920 --> 0:10:07.120 remote UM and and not come to a site. What 0:10:07.160 --> 0:10:11.440 we're finding, UM is that people do want to be connected. 0:10:11.840 --> 0:10:15.040 They just want flexibility and how they do it and 0:10:15.160 --> 0:10:17.840 when they do it and where they do it. But 0:10:17.960 --> 0:10:20.959 we are finding people still crave those social connections and 0:10:21.120 --> 0:10:23.880 coming to work for part of the time in some 0:10:24.000 --> 0:10:26.960 sort of hybrid arrangement for the roles that allow for 0:10:27.040 --> 0:10:30.880 that is seeming to be the recipe for success. I'm 0:10:30.880 --> 0:10:33.480 wondering if the skills are changing that are needed for 0:10:33.520 --> 0:10:36.920 this workforce of the future. When you look at the 0:10:37.000 --> 0:10:40.440 candidates in front of you for jobs, which are bound 0:10:40.480 --> 0:10:45.480 to be the most successful. Yeah, I would to answer 0:10:45.559 --> 0:10:49.520 your question directly to skills are absolutely changing. Uh, as 0:10:49.600 --> 0:10:52.160 you know, as we look at candidates, the ones that 0:10:52.200 --> 0:10:55.480 will be successful are the ones. Of course, you know, 0:10:55.840 --> 0:10:59.000 technical capability is important, but what's even more important is 0:10:59.040 --> 0:11:02.120 the ability to learn. Because we're not even able to 0:11:02.160 --> 0:11:05.400 predict what skills someone might need, and three and five 0:11:05.480 --> 0:11:08.400 years down the road, we know that the skills required 0:11:08.440 --> 0:11:12.040 are changing so rapidly. We need to have the ability 0:11:12.080 --> 0:11:14.480 to learn our our team members, our workforce has to 0:11:14.520 --> 0:11:17.360 be able to pivot and be agile and adapt so 0:11:17.440 --> 0:11:21.080 we can capitalize on market opportunities as they emerge. So 0:11:21.200 --> 0:11:25.560 the ability to learn, the ability to collaborate and connect 0:11:25.600 --> 0:11:30.120 with people so critically important. And this is again where diversity, 0:11:30.160 --> 0:11:34.000 equality and exclusion UM. Making sure that your team members 0:11:34.080 --> 0:11:39.479 are working together, collaboratively, respecting each other, leveraging each other's 0:11:39.640 --> 0:11:44.120 strength UM to really innovate in in an incredible way. 0:11:44.280 --> 0:11:48.559 It's really really important and why it's the foundation for Micron. 0:11:49.080 --> 0:11:53.480 So I would say learning UM continuous learning critically important, 0:11:53.880 --> 0:11:58.960 ability to communicate, collaborate very very important. And then of 0:11:58.960 --> 0:12:03.520 course at MICROME, we need a strong pipeline of STEM 0:12:03.600 --> 0:12:09.240 talent and we need students in the pipeline ready to 0:12:09.320 --> 0:12:13.520 take on these tough challenges. So we have invested quite 0:12:13.520 --> 0:12:17.760 a bit in that STEM pipeline. At micron UM, we're 0:12:17.800 --> 0:12:21.559 committed to growing the pipeline of underrepresented talent and making 0:12:21.640 --> 0:12:25.079 STEM education investments around the world. In fact, in f 0:12:25.280 --> 0:12:29.160 y twenty one, Micron Foundation distributed more than seven million 0:12:29.160 --> 0:12:33.760 dollars and grants targeting equitable access to STEM education and 0:12:33.800 --> 0:12:38.200 basic human needs. So those types of investments to prepare 0:12:38.240 --> 0:12:42.800 the workforce of the future are incredibly important. April, thank 0:12:42.840 --> 0:12:45.319 you so much for joining us. Really fascinating stuff. There 0:12:45.400 --> 0:12:49.520 is a corporate American global economies deal with some labor 0:12:49.520 --> 0:12:52.559 shortages and certainly some skilled labor shortages across the board 0:12:52.600 --> 0:12:55.080 as well for some of those tech companies. April Arts 0:12:55.080 --> 0:12:58.720 and Chief People Officer Micron Technology. It's a Simil Trades 0:12:58.720 --> 0:13:01.880 on the NAZAC MU. It's got about a hundred billion 0:13:01.920 --> 0:13:10.440 dollar market cap. I'm wondering, you know, you gotta wonder, Paul, 0:13:10.480 --> 0:13:12.760 how much the retail bidder is going to be the 0:13:12.800 --> 0:13:17.000 marginal buyer in this market. Yeah, exactly, And it seems 0:13:17.280 --> 0:13:19.160 like that, you know, we've seen in this pandemic and 0:13:19.280 --> 0:13:22.120 with the meme stocks in particular, retailers with a lot 0:13:22.120 --> 0:13:25.920 of these zero fee apps really jumping into the market 0:13:26.080 --> 0:13:28.520 absolutely spend money on clothes or spend money on the 0:13:28.520 --> 0:13:31.520 stock market. We're gonna talk now to David Luke's he's 0:13:31.559 --> 0:13:34.080 the Site Center's president at CEO. He's going to talk 0:13:34.080 --> 0:13:38.520 about holiday spending, retail supply, chain, bottlenecks. David, thank you 0:13:38.559 --> 0:13:42.920 for joining us. Once we get past this holiday shopping season. 0:13:43.600 --> 0:13:47.239 Is the buyer going to be there for these retailers. 0:13:48.760 --> 0:13:50.680 It sure looks like it. I mean, they've showed up 0:13:50.720 --> 0:13:52.280 quite a bit in the past couple of months. But 0:13:52.440 --> 0:13:54.719 I guess you know, as you're saying, it's always nice 0:13:54.760 --> 0:13:57.160 to look at the foot traffic and the holiday season, 0:13:57.200 --> 0:13:59.319 but that that doesn't really tell you what happens to 0:13:59.320 --> 0:14:01.880 the next ten years. I think what we're really seeing 0:14:02.000 --> 0:14:04.360 is that the way people are shopping is a lot 0:14:04.480 --> 0:14:06.360 different than it used to be. Uh and a lot 0:14:06.360 --> 0:14:08.719 of retailers are making bets on what that future looks like, 0:14:09.800 --> 0:14:11.640 all right, so David, that's kind of where I wanted 0:14:11.679 --> 0:14:14.360 to go. As we've talked to, you know, retailers over 0:14:14.400 --> 0:14:16.920 the years, there's been this obviously, this argument that the 0:14:17.040 --> 0:14:20.680 United States is overstored, need to take out a lot 0:14:20.720 --> 0:14:23.880 of stores out of the inventory. And and you at 0:14:23.960 --> 0:14:28.360 site centers, you're a reat that focuses on these properties. 0:14:28.520 --> 0:14:32.000 What's your view, Well, if you look at the data 0:14:32.040 --> 0:14:34.240 and what's what's so nice about the sectors Now, we've 0:14:34.240 --> 0:14:37.200 got very good mobile phone data that goes back five 0:14:37.280 --> 0:14:40.480 or six years, and what you're seeing coming out of 0:14:40.520 --> 0:14:44.160 the pandemic is that customer visits are up. In other words, 0:14:44.160 --> 0:14:46.920 people are going to shopping centers more times per week. 0:14:47.560 --> 0:14:49.960 But what's really interesting is they're spending less time there. 0:14:50.840 --> 0:14:52.440 And so if you kind of stay back and say, well, 0:14:52.480 --> 0:14:54.640 how how is that possible or why is that happening? 0:14:54.840 --> 0:14:58.000 And I think the reasons are pretty clear. There's more 0:14:58.040 --> 0:15:00.920 people in the suburbs, they have more money, and because 0:15:00.960 --> 0:15:04.200 of this ongoing hybrid work, they're just around shopping the 0:15:04.200 --> 0:15:07.800 centers more frequently. So they're using convenience trips to drive 0:15:07.840 --> 0:15:10.480 a lot of sales. And the retailers are banking on this. 0:15:10.640 --> 0:15:12.880 I mean, the the amount of leasing right now is 0:15:12.920 --> 0:15:16.280 so much higher than it's been in twenty years. Retailers 0:15:16.280 --> 0:15:18.800 are banking on the fact that these suburbs are going 0:15:18.840 --> 0:15:21.880 to have people that are more approximate to properties long term, 0:15:21.920 --> 0:15:24.400 and it's generate sales. Incredible. I grew up in Paramus, 0:15:24.400 --> 0:15:26.960 New Jersey, which is, you know, the mall center of America, 0:15:27.640 --> 0:15:30.880 and yeah, you know, I wonder here, how is this changing? 0:15:30.920 --> 0:15:35.400 How are the suburbs really changing across the country. Which 0:15:35.960 --> 0:15:40.760 areas are seeing the most traffic. Well, I think remember 0:15:40.760 --> 0:15:44.480 in retail from a landlord perspective, there's two food groups. 0:15:44.520 --> 0:15:48.080 There's fashion malls and then there's convenience properties. And the 0:15:48.080 --> 0:15:50.400 fashion malls are more destination trips. Right. You go there 0:15:50.440 --> 0:15:52.080 and you're looking for luxury goods and you might have 0:15:52.120 --> 0:15:54.480 it might be a social event. It's not a social 0:15:54.480 --> 0:15:57.120 event to go to a Walgreens or a grocery store. Um, 0:15:57.200 --> 0:15:59.760 but that's what's generating a lot of the sales. Are 0:15:59.480 --> 0:16:03.080 these big box chains, these national chains where you know, 0:16:03.160 --> 0:16:07.640 seventy of the property is parking. So the convenience aspect 0:16:07.680 --> 0:16:10.920 has become really really important. And I think in the suburbs. 0:16:11.000 --> 0:16:14.720 You're seeing so much demand for housing. Um it's very 0:16:14.760 --> 0:16:18.080 difficult to entitle and get land permits to build new 0:16:18.120 --> 0:16:20.760 shopping centers, and so there's a very little construction for 0:16:20.800 --> 0:16:23.080 the last ten years. And all of a sudden, the 0:16:23.120 --> 0:16:25.440 retailers are saying, wait a minute, the customers are in 0:16:25.480 --> 0:16:28.640 the suburbs three four, five days a week. They're making 0:16:28.680 --> 0:16:32.040 trips throughout every weekday, which we can see. I mean 0:16:32.080 --> 0:16:34.440 the new business lunch is that five guys in the suburbs. 0:16:34.480 --> 0:16:36.640 It's not, as you know, a steakhouse in the city. 0:16:37.080 --> 0:16:39.360 So um so. So you're seeing a lot of this 0:16:39.840 --> 0:16:42.000 demand that just didn't exist a couple of years ago. 0:16:42.000 --> 0:16:44.440 The same thing with dentists and doctors right there leaving 0:16:44.480 --> 0:16:47.040 the cities. They're moving to the suburbs, and that's that's 0:16:47.240 --> 0:16:50.160 sponsoring a lot of leasing demand. Hey David, real quick, 0:16:50.160 --> 0:16:52.400 thirty seconds, just a question from one of our listeners. 0:16:52.560 --> 0:16:54.920 M and a activity in a strip center space picked 0:16:54.960 --> 0:16:58.200 up this year. You're expected to continue next year? Yeah? 0:16:58.360 --> 0:17:01.040 Did there? You know there there were two companies that merge, 0:17:01.120 --> 0:17:03.120 so we lost two reads in our sector, and then 0:17:03.120 --> 0:17:05.320 there were two companies that I p owed. Um so 0:17:05.359 --> 0:17:08.680 there were two new entrants. The reality is the private 0:17:08.720 --> 0:17:12.640 market values on assets are higher than the public market pricing. 0:17:12.720 --> 0:17:14.800 And whenever that happens, you know, you do have to 0:17:14.840 --> 0:17:18.360 wonder if if either further m and A or take 0:17:18.400 --> 0:17:20.720 private start to occur. So, if I had to bet, 0:17:20.760 --> 0:17:24.439 I would say there's probably fewer publicly traded reads in 0:17:24.480 --> 0:17:27.320 the next couple of years than there are now, just 0:17:27.320 --> 0:17:29.600 because there's so much private capital looking for real estate. 0:17:30.240 --> 0:17:31.879 All Right, David, thank you so much for joining us. 0:17:31.880 --> 0:17:35.320 Really appreciate you taking the time. David Luke's chief investment 0:17:35.320 --> 0:17:39.280 Officer and president of Site Centers ny SC listed stock 0:17:39.560 --> 0:17:45.960 s I t C is the ticker there. Let's talk 0:17:46.240 --> 0:17:49.160 retail sales. We only got a few more days shopping 0:17:49.240 --> 0:17:52.320 days until Christmas, but I'm gonna talk about how you 0:17:52.359 --> 0:17:54.879 actually pay for the stuff you buy. It used to 0:17:54.880 --> 0:17:58.239 be cash, then credit debit cards. Now I just use 0:17:58.359 --> 0:18:01.840 my phone. It's really changing. Um let's talk to video. 0:18:02.119 --> 0:18:05.960 Peter's CEO of mar Ghetta Video. Thanks so much for 0:18:06.040 --> 0:18:08.600 joining us here. Tell us what your company does, how 0:18:08.680 --> 0:18:14.399 you fit into that supply chain of global retail. Thanks 0:18:14.400 --> 0:18:17.720 for having me. Marcatta is the first modern card issuing platform, 0:18:17.800 --> 0:18:21.640 we enable any disruptive company to build a payments card 0:18:21.720 --> 0:18:25.040 of their choice. And so the specific example that you 0:18:25.160 --> 0:18:28.520 shared is in the Buying Out pay leaders space. Many 0:18:28.600 --> 0:18:30.639 of the leaders in the Buying Now paid leader space 0:18:30.840 --> 0:18:34.960 use Marcatta to instantly issue a virtual card for their 0:18:35.000 --> 0:18:38.760 customers while they're in the shopping checkout experience to pay 0:18:38.800 --> 0:18:41.280 for their purchase over time. But you can think about 0:18:41.280 --> 0:18:44.520 this card experience being used in non demand delivery by 0:18:44.720 --> 0:18:48.159 crypto providers so that they can monetize their crypto holding. 0:18:48.840 --> 0:18:52.439 It's used in digital banking, it's using industries across the world. 0:18:52.680 --> 0:18:54.360 But very excited to talk to you a little bit 0:18:54.359 --> 0:18:58.400 more about how it's impacting shopping this season for our consumers. 0:18:58.440 --> 0:19:01.480 I'm glad you went there. I am so interested in 0:19:01.560 --> 0:19:04.600 this by now pay later theme. You know, you do 0:19:04.800 --> 0:19:08.520 have some companies that let you buy now, pay later 0:19:08.920 --> 0:19:12.080 with your credit card, And I'm wondering if there are 0:19:12.119 --> 0:19:17.000 any concerns here about customers really adding up their debtloads 0:19:17.040 --> 0:19:22.600 here into the holiday season. You know, I think consumers 0:19:22.640 --> 0:19:26.240 should always be very mindful about managing their cash flow, 0:19:26.680 --> 0:19:30.120 about managing all of the financial obligations that they are 0:19:30.160 --> 0:19:33.600 taking on across channels. That said, I think that by 0:19:33.640 --> 0:19:36.879 Now pay Later is experiencing the same frenzy that we 0:19:36.920 --> 0:19:39.040 saw on the credit card market a few decades ago 0:19:39.320 --> 0:19:41.680 when people ask the question of gosh, is this discally 0:19:41.760 --> 0:19:45.239 responsible for consumers to be buying on credit? And what 0:19:45.280 --> 0:19:49.440 we're seeing decades later is that absolutely. It gives consumers 0:19:49.440 --> 0:19:53.359 the flexibility and the optionality to pay on their own time, 0:19:54.240 --> 0:19:57.359 using all of the options at their disposal. And what 0:19:57.440 --> 0:20:00.600 by now pay Later does is give consumer is the 0:20:00.720 --> 0:20:04.400 option to pay in installments over time, while the merchant 0:20:04.680 --> 0:20:07.280 pays for that benefit to the buy now, pay later 0:20:07.359 --> 0:20:10.640 providers because they now are able to attract a broader 0:20:10.680 --> 0:20:14.600 swap of customers and to make that checkout experience as 0:20:14.640 --> 0:20:18.159 seamless as possible. It's it's just another payment option. It 0:20:18.200 --> 0:20:21.280 acts very differently from debit and credit, and consumers are 0:20:21.320 --> 0:20:26.280 demanding it more now than ever. So how payment trends? 0:20:26.359 --> 0:20:29.720 How are they trending these days? Video are people using 0:20:30.480 --> 0:20:36.240 primarily credit cards, cash, buy now, pay later, crypto? How 0:20:36.400 --> 0:20:40.560 the how are the trends right now? This is a 0:20:40.720 --> 0:20:45.200 very rapidly changing space, and I think the COVID pandemic 0:20:45.280 --> 0:20:49.679 has been probably the biggest accelerant in payments transformation. So 0:20:49.760 --> 0:20:52.040 what we are seeing is that the use of cash 0:20:52.400 --> 0:20:56.320 has dropped off dramatically, as you'd expect. It's a question 0:20:56.480 --> 0:20:59.399 of safety and hygiene, but also just convenience that people 0:20:59.480 --> 0:21:02.200 just don't want to deal with grubby cash. We are 0:21:02.280 --> 0:21:06.480 seeing digital payment skyrocket and we are particularly seeing the 0:21:06.560 --> 0:21:09.880 use of buying out paid leader grow by triple digits. Now, 0:21:09.920 --> 0:21:12.640 a lot of experts thought this was a one time phenomenon, 0:21:13.040 --> 0:21:15.719 it was a novelty of payments that would quickly fade. 0:21:16.040 --> 0:21:18.880 And while we saw buy now pay Leader grow by 0:21:18.960 --> 0:21:22.360 two hundred and fifty eight percent on Black Friday last year, 0:21:22.800 --> 0:21:25.400 it continued to grow at triple digits this year too. 0:21:25.440 --> 0:21:27.239 So this year on Black Friday, we saw buying our 0:21:27.280 --> 0:21:30.200 pay leader volume and grow by a hundred and five percent, 0:21:30.800 --> 0:21:34.080 and so it continues to be a huge way with 0:21:34.119 --> 0:21:37.200 how consumers are demanding to pay. I'm wondering what other 0:21:37.320 --> 0:21:41.560 changes you are seeing in terms of where people are shopping, 0:21:41.720 --> 0:21:44.359 how they're paying for it. You work with so many 0:21:44.400 --> 0:21:48.000 companies in the space that you probably have the cutting 0:21:48.080 --> 0:21:52.320 edge here. So there are a few things that we're seeing. 0:21:52.520 --> 0:21:56.119 Um One is that while Black Friday continues to be 0:21:56.119 --> 0:21:58.639 a top shopping day. Another trend that we are seeing 0:21:58.720 --> 0:22:02.359 is that Cyber Mondays started to drop off in its significance. 0:22:02.760 --> 0:22:06.120 So usually what we saw was that Cyber Monday had 0:22:06.520 --> 0:22:09.520 a pop of about seventy two when compared to Black 0:22:09.560 --> 0:22:12.320 Friday about two years ago. That has dropped down by 0:22:12.320 --> 0:22:15.680 about twenty points to roughly fifty five percent this year, 0:22:16.280 --> 0:22:19.600 telling us that consumers are now spreading out their purchases, 0:22:19.960 --> 0:22:23.560 not limiting it just to Cyber Monday. And also companies 0:22:23.600 --> 0:22:27.280 are probably giving their promotions also the holiday season rather 0:22:27.320 --> 0:22:30.400 than saving it just for Cyber Monday. The other trend 0:22:30.440 --> 0:22:34.440 that we're seeing is that people are demanding for shopping 0:22:34.480 --> 0:22:38.040 to be very seamless and a digital experience, and so 0:22:38.200 --> 0:22:41.440 one of the customers that we have, Klarna, has built 0:22:41.480 --> 0:22:44.399 a wonderful shopping app which allows you to shop hundreds 0:22:44.400 --> 0:22:47.520