WEBVTT - Bloomberg Surveillance TV: March 24, 2025 0:00:00.080 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.600 --> 0:00:15.440 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.440 --> 0:00:18.680 with Lisa Bromwitz and Amrie Hordern. Join us each day 0:00:18.720 --> 0:00:22.239 for insight from the best in markets, economics, and geopolitics 0:00:22.400 --> 0:00:24.880 from our global headquarters in New York City. We are 0:00:24.920 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.680 --> 0:00:31.280 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.280 --> 0:00:33.919 anywhere else you listen, and as always on the Bloomberg 0:00:34.000 --> 0:00:37.160 Terminal and the Bloomberg Business app. We begin this hour 0:00:37.400 --> 0:00:40.040 with stocks hire on reports for a more targeted US 0:00:40.120 --> 0:00:43.400 tariff approach. Jean Pavan of Blackrock writing, we stay overweight 0:00:43.640 --> 0:00:46.720 US equities on our tactical horizon of six to twelve months, 0:00:46.880 --> 0:00:50.240 as policy uncertainty should ease over the period. John joins 0:00:50.280 --> 0:00:52.400 us now for more. John, good to see you more 0:00:52.440 --> 0:00:55.640 confidence being long stocks versus bonds. Just help us understand 0:00:55.800 --> 0:00:57.080 the why. Well. 0:00:57.080 --> 0:01:00.360 On the bone side, I think we are a high 0:01:00.440 --> 0:01:04.600 conviction that we are observing right now resetting of global 0:01:04.680 --> 0:01:05.440 rates higher. 0:01:05.440 --> 0:01:06.319 It's a big story. 0:01:06.360 --> 0:01:10.200 I think you know, we see fiscal spending being everywhere. 0:01:10.520 --> 0:01:12.720 This is important reaction to the foreign policy of the 0:01:12.840 --> 0:01:15.399 US UH and that has still to play out. So 0:01:15.440 --> 0:01:18.920 I guess being underweight bonds is is OIG conviction. On 0:01:18.959 --> 0:01:22.960 the equity side of things, we remain of the view 0:01:23.080 --> 0:01:24.880 that we are at, Like you. 0:01:24.760 --> 0:01:28.480 Know, uncertainty right now is maxed out. Never seen that before. 0:01:28.760 --> 0:01:32.720 Along many policy leavers, objectives are not clear, and so 0:01:32.840 --> 0:01:35.679 all that together I don't think can last forever. I mean, 0:01:35.680 --> 0:01:38.120 that's not good for anyone. So we think over the 0:01:38.160 --> 0:01:42.120 next few weeks, as we get more clarity, I think 0:01:42.160 --> 0:01:44.680 markets will be able to get on with whatever is 0:01:44.720 --> 0:01:45.399 the destination. 0:01:45.600 --> 0:01:47.480 And that's that's the that's the overweight the. 0:01:47.480 --> 0:01:50.200 Markets swear markets in the United States. What about markets 0:01:50.200 --> 0:01:52.920 elsewhere that have actually rallied into this decision. 0:01:52.920 --> 0:01:54.960 I'm thinking of China, I'm thinking of Europe. 0:01:55.240 --> 0:01:57.880 Yeah, so I think right now this has been the opposite. Right, so, 0:01:57.920 --> 0:02:00.560 we've seen the rest of the world out performing in 0:02:00.600 --> 0:02:02.960 the US, but on the sixty to twelve month horizon, 0:02:03.520 --> 0:02:06.480 we expect to go back to the US taking the lead. 0:02:07.040 --> 0:02:09.960 I think this is partly because on the European side, 0:02:10.080 --> 0:02:12.560 even though we are a bit more positive, we turn neutral. 0:02:12.600 --> 0:02:14.839 We used to be on the weight. We think this 0:02:14.880 --> 0:02:17.239 is more of a narrow story. It's ministry spending its 0:02:17.240 --> 0:02:20.120 banks and it has some momentum for a few months, 0:02:20.120 --> 0:02:22.120 but we don't think this is yet a macro story 0:02:22.120 --> 0:02:23.679 that's going to carry Europe. 0:02:23.400 --> 0:02:24.600 For the next twelve months. 0:02:24.760 --> 0:02:27.359 So we expect to revert back to US taking the 0:02:27.440 --> 0:02:28.480 lead as a result, if you. 0:02:28.440 --> 0:02:31.040 Put these two ideas together, the idea that we're seeing 0:02:31.080 --> 0:02:34.519 a structural repricing of rates and that you still are 0:02:35.280 --> 0:02:37.560 overweight the US or expecting the US to take the 0:02:37.600 --> 0:02:40.960 lead later this year, do you think overall equity returns 0:02:41.080 --> 0:02:44.640 are going to be constrained by this repricing of rates. 0:02:44.400 --> 0:02:48.600 Globally, So we don't think rates are coming down. We 0:02:48.639 --> 0:02:50.960 think the ten year in a year in the US, 0:02:51.360 --> 0:02:54.400 which has been rallying, is not the story we're going 0:02:54.400 --> 0:02:56.680 to see going forward. So there's going to be an adjustment. 0:02:57.160 --> 0:03:00.520 But we think that you know, there's like deep forces 0:03:00.520 --> 0:03:03.760 that will reassert themselves AI. We still are, you know, 0:03:03.960 --> 0:03:09.280 very bollish on AI being a powerful source of driver's returns, 0:03:09.560 --> 0:03:11.560 and as a result, we think it's possible to withstand 0:03:11.639 --> 0:03:15.360 higher rates, moderate increase in rates, and withstand those for 0:03:15.400 --> 0:03:19.320 equity if we get a very significant adjustment in rates, 0:03:19.320 --> 0:03:22.239 which is not impossible given the uncity we're facing. Depending 0:03:22.240 --> 0:03:24.240 on the policies that will be put in place, then 0:03:24.280 --> 0:03:25.919 it would challenge the view in equities. 0:03:25.919 --> 0:03:27.960 I guess for the US in the United States, do 0:03:28.000 --> 0:03:29.600 you think that the US is going to be the 0:03:29.639 --> 0:03:32.720 main beneficiary from this AI mega trend that you've been 0:03:32.720 --> 0:03:34.720 talking about for quite a while, or do you think 0:03:34.760 --> 0:03:37.360 that increasingly you and your colleagues are starting to think 0:03:37.360 --> 0:03:40.400 about China as also being maybe not as much of 0:03:40.400 --> 0:03:42.720 a beneficiary, but a significant one with some of the 0:03:42.760 --> 0:03:44.160 advancements that we're seeing currently. 0:03:44.520 --> 0:03:47.640 Yeah, I think both are set to benefit from the 0:03:47.680 --> 0:03:50.240 from the AI story. I think about China and the US, 0:03:50.520 --> 0:03:52.200 we think this is where it plays out. There's a 0:03:52.200 --> 0:03:54.800 bit of a Middle East story as well, but it's 0:03:54.880 --> 0:03:57.760 not a global story, so we think this is more 0:03:57.800 --> 0:04:00.920 powerful in the US. I think the U US eventually 0:04:00.960 --> 0:04:04.320 provide an environment where we were more comfortable with I guess, 0:04:04.760 --> 0:04:07.720 you know, on the macro perspective, Uh, so the AI 0:04:07.720 --> 0:04:09.760 story is playing in both places. I think the macro 0:04:09.840 --> 0:04:12.040 backdrop eventually is more positive in the US. That's why 0:04:12.080 --> 0:04:15.120 the combination of macro in AI favors US over China. 0:04:15.160 --> 0:04:16.920 For US, it's interesting you mentioned the Middle East. We 0:04:16.960 --> 0:04:18.800 just had shake time noon down in Washington and the 0:04:18.839 --> 0:04:20.920 UAE saying they're going to invest more than one trillion 0:04:20.960 --> 0:04:23.919 in AI. But a lot of that is almost contingent 0:04:24.000 --> 0:04:24.880 on them being able. 0:04:24.680 --> 0:04:26.000 To get access to these chips. 0:04:26.200 --> 0:04:28.080 Is that all the leverage the US holds, they have 0:04:28.120 --> 0:04:28.680 all the power. 0:04:30.480 --> 0:04:33.560 I think that's part of it, right, So there's there's 0:04:33.640 --> 0:04:36.320 a it's it's it's first of all, it's a story 0:04:36.360 --> 0:04:39.240 that is a very high buyers to intrigue, a massive 0:04:39.279 --> 0:04:42.159 amount of cape that is needed to be a player 0:04:42.160 --> 0:04:44.320 in that space, and I think so you need big 0:04:44.360 --> 0:04:47.839 firm with big balance sheet. Uh, it's possible for other 0:04:47.920 --> 0:04:50.719 countries with deep pockets to play a role in there. 0:04:50.920 --> 0:04:53.359 But I do think that the US does have, you know, 0:04:53.400 --> 0:04:54.880 the upper hand on this at this stage. 0:04:54.880 --> 0:04:56.840 When you see positive news like that, but then you 0:04:56.880 --> 0:05:01.160 also see banks coming out and potentially easing their probability 0:05:01.200 --> 0:05:02.480 of US recession. 0:05:02.720 --> 0:05:03.640 How do you wag the two? 0:05:04.800 --> 0:05:05.000 Well? 0:05:05.040 --> 0:05:07.279 I think right now that the part we haven't talked about. 0:05:07.279 --> 0:05:09.240 We've talked about the six to twelve month horizon with 0:05:09.320 --> 0:05:11.400 the our view that eventually we get back to a 0:05:11.400 --> 0:05:14.680 better place. But for now, as I said, the uncertainty 0:05:14.720 --> 0:05:17.440 is kind of peak level. I don't think I've ever seen, 0:05:18.000 --> 0:05:19.839 you know, so much a range of views on what 0:05:19.920 --> 0:05:24.080 might happen. The commentary on the outlook is as wide 0:05:24.080 --> 0:05:26.240 as I've never seen. It's as political has never seen it. 0:05:26.720 --> 0:05:29.960 And as a result, that is holding back people. And 0:05:30.000 --> 0:05:31.960 the longer it lasts, then I think we don't think 0:05:31.960 --> 0:05:33.640 a recession is in the card. We think there's a 0:05:33.680 --> 0:05:37.279 lot of resilience. In fact, I don't think the recession 0:05:37.320 --> 0:05:39.560 is the biggest risk. I think the recession the biggest 0:05:39.640 --> 0:05:42.640 risk is long term decision, infrastructure decision and so on 0:05:43.200 --> 0:05:44.840 that if they're put on old we're going to see 0:05:44.839 --> 0:05:47.560 a lower structural growth rate in the US eventually, and 0:05:47.600 --> 0:05:50.000 that's much bigger deal than a recession. 0:05:50.040 --> 0:05:51.960 You keep talking about how later this year we'll get 0:05:51.960 --> 0:05:54.520 to a better place from some sort of policy level, 0:05:54.560 --> 0:05:57.039 or from a certainty level. What does that mean at 0:05:57.080 --> 0:05:59.479 a time when we keep talking about uncertainty being a 0:05:59.480 --> 0:06:01.360 feature not a bug of this administration. 0:06:02.320 --> 0:06:02.960 I don't, I think. 0:06:03.000 --> 0:06:04.919 I mean, I'll give you one example in the tariff. 0:06:04.960 --> 0:06:08.680 I think you know you right now, there is a debate. 0:06:08.720 --> 0:06:11.080 There's uncertainty about what will be the impact of those 0:06:11.120 --> 0:06:13.960 tariff for the US, for the trading partners, and you 0:06:13.960 --> 0:06:15.960 can make an argument that it's going to be minimal, 0:06:16.040 --> 0:06:18.400 it doesn't hurt the US. Once the evidence comes in, 0:06:19.279 --> 0:06:22.359 I think the leverage of this buggaining chip will be waning, 0:06:22.480 --> 0:06:24.000 and so I think one way or the other, we're 0:06:24.000 --> 0:06:26.240 going to see a reduction. It's going to be harder 0:06:26.279 --> 0:06:29.080 to dismiss the damage from tariff, is going to be 0:06:29.200 --> 0:06:31.360 harder to just make bold statement about we're going to 0:06:31.440 --> 0:06:33.920 go with even higher tariffs, and I think you get 0:06:33.960 --> 0:06:36.200 a circunvergence someplace as a result. 0:06:36.440 --> 0:06:38.520 Is that the moment to buy bonds when we actually 0:06:38.520 --> 0:06:40.560 start to say that, or is there another reason why 0:06:40.680 --> 0:06:42.680 you just don't believe treasuries are going to play that 0:06:42.760 --> 0:06:43.599 role this time around. 0:06:43.880 --> 0:06:47.080 I think the underlying forces. We don't think inflation is resolved. 0:06:47.120 --> 0:06:50.080 I think the Fed last week has painted the most 0:06:50.080 --> 0:06:53.719 optimistic scenario on and they've included then in their forecasts 0:06:53.720 --> 0:06:54.360 on the tariffs. 0:06:54.360 --> 0:06:55.040 You don't buy it. 0:06:55.160 --> 0:06:55.760 I don't buy it. 0:06:55.839 --> 0:06:57.640 And then I think the fiscal side, I mean, we'll 0:06:57.640 --> 0:07:01.440 need to see, but we have hope of taxic extension 0:07:01.480 --> 0:07:03.560 coming in, so we know this is this is. 0:07:03.600 --> 0:07:06.800 UH going to make the deficit wider. 0:07:06.839 --> 0:07:10.560 If it's the only thing happening, the saving is much 0:07:10.600 --> 0:07:13.160 more concertain, and so I think the fiscal story remains 0:07:13.720 --> 0:07:15.800 one of deficits and putting pressure on meals. 0:07:15.840 --> 0:07:17.720 When you open up the SEP and you look at 0:07:17.720 --> 0:07:20.640 those forecasts from the Federal Reserve, which pace of that 0:07:20.720 --> 0:07:22.680 jumped up to you and said that's aspirational? 0:07:22.920 --> 0:07:23.600 I don't buy it. 0:07:24.520 --> 0:07:24.720 Well. 0:07:24.760 --> 0:07:26.840 To me, the most revealing part of the of the 0:07:27.560 --> 0:07:30.320 SEP and the press conference last week was when when 0:07:30.440 --> 0:07:32.880 asked about whether this is a one of story inflation. 0:07:33.280 --> 0:07:35.240 I think the chairman was very careful to say, well, 0:07:35.280 --> 0:07:36.120 we don't know for sure. 0:07:36.600 --> 0:07:39.480 Last time it was. But when he answered the question later. 0:07:39.440 --> 0:07:42.440 About like when they would get concerned about inflation, he said, well, 0:07:42.480 --> 0:07:44.920 if we were to see inflation appearing in as part 0:07:44.920 --> 0:07:47.280 of the economy that has nothing to do with with tariff, 0:07:47.320 --> 0:07:48.520 then we would get concerned. 0:07:48.960 --> 0:07:51.120 That's to me like doubling down on this is a 0:07:51.120 --> 0:07:51.480 one off. 0:07:51.480 --> 0:07:53.880 They see the tariff as being a one off, and 0:07:53.920 --> 0:07:56.000 so that that definitely stand stood out for me. 0:07:56.240 --> 0:07:57.480 Do you not think it is a one off. 0:07:58.440 --> 0:08:00.200 I think I think it could be. 0:08:00.080 --> 0:08:02.800 But it was last time because it was like very targeted. 0:08:03.440 --> 0:08:06.040 If we're talking about Broadbay's resetting of global trade, I 0:08:06.080 --> 0:08:07.880 think there's going to be adjustment. I think the cost 0:08:07.920 --> 0:08:11.240 of doing international production will be higher. And it's not 0:08:11.320 --> 0:08:13.440 like just a tax or a tariff. It's the broader 0:08:13.480 --> 0:08:15.000 adjustment higher cost of production. 0:08:15.080 --> 0:08:17.520 For some time, you've heard the argument from economists that 0:08:17.560 --> 0:08:21.200 because employment anxiety is higher now, the second round effects 0:08:21.240 --> 0:08:23.960 will be dampened. People won't be able to ask for 0:08:24.280 --> 0:08:26.400 a raise. You won't see those second or the second 0:08:26.480 --> 0:08:28.960 round effects of that spike in prices. 0:08:29.000 --> 0:08:30.320 What do you say back to those people. 0:08:30.920 --> 0:08:33.560 I think we have a very tight liberal market. I 0:08:33.600 --> 0:08:37.000 think the FED seasons are being balanced. I think we 0:08:37.080 --> 0:08:39.400 have seen over the last few years immigration playing a 0:08:39.440 --> 0:08:42.160 massive role in helping the liberal market cope with a 0:08:42.160 --> 0:08:43.040 lot of tightness. 0:08:43.360 --> 0:08:45.640 I think that is the big story going forward. 0:08:45.720 --> 0:08:48.800 So I'm not sure that the boggaining power for wage 0:08:48.840 --> 0:08:50.160 negotiations will shift that much. 0:08:50.160 --> 0:08:56.240 As for a pay raise, Really, you're on really a mission, man. 0:08:56.280 --> 0:09:00.559 I wonder what that psychology shame from them, you know. 0:09:01.440 --> 0:09:04.600 Employer and yeah, well I keep fitting it not asking 0:09:04.600 --> 0:09:09.040 for a bowl of whatever. It's Oliver, John Bava and 0:09:09.080 --> 0:09:21.880 Black Croc. Thank you, Thank you, Banks for America publishing 0:09:21.920 --> 0:09:25.280 its newest small Businesses Checkpoint. The team rights in the following. 0:09:25.520 --> 0:09:29.440 Despite continued optimism, small business uncertainty is on the rise. 0:09:29.679 --> 0:09:33.000 According to aggregated credit and debit card spending data, small 0:09:33.040 --> 0:09:37.280 businesses are slowing their card spending across the board. Sharon Miller, 0:09:37.320 --> 0:09:39.280 the President and co head of Business Banking and Bank 0:09:39.280 --> 0:09:40.440 for America, joined us now for more. 0:09:40.480 --> 0:09:41.800 Sharon, good to see you, good to see it. 0:09:42.120 --> 0:09:42.640 Good morning. 0:09:42.679 --> 0:09:45.120 Let's talk about the little spots of weakness that we're 0:09:45.120 --> 0:09:48.079 starting to see emerge. Where are they and what's behind it? 0:09:48.440 --> 0:09:52.839 Well, we are seeing weakness in manufacturing firms, especially the 0:09:53.040 --> 0:09:56.840 smaller manufacturing firms, so those with five hundred thousand revenue 0:09:56.880 --> 0:09:59.840 and below. But as you look at the larger companies, 0:10:00.000 --> 0:10:02.640 we are still seeing strength there. We're seeing strength and 0:10:02.760 --> 0:10:07.440 retailers with the exception of furniture, which. 0:10:07.240 --> 0:10:09.720 Really shows the sort of ad hoc nature of some 0:10:09.800 --> 0:10:12.360 of the threats and how different companies are responding to it. 0:10:12.400 --> 0:10:14.960 Before we dig into the specific sectors, I'm wondering the 0:10:14.960 --> 0:10:18.000 difference between big and small businesses you say small businesses 0:10:18.040 --> 0:10:20.959 are slowing their card spending across the board. Is that 0:10:21.000 --> 0:10:23.040 the right distinction to make small versus big? 0:10:23.320 --> 0:10:26.840 I would say small versus medium sized businesses. So when 0:10:26.840 --> 0:10:29.880 you think of our segments anywhere from startup to fifty 0:10:29.960 --> 0:10:32.360 million in revenues, so you have small and mid sized 0:10:32.400 --> 0:10:35.160 companies within there. But generally speaking, we're talking about a 0:10:35.160 --> 0:10:38.160 million dollar in below company. When we're seeing smaller businesses. 0:10:38.240 --> 0:10:40.640 What's the standout? What industry has been very strong at 0:10:40.640 --> 0:10:41.000 the moment. 0:10:41.280 --> 0:10:44.199 Well, we are seeing strength and retailers with the exception 0:10:44.240 --> 0:10:47.760 of furniture, but restaurant spending is strong. We are seeing 0:10:47.800 --> 0:10:53.120 strong strength and shopping going out to eat, all of 0:10:53.160 --> 0:10:56.880 those types of retailers, e commerce. So I think that 0:10:56.960 --> 0:10:59.920 there's some trends there, and so you have to see 0:11:00.040 --> 0:11:02.400 what the data is telling you, not necessarily what the 0:11:02.400 --> 0:11:03.520 consumer is telling you. 0:11:03.880 --> 0:11:07.840 Is this a leading indicator? Are these card data tending 0:11:07.960 --> 0:11:11.520 to a point to strength or weakness depending on where 0:11:11.520 --> 0:11:12.360 we are in the cycle. 0:11:12.480 --> 0:11:14.679 Well, I think it's a weight and see attitude. I mean, 0:11:14.720 --> 0:11:18.640 there are things on the horizon and some dependencies that 0:11:18.720 --> 0:11:22.880 businesses are thinking about, whether it's tariffs, the political environment, taxes. 0:11:23.120 --> 0:11:26.120 How is all that going to come to life as 0:11:26.160 --> 0:11:29.200 they're thinking about CAPEX for their business. 0:11:28.920 --> 0:11:31.080 Let's say on CAPEX, how do you get a decent 0:11:31.160 --> 0:11:35.280 idea of whether those CAPEX decisions aren't being delayed, pushed back, 0:11:35.559 --> 0:11:38.120 or just totally derailed. Which one do you think it 0:11:38.160 --> 0:11:38.760 is at the moment? 0:11:38.920 --> 0:11:40.960 I think it's delayed. I think it's a weight and 0:11:41.000 --> 0:11:45.240 see attitude where you're still seeing people spending on their business, 0:11:45.400 --> 0:11:48.360 albeit not as strong as we had seen last year. 0:11:48.480 --> 0:11:51.880 So there is some wait and see out there because 0:11:52.200 --> 0:11:54.720 they don't know what's going to happen. And so as 0:11:54.720 --> 0:11:57.000 I'm talking to clients around the country, that's what I'm 0:11:57.040 --> 0:11:59.640 hearing as well. We do want to expand we do 0:11:59.720 --> 0:12:02.080 want to invest in our business, but we're holding off 0:12:02.280 --> 0:12:04.040 just a bit to see what's going to happen. 0:12:04.120 --> 0:12:04.360 Sean. 0:12:04.400 --> 0:12:06.320 As you know, these companies have a massive role to 0:12:06.320 --> 0:12:09.520 play an employment in this country, and we're starting to 0:12:09.679 --> 0:12:12.200 focus even more on the hard day to the employment 0:12:12.280 --> 0:12:15.240 numbers that come in every week jobless claims. Now, if 0:12:15.280 --> 0:12:17.120 you go into a wait and see economy, how long 0:12:17.160 --> 0:12:19.040 before you start to say we're not going to hire, 0:12:19.120 --> 0:12:19.839 we're going to fire. 0:12:20.200 --> 0:12:21.040 Is there a lack of time. 0:12:21.160 --> 0:12:23.520 Is there a typical framework timeline to think about this, 0:12:23.640 --> 0:12:25.080 or we in no man's land. 0:12:25.520 --> 0:12:26.920 I wouldn't say we're in no man's land. 0:12:26.960 --> 0:12:29.240 I mean we've got to watch the data every week, 0:12:29.320 --> 0:12:32.200 every month and what's happening in the economy. But I 0:12:32.240 --> 0:12:35.600 would say that in business formation and those that are 0:12:35.640 --> 0:12:40.240 actually putting together plans to hire businesses, we are seeing 0:12:40.280 --> 0:12:43.400 an increase in the number of new businesses opened that 0:12:43.480 --> 0:12:46.480 are talking about I'm going to employ people, and so 0:12:47.040 --> 0:12:49.600 that is good news as you think about where we 0:12:49.640 --> 0:12:52.480 are today versus pre pandemic. 0:12:52.080 --> 0:12:55.400 Levels, Are there significant exceptions We were talking about sort 0:12:55.440 --> 0:12:57.400 of the ad hoc nature of who gets hurt and 0:12:57.400 --> 0:13:00.719 who doesn't. Are there areas small park where you are 0:13:00.760 --> 0:13:02.360 seeing real deterioration. 0:13:03.160 --> 0:13:05.960 I would say we are seeing, you know, a little 0:13:06.000 --> 0:13:09.560 bit of deterioration and manufacturing, especially in those firms less 0:13:09.600 --> 0:13:13.480 than five hundred thousand in revenues. In furniture, that's the 0:13:13.520 --> 0:13:17.679 only retail category that we did see a decline. And 0:13:17.720 --> 0:13:20.960 so those two areas are areas that we are watching. 0:13:21.080 --> 0:13:23.560 Find the retailer point absolutely fascinating and I think it 0:13:23.600 --> 0:13:26.280 reinforces what Chairman pow said just last week that you 0:13:26.320 --> 0:13:28.880 can read too much into the sentiment survey data is 0:13:28.920 --> 0:13:31.280 look at what people are doing and right now for him, 0:13:31.320 --> 0:13:33.280 for many for economists too, they're looking at the hard 0:13:33.360 --> 0:13:35.439 data and it's still holding up and there's not much 0:13:35.440 --> 0:13:35.960 to see here. 0:13:36.280 --> 0:13:38.600 When you take surveys online, there have been studies that 0:13:38.640 --> 0:13:40.640 show that people tend to say that they feel less good, 0:13:40.960 --> 0:13:43.120 and a lot of these surveys are online, and so 0:13:43.200 --> 0:13:45.040 they all ran to online. 0:13:44.720 --> 0:13:45.640 I feel terrible. 0:13:46.160 --> 0:13:48.520 Why and then they say, oh, I'm going to go shopping, 0:13:48.559 --> 0:13:50.079 you know, And this is sort of what has been 0:13:50.120 --> 0:13:53.199 bearing out retail fare exactly in the data. 0:13:53.000 --> 0:13:53.800 That sounded personal. 0:13:53.840 --> 0:13:56.920 Branmo's just saying, it's always you know, those texts that 0:13:56.960 --> 0:13:58.679 you said to people or you're just ranting and then 0:13:58.679 --> 0:14:00.360 you're like, Okay, now I'm done, move on. 0:14:00.480 --> 0:14:02.760 Is that how people approach you, Mitch? When it comes 0:14:02.760 --> 0:14:04.160 out on Friday, you are. 0:14:04.120 --> 0:14:06.680 My opinion on the world pretty much. 0:14:06.760 --> 0:14:08.760 Sharon is good to see as always. Thanks for being 0:14:08.760 --> 0:14:11.200 with us. We appreciate the update. Sharon millerde of Bank 0:14:11.240 --> 0:14:23.360 for America. Let's stick with the consumer investors looking ahead 0:14:23.360 --> 0:14:26.360 to consumer confidence and later on this week, Danna Tausi 0:14:26.400 --> 0:14:29.520 if the Taosi Advisory Group writing, frenetic is an app 0:14:29.520 --> 0:14:32.920 word to describe the current environment. Key measurements such as 0:14:32.960 --> 0:14:36.560 consumer sentiment and volatility in the stock market reflect the 0:14:36.640 --> 0:14:39.720 anxiety out there. Dana John just now for more, Donna, 0:14:39.720 --> 0:14:40.560 good to see what's. 0:14:40.320 --> 0:14:41.280 Always nice to see you. 0:14:41.320 --> 0:14:42.000 Thank you for having me. 0:14:42.080 --> 0:14:44.080 People pulling back, that's what we want to know. Do 0:14:44.120 --> 0:14:45.320 you see it in the channel checks? 0:14:45.600 --> 0:14:47.760 We are we are singing in the channel checks. When 0:14:47.760 --> 0:14:49.680 you look at the earnings results that are coming out 0:14:49.680 --> 0:14:53.800 from retailers lately, the fourth quarter almost feels divorced from 0:14:53.800 --> 0:14:56.080 what you have in the first quarter, and going forward, 0:14:56.400 --> 0:14:58.800 you look at the guidance that companies are giving out 0:14:58.840 --> 0:15:01.840 in the consumer space for the first quarter. In essence, 0:15:01.880 --> 0:15:04.440 we always know the consumer area is a third and 0:15:04.520 --> 0:15:08.520 fourth quarter weighted, but now the first quarter is expected 0:15:08.560 --> 0:15:11.280 to be for the most part, weaker than consensus and 0:15:11.320 --> 0:15:14.400 what consensus had out there, So you need to accelerate 0:15:14.520 --> 0:15:17.440 even more rapidly. And that word forrenetic the reason I 0:15:17.560 --> 0:15:22.320 like it. I looked up the definition anxiety indusive indusive 0:15:22.360 --> 0:15:25.600 activity in a wild and uncontrollable way, and that what 0:15:25.720 --> 0:15:26.600 it feels like today. 0:15:26.680 --> 0:15:29.640 Consumption has been super resilient for the last several years. 0:15:29.640 --> 0:15:32.120 But beneath the surface, beneath the headline numbers, it's been 0:15:32.200 --> 0:15:35.320 very bifurcated. Low income consumers have been squeezed for quite 0:15:35.360 --> 0:15:38.000 a while. A number of years now. High income consumers 0:15:38.000 --> 0:15:40.520 have held up. Is that still the case, because if 0:15:40.560 --> 0:15:42.520 they start to go, this is over? 0:15:42.880 --> 0:15:43.600 What's the story? 0:15:43.760 --> 0:15:47.240 I think the higher consumers moditorated. They're spending a bit. 0:15:47.440 --> 0:15:49.920 You look at what Delta Airlines said a few weeks ago, 0:15:49.960 --> 0:15:52.440 and Delta is the premier airline or the premium price 0:15:52.480 --> 0:15:55.240 of twenty percent or more. You're still seeing the uber 0:15:55.320 --> 0:15:58.400 high end doing very well. You look at Rmez's results 0:15:58.400 --> 0:16:01.640 and the double digit increases. But everyone else out there 0:16:01.840 --> 0:16:04.480 it's a state where it's not as robust as it 0:16:04.560 --> 0:16:08.160 had been, and consumers are discerning. Look at what Costco 0:16:08.240 --> 0:16:11.200 said where they've seen a shift to people eating at home, 0:16:11.480 --> 0:16:14.360 and we're seeing more evidence of that type of behavior. 0:16:14.680 --> 0:16:15.640 What do you need to win? 0:16:15.960 --> 0:16:19.520 You need newness, you need events, you need activation in 0:16:19.640 --> 0:16:23.160 order to drive interest. I was on Friday and on Saturday, 0:16:23.160 --> 0:16:25.080 I was downtown at the opening of the new print 0:16:25.160 --> 0:16:27.800 Tom's Department store, the first one here in the US, 0:16:28.040 --> 0:16:31.640 the weight was around the block, So there's interest in newness. 0:16:31.840 --> 0:16:34.200 Do we have a sense then, just to that point 0:16:34.320 --> 0:16:36.800 of who might be using this as an excuse the 0:16:36.840 --> 0:16:40.000 idea that there's consumer hesitancy. So when on kitchen sink 0:16:40.080 --> 0:16:42.840 it throw all your problems out there, clear the decks, 0:16:43.080 --> 0:16:44.080 and then do what you want. 0:16:44.480 --> 0:16:46.800 I think some of the companies overall who have been 0:16:46.840 --> 0:16:50.920 performing poorly you are able to do that. You've certainly 0:16:50.960 --> 0:16:54.040 taken a look at some of the lower end department 0:16:54.040 --> 0:16:56.800 stores that have had some of those issues, but many 0:16:56.880 --> 0:16:59.560 of the others they're hoping that they can still see 0:16:59.600 --> 0:17:04.280 that sell through the ones that are winning brand leaders, 0:17:04.680 --> 0:17:10.280 discounters and off pricers. You definitely see even the weakness 0:17:10.280 --> 0:17:12.919 and some of the luxury brands that haven't been as strong. 0:17:13.200 --> 0:17:15.320 You look at some of the European brands like Caring 0:17:15.680 --> 0:17:18.800 doesn't have the same robust posture that they had before, 0:17:19.000 --> 0:17:21.480 and they just found a new Gucci designers. So we'll 0:17:21.480 --> 0:17:24.720 see what happens. It'll be interesting to see LVMH's sales 0:17:24.760 --> 0:17:26.719 results when they report in mid April. 0:17:26.960 --> 0:17:29.879 Who do you think is going to be really caught 0:17:30.000 --> 0:17:31.920 in the crosshairs when it comes to tariffs. 0:17:32.240 --> 0:17:35.120 The areas that are being impacted the most from tariffs, 0:17:35.400 --> 0:17:37.760 it's definitely some of the footwear companies, some of the 0:17:37.800 --> 0:17:41.080 dollar stores, and the speed which you need to diversify. 0:17:41.560 --> 0:17:44.400 You can do three things. You diversify to other areas, 0:17:44.520 --> 0:17:46.720 you split the cost with the manufacturers, or and you 0:17:46.840 --> 0:17:51.400 raise prices. But diversifying and paying the cost with manufacturers 0:17:51.480 --> 0:17:55.120 or them diversifying it takes time. There's a reason companies 0:17:55.119 --> 0:17:57.720 went to China. It's fast and the labor knew what 0:17:57.760 --> 0:17:59.280 to do and it's cost effective. 0:17:59.400 --> 0:18:01.720 But when it comes to April second, we're going to 0:18:01.760 --> 0:18:03.600 get this quote liberation day. Maybe it's going to be 0:18:03.680 --> 0:18:06.960 more selective than a broad scope. How are these companies 0:18:07.000 --> 0:18:09.400 preparing for that they're not being able to move manufacturing 0:18:09.400 --> 0:18:10.240 a matter of weeks. 0:18:10.560 --> 0:18:13.240