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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live

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Speaker 2: weekdays at ten am Eastern on focarplaying Enroud Auto with

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Speaker 2: the Bloomberg Business App. Listen on demand wherever you get

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Speaker 2: your podcasts, or watch us live on YouTube.

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Speaker 3: Let's get over to Dave Peacock. He's the CEO of

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Speaker 3: Advantage Solutions. He joins us live from Saint Louis, Missouri,

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Speaker 3: and we want to talk a little bit about retail

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Speaker 3: sales and the economic data that we got in this morning. Dave,

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Speaker 3: I see retail sales coming in stronger than anticipated on

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Speaker 3: the headline, but if you take out.

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Speaker 4: Cars, they're weaker. Cars and gas they're weaker.

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Speaker 5: What's your view.

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Speaker 6: Yeah, we're seeing i'd say resilient consumer, but at the

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Speaker 6: same time a little bit sluggish, especially in the space

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Speaker 6: where we work, which is food and personal care, primarily

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Speaker 6: the retail sector. And some of that is because of

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Speaker 6: the twenty two percent higher prices for groceries that you've

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Speaker 6: seen kind of coming out of the pandemic. Well, wages

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Speaker 6: are catching up with that. I think for certain consumers

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Speaker 6: it's forced them to go value seeking.

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Speaker 7: Are we still way above pre pandemic levels. As far

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Speaker 7: as things like that, the stuff that I actually.

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Speaker 6: Use and eat, we are so depending on the category,

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Speaker 6: but overall groceries are around twenty two percent higher than

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Speaker 6: they were pre pandemic.

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Speaker 7: As far as promotions, I want to set the table

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Speaker 7: for Thanksgiving, so to just stick to promotions, the thing

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Speaker 7: that the things that are discounting.

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Speaker 6: You know, our proprietary research, the advantage we've got says

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Speaker 6: that forty percent of shoppers are going to either pull

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Speaker 6: back or trade down as a shop for the holidays.

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Speaker 7: So when you have to trade down from a turkey, though, well.

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Speaker 6: Side be honest because it's ull per pounds, so you

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Speaker 6: might actually see people buy a smaller turkey.

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Speaker 7: You also have.

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Speaker 6: Different price points if it's frozen or fresh. And then

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Speaker 6: if you look at the other items in the store,

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Speaker 6: you're seeing private label products growing in the retail sector

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Speaker 6: while national brands are flattish to declining of it.

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Speaker 3: So rather than go with the butterball, you look at

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Speaker 3: the Kirkland turkey. Are consumers trading down still from you

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Speaker 3: name brand stores. I'm not going to go to Chico's,

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Speaker 3: I'm more likely to go to Costco.

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Speaker 5: Is that the case with everybody else.

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Speaker 6: You're continuing to see channel shift into the value segment,

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Speaker 6: into the club stores, into mass merge, and so yeah,

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Speaker 6: you are seeing that channel shift with with some consumers.

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Speaker 3: Are you seeing the discounting? I mean John mentions it,

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Speaker 3: he's always on the lookout.

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Speaker 5: For a sale.

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Speaker 3: But are producers offering discounts more than they normally would

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Speaker 3: around the season?

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Speaker 6: You know you're seeing continue discounting, But if you look

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Speaker 6: at percent of volume within the grocery store more broadly

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Speaker 6: sold on deal or sold on promotion, we're still actually

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Speaker 6: a little bit below pandemic levels. What consumers are doing

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Speaker 6: to value seek is some are looking for promotions, but

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Speaker 6: at a lower rate overall than pre pandemic. But they

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Speaker 6: are looking at private label and they are looking at

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Speaker 6: different channels where prices can be lower.

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Speaker 7: If retail sales are up in this period, does that

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Speaker 7: mean debt is also? Are they putting it on credit cards?

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Speaker 6: Do you measure that you are seeing credit card balances

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Speaker 6: increase and an increase somewhat dramatically. When you look at

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Speaker 6: items like food and personal care, they tend to be

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Speaker 6: within the normal budget on a month to month basis

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Speaker 6: for most consumers, and so where you're seeing debt creep

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Speaker 6: up potentially is things like higher value durable goods.

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Speaker 7: This is a question for both of you, who can

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Speaker 7: afford a new car of these days? Well, I mean, it's.

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Speaker 5: Not average, it's not the average, Jill right. I'll just

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Speaker 5: step in John and say.

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Speaker 3: Bloomberg News did a great story last week pointing out

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Speaker 3: that even you know, the top quintile is finding it

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Speaker 3: difficult to afford a new car, and therefore look at

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Speaker 3: used cars.

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Speaker 4: That's why you.

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Speaker 3: Know, you see the retail number, retail sales advancing month

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Speaker 3: over month zero point four percent. We were only looking

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Speaker 3: for zero point three percent. So it's doing well. Then

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Speaker 3: you look at the x auto number and it's doing poorly,

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Speaker 3: and I guess that's because the price of new cars

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Speaker 3: is just so high.

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Speaker 4: Is that is that the case, Dave?

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Speaker 6: I think that's the case. And you know you're looking

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Speaker 6: at dollar increases and so the pricing plays a factor.

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Speaker 6: So one thing that we look at, because we operate

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Speaker 6: in the retail space of grocery stores, convenience stores mass merged.

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Speaker 6: But if you look at restaurants, you saw I think

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Speaker 6: zero point seven percent in the service sector growth but

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Speaker 6: pricing overall in food away from home has been growing

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Speaker 6: at three plus times the rate of food at home recently,

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Speaker 6: so food at home is prices have been going up

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Speaker 6: around one one and a half percent in the last year,

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Speaker 6: and food away from home and restaurants has been closer

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Speaker 6: to three and a half to four.

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Speaker 5: But on the.

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Speaker 3: Durable goods, do you see prices of other you know,

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Speaker 3: big ticket items like appliance is as high as they

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Speaker 3: are with automobiles.

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Speaker 6: Yeah, you're seeing pretty inflated pricing. And what's you know,

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Speaker 6: I don't know because we don't work in the automobile space,

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Speaker 6: But the question would be how much inventory or dealers

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Speaker 6: holding and how what kind of deals are being offered

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Speaker 6: by both dealers and manufacturers to get product off.

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Speaker 7: These lots going forward. Are retailer's confident that they can

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Speaker 7: still pass costs along to consumers?

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Speaker 6: Yeah, I think it's to some degree, And it's really

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Speaker 6: a question of manufacturers more than retailers, because retailers are

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Speaker 6: often the one receiving runs, receiving the pricing. There are

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Speaker 6: commodities depending on what you're making, what food you're providing,

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Speaker 6: what personal care item for instance, that are still increasing

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Speaker 6: or still at elevated levels, and so you know, cocoa

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Speaker 6: and chocolate is a good example of that, and we

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Speaker 6: saw that during Halloween and it certainly suppressed some of

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Speaker 6: the volume during the Halloween windows. So people are going

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Speaker 6: to pass it on when they have to, but I

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Speaker 6: think they're more reticent given the economic reality.

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Speaker 7: What does all this mean for the holiday shopping season.

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Speaker 6: It's a short season, right, so we have a late

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Speaker 6: Black Friday, we have a late Thanksgiving, and so you

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Speaker 6: know the season will spread over twenty two or so

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Speaker 6: days versus thirty four. And I think it'll be interesting

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Speaker 6: to see how supply chains hold up relative to a

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Speaker 6: more compressed demand. Sixty three percent of shoppers, based on

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Speaker 6: our research, indicate they're going to shop a little earlier,

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Speaker 6: so we may be seeing some of that creeping in

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Speaker 6: earlier in November. So it'll be interesting to see where

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Speaker 6: the retail sales come out for the next month.

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Speaker 7: Hey, can you address for us the divide between the

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Speaker 7: haves and have nots and what the overall retail picture

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Speaker 7: looks like right now?

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Speaker 6: When you say have and have nots, do you mean

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Speaker 6: by retailer or by consumer?

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Speaker 7: Well, we'll do both.

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Speaker 6: I suppose yeah, I mean what we're seeing, let's look

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Speaker 6: at the consumer, because I think everything starts there. What

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Speaker 6: we see is, you know, lower income consumers are really

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Speaker 6: kind of strained in this economy, especially with the elevated

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Speaker 6: grocery prices we talked about, which are a day to

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Speaker 6: day item, and so they're the ones that are going

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Speaker 6: to different channels. They may be pulling back a bit

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Speaker 6: on their purchases, which is why you're seeing slower volume,

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Speaker 6: and they are looking at private label products on the

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Speaker 6: upper end. One thing, at least in the food space

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Speaker 6: where we operate, you are seeing for some is golp

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Speaker 6: one drugs. You know, is as much as fifteen percent

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Speaker 6: of a company's pharmaceutical expenses within their benefits plans. Kimmy

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Speaker 6: going now to golp one drugs. Depending on the company,

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Speaker 6: it's not saying it's everywhere, but there is a belief

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Speaker 6: that it is having an impact on demand, especially for

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Speaker 6: that higher lend consumer. They can afford those medications.

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Speaker 3: Yeah I can't afford them, but I can't wait to

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Speaker 3: get my hands on some weig of eurozempic.

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Speaker 7: Doesn't your healthcare plan pay for that?

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Speaker 5: They won't? They say, I'm not fat enough yet.

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Speaker 7: But what about me?

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Speaker 5: I'm doing my best.

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Speaker 3: John Tucker, we can both try and find it from

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Speaker 3: an unregistered pharmacy.

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Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live

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Speaker 2: in ten am Eastern on applecar Play and Android Auto

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Speaker 2: with the Bloomberg Business Act. You can also listen live

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Speaker 2: on Amazon Alexa from our flagship New York station, Just

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Speaker 2: Say Alexa Play Bloomberg eleven thirty.

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Speaker 3: Let's shift gears a little bit to politics, or least

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Speaker 3: large corporate involvement in politics. Brook Sutherland joins us Bloomberg's

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Speaker 3: Boston bureau chief. She's also the writer of the Industrial

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Speaker 3: Strength newsletter, and she has a story out on the

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Speaker 3: terminal entitled Nobody Knows What's going to Happen CEO's Brace

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Speaker 3: for More Trump Brooke, it's interesting you kick off the

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Speaker 3: story talking about how corporate leaders just really didn't want

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Speaker 3: the same thing that the American public wanted, and that

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Speaker 3: is Donald Trump in a second term.

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Speaker 8: Yes, I mean, I think you know, if you look

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Speaker 8: at a lot of the post is that he has proposed,

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Speaker 8: they're not necessarily pro business. You know, of course you

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Speaker 8: have the prospect of lower regulation, lower taxes. Those are

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Speaker 8: the types of things that businesses love to hear. But

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Speaker 8: you also have the disability of a trade war, and

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Speaker 8: you know, a reignition of inflation, which is not helpful

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Speaker 8: for business leaders. And then you know there's also just

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Speaker 8: the chaos factor, you know, the possibility of governance by

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Speaker 8: tweet returning and becoming sort of a commonplace thing. I

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Speaker 8: think we all all forget a little bit about what

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Speaker 8: exactly it was like during Trump's first term, but he

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Speaker 8: would rather frequently target specific companies who he was frustrated

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Speaker 8: for for whatever different reason, and that creates a lot

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Speaker 8: of volatility, a lot of instability for these companies that

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Speaker 8: really crave predictability and like to make their decisions on

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Speaker 8: a playing field that they understand and can anticipate.

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Speaker 3: On the other hand, did you hear Jamie Diamond talking

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Speaker 3: to Lisa Bromwitz yesterday from the APEC summit in Peru.

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Speaker 4: He said, bank.

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Speaker 3: Leaders, whether they voted for Trump or Kamala Harris, were

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Speaker 3: dancing in the streets.

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Speaker 5: He was pretty upbeat.

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Speaker 8: Brooke, Well, I think it might on one industry you're in.

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Speaker 8: I mean, I think banking is certainly one that expects

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Speaker 8: to see a lot of relief on the regulatory front

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Speaker 8: and probably would be less likely to be directly affected

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Speaker 8: by anything like tariffs. Whereas manufacturers, even those with substantially

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Speaker 8: US manufacturing operations, it's extremely rare for those companies to

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Speaker 8: have entirely domestic supply chains. They like to talk a

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Speaker 8: lot about local for local manufacturing, but what that means

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Speaker 8: is North America in terms of supplying their US operations.

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Speaker 8: It's not necessarily just America. And so a lot of

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Speaker 8: these companies rely on raw material or component imports to

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Speaker 8: some extent, and all of that could potentially be vulnerable

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Speaker 8: under the tariffs that Trump has proposed. Now there is

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Speaker 8: a sense that, you know, some of this is perhaps bluster,

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Speaker 8: it's a negotiating tactic that you know, the policies that

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Speaker 8: he's put out there, whether it's sixty percent tariffs on

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Speaker 8: China goods, you know, up to one hundred percent tariffs

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Speaker 8: on goods from Mexico, ten to twenty percent on everybody else,

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Speaker 8: that these are not necessarily the final destination. It's you know,

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Speaker 8: meant to be more sort of a negotiating tactic. And

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Speaker 8: if that is the case, then you know, I think

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Speaker 8: a lot of these companies have shown an ability to

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Speaker 8: be adept and pivot their supply chains. But I think

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Speaker 8: it's very unpredictable right now and it's not entirely clear

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Speaker 8: what his goals are. And he has focused a lot

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Speaker 8: on Mexico. And if you look at Mexico, that really

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Speaker 8: was one of the biggest beneficiaries of the tariffs from

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Speaker 8: his last term, you know, because a lot of companies

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Speaker 8: who had supply chains in China decided to bring those

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Speaker 8: back to North America. But they didn't put them in

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Speaker 8: the US. They put them in Mexico, which has seen

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Speaker 8: you know, a really big boom and spending, specifically by manufacturing.

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Speaker 7: Yeah, is there really a cost effective way for companies

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Speaker 7: to bring their stuff back to the United States.

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Speaker 8: Well, to do it effectively, you have to have robots

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Speaker 8: or automation. And you know, there are some industries for

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Speaker 8: which that works better, for which it you know, makes

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Speaker 8: more sense to invest in automation, and there are others

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Speaker 8: for which it is much trickier. And you know, some

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Speaker 8: of the companies that have been investing in Mexico are

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Speaker 8: doing so part because they really struggle to find the

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Speaker 8: labor that they need in the US. And so you know,

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Speaker 8: whether or not you have automation, just getting that the

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Speaker 8: people that you need can be very challenging. And even now,

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Speaker 8: you know, as we've seen sort of some of these

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Speaker 8: labor shortages ease, you still hear manufacturers talking all the

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Speaker 8: time about how difficult it is to get a quality workforce.

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Speaker 8: And it's important to remember that this was a challenge

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Speaker 8: for the industry even before the pandemic, which certainly exacerbated things.

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Speaker 8: But this has been sort of a long standing issue

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Speaker 8: in the US. Factory jobs tend to be very rigid.

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Speaker 8: There's no work from Hull. They tend to operate on

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Speaker 8: like a very set schedule, and that is not appealing

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Speaker 8: to a lot of the American population.

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Speaker 3: Yeah, it's I think a fascinating story and a fascinating topic.

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Speaker 3: I just spoke with Peter Rollinson, the CEO of Lucid,

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Speaker 3: and we were asking him if he was bummed about

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Speaker 3: maybe losing the tax credit or the fact that his

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Speaker 3: chief rival, Elon Musk is like best friends with Donald

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Speaker 3: Trump now, and he pointed out, Hey, you know, we

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Speaker 3: build and produce our pus here in the United States

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Speaker 3: of America, and I think Donald Trump wants to keep

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Speaker 3: manufacturing here.

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Speaker 7: One of the things that CEOs and investors always want

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Speaker 7: is certainty.

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Speaker 5: It doesn't sound like from that that's true, and that's.

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Speaker 7: Reporting that they're getting much of it right now.

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Speaker 3: I think Brook's main point. Brook, thanks so much for

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Speaker 3: joining us. Definitely recommend you read the story. Nobody knows

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Speaker 3: what's going to happen. CEOs brace for more Trump.

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Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live

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Speaker 2: weekdays at ten am Eastern on Apple Car playing Android

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Speaker 2: Outo with the Bloomberg Business app. Listen on demand wherever

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Speaker 2: you get your podcasts, or watch us live on YouTube now.

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Speaker 3: We had seen shares of Tesla and Rivian sliding yesterday

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Speaker 3: on a report that Trump plans to acts the seventy

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Speaker 3: five hundred dollars EV tax credit put in place unto

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Speaker 3: the Biden administration. You do see Tesla shares bouncing back

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Speaker 3: a bit today. They're up three and a half percent

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Speaker 3: after falling five point eight percent yesterday. Rivian, though still down,

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Speaker 3: and I spoke earlier this morning with the CEO of Lucid,

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Speaker 3: Peter Rollinson. His shares are off another four percent a

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Speaker 3: day after falling five percent yesterday and have hit an

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Speaker 3: all time low at less than two dollars Rivian or sorry,

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Speaker 3: Lucid trading for a dollar ninety nine a share. I

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Speaker 3: want to bring in Steve Man, Bloomberg Intelligence, Global autos

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Speaker 3: and Industrial Research Manager, and Steve, I guess the main question,

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Speaker 3: how will the EV industry be affected by the Trump administration?

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Speaker 9: Yeah, if Trump decides to kind of remove or cut

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Speaker 9: the seventy five hundred tax credit or EV tax credit,

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Speaker 9: I think most people believe that the EV penetration will stall.

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Speaker 9: If not stall, it will probably fall because a lot

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Speaker 9: of the consumers are relying on that that's seventy five

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Speaker 9: hundred dollars to make sure, you know, to bring down

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Speaker 9: the price, the effective price of the vehicle. Most evs

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Speaker 9: sold in America are still very expensive. There's only a

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Speaker 9: limited number of them that are under fifty thousand dollars.

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Speaker 9: So the fear is, uh, you know, it's going to

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Speaker 9: stall EV penetration. The automaker is going to have a

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Speaker 9: hard time because they's already invested. They've already committed investing

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Speaker 9: a lot of money under the Inflation Reduction Act, about

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Speaker 9: one hundred and over one hundred and fifty billion dollars

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Speaker 9: to onshore a lot of supply chains. So it's going

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Speaker 9: to cost a lot of chaos within the industry.

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Speaker 7: So they'll be under no pressure whatsoever moving forward, possibly

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Speaker 7: to increase sales of evs.

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Speaker 9: Yeah, I think the automakers are going to have to

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Speaker 9: increase incentives. I think what could happen if the EV

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Speaker 9: penetration rate does decrease from about eight percent currently in

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Speaker 9: the US. You know you're gonna lead.

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Speaker 5: He's gonna be.

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Speaker 9: Left with the strongest players, And that to me, that

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Speaker 9: looks like it's Tesla, because Tesla does have the lowest

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Speaker 9: costs structure amongst all the EV makers in the US,

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Speaker 9: and if the market shrinks, the weaker ones will probably

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Speaker 9: fall on the wayside.

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Speaker 7: And oddly enough, First Bro or what do we call him,

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Speaker 7: first friend, Elon Musk, he's not necessarily in favor of

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Speaker 7: these these tax subsidies for evs.

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Speaker 9: Yeah, I think, you know, to him, I don't. He

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Speaker 9: thinks Tesla doesn't need them, And you know, it's it's

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Speaker 9: partly true if you look at the amount of cars

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Speaker 9: that are least and eligible for the seventy five hundred.

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Speaker 9: Actually a lot of the seventy five hundred tax credit

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Speaker 9: as actually from leased vehicles If you look at the

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Speaker 9: amount of leased vehicles that Tesla have sold in the

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Speaker 9: past twelve months, it's about twenty percent, so you know

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Speaker 9: they'll get impacted. But if you compare it to Rivian,

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Speaker 9: you know, Rivian has about fifty percent of their vehicles

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Speaker 9: and those and eligible for the seventy five hundred, so

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Speaker 9: it could be a bigger impact in Rivian. Then that's

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Speaker 9: probably why you're seeing their stop falling much more.

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Speaker 3: Yeah, there's a limit on you don't get the tax

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Speaker 3: credit if you're buying a vehicle that costs more than

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Speaker 3: eighty thousand dollars. And I believe there's a household income

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Speaker 3: requirement as well, you have to be below a certain level.

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Speaker 3: But if you lease it, you can get around at

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Speaker 3: least one part of that tax credit.

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Speaker 5: Isn't that right, Steve? That's right.

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Speaker 9: That's actually what I'm referring to. So when we look

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Speaker 9: at the companies who's going to get impacted, we really

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Speaker 9: look at, you know, how many of those vehicles are leased.

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Speaker 9: If you look at EV's in general in the US,

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Speaker 9: the you know, the leasing penetration is actually upwards of

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Speaker 9: seventy five eighty ninety percent, so a lot of people

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Speaker 9: that actually buy evs are leasing it to get that

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Speaker 9: seventy five hundred dollars.

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Speaker 3: What does the EV market look like right now? I mean,

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Speaker 3: I know, if you read the headlines, you would think

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Speaker 3: that no one has bought an this year. Like you know,

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Speaker 3: the industry is in trouble because they're so unpopular, not

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Speaker 3: just politically, but you know, since there's difficult to charge

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Speaker 3: for a lot of people, it's just not an option. However,

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Speaker 3: don't we still see EV sales actually growing?

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Speaker 2: Oh?

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Speaker 5: We are.

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Speaker 9: We are seeing EV sales growing, especially in the second

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Speaker 9: half of this year, because there's been a lot of

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Speaker 9: price cuts right over the past eighteen twenty four months

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Speaker 9: in the industry and a lot of these vehicles have

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Speaker 9: become more affordable, and even especially in the used EV market,

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Speaker 9: those vehicles are very competitive to gasoline cars. What the

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Speaker 9: industry is really facing is really it's affordability, and it's exaggerating.

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Speaker 9: It's getting more impacted by the fact that interest rates

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Speaker 9: are high. A lot of people cannot afford expensive cars

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Speaker 9: these days, and EV's are a little bit more expensive

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Speaker 9: than ice at the moment. So what the industry was

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Speaker 9: trying to do, and I think what the IRA was

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Speaker 9: trying to dude. We're trying to onshore a lot of

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Speaker 9: the production well on shore, a lot of the supply

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Speaker 9: chain in the US in hopes of braining costs down

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Speaker 9: so automakers can offer more affordable evs. And that's what

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Speaker 9: we were expecting. We were actually expecting the EV penetration

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Speaker 9: rate to rise, especially into twenty twenty six and twenty

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Speaker 9: twenty seven.

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Speaker 3: I got to break in here because I feel like,

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Speaker 3: you know, Americans have shown a propensity for taking one

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Speaker 3: thousand dollars plus monthly payments. I don't think it's about

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Speaker 3: the price. Frankly, what do you are that's the big problem.

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Speaker 3: I'm test driving right now at GMC Sierra EV. It

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Speaker 3: is a fantastic vehicle. It's expensive, but I think a

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Speaker 3: lot of people are willing to take on debt to

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Speaker 3: own a car like that.

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Speaker 4: The problem is there's nowhere to charge it.

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Speaker 3: I park in a garage across the street in Manhattan,

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Speaker 3: you know, capital of the world, and the only option

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Speaker 3: they offer is the slowest potential charge for twenty dollars

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Speaker 3: a day.

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Speaker 5: So it's just not worth it.

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Speaker 9: Yeah, think that's a very good point. Affordabuild. It is

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Speaker 9: not the only hurdle. It's the charging and the range,

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Speaker 9: and you know, depending on the use, I think a

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Speaker 9: lot of people with the second vehicle may may get

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Speaker 9: an EV. Uh, someone who's using it for daily commutes

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Speaker 9: make an EV. But you know, America is a big

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Speaker 9: country and people love to drive cars, and there are

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Speaker 9: a big majority of car buyers that are you know,

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Speaker 9: are you know, probably staying away from EV.

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Speaker 5: Because of that?

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Speaker 4: All right, Steve, great update, We got to hang out man.

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Speaker 5: I need to talk to you a little bit more.

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Speaker 3: Steve Man there Bloomberg Intelligence, Global Autos and Industrial.

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Speaker 5: Steef, not me research manager.

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Speaker 3: He knows more about cars than you do, and that's

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Speaker 3: what I want to rap with him about.

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Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live

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00:20:51,760 --> 00:20:54,800
Speaker 2: weekdays at ten am Eastern on Apple car Play and

406
00:20:54,800 --> 00:20:57,720
Speaker 2: Android Auto with the Bloomberg Business Act. You can also

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00:20:57,800 --> 00:21:00,960
Speaker 2: listen live on Amazon Alexa from our flagship New York

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00:21:01,040 --> 00:21:04,040
Speaker 2: station just say Alexa playing Bloomberg eleven.

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Speaker 5: I know that you have plans tonight.

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Speaker 7: We were just talking about it.

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Speaker 3: You're an empty nester, right, You're gonna You're gonna hit

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Speaker 3: the town with some Wall Street big wigs. I, however,

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Speaker 3: have little kids at home, so I don't get to

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Speaker 3: go out.

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Speaker 5: But I'm excited.

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Speaker 3: Nonetheless because iron Mike Tyson, a fifty eight year old

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Speaker 3: man is preparing to knock out a twenty seven year

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Speaker 3: old punk on Netflix. And there's no way I'm gonna

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Speaker 3: miss that. Keitha wrong And Athen joins us right now

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Speaker 3: Bloomberg Intelligence analysts for US Media, and she covers a

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Speaker 3: course Netflix as well out of Princeton, New Jersey.

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Speaker 7: Is he really expected to win this thing.

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Speaker 5: Mike Tyson?

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Speaker 3: He's not gonna lose a boxing match to fifty eight,

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Speaker 3: all right, Keith.

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Speaker 4: I don't know if you've got the odds on the fight,

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Speaker 4: But what is this event?

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Speaker 3: I never I hadn't really realized it was going to

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Speaker 3: be on my TV until I started reading the news

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Speaker 3: this morning.

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Speaker 4: Yeah.

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Speaker 10: I mean, there's just been so much buzz building up

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Speaker 10: for this matchup. It's been heavily promoted, heavily hyped, and

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Speaker 10: I mean regardless of whether Mike Tyson or Jake Paul,

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Speaker 10: regardless of who wins that. I mean, obviously the big

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Speaker 10: winner in either case is going to be Netflix. You know,

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Speaker 10: they have over two hundred and eighty million subscribers all

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Speaker 10: across the world. This is by far their biggest foray

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Speaker 10: into live sports. And remember they're really trying to build

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Speaker 10: a business here from scratch, that business being the advertising business,

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Speaker 10: and you need eyeballs for that, and they know they

442
00:22:34,560 --> 00:22:37,760
Speaker 10: will get the eyeballs with this matchup.

443
00:22:37,880 --> 00:22:40,399
Speaker 7: So how many people signed up just to see this

444
00:22:40,560 --> 00:22:41,000
Speaker 7: match that?

445
00:22:41,119 --> 00:22:43,200
Speaker 4: I so we are.

446
00:22:43,400 --> 00:22:46,399
Speaker 10: You know, we've obviously I think everybody who wants a

447
00:22:46,400 --> 00:22:49,879
Speaker 10: Netflix subscription already kind of has one, but you know,

448
00:22:49,960 --> 00:22:52,720
Speaker 10: for those who probably don't have one, I think this

449
00:22:52,800 --> 00:22:55,840
Speaker 10: is obviously going to give them that impet us to join,

450
00:22:56,240 --> 00:22:59,120
Speaker 10: and we think it'll actually end up triggering a lot

451
00:22:59,160 --> 00:23:02,760
Speaker 10: more subscribe viers to go on the advertising tier, which

452
00:23:02,840 --> 00:23:05,399
Speaker 10: is one of the cheaper options out there at seven

453
00:23:05,440 --> 00:23:08,960
Speaker 10: dollars a month. And that's actually what Netflix really wants

454
00:23:09,000 --> 00:23:10,320
Speaker 10: because at the end of the day, they want to

455
00:23:10,359 --> 00:23:12,480
Speaker 10: kind of build up that viewer base so that they

456
00:23:12,560 --> 00:23:16,080
Speaker 10: can sell ads against that. So we're actually projecting that,

457
00:23:16,200 --> 00:23:19,919
Speaker 10: you know, Netflix over the course of the entire quarter

458
00:23:20,440 --> 00:23:23,560
Speaker 10: will actually end up adding about ten more than ten

459
00:23:23,560 --> 00:23:26,760
Speaker 10: million subscribers, which is a really healthy number for the

460
00:23:26,760 --> 00:23:27,359
Speaker 10: fourth quarter.

461
00:23:27,520 --> 00:23:30,040
Speaker 7: I remember the conversation my brother had with my father

462
00:23:30,200 --> 00:23:33,840
Speaker 7: way way way back when to get cable. The great

463
00:23:33,840 --> 00:23:38,080
Speaker 7: thing about cable they don't have any ads. How quickly

464
00:23:38,119 --> 00:23:39,960
Speaker 7: that changed. Yeah, now it's changing.

465
00:23:39,640 --> 00:23:42,439
Speaker 5: For streaming, dreaming, streaming as well, KEITHA.

466
00:23:42,520 --> 00:23:45,680
Speaker 3: The main question, and I don't know if you're read

467
00:23:45,720 --> 00:23:49,080
Speaker 3: in on this that I have, is is it a

468
00:23:49,119 --> 00:23:49,760
Speaker 3: real fight?

469
00:23:50,160 --> 00:23:51,080
Speaker 4: Is it a setup?

470
00:23:51,320 --> 00:23:54,120
Speaker 3: I mean, are these two really gonna go at each other?

471
00:23:55,119 --> 00:23:57,880
Speaker 4: No, hold bar, It's a real fight.

472
00:23:58,000 --> 00:24:01,280
Speaker 10: This is not WWE where it's stayed, so it's a

473
00:24:01,320 --> 00:24:03,320
Speaker 10: real fight. I mean, I know all the bets are

474
00:24:03,320 --> 00:24:07,400
Speaker 10: out there, so you know everybody's excited.

475
00:24:07,840 --> 00:24:08,600
Speaker 5: Yeah, I'm pumped.

476
00:24:08,760 --> 00:24:12,240
Speaker 7: This gives you some indication of like just boxing in channel.

477
00:24:12,280 --> 00:24:15,520
Speaker 7: Can you name who is the world heavyweight champion right now?

478
00:24:15,680 --> 00:24:16,480
Speaker 5: No idea.

479
00:24:16,560 --> 00:24:18,720
Speaker 3: But I also don't really know who Jake Paul is,

480
00:24:19,160 --> 00:24:22,880
Speaker 3: so I'm not caught up on non financial news.

481
00:24:23,200 --> 00:24:24,719
Speaker 5: In terms of entertainment.

482
00:24:24,960 --> 00:24:28,200
Speaker 3: The only thing I know is like what drives money

483
00:24:28,240 --> 00:24:32,080
Speaker 3: making and streaming and squid Game is one of those things.

484
00:24:32,160 --> 00:24:32,480
Speaker 5: KEITHA.

485
00:24:33,160 --> 00:24:35,600
Speaker 3: I think a ton of people watched this, and my

486
00:24:35,800 --> 00:24:38,639
Speaker 3: sense is you had to get to the end, and

487
00:24:38,680 --> 00:24:42,359
Speaker 3: when you did, you realized what an incredibly depressing, like

488
00:24:42,480 --> 00:24:45,840
Speaker 3: disappointing letdown. I never want to go through something like

489
00:24:45,880 --> 00:24:49,439
Speaker 3: that again. I would pay money not to watch Squid

490
00:24:49,480 --> 00:24:54,439
Speaker 3: Game again. But Netflix is going to bring out another

491
00:24:54,520 --> 00:24:56,520
Speaker 3: season of this. Is it going to do well?

492
00:24:56,600 --> 00:24:58,600
Speaker 5: Or have we all learned our lesson.

493
00:25:00,000 --> 00:25:02,760
Speaker 10: Want to be gangbusters? I mean, Squid Game one was

494
00:25:03,520 --> 00:25:07,600
Speaker 10: by far the most watched series for Netflix ever. And

495
00:25:07,680 --> 00:25:10,600
Speaker 10: why that's surprising is because this is a non English series.

496
00:25:10,640 --> 00:25:12,480
Speaker 10: I mean, this, this came out of Korea. It was

497
00:25:12,520 --> 00:25:15,000
Speaker 10: made for you know, you have series here that are

498
00:25:15,000 --> 00:25:17,520
Speaker 10: made for something like three hundred four hundred million. This

499
00:25:17,680 --> 00:25:20,439
Speaker 10: entire series was made for something like less than twenty

500
00:25:20,480 --> 00:25:23,000
Speaker 10: million when when it first came out. So it just

501
00:25:23,080 --> 00:25:26,320
Speaker 10: kind of showed how, you know, hits can be generated anywhere,

502
00:25:26,480 --> 00:25:31,119
Speaker 10: how content can resonate across the globe. And Netflix will will,

503
00:25:31,320 --> 00:25:33,639
Speaker 10: you know, obviously go all out on the second season,

504
00:25:33,680 --> 00:25:35,679
Speaker 10: just kind of knowing how much of buzz and how

505
00:25:35,760 --> 00:25:39,240
Speaker 10: much of anticipation has been built already, you know, for

506
00:25:39,320 --> 00:25:40,760
Speaker 10: the after the first season launched.

507
00:25:41,000 --> 00:25:43,479
Speaker 7: So the Korean producers this time or are they challenging

508
00:25:43,800 --> 00:25:45,720
Speaker 7: Netflix a premium for this programming.

509
00:25:46,680 --> 00:25:48,160
Speaker 10: I'm absolutely sure that they are.

510
00:25:49,320 --> 00:25:52,560
Speaker 3: What apparently listen, dude, apparently the writer and Geith it

511
00:25:52,600 --> 00:25:55,159
Speaker 3: correct me if I'm wrong. I think I read the

512
00:25:55,200 --> 00:25:58,919
Speaker 3: other day or heard from Katie Orshnale the writer lost

513
00:25:59,200 --> 00:26:04,200
Speaker 3: seven or eight because the production process was so stressful.

514
00:26:04,320 --> 00:26:05,000
Speaker 5: Is that true?

515
00:26:05,960 --> 00:26:09,240
Speaker 10: I read the same thing. Yeah, I mean it obviously

516
00:26:09,280 --> 00:26:11,760
Speaker 10: they went all out. Yes, it is true, and I

517
00:26:12,600 --> 00:26:13,680
Speaker 10: saw the same thing as well.

518
00:26:14,000 --> 00:26:15,879
Speaker 7: I lost like ten teeth when they told me I

519
00:26:15,920 --> 00:26:17,280
Speaker 7: had to co host with Matt today.

520
00:26:17,960 --> 00:26:20,479
Speaker 4: Dude, I haven't lost teeth since like the fourth grade.

521
00:26:20,520 --> 00:26:21,679
Speaker 5: How do you lose teeth?

522
00:26:21,800 --> 00:26:24,000
Speaker 7: I guess it's stress thing.

523
00:26:24,160 --> 00:26:26,040
Speaker 5: And I chewed tobacco for like thirty years.

524
00:26:26,080 --> 00:26:28,920
Speaker 3: All Right, keitha wrongnoth and thanks so much for joining us.

525
00:26:29,080 --> 00:26:32,120
Speaker 3: She is a Bloomberg Intelligence analyst on US media and Netflix.

526
00:26:32,200 --> 00:26:34,240
Speaker 5: If nothing else, at least you know.

527
00:26:34,240 --> 00:26:37,280
Speaker 3: From listening to us on Bloomberg Radio today that there's

528
00:26:37,320 --> 00:26:40,440
Speaker 3: something to watch on Netflix today Mike Tyson versus Jake.

529
00:26:40,320 --> 00:26:42,119
Speaker 5: Paul Who I guess is like you're gonna watch this

530
00:26:43,280 --> 00:26:47,080
Speaker 5: or yeah, you know. That's a good question.

531
00:26:47,280 --> 00:26:53,120
Speaker 3: What time does this thing actually start? I have no idea,

532
00:26:53,160 --> 00:26:56,240
Speaker 3: but I'm assuming it's past their bedtime. Does anybody in

533
00:26:56,240 --> 00:26:59,440
Speaker 3: the control room know when the Mike Tyson, Mike Tyson, no, no,

534
00:26:59,440 --> 00:27:01,480
Speaker 3: no one knows. Well, we'll figure it out and I'll

535
00:27:01,480 --> 00:27:02,639
Speaker 3: put the kids to bed no matter what.

536
00:27:04,880 --> 00:27:08,520
Speaker 2: Now on Bloomberg Intelligence, Unis in Focus.

537
00:27:10,880 --> 00:27:13,720
Speaker 5: Focus on UNIS is brought to you by Bam.

538
00:27:13,480 --> 00:27:18,879
Speaker 3: Bam Mutual insures municipal bonds that finance essential infrastructure and

539
00:27:18,920 --> 00:27:23,440
Speaker 3: provides guaranteed income to improve any portfolio. Be a part

540
00:27:23,560 --> 00:27:29,960
Speaker 3: of Building America invest in Bam Bam insured bonds. Ma'n

541
00:27:30,080 --> 00:27:33,440
Speaker 3: me and Paul one time did a showdown from Build

542
00:27:33,480 --> 00:27:36,159
Speaker 3: America Mutual and it was a fantastic experience. Got to

543
00:27:36,200 --> 00:27:38,879
Speaker 3: meet all the guys that were working there, got to

544
00:27:39,080 --> 00:27:42,600
Speaker 3: really immerse ourselves in the MUNI market, which I love

545
00:27:42,640 --> 00:27:44,680
Speaker 3: to do. We'll continue that right now with Bloomberg Municipal

546
00:27:44,720 --> 00:27:47,959
Speaker 3: bond reporter Max Adler. He joins us on Zoom Out

547
00:27:48,000 --> 00:27:51,160
Speaker 3: of Los Angeles and Max, before we get to any

548
00:27:51,359 --> 00:27:54,960
Speaker 3: of the specific stories on your radar right now, I

549
00:27:55,000 --> 00:28:00,879
Speaker 3: want to ask about the potential to remove the tax

550
00:28:00,960 --> 00:28:05,440
Speaker 3: advantage of muni's. John mentioned it earlier on how likely

551
00:28:05,760 --> 00:28:08,399
Speaker 3: is that to happen?

552
00:28:09,600 --> 00:28:11,480
Speaker 1: Well, thanks for having me. It's going to be tough

553
00:28:11,480 --> 00:28:15,159
Speaker 1: to follow up that fabulous ad read, But on the

554
00:28:15,200 --> 00:28:18,720
Speaker 1: tax exemption, we don't think it's that likely. It's definitely

555
00:28:18,800 --> 00:28:22,240
Speaker 1: something that's been floated. We have all of these potential

556
00:28:22,240 --> 00:28:24,360
Speaker 1: tax cuts that the Trump administration is going to try

557
00:28:24,400 --> 00:28:28,800
Speaker 1: to push through. They're going to try to extend the TCJA,

558
00:28:28,960 --> 00:28:32,320
Speaker 1: and this has been floated as a possible way to

559
00:28:32,480 --> 00:28:34,600
Speaker 1: make up some of the tax revenue that would be lost.

560
00:28:35,240 --> 00:28:38,520
Speaker 1: But we don't think it's that likely. Trump does have

561
00:28:38,520 --> 00:28:41,000
Speaker 1: a lot of finance people in his corner, Howard Lutnik

562
00:28:41,560 --> 00:28:46,360
Speaker 1: and Canter Fitzgerald. They have some UNI holdings. I would

563
00:28:46,360 --> 00:28:48,560
Speaker 1: not think that he'd be advising Trump to get rid

564
00:28:48,640 --> 00:28:52,280
Speaker 1: of the MUNI tax exemption. And the federal government hasn't

565
00:28:52,280 --> 00:28:55,680
Speaker 1: proven that it can make up for the infrastructure demands

566
00:28:55,720 --> 00:29:00,560
Speaker 1: that unipoke bonds take care of. Right now, muni's about

567
00:29:00,600 --> 00:29:04,240
Speaker 1: seventy five percent of the infrastructure projects that are built

568
00:29:04,240 --> 00:29:08,080
Speaker 1: in the US. So there definitely would be a problem

569
00:29:08,200 --> 00:29:11,840
Speaker 1: financing a lot of those infrastructure projects if the tax

570
00:29:11,880 --> 00:29:13,920
Speaker 1: exemption was done away with.

571
00:29:14,240 --> 00:29:16,760
Speaker 7: Yeah, they'd have to turn to the taxable market. I mean,

572
00:29:17,400 --> 00:29:18,360
Speaker 7: how likely is that?

573
00:29:20,280 --> 00:29:24,680
Speaker 1: Yeah, I don't know if that would be particularly likely.

574
00:29:26,280 --> 00:29:29,720
Speaker 1: We do think that the taxable market would expand a

575
00:29:29,760 --> 00:29:34,240
Speaker 1: little bit if Trump does get his tax cuts through,

576
00:29:34,920 --> 00:29:38,600
Speaker 1: that would lessen the value of the UNI tax exemption

577
00:29:38,760 --> 00:29:42,160
Speaker 1: to some extent, especially in bigger tax states. But yeah, no,

578
00:29:42,240 --> 00:29:45,720
Speaker 1: we don't think it's particularly likely that all of the

579
00:29:45,760 --> 00:29:49,960
Speaker 1: country's infrastructure needs would be met by the taxable market, all.

580
00:29:49,920 --> 00:29:52,800
Speaker 3: Right, So it's not likely, but this is one of

581
00:29:52,840 --> 00:29:58,640
Speaker 3: the ways he could make up for lost revenue from

582
00:29:58,680 --> 00:30:03,440
Speaker 3: the tax cuts. How what kind of shape are the

583
00:30:03,520 --> 00:30:07,480
Speaker 3: municipalities in right now, because you know, a few years

584
00:30:07,520 --> 00:30:10,320
Speaker 3: ago they were just swimming in cash and didn't really

585
00:30:10,360 --> 00:30:13,560
Speaker 3: need to issue too much debt anyway, how do they

586
00:30:13,600 --> 00:30:14,320
Speaker 3: look currently?

587
00:30:16,240 --> 00:30:20,880
Speaker 1: They're so showing some signs of strain, especially in bigger cities.

588
00:30:20,920 --> 00:30:23,240
Speaker 1: We see a lot of different transit agencies right now

589
00:30:23,240 --> 00:30:26,920
Speaker 1: are having a lot of problems that started before the

590
00:30:26,920 --> 00:30:31,000
Speaker 1: COVID pandemic and was exacerbated during the pandemic. You're seeing

591
00:30:31,040 --> 00:30:35,560
Speaker 1: San Francisco is having some signs of budget strain. Chicago

592
00:30:35,960 --> 00:30:38,800
Speaker 1: has been talked about a lot. They're having a lot

593
00:30:38,840 --> 00:30:42,720
Speaker 1: of problems funding their public schools and just with revenues

594
00:30:42,720 --> 00:30:46,160
Speaker 1: in general. So a lot of cities are showing some

595
00:30:46,200 --> 00:30:49,880
Speaker 1: signs of strain, especially now that some of the federal

596
00:30:50,800 --> 00:30:53,640
Speaker 1: stimulus that was injected into the cities during COVID is

597
00:30:53,760 --> 00:30:54,320
Speaker 1: drying up.

598
00:30:54,880 --> 00:30:57,440
Speaker 7: All right, let's talk about sports. Sames traffic, and of

599
00:30:57,480 --> 00:31:01,240
Speaker 7: field was pretty much destroyed by what was it, Hurricane Milton.

600
00:31:01,760 --> 00:31:03,840
Speaker 7: But it's Muni's to the rescue, or is.

601
00:31:03,840 --> 00:31:06,680
Speaker 5: It Probably not.

602
00:31:07,200 --> 00:31:10,280
Speaker 1: It's actually the team that is likely to be covering

603
00:31:10,280 --> 00:31:12,800
Speaker 1: the cost of this. So as part of their lease

604
00:31:12,840 --> 00:31:15,960
Speaker 1: agreement with the City of Saint Petersburg, they don't pay

605
00:31:16,280 --> 00:31:19,240
Speaker 1: anything in rent pretty much, but they are on the

606
00:31:19,240 --> 00:31:23,560
Speaker 1: hook for any maintenance costs and the cost of repairing

607
00:31:23,600 --> 00:31:26,520
Speaker 1: the stadium right now. And as you said there, the

608
00:31:26,600 --> 00:31:29,160
Speaker 1: roof of Trump kind of Field was entirely ripped off

609
00:31:29,240 --> 00:31:32,640
Speaker 1: during Hurricane Milton. They have about fifty five million dollars

610
00:31:32,680 --> 00:31:36,640
Speaker 1: in damages. The Rays have been contributing to this escrow

611
00:31:36,640 --> 00:31:40,120
Speaker 1: account essentially over the length of their lease, which has

612
00:31:40,320 --> 00:31:42,920
Speaker 1: almost been like twenty seven years at this point. So

613
00:31:43,000 --> 00:31:45,360
Speaker 1: there is money in that account that they'll then use

614
00:31:45,440 --> 00:31:49,240
Speaker 1: for the repairs, but it won't be it won't be

615
00:31:49,280 --> 00:31:51,200
Speaker 1: AMMUNI funded repair projects.

616
00:31:51,400 --> 00:31:54,360
Speaker 7: Okay, So I saw the story where the Rays. Of

617
00:31:54,400 --> 00:31:56,560
Speaker 7: course they're moving to Steinbrenner Field, the Yankee is going

618
00:31:56,600 --> 00:32:04,160
Speaker 7: to let them use their training facility, but will everybody

619
00:32:04,160 --> 00:32:07,560
Speaker 7: fit in there? And given the average fan base, yeah,

620
00:32:07,960 --> 00:32:10,000
Speaker 7: they're not going to have any problems moving into a

621
00:32:10,160 --> 00:32:11,320
Speaker 7: much smaller stadium.

622
00:32:11,480 --> 00:32:13,960
Speaker 3: By the way, if people have invested in that kind

623
00:32:14,000 --> 00:32:19,000
Speaker 3: of paper in the past, you know, financing stadiums and

624
00:32:19,040 --> 00:32:22,240
Speaker 3: the like, how well do those investments typically do?

625
00:32:24,320 --> 00:32:27,880
Speaker 1: They typically pay off pretty well. There's like a lot

626
00:32:27,920 --> 00:32:30,960
Speaker 1: of demand for that paper as well. There are a

627
00:32:31,000 --> 00:32:33,000
Speaker 1: lot of like affinity buyers that want to come in

628
00:32:33,240 --> 00:32:38,400
Speaker 1: and buy credits of names that they that they know

629
00:32:38,520 --> 00:32:41,960
Speaker 1: pretty well. It happens with universities, It even happens with

630
00:32:42,000 --> 00:32:45,120
Speaker 1: smaller schools. There was a private school out here in

631
00:32:45,640 --> 00:32:48,840
Speaker 1: La the Curtis School. Their bonds sold out really well,

632
00:32:48,880 --> 00:32:52,479
Speaker 1: and that was mostly like affinity buyers. But stadiums in

633
00:32:52,520 --> 00:32:54,840
Speaker 1: particular do get a lot of those affinity buyers. It

634
00:32:54,880 --> 00:32:59,080
Speaker 1: reminds me of a recent deal that the City of Buffalo,

635
00:32:59,200 --> 00:33:03,920
Speaker 1: actually County where Buffalo is located, was marketing recently. They

636
00:33:03,920 --> 00:33:06,760
Speaker 1: were trying to sell bills bonds as they were calling them,

637
00:33:07,120 --> 00:33:11,240
Speaker 1: and that deal also was pretty well subscribed. It didn't

638
00:33:11,320 --> 00:33:15,920
Speaker 1: draw as much retail demand as they expected. But certainly

639
00:33:16,040 --> 00:33:19,240
Speaker 1: the institutional investors stepped up, all.

640
00:33:19,200 --> 00:33:20,959
Speaker 5: Right, Max, thanks so much for joining us.

641
00:33:21,000 --> 00:33:24,719
Speaker 3: Max Adler there, Bloomberg Municipal Bond Reporter out of Los Angeles.

642
00:33:25,240 --> 00:33:29,760
Speaker 2: This is the Bloomberg Intelligence Podcast, available on apples, Spotify,

643
00:33:29,960 --> 00:33:33,600
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644
00:33:33,760 --> 00:33:36,720
Speaker 2: ten am to noon Eastern on Bloomberg dot com, the

645
00:33:36,840 --> 00:33:40,280
Speaker 2: iHeartRadio app, tune In, and the Bloomberg Business app. You

646
00:33:40,320 --> 00:33:43,480
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647
00:33:43,640 --> 00:33:45,280
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