1
00:00:02,400 --> 00:00:06,720
Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.

2
00:00:11,640 --> 00:00:15,440
Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along

3
00:00:15,480 --> 00:00:18,720
Speaker 2: with Lisa Bromwitz and Amrie Hordern. Join us each day

4
00:00:18,720 --> 00:00:22,280
Speaker 2: for insight from the best in markets, economics, and geopolitics

5
00:00:22,440 --> 00:00:24,920
Speaker 2: from our global headquarters in New York City. We are

6
00:00:24,920 --> 00:00:27,680
Speaker 2: live on Bloomberg Television weekday mornings from six to nine

7
00:00:27,720 --> 00:00:31,240
Speaker 2: am Eastern. Subscribe to the podcast on Apple, Spotify or

8
00:00:31,320 --> 00:00:33,960
Speaker 2: anywhere else you listen, and as always on the Bloomberg

9
00:00:34,040 --> 00:00:35,840
Speaker 2: Terminal and the Bloomberg Business App.

10
00:00:36,240 --> 00:00:38,760
Speaker 3: Investors trying to claw their way out of recent worries

11
00:00:38,800 --> 00:00:43,120
Speaker 3: about overvalued tech companies sigflation. Apollo Global Management president Jim

12
00:00:43,159 --> 00:00:46,440
Speaker 3: Zelter joins us. Now, Jim, wonderful to see you. Thank

13
00:00:46,479 --> 00:00:47,280
Speaker 3: you so much for being here.

14
00:00:47,280 --> 00:00:48,040
Speaker 4: Always nice to be here.

15
00:00:48,400 --> 00:00:49,760
Speaker 1: So let's start with the.

16
00:00:49,800 --> 00:00:52,200
Speaker 3: Look ahead for next year, which is everything is awesome

17
00:00:52,280 --> 00:00:54,120
Speaker 3: and what we're hearing from every single person who comes

18
00:00:54,160 --> 00:00:55,880
Speaker 3: on the show, is it next year is going to

19
00:00:55,880 --> 00:00:58,000
Speaker 3: be double digit gains in the S and P five

20
00:00:58,080 --> 00:01:00,000
Speaker 3: hundred at the same time that you continue to get

21
00:01:00,080 --> 00:01:03,520
Speaker 3: get grind out better returns from the debt space.

22
00:01:03,720 --> 00:01:04,880
Speaker 1: Is there a contradiction here.

23
00:01:05,680 --> 00:01:08,759
Speaker 5: Well, I would just say that the confidence sitting here

24
00:01:08,800 --> 00:01:13,160
Speaker 5: in December about next year that anybody puts forth has

25
00:01:13,200 --> 00:01:16,119
Speaker 5: to be taken with a little bit of skepticism because

26
00:01:16,160 --> 00:01:18,600
Speaker 5: of the year we've just had. If you were here

27
00:01:18,640 --> 00:01:20,959
Speaker 5: on this journey, this year obviously has been a turnis

28
00:01:21,040 --> 00:01:22,840
Speaker 5: on volatility, and we've ended up in a place that

29
00:01:22,880 --> 00:01:25,400
Speaker 5: many probably wouldn't have predicted. But as we sit here

30
00:01:25,480 --> 00:01:28,040
Speaker 5: right now thinking about the year ahead, you're going to

31
00:01:28,120 --> 00:01:30,679
Speaker 5: end this year with an extremely strong M and a

32
00:01:30,800 --> 00:01:33,720
Speaker 5: calendar an M and a backlog in terms of what's

33
00:01:34,200 --> 00:01:37,319
Speaker 5: actually been executed this year, but also in the pipeline

34
00:01:37,319 --> 00:01:41,039
Speaker 5: of new deals. The expectations on the Bloomberg Economics page

35
00:01:41,080 --> 00:01:43,479
Speaker 5: is a thirty percent chance of a recession next year,

36
00:01:44,080 --> 00:01:46,840
Speaker 5: a little bit higher inflation, a little bit lower growth,

37
00:01:47,319 --> 00:01:49,720
Speaker 5: And as we talked about a moment ago, one of

38
00:01:49,760 --> 00:01:52,520
Speaker 5: the markets has to be wrong in this intersection right now,

39
00:01:52,560 --> 00:01:55,680
Speaker 5: where many are saying we need to lower rates because

40
00:01:55,720 --> 00:01:59,960
Speaker 5: of an economic slowdown and the other side saying earnings

41
00:02:00,120 --> 00:02:03,680
Speaker 5: upside because of accelerating earnings from the mag seven and

42
00:02:03,760 --> 00:02:06,880
Speaker 5: the four ninety three. Those both can't be correct or

43
00:02:06,920 --> 00:02:09,360
Speaker 5: it's very, very unlikely that they'll both be correct.

44
00:02:10,280 --> 00:02:10,799
Speaker 4: We're in the.

45
00:02:10,720 --> 00:02:13,880
Speaker 5: Camp at Apollo, as Torson's been up here in many

46
00:02:13,919 --> 00:02:18,960
Speaker 5: others that between the k shape economy and other demographic issues,

47
00:02:19,400 --> 00:02:22,520
Speaker 5: we're going to probably see a deceleration of lower rates

48
00:02:23,480 --> 00:02:26,480
Speaker 5: and a stronger economy in terms of m and a

49
00:02:26,720 --> 00:02:30,799
Speaker 5: capex cycle, positive regulatory backdrop, and things of that nature.

50
00:02:30,919 --> 00:02:34,120
Speaker 3: So if bonds and stocks can't both be right, and

51
00:02:34,160 --> 00:02:36,880
Speaker 3: they seem to be in conflict right now, are you

52
00:02:37,000 --> 00:02:39,600
Speaker 3: saying that stocks right and bonds have it wrong.

53
00:02:40,040 --> 00:02:42,680
Speaker 5: I'm saying what's been surprising to all of it. If

54
00:02:42,680 --> 00:02:44,480
Speaker 5: we take a big step back the last four or

55
00:02:44,520 --> 00:02:48,680
Speaker 5: five years, the idea that the FED would raise rates

56
00:02:48,720 --> 00:02:50,840
Speaker 5: so much that they did be starting in twenty two,

57
00:02:51,520 --> 00:02:55,400
Speaker 5: we all predicted massive slow down in the US economy,

58
00:02:55,480 --> 00:02:59,440
Speaker 5: tightening financial conditions, and we were all wrong. This US

59
00:02:59,480 --> 00:03:03,840
Speaker 5: economy has been amazingly resilient. Now it's been resilient for

60
00:03:04,600 --> 00:03:07,440
Speaker 5: organic reasons as well as a lot.

61
00:03:07,200 --> 00:03:08,840
Speaker 4: Of fiscal spending.

62
00:03:09,919 --> 00:03:14,000
Speaker 5: Obviously now the capex cycle, but the US economy has

63
00:03:14,000 --> 00:03:16,280
Speaker 5: been in the most resilient for a variety of reasons,

64
00:03:16,320 --> 00:03:19,440
Speaker 5: and our suspicion is that that will tend to continue

65
00:03:19,480 --> 00:03:22,160
Speaker 5: in the year ahead. So I think if you look

66
00:03:22,560 --> 00:03:24,280
Speaker 5: if you look at the gap in the last month

67
00:03:24,360 --> 00:03:27,400
Speaker 5: or two of the MAG seven earnings growth and the

68
00:03:27,440 --> 00:03:30,480
Speaker 5: four ninety three a year ago, it was like thirty

69
00:03:30,520 --> 00:03:33,600
Speaker 5: thirty five percent. The growth rates of the MAG seven

70
00:03:33,600 --> 00:03:35,720
Speaker 5: and the four ninety three in the last quarter was

71
00:03:35,760 --> 00:03:39,520
Speaker 5: eleven percent, twenty two versus eleven. I believe so the

72
00:03:39,560 --> 00:03:42,840
Speaker 5: rest of the US economy is doing somewhat better in

73
00:03:42,960 --> 00:03:44,920
Speaker 5: light of the breadth of the AI cycle.

74
00:03:45,240 --> 00:03:48,480
Speaker 3: How much is this really all predicated on the ongoing

75
00:03:48,520 --> 00:03:50,960
Speaker 3: funding of the AI cycle. I mean, this is sort

76
00:03:50,960 --> 00:03:53,000
Speaker 3: of the fear that you're seeing baked into markets right

77
00:03:53,000 --> 00:03:55,040
Speaker 3: now is that there's a lot of debt coming into

78
00:03:55,120 --> 00:03:58,480
Speaker 3: the space. Everything is leveraged to AI being the solution

79
00:03:58,560 --> 00:03:59,880
Speaker 3: to absolutely every problem that we have.

80
00:04:00,400 --> 00:04:02,080
Speaker 5: Well, I think you need to separate that a little

81
00:04:02,080 --> 00:04:06,560
Speaker 5: bit on the equity side of the AI activity and

82
00:04:07,360 --> 00:04:10,040
Speaker 5: re mentioned it at the start. Certainly, you've got the

83
00:04:11,320 --> 00:04:15,640
Speaker 5: incumbents that have amazing business models, whether that's Alphabet, Meta

84
00:04:15,760 --> 00:04:18,240
Speaker 5: and the other Microsoft and Amazon, and then you've got

85
00:04:18,240 --> 00:04:21,880
Speaker 5: the upstart Open AI. They're all coming from a different situation.

86
00:04:22,040 --> 00:04:25,640
Speaker 5: Once the four or five have incredibly strong balance sheets

87
00:04:25,960 --> 00:04:29,920
Speaker 5: and incredibly strong capbex and shut me free cash flow,

88
00:04:30,240 --> 00:04:34,560
Speaker 5: which they're going to allocate to the AAI equity story

89
00:04:34,880 --> 00:04:37,080
Speaker 5: because for them it's an existential issue.

90
00:04:37,080 --> 00:04:39,240
Speaker 4: So for that, that's the equity side of the equation.

91
00:04:39,640 --> 00:04:42,640
Speaker 5: What you're really touching on is this question of the

92
00:04:42,800 --> 00:04:46,760
Speaker 5: five to seven trillion that's expected to be needed to

93
00:04:46,839 --> 00:04:51,040
Speaker 5: fund the data center and infrastructure capbecks of the.

94
00:04:50,920 --> 00:04:52,360
Speaker 4: Next five to seven years.

95
00:04:52,640 --> 00:04:55,480
Speaker 5: That's been the zip code of the numbers being being

96
00:04:55,520 --> 00:04:58,880
Speaker 5: bantered around and today if you look at that number

97
00:04:58,920 --> 00:05:00,919
Speaker 5: and aggregate and take us step back again, is the

98
00:05:01,000 --> 00:05:05,320
Speaker 5: industry of that five trillion? About a trillion five will

99
00:05:05,320 --> 00:05:09,560
Speaker 5: get funded from free cash flow of the of the hyperscalers.

100
00:05:10,120 --> 00:05:14,880
Speaker 5: The next trillion five will get funded between project finance,

101
00:05:15,320 --> 00:05:19,080
Speaker 5: private capital, and a variety of their debt markets. About

102
00:05:19,080 --> 00:05:21,400
Speaker 5: a trillion and trillion a quarter will get done by

103
00:05:21,400 --> 00:05:24,480
Speaker 5: the high grade investment grade market. So it leaves about

104
00:05:24,480 --> 00:05:27,880
Speaker 5: a trillion trillion five. Where's that going to get financed?

105
00:05:28,120 --> 00:05:31,200
Speaker 5: That's a question mark. What's the clearing price of that

106
00:05:31,320 --> 00:05:34,360
Speaker 5: of that paper and so you know, we spent a

107
00:05:34,400 --> 00:05:37,000
Speaker 5: lot of time thinking about that. That's those are the

108
00:05:37,080 --> 00:05:40,920
Speaker 5: big picture moves that will really have an impact on

109
00:05:41,360 --> 00:05:45,359
Speaker 5: pricing of the IG market, pricing of the high yield market,

110
00:05:45,680 --> 00:05:47,880
Speaker 5: pricing of investment grade private credit.

111
00:05:48,200 --> 00:05:48,960
Speaker 4: That's the big.

112
00:05:48,880 --> 00:05:51,320
Speaker 5: Question that we're all grappling with if you're in these

113
00:05:51,360 --> 00:05:52,120
Speaker 5: markets today.

114
00:05:52,279 --> 00:05:54,200
Speaker 6: Last time you were on you talked about how financing

115
00:05:54,200 --> 00:05:57,159
Speaker 6: these data centers is fundamentally different than in the past

116
00:05:57,240 --> 00:05:59,880
Speaker 6: financing other technology projects.

117
00:06:00,279 --> 00:06:01,720
Speaker 1: Why why are they so different?

118
00:06:01,920 --> 00:06:05,479
Speaker 5: Well, the last thirty years in the US high yield

119
00:06:05,520 --> 00:06:08,200
Speaker 5: and leverage finance market, for the most part, you've been

120
00:06:08,240 --> 00:06:13,120
Speaker 5: financing companies that were disruptors, but they were not investment

121
00:06:13,120 --> 00:06:17,280
Speaker 5: grade disruptors. Think of the cable companies, Think of healthcare companies,

122
00:06:17,560 --> 00:06:21,839
Speaker 5: think of gaming, even companies like MCI in the regional airlines.

123
00:06:22,320 --> 00:06:25,640
Speaker 5: This time with the hyperscalers. Again, if you look at

124
00:06:25,680 --> 00:06:28,880
Speaker 5: the balance sheets of Microsoft and Google and Amazon, these

125
00:06:28,880 --> 00:06:32,200
Speaker 5: are some of the greatest companies we've ever seen. Three

126
00:06:32,360 --> 00:06:35,360
Speaker 5: four hundred billion in revenues, one hundred and fifty billion

127
00:06:35,360 --> 00:06:36,920
Speaker 5: a year per company in.

128
00:06:36,920 --> 00:06:37,719
Speaker 4: Free cash flow.

129
00:06:38,160 --> 00:06:42,599
Speaker 5: So there is a counterparty to those businesses you're willing

130
00:06:42,640 --> 00:06:45,880
Speaker 5: to take on much longer duration risk. If they are

131
00:06:45,960 --> 00:06:48,680
Speaker 5: the tenant counterparty, then you might have been at an

132
00:06:48,800 --> 00:06:52,640
Speaker 5: upstart MCI or an upstart airline. It's just a very

133
00:06:52,640 --> 00:06:57,480
Speaker 5: different economic equation. It's great investment grade risk. It's challenging

134
00:06:57,520 --> 00:06:58,640
Speaker 5: non investment grade risk.

135
00:06:58,720 --> 00:07:00,640
Speaker 4: Now the pack of that.

136
00:07:01,120 --> 00:07:04,720
Speaker 5: If you look at the investment grade market today, which

137
00:07:04,760 --> 00:07:08,240
Speaker 5: is about eleven trillion, it's up from about three trillion

138
00:07:08,920 --> 00:07:13,560
Speaker 5: ten years ago. That's really dominated by the financial services companies.

139
00:07:13,600 --> 00:07:17,800
Speaker 5: The biggest issuers are JP Morgan, BAA, Wells, Morgan Stanley,

140
00:07:18,040 --> 00:07:22,760
Speaker 5: the top seven or all banks. If the predictions about

141
00:07:23,160 --> 00:07:27,800
Speaker 5: the AI data center boom are correct and the capital

142
00:07:27,840 --> 00:07:30,440
Speaker 5: needs of the five trillion that I just mentioned will

143
00:07:30,440 --> 00:07:34,280
Speaker 5: come through, you're going to look at the IG marketplace

144
00:07:34,360 --> 00:07:37,560
Speaker 5: in the next five years. The top ten will be

145
00:07:37,680 --> 00:07:41,000
Speaker 5: very different. It will have Meta, it will have Amazon,

146
00:07:41,120 --> 00:07:45,520
Speaker 5: it will have Microsoft. If they do pursue that path

147
00:07:45,560 --> 00:07:49,320
Speaker 5: of funding, which is one of the largest deepest markets

148
00:07:49,360 --> 00:07:51,160
Speaker 5: eleven trillion, they're going to have.

149
00:07:51,080 --> 00:07:51,800
Speaker 4: To access that.

150
00:07:51,960 --> 00:07:55,800
Speaker 5: So when we step back and think about the next

151
00:07:55,800 --> 00:07:59,000
Speaker 5: three to five years, we think about how the investment

152
00:07:59,040 --> 00:08:02,600
Speaker 5: grade public mark market is going to change in context

153
00:08:02,640 --> 00:08:06,240
Speaker 5: and risk. It's one thing financing some of the great

154
00:08:06,280 --> 00:08:11,000
Speaker 5: financial services and banks in the world POSTGFC, our banks

155
00:08:11,000 --> 00:08:14,400
Speaker 5: and our financial services companies are the strongest, healthiest in

156
00:08:14,440 --> 00:08:14,840
Speaker 5: the world.

157
00:08:15,280 --> 00:08:17,080
Speaker 4: You don't mind being a debt lender to those.

158
00:08:17,560 --> 00:08:21,480
Speaker 5: These other companies are taking business models that have been amazing,

159
00:08:21,560 --> 00:08:25,360
Speaker 5: business models that have been asset light, business models that

160
00:08:25,440 --> 00:08:29,240
Speaker 5: have generated tremendous amounts of cash flow, and they're just

161
00:08:29,400 --> 00:08:33,360
Speaker 5: changing the risk of being a lender to those companies.

162
00:08:33,640 --> 00:08:35,840
Speaker 5: It's not bad risk, it's just different risk.

163
00:08:36,160 --> 00:08:39,280
Speaker 1: It sounds like this year was the year of credit.

164
00:08:39,360 --> 00:08:41,679
Speaker 3: We were talking about how the twenty twenty five banner

165
00:08:41,800 --> 00:08:42,560
Speaker 3: year was credit.

166
00:08:43,000 --> 00:08:44,520
Speaker 1: It sounds like next year isn't going to be.

167
00:08:44,720 --> 00:08:48,000
Speaker 3: It sounds like next year the investment is in something

168
00:08:48,080 --> 00:08:51,400
Speaker 3: that is more revenue stream based, that is maybe more

169
00:08:51,440 --> 00:08:54,440
Speaker 3: equity driven, that isn't as leverage to the story that

170
00:08:54,480 --> 00:08:58,680
Speaker 3: you're talking about, which is an increasing glut of issuance, potential,

171
00:08:58,760 --> 00:09:01,360
Speaker 3: sticky inflation, and that's not that accommodative.

172
00:09:02,160 --> 00:09:03,920
Speaker 5: I actually take the other side of that. I think

173
00:09:03,960 --> 00:09:05,920
Speaker 5: it's actually a tremendous time to be in credit.

174
00:09:05,960 --> 00:09:07,439
Speaker 1: I long there, I go.

175
00:09:07,800 --> 00:09:11,360
Speaker 5: I think this is all about dispersion. It's picking the

176
00:09:11,440 --> 00:09:14,760
Speaker 5: right names from the wrong names. It's about like people

177
00:09:14,800 --> 00:09:18,600
Speaker 5: in credit are focused on credit, whether it's IG public,

178
00:09:18,679 --> 00:09:22,280
Speaker 5: high yield private and it's the dispersion that we've been waiting.

179
00:09:22,280 --> 00:09:24,640
Speaker 4: If you're if you're a forty year.

180
00:09:24,559 --> 00:09:27,520
Speaker 5: Veteran of this business and it built a massive credit platform.

181
00:09:27,880 --> 00:09:29,000
Speaker 4: We like dispersion.

182
00:09:29,080 --> 00:09:31,120
Speaker 5: We like being in the middle of trying to pick

183
00:09:31,160 --> 00:09:33,400
Speaker 5: the winners and losers because at the end of the day,

184
00:09:33,440 --> 00:09:35,400
Speaker 5: that's just good credit picking. And I do think you're

185
00:09:35,400 --> 00:09:38,760
Speaker 5: getting rewarded with base rates between three and four percent,

186
00:09:39,400 --> 00:09:42,080
Speaker 5: and the clearing price for a lot of this capbex

187
00:09:42,160 --> 00:09:46,040
Speaker 5: for these data centers going to be more challenging. That's

188
00:09:46,080 --> 00:09:49,080
Speaker 5: when you can actually earn your keep by being a

189
00:09:49,120 --> 00:09:49,840
Speaker 5: smart investor.

190
00:09:49,880 --> 00:09:51,480
Speaker 1: Do you think we're heading into a distress cycle.

191
00:09:53,120 --> 00:09:53,960
Speaker 4: I don't see it.

192
00:09:54,400 --> 00:09:57,720
Speaker 5: We are one of the largest historical players in the

193
00:09:57,800 --> 00:10:01,839
Speaker 5: distressed arena. You look at the numbers in the last

194
00:10:01,880 --> 00:10:05,160
Speaker 5: twelve months in the loan market, in the high yield market,

195
00:10:05,920 --> 00:10:10,040
Speaker 5: they've actually come down in terms of the default rates,

196
00:10:10,080 --> 00:10:12,320
Speaker 5: they were a little bit north of three four percent.

197
00:10:12,640 --> 00:10:16,760
Speaker 5: They've actually declined. So on a three trillion plus high

198
00:10:16,840 --> 00:10:19,679
Speaker 5: yield and loan market, defaults of two and a half

199
00:10:19,720 --> 00:10:23,160
Speaker 5: three percent, that's sixty to ninety billion. I don't see

200
00:10:23,160 --> 00:10:26,640
Speaker 5: an overwhelming amount. Now what I do see is I

201
00:10:26,800 --> 00:10:32,280
Speaker 5: think you're going to get more secular distressed than cyclical distressed,

202
00:10:32,440 --> 00:10:36,000
Speaker 5: and that's very important. When we think about secular distressed,

203
00:10:36,520 --> 00:10:40,800
Speaker 5: I think that the development of AI will change broad

204
00:10:40,960 --> 00:10:45,239
Speaker 5: business models. If we've talked a lot about healthcare technology,

205
00:10:45,240 --> 00:10:49,000
Speaker 5: we've talked a lot about the outsourcing businesses, We've talked

206
00:10:49,040 --> 00:10:54,080
Speaker 5: about software, enterprise software. The AI impact can have dramatic

207
00:10:54,160 --> 00:10:55,760
Speaker 5: impact on those business models.

208
00:10:56,320 --> 00:10:58,120
Speaker 4: And typically, when you go.

209
00:10:58,160 --> 00:11:01,199
Speaker 5: Back in the underwriting memo and you think about your

210
00:11:01,240 --> 00:11:04,560
Speaker 5: base case and your downside being down five, ten, fifteen percent,

211
00:11:05,120 --> 00:11:10,599
Speaker 5: when you have secular dislocation, you've missed the downside by multiples,

212
00:11:10,880 --> 00:11:13,319
Speaker 5: and that's what you're probably going to have. But again,

213
00:11:13,559 --> 00:11:15,760
Speaker 5: I think that what I think is a great question

214
00:11:15,800 --> 00:11:18,000
Speaker 5: because I think a lot of the topics that are

215
00:11:18,000 --> 00:11:21,719
Speaker 5: being discussed right now about the role of banks and

216
00:11:21,840 --> 00:11:26,840
Speaker 5: private credit, or the transparency of private credit, they're legitimate questions.

217
00:11:27,200 --> 00:11:30,040
Speaker 5: But the bigger questions are, it's been a long time

218
00:11:30,080 --> 00:11:31,400
Speaker 5: since we've had a credit cycle.

219
00:11:31,600 --> 00:11:33,240
Speaker 4: We're going to have a credit cycle.

220
00:11:33,600 --> 00:11:37,720
Speaker 5: That's normal, it's natural, it's a cleansing process of capitalism.

221
00:11:38,120 --> 00:11:40,240
Speaker 5: And again, I think that when you have a business

222
00:11:40,280 --> 00:11:42,800
Speaker 5: like we've been in where you have many companies that

223
00:11:42,880 --> 00:11:45,280
Speaker 5: are more upstarts. We've been doing this. I've been doing

224
00:11:45,320 --> 00:11:47,160
Speaker 5: it for forty years. We've been doing it Apollo for

225
00:11:47,200 --> 00:11:50,800
Speaker 5: thirty five years. I feel comfortable about our ability. But

226
00:11:50,920 --> 00:11:53,320
Speaker 5: you've got some tourus in this space, no doubt about it.

227
00:11:53,360 --> 00:11:57,000
Speaker 3: And Jim, that question of affordability very much in the

228
00:11:57,040 --> 00:11:59,800
Speaker 3: focus point, not just for the veneral Reserve but also

229
00:12:00,240 --> 00:12:01,079
Speaker 3: the federal government.

230
00:12:01,480 --> 00:12:03,800
Speaker 1: From the FED perspective.

231
00:12:03,440 --> 00:12:07,480
Speaker 3: How much is seeming like the logical step to cut

232
00:12:07,559 --> 00:12:11,560
Speaker 3: rates in response to affordability concerns at the lower end

233
00:12:11,679 --> 00:12:12,640
Speaker 3: of the consumer base.

234
00:12:14,880 --> 00:12:17,040
Speaker 5: You know, I know you've had Torsten on recently to

235
00:12:17,040 --> 00:12:19,920
Speaker 5: talk about this. I do think the K shape economy

236
00:12:19,960 --> 00:12:24,520
Speaker 5: and the demographics of that, it's really having an impact

237
00:12:24,679 --> 00:12:29,040
Speaker 5: on the transmission mechanism of FED policy. I do think

238
00:12:29,080 --> 00:12:32,280
Speaker 5: the last three to five years you've seen, whether it

239
00:12:32,320 --> 00:12:34,840
Speaker 5: was this emergence of the K shape economy and our

240
00:12:34,880 --> 00:12:40,959
Speaker 5: demographic shift of income and wealth, along with the evolution

241
00:12:41,200 --> 00:12:46,040
Speaker 5: of our banking system, the evolution of dispersion, securitization, private capital,

242
00:12:46,600 --> 00:12:51,000
Speaker 5: I think that's blunted the impact on monetary policy. And

243
00:12:51,120 --> 00:12:55,920
Speaker 5: so you know, I well, I understand the impact of

244
00:12:56,520 --> 00:12:58,599
Speaker 5: the view that rates are a bit higher than the

245
00:12:59,240 --> 00:13:03,079
Speaker 5: nominal rate right now or the neutral rate issues me.

246
00:13:03,640 --> 00:13:07,520
Speaker 5: I just don't see a huge other than confidence in

247
00:13:07,559 --> 00:13:10,080
Speaker 5: the equity market. I don't see a reason to cut

248
00:13:10,120 --> 00:13:12,560
Speaker 5: rates dramatically. But I do think there's no doubt this

249
00:13:12,600 --> 00:13:15,400
Speaker 5: affordability issue. We saw it in New York, we saw

250
00:13:15,440 --> 00:13:16,839
Speaker 5: it in the national we saw it in the various

251
00:13:16,840 --> 00:13:19,920
Speaker 5: elections around the country, Virginia in other places. It's going

252
00:13:19,960 --> 00:13:21,640
Speaker 5: to be a topic for this administration to.

253
00:13:21,600 --> 00:13:25,000
Speaker 6: Deal with absolutely, and we've seen them actually backtrack on

254
00:13:25,040 --> 00:13:28,200
Speaker 6: some issues because of it. Torsten'thlock actually published this morning

255
00:13:28,240 --> 00:13:30,840
Speaker 6: talking about significant fiscal boost coming in twenty twenty six.

256
00:13:30,840 --> 00:13:32,920
Speaker 6: When it comes to the One Being Beautiful Bill twenty

257
00:13:32,920 --> 00:13:35,280
Speaker 6: twenty five, it was a lot of uncertainty. At least

258
00:13:35,280 --> 00:13:37,640
Speaker 6: that's how people were viewing Washington. What do you view

259
00:13:37,880 --> 00:13:40,440
Speaker 6: Washington for twenty twenty six. What's most important for you?

260
00:13:41,800 --> 00:13:44,319
Speaker 5: Well, I think that certainly it would be interesting to

261
00:13:44,360 --> 00:13:47,079
Speaker 5: see what happens with the Supreme Court and the tariffs.

262
00:13:47,600 --> 00:13:52,480
Speaker 5: I still think that there's a lot of domestic initiatives

263
00:13:52,520 --> 00:13:58,360
Speaker 5: in terms of large industrial capex, But from our perspective,

264
00:13:59,320 --> 00:14:01,800
Speaker 5: this administration. You know, when you look back at it,

265
00:14:01,840 --> 00:14:04,480
Speaker 5: you really have nine to twelve months to really get

266
00:14:04,520 --> 00:14:07,280
Speaker 5: most of your activity done, and then the activity will

267
00:14:07,280 --> 00:14:10,199
Speaker 5: be on the midterms next year. So I think that

268
00:14:10,240 --> 00:14:14,400
Speaker 5: their ability to move in large swath domestic activities is

269
00:14:14,440 --> 00:14:15,800
Speaker 5: going to be much more limited than.

270
00:14:15,679 --> 00:14:16,400
Speaker 4: It was this year.

271
00:14:16,640 --> 00:14:18,320
Speaker 6: So it's more of a wait and see and see

272
00:14:18,320 --> 00:14:20,400
Speaker 6: how I think Sony digest it.

273
00:14:20,680 --> 00:14:22,720
Speaker 1: Do you think they'll take more equity stakes.

274
00:14:24,200 --> 00:14:27,360
Speaker 5: I don't have a view on that. In particular, they've

275
00:14:27,400 --> 00:14:31,720
Speaker 5: had a handful. Certainly, they need to deal with some

276
00:14:31,760 --> 00:14:34,880
Speaker 5: of the domestic issues with regard to chip manufacturing in

277
00:14:34,880 --> 00:14:38,280
Speaker 5: the US. A lot of the activities that were approved

278
00:14:38,280 --> 00:14:42,480
Speaker 5: in the Chips Act with the prior administration have not

279
00:14:42,600 --> 00:14:47,680
Speaker 5: been put to work, So that's an ongoing need for

280
00:14:47,840 --> 00:14:50,080
Speaker 5: national security and other reasons for them to deal with.

281
00:14:51,040 --> 00:14:53,040
Speaker 5: So that would that would be on the agenda in

282
00:14:53,160 --> 00:14:56,720
Speaker 5: terms of manufacturing, But I'm not sure I see a

283
00:14:56,760 --> 00:14:58,920
Speaker 5: lot of equity stakes as part.

284
00:14:58,840 --> 00:14:59,200
Speaker 4: Of the plan.

285
00:14:59,320 --> 00:15:02,240
Speaker 6: I know you can't and on potential live deals. There

286
00:15:02,280 --> 00:15:05,760
Speaker 6: is this paramount offer Forearner Brothers. It would be financed

287
00:15:05,800 --> 00:15:09,520
Speaker 6: by Apollo according to reporting. Do you see this environment

288
00:15:09,600 --> 00:15:13,280
Speaker 6: the regulatory environment ripe for deals in a lot of

289
00:15:13,280 --> 00:15:14,040
Speaker 6: these spaces.

290
00:15:15,400 --> 00:15:17,520
Speaker 5: You know, I think there's a reason why the M

291
00:15:17,520 --> 00:15:21,360
Speaker 5: and A market will have a near record performance this

292
00:15:21,480 --> 00:15:25,040
Speaker 5: year in terms of volume, north of five trillion. Certainly

293
00:15:25,120 --> 00:15:29,560
Speaker 5: you have an administration that's much more comfortable with large

294
00:15:29,600 --> 00:15:37,240
Speaker 5: industrial mergers, and certainly those larger transactions are able to

295
00:15:37,280 --> 00:15:41,280
Speaker 5: garner very large financing packages. People want to invest in

296
00:15:41,400 --> 00:15:47,280
Speaker 5: high quality companies, and certainly, whether it's industrial consolidation or

297
00:15:47,360 --> 00:15:51,320
Speaker 5: media consolidation, those types of activities garner a lot of

298
00:15:51,360 --> 00:15:53,160
Speaker 5: attention and confidence.

299
00:15:53,960 --> 00:15:55,920
Speaker 3: Is there a lot of to get done between now

300
00:15:55,920 --> 00:15:57,520
Speaker 3: and the end of the year, or is everyone pretty

301
00:15:57,560 --> 00:15:59,480
Speaker 3: much packing it up, putting their crystal balls on.

302
00:16:00,160 --> 00:16:01,280
Speaker 1: Look, we're going to the beach.

303
00:16:01,880 --> 00:16:01,960
Speaker 7: No.

304
00:16:02,120 --> 00:16:05,320
Speaker 5: I think these are very robust markets. There's a lot

305
00:16:05,360 --> 00:16:09,640
Speaker 5: of activity going on right now. The market will probably

306
00:16:09,640 --> 00:16:11,360
Speaker 5: shut down in two and a half weeks or so

307
00:16:11,480 --> 00:16:14,440
Speaker 5: for a little bit of a global respite, and the

308
00:16:14,480 --> 00:16:17,160
Speaker 5: predictions and the crystal balls will come out, But there's

309
00:16:17,200 --> 00:16:19,240
Speaker 5: still a fair amount of activity going on, and I

310
00:16:19,240 --> 00:16:23,320
Speaker 5: think the pipelines are fairly well built into the first quarter,

311
00:16:23,360 --> 00:16:25,880
Speaker 5: so I would suspect a busy first quarter as well.

312
00:16:25,920 --> 00:16:28,000
Speaker 3: The crystal balls already around, Jim, come on, they already

313
00:16:28,000 --> 00:16:30,040
Speaker 3: come out because people are looking for something to talk about.

314
00:16:30,040 --> 00:16:31,600
Speaker 1: Twenty twenty six is already done in dusted.

315
00:16:31,640 --> 00:16:33,320
Speaker 3: People are talking about twenty twenty seven at this point.

316
00:16:33,320 --> 00:16:35,800
Speaker 5: Can you imagine we have to have people watch TV

317
00:16:35,960 --> 00:16:36,840
Speaker 5: and sell newspapers.

318
00:16:36,840 --> 00:16:37,800
Speaker 4: So it's important to all of.

319
00:16:37,760 --> 00:16:42,200
Speaker 2: Us stay with us. Multiple impex saviidance coming up off

320
00:16:42,240 --> 00:16:42,520
Speaker 2: to this.

321
00:16:51,680 --> 00:16:53,720
Speaker 3: Sticking with the Fed ahead of next week's meeting. Lindsay

322
00:16:53,720 --> 00:16:57,520
Speaker 3: p exem stiphail clearly in the inflation camp of worries, writing,

323
00:16:57,520 --> 00:16:59,880
Speaker 3: while inflation held steady in September, the lack of down

324
00:17:00,240 --> 00:17:04,720
Speaker 3: improvement from a still elevated level raises concerns that any

325
00:17:04,760 --> 00:17:08,560
Speaker 3: further policy easing could risk an acceleration of price pressures.

326
00:17:08,560 --> 00:17:09,280
Speaker 1: Lindsay joins us.

327
00:17:09,280 --> 00:17:11,360
Speaker 3: Now, Lindsay, thank you so much for being with us.

328
00:17:11,400 --> 00:17:12,200
Speaker 1: I want to start there.

329
00:17:12,240 --> 00:17:16,040
Speaker 3: Why are you still concerned about inflation worries being the

330
00:17:16,080 --> 00:17:18,679
Speaker 3: pre eminent concern at a time when it seems like

331
00:17:18,720 --> 00:17:21,320
Speaker 3: the FED has moved more to the employment side of

332
00:17:21,320 --> 00:17:21,840
Speaker 3: the equation.

333
00:17:23,080 --> 00:17:24,840
Speaker 7: Well, it does seem at least some FED officials have

334
00:17:24,880 --> 00:17:28,399
Speaker 7: shifted their focus away from price stability to full employment,

335
00:17:28,840 --> 00:17:31,080
Speaker 7: But there are still a number of FED officials that

336
00:17:31,119 --> 00:17:35,080
Speaker 7: have come out to highlight the need to remain focused

337
00:17:35,080 --> 00:17:38,760
Speaker 7: on reinstating price stability after years of allowing price pressures

338
00:17:38,760 --> 00:17:41,960
Speaker 7: to remain above that two percent target. Now we have

339
00:17:42,119 --> 00:17:45,720
Speaker 7: made considerable progress in terms of reining in that growth

340
00:17:45,960 --> 00:17:48,280
Speaker 7: in the aftermath of the pandemic, but we've never been

341
00:17:48,320 --> 00:17:50,719
Speaker 7: able to get back to that point of price stability,

342
00:17:51,080 --> 00:17:54,359
Speaker 7: And now with this lack of downward momentum, it does

343
00:17:54,520 --> 00:17:58,280
Speaker 7: suggest that the FED might have reached a neutral position

344
00:17:58,560 --> 00:18:01,919
Speaker 7: in policy appropriate now to take a position a sidelined

345
00:18:02,040 --> 00:18:07,600
Speaker 7: position without further rate cuts, without further risk of inciting inflation.

346
00:18:08,040 --> 00:18:11,840
Speaker 7: Particularly now, there are a number of upside risks as

347
00:18:11,840 --> 00:18:13,800
Speaker 7: we look out to the end of the year and

348
00:18:13,960 --> 00:18:16,440
Speaker 7: turn the calendar page into twenty twenty six. So now

349
00:18:16,560 --> 00:18:19,760
Speaker 7: is not the time to entirely divert focus away from

350
00:18:19,840 --> 00:18:20,960
Speaker 7: achieving price stability.

351
00:18:21,280 --> 00:18:21,920
Speaker 1: Wenzi, do you.

352
00:18:21,840 --> 00:18:24,480
Speaker 6: Think that the FED has enough information and data given

353
00:18:24,480 --> 00:18:25,879
Speaker 6: what happened with the government.

354
00:18:25,480 --> 00:18:27,920
Speaker 1: Shutdown to make a decision next week.

355
00:18:29,560 --> 00:18:31,560
Speaker 7: I think the FED has a good read on what's

356
00:18:31,600 --> 00:18:34,840
Speaker 7: happening in terms of the underlying momentum in terms of

357
00:18:34,880 --> 00:18:38,840
Speaker 7: cost pressures. Again, we haven't seen necessarily all of the

358
00:18:38,920 --> 00:18:41,640
Speaker 7: data moved to the upside, but we haven't seen any

359
00:18:41,680 --> 00:18:46,240
Speaker 7: indications of a material downward momentum in inflation, and as such,

360
00:18:46,520 --> 00:18:48,920
Speaker 7: I do think, coupled with the fact that consumer still

361
00:18:49,000 --> 00:18:52,760
Speaker 7: remains on far from robust but solid footing, the economy

362
00:18:52,840 --> 00:18:55,200
Speaker 7: is on track for a plus three percent growth pace,

363
00:18:55,560 --> 00:18:58,800
Speaker 7: and we continue to see again not robust, but positive

364
00:18:58,880 --> 00:19:02,199
Speaker 7: solid job creation, I think the Fed should air on

365
00:19:02,240 --> 00:19:05,040
Speaker 7: the side of caution, moving to the sideline, allowing for

366
00:19:05,080 --> 00:19:08,639
Speaker 7: a further understanding of the evolution of both the price

367
00:19:08,680 --> 00:19:12,800
Speaker 7: and the labor data before making any additional policy adjustments.

368
00:19:12,960 --> 00:19:16,320
Speaker 6: Lisa brought this up earlier if potentially it's a hawkish cut,

369
00:19:16,400 --> 00:19:19,040
Speaker 6: but what you're describing is maybe maybe we have a

370
00:19:19,160 --> 00:19:20,639
Speaker 6: dubvish pause next week.

371
00:19:21,240 --> 00:19:23,440
Speaker 7: Is that correct? Not necessarily a dubbish pause. I think

372
00:19:23,440 --> 00:19:25,720
Speaker 7: we're looking for more of a neutral pause. I think

373
00:19:25,720 --> 00:19:28,560
Speaker 7: the FED at this point is pretty well divided between

374
00:19:29,200 --> 00:19:31,720
Speaker 7: those that have that lingering fear of price pressures and

375
00:19:31,760 --> 00:19:34,720
Speaker 7: those that are facing this emerging concern of weakness on

376
00:19:34,720 --> 00:19:37,320
Speaker 7: the labor market front. So I do think the FED

377
00:19:37,320 --> 00:19:42,199
Speaker 7: could very clearly articulate a neutral pause push policy to

378
00:19:42,240 --> 00:19:45,959
Speaker 7: the sideline, say we're not going to make any unnecessary

379
00:19:46,040 --> 00:19:48,840
Speaker 7: movements until we have a better read on prices and

380
00:19:48,880 --> 00:19:52,320
Speaker 7: the labor market. Given there are risks to both sides

381
00:19:52,359 --> 00:19:53,840
Speaker 7: of the fed s dual mandate.

382
00:19:53,600 --> 00:19:56,840
Speaker 3: Lindsay, when you say inflation pressures are still in the system,

383
00:19:57,119 --> 00:19:59,280
Speaker 3: there is a real question of what those inflation pressures

384
00:19:59,280 --> 00:20:01,240
Speaker 3: look like percent. A lot of people say we can

385
00:20:01,280 --> 00:20:03,879
Speaker 3: handle four percent, not so much. How much are you

386
00:20:03,920 --> 00:20:07,080
Speaker 3: seeing an actual unmooring of inflation expectations in a way

387
00:20:07,080 --> 00:20:11,240
Speaker 3: that feels unsustainable and unduly punitive rather than two and

388
00:20:11,240 --> 00:20:11,800
Speaker 3: a half.

389
00:20:11,560 --> 00:20:13,280
Speaker 1: Percent, say, or two point eight percent.

390
00:20:14,560 --> 00:20:16,560
Speaker 7: Well, I think at the current read right around two

391
00:20:16,600 --> 00:20:18,920
Speaker 7: and a half ish percent, I think the Fed would

392
00:20:18,960 --> 00:20:21,760
Speaker 7: be willing to tolerate that longer term. But my concern

393
00:20:21,840 --> 00:20:24,760
Speaker 7: is these upside pressures that are still coming down the pipeline.

394
00:20:24,920 --> 00:20:28,080
Speaker 7: Should we see a stronger than expected growth profile at

395
00:20:28,160 --> 00:20:31,560
Speaker 7: year end, or a stronger more spendy consumer as we

396
00:20:31,640 --> 00:20:35,000
Speaker 7: now enter this key holiday shopping season, or turning the

397
00:20:35,080 --> 00:20:38,480
Speaker 7: corner into twenty twenty six, should businesses now begin to

398
00:20:38,560 --> 00:20:41,320
Speaker 7: pass through more of those cost increases to the end

399
00:20:41,359 --> 00:20:45,160
Speaker 7: consumer that were previously absorbed into the bottom line now

400
00:20:45,160 --> 00:20:49,639
Speaker 7: that inventories have been drawn down significantly, any one or

401
00:20:49,800 --> 00:20:54,000
Speaker 7: combination of those factors could add significant upward pressure to

402
00:20:54,119 --> 00:20:57,160
Speaker 7: inflation going forward. So it's not necessarily where we sit

403
00:20:57,240 --> 00:21:01,280
Speaker 7: right now, but the risk to prices pressures as we

404
00:21:01,320 --> 00:21:03,800
Speaker 7: look out to the remote aiming months of the re

405
00:21:03,800 --> 00:21:06,320
Speaker 7: maining weeks excuse me, of the year, and into twenty

406
00:21:06,359 --> 00:21:07,080
Speaker 7: twenty six.

407
00:21:07,000 --> 00:21:09,800
Speaker 3: Lisie, just real quick here going forward, I'm curious how

408
00:21:09,840 --> 00:21:13,119
Speaker 3: effective you think monetary policy really is in tackling some

409
00:21:13,200 --> 00:21:15,520
Speaker 3: of the issues that are pre eminem, particularly when it

410
00:21:15,520 --> 00:21:18,639
Speaker 3: comes to the key shaped economy, in questions around just

411
00:21:18,720 --> 00:21:22,280
Speaker 3: how much wages are not keeping pace at the lower end.

412
00:21:24,840 --> 00:21:28,080
Speaker 7: Well, wages still are relatively positive. We see about this

413
00:21:28,160 --> 00:21:30,000
Speaker 7: four percent ish, but you're right, a lot of that

414
00:21:30,080 --> 00:21:32,479
Speaker 7: growth has been isolated to the upper end of the

415
00:21:32,480 --> 00:21:37,000
Speaker 7: income spectrum, fueling a lot of the activity on the

416
00:21:37,040 --> 00:21:40,920
Speaker 7: retail side in the upper echelon, and so we don't

417
00:21:40,960 --> 00:21:45,200
Speaker 7: see necessarily this broad based expenditure. When we talk about

418
00:21:45,480 --> 00:21:48,920
Speaker 7: the consumer being solid, we do have to be somewhat

419
00:21:48,960 --> 00:21:51,239
Speaker 7: careful painting with a broad brush because a lot of

420
00:21:51,240 --> 00:21:54,560
Speaker 7: that momentum has come from this underlying increase in asset

421
00:21:54,680 --> 00:21:58,719
Speaker 7: valuations fueling trillions tens of trillions of dollars in wealth.

422
00:21:58,960 --> 00:22:01,320
Speaker 7: But again that's very much much isolated to the middle

423
00:22:01,440 --> 00:22:04,600
Speaker 7: or the upper end of the income spectrum, as we're

424
00:22:04,640 --> 00:22:08,240
Speaker 7: talking about property ownership participation in the equity market, which

425
00:22:08,359 --> 00:22:11,560
Speaker 7: those at the lower end, statistically speaking, are less likely

426
00:22:11,600 --> 00:22:14,080
Speaker 7: to own property or have a stake in the equity market.

427
00:22:14,320 --> 00:22:17,720
Speaker 7: So we do see again not necessarily the fed'sibility to

428
00:22:17,760 --> 00:22:21,840
Speaker 7: completely afiliorate this K shaped recovery. But there is a

429
00:22:22,040 --> 00:22:25,239
Speaker 7: role of monetary policy, but a delicate one. We have

430
00:22:25,320 --> 00:22:27,800
Speaker 7: to make sure that we're attentive to both that labor

431
00:22:27,840 --> 00:22:31,840
Speaker 7: market and the price data components of that recovery.

432
00:22:33,240 --> 00:22:36,719
Speaker 2: Stay with us. Multile Impex Savannah's coming up after this.

433
00:22:45,280 --> 00:22:48,080
Speaker 3: Stocks edging higher following a week start to the trading month.

434
00:22:48,160 --> 00:22:52,239
Speaker 3: Katie Kaminski of Alpha Simplex Group writing ratecut optimism has

435
00:22:52,280 --> 00:22:54,160
Speaker 3: boosted small cap and mid cuff.

436
00:22:53,960 --> 00:22:56,119
Speaker 1: Stocks more than AI big tech.

437
00:22:56,400 --> 00:23:01,160
Speaker 3: Overall investor sentiment has stabilized, but fears still remain for overvaluation.

438
00:23:01,480 --> 00:23:02,280
Speaker 1: Katie joins us.

439
00:23:02,280 --> 00:23:05,119
Speaker 3: Now, Katie, I wanted to start with your understanding of

440
00:23:05,119 --> 00:23:07,280
Speaker 3: what actually has been happening in markets over the past

441
00:23:07,280 --> 00:23:09,359
Speaker 3: couple of trading sessions. It seems like there is an

442
00:23:09,440 --> 00:23:13,199
Speaker 3: increasing breakdown in risk led by bitcoin, maybe a bit

443
00:23:13,240 --> 00:23:14,040
Speaker 3: of a stabilization.

444
00:23:14,200 --> 00:23:16,960
Speaker 1: But from a technical standpoint, what do you see.

445
00:23:18,359 --> 00:23:20,600
Speaker 8: This is a good point because what we have seen,

446
00:23:20,640 --> 00:23:23,600
Speaker 8: you've definitely seen a breakdown in some of the recent trends.

447
00:23:24,160 --> 00:23:27,480
Speaker 8: There has been a shift in sentiment overall, and you're

448
00:23:27,520 --> 00:23:30,480
Speaker 8: starting to see some deterioration in some of the key themes,

449
00:23:31,359 --> 00:23:34,560
Speaker 8: of course gold being something that has been selling off today,

450
00:23:35,119 --> 00:23:38,760
Speaker 8: and it is also surprising that you're also seeing yields

451
00:23:38,800 --> 00:23:43,120
Speaker 8: higher when rate cut optimism should be a positive for them.

452
00:23:43,200 --> 00:23:45,960
Speaker 8: So I think that just highlights the amount of uncertainty

453
00:23:46,320 --> 00:23:50,440
Speaker 8: and the potential for risk off sentiment when people are

454
00:23:50,440 --> 00:23:52,720
Speaker 8: concerned about high valuations.

455
00:23:52,720 --> 00:23:54,560
Speaker 3: One thing that really I was looking forward to speaking

456
00:23:54,560 --> 00:23:58,040
Speaker 3: with you, Katie, because when you're following trends, sometimes you

457
00:23:58,040 --> 00:24:01,080
Speaker 3: can find the pivot points and understand there something different here.

458
00:24:01,160 --> 00:24:02,160
Speaker 1: We're not going to see.

459
00:24:01,960 --> 00:24:04,479
Speaker 3: Maybe the melt up rally that we typically do in

460
00:24:04,520 --> 00:24:07,600
Speaker 3: December heading into year end. Are you sensing that there

461
00:24:07,720 --> 00:24:10,000
Speaker 3: is some sort of pivot going on under the hood

462
00:24:10,080 --> 00:24:10,720
Speaker 3: in markets?

463
00:24:11,840 --> 00:24:14,680
Speaker 8: Well, this is a very good point because technically December

464
00:24:14,760 --> 00:24:17,720
Speaker 8: is generally one of the better months for equity markets.

465
00:24:17,800 --> 00:24:19,920
Speaker 1: There tends to be a lot of positive.

466
00:24:19,480 --> 00:24:23,080
Speaker 8: Sentiment, but I think in the backdrop of some tepid

467
00:24:23,160 --> 00:24:27,879
Speaker 8: economic information, some weaker labor data, people are getting a

468
00:24:27,920 --> 00:24:31,200
Speaker 8: little more nervous. So there is some indication at least

469
00:24:31,200 --> 00:24:33,760
Speaker 8: with some of the price reversals that we've seen. I

470
00:24:33,800 --> 00:24:36,840
Speaker 8: think some of these other asset classes like bitcoin, even

471
00:24:36,880 --> 00:24:40,639
Speaker 8: now gold selling off some suggests that there is chance

472
00:24:40,680 --> 00:24:42,920
Speaker 8: for some deterioration in equity markets.

473
00:24:43,080 --> 00:24:46,720
Speaker 9: Katie, isn't japan Ism the waiting on AIPA, or is

474
00:24:46,760 --> 00:24:49,879
Speaker 9: the market just basically looking for an excuse to hold

475
00:24:49,920 --> 00:24:52,080
Speaker 9: pat at the moment, especially when there's a number of

476
00:24:52,200 --> 00:24:54,560
Speaker 9: questions still going into year end, most notably the Fed

477
00:24:54,640 --> 00:24:55,159
Speaker 9: next week.

478
00:24:56,240 --> 00:24:58,280
Speaker 8: This is a good point because there's not a lot

479
00:24:58,320 --> 00:25:01,320
Speaker 8: of data to hang on to. It is definitely mixed data,

480
00:25:01,760 --> 00:25:05,280
Speaker 8: and I think with concerns of over evaluation and just

481
00:25:05,400 --> 00:25:09,040
Speaker 8: how exposed many investors are to these themes, there is

482
00:25:09,080 --> 00:25:12,600
Speaker 8: some clear uncertainty there. But what's interesting to me is

483
00:25:12,640 --> 00:25:15,280
Speaker 8: you see like small cap has been doing a lot better,

484
00:25:15,359 --> 00:25:18,880
Speaker 8: for example, than big tech, and that's just a little bit.

485
00:25:18,840 --> 00:25:21,280
Speaker 1: Of a reversal from what we've seen typically this.

486
00:25:21,280 --> 00:25:23,920
Speaker 8: Year, So you're just seeing a little bit of pivoting,

487
00:25:23,960 --> 00:25:27,320
Speaker 8: a little bit of changing direction, which suggests that we

488
00:25:27,440 --> 00:25:29,760
Speaker 8: might be in for a change and trend moves at

489
00:25:29,760 --> 00:25:30,280
Speaker 8: some point.

490
00:25:30,480 --> 00:25:33,119
Speaker 6: Lisa pointed out that the PCEE data we're going to

491
00:25:33,160 --> 00:25:35,240
Speaker 6: get on Friday is very stale.

492
00:25:35,320 --> 00:25:36,720
Speaker 1: This is from September.

493
00:25:36,760 --> 00:25:39,000
Speaker 6: So when you look at the data coming out, what

494
00:25:39,080 --> 00:25:40,359
Speaker 6: do you want to hang your hat on.

495
00:25:41,880 --> 00:25:43,159
Speaker 1: Ah, that's a good question.

496
00:25:43,200 --> 00:25:46,000
Speaker 8: I mean, obviously we'll start to get more data next week.

497
00:25:46,520 --> 00:25:49,760
Speaker 8: I'd say that there's not a lot for investors to

498
00:25:50,000 --> 00:25:52,480
Speaker 8: hang on to at this point, and it really is

499
00:25:52,520 --> 00:25:54,560
Speaker 8: sort of the end of the year, which tends to

500
00:25:54,600 --> 00:25:58,400
Speaker 8: be a very positive environment. So I think they're focused

501
00:25:58,480 --> 00:26:02,120
Speaker 8: much more on sort of following the narrative for rate.

502
00:26:01,960 --> 00:26:03,160
Speaker 1: Cuts for next week.

503
00:26:03,200 --> 00:26:06,240
Speaker 8: That seems to be the only major thing to follow

504
00:26:06,280 --> 00:26:09,320
Speaker 8: and see what's going on. But you're correct, there's not

505
00:26:09,480 --> 00:26:11,960
Speaker 8: a lot of very pivotal data that's going to help

506
00:26:12,040 --> 00:26:13,639
Speaker 8: us figure out what's really going on.

507
00:26:13,720 --> 00:26:15,520
Speaker 3: Well, this goes back to something you were saying earlier.

508
00:26:15,520 --> 00:26:17,760
Speaker 3: If you're following rate cuts, why are yields rising.

509
00:26:19,000 --> 00:26:19,560
Speaker 1: Exactly?

510
00:26:19,640 --> 00:26:22,400
Speaker 8: I mean, I would guess that that's probably a reaction

511
00:26:22,560 --> 00:26:26,000
Speaker 8: to what is going on in Japan. Clearly we saw

512
00:26:26,640 --> 00:26:30,720
Speaker 8: the potential for hikes there, causing treasure yields to move upwards.

513
00:26:31,200 --> 00:26:34,800
Speaker 8: Besides that, I mean, it is slightly counterintuitive for yields

514
00:26:34,840 --> 00:26:37,960
Speaker 8: to be rising going into a potential for rate cut.

515
00:26:38,040 --> 00:26:39,919
Speaker 1: But this just may have to do with some of

516
00:26:39,920 --> 00:26:40,719
Speaker 1: the uncertainty.

517
00:26:40,760 --> 00:26:43,440
Speaker 8: I know that there's been a lot of discussion about

518
00:26:43,480 --> 00:26:46,840
Speaker 8: disagreement within the Fed, so that may be causing.

519
00:26:46,520 --> 00:26:48,440
Speaker 1: A little bit of jitters in the bond markets.

520
00:26:48,560 --> 00:26:50,800
Speaker 3: Yesterday we did see ten year and two year Japanese

521
00:26:51,280 --> 00:26:53,240
Speaker 3: bond yields and reach the highest levels that we've seen

522
00:26:53,320 --> 00:26:55,600
Speaker 3: going back to two thousand and eight. The expectation was

523
00:26:56,040 --> 00:26:58,520
Speaker 3: that you were going to see a rate hike at

524
00:26:58,520 --> 00:27:01,840
Speaker 3: the next Bank of Japan meeting. That said earlier in

525
00:27:01,840 --> 00:27:04,720
Speaker 3: the morning, it wasn't when we saw the yields creep higher.

526
00:27:05,040 --> 00:27:08,880
Speaker 3: It was after the ism manufacturing data, and then as

527
00:27:08,920 --> 00:27:11,560
Speaker 3: Cameron Dawson was pointing out, it was after this story

528
00:27:11,600 --> 00:27:16,960
Speaker 3: about Costco potentially actually laying the groundwork to reclaim some

529
00:27:17,080 --> 00:27:19,240
Speaker 3: of the revenue some of the tariffs that they paid

530
00:27:19,840 --> 00:27:21,399
Speaker 3: over the course of this year in the case of

531
00:27:21,400 --> 00:27:24,800
Speaker 3: a Supreme Court ruling which of these narratives makes the

532
00:27:24,840 --> 00:27:25,880
Speaker 3: most sense to you, or.

533
00:27:25,800 --> 00:27:28,000
Speaker 1: Do you think that there's something else entirely.

534
00:27:28,760 --> 00:27:31,800
Speaker 8: Well, this is I mean, really it's very tricky, right

535
00:27:31,880 --> 00:27:35,159
Speaker 8: because you have market moves that seem counterintuitive to general

536
00:27:35,200 --> 00:27:37,960
Speaker 8: macroeconomic themes, such as the FED rate cuts.

537
00:27:38,359 --> 00:27:41,359
Speaker 1: Then you have you know, Japan, which is moving in

538
00:27:41,400 --> 00:27:42,120
Speaker 1: a different.

539
00:27:41,840 --> 00:27:45,320
Speaker 8: Direction, and as you just pointed out, you're also seeing

540
00:27:45,359 --> 00:27:48,879
Speaker 8: some weakness in labor data and manufacturing, which paints a

541
00:27:48,920 --> 00:27:53,280
Speaker 8: more concerning picture about the general US economy. And especially

542
00:27:53,280 --> 00:27:56,120
Speaker 8: if you're thinking about long term bonds, you know, there

543
00:27:56,119 --> 00:27:58,600
Speaker 8: may be some questions of whether or not rates can

544
00:27:58,640 --> 00:28:02,560
Speaker 8: stay low for long if the you know, if we

545
00:28:02,640 --> 00:28:05,160
Speaker 8: sort of don't know what's going on next.

546
00:28:05,160 --> 00:28:07,600
Speaker 1: So you're right, it's very tricky right now.

547
00:28:07,720 --> 00:28:10,000
Speaker 6: When you start thinking about the FED meeting next week,

548
00:28:10,400 --> 00:28:14,160
Speaker 6: the market is making this idea of another interest rate cut,

549
00:28:14,160 --> 00:28:17,560
Speaker 6: but you're talking about maybe some disagreement at the Federal Reserve.

550
00:28:17,640 --> 00:28:20,159
Speaker 6: Do you think there's a potential that they stay patent

551
00:28:20,200 --> 00:28:21,000
Speaker 6: on pause.

552
00:28:22,720 --> 00:28:24,920
Speaker 1: Right now? The market is not thinking that.

553
00:28:25,040 --> 00:28:28,680
Speaker 8: But given the level of disagreement, the level of uncertainty,

554
00:28:28,720 --> 00:28:32,679
Speaker 8: and the wide range of potential outcomes, I think we

555
00:28:32,760 --> 00:28:35,840
Speaker 8: haven't had this level of disagreement in the FED for

556
00:28:36,000 --> 00:28:40,400
Speaker 8: almost thirteen years or longer. So just given that sort

557
00:28:40,400 --> 00:28:44,040
Speaker 8: of range of outcomes, there's always a probability you're going

558
00:28:44,080 --> 00:28:49,720
Speaker 8: to have more disagreement or more disappointment than if you

559
00:28:49,800 --> 00:28:51,480
Speaker 8: have a lot of consensus on the FED.

560
00:28:51,800 --> 00:28:54,880
Speaker 6: If the FED does pause and does not cut interest rates,

561
00:28:54,920 --> 00:28:56,920
Speaker 6: will there be a Santa Rally at least A started

562
00:28:56,920 --> 00:28:58,080
Speaker 6: the program off this morning.

563
00:28:59,760 --> 00:29:00,680
Speaker 1: That's that's a good question.

564
00:29:00,760 --> 00:29:03,080
Speaker 8: I mean, that could definitely put a pause on a

565
00:29:03,160 --> 00:29:06,680
Speaker 8: Santarelli because you look at how small cap US stocks

566
00:29:06,680 --> 00:29:11,120
Speaker 8: have really reacted. There's clearly that would be a headwind

567
00:29:11,160 --> 00:29:15,440
Speaker 8: for many equity investors, and I do think that could be,

568
00:29:16,120 --> 00:29:19,680
Speaker 8: you know, a potential negative for equity markets should they

569
00:29:19,720 --> 00:29:21,520
Speaker 8: not deliver as people expect.

570
00:29:22,240 --> 00:29:25,080
Speaker 2: Stay with us multiple IMPEG surveillance coming up.

571
00:29:25,240 --> 00:29:37,920
Speaker 3: After this, the National Retail Federation forecasting twenty twenty five

572
00:29:37,960 --> 00:29:42,120
Speaker 3: holiday sales to exceed one trillion dollars for the first time.

573
00:29:42,520 --> 00:29:44,280
Speaker 3: Joining US now, I'm so pleased to say is Matt

574
00:29:44,280 --> 00:29:48,120
Speaker 3: sha CEO and President of the National Retail Federation.

575
00:29:48,240 --> 00:29:49,880
Speaker 1: Matt, thank you so much for being with us.

576
00:29:50,160 --> 00:29:51,760
Speaker 3: First, I just want to get a sense of how

577
00:29:51,840 --> 00:29:54,120
Speaker 3: much that one trillion dollar figure and how much some

578
00:29:54,200 --> 00:29:57,040
Speaker 3: of the increases that we've seen in sales during this

579
00:29:57,440 --> 00:30:01,400
Speaker 3: holiday shopping season have really stemmed from just higher prices,

580
00:30:01,680 --> 00:30:04,120
Speaker 3: not next necessarily a greater degree of volume.

581
00:30:05,560 --> 00:30:07,560
Speaker 10: Well, good morning, Happy to be with you today to

582
00:30:07,560 --> 00:30:11,560
Speaker 10: talk about the big holiday weekend on Cyber Tuesday now,

583
00:30:11,600 --> 00:30:13,800
Speaker 10: but we had a great weekend. We had tens of

584
00:30:13,800 --> 00:30:16,520
Speaker 10: millions of Americans out shopping. We're going to be releasing

585
00:30:17,200 --> 00:30:19,680
Speaker 10: the results of the weekend on our holiday call at

586
00:30:19,760 --> 00:30:23,320
Speaker 10: eleven o'clock this morning, eleven Eastern. So I think what

587
00:30:23,360 --> 00:30:27,160
Speaker 10: we saw was retailers delivering real value to consumers. And

588
00:30:27,200 --> 00:30:30,360
Speaker 10: while there have been some price increases throughout the system

589
00:30:30,640 --> 00:30:33,680
Speaker 10: through this whole year, retailers have worked very, very hard

590
00:30:34,160 --> 00:30:37,400
Speaker 10: to keep delivering value for customers and to avoid passing

591
00:30:37,440 --> 00:30:41,080
Speaker 10: on any price increases. So we're looking at maybe one

592
00:30:41,160 --> 00:30:44,520
Speaker 10: percent price increases on food, and really for the last

593
00:30:44,840 --> 00:30:46,920
Speaker 10: couple of years, we've been seeing on the good side,

594
00:30:47,320 --> 00:30:49,320
Speaker 10: flat to down on inflation.

595
00:30:49,440 --> 00:30:50,560
Speaker 4: So there's real growth there.

596
00:30:50,600 --> 00:30:53,920
Speaker 10: With a four percent forecast, our forecast three point seven

597
00:30:53,960 --> 00:30:56,200
Speaker 10: to four point two percent, we'll see real.

598
00:30:56,000 --> 00:30:56,720
Speaker 4: Growth this year.

599
00:30:56,720 --> 00:30:59,360
Speaker 10: And I think you saw some great deals over the

600
00:30:59,360 --> 00:31:02,320
Speaker 10: weekend and some retailers that we're really winning with customers.

601
00:31:02,480 --> 00:31:04,840
Speaker 3: So let's talk about this period of discounting. It was

602
00:31:05,000 --> 00:31:08,440
Speaker 3: a Black Friday, then it was Cyber Monday, where actually

603
00:31:08,520 --> 00:31:11,800
Speaker 3: there are potentially steeper discounts averaging thirty one percent compared

604
00:31:11,800 --> 00:31:14,360
Speaker 3: with twenty eight percent of Black Friday. Now we're onto,

605
00:31:14,920 --> 00:31:18,480
Speaker 3: you know, let's go teetotaling Tuesday or something. I mean,

606
00:31:18,480 --> 00:31:21,200
Speaker 3: it seems like it's just continuing in terms of the

607
00:31:21,240 --> 00:31:25,080
Speaker 3: sales and the promotions. Does that indicate that retailers are

608
00:31:25,080 --> 00:31:26,080
Speaker 3: looking to clear their shelves?

609
00:31:26,120 --> 00:31:28,480
Speaker 1: So does that indicate that there.

610
00:31:28,160 --> 00:31:31,240
Speaker 3: Just is a need to generate eyeballs or is it

611
00:31:31,400 --> 00:31:34,200
Speaker 3: just that they feel like they want to give a

612
00:31:34,240 --> 00:31:35,880
Speaker 3: sense of value to their customers.

613
00:31:37,040 --> 00:31:39,479
Speaker 10: Well, I think there are a couple of things happening here.

614
00:31:40,000 --> 00:31:42,760
Speaker 10: First of all, I think we begin with inventory levels,

615
00:31:43,160 --> 00:31:46,120
Speaker 10: and inventory levels are in a very good place on

616
00:31:46,160 --> 00:31:47,080
Speaker 10: a historic basis.

617
00:31:47,160 --> 00:31:48,920
Speaker 4: So we're about one point one point.

618
00:31:48,720 --> 00:31:51,480
Speaker 10: Three, which means we've got a little more than a

619
00:31:51,520 --> 00:31:55,880
Speaker 10: month's supply for a month's worth of sale. So they're

620
00:31:55,880 --> 00:31:59,040
Speaker 10: not holding too much inventory. They've got the right inventory

621
00:31:59,080 --> 00:32:02,240
Speaker 10: in place. I think it's a very competitive retail environment.

622
00:32:02,840 --> 00:32:06,880
Speaker 10: Consumers are under some pressure at the lower end, but

623
00:32:06,920 --> 00:32:09,320
Speaker 10: they're still out there spending and we're on track to

624
00:32:09,360 --> 00:32:12,440
Speaker 10: have a very good year overall, probably in the four

625
00:32:12,480 --> 00:32:16,080
Speaker 10: percent range for the year. And what we're seeing is

626
00:32:16,360 --> 00:32:21,160
Speaker 10: consumers are being very deliberate, very thoughtful, very purposeful. They've

627
00:32:21,160 --> 00:32:25,080
Speaker 10: got lots of information at their fingertips. They're really looking

628
00:32:25,120 --> 00:32:27,800
Speaker 10: for the best deals. They can find the best value

629
00:32:28,520 --> 00:32:31,320
Speaker 10: based on the things they need and want. So I

630
00:32:31,320 --> 00:32:34,120
Speaker 10: think what we see is a competitive landscape. Inventory levels

631
00:32:34,160 --> 00:32:36,880
Speaker 10: in a good place, Margins are holding up very well

632
00:32:36,920 --> 00:32:40,640
Speaker 10: for retailers across the board, and the promotions we've seen

633
00:32:40,640 --> 00:32:43,720
Speaker 10: have been planned promotion, so there's you know, this is

634
00:32:43,720 --> 00:32:46,680
Speaker 10: all part of a planned rollout for the holiday season,

635
00:32:47,160 --> 00:32:49,600
Speaker 10: and I think thus Fart's going really well. We're off

636
00:32:49,600 --> 00:32:52,080
Speaker 10: to a great start for the five day holiday weekend

637
00:32:52,160 --> 00:32:53,120
Speaker 10: here for Thanksgiving.

638
00:32:53,240 --> 00:32:55,360
Speaker 6: Matt to Lisa's point, though, maybe we call it tarty

639
00:32:55,440 --> 00:32:59,320
Speaker 6: transaction Tuesday. I am getting non sit up emails this

640
00:32:59,400 --> 00:33:02,680
Speaker 6: morning about how cyber Monday has been quote extended, and

641
00:33:02,720 --> 00:33:05,400
Speaker 6: to be honest, I actually took advantage of them very

642
00:33:05,440 --> 00:33:07,800
Speaker 6: early this morning. Something I forgot I wanted to purchase

643
00:33:08,040 --> 00:33:10,280
Speaker 6: are you saying that is all planned and this basically

644
00:33:10,360 --> 00:33:13,400
Speaker 6: just becomes a discount week or does it actually show

645
00:33:13,480 --> 00:33:17,200
Speaker 6: that these retailers are really desperate to try to get

646
00:33:17,240 --> 00:33:20,640
Speaker 6: eyeballs and individuals back on their site.

647
00:33:21,200 --> 00:33:23,760
Speaker 10: Well, I think, Amory. I think one thing we've seen

648
00:33:24,560 --> 00:33:26,800
Speaker 10: is the holiday season has been extended over the last

649
00:33:26,840 --> 00:33:30,640
Speaker 10: several years, and certainly since the pandemic, We've seen consumers

650
00:33:30,680 --> 00:33:34,720
Speaker 10: beginning their shopping much much earlier than was traditionally the case,

651
00:33:35,280 --> 00:33:37,920
Speaker 10: and we see retailers delivering those deals all the way

652
00:33:37,920 --> 00:33:41,320
Speaker 10: back into the summer and throughout the fall. So what

653
00:33:41,360 --> 00:33:43,560
Speaker 10: we're seeing now, I think is a continuation of that.

654
00:33:43,560 --> 00:33:47,040
Speaker 10: They're going to continue to be day by day, week

655
00:33:47,080 --> 00:33:51,320
Speaker 10: by week, different kinds of promotions, different kinds of rollouts

656
00:33:51,920 --> 00:33:54,959
Speaker 10: that are going to be designed to attract consumer engagement

657
00:33:55,440 --> 00:33:58,479
Speaker 10: throughout the holiday season. And I think that this has

658
00:33:58,480 --> 00:34:02,360
Speaker 10: all been This is a thoughtful series of deliberate sort

659
00:34:02,400 --> 00:34:06,320
Speaker 10: of promotions that are out there. They're planned, they're responding

660
00:34:06,320 --> 00:34:09,640
Speaker 10: to what consumers are looking for. And I think back

661
00:34:09,680 --> 00:34:13,040
Speaker 10: to the competitive landscape that we're operating in. We're not

662
00:34:13,080 --> 00:34:16,120
Speaker 10: in the period where every retailer is a winner and

663
00:34:16,200 --> 00:34:18,560
Speaker 10: every business is going to win the way we saw

664
00:34:18,600 --> 00:34:22,400
Speaker 10: in twenty one, twenty two, twenty three. Even this is

665
00:34:22,400 --> 00:34:25,720
Speaker 10: an environment which it's much more competitive, and so retailers

666
00:34:25,760 --> 00:34:28,920
Speaker 10: are trying to distinguish themselves in the marketplace deliver that

667
00:34:29,000 --> 00:34:32,319
Speaker 10: real value. And value is I think more complicated. It's

668
00:34:32,360 --> 00:34:35,960
Speaker 10: not just price. For some consumer's value is price, but

669
00:34:36,040 --> 00:34:38,279
Speaker 10: it can be quality, it can be selection, it can

670
00:34:38,320 --> 00:34:41,560
Speaker 10: be convenience when it comes to fulfillment delivery. So when

671
00:34:41,560 --> 00:34:45,200
Speaker 10: consumers say they're looking for value, they're looking for something

672
00:34:45,200 --> 00:34:47,400
Speaker 10: that makes them feel they got what they paid for,

673
00:34:47,480 --> 00:34:49,920
Speaker 10: and that might be a great quality item, that might

674
00:34:49,960 --> 00:34:52,319
Speaker 10: be an item that gets delivered more quickly than they

675
00:34:52,360 --> 00:34:54,759
Speaker 10: could get it from another competitor. So I think there's

676
00:34:54,760 --> 00:34:57,680
Speaker 10: a whole series of things that we use when we

677
00:34:57,719 --> 00:35:00,600
Speaker 10: say value, we're talking about a series of different kinds

678
00:35:00,600 --> 00:35:04,560
Speaker 10: of experiences based on the consumer. And again, you know,

679
00:35:04,600 --> 00:35:07,080
Speaker 10: we'll talk more about this at eleven this morning, but

680
00:35:07,160 --> 00:35:10,160
Speaker 10: we saw retailers really delivering value through this weekend. The

681
00:35:10,239 --> 00:35:13,319
Speaker 10: numbers were good, traffic was good online in store, So

682
00:35:13,400 --> 00:35:16,080
Speaker 10: I think we're off to a very healthy holiday season.

683
00:35:16,680 --> 00:35:19,239
Speaker 6: Stepping away from the holiday season for a moment, can

684
00:35:19,280 --> 00:35:22,440
Speaker 6: you give us a sense of how retailers are dealing

685
00:35:22,440 --> 00:35:25,879
Speaker 6: with tariffs and this potential of AEPA being struck down.

686
00:35:25,960 --> 00:35:30,359
Speaker 6: Are they talking about potentially benefiting for the reimbursements that

687
00:35:30,440 --> 00:35:33,120
Speaker 6: might be needed to be paid back to them if

688
00:35:33,160 --> 00:35:35,400
Speaker 6: the Supreme Court deems that AEPA was illegal.

689
00:35:37,000 --> 00:35:39,720
Speaker 10: Well, I think what we've seen this year, and again

690
00:35:39,760 --> 00:35:41,919
Speaker 10: going back to the pandemic we've seen for the last

691
00:35:41,920 --> 00:35:46,800
Speaker 10: five years, this great period of disruption, this period of uncertainty, unpredictability,

692
00:35:47,520 --> 00:35:51,840
Speaker 10: even volatility across the market, things that are outside the

693
00:35:51,880 --> 00:35:54,640
Speaker 10: control of a retail business or any business for that matter.

694
00:35:55,040 --> 00:35:58,160
Speaker 10: And so I think as we look forward, retailers again

695
00:35:58,200 --> 00:36:01,080
Speaker 10: are focused on the things they can can control and

696
00:36:01,400 --> 00:36:05,560
Speaker 10: what they can control. Their relationship with their partners, their suppliers.

697
00:36:05,600 --> 00:36:08,400
Speaker 10: They can be creative and thoughtful about the way they're

698
00:36:08,440 --> 00:36:11,759
Speaker 10: handling their sourcing, their inventory, they're importing, the way they're

699
00:36:11,800 --> 00:36:15,279
Speaker 10: communicating with customers. Those are all things they can control.

700
00:36:15,719 --> 00:36:19,080
Speaker 10: What the court does or doesn't do when it finally

701
00:36:19,080 --> 00:36:22,040
Speaker 10: issues a decision on the tariffs, I think that's something

702
00:36:22,080 --> 00:36:25,560
Speaker 10: that we can't control, our members can't control, and we'll

703
00:36:25,560 --> 00:36:27,359
Speaker 10: handle that when we get to it. So I don't

704
00:36:27,360 --> 00:36:30,560
Speaker 10: think anyone's counting on a result one way or the other.

705
00:36:31,040 --> 00:36:31,880
Speaker 4: It's what we're.

706
00:36:31,680 --> 00:36:35,120
Speaker 10: Looking for is certainty, predictability, something that will smooth out

707
00:36:35,200 --> 00:36:38,440
Speaker 10: the relationships in the supply chain, and the court will

708
00:36:38,440 --> 00:36:41,040
Speaker 10: make a decision and we'll certainly go from there based

709
00:36:41,080 --> 00:36:42,320
Speaker 10: on what the court decides.

710
00:36:43,640 --> 00:36:46,920
Speaker 2: This is the bloomberg S Events podcast, bringing you the

711
00:36:46,960 --> 00:36:50,560
Speaker 2: best in markets, economics, angiopolitics. You can watch the show

712
00:36:50,600 --> 00:36:53,560
Speaker 2: live on Bloomberg TV weekday mornings from six am to

713
00:36:53,680 --> 00:36:57,440
Speaker 2: nine am Eastern. Subscribe to the podcast on Apple, Spotify,

714
00:36:57,600 --> 00:36:59,759
Speaker 2: or anywhere else you listen, and as always on the

715
00:36:59,800 --> 00:37:02,239
Speaker 2: Blue Bug Terminal and the Bloomberg Based this out

716
00:37:06,440 --> 00:37:06,879
Speaker 5: Mm hmm