WEBVTT - US Stocks Limp Into Year End While Treasury Yields Rise 0:00:02.520 --> 0:00:07.000 Bloomberg Audio Studios, Podcasts, radio news. 0:00:08.680 --> 0:00:13.080 This is Bloomberg business Weekdaily reporting from the magazine that 0:00:13.160 --> 0:00:17.639 helps global leaders stay ahead with insight on the people, companies, 0:00:17.680 --> 0:00:22.560 and trends shaping today's complex economy. Plus global business, finance 0:00:22.600 --> 0:00:26.279 and tech news as it happens. The Bloomberg Business Weekdaily 0:00:26.400 --> 0:00:31.360 Podcast with Carol Masser and Tim Steneveek on Bloomberg Radio. 0:00:32.080 --> 0:00:35.519 We also have some questions about things like private credits, 0:00:35.600 --> 0:00:39.000 private markets, what happens next there? So that is our backdrop. 0:00:39.320 --> 0:00:43.360 Let's talk about the alternative investing landscape. We've got Micreen 0:00:43.400 --> 0:00:46.080 with US portfolio manager and chief strategist at the old 0:00:46.120 --> 0:00:49.479 strategy Ria Simplify Asset Management. They offer an array of 0:00:49.520 --> 0:00:52.519 ETFs and funds. Mike, good to have you here. 0:00:52.320 --> 0:00:53.000 With Tim and me. 0:00:53.159 --> 0:00:55.640 As we have just about two hours to go and 0:00:55.640 --> 0:00:57.960 we wrap up trading here in the United States, ALT 0:00:58.040 --> 0:01:01.960 investing some clear winners and losers. What trends do you 0:01:02.000 --> 0:01:04.080 think might carry into twenty twenty six. 0:01:05.240 --> 0:01:06.760 Well, I think one of the trends has been really 0:01:06.800 --> 0:01:10.400 critical and it has been introduced with the alternative ETF space, 0:01:10.400 --> 0:01:15.160 which really didn't emerge until twenty twenty tied to regulatory changes. 0:01:15.600 --> 0:01:18.759 Things like managed futures and actually trend following are one 0:01:18.760 --> 0:01:21.120 of the tools that has made its way over into 0:01:21.160 --> 0:01:23.800 the ETF space. That has been a leading area of 0:01:23.880 --> 0:01:27.000 interest as people look to diversify from the traditional bond 0:01:27.120 --> 0:01:31.520 equity mix. That's one area where I continually emphasize that 0:01:31.560 --> 0:01:34.480 you're trying not to actually outsmart the market. You're trying 0:01:34.520 --> 0:01:37.960 to recognize that there's information being diffused that you don't 0:01:38.000 --> 0:01:40.840 necessarily have at that point. So that trend following is 0:01:40.880 --> 0:01:44.680 one area. I think other areas that we're seeing increased 0:01:44.680 --> 0:01:48.840 demand for various forms of income. Those take the form 0:01:48.920 --> 0:01:53.080 of derivative tradings, things like call overwriting strategies or put 0:01:53.080 --> 0:01:56.880 selling strategies that are designed to enhance income, or it 0:01:56.920 --> 0:01:59.160 can take the form of things like a hedged high 0:01:59.200 --> 0:02:01.280 yield credit FID, which is one that I manage at 0:02:01.320 --> 0:02:05.160 Simplify asset management, that is designed to reduce the risk 0:02:05.240 --> 0:02:09.400 associated with the uncertainty of areas like high yield with 0:02:09.520 --> 0:02:13.400 credit spreads relatively tight, you want that fixed income exposure 0:02:13.480 --> 0:02:17.000 and that income generation. But we're really not certain how 0:02:17.040 --> 0:02:19.399 the economy is going to play out in twenty twenty six. 0:02:19.480 --> 0:02:23.000 Does a slowdown continue or does it reaccelerate. It's a 0:02:23.000 --> 0:02:25.600 good place to think about other ways to protect some 0:02:25.680 --> 0:02:27.320 of the some of the risks that you have in 0:02:27.360 --> 0:02:28.000 the portfolio. 0:02:28.080 --> 0:02:29.440 So what do you think it's going to do? 0:02:31.120 --> 0:02:33.520 I think unfortunately I heard you talking about the S. 0:02:33.480 --> 0:02:35.160 And P and the lead in. Yeah, you know, I've 0:02:35.200 --> 0:02:38.760 spent a lot of time around bull market. Yeah. 0:02:38.800 --> 0:02:41.920 Well, actually, I think the most important statistic is if 0:02:41.919 --> 0:02:45.239 you pull up the statistics to show asset class performance. 0:02:45.280 --> 0:02:47.359 We're actually now, I believe in nine out of the 0:02:47.400 --> 0:02:51.799 past ten years that large cap momentum and growth orientation 0:02:52.440 --> 0:02:55.400 has been the place to be. Unfortunately, as you know, 0:02:55.440 --> 0:02:57.960 that echoes the work that I do around the impact 0:02:58.040 --> 0:03:02.160 of passive investing in markets. People are largely shunted into 0:03:02.360 --> 0:03:06.840 momentum and cap focused indices by virtue of the way 0:03:06.840 --> 0:03:09.480 we structure our retirement system in the United States. 0:03:10.440 --> 0:03:11.400 Unless we see a. 0:03:11.360 --> 0:03:14.600 Significant change in the economy, it's just really hard to 0:03:14.639 --> 0:03:15.919 bet that that's not going to happen. 0:03:16.160 --> 0:03:18.200 Yet again, Yeah, I you know that. 0:03:18.320 --> 0:03:19.880 I love that you went there, Mike, because I can't 0:03:19.919 --> 0:03:22.040 tell you how many years, several years in a row, 0:03:22.080 --> 0:03:25.079 where people said momentum trade is over the big tech 0:03:25.360 --> 0:03:28.040 you know, megacaps done, It's time to go into some 0:03:28.080 --> 0:03:31.520 of the value names, smaller caps. And yet you know, 0:03:31.560 --> 0:03:33.079 here we are a third year in a row. 0:03:33.160 --> 0:03:33.880 Oh you saw this. 0:03:33.880 --> 0:03:35.800 Every year for the last five years. Well, we doing 0:03:35.840 --> 0:03:36.320 the show with you. 0:03:36.440 --> 0:03:38.360 We see the outperformance. But when I look at the 0:03:38.400 --> 0:03:41.080 economy around me, what impacts my world? A lot of 0:03:41.080 --> 0:03:44.640 those megacap names are largely what I spend a lot 0:03:44.640 --> 0:03:46.240 of time with on a daily basis. 0:03:47.200 --> 0:03:48.880 I think there's some truth to that, but I think 0:03:49.120 --> 0:03:51.040 it also feeds back in both directions. 0:03:51.120 --> 0:03:52.360 Right, given a very. 0:03:52.240 --> 0:03:55.040 Very low cost of capital, we're seeing the impact that 0:03:55.040 --> 0:03:57.800 that has on the investments that these companies can make. 0:03:58.400 --> 0:03:59.960 That means that Amazon. 0:03:59.560 --> 0:04:01.760 Can go out and make acquisitions, or Google can make 0:04:01.800 --> 0:04:05.120 the roughly fifteen hundred acquisitions it's made over the past 0:04:05.160 --> 0:04:09.360 seven years. This puts them in front of you, regardless 0:04:09.400 --> 0:04:11.480 of whether they earned that place initially. 0:04:12.360 --> 0:04:16.080 Michael, I keep getting these emails from whatever formally high 0:04:16.120 --> 0:04:19.520 yield savings account that I had I'll call the highyield 0:04:19.520 --> 0:04:23.200 savings account that tells me that the APR is going down. 0:04:24.000 --> 0:04:27.159 You know, the yield is going down as a result 0:04:27.200 --> 0:04:29.160 of the FED lowering rates, and as a result of 0:04:29.240 --> 0:04:34.120 rates coming down, that money that's in money markets, that's 0:04:34.120 --> 0:04:36.800 in high yield savings accounts, where it's going, where's it going? 0:04:38.200 --> 0:04:41.040 Well, where we're really seeing that money trend is one 0:04:41.120 --> 0:04:42.160 it continues to grow. 0:04:42.240 --> 0:04:43.400 So despite the fact that the. 0:04:43.400 --> 0:04:46.400 Yields are following, money market funds continue to hit new 0:04:46.480 --> 0:04:49.400 highs in terms of assets. That is a byproduct of 0:04:49.440 --> 0:04:52.840 the money market yield in and of itself. After nearly 0:04:52.880 --> 0:04:56.400 a decade of roughly zero yields, suddenly people are getting. 0:04:56.120 --> 0:04:57.960 Three to five percent on those. 0:04:58.080 --> 0:05:02.159 Over the past several years, that's created significant additional income, 0:05:02.160 --> 0:05:04.320 which is meant that money doesn't have to be spent 0:05:04.440 --> 0:05:08.800 in other areas, particularly for those who are starting with money. 0:05:08.880 --> 0:05:13.559 The money can't really leave the money market funds because 0:05:13.600 --> 0:05:15.480 when you go to buy, somebody else is going to 0:05:15.520 --> 0:05:19.320 sell and receive the assets as well. What can happen, 0:05:19.440 --> 0:05:23.360 and what historically causes those assets to fall is either 0:05:23.440 --> 0:05:27.280 the loss of the underlying asset bonds, default companies go bankrupt, 0:05:27.360 --> 0:05:30.440 et cetera. That requires injections of cash that take the 0:05:30.440 --> 0:05:34.200 former primary securities, or we see a surge in new 0:05:34.279 --> 0:05:38.239 issuance things like IPOs, credit for new investment purposes, et cetera. 0:05:38.839 --> 0:05:41.080 It's that latter part that I think we're actually going 0:05:41.120 --> 0:05:43.560 to really see in twenty twenty six. We continue to 0:05:43.560 --> 0:05:47.360 see astonishing demand for investment grade debt. Some of it 0:05:47.400 --> 0:05:50.640 is increasingly questionable how investment grade it is going into 0:05:50.680 --> 0:05:54.119 areas like data centers, but that is an area where 0:05:54.120 --> 0:05:58.200 we are continuing to see significant inflows into the fixed 0:05:58.200 --> 0:05:58.960 income space. 0:05:59.240 --> 0:06:00.680 Well, that's what I want to ask you, you know, 0:06:00.760 --> 0:06:02.560 just going on your website looking at some of the 0:06:02.600 --> 0:06:04.680 company ETFs that you guys offer out there. 0:06:04.760 --> 0:06:05.479 It is an array. 0:06:05.640 --> 0:06:11.799 It's government money market, managed futures, volatility, premium focus, high yield, healthcare, 0:06:12.600 --> 0:06:18.120 Tesla volt Tesla Revolution, ETF, energy, infrastructure, gold, Bitcoin, China. 0:06:18.200 --> 0:06:19.520 These are some of the things that we're going to 0:06:19.560 --> 0:06:23.839 tackle over the next three hours. I am curious about, 0:06:24.160 --> 0:06:26.080 as we were getting near the end of the year, 0:06:26.400 --> 0:06:29.120 were you guys noticing any interesting trends in terms of 0:06:29.160 --> 0:06:31.520 flows in and out of some of these spaces, especially 0:06:31.560 --> 0:06:34.159 after a year where whether it was gold, whether it 0:06:34.200 --> 0:06:37.159 was some of the commodities, whether it was you know, 0:06:37.520 --> 0:06:39.760 some of the healthcare names and others that may have 0:06:40.040 --> 0:06:42.560 run up over twenty twenty five. 0:06:43.680 --> 0:06:45.840 Well, there's a couple of areas, and our growth is 0:06:46.120 --> 0:06:49.600 largely organic and driven by that innovation. We've seen tremendous 0:06:49.640 --> 0:06:53.320 inflows into areas like money market funds. We actually introduced 0:06:53.320 --> 0:06:56.119 a money market ETF in the past year. That's power 0:06:56.279 --> 0:06:59.680 a significant quantity of growth. Our fixed income strategy, the 0:06:59.760 --> 0:07:02.080 high yield strategy that I run, has done well and 0:07:02.160 --> 0:07:05.120 has attracted significant assets over the course of the year. 0:07:05.640 --> 0:07:08.520 Our other areas in fixed income where we offer differential 0:07:08.800 --> 0:07:12.880 exposure to coupon yields in things like mortgages buying new 0:07:12.920 --> 0:07:16.800 issue mortgages as compared to the seasoned index, that has 0:07:16.800 --> 0:07:20.840 been a beneficiary. The areas that we've seen that have 0:07:20.920 --> 0:07:24.520 been I think more alternative in their construction. We have 0:07:24.720 --> 0:07:29.560 a true ESG Healthcare Fund run by my good friend 0:07:29.560 --> 0:07:34.320 Mike Taylor. Mike donates all the proceeds associated with that 0:07:34.520 --> 0:07:38.760 to the Susan G. Coman Foundation, so it's truly giving. 0:07:38.880 --> 0:07:42.320 You know, it's doing good. By doing good, It's performed 0:07:42.360 --> 0:07:45.480 fantastically well. That area of healthcare is starting to attract 0:07:45.480 --> 0:07:49.120 attention as technology starts to lose a little bit of 0:07:49.160 --> 0:07:51.960 its luster. The other area that I mentioned was the 0:07:52.000 --> 0:07:55.640 managed future space that is now our largest strategy and 0:07:55.720 --> 0:07:57.920 has really been a source of continued growth. 0:07:58.040 --> 0:08:00.240 All right, Well, hopefully we can continue talking about that 0:08:00.320 --> 0:08:03.000 certainly in the new year. Happy new year, Mike, Thank 0:08:03.040 --> 0:08:06.280 you so much. Mike Green, portfolio manager, chief strategist over 0:08:06.320 --> 0:08:10.160 at Simplify Asset Management. Joining us here on this Wednesday. 0:08:10.600 --> 0:08:13.400 Stay with us. More from Bloomberg Business Week Daily coming 0:08:13.480 --> 0:08:14.360 up after this. 0:08:18.080 --> 0:08:22.080 You're listening to the Bloomberg Business Weekdaily Podcast. Catch us 0:08:22.160 --> 0:08:25.640 live weekday afternoons from two to five pm Eastern. Listen 0:08:25.640 --> 0:08:29.240 on Applecarplay and Android Auto with the Bloomberg Business app, 0:08:29.360 --> 0:08:31.120 or watch us live on YouTube. 0:08:32.280 --> 0:08:33.600 All right, so we want to talk a little bit 0:08:33.600 --> 0:08:36.840 more about retail, more on the trends, the consumption habits, 0:08:37.120 --> 0:08:40.120 and also the role of technology increasingly that may shape 0:08:40.280 --> 0:08:42.120 what goes on in the consumer space in the new year. 0:08:42.200 --> 0:08:45.080 Joining us right now is Laura Champaigne. She's Tabor Asset 0:08:45.120 --> 0:08:48.840 Management's director of research and consumer sector head, joining Tim 0:08:48.840 --> 0:08:49.920 and me right here in studio. 0:08:50.000 --> 0:08:52.200 Welcome, Welcome, Thanks Carol, thanks for having me. 0:08:52.200 --> 0:08:54.160 How are you thinking about twenty twenty five when it 0:08:54.200 --> 0:08:55.360 comes to the retail space? 0:08:56.000 --> 0:08:58.240 Twenty twenty five has been interesting. I think some of 0:08:58.280 --> 0:09:01.800 the trends like strengthen apparel and accessories likely extended to 0:09:01.880 --> 0:09:05.000 next year. We're excited about GLP ones moving to oral, 0:09:05.120 --> 0:09:08.120 not just injectables, so people have to buy new clothes 0:09:08.160 --> 0:09:09.040 if they're changing side. 0:09:09.040 --> 0:09:10.320 I was just going to say what is that doing 0:09:10.360 --> 0:09:12.679 for retail? But you answered the question right there, right 0:09:12.920 --> 0:09:13.439 right close. 0:09:13.559 --> 0:09:16.600 New size exactly, and new clothes may as well have 0:09:16.640 --> 0:09:19.120 new accessories to go with it. So we're focused in 0:09:19.200 --> 0:09:22.800 on apparel. We think they're interesting things happening. You mentioned Nike. 0:09:22.840 --> 0:09:26.600 I think at an earlier segment they are desperate and 0:09:26.640 --> 0:09:29.760 eager to grow again, which puts pressure on Adidas, that 0:09:29.800 --> 0:09:32.880 puts pressure on Hoka on on running. So I think 0:09:32.880 --> 0:09:35.400 that'll be an interesting sector to watch these guys duke 0:09:35.480 --> 0:09:38.880 it out there. We saw so much Nike at Burlington 0:09:39.000 --> 0:09:43.960 last yesterday in the store. In the store Burlington had 0:09:44.000 --> 0:09:46.280 three in caps of Nike and not the weird ones, 0:09:46.360 --> 0:09:47.839 not the Dorito's partnership. 0:09:47.920 --> 0:09:50.160 What does that tell you that they're offloading stuff that 0:09:50.280 --> 0:09:51.160 just wasn't selling. 0:09:51.440 --> 0:09:53.200 It's a weird time of year, right, so it's a 0:09:53.200 --> 0:09:55.880 clearance time of year, and it may be that or 0:09:56.120 --> 0:09:58.760 it may be that Nike will grow sales wherever they 0:09:58.800 --> 0:10:01.520 can and off price. The three big off pricers are 0:10:01.559 --> 0:10:03.239 top ten footwear retailers. 0:10:03.280 --> 0:10:05.840 Now does that dilute the brand at all? To be 0:10:06.440 --> 0:10:07.679 so focused on off price? 0:10:07.840 --> 0:10:08.400 I think it. 0:10:08.440 --> 0:10:11.760 Dilutes the brand and potentially it dilutes the returns. So 0:10:11.800 --> 0:10:15.280 I think investors are really focused at this moment on sales. 0:10:15.720 --> 0:10:19.720 Them trying to turn sales positive, but margins will be lower. 0:10:19.800 --> 0:10:22.120 The reason the previous management team focused so much on 0:10:22.200 --> 0:10:25.840 direct was to maximize profit. We'll see how the market 0:10:25.960 --> 0:10:28.080 views it next year, but I would guess footwar's less 0:10:28.120 --> 0:10:29.600 profitable in twenty twenty six. 0:10:29.640 --> 0:10:30.719 Okay, I want to go back to this thing you 0:10:30.760 --> 0:10:33.360 said about GLP ones because I actually haven't cool right now? 0:10:33.679 --> 0:10:34.120 Very cool? 0:10:34.440 --> 0:10:38.160 As a society. Are we losing collectively losing so much 0:10:38.200 --> 0:10:41.000 weight that we are all changing our closets, we have 0:10:41.040 --> 0:10:42.719 to all get new clothes. I mean, is that how 0:10:42.720 --> 0:10:44.400 widespread these GLP ones are? 0:10:44.760 --> 0:10:44.920 You know? 0:10:45.000 --> 0:10:46.640 As a CNEC, I'll tell you that we lose weight 0:10:46.640 --> 0:10:48.720 and then we gain it back. So most people don't 0:10:48.760 --> 0:10:50.000 stay on the GLP one. 0:10:50.120 --> 0:10:50.600 Well, if they don't. 0:10:51.320 --> 0:10:54.920 This was explained to me I'd read this somewhere. The 0:10:54.960 --> 0:10:58.120 criticism of having to stay on these is like, well, 0:10:58.720 --> 0:11:01.280 if you stop working out, you get out of shape too, 0:11:01.400 --> 0:11:03.560 So you have to think about it like that. 0:11:04.400 --> 0:11:07.160 Most of the analysts we've talked to on the GLP 0:11:07.280 --> 0:11:10.600 ones say that when people stop GLP ones they might 0:11:10.640 --> 0:11:12.200 be eligible again in nine months. 0:11:12.480 --> 0:11:14.400 Do they stop them because they're no longer eligible? 0:11:14.520 --> 0:11:16.760 They stop them because they're expensive. So some of the 0:11:16.840 --> 0:11:21.000 moves that people are making to make these drugs cheaper 0:11:21.080 --> 0:11:24.239 may help people stay on them longer term. Also injectable, 0:11:24.520 --> 0:11:26.800 it's a big deal to shift towards oral we think. 0:11:26.960 --> 0:11:31.000 So don't throw away the clothes, because that's what I tell. 0:11:30.920 --> 0:11:32.440 You, my husband. I've never thrown them on. 0:11:32.480 --> 0:11:34.720 You into it. 0:11:34.840 --> 0:11:35.000 Hey. 0:11:35.120 --> 0:11:36.760 The thing, though, I want to say is that a 0:11:36.800 --> 0:11:38.760 lot of the glp ones are actually for people who 0:11:38.800 --> 0:11:42.679 are diabetics, and so they tend to stay on them 0:11:42.800 --> 0:11:46.720 longer or forever because it's in managing the disease unless 0:11:46.720 --> 0:11:50.080 they ultimately don't need it anymore. But those are It's 0:11:50.120 --> 0:11:53.600 also a market where people are losing weight dramatically, and 0:11:53.679 --> 0:11:57.439 so I mean that is a big sector of our economy, 0:11:57.559 --> 0:11:59.439 or a big sector of our population. 0:12:00.240 --> 0:12:02.680 We also think that apparel has benefiting in part because 0:12:02.800 --> 0:12:07.120 you mentioned Whirlpool earlier. Big ticket appliance is flooring. Those 0:12:07.160 --> 0:12:10.320 sales are way down. Mattresses trying to turn a corner. 0:12:10.360 --> 0:12:12.640 Furniture too, and we hope they do next year. But 0:12:13.120 --> 0:12:15.079 since those segments have been down and they've been such 0:12:15.120 --> 0:12:18.120 a big part of this consumer discretionary budget, it's left 0:12:18.200 --> 0:12:19.760 room for people to buy more apparel. 0:12:20.440 --> 0:12:22.360 I just looked at the credit card statement. My wife 0:12:22.400 --> 0:12:24.719 not only rejoined Costco today but put in a big 0:12:24.840 --> 0:12:29.240 order as well. That's what she's doing Costco for twenty 0:12:29.240 --> 0:12:30.560 twenty six. Things looking good. 0:12:31.320 --> 0:12:34.160 Costco has been losing ground to Walmart, and it's a 0:12:34.200 --> 0:12:38.199 slightly different customer, although Walmart is gaining with higher income consumers. 0:12:38.440 --> 0:12:41.880 Costco took tariffs to heart in a serious way, which 0:12:41.880 --> 0:12:45.280 meant that they had less decor for holiday. I've been 0:12:45.280 --> 0:12:48.199 in there once again yesterday, a lot less furniture than 0:12:48.200 --> 0:12:50.040 they usually have this time of year. 0:12:50.360 --> 0:12:50.720 I think that. 0:12:50.800 --> 0:12:52.040 So, what do you mean they took it to heart 0:12:52.040 --> 0:12:52.760 that they didn't plan. 0:12:53.240 --> 0:12:56.200 I mean that they canceled orders and they stopped buying 0:12:56.240 --> 0:12:58.920 some categories that they used to buy, so they had 0:12:58.960 --> 0:13:01.560 maybe a third as many Christmas trees as they normally 0:13:01.640 --> 0:13:03.400 would and are trying to make it up with like 0:13:03.440 --> 0:13:06.280 baked goods and wine, which they're awesome at. But I 0:13:06.280 --> 0:13:09.200 think it's tough when you take so many big ticket 0:13:09.240 --> 0:13:10.200 items out of the store. 0:13:10.360 --> 0:13:11.280 Talk to us, Oh good. 0:13:11.600 --> 0:13:13.760 Just still on Costco is I was looking, I was 0:13:14.040 --> 0:13:16.320 actually planning out tomorrow and I was thinking, maybe we 0:13:16.360 --> 0:13:19.120 could actually do our Costco order tomorrow. They're closed on 0:13:19.160 --> 0:13:21.920 New Year's Day? Is that pretty rare in retail these days? 0:13:22.280 --> 0:13:25.800 It's rare in retail, But Costco is there at Costco 0:13:26.160 --> 0:13:28.360 where you want to work, like, they pay well, they 0:13:28.400 --> 0:13:31.640 take holidays, they pay good health care. I mean recently 0:13:31.679 --> 0:13:35.400 they started disclosing their regional profit trends. They're barely profitable 0:13:35.400 --> 0:13:38.240 in the US. It's just the membership fees. So anything 0:13:38.280 --> 0:13:40.480 you can buy from there, you really should. They make 0:13:40.520 --> 0:13:42.360 most of their money in their international location. 0:13:42.440 --> 0:13:44.760 Looking at Costco down about five and a half percent 0:13:44.840 --> 0:13:47.680 year to date, Walmart is up almost twenty four percent 0:13:47.760 --> 0:13:49.559 year to date. What is it that Walmart has kind 0:13:49.559 --> 0:13:52.040 of figured out? Is it the digital Is it also 0:13:52.240 --> 0:13:55.920 kind of playing to a higher end consumer on some level? 0:13:56.600 --> 0:13:59.480 It's that and it's also and they work hand in hand, 0:13:59.559 --> 0:14:01.800 so the way they're using tech and AI, A lot 0:14:01.840 --> 0:14:05.040 of it's the back end making their deliveries so fast 0:14:05.120 --> 0:14:08.600 and helping them carry the right products so better merchandising. 0:14:08.640 --> 0:14:10.480 They'll deliver to your house, so if you don't enjoy 0:14:10.520 --> 0:14:13.520 the Walmart shopping experience, you can just wait for the truck. 0:14:13.679 --> 0:14:18.040 So that's bringing in higher income customers, staying really sharp 0:14:18.080 --> 0:14:20.800 on prices, being able to watch, you know, real time 0:14:20.880 --> 0:14:21.720 competitors price. 0:14:21.760 --> 0:14:22.960 That's where you get your gold bars. 0:14:23.040 --> 0:14:24.640 That's where I get my gold bars. Yeah, and I 0:14:24.640 --> 0:14:28.520 have them delivered. Hey, bringing the truck unpacked. What's the 0:14:28.800 --> 0:14:31.800 what's the retail category that you find most interesting right now? 0:14:32.120 --> 0:14:35.040 I think beauty is going to have a resurgence. I 0:14:35.080 --> 0:14:36.480 think that that we've been in. 0:14:36.640 --> 0:14:39.640 Another Stepoora that I go into just outside our office 0:14:39.680 --> 0:14:41.680 is often packed, and you. 0:14:41.840 --> 0:14:44.840 Check out Alta when you're not in Manhattan because they 0:14:44.880 --> 0:14:45.920 are also packed. 0:14:45.920 --> 0:14:49.160 In cover story just in the last couple of months 0:14:49.160 --> 0:14:52.560 on this Amanda Mall wrote about multi success remarkable. 0:14:52.880 --> 0:14:56.880 And carrying a good mix of beauty, skincare, healthcare which 0:14:56.960 --> 0:15:00.200 which others are, hair care which others don't. Do you know, 0:15:00.240 --> 0:15:02.960 Sophora's really focused in on makeup, and Alta does a 0:15:03.000 --> 0:15:04.960 great job of carrying like mid tier brands. 0:15:04.960 --> 0:15:06.760 So who are the winners in the space in twenty 0:15:06.800 --> 0:15:07.360 twenty six. 0:15:07.680 --> 0:15:10.200 Yeah, we like Alta look for kids, and we're seeing 0:15:10.200 --> 0:15:12.440 a lot more kids in makeup. Five below I think 0:15:12.560 --> 0:15:15.040 is a winner. I think five below had great price 0:15:15.080 --> 0:15:16.560 points on You say kids. 0:15:16.280 --> 0:15:17.640 Are you talking like eight year olds? 0:15:17.760 --> 0:15:19.880 I'm talking a lot eight to eighteen, So. 0:15:21.480 --> 0:15:22.360 I guess that's kids. 0:15:22.480 --> 0:15:24.480 Yeah, yeah, I know, but I do see them in 0:15:24.520 --> 0:15:26.520 Alta and I see them in five below in that 0:15:26.640 --> 0:15:29.640 kind of lipstick area, you know, and also buying the 0:15:29.680 --> 0:15:32.880 fake that they had some great fake Kelly's yesterday when 0:15:32.880 --> 0:15:35.960 I was in stores, and of course the Alhambra. They're 0:15:36.040 --> 0:15:39.120 really good at, you know, making it look luxurious for 0:15:39.160 --> 0:15:39.840 the little kids. 0:15:40.440 --> 0:15:44.840 We led talking about Carvana, which has just taken off 0:15:44.880 --> 0:15:47.000 in a big way this year. eBay was up Whirlpool, 0:15:47.080 --> 0:15:50.040 as you mentioned, best Buy to the downside, any of 0:15:50.080 --> 0:15:52.320 those names that you think are worth noting, and. 0:15:52.360 --> 0:15:55.480 Best Buy, we're still concerned about. The data we see 0:15:55.560 --> 0:15:58.000 does not look great for them, and they got some 0:15:58.160 --> 0:16:01.280 help with the new gaming systems this year that probably 0:16:01.320 --> 0:16:05.000 doesn't recur, so best Buy it once again. Walmart taking 0:16:05.000 --> 0:16:09.080 consumer electronics very seriously in gaining with a higher income customer. 0:16:09.080 --> 0:16:10.200 It's not good news for best Buy. 0:16:10.560 --> 0:16:13.520 Give us a big prediction for next year. What happens. 0:16:13.960 --> 0:16:16.160 We're saying, getting asks what's the best day to shop 0:16:16.200 --> 0:16:18.120 at TJX when they get the new delivery. 0:16:18.200 --> 0:16:21.840 You know what, I think that that victorious secret gets 0:16:21.840 --> 0:16:23.080 its momentum back next year. 0:16:23.160 --> 0:16:27.600 You know, Dana Telsey talked about Victoria's Secret with us too, 0:16:27.600 --> 0:16:30.280 that they seem to be going through a redo. 0:16:30.640 --> 0:16:33.760 And we don't need them to be massively successful for 0:16:33.840 --> 0:16:36.520 the stock to work. They're peak. They were selling forty 0:16:36.520 --> 0:16:39.000 five percent of all brawls and units in the US. 0:16:39.200 --> 0:16:42.040 They're down to twenty percent. Move up to twenty five 0:16:42.120 --> 0:16:46.320 or thirty you know, new closed, new sizes, new undergarments. 0:16:46.000 --> 0:16:47.760 All right there it is. That's what we're going to end. 0:16:47.760 --> 0:16:50.600 That's the prediction. Well, hopefully we see you less than 0:16:50.600 --> 0:16:52.640 a year from now. But happy new year, Laura, thanks 0:16:52.640 --> 0:16:55.160 so much for joining us. Laura champai and is Tabor 0:16:55.200 --> 0:16:58.960 Asset and Management's Director of Research and the Consumer sector head. 0:17:00.320 --> 0:17:04.159 This is the Bloomberg Business Week Daily Podcast listen live 0:17:04.280 --> 0:17:07.240 each weekday starting at two pm Eastern on Apple car 0:17:07.240 --> 0:17:10.200 Play and Android Auto with the Bloomberg Business app. You 0:17:10.240 --> 0:17:13.440 can also listen live on Amazon Alexa from our flagship 0:17:13.520 --> 0:17:17.080 New York station Just Say Alexa played Bloomberg eleven thirty. 0:17:18.040 --> 0:17:19.919 Gotta say, though, Tim, If I had a nickel for 0:17:19.960 --> 0:17:23.040 every time I said AI or artificial intelligence. 0:17:22.560 --> 0:17:24.920 You'd almost be able to share afford a sheriff in video. 0:17:25.040 --> 0:17:28.680 I would not be here probably no. No, love my job, 0:17:28.760 --> 0:17:30.520 love my job. But you just think about how many 0:17:30.520 --> 0:17:33.760 times every conversation, even over the last couple of days. 0:17:33.960 --> 0:17:36.000 As we get ready to wrap up twenty twenty five 0:17:36.480 --> 0:17:39.879 artificial intelligence. Just in our world, there are questions about 0:17:39.880 --> 0:17:42.080 the spend, the buildout and so on and so forth. 0:17:42.280 --> 0:17:43.960 But curious to see what our next guest has to 0:17:44.000 --> 0:17:47.000 say about all of this. Manos Kuko metes He is 0:17:47.080 --> 0:17:50.200 CEO of UMI. He previously led the science and engineering 0:17:50.240 --> 0:17:53.879 for Google Cloud's Natural language services, while also bootstrapping and 0:17:53.920 --> 0:17:56.720 leading the Google Cloud jen Ai efforts. He has been 0:17:56.760 --> 0:18:00.879 working on Jenai system since twenty sixteen Microsoft and then 0:18:00.920 --> 0:18:03.399 a Meta Man. It's great to have you here on 0:18:03.440 --> 0:18:07.760 Bloomberg Business Week and Bloomberg Markets a reminder that AI 0:18:07.880 --> 0:18:10.280 has been around for a long time. So I'm curious 0:18:10.560 --> 0:18:13.480 when you look at where we are today, how do 0:18:13.520 --> 0:18:16.679 you put it into perspective and what's kind of the 0:18:16.760 --> 0:18:22.120 significance of what happened in twenty twenty five after what's 0:18:22.160 --> 0:18:26.280 been three NonStop years of talking about AI and AI investing. 0:18:27.960 --> 0:18:30.679 Yeah, Carol, and think than your remounts for having me. 0:18:31.520 --> 0:18:34.199 As you mentioned, I've been working on AI since tw 0:18:34.200 --> 0:18:36.800 thousand and sixteen, or actually even earlier than that. Twenty 0:18:36.920 --> 0:18:39.159 sixteen was the first time I tried with some of 0:18:39.240 --> 0:18:41.760 Michael founders to me when we're still at Microsoft to 0:18:41.760 --> 0:18:45.760 build something like bet back in twenty sixteen, but it 0:18:45.840 --> 0:18:47.280 was just a little bit pretty much sure, And as 0:18:47.320 --> 0:18:48.879 you mentioned, in the last couple of years has been 0:18:48.960 --> 0:18:54.040 tremendous progress. I mean, it's especially you know five, it's 0:18:54.040 --> 0:18:57.119 been moving forward and advancing at the breakneck speed that 0:18:57.160 --> 0:19:00.439 it's hard to keep up to and very exciting at 0:19:00.480 --> 0:19:00.960 the same time. 0:19:01.040 --> 0:19:03.440 Do you buy all of the momentum? Do you believe 0:19:03.600 --> 0:19:06.280 that the spend and the build out it's going to 0:19:06.320 --> 0:19:08.679 continue at this level or that there's going to be 0:19:08.680 --> 0:19:11.520 some hiccups, especially when it comes to power finding the 0:19:11.600 --> 0:19:15.320 necessary power to keep all of these data centers going. 0:19:17.240 --> 0:19:19.359