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

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Speaker 2: This is the Bloomberg Surveillance Podcast. Catch us live weekdays

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Speaker 2: at seven am Eastern on Apple car Player, Android Auto

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

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Speaker 1: Sonia Martin joins us. She's head of FX and Monetary

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Speaker 1: policy at DZ Bank, and she joins us here. Sonya,

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Speaker 1: thank you so much for joining us here.

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Speaker 3: Is there a.

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Speaker 1: Bearish call for this US dollar anywhere in sight?

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Speaker 4: Oh?

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Speaker 5: Really, to be honest, I think it's a bit of

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Speaker 5: a one way straight for the time being. I'm hoping

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Speaker 5: we're going to get a bit of a breather over

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Speaker 5: the holidays season. So we're lucky markets are now and

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Speaker 5: I sort of wait and see stands. You know, there's

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Speaker 5: been a lot of news to digest from the Trump election,

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Speaker 5: but now it's kind of time to see what's going

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Speaker 5: to have once he actually moves into the Oval office again.

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Speaker 5: So maybe we're going to get able to breather. I

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Speaker 5: don't really think that euro dollar it has a chance

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Speaker 5: to really rise here. It's too much positive news for

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Speaker 5: the US dollar in the pipeline and really frankly speaking,

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Speaker 5: also too many bad news for the euro in the pipeline,

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Speaker 5: So I still think we're heading down in euro dollar.

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Speaker 4: So when you're looking specifically at the Bloomberg Dollar Spot Index,

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Speaker 4: I mean, it's fall on the levels roughly around two

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Speaker 4: weeks ago, but we still seen dollar strength in the

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Speaker 4: last couple of weeks too. So when you're talking about

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Speaker 4: especially the Trump administration coming in, particularly if they end

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Speaker 4: up going harder faster on tariffs, what are the scenarios

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Speaker 4: for the US dollar.

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Speaker 5: Well, I think looking at the first three, maybe six

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Speaker 5: months of the new presidency, we're probably going to look

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Speaker 5: at a stronger dollar because what's going to happen is

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Speaker 5: Trump is going to start talking about terrors, and what

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Speaker 5: that means is more inflation. I mean, I know that

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Speaker 5: a lot of the Trump voters don't understand that they're

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Speaker 5: the ones who are going to end up paying for

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Speaker 5: those terrorists, but they will end up paying for them.

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Speaker 5: And if Trump comes true and is promised to levy

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Speaker 5: twenty five percent of importan goods from Mexico, the Americans

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Speaker 5: will be paying a lot of money for their cars.

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Speaker 5: So this is inflationary and that means that the window

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Speaker 5: for the FED to cut rates will be closing soon,

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Speaker 5: and this is all done a positive and of course

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Speaker 5: then we also have a strong growth boost from tax cuts.

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Speaker 5: All that combines to make a strong doll I think

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Speaker 5: further down the line there are risks, but they're not

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Speaker 5: going to matter so much in the first half of

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Speaker 5: next year.

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Speaker 1: Sonia, What are the currency markets telling you about Federal

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Speaker 1: reserve policy decisions?

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Speaker 6: Here?

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Speaker 1: Does the currency markets that they're pricing in more FED

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Speaker 1: rate cuts?

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Speaker 5: It's less. I mean it has sort of been become

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Speaker 5: less since the Trump of election victory, because you know

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Speaker 5: there is that window of opportunity that's going to be closing.

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Speaker 5: Right now. We're having a debate in the market about

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Speaker 5: whether they should be cutting in December at all, which

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Speaker 5: I think they should because their window is still open.

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Speaker 5: This is the time to do it, because that window

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Speaker 5: will closed, so they will be cutting, and I think

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Speaker 5: the market is sort of adjusting to having them cut

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Speaker 5: less for less long. So we're looking at the spring

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Speaker 5: of twenty twenty five and that'll probably be it. And

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Speaker 5: so this is interesting because a lot of other central

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Speaker 5: banks will still be in the middle of their raid

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Speaker 5: cut cycle. So it's going to open up a bit

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Speaker 5: of a divergence when you look at MONTO policy next year.

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Speaker 4: It's interesting too, because, like you were saying, you have

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Speaker 4: other central banks in the middle of cutting cycles. But

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Speaker 4: then when you think about the Bank of Japan completely

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Speaker 4: on a different course just given their economy and just

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Speaker 4: looking at the end, I mean, that was breaching the

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Speaker 4: one fifty level earlier, especially when you're thinking about what

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Speaker 4: that means with the latest inflation data in Japan as well,

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Speaker 4: and especially boosting some of the likelihood that the Bank

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Speaker 4: of Japan will continue to raise reads, especially when it

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Speaker 4: comes to that meeting in December. So give us kind

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Speaker 4: of the dynamics between when you're looking at the dollar

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Speaker 4: versus say, what's happening with the end, because we've seen

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Speaker 4: that really track closely with S and P five hundred futures.

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Speaker 5: Well, I think the n is probably one of the

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Speaker 5: few currencies that has an opportunity here to beat the

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Speaker 5: dollar next year, and that is simply because the boj

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Speaker 5: has really changed its course. I mean, the raid hikes

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Speaker 5: will cut, for the rate taps will come. But in

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Speaker 5: the grand scheme of things, what really matters is that

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Speaker 5: the Bank of Japan is you know, proceeding with its

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Speaker 5: quantitative tightening, they're reducing their balance sheet. It's a big

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Speaker 5: balance sheet. It's a lot of reducing to be done,

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Speaker 5: and that is really going to make the difference, I

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Speaker 5: think for the currency market. So we're looking at doll

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Speaker 5: a en to fall, maybe less aggressively than it might

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Speaker 5: have had Harris on the election, but it will fall.

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Speaker 5: So yen will rise against you just look at the

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Speaker 5: doll yen against the two year yield spread on the

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Speaker 5: tenny years. But you can see there as well, there's

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Speaker 5: a closed correlation and that's definitely pointing for dollien to fall.

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Speaker 1: The European Central Bank has been cutting rates. The expectations

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Speaker 1: they will continue to cut rates. To what degree do

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Speaker 1: you think the ECB will be dubbishyer going forward and

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Speaker 1: what does that mean for currencies?

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Speaker 5: Well, I think the c to be has every reason

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Speaker 5: to be quite dubbish. I mean there's currently speculation whether

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Speaker 5: they might cut rates by fifty basis points at the

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Speaker 5: next meeting. Again, I'm not a big fan of that speculation.

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Speaker 5: The use to be has reasons to cut they can

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Speaker 5: send it up message and basically tell the market we

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Speaker 5: will be continuing will continue to cut twenty five basis

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Speaker 5: points at every meeting. I don't really see the need

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Speaker 5: to do fifty simply because there are still inflationary concerns

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Speaker 5: lingering in the background, and you know, doing twenty five

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Speaker 5: and sending a dover signal seems to me a safer

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Speaker 5: course of action. I think the interesting thing with the

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Speaker 5: ECB will be that once the Fed stops cutting in

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Speaker 5: late spring, the ECB will continue and I think that'll

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Speaker 5: probably end up cutting rates at least throughout the summer

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Speaker 5: into the autumn of twenty twenty five, and that's negative

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Speaker 5: for your dollar as well.

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Speaker 4: Which currency is do you think will be most affected

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Speaker 4: and most vulnerable to trade tensions with the US depending

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Speaker 4: on what happens with tariffs.

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Speaker 5: Well, I mean the euro is obviously one big candidate.

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Speaker 5: But the problem is there are currencies that are affected,

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Speaker 5: you know, on various levels. So you look at for

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Speaker 5: the Eastern European currencies, right, I mean, for them, the

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Speaker 5: growth showdown in Germany is going to be a big problem.

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Speaker 5: We have central banks that are cutting rates quite aggressively

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Speaker 5: as well. A Mexican Paesel obviously is a candidate for

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Speaker 5: losses and despite its current surprising. I think resilience, but

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Speaker 5: you know Trump isn't an office yet, so there's more

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Speaker 5: to come on that front. Then you have countries where

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Speaker 5: you can get the double wharemy impact of you know,

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Speaker 5: slower growth in the in Europe, maybe also slow growth

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Speaker 5: in China, so you know, so it's it's I think

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Speaker 5: for many currency is going to be a very challenging year.

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Speaker 5: There will be a number of currencies that will you know,

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Speaker 5: actually underperform and already weak euro.

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Speaker 1: So Sonya. It's just kind of given that economic backdrop,

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Speaker 1: where do you see the best value out there in

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Speaker 1: the currency markets?

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Speaker 5: Well, I think again, very few that are really interesting.

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Speaker 5: I think again Japan. A bit of a bit of

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Speaker 5: a timing issue with Japan. Obviously, we've seen last year

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Speaker 5: that it can go horribly wrong. When the boj did

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Speaker 5: it's turn around, the market kind of didn't react very much,

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Speaker 5: and then we had this speculative attack on the end.

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Speaker 5: But I like the end. I like Australia and New Zealand.

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Speaker 5: The Aussies are not in any rush to cut rates.

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Speaker 5: They will be cutting rates next year, but in a

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Speaker 5: much you know, much later than anyone else. I quite

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Speaker 5: like New Zealand. The economy's going to look quite strong

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Speaker 5: the second half the year, but to be honest, after

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Speaker 5: that the ground gets pretty fit.

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Speaker 1: Excellent, Sonia, thank you so much. We appreciate that, Sonya Martin.

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Speaker 1: She is the head of FX and Monetary Policy at

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Speaker 1: DZ Bank over there in Germany.

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

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Speaker 2: weekday afternoons from seven to ten am. Easter Listen on

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Speaker 2: or watch us live on YouTube.

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Speaker 1: Nannika gup That joins us. She's a director of macro

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Speaker 1: economic Research, Equities and Commodities at Wisdom Try. She is

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Speaker 1: based in London. Anita, thanks so much for joining us here.

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Speaker 1: Can we step back and can you give us a

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Speaker 1: sense of just how the European economy is playing out

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Speaker 1: these days?

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Speaker 7: Yes, Paul, you know, i'd light you mentioned the story

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Speaker 7: here in Europe is very different to what we've been

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Speaker 7: witnessing in the US. Just this week we've had you know,

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Speaker 7: much weaker release of PMI data. What surprised me was

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Speaker 7: man normally manufacturing was weak, which has been you know,

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Speaker 7: a theme over this past year, but we've also seen

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Speaker 7: weakness and the services PMI data now for Europe, which

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Speaker 7: is again very different to the US. The European consumer

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Speaker 7: has actually been a big saver. So while you know,

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Speaker 7: US consumers have been eroding their savings, European consumers have

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Speaker 7: been hoarding their savings and that remains a key question

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Speaker 7: mark of you know, could we reach a point where

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Speaker 7: the European consumers starts to spend and that could be

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Speaker 7: the new catalyst. However, what we're also seeing is, you know,

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Speaker 7: consumer confidence numbers across European consumers remain very weak, and

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Speaker 7: so that catalyst is unlikely to be triggered or you know,

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Speaker 7: yield any tailwinds for the European economy because the confidence

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Speaker 7: just isn't there. So unlike the US, where you continue

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Speaker 7: see very strong spending by the consumer and that's supporting

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Speaker 7: the economy, it's a very different picture here and it's

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Speaker 7: unlikely to change until we see you know, some stability

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Speaker 7: in the economic as well as the political front.

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Speaker 4: And when you're talking about the economic front too, just

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Speaker 4: the latest data on the Eurozone seeing inflation accelerating beyond

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Speaker 4: when you're thinking about the ECB's two percent targets similar

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Speaker 4: to obviously the federal reserves goal as well. What does

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Speaker 4: that mean for ECB cuts, because looking at the swaps market,

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Speaker 4: they're still anticipating that there's going to be more cuts

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Speaker 4: at their next meeting next month.

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Speaker 7: That's right, you know, the the inflation numbers, uh, you know,

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Speaker 7: give out this impression that inflation is actually much higher.

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Speaker 7: But beneath the surface, you are seeing weakness continue to

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Speaker 7: creep in and that that will tell out, that will

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Speaker 7: show that, you know, in the following quarters we will

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Speaker 7: see inflation coming down further and that continues to feed

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Speaker 7: into the narrative the ECB is likely to remain extremely dubbish.

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Speaker 7: We've had very strongly opposing views. Just this week. We've

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Speaker 7: had it's about Schnabel tilt very hawkish, while we've had

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Speaker 7: you know, a Gallao, you know, tilt on the extreme

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Speaker 7: dubbish narrative saying that you know, we could go as

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Speaker 7: aggressive as fifty, whereas Schnabel's saying, you know, we must

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Speaker 7: take a much more cootious path. The market still believes

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Speaker 7: that with such a backdrop of anemic growth alongside inflation

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Speaker 7: that is cooling, you know, it just paves the way

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Speaker 7: for the ECB to go ahead with further interest rate cards.

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Speaker 7: So we're likely to achieve one point seventy five for

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Speaker 7: the ECB policy rate by the summer of twenty twenty five.

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Speaker 1: Anika. Earlier this month, we Americans we elected ourselves a

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Speaker 1: new president. We've got a new Republican Congress about to

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Speaker 1: take office in January. How did that change maybe your

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Speaker 1: outlook for just your economic forecasts across Europe?

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Speaker 7: If at all, it has a very big impath, and

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Speaker 7: I think that has been the key driver of sentiment

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Speaker 7: across the Eurozone economy. You know, first and foremost, we

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Speaker 7: are likely to see an escalation of tariffs you know,

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Speaker 7: being placed on the Eurozone economy, and that just raises

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Speaker 7: further uncertainty, you know, for how trade is likely to

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Speaker 7: be impacted going to the impact of tariffs. One saving

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Speaker 7: factor has been the Europe, which continues to remain weak

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Speaker 7: and obviously, with the easy be doing much of the

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Speaker 7: heavy lifting, the euro is likely to remain even weaker,

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Speaker 7: which will provide a bit of a catalyst for the exporters,

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Speaker 7: but not enough to outweigh you know, weaker demand alongside

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Speaker 7: the impact of higher tariffs.

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Speaker 4: And when we talk about an escalation potentially when it

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Speaker 4: comes to those tariff threats. What products in particularly, or

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Speaker 4: if you're thinking about more across industries could be most

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Speaker 4: impacted in Europe and then end up being more expensive

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Speaker 4: for consumers.

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Speaker 7: Absolutely, it's you know a lot of the consumer discrustion

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Speaker 7: names the well known uh you know, companies that are

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Speaker 7: exporting in the luxury sector. They're likely to be impacted.

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Speaker 7: The auto industry, which remains key for Germany, uh, you know,

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Speaker 7: as well as France. These companies are also likely to

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Speaker 7: be to come under a severe threat and that remains

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Speaker 7: the overarching concern for the Euro's in economy. It's so

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Speaker 7: dependent on exports, even more in comparison to Japan, and

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Speaker 7: you know, a weaker Euro is not enough to offset uh,

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Speaker 7: you know, the weakening demand backdrop alongside this this impact

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Speaker 7: of higher tariffs.

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Speaker 1: Gold. What do you think about gold here? Anika?

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Speaker 7: We still like gold, you know, I know that we've

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Speaker 7: had an immense cooling and crisis, but you have to

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Speaker 7: keep in mind we've had a very sharp, strong rally

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Speaker 7: in gold. Geopolitical risks, if anything, have not gone away.

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Speaker 7: I know that President Electroump has claimed that he will

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Speaker 7: end the war. But if you you know, the observations

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Speaker 7: that I'm noticing are, if anything, we've had a ramp

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Speaker 7: up of the war between Russia and Ukraine, and we're

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Speaker 7: also seeing tensions in the Middle East escalate. There is

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Speaker 7: you know, a cease five being called, but they are

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Speaker 7: contingent on a number of conditions which if you know,

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Speaker 7: any of the two parties violate, it will result in

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Speaker 7: extreme escalation of of those tensions. So that remains a

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Speaker 7: key support factor for gold. The second big one will

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Speaker 7: be physical buying by the central banks that remains you know,

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Speaker 7: front and center. ETF buying in gold or oriented EDCs

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Speaker 7: has resumed, remains very strong in China as well as Europe,

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Speaker 7: and I think those will be the structural drivers for

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Speaker 7: gold going forward.

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Speaker 4: What about when it comes to the ten year treasury yield?

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Speaker 4: The low in September was around three six right now

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Speaker 4: it's around four to two, and of course the high

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Speaker 4: this year is around four to seven. And what do

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Speaker 4: you think is most important for traders in those levels

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Speaker 4: as far as those thresholds mean for resistance as well support.

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Speaker 7: Yeah, I mean, it really all boils down to the

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Speaker 7: US elections and the results of the US elections. I mean,

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Speaker 7: you know, since we've seen Trump coming in taking power,

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Speaker 7: you know, most of his mandate is extremely inflationary, and

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Speaker 7: that just tells us that yields are likely to remain

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Speaker 7: higher for longer. You know, the expansion of fiscal policy

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Speaker 7: again points in the direction of yields remaining higher for longer,

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Speaker 7: and that just tells us that, you know, the expectation

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Speaker 7: of federiate cuts have now declined, and at the same time,

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Speaker 7: we're likely to have treasure yields remaining high, and that

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Speaker 7: could pressure equities going into twenty twenty five.

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Speaker 1: Nika, thank you so much. We appreciate that. Anika Gupta,

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Speaker 1: she's the director of macro Economic Research, Equities and Commodities

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Speaker 1: Group over there at Wisdom treat She is based in London.

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Speaker 1: We appreciate getting a few minutes of her time.

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Speaker 2: This is the Bloomberg Surveillance Podcast. Listen live each weekday

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Speaker 2: starting at seven am Eastern on applecar Play and Android

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Speaker 1: You know the economic data Jesse the macroeconomic data that

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Speaker 1: we see on Eco go that we use all the time.

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Speaker 1: I mean, GDPs pretty darn solid, inflation coming down, maybe

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Speaker 1: not where the Fed exactly wants to be coming down.

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Speaker 1: The retail sales numbers can seem so strong, pretty darn strong,

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Speaker 1: but you still get that sense that that K shaped

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Speaker 1: economy still out there, not everyone is participating in it

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Speaker 1: kind of begs a question, how are the small businesses

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Speaker 1: doing out there in the US economy. Gene Marx can

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Speaker 1: help us out on that. Gene Marxy is the founder

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Speaker 1: of the Marx Group. Hey, Gene, talk to us about

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Speaker 1: kind of your clients, your small business owners. How are

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Speaker 1: they doing out there?

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Speaker 6: First of well, good morning, And I can tell you

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Speaker 6: that small businesses themselves, when you try to talk about

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Speaker 6: their you know, how they're generally doing, it's a little

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Speaker 6: tough to generalize, only because there's thirty three million small businesses,

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Speaker 6: you know, guys.

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Speaker 3: I mean there's you know, all across the country.

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Speaker 6: The businesses themselves make up half of our GDP, half

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Speaker 6: of our employees. When I you know, serving my clients

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Speaker 6: and my readers and my community kind of depends on

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Speaker 6: the industry that they're in or It depends on the

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Speaker 6: region that they're in.

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Speaker 3: I mean, some some are stronger than others.

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Speaker 6: But if you want to do like just a general take,

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Speaker 6: I would say that twenty twenty four has been a

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Speaker 6: challenging year for most small businesses.

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Speaker 3: You know. I just did a piece for the Philadelphia.

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Speaker 6: Inquiry and I interviewed about a dozen small businesses in

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Speaker 6: the Philadelphia area, retailers, distributors, whatnot, how they were preparing

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Speaker 6: for the holiday season and how twenty twenty four has

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Speaker 6: been very non you know, very anecdotal, and every single

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Speaker 6: one of them across the board had said that they

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Speaker 6: were hoping that the holidays were going to be saving

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Speaker 6: them this year, because they've been, you know, they have

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Speaker 6: been struggling. So again, tough to generalize because again some

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Speaker 6: businesses have done better than others. But if you were

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Speaker 6: to do that for the thirty plus million small businesses,

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Speaker 6: you know, I would sum up twenty twenty four as

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Speaker 6: as a challenging year. Also, one final thing, you know,

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Speaker 6: I wrote a piece for The Hill where I summed

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Speaker 6: up a bunch of surveys that were taken by Bank

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Speaker 6: of America and Verizon and you know other places for

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Speaker 6: the National Federation of Independent Businesses, those surveys also found

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Speaker 6: the same, you know, the same thing. You know, Revenues

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Speaker 6: themselves were flat or even a little bit down, and

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Speaker 6: profits themselves were also flat among those surveys.

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Speaker 3: And this is through September thirtieth of twenty twenty four.

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Speaker 3: So I hope that.

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Speaker 6: Gives you some indication as to you know, where their

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Speaker 6: heads are at right now.

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Speaker 4: To your point, Jim, when it comes to those small businesses,

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Speaker 4: they're typically highly indebtitive and also really sensitive to higher

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Speaker 4: interest rates. So especially over the past few years, as

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Speaker 4: the FED was really aggressive with raising borrowing costs, they

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Speaker 4: were obviously more reliant on kind of cheap labor as well.

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Speaker 4: In addition to what's happening, when you think about rate

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Speaker 4: cuts potentially relieving them, but also we might not see

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Speaker 4: as aggressive rate cuts next year, but also the other

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Speaker 4: caveat too, when you have smaller companies that are more

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Speaker 4: dependent on cheaper labor. How will mass deportations from the

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Speaker 4: Trump administration end up affecting small businesses to.

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Speaker 6: That end, that's a great question, Jess and I get

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Speaker 6: asked that question a lot about mass deportation. So you know,

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Speaker 6: my understanding is and you guys correct me if you

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Speaker 6: think this is wrong. But the idea between the Trump

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Speaker 6: administration's mass deportation is to deport illegal or undocumented immigrants.

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Speaker 3: So when you look at.

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Speaker 6: It face value, that should have no impact on small

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Speaker 6: businesses because why would small businesses be hiring illegal or

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Speaker 6: undocumented people? Right, So, you know, on the one hand,

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Speaker 6: you have, you know, some small.

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Speaker 3: Businesses that are you know, you're making sure they're doing

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Speaker 3: what they need.

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Speaker 6: To do among the law, and they are not hiring

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Speaker 6: undocumented immigrants, and most of my clients are that way.

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Speaker 6: But then you do have some small businesses that are

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Speaker 6: practicing that I'm.

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Speaker 3: Not quite sure, you know, what the impact will be

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Speaker 3: on them.

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Speaker 6: And I'm not quite sure that most of us who

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Speaker 6: are complying with the law care what the impact would

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Speaker 6: be on those businesses, because if they are hiring undocumented

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Speaker 6: or illegal people that tend to be deported, again, they

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Speaker 6: were breaking the law from the very beginning, and they're

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Speaker 6: going to have to start getting legal if they want

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Speaker 6: to compete fairly. So you know, that's the impact that

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Speaker 6: I see for those clients of mine that are complying

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Speaker 6: with the law and making sure that their employees have

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Speaker 6: the right documentation, they're not going to see any impact from.

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Speaker 3: This type of thing.

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Speaker 6: But for those companies that have not been complying with

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Speaker 6: the law, yeah they'll be impacted by it. But then again,

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Speaker 6: maybe they should be impacted by it if they're hiring

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Speaker 6: people that don't have the right documentation.

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Speaker 1: Another aspect of the incoming Trump administration, at least at

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Speaker 1: this point in terms of speculation, is potentially lower taxes.

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Speaker 1: Give us a sense of what I I think that's

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Speaker 1: going to be good for the small business owner. How

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Speaker 1: big of an issue is it?

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Speaker 3: Massive?

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Speaker 6: So I've been reading if you haven't figured it out

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Speaker 6: in front of you guys watching me on YouTube, I'm

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Speaker 6: actually a certified public accountant, so that should come as

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Speaker 6: no surprise to anybody when you look at this face.

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Speaker 6: So taxes has been a big issue for us this year,

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Speaker 6: and next year is going to be a tax arm again.

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Speaker 6: I mean there's going to be such a huge change

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Speaker 6: in taxes that impacts small businesses and all of us individually.

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Speaker 3: For the small business owner.

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Speaker 6: There is one giant well there are a few, but

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Speaker 6: there's one giant tax deduction that is hopefully going to

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Speaker 6: be preserved it's the qualified Business income tax deduction. That's

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Speaker 6: where if you want to pass through business. Most businesses

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Speaker 6: are passed through, which means they're anes corporation or a partnership.

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Speaker 6: So whatever money you make at the business level passes

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Speaker 6: through to your individual tax return. Well, right now, because

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Speaker 6: of the twenty seventeen Tax Cuts and Jobs Act, we

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Speaker 6: get to deduct twenty percent of that income.

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Speaker 3: Before it hits our personal return.

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Speaker 6: So if I make a thousand bucks this year, only

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Speaker 6: eight hundred bucks gets taxed at the personal the individual level.

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Speaker 6: That provision is expected to expire at the end of

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Speaker 6: twenty twenty five.

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Speaker 3: You're going to have a huge impact on the small.

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Speaker 6: Businesses that have enjoyed that deduction since twenty seventeen. Now,

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Speaker 6: with the President Electron coming into office and hopefully with

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Speaker 6: the Congressional Bank Akee backing, he'll have the ability to

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Speaker 6: even either extend or make that deduction permanent. That will

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Speaker 6: have a huge impact on many small businesses. Other deductions

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Speaker 6: for research and development and also for the purchase of

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Speaker 6: capital equipment using bonus appreciation. Those deductions have either expired

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Speaker 6: already or they've been going away. They're expected to be

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Speaker 6: restored one hundred percent under the Trump administration and a

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Speaker 6: GOP Congress, and that also will be a huge tax

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Speaker 6: benefit to businesses. So you know, I have to say,

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Speaker 6: you know, during the election, when I was looking at

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Speaker 6: my personal tax bills as a business owner, it would

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Speaker 6: have gone up significantly, if you know, if Vice President

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Speaker 6: Harris had elected. But now you know the way the

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Speaker 6: election turned out, I think myself and a lot of

439
00:22:04,600 --> 00:22:09,640
Speaker 6: small business owners will continue to see lower taxes. And

440
00:22:09,720 --> 00:22:12,760
Speaker 6: obviously it's a huge expense for us, so the lower

441
00:22:12,760 --> 00:22:13,400
Speaker 6: we can keep it.

442
00:22:13,359 --> 00:22:13,680
Speaker 3: The better.

443
00:22:13,880 --> 00:22:15,560
Speaker 1: All Right, We'll see you pays for it. Gene Marx,

444
00:22:15,560 --> 00:22:17,600
Speaker 1: thank you so much. We appreciate it. Gene Mark's, founder

445
00:22:17,680 --> 00:22:22,280
Speaker 1: of the Marx Group. There.

446
00:22:24,119 --> 00:22:28,440
Speaker 2: This is the Bloomberg Surveillance Podcast. Listen live each weekday

447
00:22:28,520 --> 00:22:31,680
Speaker 2: starting at seven am Eastern on applecar Play and Android

448
00:22:31,720 --> 00:22:34,680
Speaker 2: Auto with the Bloomberg Business app. You can also watch

449
00:22:34,760 --> 00:22:38,000
Speaker 2: us live every weekday on YouTube and always on the

450
00:22:38,000 --> 00:22:39,000
Speaker 2: Bloomberg terminal.

451
00:22:39,200 --> 00:22:42,240
Speaker 1: Let's check in with Angie Solanki. She is a national

452
00:22:42,280 --> 00:22:46,280
Speaker 1: director of Retail Services for the US for Colliers. Angie,

453
00:22:46,320 --> 00:22:48,560
Speaker 1: thanks so much for joining us here on this Black Friday.

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00:22:49,119 --> 00:22:50,040
Speaker 3: Just stepping back.

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00:22:50,520 --> 00:22:52,800
Speaker 1: Do you think the consumers in a position to spend

456
00:22:52,840 --> 00:22:54,080
Speaker 1: here this holiday season.

457
00:22:55,280 --> 00:22:58,960
Speaker 8: Well, I'm here actually in southern California, at a shopping

458
00:22:59,000 --> 00:23:02,960
Speaker 8: center in a suburban market. So I was actually quite surprised.

459
00:23:03,240 --> 00:23:05,600
Speaker 8: This is not something I do on a routine basis.

460
00:23:05,640 --> 00:23:07,960
Speaker 8: I think the last time I actually came to a

461
00:23:08,000 --> 00:23:10,720
Speaker 8: Black Friday at five in the morning was about twenty

462
00:23:10,800 --> 00:23:13,760
Speaker 8: years ago. I think that was Kymart, I don't remember.

463
00:23:13,800 --> 00:23:18,080
Speaker 8: But nonetheless, here I am. I'm actually quite surprised. This

464
00:23:18,119 --> 00:23:21,520
Speaker 8: is a line in front of Target. I think you

465
00:23:21,600 --> 00:23:25,119
Speaker 8: had just mentioned it's not that long. But when I

466
00:23:25,160 --> 00:23:28,560
Speaker 8: got here, Cole's was actually opened an hour before, so

467
00:23:28,640 --> 00:23:31,480
Speaker 8: Target hasn't opened yet. It opens at six. I went

468
00:23:31,520 --> 00:23:35,119
Speaker 8: into Cole's and I was pleasantly greeted or surprised because

469
00:23:35,119 --> 00:23:38,680
Speaker 8: I got a five dollars cash Cole's cash card and

470
00:23:39,080 --> 00:23:41,639
Speaker 8: walked in and they said, you know, I was pretty

471
00:23:41,680 --> 00:23:46,520
Speaker 8: impressed with the sales. Fifty percent off on toys, fenty beauty,

472
00:23:46,600 --> 00:23:49,560
Speaker 8: and Sephora was thirty percent off. So there are some

473
00:23:49,600 --> 00:23:52,280
Speaker 8: really great deals right now, and consumers are leaning into

474
00:23:52,320 --> 00:23:53,240
Speaker 8: this all right.

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00:23:53,320 --> 00:23:57,879
Speaker 1: And Angie is reporting from East Vale, California, that is

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00:23:58,359 --> 00:24:01,800
Speaker 1: east of Los Angeles, really east of Anaheim, California, so

477
00:24:02,160 --> 00:24:04,200
Speaker 1: right there and showing some lines there. That's pretty cool.

478
00:24:04,760 --> 00:24:07,640
Speaker 4: Yeah, No, it definitely is, and especially because since you're

479
00:24:07,680 --> 00:24:09,800
Speaker 4: on the other side of the coast from US, obviously

480
00:24:09,800 --> 00:24:13,199
Speaker 4: it's still pretty early there, right before six am. So

481
00:24:13,800 --> 00:24:15,760
Speaker 4: it's interesting too when you're talking about some of the

482
00:24:15,880 --> 00:24:18,440
Speaker 4: different sales that you're seeing. How aggressive do you think

483
00:24:18,480 --> 00:24:19,720
Speaker 4: some of the promotions are going to be?

484
00:24:20,800 --> 00:24:22,639
Speaker 8: Oh, I think they're going to be pretty spot on

485
00:24:22,760 --> 00:24:25,919
Speaker 8: in terms of, you know, the deep discounts. So what

486
00:24:25,960 --> 00:24:29,600
Speaker 8: we're seeing is leading up to Black Friday it was

487
00:24:29,680 --> 00:24:33,080
Speaker 8: twenty to thirty percent. As of today this morning, I'm

488
00:24:33,119 --> 00:24:36,159
Speaker 8: seeing forty and up to seventy percent. So we have

489
00:24:36,200 --> 00:24:38,720
Speaker 8: a really short period of time this year, as we

490
00:24:38,800 --> 00:24:43,359
Speaker 8: all know, and it's really condensed. But you know, the

491
00:24:43,400 --> 00:24:46,399
Speaker 8: consumer today is really targeted in what they're doing, So

492
00:24:46,440 --> 00:24:48,720
Speaker 8: they're going out there and they are finding some of

493
00:24:48,720 --> 00:24:52,119
Speaker 8: these deep discounts to really benefit because they are, you know,

494
00:24:52,200 --> 00:24:53,440
Speaker 8: budget conscious right now.

495
00:24:54,000 --> 00:24:55,960
Speaker 1: So that's kind of where I wanted to go to, Angie.

496
00:24:56,520 --> 00:24:58,879
Speaker 1: What's your view of the consumer here? The retail sales

497
00:24:58,960 --> 00:25:02,680
Speaker 1: numbers we see are are pretty solid inflations coming down.

498
00:25:03,160 --> 00:25:05,680
Speaker 1: Employment is you know, four point one percent. Very low

499
00:25:05,720 --> 00:25:08,720
Speaker 1: wage gains seem pretty solid, but we know that there's

500
00:25:08,840 --> 00:25:11,919
Speaker 1: this k shape economy out there where a lot of

501
00:25:11,920 --> 00:25:15,919
Speaker 1: folks struggling. Quite frankly, what are you seeing in the numbers?

502
00:25:17,040 --> 00:25:18,800
Speaker 8: Yeah, no, I would agree with you. But you know

503
00:25:18,840 --> 00:25:22,520
Speaker 8: what I'm really interested in monitoring right now is these

504
00:25:22,560 --> 00:25:25,800
Speaker 8: deep discounts. So what consumers are doing is they're cautious,

505
00:25:25,880 --> 00:25:29,639
Speaker 8: but they're very strategic in how they're buying, where they're buying,

506
00:25:29,680 --> 00:25:32,240
Speaker 8: what they're buying. So they may not be buying as

507
00:25:32,359 --> 00:25:35,720
Speaker 8: much as they have in prior years, but what they

508
00:25:35,760 --> 00:25:38,840
Speaker 8: are doing is they're buying fewer items, but that are

509
00:25:38,920 --> 00:25:42,080
Speaker 8: very thoughtful that they're providing to either their families or

510
00:25:42,080 --> 00:25:44,680
Speaker 8: their loved ones. So I think it's much more strategic

511
00:25:44,840 --> 00:25:47,800
Speaker 8: in terms of how they're going about this shopping season.

512
00:25:48,119 --> 00:25:49,520
Speaker 8: The other thing I'd say is there's a lot of

513
00:25:49,600 --> 00:25:53,560
Speaker 8: fomo out there. I am really surprised the shopping bags

514
00:25:53,600 --> 00:25:56,600
Speaker 8: are still all around. I was earlier this week. I

515
00:25:56,640 --> 00:26:00,680
Speaker 8: went to Disney Downtown Disney and it was just packed

516
00:26:00,680 --> 00:26:04,760
Speaker 8: with shoppers buying, you know, all the pre block Friday

517
00:26:04,800 --> 00:26:08,040
Speaker 8: sale items. So if people are still out there buying.

518
00:26:08,359 --> 00:26:10,680
Speaker 4: What specific products. Do you think when you're thinking more

519
00:26:10,720 --> 00:26:14,000
Speaker 4: about electronics versus apparel, where do you see people spitting

520
00:26:14,040 --> 00:26:14,879
Speaker 4: the most?

521
00:26:15,680 --> 00:26:17,359
Speaker 8: Yeah, definitely. I think you know, you're not going to

522
00:26:17,400 --> 00:26:20,960
Speaker 8: see on the high end, high price point electronics, but

523
00:26:21,080 --> 00:26:23,840
Speaker 8: like the AirPods, things of that nature. Look, I just

524
00:26:23,920 --> 00:26:27,320
Speaker 8: bought these. These are my first and only metaglasses that

525
00:26:27,400 --> 00:26:30,199
Speaker 8: I wanted to test out, and they were on sale.

526
00:26:30,520 --> 00:26:32,040
Speaker 8: You know, it was like, hey, if I'm going to

527
00:26:32,119 --> 00:26:34,160
Speaker 8: get thirty percent off, might as well try it. But

528
00:26:34,240 --> 00:26:35,920
Speaker 8: my point is that I think you're going to start

529
00:26:35,920 --> 00:26:38,520
Speaker 8: seeing you know, more of the kind of the lower

530
00:26:38,560 --> 00:26:41,720
Speaker 8: price point items on the electronics side, more on beauty.

531
00:26:42,040 --> 00:26:44,040
Speaker 8: I would say, I think people are a bit you know,

532
00:26:44,440 --> 00:26:47,560
Speaker 8: flushed out on apparel, so not as much. I think

533
00:26:47,600 --> 00:26:50,240
Speaker 8: shoes are definitely going to be on the higher end,

534
00:26:50,320 --> 00:26:51,680
Speaker 8: so you're going to see a lot of people buying

535
00:26:51,720 --> 00:26:53,200
Speaker 8: more on the shoe side, Jess.

536
00:26:53,200 --> 00:26:55,720
Speaker 1: We had Dana Tellsley from Tellsy Advisor in earlier this

537
00:26:55,720 --> 00:26:58,240
Speaker 1: week and she said, the go to item is the

538
00:26:58,320 --> 00:27:02,159
Speaker 1: Birkenstock closed hoe shoe, which I meet they thought of

539
00:27:02,200 --> 00:27:03,200
Speaker 1: John Tucker, right.

540
00:27:03,240 --> 00:27:03,720
Speaker 8: I mean.

541
00:27:05,160 --> 00:27:08,160
Speaker 4: The top of his list along with that hammer exactly.

542
00:27:08,640 --> 00:27:13,800
Speaker 1: Yes. Yeah, So Angie. So, you know, we saw when

543
00:27:14,400 --> 00:27:16,480
Speaker 1: Walmart reported that they said they had they saw a

544
00:27:16,520 --> 00:27:18,960
Speaker 1: lot of strength coming from some of their customers with

545
00:27:19,119 --> 00:27:22,320
Speaker 1: incomes north of one hundred thousand dollars. That surprised a

546
00:27:22,359 --> 00:27:25,359
Speaker 1: lot of people. So it seems like people are looking

547
00:27:25,400 --> 00:27:27,560
Speaker 1: for just a lot of folks are just looking for

548
00:27:27,680 --> 00:27:28,400
Speaker 1: value out there.

549
00:27:29,480 --> 00:27:31,919
Speaker 8: It's all about the value game right now. It's you know,

550
00:27:32,160 --> 00:27:34,840
Speaker 8: I would say, you know, mid middle income and below,

551
00:27:35,280 --> 00:27:37,280
Speaker 8: they're all out there looking for that that I think

552
00:27:37,359 --> 00:27:38,680
Speaker 8: is the name of the game because you have to

553
00:27:38,680 --> 00:27:41,159
Speaker 8: stop and think about it. You know, for those that

554
00:27:41,200 --> 00:27:44,040
Speaker 8: are you know, in one hundred thousand dollars range in

555
00:27:44,240 --> 00:27:48,520
Speaker 8: one hundred thousand annual income and above, really their spend

556
00:27:48,680 --> 00:27:51,320
Speaker 8: is allocated very differently. So they're going to be traveling,

557
00:27:51,440 --> 00:27:53,879
Speaker 8: it's services, they're going to be looking at, you know,

558
00:27:54,040 --> 00:27:57,679
Speaker 8: actual product purchase. So you know, their spend is just

559
00:27:57,720 --> 00:27:59,639
Speaker 8: allocated differently from from others.

560
00:28:00,160 --> 00:28:02,760
Speaker 4: What about when it comes to shipping in potential product

561
00:28:02,800 --> 00:28:05,480
Speaker 4: delays this year, because you're just mentioning how there's a

562
00:28:05,520 --> 00:28:07,919
Speaker 4: few shorter days ahead of the Christmas holiday.

563
00:28:09,240 --> 00:28:12,040
Speaker 8: Yeah, you know what's really interesting to me is just

564
00:28:12,119 --> 00:28:15,159
Speaker 8: talking about shipping in delays. We've become so accustomed to

565
00:28:15,200 --> 00:28:18,760
Speaker 8: getting everything immediately the minute we hit the buy button.

566
00:28:19,080 --> 00:28:20,800
Speaker 8: So I think we're going to see a surge and

567
00:28:20,920 --> 00:28:23,679
Speaker 8: in store. So that's our prediction, is that we're going

568
00:28:23,680 --> 00:28:25,480
Speaker 8: to definitely see much more of a surge in terms

569
00:28:25,480 --> 00:28:28,280
Speaker 8: of people going into stores and shopping, and hopefully for

570
00:28:28,320 --> 00:28:30,919
Speaker 8: our retailers that's a great gain because maybe they can

571
00:28:30,920 --> 00:28:32,640
Speaker 8: see an upside in a second purchase.

572
00:28:33,480 --> 00:28:35,080
Speaker 1: All right, Anjie, thanks so much for joining us.

573
00:28:35,119 --> 00:28:35,280
Speaker 8: A J.

574
00:28:35,400 --> 00:28:40,040
Speaker 1: Slank joining us there. She is at Colliers covering the

575
00:28:40,040 --> 00:28:43,760
Speaker 1: retail space. She's right now reporting outside a retail store

576
00:28:43,800 --> 00:28:47,560
Speaker 1: to talk about the retail of business. She's in Eastville, California,

577
00:28:47,840 --> 00:28:51,040
Speaker 1: in front of a Target and Dick's Sporting store Target

578
00:28:51,040 --> 00:28:52,240
Speaker 1: that has palm trees.

579
00:28:52,640 --> 00:28:57,120
Speaker 2: This is the Bloomberg Surveillance Podcast, available on Apple, Spotify,

580
00:28:57,240 --> 00:29:00,640
Speaker 2: and anywhere else you get your podcasts US and live

581
00:29:00,680 --> 00:29:04,440
Speaker 2: each weekday seven to ten am Eastern on Bloomberg dot com,

582
00:29:04,480 --> 00:29:08,080
Speaker 2: the iHeartRadio app, tune In, and the Bloomberg Business app.

583
00:29:08,360 --> 00:29:11,360
Speaker 2: You can also watch US live every weekday on YouTube

584
00:29:11,720 --> 00:29:13,520
Speaker 2: and always on the Bloomberg terminal