WEBVTT - Oil Dips in Thin Post-Christmas Trade Amid Ukraine Talk Progress 0:00:02.720 --> 0:00:10.600 Bloomberg Audio Studios, podcasts, radio news. You're listening to the 0:00:10.600 --> 0:00:14.560 Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 0:00:14.640 --> 0:00:17.880 Eastern on Apple Coarclay, and Android Auto with the Bloomberg 0:00:17.920 --> 0:00:21.000 Business App. Listen on demand wherever you get your podcasts, 0:00:21.360 --> 0:00:23.120 or watch us live on YouTube. 0:00:25.200 --> 0:00:27.880 I want to check in with Ellen Wald. She is 0:00:28.560 --> 0:00:32.760 joining us here. Ellen. You know, a lot of going 0:00:32.800 --> 0:00:33.120 on in. 0:00:33.080 --> 0:00:36.879 The geopolitical markets impacting the global crude market, but we 0:00:36.960 --> 0:00:40.040 still got crud at low levels Brent CRWD sixty one bucks, 0:00:40.479 --> 0:00:43.760 WTI fifty seven dollars here. What's your view of the 0:00:43.800 --> 0:00:46.040 supplying demand that there for global crud? 0:00:47.080 --> 0:00:48.959 Yeah, I think a lot of what we're seeing right 0:00:49.000 --> 0:00:51.600 now is, first of all, kind of end of year, 0:00:51.960 --> 0:00:53.320 not a lot of trading going on. 0:00:53.240 --> 0:00:57.400 In general, you know, not a lot of people on 0:00:57.440 --> 0:00:59.240 you know, working and trading a whole lot. 0:00:59.280 --> 0:01:01.720 But also I do think that we are actually seeing 0:01:02.240 --> 0:01:07.119 a pullback because earlier this month there were incredible hopes 0:01:07.280 --> 0:01:11.720 that we might see a resolution to the Russia Ukraine conflict, 0:01:11.760 --> 0:01:12.600 and that one brought. 0:01:12.440 --> 0:01:14.800 A lot of oil back of the market. I think 0:01:14.800 --> 0:01:17.840 we're kind of seeing kind of a pullback from that. 0:01:17.959 --> 0:01:20.120 People are realizing like that's that's not actually going to 0:01:20.160 --> 0:01:25.119 happen that soon. I also think that we're also seeing 0:01:25.160 --> 0:01:27.440 a little bit of a pullback from a slight fear 0:01:27.680 --> 0:01:28.920 of a supply. 0:01:28.720 --> 0:01:32.240 Disruption regarding Venezuela. It's pretty clear that the only supply 0:01:32.280 --> 0:01:33.120 disruption that's. 0:01:32.920 --> 0:01:35.720 Going on is Venezuela's supply is not going to reach 0:01:35.760 --> 0:01:36.600 the rest of the world. 0:01:37.280 --> 0:01:38.759 But the issue there is. 0:01:38.720 --> 0:01:41.560 That once the US is comveandeered this crewed, and President 0:01:41.600 --> 0:01:44.400 Trump has said outright that he plans to just you know, 0:01:44.520 --> 0:01:47.680 take the crew, put it into two US supplies, put 0:01:47.720 --> 0:01:51.040 it into the spr and whatnot, and that actually introduces 0:01:51.160 --> 0:01:54.200 more supply into the system, because this was crude oil 0:01:54.280 --> 0:01:56.680 that was sanctioned, was kind of being bought on the 0:01:56.720 --> 0:02:00.200 black market, but now it's being introduced into the the 0:02:00.280 --> 0:02:03.280 larger supply, and so that's going to push prices down, 0:02:03.480 --> 0:02:06.840 believe it or not. Though I do think that, you know, 0:02:07.440 --> 0:02:10.320 it's not quite settled there. We're really going off exactly 0:02:10.560 --> 0:02:14.760 what he said. So I think that there's a fear 0:02:14.840 --> 0:02:18.399 that we've got rising supply and that demand is not 0:02:18.520 --> 0:02:22.800 all that firm, that we could definitely see declining demand. 0:02:23.280 --> 0:02:25.680 I do think when we're looking ahead to twenty twenty 0:02:25.720 --> 0:02:28.520 six though, that people are looking very closely at the 0:02:28.639 --> 0:02:32.200 US supply and whether it's going to start to show 0:02:32.320 --> 0:02:34.000 signs of pulling back. 0:02:34.840 --> 0:02:38.320 Interesting, So maybe an issue of oversupply going in twenty 0:02:38.400 --> 0:02:41.680 twenty six where US becomes sort of a marginal barrel there. 0:02:42.560 --> 0:02:44.400 What's really interesting in some of your notes and I'm 0:02:44.400 --> 0:02:47.240 thinking about today in particular the move We've got thin trading, 0:02:47.240 --> 0:02:49.959 but oil is lower. As you mentioned, maybe people are 0:02:51.200 --> 0:02:54.280 taking three steps ahead to think what Venezuela ultimately has 0:02:54.400 --> 0:02:54.840 in terms of. 0:02:54.840 --> 0:02:55.680 Impact on supply. 0:02:56.160 --> 0:02:58.639 But also there is tentative even though you seem to 0:02:58.639 --> 0:03:00.440 say it's a little bit ahead of its there is 0:03:00.440 --> 0:03:05.160 some tentative optimism around a long stalled Ukraine piece talk 0:03:05.240 --> 0:03:08.920 at least in Zelenski looking to visit President Trump in Florida. 0:03:08.960 --> 0:03:12.960 We understand you make the leap that maybe all of 0:03:13.000 --> 0:03:16.560 this is something that then ultimately affects China. Can you 0:03:16.600 --> 0:03:19.480 talk us through as to why we see Venezuela and 0:03:19.520 --> 0:03:22.440 Russia maybe impacting China in a way that we should 0:03:22.800 --> 0:03:23.440 keep an eye on. 0:03:24.320 --> 0:03:28.440 Yeah, exactly, so, right now, China is a huge purchaser 0:03:28.480 --> 0:03:29.760 of Russian oil. 0:03:29.800 --> 0:03:30.600 They're also a. 0:03:30.520 --> 0:03:32.800 Purchaser of Venezuelan oil and not you know, to the. 0:03:32.800 --> 0:03:36.320 Extent that they purchase Russian and Iranian crewed bit still 0:03:36.600 --> 0:03:40.760 and so really, you know, this impacts China supply, and 0:03:41.080 --> 0:03:43.880 China has really been kind of getting away with an 0:03:43.880 --> 0:03:47.680 incredible amount of very low cost supply that they're buying 0:03:47.760 --> 0:03:50.040 off of this so called black market. 0:03:50.440 --> 0:03:53.800 And you know, if some of this supply that they 0:03:53.800 --> 0:03:55.720 even buying off the black market gets. 0:03:55.520 --> 0:04:00.960 Transitioned into the regular you know, oil market into supply, yes, 0:04:01.080 --> 0:04:03.320 it's going to push prices down overall. 0:04:03.440 --> 0:04:04.400 But China is. 0:04:04.360 --> 0:04:06.320 Going to start to have to pay more because they're 0:04:06.360 --> 0:04:10.080 paying such incredible discounts. 0:04:08.840 --> 0:04:11.120 For their sanctioned oil that they're buying right now. 0:04:11.280 --> 0:04:13.880 So China could be kind of looking at this with 0:04:14.720 --> 0:04:16.840 They probably are looking at this with a lot of 0:04:16.839 --> 0:04:19.719 interest in you know, what's going to be the prices 0:04:19.760 --> 0:04:21.840 that we're going to have to pay for oil in 0:04:21.920 --> 0:04:26.520 twenty twenty six, given all of these shifting geopolitical factors, 0:04:26.680 --> 0:04:29.719 and so they may actually be anticipating having to pay more, 0:04:29.960 --> 0:04:32.400 whereas the rest of the world is looking at paying less. 0:04:33.120 --> 0:04:34.640 Carolyn, you may not know this, but I am a 0:04:34.680 --> 0:04:37.880 big fan of the television show Landman, So I now 0:04:37.920 --> 0:04:41.080 consider myself an expert on all things oil and gas. 0:04:41.160 --> 0:04:44.200 So Ellen are good friends down in the oil patch. 0:04:44.279 --> 0:04:47.200 They can't be very happy with WTI and but they're 0:04:47.240 --> 0:04:49.680 fifty seven handle what are they doing today? 0:04:50.760 --> 0:04:51.480 What are they doing? 0:04:51.600 --> 0:04:54.720 So it's really interesting because if you want to know 0:04:55.040 --> 0:04:57.080 or if you want to get an idea about what's 0:04:57.120 --> 0:04:58.960 going on in the oil patch, yes, you could watch 0:04:59.040 --> 0:05:02.680 land Men. You could hop on over to the Dallas 0:05:03.000 --> 0:05:05.599 the Bank, the Dallas Federal Reserve where they do a 0:05:05.680 --> 0:05:10.240 quarterly survey of oil producers and also oil services companies, 0:05:10.279 --> 0:05:11.919 and they will give you a little glimpse into the 0:05:11.920 --> 0:05:12.880 mind of what they're thinking. 0:05:12.920 --> 0:05:14.560 And so the latest survey has showed. 0:05:14.360 --> 0:05:19.000 Everything from things are looking up. I'm you know, you know, 0:05:19.160 --> 0:05:23.039 not planning to reduce any production to I have to 0:05:23.080 --> 0:05:26.120 pay people to take my natural gas so that I 0:05:26.160 --> 0:05:27.320 can continue to produce. 0:05:27.600 --> 0:05:30.880 So I think the answer is it's really mixed, and. 0:05:30.839 --> 0:05:34.480 Some producers are looking at a better outlook and other 0:05:34.520 --> 0:05:36.880 producers are looking at a much more dismal outlook. And 0:05:36.920 --> 0:05:39.400 I do think that depends a lot on exactly where 0:05:39.400 --> 0:05:42.279 they're producing and how they're producing and what their wells 0:05:42.320 --> 0:05:46.280 look like, because it's really become a very complex and 0:05:47.120 --> 0:05:49.880 a complex game out there in terms of what kind 0:05:49.920 --> 0:05:52.440 of wells you have, what stage they're in, where you 0:05:52.520 --> 0:05:55.359 are and drilling in terms of how much you're going 0:05:55.400 --> 0:05:56.080 to get per barrel. 0:05:56.520 --> 0:05:58.360 This is a term that nobody in the oil business 0:05:58.400 --> 0:06:00.960 likes to hear. But is there a gloss in global 0:06:01.080 --> 0:06:01.960 oil supply? 0:06:03.440 --> 0:06:04.560 That depends when you ask. 0:06:05.160 --> 0:06:09.159 I think if you if you ask the IA, they'll 0:06:09.200 --> 0:06:11.960 tell you, yes, we're in a huge oil supply clut. 0:06:12.040 --> 0:06:14.720 If you ask Opek, they're going to say no, it's 0:06:14.800 --> 0:06:17.800 definitely not as bad as the IA seems. Now, why 0:06:17.800 --> 0:06:21.360 can we have these two competing answers well, because it's actually. 0:06:21.040 --> 0:06:23.159 Really hard to count all those barrels of oil out there. 0:06:23.480 --> 0:06:25.760 It's not like you just get a number out of 0:06:25.880 --> 0:06:27.960 computer spits you a number for you know, what's global 0:06:28.000 --> 0:06:30.560 consumption today. These are things that they have to be 0:06:30.560 --> 0:06:32.960 measured and it can be quite difficult, particularly with all 0:06:33.000 --> 0:06:36.000 of these sanctioned oil going on out there. So I 0:06:36.040 --> 0:06:40.560 can see why they're coming off with different different answers. 0:06:40.600 --> 0:06:44.320 Fascinating always catching up with Ellenwold of the Atlantic Council 0:06:44.480 --> 0:06:48.359 She's also got a book, Saudi Inc. We love to 0:06:48.400 --> 0:06:50.040 read that, So thank you. 0:06:50.040 --> 0:06:53.200 Stay with us. More from Bloomberg Intelligence coming up after this. 0:06:57.080 --> 0:07:00.799 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:07:00.880 --> 0:07:03.960 weekdays at ten am Eastern on Apple, Cocklay and Android 0:07:03.960 --> 0:07:07.279 Auto with the Blueberg Business App. Listen on demand wherever 0:07:07.320 --> 0:07:10.880 you get your podcasts, or watch us live on YouTube. 0:07:11.440 --> 0:07:14.120 All right, retail sales, I think this Christmas season, the 0:07:14.160 --> 0:07:17.240 holiday season, from what we heard from the experts, Caroline, 0:07:17.240 --> 0:07:20.040 have been pretty solid. Kind of people are spending money, 0:07:20.320 --> 0:07:20.880 you know, so. 0:07:21.320 --> 0:07:24.240 Anecdotally, anecdotally I spent some money. 0:07:24.600 --> 0:07:27.000 Okay, speak right now, we've got some hard data folks 0:07:27.360 --> 0:07:30.560 joining us now with Michelle Allan, CEO of June Group 0:07:30.840 --> 0:07:34.160 and chief business officer at VERB talk about just kind 0:07:34.160 --> 0:07:36.960 of the consumer out there and retail and how's. 0:07:36.720 --> 0:07:37.520 The consumer doing. 0:07:37.560 --> 0:07:40.640 We've all heard about the K shaped economy, but what 0:07:40.640 --> 0:07:44.040 does that really mean for retailers out there and dollars 0:07:44.080 --> 0:07:44.559 being spent? 0:07:45.280 --> 0:07:47.000 So, Michelle, thanks so much for joining us here. 0:07:47.000 --> 0:07:49.120 What can you tell us about what we've learned over 0:07:49.120 --> 0:07:50.520 the last several. 0:07:50.200 --> 0:07:52.360 Weeks, maybe about the US consumer? 0:07:53.120 --> 0:07:56.320 Yeah, thanks thanks for having me. First of all, you know, 0:07:56.360 --> 0:08:01.120 we analyzed billions of search for on a basis using 0:08:01.160 --> 0:08:04.560 our Captify product, and what we're seeing in this holiday 0:08:04.600 --> 0:08:09.720 season is this very interesting behavior from consumers were you know, 0:08:09.840 --> 0:08:13.920 instead of being focused on deal driven shopping, they are 0:08:13.960 --> 0:08:19.400 shifting to an intent driven one. Obviously, before Black Friday 0:08:19.720 --> 0:08:22.800 you see a lot of you know, consumers looking for deals. 0:08:23.200 --> 0:08:27.200 But what we saw in the time leading to Christmas 0:08:27.600 --> 0:08:33.800 after Black Friday is that consumers were looking for trusted brands, 0:08:34.400 --> 0:08:36.640 They were looking for creative toys, and they were looking 0:08:36.640 --> 0:08:41.840 for subscriptions that remove friction and deliver instant value. Overall, 0:08:41.920 --> 0:08:46.240 this tells us that consumers weren't overwhelmed by what was 0:08:46.400 --> 0:08:50.160 available there. They were more intentional and selective around the 0:08:50.160 --> 0:08:51.200 brands that they chose. 0:08:51.320 --> 0:08:54.559 That's the term I've heard, like more intentional intentional buying. 0:08:54.559 --> 0:08:57.760 That's the first time I've heard that term here, but 0:08:57.840 --> 0:08:59.760 I've heard it a few times here this holiday season. 0:09:00.400 --> 0:09:02.600 How promotional were retailers out there? 0:09:02.600 --> 0:09:05.800 How promotional did they have to be, Michelle to drive traffic? 0:09:06.600 --> 0:09:09.440 Yeah, some of them. You know, there are two sides 0:09:09.480 --> 0:09:12.800 of the spectrum. You know, if you look at the markets, 0:09:12.960 --> 0:09:15.439 you still have the Marshalls and tim us of the world. 0:09:15.800 --> 0:09:18.800 We are looking to cast a white net and to 0:09:19.080 --> 0:09:21.640 attract those consumers that are looking. 0:09:21.360 --> 0:09:23.320 For for the for the deals. 0:09:23.720 --> 0:09:26.720 At the same time, when you look at the DTC brands, 0:09:26.800 --> 0:09:27.320 you know there. 0:09:27.240 --> 0:09:28.600 Will be partners of the world. 0:09:29.280 --> 0:09:32.600 They were more focused on creating this you know, premium 0:09:32.600 --> 0:09:37.079 experience around the shopping and you saw that translate into 0:09:37.120 --> 0:09:39.240 searchers that were you know, very. 0:09:39.040 --> 0:09:40.480 Specific to those brands. 0:09:40.840 --> 0:09:45.199 I think that consumers we're looking for brands that are trustable, 0:09:45.679 --> 0:09:48.920 that you know, will allow them to cast the white 0:09:49.000 --> 0:09:52.040 net when they are going and you know, buying gifts 0:09:52.040 --> 0:09:55.960 for their friends and relatives, but also tread and true 0:09:56.040 --> 0:10:01.840 brands that will never be objectionable or questionable for their 0:10:02.400 --> 0:10:03.000 last ones. 0:10:03.760 --> 0:10:06.679 How are people coming to those brands at the moment? 0:10:06.840 --> 0:10:12.240 There's companies that really managed to interweave the really bricks 0:10:12.280 --> 0:10:15.480 some watar element as well as the online and advertising. 0:10:15.960 --> 0:10:19.200 How you seeing people building a relationship with a brand 0:10:19.200 --> 0:10:19.679 at the moment. 0:10:20.840 --> 0:10:23.680 Yeah, I think that some of it is traditional buying, 0:10:23.800 --> 0:10:26.000 you know, traditional e commerce buying. You see that a 0:10:26.040 --> 0:10:29.560 lot with the DTC brands who have their own you 0:10:29.600 --> 0:10:31.000 know e commerce environments. 0:10:31.280 --> 0:10:34.160 But you also see a big shift into. 0:10:33.960 --> 0:10:37.960 Social There was around one hundred and eighty percent increase 0:10:38.400 --> 0:10:41.360 in searches related to the TikTok shop. So if you 0:10:41.440 --> 0:10:44.520 consider that, you know, in the past, TikTok was a 0:10:44.559 --> 0:10:48.160 great venue for brand discovery. It was kind of like 0:10:48.200 --> 0:10:51.280 a PR tactic in a way, but now it's much 0:10:51.320 --> 0:10:54.840 more than that. It allows consumers to really close the 0:10:54.840 --> 0:10:58.520 loop and make a purchase very quickly, So it went 0:10:58.600 --> 0:11:02.480 beyond just, you know, a discovery tool as it used 0:11:02.520 --> 0:11:04.600 to be. And I think that brands that are that 0:11:04.640 --> 0:11:08.120 are smart about reaching their target audiences are going to 0:11:08.400 --> 0:11:11.960 put more focus on those types of shoppings in environments 0:11:11.960 --> 0:11:16.080 because shopping windows are becoming smaller, shorter and shorter, and 0:11:16.920 --> 0:11:20.280 consumers want to feel good about the decisions that they 0:11:20.320 --> 0:11:23.440 make and social environment is allowing. 0:11:23.120 --> 0:11:23.600 Them to do that. 0:11:23.640 --> 0:11:26.640 I mean, how do we break down generationally or just 0:11:27.240 --> 0:11:29.959 bring us with people who are on TikTok? Is it 0:11:30.320 --> 0:11:32.440 who is the person that's spending right now? What do 0:11:32.480 --> 0:11:34.600 they seem like? What are they what are their views 0:11:34.600 --> 0:11:37.320 on gifting? Is it mainly parents that are coming into 0:11:37.320 --> 0:11:39.160 TikTok and doing it? What are you seeing in terms 0:11:39.200 --> 0:11:42.400 of the gen z cohorts as well, we see the 0:11:42.440 --> 0:11:43.079 full gamut. 0:11:43.400 --> 0:11:44.960 I think that if you look at some of the 0:11:44.960 --> 0:11:48.800 brands that were mentioned in our research, you know, some 0:11:48.880 --> 0:11:53.880 of them cater to younger audiences, others cater to all 0:11:53.960 --> 0:11:54.800 their audiences. 0:11:55.040 --> 0:11:57.680 So we see really the full the full range. 0:11:58.360 --> 0:12:01.240 I think that sometimes people assume TikTok and those types 0:12:01.240 --> 0:12:05.280 of remdments are a better fit for the younger generations, 0:12:05.320 --> 0:12:09.160 but based on what we're seeing, it's actually the full range. 0:12:09.280 --> 0:12:10.640 And that's just the beginning. 0:12:10.720 --> 0:12:14.280 Right with the introduction of l A lamps and creating 0:12:14.320 --> 0:12:17.600 shoppable experience with experiences with l lamps, I think that 0:12:17.640 --> 0:12:21.839 we're going to see more and more shopping experiences becoming 0:12:22.480 --> 0:12:27.080 more focused and shorter, and again consumers will want to 0:12:27.120 --> 0:12:30.360 feel good about what the decisions that they made. Removing 0:12:30.440 --> 0:12:34.400 reduced that level of anxiety or FOMO is going to 0:12:34.440 --> 0:12:37.520 be key to those brands that are interested and being 0:12:37.559 --> 0:12:39.000 successful in these environments. 0:12:39.280 --> 0:12:42.760 Michelle, I think we're just starting to see consumers broadly defined, 0:12:42.840 --> 0:12:45.640 get starting to get a little bit comfortable with AI 0:12:45.800 --> 0:12:49.360 and how AI might be helpful to them. Probably can 0:12:49.400 --> 0:12:52.720 say the same thing about retailers. How are they using AI? 0:12:53.160 --> 0:12:54.880 Just give us an overview kind of what we learned 0:12:54.880 --> 0:12:58.800 and maybe during this shopping season, was AI prominent with 0:12:59.400 --> 0:13:01.200 the consumer with the retailer. 0:13:02.400 --> 0:13:05.320 I think we're in early stages of that. I do 0:13:05.400 --> 0:13:08.199 think that there are certain verticals in the market that 0:13:08.240 --> 0:13:14.080 are already taking advantage of, you know, consumer's ability to 0:13:14.120 --> 0:13:17.840 find the right solution for them. I think travel is 0:13:17.840 --> 0:13:20.160 a great example for that. I mean, think about how 0:13:20.240 --> 0:13:23.920 much time you normally spend in finding the best flight 0:13:24.040 --> 0:13:27.480 or the best hotel and using AI in order to 0:13:28.040 --> 0:13:31.680 do that work for you. Using agents is going to 0:13:32.440 --> 0:13:35.120 reduce a lot of that thermo or anxiety that people 0:13:35.160 --> 0:13:37.439 normally have when they search for travel. 0:13:37.800 --> 0:13:39.199 And you know, travel is one of. 0:13:39.160 --> 0:13:42.280 Our biggest verticals, and we always look at, you know, 0:13:42.320 --> 0:13:46.880 what can travel clients or brands can do better, And 0:13:46.920 --> 0:13:48.840 I think that they are ahead of the game, and 0:13:48.880 --> 0:13:53.319 I'm expecting others in retail in other areas to follow 0:13:53.400 --> 0:13:56.400 suit and optimize, you know, in the same way that 0:13:56.440 --> 0:14:00.360 they used to optimize for web searchers, to opt demise 0:14:00.440 --> 0:14:05.040 for how their brands appear in those lm AI environments. 0:14:05.720 --> 0:14:08.760 So this year, though Michelle talked to us, is it 0:14:08.840 --> 0:14:11.959 still e commerce taking share from bricks and mortar or 0:14:12.000 --> 0:14:15.600 do we have maybe kind of a new status quo 0:14:15.679 --> 0:14:17.640 there between e commerce and bricks and mortar. 0:14:18.520 --> 0:14:20.880 I think that one interesting thing that we saw was 0:14:21.040 --> 0:14:26.800 actually digital subscriptions. I think that those generate this you know, 0:14:26.920 --> 0:14:29.600 instant value. You don't need to wait for a product 0:14:29.640 --> 0:14:33.680 to be delivered. And in the past, those types of 0:14:33.720 --> 0:14:36.360 products had a stigma to them that they are not 0:14:36.480 --> 0:14:40.040 thoughtful enough or not specific enough to the person that 0:14:40.080 --> 0:14:43.320 you were trying to gift, and we've seen that shift 0:14:43.360 --> 0:14:46.160 over time. I think that, you know, based on the 0:14:46.240 --> 0:14:50.560 data that we're seeing this year, we saw some strong 0:14:50.640 --> 0:14:54.080 signals that digital products now carry as much weight as 0:14:54.080 --> 0:14:58.280 physical products, especially when time is scarce. And I think 0:14:58.280 --> 0:15:00.800 that what makes it even more interesting is if you 0:15:00.840 --> 0:15:04.120 look at the types of products that are were being promoted. 0:15:05.240 --> 0:15:09.920 You know, can the on limited or peloton does also 0:15:09.960 --> 0:15:14.000 give a nod to everyone's New Year's resolutions, right and 0:15:14.320 --> 0:15:16.920 making sure that there is some alignment between the gift 0:15:17.480 --> 0:15:20.960 and what people are trying to do in Q one 0:15:21.600 --> 0:15:26.160 or you know Q five as we sometimes call it, all. 0:15:26.040 --> 0:15:30.240 About the wellness. Michelle Alone, chief business Officer, over connecting 0:15:30.200 --> 0:15:33.680 advertisers to publishers across emerging channels great to get your 0:15:33.720 --> 0:15:35.200 expertise today. Thank you very much. 0:15:35.320 --> 0:15:35.400 Ed. 0:15:36.320 --> 0:15:39.400 Stay with us. More from Bloomberg Intelligence coming up after this. 0:15:43.320 --> 0:15:47.040 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:15:47.120 --> 0:15:50.200 weekdays at ten am Eastern on Apple Coarclay and Android 0:15:50.200 --> 0:15:53.520 Auto with the Bloomberg Business App, Listen on demand wherever 0:15:53.560 --> 0:15:57.120 you get your podcasts, or watch us live on YouTube. 0:15:58.280 --> 0:15:59.480 We're not going to look at the day. We're going 0:15:59.520 --> 0:16:00.760 to look at the and we're going to look at 0:16:00.800 --> 0:16:03.120 what twenty twenty six brings too. With Carole Pepper pe 0:16:03.320 --> 0:16:04.120 Pull they got the puffect. 0:16:04.160 --> 0:16:08.480 The guest absolutely, Carol Pepper Pepper International CEO. Carol Again, 0:16:08.920 --> 0:16:10.760 Carolina and I were just kind of going over the 0:16:11.280 --> 0:16:14.160 total returns here in at twenty twenty five. What's the 0:16:14.200 --> 0:16:18.320 conversation you're having with your family office clients about twenty 0:16:18.480 --> 0:16:19.360 twenty six. 0:16:20.520 --> 0:16:24.640 Yeah, well, family offices are excited about this strong rally 0:16:25.080 --> 0:16:27.080 and although some of them still sat a bit on 0:16:27.120 --> 0:16:29.840 the sidelines during twenty five because in the beginning of 0:16:29.960 --> 0:16:32.680 the year it did look a bit dicey, they're all 0:16:32.760 --> 0:16:35.640 ready to take their dry powder and start investing. So 0:16:35.720 --> 0:16:37.560 I think it's going to be a very strong year. 0:16:38.080 --> 0:16:40.880 The fundamentals are there. We got that second, we've got 0:16:40.880 --> 0:16:44.480 a ray cut in December, which is phenomenal. The markets 0:16:44.520 --> 0:16:47.480 are strong, they're strong underpinnings, and so I think people 0:16:47.520 --> 0:16:50.360 are going to be going in early on. And as 0:16:50.360 --> 0:16:52.480 you say, if you can't make a deal in this market, 0:16:52.640 --> 0:16:55.480 go home, because it's going to be a fantastic market 0:16:55.480 --> 0:16:56.240 in twenty six. 0:16:56.600 --> 0:16:59.120 How much risk do you think your clients are going 0:16:59.160 --> 0:17:01.760 to be looking to take care after three strong years 0:17:01.760 --> 0:17:05.639 of equity returns, I think maybe looking outside of traditional 0:17:05.720 --> 0:17:08.200 public equity for maybe some other areas that might generate return. 0:17:09.280 --> 0:17:09.639 Well. 0:17:09.920 --> 0:17:13.400 Family offices are always interested in alternative investments and non 0:17:13.440 --> 0:17:18.680 correlated assets because we create asset allocations that last for generations, 0:17:19.000 --> 0:17:22.439 and portfolios are each tailored to the particular purpose of 0:17:22.440 --> 0:17:25.960 that portfolio. So for sure, we were in precious metals 0:17:25.960 --> 0:17:28.560 a couple of years ago. We've written that trend up. 0:17:28.960 --> 0:17:32.200 The AI data center trend is honestly just getting started, 0:17:32.200 --> 0:17:34.280 and a lot of those deals have been in the 0:17:34.320 --> 0:17:37.320 private side, through private debt deals and private hedge funds 0:17:37.560 --> 0:17:40.440 that are funding these plays. But those things will begin 0:17:40.480 --> 0:17:44.959 to come into the public markets as well. So AI technology, 0:17:45.600 --> 0:17:48.280 rare earth metals required to build a lot of this 0:17:48.440 --> 0:17:52.439 new technology that we're looking for in our country, deposits 0:17:52.480 --> 0:17:55.600 being found onshore that are going to be able to 0:17:55.640 --> 0:17:59.600 empower the resurgence of this new AI world that we're creating. 0:18:00.320 --> 0:18:02.800 There's a lot of areas to invest in this year 0:18:02.800 --> 0:18:03.520 in twenty. 0:18:03.280 --> 0:18:04.800 Six Carol, can I jump in on that, because we 0:18:04.800 --> 0:18:08.240 are anticipating some mega IPOs potentially in the AI world. 0:18:08.320 --> 0:18:11.639 We're expecting maybe SpaceX's sort of AI and defense in 0:18:11.640 --> 0:18:14.240 many ways, but Opening Eye could well tap the markets. 0:18:14.760 --> 0:18:17.160 If you're someone who hasn't managed to gain access through 0:18:17.160 --> 0:18:19.960 the private markets, are you left holding the baby? Do 0:18:20.000 --> 0:18:22.480 you think though, that actually there's more room to run 0:18:22.520 --> 0:18:24.480 in terms of valuations once in the public market. 0:18:25.359 --> 0:18:28.600 Absolutely, because you'll have an even larger capital base and 0:18:28.640 --> 0:18:29.960 they're just getting started. 0:18:30.440 --> 0:18:33.080 Family officers are working on this. You know, if you 0:18:33.080 --> 0:18:34.440 think about how quickly. 0:18:34.119 --> 0:18:37.879 The Internet changed, double triple, quadruple that rate of change. 0:18:37.920 --> 0:18:41.240 So even though we've got cutting edge ships today from Nvidia. 0:18:41.160 --> 0:18:42.439 We don't know what they're going to look like. 0:18:42.480 --> 0:18:44.960 Even by the end of the year, data centers that 0:18:45.040 --> 0:18:47.159 are the size of twenty football fields are going to 0:18:47.160 --> 0:18:50.639 shrink down to the size of shipping containers. Very shortly, 0:18:50.680 --> 0:18:53.840 you're going to find AI data centers inside of huge 0:18:53.880 --> 0:18:58.040 office buildings, for example, that have been repurposed to handle 0:18:58.080 --> 0:19:00.959 all the new compute power that's required. So you're going 0:19:01.000 --> 0:19:04.480 to see tremendous change happening in the AI space. 0:19:04.600 --> 0:19:07.240 And as that happens, you need a lot of capital. 0:19:07.359 --> 0:19:10.640 So yes, when it comes public, obviously the first few 0:19:10.720 --> 0:19:13.320 days is going to drift down. That's when you grab it, 0:19:13.720 --> 0:19:15.240 or on a fear day, because it's not like we're 0:19:15.240 --> 0:19:16.880 not going to have fear days in twenty six. 0:19:16.920 --> 0:19:18.160 We always have fear days. 0:19:18.520 --> 0:19:21.440 But yes, there will be opportunities for you to get 0:19:21.440 --> 0:19:25.359 into that trend, stick it into files college account or 0:19:25.359 --> 0:19:27.240 in your retirement account and just let it run. 0:19:27.560 --> 0:19:29.320 How much is the AI bubble going to be the 0:19:29.359 --> 0:19:32.360 fear trend? We have this on again, off again view. 0:19:32.440 --> 0:19:35.000 It feels as though people are brought back into AI 0:19:35.040 --> 0:19:37.359 optimism just in the last couple of weeks, but since 0:19:37.359 --> 0:19:40.600 October and onwards, we've had these fleeting moments of panic 0:19:40.680 --> 0:19:43.840 really that the debt that's getting loaded onto certain companies, 0:19:43.960 --> 0:19:46.439 or indeed just whether the productivity gains are going to 0:19:46.440 --> 0:19:48.960 be enough to vindicate the amount of infrastructure investment that 0:19:48.960 --> 0:19:49.399 we're seeing. 0:19:50.080 --> 0:19:52.640 Well, they will, it's just a question of timing, honestly. 0:19:53.200 --> 0:19:56.280 And the good part for the AI companies, Unlike during 0:19:56.320 --> 0:19:58.160 the dot Com these companies. 0:19:57.760 --> 0:19:59.320 Have a boatload of cash. 0:19:59.480 --> 0:20:02.639 If you rec during the dot com era, people were 0:20:02.760 --> 0:20:06.000 you know, basically buying on vaporware with no cash, no innings, 0:20:06.040 --> 0:20:09.360 no nothing. And in this case there is a massive 0:20:09.480 --> 0:20:12.240 cash hoard behind a lot of these plays. They learn 0:20:12.280 --> 0:20:14.960 their lessons and so they're ready to ride through those 0:20:15.000 --> 0:20:17.440 periods when there's doubt because other things are happening in 0:20:17.480 --> 0:20:19.160 the world besides AI. 0:20:19.400 --> 0:20:20.639 So I don't think they do. 0:20:20.600 --> 0:20:25.320