WEBVTT - Amazon & Google Are Defining Consumerism's Future, Munster Says 0:00:05.800 --> 0:00:08.360 Welcome to the Bloomberg p m L Podcast. I'm pim 0:00:08.400 --> 0:00:11.200 Fox along with my co host Lisa A. Bramowitz. Each 0:00:11.240 --> 0:00:14.440 day we bring you the most important, noteworthy and useful 0:00:14.480 --> 0:00:17.079 interviews for you and your money, whether you're at the 0:00:17.120 --> 0:00:20.360 grocery store or the trading floor. Find the Bloomberg p 0:00:20.520 --> 0:00:32.239 m L Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. 0:00:32.240 --> 0:00:35.360 All right now, right now, let's talk about Amazon and 0:00:35.479 --> 0:00:38.640 Alphabet parent company of Google earnings with Gene Munster. He 0:00:38.840 --> 0:00:42.879 is with the Loop of Ventures and Gene Munster tell us, well, 0:00:42.920 --> 0:00:45.839 first of all, congratulations on Loop Ventures as always for 0:00:45.920 --> 0:00:50.760 your prosperity and your your upward trajectory. Uh, you're gonna 0:00:50.800 --> 0:00:53.280 match that along with what's going on with Amazon and Google, 0:00:53.320 --> 0:00:55.880 because you know, you seem to have hitched your ride 0:00:55.920 --> 0:01:00.360 to to behemos that just keep growing. Yeah things. So, 0:01:00.400 --> 0:01:04.080 I mean, these are both megacab companies that are enjoying 0:01:04.360 --> 0:01:08.480 a phenomenal core business and have some other beds that 0:01:08.560 --> 0:01:11.160 should really reinvent these companies over the long hals, So 0:01:11.200 --> 0:01:14.040 I just want to give you two quick points. First 0:01:14.120 --> 0:01:17.759 is on Amazon, their unit growth is twenty four percent. 0:01:17.880 --> 0:01:20.399 That's the pace of the sold units. That was the 0:01:20.480 --> 0:01:22.680 same unit growth as in the December quarter, which is 0:01:22.720 --> 0:01:24.959 hard because the numbers get bigger, it's harder to continue. 0:01:25.000 --> 0:01:28.880 That's that's the impression number. And from Google's perspective, dead 0:01:28.959 --> 0:01:32.600 paid click growth, that's the key metric in the street 0:01:32.640 --> 0:01:36.000 was looking forward was up from last quarter. So what 0:01:36.080 --> 0:01:39.840 I really want to emphasize here is these are behemoth companies. 0:01:40.440 --> 0:01:43.880 Their core businesses are doing phenomenal, but the other crazy 0:01:44.000 --> 0:01:47.600 part is that they're investing in these other optionality values 0:01:47.600 --> 0:01:50.760 that will reinvent these businesses in the next decades. You know, 0:01:51.200 --> 0:01:54.120 as you talk about these behemoth companies that are taking 0:01:54.200 --> 0:01:57.840 over everything, I have to bring up the main theme 0:01:57.880 --> 0:01:59.560 that is on a lot of people's minds. At what 0:01:59.760 --> 0:02:03.080 point are these companies too big and are actually restricting 0:02:03.160 --> 0:02:06.320 growth in other parts of the economy and are frankly 0:02:06.640 --> 0:02:12.080 stifling out any competition that could possibly come up. Well, 0:02:12.240 --> 0:02:16.320 both of these companies have a disruptive factor on competition. 0:02:16.440 --> 0:02:19.040 So in to both cases, they had a huge impact 0:02:19.080 --> 0:02:21.280 in the media world. Obviously Amazon what they've done to 0:02:21.360 --> 0:02:24.880 brick and mortar, and so yes, they are causing an 0:02:24.880 --> 0:02:29.200 incredible wake of heartache for other companies. But the reality 0:02:29.360 --> 0:02:32.720 is that this is how consumers want the future to evolve, 0:02:32.760 --> 0:02:35.799 and they are defining that. And so I think that 0:02:35.800 --> 0:02:38.919 that's just the they're not too big too. They still 0:02:38.919 --> 0:02:41.760 have room to get bigger, and unfortunately for other companies, 0:02:41.760 --> 0:02:43.840 they're going to get some companies, a lot of companies 0:02:43.840 --> 0:02:46.280 will get run over teen months to just a but 0:02:46.520 --> 0:02:49.680 you know your numbers into perspective, all right, So unit 0:02:49.760 --> 0:02:53.440 growth at Amazon, at a company that is doing it, 0:02:53.520 --> 0:02:55.800 has a run rate right now of a hundred and 0:02:55.880 --> 0:03:01.480 forty two billion dollars. It's really hard to put your 0:03:01.480 --> 0:03:03.359 mind around. And we love doing this kind of stuff. 0:03:03.360 --> 0:03:05.600 But one other thought here is that if you think 0:03:05.639 --> 0:03:08.720 about total e commerce in the US, about twenty of 0:03:08.760 --> 0:03:13.160 it today is is Amazon, as you mentioned, growing overall 0:03:13.200 --> 0:03:15.320 e commerce from the US and growing at eight percent. 0:03:15.440 --> 0:03:18.799 So these are just staggering numbers. And and I want 0:03:18.840 --> 0:03:20.880 to make sure we also talk a little bit about 0:03:20.960 --> 0:03:22.760 what some of the things that both these companies are 0:03:22.760 --> 0:03:25.440 working on, because that I think it is equally as exciting. Well, 0:03:25.440 --> 0:03:27.359 go for you, go for it, Jim, because as you say, 0:03:27.400 --> 0:03:31.360 this is almost like creative destruction, and it is really uh, 0:03:31.400 --> 0:03:35.080 well it's creating the future now. It is so in 0:03:35.360 --> 0:03:38.000 Amazon's case, the three areas that they're really focused on 0:03:38.000 --> 0:03:42.280 our media fulfillment and then uh international, but media this 0:03:42.440 --> 0:03:46.040 basically they want to become more like a Showtime or 0:03:46.040 --> 0:03:49.480 an HBO and just continue to add content their fulfillment. 0:03:49.480 --> 0:03:52.560 They're doing last mile. And then for Google's side, I 0:03:52.600 --> 0:03:55.840 just want to leave your listeners with a new word 0:03:56.400 --> 0:04:01.440 called TensorFlow. Tenser flow and remember that because this is 0:04:01.480 --> 0:04:05.480 the new platform that Google has that allows anybody to 0:04:05.560 --> 0:04:09.560 access it for doing machine learning and artificial intelligence. And 0:04:09.560 --> 0:04:14.000 they basically Google is allowing everyday people and companies to 0:04:14.120 --> 0:04:17.520 access all their learnings and machine learning. Their CEO mentioned 0:04:17.560 --> 0:04:19.679 Google CEO mentioned it. So the first thing you mentioned 0:04:19.680 --> 0:04:22.120 on the call last night was TensorFlow, and I just 0:04:22.160 --> 0:04:24.200 want to point that out. This is an example of 0:04:24.240 --> 0:04:27.200 how Google is going to redefine themselves with the next decade. 0:04:27.440 --> 0:04:29.400 What about the Google Car. I know that that was 0:04:29.440 --> 0:04:32.599 something that was a pretty hot topic a while back, 0:04:32.680 --> 0:04:34.799 but now there's sort of this feeling that in Detroit, 0:04:35.000 --> 0:04:38.400 the big beheemoth automakers are really gonna have the upper 0:04:38.440 --> 0:04:41.600 hand when it comes to autonomous driving and electric vehicles. 0:04:42.640 --> 0:04:45.000 I think Detroit is going to be in a world 0:04:45.000 --> 0:04:48.080 of hurt in the next one years. I'm sad to 0:04:48.320 --> 0:04:50.520 predict that, but I think that that they just have 0:04:50.760 --> 0:04:55.719 a lot of uh infrastructure around manufacturing and labor that 0:04:55.880 --> 0:04:58.280 is difficult for them to break from. But Google is 0:04:58.279 --> 0:05:01.640 going to take over. I think Google test lads and 0:05:01.920 --> 0:05:05.080 a great position. Google mentioned on their call last night 0:05:05.120 --> 0:05:07.440 that they see their way Motivision, which is the car division, 0:05:07.480 --> 0:05:10.080 to also be in public transportation. I mean, this is 0:05:10.360 --> 0:05:13.239 the type of broad thinking that we're hearing from Google 0:05:13.440 --> 0:05:15.320 when you just don't hear that type of broad thinking 0:05:15.320 --> 0:05:18.520 from Detroit. You know, I just want to take you 0:05:18.560 --> 0:05:21.360 back to this tensor flow t E N s o 0:05:21.520 --> 0:05:26.080 r flow because this is really an amazing site that well, 0:05:26.440 --> 0:05:28.520 you know, you get to use words like neural networks 0:05:28.520 --> 0:05:31.520 for machine translation. I'm not sure exactly what that is. 0:05:31.560 --> 0:05:33.480 I can make a guess, but what are the kinds 0:05:33.520 --> 0:05:36.640 of companies that will be using this so that what 0:05:36.760 --> 0:05:39.880 that is is basically Google allows you to use their 0:05:39.960 --> 0:05:42.800 voice recognition so we can just tap into them. They 0:05:42.839 --> 0:05:45.080 can listen to what we're doing, it can do a 0:05:45.120 --> 0:05:48.440 transcript of it and start to build insights from those transcripts. 0:05:48.480 --> 0:05:50.440 So that's some of the things that you're talking about there. 0:05:50.800 --> 0:05:53.960 But other things that this uh tensor flow does is 0:05:54.080 --> 0:05:57.200 allows you to use Google's learnings by looking at an image, 0:05:57.240 --> 0:05:59.839 so uh looking at image and reading what that image 0:06:00.080 --> 0:06:04.280 my uh information about that image, and so it is uh, 0:06:04.520 --> 0:06:06.440 it's just the start of what is going to be 0:06:06.480 --> 0:06:09.400 a machine learned driven world. Yeah, Gene Munster, thank you 0:06:09.440 --> 0:06:10.960 so much for joining us. We could talk a lot 0:06:10.960 --> 0:06:13.200 about this. Unfortunately we have to leave it there. Jane 0:06:13.240 --> 0:06:16.479 Munster is the co founder of loop Venture's former managing 0:06:16.480 --> 0:06:21.080 director and senior research analyst at Piper Jaffrey Companies. I'm 0:06:21.160 --> 0:06:23.800 Lisa Abramoid's here with pim Fox. You've been listening to 0:06:23.880 --> 0:06:40.000 Bloomberg Markets on Bloomberg eleven three. Oh. We did get 0:06:40.000 --> 0:06:42.400 our GDP report this morning. In the U S economy 0:06:42.800 --> 0:06:45.640 expanded at the slowest pace in three years. This is 0:06:45.880 --> 0:06:49.400 perhaps due to the weaker auto sales and lower home 0:06:49.480 --> 0:06:52.839 heating bills. But does this signify some kind of broader 0:06:53.279 --> 0:06:56.520 weakening that is starting to set in? We want to 0:06:56.560 --> 0:06:59.479 find out. Constance Hunter has some answers for us. Constance 0:06:59.520 --> 0:07:03.479 Hunter is chief economist a KPMG and constants. What was 0:07:03.520 --> 0:07:07.400 your main takeaway from this particular report. Well, two things. One, 0:07:07.920 --> 0:07:10.840 I know everybody's focused on the consumption data because of 0:07:10.840 --> 0:07:14.640 course the consumer seventy GDP and it's very important. And 0:07:15.120 --> 0:07:19.720 the lower energy prices and and mild winter really contributed. 0:07:19.760 --> 0:07:23.119 That subtracted thirty basis points off GDP. Then the lower 0:07:23.200 --> 0:07:26.720 rate of consumption of auto subtracted another forty five basis points, 0:07:27.080 --> 0:07:30.960 so we're looking at factors that really slowed consumption in 0:07:31.000 --> 0:07:33.600 a concerning way. Even if you added back those factors, 0:07:33.600 --> 0:07:36.200 we only have a one percent annualized consumption rate in 0:07:36.240 --> 0:07:39.000 the first quarter. And the question is why. Because we've 0:07:39.040 --> 0:07:42.800 had seventy seven consecutive months of jobs growth, we're starting 0:07:42.840 --> 0:07:46.679 to see wages go up, and not just the wage 0:07:46.760 --> 0:07:49.080 data that we got today, but for example, the Atlanta 0:07:49.120 --> 0:07:52.720 Fed has an index the employment caused their employment cost index, 0:07:53.040 --> 0:07:57.240 which doesn't factor in UH benefits like healthcare. It's it's 0:07:57.240 --> 0:08:00.160 the money that goes right to the individual and only 0:08:00.200 --> 0:08:04.520 for families earning under a D fifty dollars. So it's 0:08:04.520 --> 0:08:08.240 a really important piece of data, and that's showing at 0:08:08.400 --> 0:08:10.840 up three point five percent year of a year. So 0:08:11.120 --> 0:08:14.400 this really is a puzzle. And and so given that, 0:08:14.560 --> 0:08:17.160 I think we're looking at somewhat of a temporary blip 0:08:17.560 --> 0:08:19.440 in the consumption numbers. But the other thing that's not 0:08:19.480 --> 0:08:21.680 getting as much air time is that we subtracted almost 0:08:21.680 --> 0:08:24.280 one percent off of the GDP growth rate because of 0:08:24.320 --> 0:08:29.240 inventory declines. And those inventory declines go hand in hand 0:08:29.680 --> 0:08:33.560 with um imports. So we saw imports increase. We also 0:08:33.600 --> 0:08:36.200 saw exports increase, which is a really good sign. Even 0:08:36.200 --> 0:08:39.920 though net imports subtracted from GDP, that increase in exports 0:08:39.920 --> 0:08:42.000 supports the idea that the rest of the world is 0:08:42.040 --> 0:08:45.040 growing in a more robust and stronger fashion. So it's 0:08:45.040 --> 0:08:48.240 going to help lift GDP overall. And so I think 0:08:48.280 --> 0:08:51.400 we have a hold on one second, I'm actually struggling 0:08:51.440 --> 0:08:55.040 to understand that. In other words, if inventories drop, that's 0:08:55.120 --> 0:08:59.520 because our imports are no, no, no, Sorry I didn't 0:08:59.559 --> 0:09:01.600 explain that. Well. So if if we see the strap 0:09:01.679 --> 0:09:05.080 in inventories this quarter corresponding with an increase in imports, 0:09:05.080 --> 0:09:07.640 what it suggests that the next quarter we're going to 0:09:07.720 --> 0:09:11.880 see those inventories filled back up. Sorry, thank you for 0:09:11.920 --> 0:09:16.120 clarifying that. That wasn't terribly clear. Let me see if 0:09:16.120 --> 0:09:18.320 I can just understand where we are in the cycle though, 0:09:18.360 --> 0:09:21.160 because I I keep hearing this idea that you know, 0:09:21.280 --> 0:09:23.800 we're eight years so whatever it is, seven years into 0:09:23.800 --> 0:09:27.120 a bull market, and they're this business cycle, and then 0:09:27.160 --> 0:09:29.280 you get people will tell you that it's different this time, 0:09:29.320 --> 0:09:31.280 because if you measure it from over here, you know 0:09:31.360 --> 0:09:34.560 it's not the same. What's your take on where we 0:09:34.600 --> 0:09:37.280 are in the in the business and interest rate cycle? Yeah, 0:09:37.320 --> 0:09:39.480 I think we're at late stage. We're what I would 0:09:39.480 --> 0:09:42.440 call the aph inning, and the FEDS job is to 0:09:42.600 --> 0:09:46.600 create extra innings, all right, Um, but we are getting 0:09:46.600 --> 0:09:50.400 to a point where we're having um wage increases. We're 0:09:50.440 --> 0:09:52.920 gonna start to see labor shortages when I don't know, 0:09:53.000 --> 0:09:57.040 sometime in sometime in and that in and of itself 0:09:57.080 --> 0:09:59.360 is going to hamper how much growth we can have 0:09:59.559 --> 0:10:01.679 going for wards. So I think we're going to be 0:10:01.679 --> 0:10:04.120 looking at the all things being equal, which of course 0:10:04.160 --> 0:10:07.040 they never are, but all things being equal, we're looking 0:10:07.080 --> 0:10:11.840 at a mild recession sometime in late nineteen because of 0:10:11.920 --> 0:10:15.400 labor shortages, because we have increased wages, and that's going 0:10:15.440 --> 0:10:17.640 to put a crimp on our ability to continue grows. 0:10:17.840 --> 0:10:19.920 So just in time, for the mid term elections, just 0:10:20.040 --> 0:10:22.200 in time for the mid term. I just wanted to 0:10:22.200 --> 0:10:28.120 make we got that twenty eighteen mid term elections. I 0:10:28.120 --> 0:10:31.080 don't know that will happen in I would say late either, 0:10:31.200 --> 0:10:33.400 like just sort of starting at the end of twenty 0:10:33.440 --> 0:10:36.080 eighteen into twenty nineteen. I think we've got some runway. Well, 0:10:36.120 --> 0:10:39.680 we'll put you down for November two thousand eighteen. I 0:10:39.679 --> 0:10:41.600 want to just point out, Yeah, for now, I wanted 0:10:41.600 --> 0:10:44.120 to point out. Black Rock's chief executive officer, Larry Fink 0:10:44.280 --> 0:10:46.840 was on Bloomberg Television earlier this morning, and he said 0:10:46.840 --> 0:10:49.920 that it was improbable that the US is GDP will 0:10:49.960 --> 0:10:52.760 grow to three percent given the current demographics, and said 0:10:52.760 --> 0:10:57.120 that right now the US is truly slowing down. Um, 0:10:57.160 --> 0:10:59.240 you know, Constants, you seem like it seems like you 0:10:59.280 --> 0:11:02.320 agree with the way, and not just demographics, but also productivity. 0:11:02.400 --> 0:11:06.280 So potential GDP is the sum of the change in 0:11:06.320 --> 0:11:08.920 the growth rate of productivity plus the change in the 0:11:08.960 --> 0:11:13.800 working age population. Working age populations growing at zero point 0:11:14.360 --> 0:11:18.000 that is is immigrants by the way, and productivity zero 0:11:18.040 --> 0:11:19.960 point eight. That gets us to a one point one 0:11:20.000 --> 0:11:23.640 potential GDP. Three is a pipe dream. Constant We were 0:11:23.640 --> 0:11:26.600 talking earlier about the results from Synchrony and Capital One 0:11:26.679 --> 0:11:29.960 showing an increasing number of charge offs for credit card loans. 0:11:30.360 --> 0:11:34.199 How concerned should we be about this? Look at it. 0:11:34.200 --> 0:11:37.920 It seems like it's it's a moderately worrying sign, and 0:11:38.000 --> 0:11:40.760 it's it's something where I would say, this is now 0:11:40.800 --> 0:11:43.400 an indicator you need to watch, whereas to three years 0:11:43.400 --> 0:11:45.400 ago it wasn't an indicator you need to pay attention to. 0:11:45.440 --> 0:11:47.120 If you have a dashboard you're looking at, you need 0:11:47.160 --> 0:11:50.240 to make sure this is on that dashboard, All right, 0:11:50.520 --> 0:11:53.360 that dash But we gotta do you think that dashboard 0:11:53.400 --> 0:11:56.600 is on everybody's desk? Do you think everybody gets we 0:11:56.640 --> 0:12:00.360 have a doomsday countdown? Pretty much everyone here? I mean, 0:12:00.600 --> 0:12:02.440 the only reason I asked is because it certainly doesn't 0:12:02.440 --> 0:12:03.960 look that way when you see you know, when you 0:12:04.000 --> 0:12:06.480 see bonds sell off and you see people go into 0:12:06.600 --> 0:12:09.439 risky acids like stocks in high yield. Yeah, well, look 0:12:09.480 --> 0:12:12.840 where are we on bonds to twenty right? So I 0:12:12.840 --> 0:12:14.640 don't know that looks like a bond rally from where 0:12:14.640 --> 0:12:16.920 I sit based on the last six months, right, we 0:12:16.960 --> 0:12:18.760 had that that we had that backup in the tenure 0:12:18.840 --> 0:12:20.520 year old and now we're back down to twenty and 0:12:20.679 --> 0:12:23.559 my hashtag rates low for a long time has remarkable 0:12:23.640 --> 0:12:27.440 shelf life that has surprised even me. And you're calling 0:12:27.480 --> 0:12:30.040 stuff for two more interest rate hikes one I think 0:12:30.120 --> 0:12:32.680 one more this year. So they had forecast three for 0:12:32.720 --> 0:12:35.440 this year and and I think they'll be lucky to 0:12:35.440 --> 0:12:37.800 get away with two rate hikes this year. All right, 0:12:37.840 --> 0:12:42.319 thanks very much appreciated. Constance Hunter joining us KPMG Chief Economist, 0:12:42.360 --> 0:12:53.679 much appreciated. We want to take a moment to let 0:12:53.720 --> 0:12:56.600 you know about something new from Bloomberg. Starting right now, 0:12:56.640 --> 0:12:59.040 you can use our io s app or our new 0:12:59.080 --> 0:13:02.800 Google Chrome extension to scan any news story on any website, 0:13:03.040 --> 0:13:06.080 instantly revealing relevant news and market data from Bloomberg and 0:13:06.200 --> 0:13:08.960 other sources related to the companies and people you're reading about. 0:13:09.280 --> 0:13:11.200 So no matter where you're reading the news, you can 0:13:11.240 --> 0:13:13.800 bring the power of Bloomberg's news and data with you. 0:13:14.000 --> 0:13:17.040 It's pretty amazing. Download our io s app or search 0:13:17.120 --> 0:13:19.320 for the Bloomberg extension on the Chrome Store to try 0:13:19.320 --> 0:13:22.400 it out. Learn more at Bloomberg dot com. Slash lens 0:13:30.559 --> 0:13:34.520 Well the zero point seven percent increase in first quarter GDP, 0:13:34.679 --> 0:13:38.360 notwithstanding our next guest says that trends and consumer confidence 0:13:38.400 --> 0:13:42.240 are healthy, and that consumers are expressing optimism regarding the 0:13:42.280 --> 0:13:46.480 short term outlook for business, jobs, and personal finance. This 0:13:46.640 --> 0:13:49.320 all leads us to housing and Cheryl Palmer, the chief 0:13:49.320 --> 0:13:52.400 executive of Taylor Morrison. Cheryl Palmer, thank you very much 0:13:52.400 --> 0:13:55.560 for being with us, my pleasure. Thank you very much 0:13:55.559 --> 0:13:58.440 for having me. Now. I was able to go through 0:13:58.480 --> 0:14:01.320 your conference call, and boy, there are a lot of 0:14:01.320 --> 0:14:03.880 different metrics that you use to judge the health of 0:14:03.920 --> 0:14:05.800 your business, and I don't know whether you want to 0:14:05.800 --> 0:14:09.080 start with net sales orders, just explained for people how 0:14:09.120 --> 0:14:12.679 do you determine success, and then maybe talk a little 0:14:12.679 --> 0:14:17.840 bit about the regional strength, which you say is pretty comprehensive. Yeah, no, 0:14:18.040 --> 0:14:20.720 thank you. You know, we did report yesterday and we're 0:14:20.760 --> 0:14:24.120 quite delighted with the results we were able to share. 0:14:24.360 --> 0:14:27.360 And there are a number of metrics to your point, 0:14:27.440 --> 0:14:30.720 but they all do derive from your opening comments, and 0:14:30.760 --> 0:14:34.040 that's how people are feeling about the world today. And 0:14:34.080 --> 0:14:37.440 I think there's been very encouraging signs as we you know, 0:14:37.520 --> 0:14:40.320 came through fourth quarter and certainly came into the spring 0:14:40.400 --> 0:14:44.200 selling season of the first quarter. The consumers feeling good, 0:14:44.240 --> 0:14:48.160 They're feeling confident, healthy, there's out there spending money, they 0:14:48.200 --> 0:14:52.200 feel good about their jobs. They're starting to see UM 0:14:52.280 --> 0:14:56.520 improvement in income, you know, affordability. So it is still 0:14:56.680 --> 0:15:00.640 very very good low interest rates. And that's know, that's 0:15:00.760 --> 0:15:05.000 creating UM an optimism in our business and it really 0:15:05.040 --> 0:15:11.160 manifested itself through UM a thirty three increase of sales 0:15:11.200 --> 0:15:14.360 here over a year, you know, Cheryl Um. First of all, 0:15:14.400 --> 0:15:18.320 I wanted to ask if you are concerned about the 0:15:18.440 --> 0:15:23.880 pricing in certain markets, particularly Toronto, San Francisco, New York. 0:15:24.040 --> 0:15:27.880 People are saying that the acceleration is certainly slowing down. 0:15:27.880 --> 0:15:31.000 If not, uh, you know, showing signs of petering out, 0:15:31.120 --> 0:15:35.200 particularly on the highest end. Are you seeing something similar 0:15:35.240 --> 0:15:38.080 to sort of edify the concern of sort of slowed 0:15:38.080 --> 0:15:42.520 down in those markets? You know, we actually have had 0:15:42.560 --> 0:15:45.440 great success across all of our price point. Now, some 0:15:45.520 --> 0:15:47.480 of the markets you mentioned we build, and we used 0:15:47.480 --> 0:15:50.280 to build in Toronto, we don't anymore, UM, but we 0:15:50.320 --> 0:15:53.160 do build in San Francisco. We do build in markets 0:15:53.160 --> 0:15:56.680 across the US and to a number of consumer groups, 0:15:56.720 --> 0:16:00.640 and we are seeing strength UM at the first time 0:16:00.680 --> 0:16:03.400 buyers We're seeing it in that move up second time buyer. 0:16:03.520 --> 0:16:06.160 We're seeing it with our fifty plus and those are 0:16:06.200 --> 0:16:11.080 some of our highest average sales prices. And um, some markets, 0:16:11.200 --> 0:16:13.400 you know, they are getting back to what I would 0:16:13.440 --> 0:16:16.640 call some of the historic highs and some markets still 0:16:16.640 --> 0:16:19.119 have a lot of runway. But as we reported yesterday, 0:16:19.560 --> 0:16:22.880 you know we've raised prices and probably about our community 0:16:22.880 --> 0:16:25.280 is just in the first quarter. So could you speak 0:16:25.280 --> 0:16:28.640 a little bit about the Esplanade Golf and a country 0:16:28.640 --> 0:16:30.880 club community. That one is in sarah Sota, but you've 0:16:30.880 --> 0:16:32.400 got a variety of them, and I want you to 0:16:32.480 --> 0:16:34.720 use that as an example of the kinds of products 0:16:34.720 --> 0:16:37.400 that you are putting into the marketplace and maybe tell 0:16:37.480 --> 0:16:41.840 us a little bit about the customer reception and cost. Yeah, 0:16:41.920 --> 0:16:45.320 that one's really exciting. Our Esplanade brand is in Florida, 0:16:45.440 --> 0:16:48.920 and we have ten of these lifestyle communities throughout Florida. 0:16:49.000 --> 0:16:51.200 And the one that I highlighted in our call yesterday, 0:16:51.200 --> 0:16:55.640 you're right, was in um Sara Soda, and I spoke 0:16:55.720 --> 0:16:59.240 to the new amenities that we've opened and really the lifestyle, 0:16:59.320 --> 0:17:02.720 the Ritz Carlton approach and our programming that we've created 0:17:02.800 --> 0:17:08.520 with really dedicated concierge's staff, and we have seen throughout 0:17:08.600 --> 0:17:12.919 Florida and throughout the Esplanade brand building since the middle 0:17:12.960 --> 0:17:16.760 of last year through the shoulder selling season um at 0:17:16.840 --> 0:17:19.320 a number of price points. Is even in our Esplanade 0:17:19.320 --> 0:17:21.800 communities we build from, you know, the low two hundreds, 0:17:21.800 --> 0:17:25.080 well over a million dollars. And these are very discerning 0:17:25.080 --> 0:17:27.840 folks know what they want now, when they wanted, how 0:17:27.960 --> 0:17:30.400 they want it, and they're going to get exactly that. 0:17:30.880 --> 0:17:34.280 And we've had just a phenomenal spring selling season, and 0:17:34.680 --> 0:17:39.119 I credit the team's great execution in delivering new amenities 0:17:39.200 --> 0:17:44.400 with great pulside service, antiki bar and new restaurants. That's 0:17:44.400 --> 0:17:46.959 how I gotta say. So that sounds it sounds lovely 0:17:47.640 --> 0:17:52.560 and clearly well. But I want to also while we've 0:17:52.560 --> 0:17:54.240 got to want you to talk a little bit about 0:17:54.320 --> 0:17:58.560 where you are making new deals, where you are acquiring property, 0:17:58.600 --> 0:18:00.760 because I know Atlanta has been a focus as well 0:18:00.800 --> 0:18:04.800 as Dallas, and you've got that Darling brand, You're correct, 0:18:04.880 --> 0:18:07.639 and so our Darling businesses in Dallas and Houston, and 0:18:07.640 --> 0:18:10.280 we are certainly investing in It's it's new for us. 0:18:10.320 --> 0:18:13.480 I mean, we just introduced our Taylor Morrison Brandon Dallas. 0:18:13.520 --> 0:18:16.280 So now we have both our Darling and Taylor Morrison 0:18:16.280 --> 0:18:19.320 in Houston, we also have both brands, So Dallas with 0:18:19.359 --> 0:18:23.640 the new Taylor Morrison brand, were investing California, were investing 0:18:24.160 --> 0:18:26.359 UM some of our newer markets in the Caroline. It's 0:18:26.400 --> 0:18:29.119 really across the portfolio. Phoenix is one of our larger 0:18:29.720 --> 0:18:32.720 are larger businesses, so that machine continues to need to 0:18:32.760 --> 0:18:36.119 be invested in UM. So we're looking for opportunities across 0:18:36.119 --> 0:18:39.680 the US today. Cheryl, this might seem like a kind 0:18:39.680 --> 0:18:43.000 of stage left question, but in my opinion, we read 0:18:43.040 --> 0:18:46.400 a lot about, you know, potential flooding on the coasts 0:18:46.480 --> 0:18:50.320 and concerns that potential buyers might have about this when 0:18:50.320 --> 0:18:53.960 people are buying your properties. Are you finding that a 0:18:53.960 --> 0:18:57.240 lot more people are talking about that where it's located, 0:18:57.600 --> 0:19:00.000 what the potential risk would be in a flooding type 0:19:00.040 --> 0:19:04.680 the situation. You know, we don't see that often. Certainly 0:19:04.680 --> 0:19:08.000 we have exorbitant range and some markets across the country, 0:19:08.000 --> 0:19:09.600 but I wouldn't tell you that that's top on the 0:19:09.720 --> 0:19:12.720 folks mind. Not with rains, not with raids. I'm talking 0:19:12.720 --> 0:19:15.400 about coastal properties. As you know, sees rise because we've 0:19:15.400 --> 0:19:17.680 been reading a lot about you know that this could 0:19:17.680 --> 0:19:20.960 potentially even impede valuations in places like Miami or other 0:19:21.000 --> 0:19:24.119 coastal cities. Yeah, I'm really going to come down to 0:19:24.280 --> 0:19:25.960 once again, we don't We're not in Miami, but we 0:19:26.000 --> 0:19:28.840 certainly are in many coastal cities in California, and it 0:19:28.920 --> 0:19:31.399 really comes down to the design and the development of 0:19:31.440 --> 0:19:36.359 those communities UM and how that infrastructure has been created. 0:19:36.960 --> 0:19:40.120 And be honest, it's not something that I would tell 0:19:40.119 --> 0:19:43.600 you is on top of consumers minds. Land acquisition, Where 0:19:43.640 --> 0:19:45.640 are you doing the most acquisition? I know you try 0:19:45.680 --> 0:19:48.040 to do it organically, but maybe give us some markets. 0:19:49.480 --> 0:19:53.080 So some of the markets I just mentioned Texas, UM's 0:19:53.200 --> 0:19:58.280 very healthy, California, Arizona, are smaller businesses in Colorado and 0:19:58.280 --> 0:20:01.960 the Caroline As. We are investing, and we're investing over 0:20:02.000 --> 0:20:05.280 the last couple of years, we've done some UM acquisitions 0:20:05.280 --> 0:20:08.400 of new companies. Right now, we're very focused on organic 0:20:08.440 --> 0:20:11.600 acquisition to your point, and I would tell you it's 0:20:11.640 --> 0:20:14.399 really across our entire portfolio, and we tend to have 0:20:14.480 --> 0:20:17.560 our longer landbanks where we build large master planned communities 0:20:17.600 --> 0:20:20.720 like our esplanades in Florida, but we're still looking for 0:20:20.760 --> 0:20:24.119 opportunities there and then in Arizona as well. Are you 0:20:24.160 --> 0:20:27.760 concerned because this you're describing something that sounds like a 0:20:27.800 --> 0:20:31.840 perfect alignment of the stars, and I'm wondering when that happens. 0:20:31.880 --> 0:20:34.040 Do you there's a little voice go off in your 0:20:34.080 --> 0:20:38.440 head that says, well, this isn't gonna last forever. Um, 0:20:38.480 --> 0:20:42.359 that voice is always in my head and that's why, um, 0:20:42.400 --> 0:20:44.399 you know, it might sound good and it is, and 0:20:44.480 --> 0:20:46.919 generally I am very bullish on how the market hang on. 0:20:46.960 --> 0:20:48.920 We're going to just have to break in Cheryl Palmer, 0:20:49.000 --> 0:21:03.560 Chief executive Taylor Morrison, thank you very much. Well, we 0:21:03.600 --> 0:21:07.360 want to learn more about utility stocks because utilities used 0:21:07.359 --> 0:21:09.040 to be the stocks you went to if you were 0:21:09.080 --> 0:21:12.720 looking for yield, but perhaps times have changed. We have 0:21:12.840 --> 0:21:16.440 John Bartlett. He is the vice president of Reeves Asset Management. 0:21:16.520 --> 0:21:19.760 He joins us here in our Bloomberg eleven three oh studios. John, 0:21:19.800 --> 0:21:24.080 thanks very much for coming in. Our utilities looked upon 0:21:24.359 --> 0:21:29.600 as investments for yield or has that just been thrown 0:21:29.640 --> 0:21:34.600 out the window? Him? Principally not yield is a very 0:21:34.640 --> 0:21:38.679 still important part of the total return of um of utilities. 0:21:38.720 --> 0:21:41.040 But but they do have an opportunity for you know, 0:21:41.119 --> 0:21:44.200 pretty pretty modest earnings growth. We see the industry growing 0:21:44.200 --> 0:21:46.800 it's earnings about five percent per year, and that's really 0:21:47.320 --> 0:21:50.720 on the back of continued investment, largely at the state level, 0:21:50.760 --> 0:21:54.320 but also at the federal level too. So UM, I 0:21:54.359 --> 0:21:55.600 want to I want to talk a little bit of 0:21:55.640 --> 0:22:00.400 it infrastructure spending because definitely your world overlaps we had 0:22:00.440 --> 0:22:04.159 heard during the campaigning season about a one trillion dollar 0:22:04.240 --> 0:22:08.720 infrastructure spending plan. We haven't heard much more about it, 0:22:08.800 --> 0:22:12.400 but you know, is there still some opportunity from fiscal 0:22:12.480 --> 0:22:14.879 stimulus that you are expecting to actually happen in the 0:22:14.920 --> 0:22:17.320 near term. Well, you know, the good news on that 0:22:17.400 --> 0:22:20.040 front is, UM, it doesn't really matter that much to 0:22:20.080 --> 0:22:23.120 me as utility investor. UM. One of the things we're 0:22:23.160 --> 0:22:26.560 really looking forward to right now is getting UM five 0:22:26.560 --> 0:22:29.960 commissioners back at the Federal Energy Regulatory Commission that's going 0:22:30.000 --> 0:22:33.040