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Speaker 1: This is the Bloomberg Surveillance Podcast.

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Speaker 2: I'm Tom Keene, along with Jonathan Farrow and Lisa Abramowitz.

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Speaker 2: Join us each day for insight from the best and economics, geopolitics,

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Speaker 2: finance and investment. Subscribe to Bloomberg Surveillance on demand on Apple,

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Speaker 2: Spotify and anywhere you get your podcasts, and always on

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Speaker 2: Bloomberg dot Com, the Bloomberg Terminal, and the Bloomberg Business app.

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Speaker 2: This is a joy what happens with young economists as

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Speaker 2: you read their research and you go, oh, they're quite competent.

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Speaker 2: Not long ago and far away, but a few years ago.

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Speaker 2: That was Michelle Meyer absolutely owning the parsing of the

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Speaker 2: American consumer. She worked for a small bank in Manhattan

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Speaker 2: and is now Chief Economists North America from MasterCard Economics.

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Speaker 1: You own the.

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Speaker 2: Analysis I put you and Allen Zetner together. You own

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Speaker 2: the analysis of the American consumer. Have we stopped spending?

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Speaker 3: We clearly have not stop spending. Far from it, and

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Speaker 3: think about the data this morning. It was an incredible

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Speaker 3: combination of continued strength and retail spend, of rebound in

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Speaker 3: Empire State manufacturing, which shows that there's still a need

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Speaker 3: for more goods production, which is because consumers are still spending,

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Speaker 3: and on top of that, you're getting some relief on

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Speaker 3: the pricing side. So it's a really nice combination.

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Speaker 2: I hate asking this question, and I'm stunned. It's my

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Speaker 2: first time I've asked it. On November fifteenth, what's back

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Speaker 2: to what's a holiday season look like?

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Speaker 1: What's Black Friday? And then Black Monday and this and that?

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Speaker 2: What does this retail madness did January look like?

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Speaker 3: Well, it is a longer holiday season. We've learned that

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Speaker 3: over the last few years, and it's a heavily promotional

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Speaker 3: based holiday season, and part of that is because of

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Speaker 3: the fact that there's so much demand out there to

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Speaker 3: buy online. I mean, think about the numbers we just

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Speaker 3: saw this morning. Our spending post numbers saw just over

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Speaker 3: eight percent year of your growth in e commerce sales.

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Speaker 3: So you know, you're seeing a consumer that is certainly

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Speaker 3: exploring many different channels of spending, including online, and that

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Speaker 3: creates a lot more opportunities for them to get products,

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Speaker 3: and it also creates a lot more need for retailers

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Speaker 3: to compete with these big moments in time where they

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Speaker 3: offer promotions, and I think that's what's going to be indicative.

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Speaker 3: So we'll learn a lot from the Black Friday period,

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Speaker 3: and it's approaching very quickly.

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Speaker 4: How sustainable is this combination of both robust retail sales

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Speaker 4: and disinflation or even outright goods deflation.

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Speaker 3: So I think you have to consider the different categories.

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Speaker 3: I mean, when you looked at CPI yesterday, you certainly

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Speaker 3: saw some categories like these big durable goods like your

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Speaker 3: refrigerators back seeing some price declines. But for many other things,

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Speaker 3: like many services, for example, you are still seeing some

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Speaker 3: price increases. So part of the drop in prices for

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Speaker 3: some of these goods simply reflects the fact that prices

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Speaker 3: increased too much out of a pandemic because of supply

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Speaker 3: chain issues, because of higher costs, and now it's reverting

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Speaker 3: a bit more to something more normal, right, So that

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Speaker 3: means in real terms you will see some support in

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Speaker 3: terms of some of these items moving through. In nominal terms,

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Speaker 3: you could see some move down in terms of overall spend.

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Speaker 3: So it really depends on why inflation is moving, and

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Speaker 3: that is a function of the type of product and

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Speaker 3: how things evolved coming out of the pandemic.

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Speaker 4: When you put it together, does this seem like a

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Speaker 4: recipe for this goldilocks soft landing, or does this seem

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Speaker 4: to paint the picture of a federal reserve that needs

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Speaker 4: to do more and of an economy that has way

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Speaker 4: too much momentum to really achieve the disinflation that a

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Speaker 4: lot of people are baking into market evaluations.

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Speaker 3: I think the data is shaping up in a way

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Speaker 3: that's really favorable at the moment because you continue to

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Speaker 3: have economic growth. Look at the third quarter GDP numbers,

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Speaker 3: that was fairly broad based economic activity, not just consumers

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Speaker 3: but also businesses investing inventories getting much more manageable and

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Speaker 3: in stock So you know, things have been evolving remarkably

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Speaker 3: well in terms of the real economy, taking out some

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Speaker 3: of the excesses, labor market coasting into a litt bit

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Speaker 3: of a slower trajectory for job growth, but still expansionary,

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Speaker 3: while you get this relief on the inflation front. So

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Speaker 3: how much of that is because of monetary policy, how

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Speaker 3: much of that is because of the nature of the

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Speaker 3: shock that we had initially, We'll see it's probably a

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Speaker 3: bit of both. But it's evolving really quite quite nicely,

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Speaker 3: and obviously exceeding many people's expectations.

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Speaker 5: Out there.

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Speaker 2: We talked about the interest expense and the debt and

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Speaker 2: the deficit earlier with Mia mcguinnis. Let's talk about the

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Speaker 2: average charge card is twenty five twenty six percent interest,

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Speaker 2: migrating up now to twenty eight twenty nine percent interest.

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Speaker 2: I find thirty percent to be almost criminal. But you

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Speaker 2: people look at this daily, is that interest rate goes up,

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Speaker 2: do we spend less?

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Speaker 3: So what we're looking at overall is how monetary policy

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Speaker 3: is transmitting into the economy broadly. So when you think

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Speaker 3: about who's borrowing out there, there's companies that are borrowing

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Speaker 3: in terms of the expansionary needs. There's consumers that are

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Speaker 3: borrowing in terms of whether or not they want to

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Speaker 3: buy a home or a big ticket item that might

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Speaker 3: require some leverage. So higher interest rates are certainly transmitting

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Speaker 3: into the economy. You can see it today with the

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Speaker 3: retail sales number that's Mike just my friends. Around housing

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Speaker 3: related items, furniture, some of these bigger ticket items that

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Speaker 3: require debt. You are seeing some hit to those types suspending.

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Speaker 3: So I think the high level of interest rates goes

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Speaker 3: back to Lisa's point around how the FED is trying

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Speaker 3: to calibrate this economy with some easing of real growth

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Speaker 3: but still allowing inflation to come down.

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Speaker 2: Okay, you're out of the game, but I'm going to

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Speaker 2: ask you the game question here, which is what is

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Speaker 2: your twelve months for to real GDP? Like, what's your

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Speaker 2: twenty twenty You're talking to fancy people at MasterCard, and

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Speaker 2: you know they don't want to charge cards. They want

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Speaker 2: to know what Michelle Meyer thinks about the economy. What's

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Speaker 2: your twenty twenty four real GDP call?

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Speaker 3: So the good news is that we are I'm still

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Speaker 3: in the game, and that we are still running at

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Speaker 3: still absolutely that is who I am as a person,

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Speaker 3: as an economist. When I look ahead, I mean this

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Speaker 3: year we had an economy that ran above its underlying trend.

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Speaker 3: So we're trending right now, given where GDP is for

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Speaker 3: real growth somewhere between two point four percent right now

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Speaker 3: in twenty twenty three. As we look ahead to twenty

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Speaker 3: twenty four, we're probably going to see some moderation closer

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Speaker 3: to the underlying trend growth rate of the economy closer

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Speaker 3: to trend.

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Speaker 6: Didn't answer, Ye's.

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Speaker 1: Still in the game.

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Speaker 6: I'm still I got to total.

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Speaker 1: Go away. Michelle Meyer's MasterCard.

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Speaker 2: There somewhere in the blur of the last four or

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Speaker 2: five days through my small little brain, would somebody get

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Speaker 2: Diane SWUNKA You know, I just said she has such

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Speaker 2: a perspective different from three zip codes in New York,

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Speaker 2: And I guess all of this is her academic work

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Speaker 2: at the University of Michigan Longo. She's putting a penalty

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Speaker 2: box there. At one point she was stealing signs from.

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Speaker 1: The Federal Reserve.

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Speaker 2: Is I think it's a football joke there, Yeah, dian

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Speaker 2: Swank understands Michigan's I guess in the penalty box, Diane Swank,

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Speaker 2: is it free and clear? Is your own Powell not

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Speaker 2: in the penalty box. I've asked this question four times,

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Speaker 2: but with immense respect to your work and your holistic

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Speaker 2: look at business data. Is it mission accomplished? Finally, for

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Speaker 2: the FED, it's.

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Speaker 7: Not mission accomplished because if that is still going to

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Speaker 7: hold rates higher for longer. But we're done with right

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Speaker 7: hikes and that's what we've been saying, and that's what

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Speaker 7: we believe. That's the good news out there is that

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Speaker 7: it does look like the soft landing is not only

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Speaker 7: possible but probable. But the journey is not yet over,

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Speaker 7: and the endurance part comes next, and that's what the

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Speaker 7: FED is watching closely. They still expect to see growth

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Speaker 7: below potential in order to have that soft landing occur.

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Speaker 7: That's one of those technical things that consumers don't really like,

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Speaker 7: because growth below potential is a rise in unemployment, which

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Speaker 7: in fact we've already seen. Most of that rise we

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Speaker 7: saw over the summer was because more people were looking

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Speaker 7: for jobs, not because of mass layoffs than in October

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Speaker 7: when we saw unemployment move up to three point nine percent,

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Speaker 7: it was because we also saw the spillover effects of

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Speaker 7: strikes as well.

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Speaker 2: When I look at this economy and all the different

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Speaker 2: narratives that are out there right now, the heart of

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Speaker 2: the matter for me is fully employed America. Butter stop

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Speaker 2: with what Austin Goolsby brilliantly said yesterday. Is a believer

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Speaker 2: in a new productivity, a new regime of productivity that's

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Speaker 2: going to make the job for everybody out there easier.

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Speaker 1: Do you buy it?

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Speaker 7: Well, we are seeing a major increase in productivity, and

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Speaker 7: I think during the frenzy, the hiring frenzy that we saw,

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Speaker 7: we know from ADP data that's locked at this more closely,

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Speaker 7: many firms stopped hiring people. Then add on top of

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Speaker 7: it the loss and hiring an educational attainment due to

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Speaker 7: the pivot online itself. And now we're unwinding that and

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Speaker 7: people are actually learning the jobs they have. Overlay that

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Speaker 7: with innovation and technology and leveraging the technologies we were

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Speaker 7: forced to use as we moved online, and you do

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Speaker 7: get higher productivity growth, and that is helping to bring

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Speaker 7: down inflation as well. The problem for most consumers, of course,

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Speaker 7: is that the level of prices are still very high.

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Speaker 7: And let's face it, you know, consumer sentiment hit its

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Speaker 7: record high for University of Michigan Centiment Index in Chau

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Speaker 7: two thousand. Yeah, I threw that in. Although I did

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Speaker 7: go to Chicago too. They won the first Heisman Trophy

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Speaker 7: right now with a lack of scandals, which a little better.

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Speaker 1: Did you go to the Goldsby speech?

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Speaker 2: I mean, you're such a hitter out there in Chicago?

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Speaker 2: Did you darken the door for the Golsby speech?

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Speaker 7: I wasn't at this one. I've been at many of them,

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Speaker 7: and I'll be at one on December first with them.

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Speaker 7: What about Hey, Dana speaking as well.

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Speaker 8: What do you feel how do you kind of view

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Speaker 8: the consumer here? We got some retail sales data today

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Speaker 8: that came in a little bit better than expected, yet target,

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Speaker 8: you know, still seeing some some challenges out there with

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Speaker 8: the reported numbers, and of course we'll hear from Walmart tomorrow.

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Speaker 8: What's what's your sense of the consumer out there?

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Speaker 7: This is a consumer that shown remarkable endurance. Remember October

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Speaker 7: is when the first student loans for about twenty three

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Speaker 7: million student borrowers were due. Of course, they started paying

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Speaker 7: those loans already in August while ahead of time, front

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Speaker 7: running the interest accruing on those loans. But we know

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Speaker 7: that student loan, your payments are going to crimp consumer spending.

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Speaker 7: And I think what's also important is we're seeing the

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Speaker 7: biggest trade offs everything within grocery stores. They're spending more

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Speaker 7: at grocery stores than at restaurants during the month, and

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Speaker 7: after adjusting for inflation, they're still spending more at grocery

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Speaker 7: stores because it's really expensive after adjusting for inflation to

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Speaker 7: go out to restaurants. That said, there's a lot of

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Speaker 7: trade offs within that as well. Beef prices hit a

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Speaker 7: record high during the month of October in that's due

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Speaker 7: to the fact that we had all these droughts. That's

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Speaker 7: in the herds, and I think, you know, the effects

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Speaker 7: of those kinds of shocks are what really matter to consumers.

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Speaker 7: And even as the FED is combating inflation the pace

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Speaker 7: at which prices increase, many consumers who finally saw their

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Speaker 7: wages level up only got to spend a moment in

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Speaker 7: the sun before they were burned by inflation, and they're

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Speaker 7: still playing catchup from those earlier increases exactly.

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Speaker 8: So, you know, in terms of the consumer here we

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Speaker 8: have the unemployment rate officially at three point nine percent.

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Speaker 8: What do you think the FED would like to see

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Speaker 8: that rate? Do they feel like it needs to drift

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Speaker 8: a little bit higher before they get a sense that

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Speaker 8: this economy really is cooling?

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Speaker 7: Well, I hate to use the word like, because I

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Speaker 7: think that's a little pejorative in this context. I think

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Speaker 7: they think it needs to go a little above four

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Speaker 7: percent in order to get the full derailing of inflation

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Speaker 7: and to be able to really cut rates as we

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Speaker 7: move into twenty twenty five. I think we're going to

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Speaker 7: see rate cuts by the middle of twenty twenty four,

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Speaker 7: but the descent on rates is going to be much

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Speaker 7: less graduate much slower than the acent on rates, and

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Speaker 7: I think that's very important to remember as well. The

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Speaker 7: Center Reserve is really pretty pleased with the fact that

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Speaker 7: so far until we had that October blip, which was

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Speaker 7: by an external shock the strikes, that we were able

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Speaker 7: to really see more people looking for jobs rather than

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Speaker 7: layoffs contributing to unemployment, more data.

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Speaker 2: Checks and all this turmoil, the vix goes to constructively bullish.

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Speaker 2: We are higher above fourteen and now at fourteen point eight,

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Speaker 2: a better VIX number off of yesterday. Dow up one hundred,

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Speaker 2: SPX up sixteen points, doing better than call it nine o'clock,

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Speaker 2: futures up four tenths of a percent, NASDAK up half

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Speaker 2: a percent as well. We're with Diane's swank this morning

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Speaker 2: of KPMG. Diane, my great theory is corporations are going

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Speaker 2: to adapt and adjust. How do they adapt and adjust?

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Speaker 2: Is it just going to be one expense reduction?

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Speaker 7: You know, that's going to be a series of I

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Speaker 7: think we're already seeing the adaption occur, and it's evolution

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Speaker 7: more of a revolution than an evolution, and that is

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Speaker 7: that after more than a decade of ulter low rates

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Speaker 7: and some business models that were built entirely on ultra

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Speaker 7: low rates still adapt to a more normal economy that

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Speaker 7: has higher rates to it, and they have to deal

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Speaker 7: with the higher wage levels that they leveled up to,

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Speaker 7: and that means they got to make their workers more

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Speaker 7: productive to be able to continue paying those wages without

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Speaker 7: mass layoffs. And that's where I think we're going. I

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Speaker 7: think we are going to see productivity growth continue to

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Speaker 7: be elevated. That's the good news. I think also it's

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Speaker 7: important to remember the tire meets the road on productivity

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Speaker 7: growth when you combine innovation and technology with our human capital,

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Speaker 7: and how valuable it is. When you really level the

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Speaker 7: boats together two together, that's when you get the big benefits.

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Speaker 2: Sure theory there is how the Cubs stole the Milwaukee

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Speaker 2: Brewer's managers.

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Speaker 1: I mean you get that.

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Speaker 2: She's like consulting the Chicago Cubs. How do we jump

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Speaker 2: started Creid Council bring them down to Chicago? Paul slip

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Speaker 2: in one more?

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Speaker 8: All right, So, Diane, I mean we have our President

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Speaker 8: Biden in San Francisco meeting with President she. How do

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Speaker 8: you figure China into your economic outlook here? What do

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Speaker 8: you what do you what would you like to see.

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Speaker 8: What do you think we're going to see.

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Speaker 7: I think it's important that you know we can't deglobalization

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Speaker 7: is a bit of a myth. We're seeing trading blocks

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Speaker 7: that have moved, and more training within blocks rather than

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Speaker 7: across blocks, which is actually boosting global trade. That's more

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Speaker 7: friction in the global economy and ultimately more risk of

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Speaker 7: supply chocks and more fragile supply chains. So I think

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Speaker 7: the concept of de risking is something that is a

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Speaker 7: relative concept. I understand there's geopolitical and strategic issues we

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Speaker 7: need to deal with with China, but these are the

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Speaker 7: two largest economies in the world. We're talking about China

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Speaker 7: and the US, and it's better to have better relations

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Speaker 7: than intense relations and intensifying geopol tensions between the two.

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Speaker 2: Dane swanp KPMG. They're chief economists, thank you. The grace

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Speaker 2: of Bloomberg's surveillance is we don't throw up films of

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Speaker 2: people being wrong or people being right.

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Speaker 1: This is a tough, tough.

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Speaker 2: Business gaming out equities, bonds, currencies, commodities.

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Speaker 1: If we tossed up.

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Speaker 2: A video John and Lisa Anastasia Amroso on the market

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Speaker 2: a number of months ago. She held Lisa's hand and said, Lisa,

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Speaker 2: It'll be okay.

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Speaker 1: A chief investor strategist and what and correct bull joins us. Now,

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Speaker 1: is this the second Is this the.

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Speaker 2: Second bull market off the October lows thirteen months ago?

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Speaker 1: Are we clicking in with a.

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Speaker 2: New bullmarket lift?

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Speaker 9: I mean, I think this is giving investors a lot

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Speaker 9: of faith and hope into the year end. You know, Tom,

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Speaker 9: It's amazing how quickly things shift, And just in the

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Speaker 9: last couple of weeks we went from really bad technicals

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Speaker 9: to really a great technical setup. And I think what's

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Speaker 9: likely to happen now is the chase into your end

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Speaker 9: is on and it's going to involve a lot of stakeholders,

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Speaker 9: whether it's this systematic traders, whether hedge funds that were

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Speaker 9: called too short, whether it's all the cash eight trillion

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Speaker 9: of it on the sideline. So I do think that

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Speaker 9: we well, I was initially going to say drift higher

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Speaker 9: into your end based on yesterday. We might rip higher

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Speaker 9: into your end, but I do think we'll finish higher.

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Speaker 10: Let's discuss what worked yesterday. Small caps, discretionary real a state.

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Speaker 10: Is that what you think works going into your end?

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Speaker 9: Well, I think tech is going to continue to work

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Speaker 9: into your end because if you look at unprofitable tech,

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Speaker 9: for example, it also rallied pretty massively yesterday as well.

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Speaker 9: You know the reason I hesitate when it comes to

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Speaker 9: consumer discretionary. You know, I love the target beat this morning,

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Speaker 9: but it does feel like a bit of a one off.

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Speaker 9: And you know, if we look at some of the

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Speaker 9: surveys of consumer spending consumer spending intentions, consumers are likely

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Speaker 9: to be slower and likely to be more discerning and

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Speaker 9: the I want to look for promotions. So you know,

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Speaker 9: maybe this everything rally does take consumer dis questioningly higher

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Speaker 9: with it, but from a quality perspective, and where I

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Speaker 9: have the most convictions on margins, on growth, on secular opportunity, John,

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Speaker 9: I think it's still tech.

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Speaker 4: Okay, So how much is this baking in both the

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Speaker 4: ongoing profits and also yields going lower given that valuations

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Speaker 4: are already pretty high considering how high the alternative is.

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Speaker 9: Yeah, I mean everything is working in the right direction

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Speaker 9: right now. Clearly this is a huge yield story. But

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Speaker 9: when it comes to big tech, for example, you know, yes,

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Speaker 9: yields help from the valuation perspective, But what I also

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Speaker 9: like about big tech for example, is that earnings growth

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Speaker 9: is there over and above the S and P. For example,

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Speaker 9: for the next year or two, the average earnings growth

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Speaker 9: is about sixteen percent. So and by the way, valuations,

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Speaker 9: I know people say big tech or tech generally is expensive,

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Speaker 9: but when you adjust for that earnings growth, it's actually

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Speaker 9: not that expensive. And when you start looking at individual stocks,

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Speaker 9: maybe forty times forward earnings on Nvidia, maybe that seems expensive,

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Speaker 9: but when you expand the chart, it's not actually off

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Speaker 9: the chart, so to speak. So everything is relative.

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Speaker 4: What's the balance of risks? We've been talking about that

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Speaker 4: throughout the morning for next year, as people get enthusiastic

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Speaker 4: into year end, is it a better than an expected

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Speaker 4: economic picture or is it some sort of recession that

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Speaker 4: really feeds into a profit recession as well.

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Speaker 9: Yeah, so we have to decouple the view into your

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Speaker 9: end versus what might happen in twenty twenty four. And

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Speaker 9: I think the reason for this optimist for twenty twenty

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Speaker 9: three has been this is a soft landing year. This

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Speaker 9: has proven to be a soft landing year. Now I

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Speaker 9: think something harder may have to happen in twenty twenty four.

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Speaker 6: And here's really the big question.

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Speaker 9: Which is going to determine the direction of the markets

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Speaker 9: in twenty twenty four is how quickly does the FED

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Speaker 9: cut or do they cut? If they cut, then I

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Speaker 9: think we're off to the races, and this is they

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Speaker 9: go in all on risk moment. But if they don't cut,

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Speaker 9: if they stay persistent, then I think some of the

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Speaker 9: bold may be disappointed.

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Speaker 2: Do we underestimate the ability of corporations to adjust? Twenty

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Speaker 2: four months ago of screaming about that we saw Target.

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Speaker 2: Today they've had a real, real post pandemic challenge. I guess, John,

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Speaker 2: what's it up right now? Forty two?

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Speaker 10: It's twenty five?

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Speaker 1: Okay, who's keeping count?

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Speaker 2: But the answer is I still think it's underestimated in

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Speaker 2: FED centric, rate centric New York City that I'm sorry,

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Speaker 2: each and every corporation out there is.

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Speaker 1: Going to adapt and adjust. What are they going to

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Speaker 1: do next year?

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Speaker 9: Yes, corporations are adjusting, and the case of Target, it

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Speaker 9: took them a while, but those inventories were eventually paired back.

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Speaker 9: I think what corporations may struggle with next year until

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Speaker 9: and unless the FED pivots is the refinancing bill of

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Speaker 9: some of their corporate debt. And by the way, This

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Speaker 9: goes across the spectrum. It's the US government which has

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Speaker 9: to refinance about thirty five percent of the debt between

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Speaker 9: now and the end of next year, is the commercial

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Speaker 9: real estate operators that have to refile a lot of the.

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Speaker 6: Debt, and then it's corporate.

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Speaker 9: So you know, the reason, Tom, why I think we

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Speaker 9: haven't seen more of an adverse impact is because the

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Speaker 9: percentage of floating rate has been low and companies have

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Speaker 9: not had a lot of fixed rate maturities that needed

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Speaker 9: to be refinanced.

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Speaker 6: That does start to change next year.

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Speaker 9: So if the FED doesn't cut, I think it does

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Speaker 9: become harder for corporates and how do they adjust well,

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Speaker 9: if margins get squeezed, I think cost cutting is the

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Speaker 9: next measure.

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Speaker 10: Does that make life difficult for certain parts of the

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Speaker 10: equity market given the nature of high yield issuers.

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Speaker 6: Yeah, it does.

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Speaker 9: The parts of the market that I worry about, or

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Speaker 9: leverage loans for example, which have already had a full

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Speaker 9: year of rates.

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Speaker 6: Around five percent.

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Speaker 9: And if you look at the net interst coverage ratios,

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Speaker 9: there were about three and a half times going.

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Speaker 6: Into the year for a lot of those issues.

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Speaker 9: There are one times today, maybe one point three, So

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Speaker 9: how does that picture change next year, especially if you

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Speaker 9: have some slow down in.

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Speaker 6: The top line for high yield.

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Speaker 9: I'm a little bit less worried because you do have

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Speaker 9: generally higher quality and better fundamentals, and there's a small

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Speaker 9: portion of high.

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Speaker 6: Yield that needs to be rolled over next year.

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Speaker 9: But from a broader economic perspective, and especially when I

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Speaker 9: think about the banking sector, if you start to have

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Speaker 9: more charge offs, incrementally more delinquencies, some default and by

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Speaker 9: the way, venture capital bankruptcies have been on the rise,

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Speaker 9: so all of that does start to impact some sector

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Speaker 9: of the economy, which I think is the bank.

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Speaker 10: Can we finish on the banks kind of left for

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Speaker 10: dead at times this year and for good reason earlier

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Speaker 10: in spring. What's your view on them into twenty four?

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Speaker 9: A very mixed view on them into twenty twenty four,

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Speaker 9: because in earlier on the show, I did say that,

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Speaker 9: you know, I was kind of warming up to the

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Speaker 9: bank sector because we were expecting the capital market activity

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Speaker 9: to pick up. That really didn't pan out so far

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Speaker 9: in the fall of this year, and I'm not sure

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Speaker 9: that it does in twenty twenty four.

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Speaker 6: So if you have lackluster capital market activity, in twenty twenty.

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Speaker 9: Four, and then on top of that you do have

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Speaker 9: those higher delinquencies, defaults, and charge offs. That comes back

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Speaker 9: to roots for the banking sector. So I appreciate the

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Speaker 9: rally that they're participating in, but that would not be

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Speaker 9: my top pic today.

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Speaker 4: You sound actually less optimistic than you did a bunch

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Speaker 4: of months ago, quite a bit less optimistic. Can you

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00:22:10,680 --> 00:22:12,639
Speaker 4: frame that out just how much you think some of

440
00:22:12,680 --> 00:22:14,000
Speaker 4: the gains have already been paked in.

441
00:22:14,680 --> 00:22:19,560
Speaker 9: Yeah, I definitely sound less optimistic your end rally nowithstanding.

442
00:22:19,760 --> 00:22:22,040
Speaker 9: And the reason for that is because a lot of

443
00:22:22,080 --> 00:22:25,359
Speaker 9: investors coming into the year expected this to be maybe

444
00:22:25,400 --> 00:22:27,880
Speaker 9: even a recession a year, or at least very lackluster

445
00:22:27,960 --> 00:22:30,560
Speaker 9: economic growth, and instead we got close to five percent

446
00:22:30,600 --> 00:22:31,160
Speaker 9: GDP in.

447
00:22:31,080 --> 00:22:31,760
Speaker 6: The third quarter.

448
00:22:32,119 --> 00:22:34,879
Speaker 9: So a lot of people are now in the soft

449
00:22:34,960 --> 00:22:37,320
Speaker 9: landing camp and are not even.

450
00:22:37,280 --> 00:22:38,639
Speaker 6: Talking about recession.

451
00:22:39,000 --> 00:22:41,360
Speaker 9: But if you think about this, you know, the longer

452
00:22:41,480 --> 00:22:43,320
Speaker 9: rates stayed at the current levels, and by the way,

453
00:22:43,400 --> 00:22:46,480
Speaker 9: if inflation falls and real rates start to pick up

454
00:22:46,600 --> 00:22:49,840
Speaker 9: the relationship we also talked about previously, then we are

455
00:22:49,880 --> 00:22:52,760
Speaker 9: going to get in restrictive territory relative to the neutral rate,

456
00:22:52,960 --> 00:22:55,440
Speaker 9: and that's when you start to worry about the FED

457
00:22:55,480 --> 00:23:00,119
Speaker 9: stays therefore too long, then that's what caused historically a recession. Well,

458
00:23:00,400 --> 00:23:02,400
Speaker 9: I do worry about that, and I don't think it's

459
00:23:02,400 --> 00:23:04,000
Speaker 9: in people's consensus numbers right now.

460
00:23:04,040 --> 00:23:07,080
Speaker 2: Is my takeaway here that Amoroso is on the edge.

461
00:23:07,000 --> 00:23:11,720
Speaker 10: Of bramo ye and it gets maybe less constructive gone

462
00:23:11,760 --> 00:23:13,960
Speaker 10: into twenty five to.

463
00:23:13,960 --> 00:23:16,760
Speaker 6: Be a long year of twenty four. So we can't

464
00:23:17,080 --> 00:23:18,840
Speaker 6: just you know, prepare for the whole thing.

465
00:23:19,119 --> 00:23:21,320
Speaker 2: That's the joy that I hurt six months ago.

466
00:23:21,359 --> 00:23:23,520
Speaker 9: Oh, the joy is here. The joy is into your

467
00:23:23,640 --> 00:23:27,200
Speaker 9: end and you know, you know, I do think that. Look,

468
00:23:27,240 --> 00:23:29,440
Speaker 9: the FED for now seems to be behind us until

469
00:23:29,480 --> 00:23:32,000
Speaker 9: mid December. You know, I think some of the worst

470
00:23:32,240 --> 00:23:36,000
Speaker 9: Fed Treasury auctions are behind us.

471
00:23:36,000 --> 00:23:37,480
Speaker 6: Okay, So that's the joy.

472
00:23:37,560 --> 00:23:38,240
Speaker 1: The conversation.

473
00:23:38,480 --> 00:23:40,560
Speaker 10: The joy was on the screen over the last twenty

474
00:23:40,600 --> 00:23:43,399
Speaker 10: four and made away and I say, you're constructive so

475
00:23:43,440 --> 00:23:46,359
Speaker 10: many times right to be and stay camo. So if

476
00:23:46,400 --> 00:23:47,040
Speaker 10: I capital it.

477
00:23:51,240 --> 00:23:55,479
Speaker 2: The Henrietta Trace joins US now economic policy research director

478
00:23:55,520 --> 00:23:59,240
Speaker 2: at Vada Partners. Henrietta, with all your years of experience

479
00:23:59,240 --> 00:24:03,480
Speaker 2: in Washington, and how polarized is the polarity right now?

480
00:24:04,960 --> 00:24:08,520
Speaker 11: I mean, they are just at each other's throats, almost literally. Certainly,

481
00:24:09,040 --> 00:24:12,520
Speaker 11: the stories out of DC yesterday were just shocking. Frankly,

482
00:24:12,640 --> 00:24:15,160
Speaker 11: they have to go on recess. I am so thankful

483
00:24:15,200 --> 00:24:18,320
Speaker 11: that they have agreed to this kick the can approach.

484
00:24:18,440 --> 00:24:20,639
Speaker 11: As you mentioned before, I think we're just going to

485
00:24:20,720 --> 00:24:23,280
Speaker 11: be doing this again, and I'm not optimistic that it's

486
00:24:23,280 --> 00:24:26,000
Speaker 11: going to stop in January or in February when the

487
00:24:26,000 --> 00:24:28,919
Speaker 11: two current deadlines exist. We're going to be doing this

488
00:24:29,000 --> 00:24:31,400
Speaker 11: every couple of months for the rest of twenty twenty four.

489
00:24:31,520 --> 00:24:32,760
Speaker 12: So we should get used to this.

490
00:24:32,760 --> 00:24:36,840
Speaker 11: Kind of acrimony government shutdown risks. Those headlines should just

491
00:24:36,920 --> 00:24:39,480
Speaker 11: be permanently emblazoned every couple of months in the newsreel.

492
00:24:39,600 --> 00:24:41,800
Speaker 10: We've got those headlines ready to go hendriady through the

493
00:24:41,840 --> 00:24:43,639
Speaker 10: whole at twenty twenty four. Can you just frame how

494
00:24:43,680 --> 00:24:46,480
Speaker 10: big this fight over spending might be just next year.

495
00:24:47,720 --> 00:24:50,920
Speaker 11: You know, it's just loud. It's not a big fight.

496
00:24:50,960 --> 00:24:53,480
Speaker 11: It's just a loud fight. They are not getting any

497
00:24:53,520 --> 00:24:56,880
Speaker 11: reductions in federal spending. This is a clean cr There

498
00:24:56,920 --> 00:24:59,800
Speaker 11: will be a minimum of about one hundred billion dollars

499
00:25:00,080 --> 00:25:04,199
Speaker 11: an additional aid that goes out across domestic and international priorities.

500
00:25:04,200 --> 00:25:07,160
Speaker 11: We are not fighting about spending cuts. We are fighting

501
00:25:07,200 --> 00:25:10,080
Speaker 11: about the process. The Freedom Caucus came up with the

502
00:25:10,119 --> 00:25:14,280
Speaker 11: idea of doing this laddered approach. It was rejected, resuscitated,

503
00:25:14,440 --> 00:25:17,760
Speaker 11: and then finally included in part in this deal. But

504
00:25:17,840 --> 00:25:20,720
Speaker 11: it contains no spending cuts, and there's no scenario where

505
00:25:20,720 --> 00:25:24,680
Speaker 11: the second tranche, which includes defense and foreign operations spending,

506
00:25:24,920 --> 00:25:27,199
Speaker 11: is going to expire after they reach a deal on

507
00:25:27,240 --> 00:25:29,840
Speaker 11: the first couple of appropriations bills. So this is a

508
00:25:29,880 --> 00:25:32,200
Speaker 11: lot of sound, This is a lot of bark very

509
00:25:32,200 --> 00:25:32,840
Speaker 11: little bite.

510
00:25:33,000 --> 00:25:36,439
Speaker 4: Given the fact that there was not Israel or Ukraine

511
00:25:36,520 --> 00:25:39,120
Speaker 4: funding in this current bill, how likely do you think

512
00:25:39,119 --> 00:25:40,960
Speaker 4: that will get done by January?

513
00:25:40,960 --> 00:25:41,479
Speaker 6: By February?

514
00:25:41,480 --> 00:25:43,679
Speaker 4: Does it even matter considering the spending that's coming out

515
00:25:43,720 --> 00:25:44,560
Speaker 4: of different pockets.

516
00:25:45,600 --> 00:25:47,159
Speaker 12: That's a really important question.

517
00:25:47,280 --> 00:25:49,320
Speaker 11: And I think a lot of this is tied up

518
00:25:49,320 --> 00:25:52,800
Speaker 11: with Minoriti leader maccaddeal and how much cloud he continues

519
00:25:52,840 --> 00:25:53,760
Speaker 11: to have with the party.

520
00:25:53,800 --> 00:25:55,600
Speaker 12: I think we can't underestimate the.

521
00:25:55,560 --> 00:25:58,640
Speaker 11: Impact of the loss in Kentucky for the governor's race

522
00:25:58,680 --> 00:26:02,520
Speaker 11: that materially acted his standing with his own conference in

523
00:26:02,560 --> 00:26:05,080
Speaker 11: the Senate Republican Caucus. And I think that's a big

524
00:26:05,119 --> 00:26:07,560
Speaker 11: problem for Ukraine AID. I was surprised in my last

525
00:26:07,640 --> 00:26:12,040
Speaker 11: round of meetings in DC how little support there is

526
00:26:12,040 --> 00:26:14,240
Speaker 11: for Ukraine versus what there has been from the United

527
00:26:14,280 --> 00:26:16,239
Speaker 11: States for the last year and eight months. It is

528
00:26:16,359 --> 00:26:20,280
Speaker 11: really a iffy question on whether Ukraine aid gets provided

529
00:26:20,280 --> 00:26:23,280
Speaker 11: at all. I do think that keeping Israel aid off

530
00:26:23,440 --> 00:26:25,840
Speaker 11: of the cr that they're passing now creates at.

531
00:26:25,840 --> 00:26:26,720
Speaker 12: Least a pathway.

532
00:26:26,920 --> 00:26:29,880
Speaker 11: But when you tie Ukraine to the border and recognize

533
00:26:29,880 --> 00:26:32,720
Speaker 11: that we haven't had border security legislation pass in a

534
00:26:32,800 --> 00:26:35,399
Speaker 11: decade or more, you really have a problem.

535
00:26:35,480 --> 00:26:37,320
Speaker 12: So I think that it is good news that we

536
00:26:37,320 --> 00:26:39,040
Speaker 12: don't have a bill yet. It keeps soap alive.

537
00:26:39,400 --> 00:26:42,960
Speaker 11: But I would dim my expectations for robust aid to

538
00:26:43,040 --> 00:26:46,800
Speaker 11: Ukraine and Israel. Obviously is another problem that is splitting

539
00:26:46,800 --> 00:26:49,919
Speaker 11: the Democratic Party just in half, just ripping it apart.

540
00:26:50,520 --> 00:26:52,600
Speaker 11: So those packages are going to be really hard to

541
00:26:52,600 --> 00:26:54,160
Speaker 11: come by, and I wouldn't be surprised that they didn't

542
00:26:54,160 --> 00:26:55,160
Speaker 11: get it till January.

543
00:26:55,240 --> 00:26:57,440
Speaker 4: You know, it's getting harder and harder to parse through

544
00:26:57,440 --> 00:26:59,600
Speaker 4: the signal from the noise in Washington, d C. We

545
00:26:59,680 --> 00:27:02,480
Speaker 4: have all these real, tangible, important issues and yet we

546
00:27:02,520 --> 00:27:06,359
Speaker 4: are focusing on scuffles both in the Senate that Bernie

547
00:27:06,400 --> 00:27:09,320
Speaker 4: Sanders had to and with a wooden gavel, and then

548
00:27:09,359 --> 00:27:14,959
Speaker 4: this the accusation that Kevin McCarthy elbowed fellow Republican Congress

549
00:27:15,000 --> 00:27:19,840
Speaker 4: member Tim Burchett during some of the contentious negotiations. Are

550
00:27:19,880 --> 00:27:22,959
Speaker 4: any of these important to you on a policy or

551
00:27:23,080 --> 00:27:24,520
Speaker 4: just functional level?

552
00:27:25,640 --> 00:27:29,400
Speaker 11: There is no policy, So I think Tom, you actually

553
00:27:29,440 --> 00:27:31,119
Speaker 11: just made a statement about how if you don't have

554
00:27:31,160 --> 00:27:33,680
Speaker 11: your fiscal house in order, you can enact policy.

555
00:27:34,080 --> 00:27:35,800
Speaker 12: That's exactly what's happening.

556
00:27:35,840 --> 00:27:39,840
Speaker 11: There is no policy, so we're only talking about fiscal austerity.

557
00:27:40,080 --> 00:27:42,840
Speaker 11: There's no discussion about passing a year in tax build

558
00:27:42,880 --> 00:27:44,320
Speaker 11: that's of any kind of merit.

559
00:27:44,720 --> 00:27:46,720
Speaker 12: They're running around punching each other in.

560
00:27:46,680 --> 00:27:50,119
Speaker 11: The back because they have gripes and qualms with who's

561
00:27:50,160 --> 00:27:53,400
Speaker 11: a liar, who has trustworthiness. There is no policy, there's

562
00:27:53,440 --> 00:27:56,639
Speaker 11: no uniting policy that drives the House of publican conference,

563
00:27:56,640 --> 00:27:58,639
Speaker 11: which is in control, and that means that the Senate

564
00:27:58,680 --> 00:28:00,960
Speaker 11: can't get their act together or get their work done.

565
00:28:01,240 --> 00:28:04,159
Speaker 11: And it's really been a darth of leadership that I

566
00:28:04,160 --> 00:28:07,879
Speaker 11: think is exacerbated by Mitch McConnell being on the way out,

567
00:28:08,200 --> 00:28:12,000
Speaker 11: and a speaker that is untested with no real leadership

568
00:28:14,640 --> 00:28:17,480
Speaker 11: mandate to work with on the Republican side. So I

569
00:28:17,480 --> 00:28:19,200
Speaker 11: think there is no policy. I don't think we will

570
00:28:19,200 --> 00:28:22,359
Speaker 11: be voting on any meaningful legislation next year. They cannot

571
00:28:22,480 --> 00:28:26,359
Speaker 11: move forward on impeachment. They can't move forward on you know,

572
00:28:26,480 --> 00:28:30,359
Speaker 11: impeaching even the Homeland Security secretary. They don't have a

573
00:28:30,400 --> 00:28:33,040
Speaker 11: plan for the border that is comprehensive or can pass

574
00:28:33,080 --> 00:28:35,960
Speaker 11: with the Republican conference. When you have these type majorities

575
00:28:36,000 --> 00:28:37,640
Speaker 11: and a lack of leadership, this is where you land.

576
00:28:37,640 --> 00:28:40,360
Speaker 11: So we just have these short term fights about federal spending.

577
00:28:40,440 --> 00:28:42,040
Speaker 11: Thankfully we don't have to deal with the debt ceiling

578
00:28:42,040 --> 00:28:43,400
Speaker 11: next year. That would have been a real problem.

579
00:28:43,400 --> 00:28:45,440
Speaker 10: Well, Henry Ti, given everything you've just said, doesn't that

580
00:28:45,480 --> 00:28:47,040
Speaker 10: make it all the more amazing that we managed to

581
00:28:47,040 --> 00:28:48,600
Speaker 10: find an agreement in the House yesterday.

582
00:28:49,880 --> 00:28:52,280
Speaker 11: I mean, you know, yes, and I don't want to

583
00:28:52,280 --> 00:28:56,240
Speaker 11: be just contrarian, but they're up. The scenario where we

584
00:28:56,280 --> 00:28:59,680
Speaker 11: shut down is even worse because there's no path to reopen.

585
00:29:00,360 --> 00:29:03,160
Speaker 11: So if you shut down the government, we will be

586
00:29:03,240 --> 00:29:05,560
Speaker 11: shut down for quite some time. People talk about, oh,

587
00:29:05,560 --> 00:29:08,320
Speaker 11: we couldn't possibly go past two weeks because you'd missed

588
00:29:08,320 --> 00:29:10,360
Speaker 11: a pay cycle. The last time we did this, for

589
00:29:10,440 --> 00:29:12,400
Speaker 11: no good reason, with no end in sight, we shut

590
00:29:12,440 --> 00:29:15,160
Speaker 11: down for thirty five days, right over the Christmas holidays.

591
00:29:15,280 --> 00:29:16,240
Speaker 12: I think the one thing.

592
00:29:16,080 --> 00:29:18,480
Speaker 11: That's kept my optimism alive contrary to a lot of

593
00:29:18,480 --> 00:29:21,360
Speaker 11: popular opinion, with you know, twenty percent or less odds

594
00:29:21,360 --> 00:29:23,000
Speaker 11: that we'd shut down all year, is.

595
00:29:23,000 --> 00:29:25,320
Speaker 12: Basically that the alternative is worse.

596
00:29:25,600 --> 00:29:28,440
Speaker 11: Shutting down means we stay shut down for quite some time.

597
00:29:28,720 --> 00:29:32,080
Speaker 11: Everybody looks incompetent, and you can't have these fights about

598
00:29:32,080 --> 00:29:35,520
Speaker 11: fiscal austerity and spending. If you're shut down, it starts

599
00:29:35,520 --> 00:29:38,920
Speaker 11: to have a material negative impact. So I mean they're

600
00:29:38,920 --> 00:29:41,320
Speaker 11: both bad options, but shutting down is the worst.

601
00:29:41,160 --> 00:29:44,280
Speaker 10: One, with lots of them looking competent when it's open. Henritta,

602
00:29:44,320 --> 00:29:46,640
Speaker 10: trace their evade partners, Henritta, thank you.

603
00:29:56,920 --> 00:29:59,880
Speaker 1: I don't talk to Jim Bartak ahead.

604
00:30:00,960 --> 00:30:03,680
Speaker 2: Let us get briefs here to say the marriage Jennifer

605
00:30:03,720 --> 00:30:07,880
Speaker 2: Bartash's marriage counselor joins us with Bloomberg Intelligence.

606
00:30:07,960 --> 00:30:09,560
Speaker 1: Jen thank you so much for joining.

607
00:30:09,880 --> 00:30:13,040
Speaker 2: I want you to explain what falls to the bottom line.

608
00:30:13,280 --> 00:30:15,880
Speaker 2: Home depot has a net income margin of nine is

609
00:30:16,080 --> 00:30:19,920
Speaker 2: tennis cents. Target I was shocked is three or a

610
00:30:20,080 --> 00:30:22,440
Speaker 2: moldy four cents on the dollar.

611
00:30:22,960 --> 00:30:25,080
Speaker 1: Is anybody making money in this business?

612
00:30:26,200 --> 00:30:29,960
Speaker 5: Good morning, Tom. It's a good question, and it's definitely

613
00:30:30,040 --> 00:30:31,760
Speaker 5: one of the challenges that we always see in this

614
00:30:31,800 --> 00:30:35,600
Speaker 5: retail sector. But I have to say, Targets results today

615
00:30:35,640 --> 00:30:38,560
Speaker 5: we're very encouraging, you know, and it does give a

616
00:30:38,600 --> 00:30:40,880
Speaker 5: little bit of optimism for the fourth quarter. So when

617
00:30:40,880 --> 00:30:43,640
Speaker 5: they beat across the board with revenue same store sales,

618
00:30:44,320 --> 00:30:47,479
Speaker 5: you know, we did see a great increase in margin.

619
00:30:48,320 --> 00:30:51,480
Speaker 5: That's all really because some of the productivity initiatives that

620
00:30:51,480 --> 00:30:54,160
Speaker 5: they put in place are starting to really help take

621
00:30:54,200 --> 00:30:55,240
Speaker 5: cost out of the business.

622
00:30:55,720 --> 00:30:57,680
Speaker 10: Willmont anst on this news as well. It's up in

623
00:30:57,680 --> 00:31:00,200
Speaker 10: a free market, buying more than one point two percent. Jen,

624
00:31:00,240 --> 00:31:01,920
Speaker 10: will hear from that company tomorrow. What is the read

625
00:31:01,960 --> 00:31:03,760
Speaker 10: across from that company to the other.

626
00:31:04,800 --> 00:31:08,720
Speaker 5: Well, I think that Target having better than expected results

627
00:31:08,920 --> 00:31:12,120
Speaker 5: really only means good things for Walmart. Walmart does tend

628
00:31:12,120 --> 00:31:15,280
Speaker 5: to outperform in environments where people are pulling back or

629
00:31:15,600 --> 00:31:18,720
Speaker 5: being very careful with their spending, and so I think

630
00:31:18,760 --> 00:31:22,120
Speaker 5: that a better than expected result today may lead to

631
00:31:22,840 --> 00:31:24,760
Speaker 5: a very good outlook for tomorrow as well.

632
00:31:24,800 --> 00:31:27,440
Speaker 4: But Jen, how do you parse through just the management

633
00:31:27,520 --> 00:31:30,600
Speaker 4: side of things versus the macro call on a management

634
00:31:30,640 --> 00:31:34,400
Speaker 4: side of saying Target seemed to work down fourteen percent

635
00:31:34,480 --> 00:31:37,040
Speaker 4: of some of its excess inventory, leading to some of

636
00:31:37,080 --> 00:31:37,720
Speaker 4: this boost.

637
00:31:38,040 --> 00:31:39,120
Speaker 12: Does that really.

638
00:31:38,920 --> 00:31:41,360
Speaker 4: Cross over to some sort of read through in the

639
00:31:41,360 --> 00:31:42,160
Speaker 4: broader consumer.

640
00:31:43,280 --> 00:31:45,760
Speaker 5: Well, I think that what we've seen is across a

641
00:31:45,800 --> 00:31:48,959
Speaker 5: lot of retailers, they've had to figure out their inventory

642
00:31:49,040 --> 00:31:51,320
Speaker 5: in kind of this post pandemic world. We went through

643
00:31:51,320 --> 00:31:54,360
Speaker 5: a phase where everybody was stockpiling inventory so that they've

644
00:31:54,360 --> 00:31:57,160
Speaker 5: had stuff available, then they had too much and they

645
00:31:57,200 --> 00:31:59,160
Speaker 5: had to clear it out, and now they're trying to

646
00:31:59,200 --> 00:32:02,080
Speaker 5: find the right equal librium. And being down versus last

647
00:32:02,120 --> 00:32:05,560
Speaker 5: year where there were still concerns about supply chain constraints

648
00:32:05,600 --> 00:32:08,440
Speaker 5: just shows that we're really getting back to that equilibrium

649
00:32:08,880 --> 00:32:11,960
Speaker 5: and we're seeing it across multiple retailers, and so I

650
00:32:11,960 --> 00:32:14,600
Speaker 5: think what's important is that inventory is down that much,

651
00:32:14,720 --> 00:32:18,200
Speaker 5: but they are already stock for holiday, So to us,

652
00:32:18,240 --> 00:32:20,520
Speaker 5: that also means that they should be able to sell

653
00:32:20,560 --> 00:32:22,840
Speaker 5: through a good portion of their inventory over the holiday

654
00:32:22,840 --> 00:32:25,360
Speaker 5: season and not end up in the same position they

655
00:32:25,360 --> 00:32:26,880
Speaker 5: were in where they had to have a lot of

656
00:32:26,920 --> 00:32:28,880
Speaker 5: Markdown's post holiday.

657
00:32:28,600 --> 00:32:31,480
Speaker 4: Jen Yesterday we were talking about drug stores in certain

658
00:32:31,480 --> 00:32:34,280
Speaker 4: cities that are putting pictures of toilet paper behind the

659
00:32:34,280 --> 00:32:37,600
Speaker 4: shelves and then having people ask request for it to

660
00:32:37,640 --> 00:32:40,040
Speaker 4: be delivered to them from the back of this store.

661
00:32:40,320 --> 00:32:43,120
Speaker 4: Target did talk about theft to our shrink as they

662
00:32:43,200 --> 00:32:45,479
Speaker 4: call it, and saying it's still weighing on their margins

663
00:32:45,520 --> 00:32:46,400
Speaker 4: in a material way.

664
00:32:46,600 --> 00:32:47,440
Speaker 6: What do you make of this?

665
00:32:47,800 --> 00:32:49,400
Speaker 4: How long are we going to hear about this in

666
00:32:49,440 --> 00:32:52,440
Speaker 4: earnings and is this just simply an excuse for margin

667
00:32:52,520 --> 00:32:55,040
Speaker 4: pressure or is this something that is going to become

668
00:32:55,200 --> 00:32:58,840
Speaker 4: increasingly concerning for both investors as well as the corporate executives.

669
00:33:00,240 --> 00:33:03,080
Speaker 5: What we usually see in longer term cycles is that

670
00:33:03,160 --> 00:33:06,920
Speaker 5: theft escalates whenever the consumer is under pressure, and as

671
00:33:06,960 --> 00:33:09,800
Speaker 5: inflation is coming down, that actually should be a little

672
00:33:09,800 --> 00:33:13,160
Speaker 5: bit of a release on that pressure. With regards to

673
00:33:13,200 --> 00:33:16,600
Speaker 5: theft and the losses that retailers are having. You know,

674
00:33:17,160 --> 00:33:20,520
Speaker 5: people generally want to do the right thing, and Target

675
00:33:20,520 --> 00:33:24,000
Speaker 5: in particular has been very vocal about theft levels. We've

676
00:33:24,040 --> 00:33:26,120
Speaker 5: saw some store closures where they said it was just

677
00:33:26,120 --> 00:33:30,000
Speaker 5: not profitable to operate, but We do think that as

678
00:33:30,000 --> 00:33:32,440
Speaker 5: inflation comes down, that should easy get a little bit

679
00:33:32,480 --> 00:33:33,320
Speaker 5: easier going forward.

680
00:33:33,480 --> 00:33:35,840
Speaker 2: John, you don't you bihold cell, but I want you

681
00:33:35,880 --> 00:33:40,000
Speaker 2: to note a four percent dividend, an eleven percent five

682
00:33:40,080 --> 00:33:41,160
Speaker 2: year dividend growth.

683
00:33:41,840 --> 00:33:42,320
Speaker 1: I got a.

684
00:33:42,320 --> 00:33:44,800
Speaker 2: Multiple of fifteen, which is what one third of the

685
00:33:44,880 --> 00:33:48,800
Speaker 2: high flyers one fifth of Nvidia. In that can Brian

686
00:33:48,920 --> 00:33:51,560
Speaker 2: Cornell and his team say we're back on plan the

687
00:33:51,600 --> 00:33:55,080
Speaker 2: pandemics beyond us and we will have the glide pass

688
00:33:55,440 --> 00:33:57,120
Speaker 2: of the TAJE we knew years ago.

689
00:33:58,360 --> 00:34:00,360
Speaker 5: I think we might be at a turning point. It

690
00:34:00,440 --> 00:34:02,600
Speaker 5: might be a little early to say that we're already there,

691
00:34:03,160 --> 00:34:06,000
Speaker 5: but I think that today's results definitely indicate that a

692
00:34:06,000 --> 00:34:08,720
Speaker 5: lot of the strategies that they're retrenching, that they're putting

693
00:34:08,719 --> 00:34:12,080
Speaker 5: back into place, do put target back on that right trajectory.

694
00:34:12,360 --> 00:34:14,440
Speaker 10: Jennifer, thanks for the update. Let's cat cheup against tomorrow

695
00:34:14,560 --> 00:34:18,640
Speaker 10: when we get numbers from Wolmont. Jennifer Pontanshestan of Bloomberg Intetogen's.

696
00:34:18,280 --> 00:34:22,160
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697
00:34:22,280 --> 00:34:26,480
Speaker 2: anywhere else you get your podcasts. Listen live every weekday

698
00:34:26,719 --> 00:34:30,239
Speaker 2: starting at seven am Eastern I'm Bloomberg dot com, the

699
00:34:30,360 --> 00:34:34,880
Speaker 2: iHeartRadio app tune In, and the Bloomberg Business App. You

700
00:34:34,920 --> 00:34:38,960
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00:34:39,000 --> 00:34:42,960
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00:34:43,120 --> 00:34:44,680
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