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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along

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Speaker 1: with my co host of Bonnie Quinn. Every business day

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Speaker 1: we bring you interviews from CEOs, A, market pros, and

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Speaker 1: Bloomberg experts, along with essential market moving news. Find the

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Speaker 1: Bloomberg Markets Podcast on Apple Podcasts or wherever you listen

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Speaker 1: to podcasts, and on Bloomberg dot com. It is time

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Speaker 1: for Bloomberg Opinion. We welcome Bloomberg Opinion columns. Jared Dillion.

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Speaker 1: He's also an editor and publisher of the Daily Dirton

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Speaker 1: app and investment strategists at Malden Economics based in Myrtle Beach,

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Speaker 1: South Carolina. Jared, thanks so much for joining us here.

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Speaker 1: Interesting column you had about mom and pop trading, this

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Speaker 1: robin Hood app. This reminded me of kind of the

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Speaker 1: late nineties when we had a lot of individual retail

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Speaker 1: investors get in there really speculating at what turned out

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Speaker 1: in hindsight in March of two thousand to be the

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Speaker 1: peak and the bubble, particularly the dot com boom. Give

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Speaker 1: us a sense of kind of what's happening now with

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Speaker 1: these mom and pop investors and all the trading apps

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Speaker 1: that are out there. Yeah, I wouldn't even say it's

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Speaker 1: really modern pop. I mean these are young people. I mean,

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Speaker 1: these are people in their twenties and early thirties, and

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Speaker 1: I think people underestimate the scale of what is happening.

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Speaker 1: I mean, you saw that robin Hood had three million

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Speaker 1: accounts opened in the first quarter of a loan. You're

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Speaker 1: talking about You're talking about just millions of people that

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Speaker 1: have dived into day trading. And the interesting thing about

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Speaker 1: this is that you know, for the last ten years

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Speaker 1: there were a lot of retail investors that um jumped

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Speaker 1: into the market, but they did it the right way.

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Speaker 1: They did it slow, they did it with index funds,

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Speaker 1: they paid low fees, and just over the last six months,

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Speaker 1: everything has gone out the window. Jared, before we get

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Speaker 1: to why no one should blame the FED for robin

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Speaker 1: Hood and it's its sins and the sins thative emanated

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Speaker 1: promis users, talk to us about what you can actually

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Speaker 1: do on robin hood financials up because it seems like

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Speaker 1: you can do some really sophisticated financial trades. You're not

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Speaker 1: talking about just buying stocks and not even just shorting stocks.

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Speaker 1: There's plenty of other things that you can do, and

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Speaker 1: there doesn't appear to be a limit to the amount

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Speaker 1: of leverage you can take. Yeah, I mean, robin Hood

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Speaker 1: is a platform that allows options trading, and you know,

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Speaker 1: I used to work in the options industry, That's where

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Speaker 1: I started my career. And if you look back at

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Speaker 1: you know, back then, total options volume in a given

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Speaker 1: day across the Fork exchanges would be about two million contracts.

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Speaker 1: Now it's up to about twelve million contracts. And these

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Speaker 1: people are, you know, very uneddicated when it comes to options. Uh,

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Speaker 1: they don't really know anything about option pricing at all,

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Speaker 1: and they're just buying upside calls in stocks just for

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Speaker 1: extreme amounts of leverage, just under the idea that stocks

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Speaker 1: always go up. So, um, I think this is not

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Speaker 1: going to end too well. Jared. I'm trying to get

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Speaker 1: a sense of kind of what's driving this move into

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Speaker 1: this retail trading in the in the you know, the

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Speaker 1: robin Hood apps and all of that, and a lot

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Speaker 1: of these young folks coming in into the market. And

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Speaker 1: I've read it might be simply the fact that we're

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Speaker 1: all stuck at home, we're all quarantined. Uh, there's no

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Speaker 1: sports to bet on, there's no casinos to go to

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Speaker 1: and to satisfy that speculative urge. Maybe folks are turning

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Speaker 1: to the stock market, particularly the options market. Does that

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Speaker 1: have value in your opinion? Now, that's that's absolutely what's

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Speaker 1: going on. People are at home and board you know.

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Speaker 1: I actually, um, you know, for five years I taught

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Speaker 1: at the local university and I checked in with one

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Speaker 1: of my former students and he's, you know, living in

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Speaker 1: his mom's basement, quarantined and he's trading you know. Um,

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Speaker 1: So it's a it's a function of it's a function

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Speaker 1: of boredom. It's a function of getting no action on

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Speaker 1: sports betting. I think it's also partially a function of

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Speaker 1: the stimulus and unemployment money that's been going out because

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Speaker 1: people are speculating with very small amounts of money. You know,

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Speaker 1: I get questions about people with you know, they have

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Speaker 1: a thousand dollars to put the work, and they're asking

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Speaker 1: about how to trade stocks. And this goes to the

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Speaker 1: kernel of your column because you say that rather than

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Speaker 1: it brings with liquidity out there and thanks to the Fed,

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Speaker 1: the real villains here are the discount brokers who have

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Speaker 1: caught trading commissions to zero. Explained that Jared, Yeah, I mean,

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Speaker 1: you know, commissions were never a huge portion of the

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Speaker 1: discount brokers revenue. They were about or less. Uh, And

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Speaker 1: these were competitive forces that drove commissions lower. I mean,

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Speaker 1: it wasn't anything finister, It wasn't really a marketing employ

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Speaker 1: to try to get more people to trade. It was

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Speaker 1: just competitive pressures that drove commissions lower. So that's really

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Speaker 1: you know, it's it's just like supply and demand. You know,

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Speaker 1: if you lower the price of something, there's going to

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Speaker 1: be more demand for it. And you've seen trading volumes

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Speaker 1: just absolutely explode since there's no commission. Now, I've always

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Speaker 1: been of the view that commissions and fees are not

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Speaker 1: necessarily a bad thing because they shape investor behavior and

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Speaker 1: then encourage buy and hold strategy. Just briefly, Jared, how

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Speaker 1: much has this to do with Dave Portnoy, whose course

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Speaker 1: Barstool Sports is founder and really hyped Robin Hood Financial

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Speaker 1: and his day trading. I think it has quite a

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Speaker 1: bit to do with it, actually, I mean, he has

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Speaker 1: a pretty large following, and I think, you know, I

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Speaker 1: think people take him a bit too literally and a

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Speaker 1: bit too seriously. You know, he's gone after people like

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Speaker 1: Warren Buffett, and Jim Simons and stuff like that, and

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Speaker 1: he says he's the greatest day trader in the world.

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Speaker 1: But you know, he's given confidence to a lot of

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Speaker 1: people that they can do the same thing. Yeah. Man,

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Speaker 1: it's just not that easy. As of course anyone who's

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Speaker 1: done it for a living it can attest to Jared Dillion,

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Speaker 1: his columnist for Bloomberg Opinion. He's editor and publisher of

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Speaker 1: The Daily Dirt Nap also investment Strategists Add Mold than Economics,

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Speaker 1: And of course he's the author of that book that

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Speaker 1: I'm sure you've all read, Street Freak, Money and man

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Speaker 1: as At Lehman Brothers, and another novel, All The Evil

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Speaker 1: of This World. Jar Dileona, thank you for joining Paul.

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Speaker 1: Can I ask you if you have a robin Hood

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Speaker 1: trading account. I do not, absolutely do not. I wouldn't

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Speaker 1: be allowed to. I'm not like Tom Keene. I'm not

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Speaker 1: long the triple leverage all cash fund. But I'm also

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Speaker 1: not day trading. I'm also not a gamer, which doesn't help. Apparently,

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Speaker 1: if you're a trainer, you've got faster fingers. Some of

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Speaker 1: the stocks that has performed exceptionally well during this pandemic

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Speaker 1: is Amazon dot Com. The stock is up forty five

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Speaker 1: percent year to date. It sports a market cap of

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Speaker 1: one point three four trillion dollars. With a t company

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Speaker 1: got and the stock got a new supporter this week

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Speaker 1: on Wall Street. Law Martin senior analysts that need him,

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Speaker 1: a company based in Los Angeles, initiated coverage this week

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Speaker 1: with a by rating a thirty price target. Stocks currently

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Speaker 1: trading at HUDD eighty three. Laura, thanks so much for

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Speaker 1: joining us here. Give us your thesis on Amazon right here. So,

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Speaker 1: I think the most important thing we're saying that's new

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Speaker 1: on this name fall is that this is really a

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Speaker 1: services company and not a product company, which is to say,

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Speaker 1: because consumers relationships with with Amazon is from a consumer

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Speaker 1: pacing where they think of it as an e commerce company.

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Speaker 1: But today of his company's revenue comes from services, and

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Speaker 1: they have an eight percent profit margins compared to e

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Speaker 1: commerce which is a three percent profit margin. So when

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Speaker 1: you look at contributions to actually operating profits, it really

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Speaker 1: comes from services like prime video, like music, like advertising

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Speaker 1: a huge here. We think they do eight billion of advertising.

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Speaker 1: So together we value what we call the media businesses

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Speaker 1: at five billion, which is about the same size as aws,

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Speaker 1: which together means it's about eight services are about eight

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Speaker 1: percent of the value here at Amacle, Laura, this is

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Speaker 1: something that's an Amazon's DNA. You talk about Amazon having

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Speaker 1: a track record of expanding total addressable market decisions, so

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Speaker 1: it's just constantly, constantly expanding the people that it reaches,

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Speaker 1: and all of those decisions are driving higher profitability and

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Speaker 1: lower shareholder risk. So it feels like this may never end.

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Speaker 1: I think that's possible. I think one of these things

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Speaker 1: I cover oppur as well, and I think both Apple

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Speaker 1: and Amazon they're about the same size of company, two

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Speaker 1: seventy billion dollars a year of revenue. I think they

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Speaker 1: both generate sixty billion dollars a free cash flow a year.

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Speaker 1: Apple turns around and buys and shares and so it

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Speaker 1: drives higher earnings for share growth with that. I think

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Speaker 1: what Amazon does, by contrast, it takes creean of that

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Speaker 1: and invest in what you just characterize as these can

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Speaker 1: expanding you know, new verticals that are non visible, and

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Speaker 1: it turns them into a WUS or advertising or groceries

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Speaker 1: or delivery last mile delivery innovations, and then it reports

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Speaker 1: out much lower free cash flow and much lower margins

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Speaker 1: to apprentices of the incometry. So I think might never

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Speaker 1: end because this is how Basis is wired. They have

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Speaker 1: grown in these ways that for the last twenty years

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Speaker 1: under the CEO Jeff Basis. So Laura talked to us

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Speaker 1: a little bit about the uh cloud business that's really

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Speaker 1: been a you know, a profit driver for Amazon for

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Speaker 1: years and years. Investors were, I guess used to our

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Speaker 1: conditioned to little to no profitability coming out of the

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Speaker 1: core e commerce business, but once they really started building

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Speaker 1: out the cloud business, it's been a real profit generator

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Speaker 1: for them. How do you view the growth and the

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Speaker 1: profitability of that business? You know, I think that it's

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Speaker 1: important they break out the cloud business is separately financially,

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Speaker 1: so there's been a lot of good financial analysis. What

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Speaker 1: we would say of our value added in this messaging

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Speaker 1: is that we think this is a playbook that you

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Speaker 1: should look at Amazon repeat they're doing it now and

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Speaker 1: advertising and what happens is when Amazon gets big enough

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Speaker 1: it's something they're successful at, they break it out separately

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Speaker 1: so you can value it separately. So um, we think

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Speaker 1: that they do about eighteen billion dollars of advertising today,

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Speaker 1: which has a profit margin and that business is soon

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Speaker 1: going to get big enough. We think it is. Together

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Speaker 1: the services businesses are almost as large as a WS.

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Speaker 1: So we think at some point in the next two

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Speaker 1: years they will break out these what I would call

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Speaker 1: their media businesses or their media revenue streams into a

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Speaker 1: separate business, and you will be able to value it

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Speaker 1: and it will be more profitable than a WS. But

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Speaker 1: right now it's hidden in this massive, you know, conglomerate.

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Speaker 1: So I always call that. What's important about AWS is

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Speaker 1: it is a playbook for how Amazon runs businesses and

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Speaker 1: then uncovers it's hidden value over time so that Wall

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Speaker 1: Street can more easily value it. You know, you talk

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Speaker 1: about Amazon also having media asset values about five billion dollars.

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Speaker 1: What happens there where a dollars going Laura, So there's

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Speaker 1: advertising in their subscription. That prime subscription product has a

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Speaker 1: profit margin. Let's remember that Netflix decieted at nine times revenue,

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Speaker 1: and it loses money prime which is mostly for shipping,

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Speaker 1: but twenty of prime subscribers stay there. There for the media,

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Speaker 1: which is Twitch, which is really important, music and video.

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Speaker 1: All of those assets are bundled in that prime subscription

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Speaker 1: and that makes turn lower. It breaks the average revenue

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Speaker 1: for user of the lifetime values higher UM and then

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Speaker 1: they have advertising as well. So all of those businesses

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Speaker 1: have much higher margins than the average, even higher than

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Speaker 1: clouds by a lot, a much higher margin than cloud

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Speaker 1: and that's you know, three times as higher margin as

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Speaker 1: the e commerce business. So these media businesses, I think

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Speaker 1: not only are they growing faster, they're helping churn fall

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Speaker 1: for the commerce part of the Amazon's and they have

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Speaker 1: much higher profitability in which was on capital. So, Laura,

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Speaker 1: what does this mean for the i'll call them traditional

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Speaker 1: media companies that you and I grew up covering. There's

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Speaker 1: been a lot of consolidation. Is that enough or is

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Speaker 1: there really not a boolk case to be made for

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Speaker 1: some of these traditional vertically integrated media companies. UM, So

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Speaker 1: I think Amazon is trying to Amazon is doing something,

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Speaker 1: dear prints in our traditional media companies with you and

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Speaker 1: I started in the world covering, And what I would

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Speaker 1: say is they have a bigger they have a bigger

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Speaker 1: they're thinking globally for one thing, um and and their

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Speaker 1: margin structure is different. They're very much data and technology driven. UM.

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Speaker 1: As you and I have seen from the past. You know,

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Speaker 1: data alone does not good content make UM, So I

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Speaker 1: don't necessarily think of Amazon as a core competitor. I

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Speaker 1: think it is much more likely that if they decide

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Speaker 1: to really go into the media business, they buy the

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Speaker 1: Walt Disney Company or they buy Fox. They can buy

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Speaker 1: these traditional media companies because their margin profile is globally

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Speaker 1: scale much more profitable. But I gotta tell you, Paul,

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Speaker 1: I think this man, this this company really thinks that

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Speaker 1: much bigger total addressable market like we think he's going

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Speaker 1: after the logistics market next. That's this one point six

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Speaker 1: trillion dollar total addressable market like media is too small

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Speaker 1: for him. But I don't think he's going to look backwards.

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Speaker 1: A go ahead, Paul, Sorry, no, no, no, that was good. Uh.

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Speaker 1: I guess we should ask a really about Apple on

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Speaker 1: Monday as well, because it's the first virtual w WDC

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Speaker 1: conference in in ever. Is there anything that you're anticipating

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Speaker 1: that will blow us away? I think the most important

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Speaker 1: thing we're waiting to hear from Apple is what's going

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Speaker 1: on with the five get phone, because I think the

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Speaker 1: stock has been running on the hopes that we have

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Speaker 1: a five get phone this year. Um, it's going to

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Speaker 1: be late. All of their products. We're going to be

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Speaker 1: late because of the COVID pandemic shutting down factories, um,

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Speaker 1: And so we're waiting to hear what's the new five

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Speaker 1: get phone going to be? And I think I think

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Speaker 1: then our next step is after we know what their

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Speaker 1: product mix is gonna be and when it's coming out,

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Speaker 1: when it's gonna they also usually announced when things are

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Speaker 1: going to be hitting the market, shelves available for purchase, um,

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Speaker 1: then we're gonna all have to go do surveys about

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Speaker 1: does any consumer care? Is anyone buying a new Apple

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Speaker 1: phone this year? I mean, I think that's a separate question.

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Speaker 1: But first we need the data on what is Apple

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Speaker 1: delivering to the marketplace and when all right, Laura's thank you,

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Speaker 1: We will eagerly await that on Monday. But also just

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Speaker 1: a very happy to chat with you about your initiation

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Speaker 1: of coverage of Amazon. The company's a hidden value multiplier

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Speaker 1: and so on. Looking for Amazon to hit thirty two

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Speaker 1: hundred dollars in the next twelve months and obviously has

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Speaker 1: a by rating on it. That's Laura Martin there, senior

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Speaker 1: media analyst at Needham and Company, and of course Paul

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Speaker 1: as soon as she said Disney, I I heard you

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Speaker 1: park up exactly. Yeah, you have to just really think

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Speaker 1: about the future of these traditional media companies, including Disney. Exactly.

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Speaker 1: Let's get back to our market coverage now. We have

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Speaker 1: Dave Pudla joining us and David Couldla of course as founder,

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Speaker 1: CEO and chief investment strategist of Mainstay Capital about two

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Speaker 1: point seven billion dollars in assets under management and named

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Speaker 1: my Baron as Barons as one of the top financial advisors,

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Speaker 1: one of the top twenty five over the past six years. David,

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Speaker 1: great to speak with you again. We've been asking participants

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Speaker 1: here of show to tell us why exactly stocks continue

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Speaker 1: to reach new highs even if we see some volatility,

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Speaker 1: and even if today is quotruple witching, it's a bit

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Speaker 1: of a bit of an exception. Well, we've been in

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Speaker 1: Good Morning, Bonnie. The mantra that I think all investors

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Speaker 1: need to heed all professionals, uh, that somehow I think

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Speaker 1: have forgotten and are remembering now is that the mantra

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Speaker 1: of don't fight the Fed. And we've seen some professionals,

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Speaker 1: some bears that have thrown in the town recently and

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Speaker 1: come back to a bullish dance. But This has been

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Speaker 1: our mantra on this rally all the way back up,

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Speaker 1: and I think that it continues to push stocks higher.

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Speaker 1: You can't. It's just very difficult to justify these levels

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Speaker 1: and even certainly continued advance on fundamentals of uh some

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Speaker 1: of these companies, fundamentals of the market and the economic reality.

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Speaker 1: But it's it's essentially fed stimulus and central bank stimulus.

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Speaker 1: Um this continued continuing to put push asset prices higher

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Speaker 1: and specifically stocks higher. So, David, you know, it's kind

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Speaker 1: of my thought here and what what I read in

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Speaker 1: here and talk to folks like you, that a lot

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Speaker 1: of this market movement, particularly the rally off the bottom,

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Speaker 1: which we're you know, roughly four off the bottom, has

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Speaker 1: been driven literally by a handful of stocks, the fang

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Speaker 1: plus kind of names. How broad based is this? And

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Speaker 1: if to the extent it's not broad based and the

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Speaker 1: depth is not there, the breath is not there, how

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Speaker 1: concerning is that to you? It's not concerning At this point.

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Speaker 1: We've seen, really, we've seen that kind of advance for

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Speaker 1: that kind of narrow leadership for quite a while. We

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Speaker 1: were seeing that in ten and early before we had

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Speaker 1: the bear market decline, and I think a lot of

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Speaker 1: that is a function of, you know that there was

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Speaker 1: this a lot of concern about the fang stocks, a

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Speaker 1: lot of concern about big cap tech that you know,

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Speaker 1: and specifically the fang stocks either you know, those stocks

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Speaker 1: that are big cap tech or retail stocks that are

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Speaker 1: being enabled by technology, that it was a house of

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Speaker 1: cards that was eminently going too far, eventually going to crumble.

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Speaker 1: And you know, our our school of thought on that

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Speaker 1: has been that, you know, technology is changing the world,

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Speaker 1: technology is eating the world. And if you look at

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Speaker 1: what happened, what's happened through the pandemic, some of these um,

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Speaker 1: the cloud stocks, I T stocks, you know, those have

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Speaker 1: been the enablers for uh, the different businesses that have

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Speaker 1: done quite well through the pandemic. It's just another another

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Speaker 1: scenario where we've seen how technology has mattered. And so

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Speaker 1: we think that, uh, it's it's a secular grows story

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Speaker 1: that remains and that these stocks are going to continue

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Speaker 1: to trade at high multiples, are going to continue to

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Speaker 1: do well, and we're continued well, we will continue to

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Speaker 1: see that leadership. We saw a rotation back into value

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Speaker 1: stocks here recently, and it was just another head fake,

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Speaker 1: the the tech stocks I t cloud, all those came

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Speaker 1: right back into leadership positions, and you know, we we

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Speaker 1: have been uh overweight growth stocks. We continue to be.

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Speaker 1: We don't fall for those value stock head fakes. And

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Speaker 1: except for we've taken a Barbell approach in our portfolios

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Speaker 1: here more recently over the past couple of months because

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Speaker 1: the we call it the lockdown rebound plays. But basically

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Speaker 1: some of these cyclical areas, whether it's the airlines, travel, leisure, uh, energy, construction, housing,

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Speaker 1: you know, there's been some some good plays on those

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Speaker 1: on the rebound, but we're staying with these secular growth stories,

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Speaker 1: specifically technology. Dave, how long does this narrative play out for? Though?

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Speaker 1: I mean it seems like nothing can go wrong for

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Speaker 1: these companies. I mean Amazon put on a four hundred

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Speaker 1: billion dollars worth of market capitalization during the pandemic. Well

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Speaker 1: that's just it. I mean, we we say that nothing

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Speaker 1: can go wrong, and I think it's that they're just

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Speaker 1: in a place where, you know, everything is right for them. Amazon,

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Speaker 1: you know, Amazons being a category killer for years and

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Speaker 1: will continue to be, you know, coming back to what's

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Speaker 1: happened during the pandemic, Um, there was an e t

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Speaker 1: F that we invested in called Clicks that was it

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Speaker 1: was just it was a slam dunk. It is an

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Speaker 1: e t F along short et F that is, it

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Speaker 1: was long uh, e commerce and short brick and mortar.

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Speaker 1: The government was closing down brick and mortar stores. Even

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Speaker 1: people that weren't accustomed to shopping online. We're being compelled

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Speaker 1: or almost forced to do so. So that was a

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Speaker 1: boost to Amazon and other online retailers. But in some

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Speaker 1: of those habits have changed forever um and and so

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Speaker 1: people are continuing to move more and more to shopping online. Uh.

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Speaker 1: That trend will continue, So the Amazons of the world,

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Speaker 1: and specifically Amazon will continue to do well. So, David,

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Speaker 1: if I believe that the economy is going to slowly

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Speaker 1: rebound in the back half of this year, then have

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Speaker 1: a much stronger I want to go along some cyclicals.

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Speaker 1: Do I want to go along some transportations? Something in

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Speaker 1: the rails, the truckers, the you know, the cargo ships

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Speaker 1: that are gonna be shipping all that cargo around the globe?

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Speaker 1: Is that a play? If I believe in a stronger yeah,

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Speaker 1: I think so. You know, I think you need to

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Speaker 1: be careful. You know, you need to look at the charts. Uh.

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Speaker 1: You know when we look at the airlines, for instance,

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Speaker 1: you know there is an opportunity because they took such

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Speaker 1: a plunge down as much as sixty on the downside,

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Speaker 1: you know when they come back to their pre COVID levels. Um.

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Speaker 1: You know, we look at the chart of the airlines

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Speaker 1: and it's it's like an e KG with noise in it.

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Speaker 1: And you know that's an industry that operates and razor

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Speaker 1: thin margins with an airline going out of business every

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Speaker 1: filing for bankruptcy every year or two. We look at

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Speaker 1: construction and housing that was on a nice upward slope

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Speaker 1: that got interrupted. It's had a nice rally back. All

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Speaker 1: those other cyclicals you're talking about though, um, some of

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Speaker 1: them have a long runway left in this in this rebound,

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Speaker 1: and I think that you, you know, investors need to

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Speaker 1: look at those areas to include in portfolios as we

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Speaker 1: moved through this recovery in the economy, but not just

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Speaker 1: here but globally. David couldla thank you so much for

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Speaker 1: joining us. David's the CEO and chief investment strategist at

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Speaker 1: main Stake Capital Management. About two point seven billion dollars

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Speaker 1: under management. We always love speaking to David, very thoughtful

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Speaker 1: analysis of the market and Vannie. You know, I love

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Speaker 1: how he talked about don't fight the FED. That was

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Speaker 1: literally the first lesson I learned on Wallstreet. When I

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Speaker 1: was on the pain Warber block trading desk back in

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Speaker 1: the mid to late eighties, managing director came up to

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Speaker 1: me and said, why are you selling stocks here? Said, well,

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Speaker 1: you know, and I said, he said, the rates are

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Speaker 1: going down, kid, buy stocks, you know. So that's one

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Speaker 1: that is stuck with me. And well, do you have

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Speaker 1: a photograph of that time? No, I do not, thankfully. Yeah.

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Speaker 1: It was a lot of fun, but so but it's

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Speaker 1: atually interesting. I think David's right spot on here. We've

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Speaker 1: had central banks around the world, UH and you know,

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Speaker 1: led by the US Photo Reserve pumping liquidity into the marketplace.

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Speaker 1: And some someone we had on the show coined a

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Speaker 1: great phrase which I love, which is back stopping. The

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Speaker 1: markets are back stopping risk assets here, and that's kind

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Speaker 1: of what it feels like. You get a little bit

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Speaker 1: of a pullback in the market, but investors still have

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Speaker 1: confidence to come back in uh and buy that dip

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Speaker 1: despite some of the economic conditions we are facing. It

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Speaker 1: is Juneteenth. It is perhaps also the first time that

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Speaker 1: nationally this is being recognized, and companies are actually recognizing junetee,

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Speaker 1: some of them offering employees who so wish to take

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Speaker 1: a day off Morgan's down, the Target and Uber among them.

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Speaker 1: But whether the moves will be scrutinized as enough, or

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Speaker 1: whether companies will also be forced to devote resources actually

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Speaker 1: make concrete, measurable changes in areas such as hiring, vendor diversity,

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Speaker 1: that's still up for grabs. Let's bring in Bloomberg Finance

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Speaker 1: reporter Laana Nuyon has been looking at what companies have

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Speaker 1: been doing and whether it's going to be enough to

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Speaker 1: satisfy public impressions. Right now, Lana, and thanks for joining

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Speaker 1: first give us an idea of just how widespread the

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Speaker 1: moves have been, particularly the juneteenths recognition. Thanks Fohnnie, it's

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Speaker 1: nice to speak to you. So, I think the widespread

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Speaker 1: factor of this is very interesting because it's more about

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Speaker 1: the major companies that have done it. So from Nike

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Speaker 1: to Target, we're seeing very large household names give employees

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Speaker 1: a day off in recognition of June teams. So I

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Speaker 1: think there's an element of corporate leadership on top of

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00:23:53,640 --> 00:23:56,439
Speaker 1: which you have banks like JP Morgan, which is closing

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00:23:56,720 --> 00:23:59,840
Speaker 1: branches early, and other banks, Bank of America and City

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00:24:00,359 --> 00:24:03,480
Speaker 1: which basically told staff that they could take a day,

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Speaker 1: a personal day, um to to commemorate junetein. So we

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00:24:07,920 --> 00:24:11,080
Speaker 1: are seeing a lot of really really big companies try

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00:24:11,160 --> 00:24:14,240
Speaker 1: to mark the moment in some way, and so that's

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00:24:14,280 --> 00:24:20,480
Speaker 1: just having a ripple effect across corporate America. York City

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00:24:20,480 --> 00:24:24,199
Speaker 1: to make Juneteenth city school holiday next year, that's according

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00:24:24,200 --> 00:24:26,959
Speaker 1: to mayor the Belasia. So just another example and had

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00:24:26,960 --> 00:24:29,000
Speaker 1: to lean on. I have to admit, I'm I always

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00:24:29,000 --> 00:24:32,720
Speaker 1: consider myself a fairly well read student of American history,

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00:24:32,720 --> 00:24:34,480
Speaker 1: but I have to admit I had never heard the

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00:24:34,600 --> 00:24:38,120
Speaker 1: term Juneteenth or its significance until a couple of days ago.

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00:24:39,119 --> 00:24:43,080
Speaker 1: What's the phenomenon behind this? Is this just a recognition

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00:24:43,359 --> 00:24:45,840
Speaker 1: of the racial inequality in this country and ways to

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00:24:45,920 --> 00:24:51,200
Speaker 1: kind of, uh, you know, kind of call it to attention. Yes, Paul,

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00:24:51,240 --> 00:24:54,040
Speaker 1: And I think that you're not alone in in being

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00:24:54,480 --> 00:24:57,240
Speaker 1: new to this. I think, um, it's lesser known outside

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00:24:57,240 --> 00:24:59,920
Speaker 1: of the black community. Um, and it has suddenly kind

449
00:24:59,920 --> 00:25:02,720
Speaker 1: of jumped onto the agenda of many people, including ourselves

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00:25:02,760 --> 00:25:07,080
Speaker 1: as business reporters. UM. And so the movement is similar

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00:25:07,119 --> 00:25:10,080
Speaker 1: to Martin Luther King Day to commemorate the end of

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00:25:10,119 --> 00:25:14,639
Speaker 1: slavery UM and to recognize and fight against um, you know,

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00:25:14,760 --> 00:25:17,960
Speaker 1: racial inequality. UM. One of those sources I spoke to

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00:25:18,040 --> 00:25:20,520
Speaker 1: for the story said that she and her family and

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00:25:20,520 --> 00:25:22,840
Speaker 1: her network used the day as a day of service

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00:25:22,960 --> 00:25:25,679
Speaker 1: and reflection to be with their families or to participate

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00:25:25,720 --> 00:25:29,040
Speaker 1: in the community service events and so UM you know,

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00:25:29,200 --> 00:25:32,240
Speaker 1: there there is a push here by the corporate sector

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00:25:32,320 --> 00:25:35,959
Speaker 1: to acknowledge that people in the black community, UM, you know,

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00:25:36,000 --> 00:25:39,320
Speaker 1: take this seriously, and also people outside of that community

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00:25:39,320 --> 00:25:42,120
Speaker 1: as well, and so UM you know, the marketing consultant

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00:25:42,119 --> 00:25:46,640
Speaker 1: I spoke to said, last year, nobody did anything for Juneteenth,

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00:25:46,680 --> 00:25:49,639
Speaker 1: and now suddenly this wave of companies is doing UM

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00:25:50,040 --> 00:25:54,040
Speaker 1: events and and commemorating in some way. Yeah. I was

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00:25:54,119 --> 00:25:56,480
Speaker 1: on air when Nike announced thought it was going to

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00:25:56,640 --> 00:26:00,240
Speaker 1: take juneteenths as a vacation date for employees who wanted

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00:26:00,280 --> 00:26:03,879
Speaker 1: to observe it. And I actually thought, in some ways

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00:26:03,920 --> 00:26:06,040
Speaker 1: it was I don't want to say a joke, because

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00:26:06,040 --> 00:26:08,280
Speaker 1: it's an important thing and it's it's nice that a

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00:26:08,320 --> 00:26:11,280
Speaker 1: company would recognize that, but it also does feel very

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00:26:11,359 --> 00:26:13,720
Speaker 1: much like lip service. Lannan, I mean, when are we

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00:26:13,760 --> 00:26:17,720
Speaker 1: going to see actual you know, corporate mandates devoting resources

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00:26:17,760 --> 00:26:22,919
Speaker 1: to making measurable changes, doing things like fixing their hiring practices,

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00:26:23,480 --> 00:26:26,440
Speaker 1: making sure that there's vendor diversity. So for a recently

475
00:26:26,520 --> 00:26:30,080
Speaker 1: was one of those vendors that signed up to what's

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00:26:30,080 --> 00:26:32,440
Speaker 1: been called a fifteen percent pledge. The founder of brother

477
00:26:32,920 --> 00:26:34,639
Speaker 1: is talking about the fifteen percent pledge, so that at

478
00:26:34,720 --> 00:26:37,800
Speaker 1: least fifteen percent of products and stores are from black

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00:26:37,840 --> 00:26:44,240
Speaker 1: owned businesses. We need more of this, No, Ronnie, that

480
00:26:44,320 --> 00:26:46,760
Speaker 1: is a very important question because a lot of the

481
00:26:46,800 --> 00:26:50,080
Speaker 1: sources I spoke to said this is extremely important. That

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00:26:50,320 --> 00:26:52,720
Speaker 1: people are not just going to be sort of pleased

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00:26:52,760 --> 00:26:56,119
Speaker 1: with a an announcement for one day or an observance

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00:26:56,160 --> 00:26:58,280
Speaker 1: for one day. This is supposed to be part of

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00:26:58,320 --> 00:27:01,800
Speaker 1: a lasting change, and people in the community are looking

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00:27:01,800 --> 00:27:04,680
Speaker 1: at UM, at these companies to see, first of all,

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00:27:04,720 --> 00:27:06,679
Speaker 1: what is your record in the past, what are you

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00:27:06,760 --> 00:27:10,359
Speaker 1: doing to UM, you know, fix any previous problems, and

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00:27:10,400 --> 00:27:13,679
Speaker 1: then what are you doing going forward to hire black people,

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00:27:14,040 --> 00:27:18,639
Speaker 1: elevate them in management and UM you know, enforced policies

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00:27:18,680 --> 00:27:22,800
Speaker 1: that are going to help to rectify racial inequality. Um.

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00:27:23,320 --> 00:27:26,160
Speaker 1: Another person that we suppose to in a brand consult

493
00:27:26,240 --> 00:27:29,520
Speaker 1: or brand strategy firm said, if it's just this day

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00:27:29,800 --> 00:27:32,800
Speaker 1: and the company doesn't do anything else, more broadly, it's

495
00:27:32,840 --> 00:27:36,719
Speaker 1: going to ring hollow, and consumers and and other business

496
00:27:36,720 --> 00:27:40,119
Speaker 1: partners are going to see that. So, UM, everyone is

497
00:27:40,160 --> 00:27:43,280
Speaker 1: looking to see that the Juneteenth actions are backed up

498
00:27:43,320 --> 00:27:48,040
Speaker 1: with broader measures in order to correct racial inequality. Interesting.

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00:27:48,080 --> 00:27:52,440
Speaker 1: I mean, you know, employees Lennon are certainly like reflecting

500
00:27:52,480 --> 00:27:56,320
Speaker 1: the broader populous, you know, more sensitive arguably just in

501
00:27:56,359 --> 00:28:00,000
Speaker 1: the last couple of weeks months to racial inequality. Uh.

502
00:28:00,080 --> 00:28:03,679
Speaker 1: Is this a reflection companies trying to do really the

503
00:28:03,800 --> 00:28:06,720
Speaker 1: right thing, or again, as Vannie suggested, maybe it's just

504
00:28:06,720 --> 00:28:09,399
Speaker 1: a little bit of lip service. I think the jury

505
00:28:09,480 --> 00:28:11,719
Speaker 1: is out, Paul. I think there are some companies that

506
00:28:11,800 --> 00:28:14,160
Speaker 1: are really trying to listen and do the right thing,

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00:28:14,240 --> 00:28:17,400
Speaker 1: and others that just want to make sure that they're

508
00:28:17,400 --> 00:28:21,359
Speaker 1: covering themselves and having the optics of you know, commemorating

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00:28:21,400 --> 00:28:24,000
Speaker 1: the day. So the marketing firm that we spoke to

510
00:28:24,440 --> 00:28:29,119
Speaker 1: said that employees in companies that they surveyed UM really

511
00:28:29,200 --> 00:28:33,080
Speaker 1: do support anti racism protests. Two percent of them support

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00:28:33,080 --> 00:28:36,240
Speaker 1: their protests, and fifty five percent say that their employers

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00:28:36,280 --> 00:28:39,440
Speaker 1: should respond directly to racial issues. So there's a conversation

514
00:28:39,520 --> 00:28:41,920
Speaker 1: that's taking place in worth places right now that has

515
00:28:42,920 --> 00:28:46,719
Speaker 1: is much more open about race than every husband before. Hey, Len,

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00:28:46,760 --> 00:28:48,680
Speaker 1: and thank you so much for joining us and sharing

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00:28:49,080 --> 00:28:53,160
Speaker 1: this reporting that you had Lennon new and Bloomberg Financial reporter,

518
00:28:53,560 --> 00:28:56,800
Speaker 1: uh talking about Juneteenth and again just coming across the

519
00:28:56,800 --> 00:29:01,320
Speaker 1: Bloomberg terminal headline New York City to Juneteenth a city

520
00:29:01,400 --> 00:29:04,120
Speaker 1: and school holiday next year, and that's according to Mayor

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00:29:04,680 --> 00:29:07,560
Speaker 1: Bill Deblasia. So again falling along what we've seen a

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00:29:07,600 --> 00:29:11,720
Speaker 1: lot in corporate America. Uh, as we tend to deal

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00:29:11,840 --> 00:29:15,920
Speaker 1: with this racial inequality. This is Bloomberg. Thanks for listening

524
00:29:15,960 --> 00:29:19,160
Speaker 1: to the Bloomberg Markets podcast. You can subscribe and listen

525
00:29:19,200 --> 00:29:22,680
Speaker 1: to interviews at Apple Podcasts or whatever a podcast platform

526
00:29:22,760 --> 00:29:26,160
Speaker 1: you prefer. I'm Bonnie Quinn. I'm on Twitter at Bonnie Quinn,

527
00:29:26,360 --> 00:29:28,720
Speaker 1: and I'm Paul Sweeney. I'm on Twitter at pt Sweeney.

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00:29:28,760 --> 00:29:31,400
Speaker 1: Before the podcast, you can always catch us worldwide at

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00:29:31,440 --> 00:29:32,240
Speaker 1: Bloomberg Radio