Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along
Speaker 2: with Lisa Bromwitz and Amrie Hordern. Join us each day
Speaker 2: for insight from the best in markets, economics, and geopolitics
Speaker 2: from our global headquarters in New York City. We are
Speaker 2: live on Bloomberg Television weekday mornings from six to nine
Speaker 2: am Eastern. Subscribe to the podcast on Apple, Spotify or
Speaker 2: anywhere else you listen, and as always on the Bloomberg
Speaker 2: Terminal and the Bloomberg Business App. Phil Camparadi of JP
Speaker 2: Morgan saying the pace of easing will be much slower
Speaker 2: going forward. The labor market weakness from the summer was misread.
Speaker 2: As long as the Fed can continue to carefully bring
Speaker 2: raids down over the next year, our thesis of a
Speaker 2: self lending and a broadening gout of equity returns will
Speaker 2: be supported. Phil joined us now for more. Phil, good
Speaker 2: morning to see you. Haven't seen you since the election,
Speaker 2: and last time we spoke you were super bullish. Are
Speaker 2: you even more bullish now?
Speaker 1: Yes? So before the election we were saying it's going
Speaker 1: to be really hard to fade us exceptionalism. We just
Speaker 1: didn't know if it was going to be US exceptional
Speaker 1: exceptionalism in lowercase with a period, or US exceptionalism in
Speaker 1: like big bold letters with an exclamation point. And I
Speaker 1: think we got the exclamation point. Okay, So we're still
Speaker 1: bullsh We're still overweight by ten percent. We were ten
Speaker 1: percent overweight equity the day before the election. We're ten
Speaker 1: percent overweight today. And the two words that I took
Speaker 1: from Chairman Powace quote yesterday, you know, the whole world
Speaker 1: focused on hurry to cut rates. Mine was strength and
Speaker 1: economy right. And that's the fundamental story, particularly with the
Speaker 1: US consumer. John, I've been on this program talking about
Speaker 1: the US consumer a lot, to the most important consumer
Speaker 1: to get right. And October gave us such a big signal.
Speaker 1: It was the largest one month gaining consumer confidence since
Speaker 1: the reopening of twenty one, the biggest contribution to consumption
Speaker 1: in the third quarter since the beginning of twenty twenty three,
Speaker 1: and the BA found about a trillion dollar when they
Speaker 1: revise the savings rate higher, So the US consumers to
Speaker 1: US look strong. The bottom line for US fifteen percent
Speaker 1: probability of recession over the next twelve months fifteen fifteen
Speaker 1: is as low as you could possibly get. And you know,
Speaker 1: for us, because snow sitting is zero probability. And at
Speaker 1: the end of the day, you want to make a
Speaker 1: big deal about rates, the average ten year rate this
Speaker 1: year has been four point two.
Speaker 3: We're four point.
Speaker 1: Four and the SMP has squeaked out twenty five percent
Speaker 1: game Okay, so it's a it's a pretty supportive environment
Speaker 1: for us still because of the fundamental signal.
Speaker 2: That's the story. It's a beautiful story. Thank you got
Speaker 2: to talk about a price of a story. Let's talk
Speaker 2: about a price of a story. Credit sprints are ready
Speaker 2: tight for what multiple is a pretty out of vitsh
Speaker 2: We are seeing the days to come in pretty strong.
Speaker 2: But that's while price. We've taken out a lot of
Speaker 2: rate cuts already for the Federalserve. Just how well priced
Speaker 2: is this story?
Speaker 1: Yeah, good question. So when when we were here pretty
Speaker 1: much up through the summer, we were talking about the
Speaker 1: cap weighted S ANDP we were talking about megacaptech, that's
Speaker 1: still part of the story, John, But our two latest
Speaker 1: trades have not been that one has been equal weight. Okay,
Speaker 1: So get arbitrarily, just get a little bit of every stock,
Speaker 1: but I think one of the ones that's really coming
Speaker 1: up is MidCap now. So MidCap for us makes sense
Speaker 1: for three reasons. One valuation seventeen times versus the twenty
Speaker 1: two times that you're quoting on the S and P.
Speaker 1: We have about a thirteen percent earnings growth for next year,
Speaker 1: which looks pretty good, and you just don't need as
Speaker 1: many rate cuts. Like it's got a little bit less
Speaker 1: sensitivity than small cap. I mean, yes, we could have
Speaker 1: jumped into the deep end of the pool about small cap,
Speaker 1: but we're getting there through MidCap, So it's a broadening
Speaker 1: out of us exceptionalism. Don't bail on the megacap, but
Speaker 1: we're diversifying that with some other with some other things.
Speaker 1: And then high yield at the end of the day, Yeah,
Speaker 1: I mean, how tight could it go. It's like the
Speaker 1: two faced high yield market. You have this like fifth
Speaker 1: percentile spread right, and then you look at it again
Speaker 1: and you're like, oh, my goodness, it's fiftieth percentile all
Speaker 1: in yield, and a lot of our clients just want
Speaker 1: the yield, including us. We want this boring, less glamorous
Speaker 1: alpha trade of out yielding our index in a world
Speaker 1: where the fundamental story continues to support hy YO well.
Speaker 4: Usually one trade that works pretty well is the more
Speaker 4: credit spreads titan, the better risk assets as a whole do.
Speaker 4: If there's just less room now for credit spreads to tighten,
Speaker 4: does that put any ceiling on risk overall or just
Speaker 4: the correlations all out of WAC considering how tight things
Speaker 4: have gotten.
Speaker 1: Yeah, so that's that's a good point. I think it's
Speaker 1: a whole story, Danny of like macro volatility coming down.
Speaker 1: I can make you know, this might not get the
Speaker 1: best ratings, but I can make the case that uncertaint
Speaker 1: is actually less now, not more. You know, post election,
Speaker 1: we know who's there. We know also that if history
Speaker 1: is a guide, a lot of companies tend to put
Speaker 1: money to work no matter who they voted for after
Speaker 1: an election, which I think can support the broadening out
Speaker 1: rally that I'm talking about. We're not expecting hy yel
Speaker 1: to titan. You know, maybe it should trade through treasuries
Speaker 1: because one of those has one hundred percent des to
Speaker 1: GDP and one of them doesn't. But that's that's not
Speaker 1: going to happen. I think at the end of the day,
Speaker 1: the high yield story is in the background. Jenny Allen said,
Speaker 1: it's like watching paint dry. That's what she wanted monetary
Speaker 1: policy to be. That's what we want the high Yeld
Speaker 1: carrier to in our portfolio.
Speaker 4: Okay, so the rally broadens out. But does leadership change.
Speaker 1: Yeah, I think that's that's the key. I think leadership
Speaker 1: does change. I think it changes to things that are
Speaker 1: more pro sicklic. Also, remember what I said at US exceptionalism,
Speaker 1: bold letters, exclamation point. That just doesn't mean megacap. I
Speaker 1: think it means that you have the financials and industrials
Speaker 1: taking part, and that's how that's how we're positioned for
Speaker 1: next year. I mean we have our soft landing definition
Speaker 1: is about two to two and a half percent growth,
Speaker 1: two to two and a half percent inflation. If you
Speaker 1: just google nominal growth of five with earnings, you get
Speaker 1: a lot of leadership in that environment. I think that's
Speaker 1: that's pretty supportive. And one of the things I really
Speaker 1: don't want to see is a fifty basis point rate cut.
Speaker 1: I don't want to see that, and I don't want
Speaker 1: to see a two percent CPI rate because I think
Speaker 1: if that's happening, we're wrong on the fundamental story and
Speaker 1: the growth story.
Speaker 2: Last week, Immybely, after that election, we began surprise to
Speaker 2: what looked like a really positive growth shock, really loud.
Speaker 2: Mohammadel Erin came on the program and he said that
Speaker 2: sound is the sucking sound of capital being tanken away
Speaker 2: from the rest of the world into the United States.
Speaker 2: You keep saying US exceptionalism. Why does it leave Europe?
Speaker 2: Where does it leave China? Why does it leave Japan?
Speaker 2: Where does it leave em.
Speaker 1: Okay, you want to answer all those please, So I
Speaker 1: think if I were going pecking order here, I think
Speaker 1: it would go to the US. So out of our
Speaker 1: ten percent overoid, eighty percent of that is in the US.
Speaker 1: And then the other piece, John, we have a small
Speaker 1: piece in emerging markets. So you know, in twenty sixteen,
Speaker 1: if you listen to anything President Trump said on the
Speaker 1: campaign trail, you wouldn't have touched EM with a ten
Speaker 1: foot poll. In twenty seventeen, EM was up thirty eight
Speaker 1: percent because of the coordinated global growth theme, So the
Speaker 1: fundamentals kind of went out there. I'm not saying that's
Speaker 1: going to happen this time, but you know, we do
Speaker 1: have an environment where at least China is acknowledging their
Speaker 1: property market. It's fallen flat again, but it is somewhere
Speaker 1: where we just want to be careful of being too underweight.
Speaker 1: And then the Japan story, it just gets a little
Speaker 1: complicated with the back of Japan normalizing rates and what
Speaker 1: that does to dollar yen. I think it makes it
Speaker 1: a little bit easier if the Fed's not going as much,
Speaker 1: that the Bank of Japan can start to normalize and
Speaker 1: it won't be like that early August trade. So in
Speaker 1: terms of pecking order, I think it would go US
Speaker 1: EM Japan, and then Europe would be a funding source.
Speaker 1: At this point, they're growing at one, we're growing at three.
Speaker 1: European Central Bank is cutting and we only have seventy
Speaker 1: five basis points of easing priced down to the end
Speaker 1: of next year. Okay, and that's kind of a weaker
Speaker 1: euro story, which isn't great for investors.
Speaker 4: Hearing you, no, you.
Speaker 3: Sound so bullish. What's the risk of Donald Trump putting
Speaker 3: on tariffs that are blankets sixty percent on Chinese imports
Speaker 3: and ten percent from everywhere else.
Speaker 1: Yeah, So, Amory, I go back to twenty nineteen. President
Speaker 1: Trump lost the majority in the midterm elections of twenty eighteen,
Speaker 1: and growth that year was three and inflation was two
Speaker 1: and the FED was cutting and I just don't I
Speaker 1: just don't know if these tariffs are going to lead
Speaker 1: to the inflation. I think it's more it could be
Speaker 1: more of a growth side. But policy error, amory, probably
Speaker 1: is our biggest risk, whether it be from the administration
Speaker 1: or whether it be from the Federal Reserve. And I
Speaker 1: think the Federal Reserve kind of got the message. They
Speaker 1: thought the Unpluyner ray was going to be four point four.
Speaker 1: At the end of this year, it's four to one.
Speaker 1: But to your point, the policy err is probably the
Speaker 1: biggest risk. It's not the left tail, it's not recession,
Speaker 1: it's policy error from the administration of the Fed.
Speaker 3: Then what would be the catalyst for that fifteen percent
Speaker 3: recession called possibility, which I know is low, But what
Speaker 3: would be the catalyst?
Speaker 1: It would be business caution and then kind of kind
Speaker 1: of layoff. So we're watching initial job as claims really closely.
Speaker 1: So do claims or the labor market show signs of cracking.
Speaker 1: There was like this hoodwink earlier this year that the
Speaker 1: FED fell for and Claudia sam was like, no, it's
Speaker 1: not happening. So so I think at the end, at
Speaker 1: the end of the day, would have to come from
Speaker 1: the labor market, amory, and then the uncertainty as you said,
Speaker 1: on tariffs on growth, and then that's the business caution
Speaker 1: and it kind of goes the other way.
Speaker 2: Not price didn't right now, clearly A turned that to
Speaker 2: be right at least South Fond Jobs claims yesterday to seventeen. Phil,
Speaker 2: it's wonderful to catch up with you. Thank you for
Speaker 2: getting up town your thoughts. Thank you, sir, Phil Camparadi
Speaker 2: that of JP Morgan. Turning to Nvidia, Frankly of HSBC,
Speaker 2: raising his price target on the chip maker to a
Speaker 2: joint Street high at two hundred, writing, we have pondered
Speaker 2: this amazing growth trajectory, and not only do we see
Speaker 2: no signs of a slowdown, we expect further upside in
Speaker 2: twenty twenty six data center momentum, which in our view
Speaker 2: is still not fully priced in by the market. Frank
Speaker 2: joins us now for more, Frank, welcome to the program, sir.
Speaker 2: I just want your opinion on what's behind that train
Speaker 2: and why it doesn't slow down anytime soon.
Speaker 5: Sure, I think it's you know, every couple of months,
Speaker 5: everyone I think, goes through the same question of can
Speaker 5: Nvidia continue on this amadian growth trajectory. It is now
Speaker 5: approaching kind of untraur territory in terms of the market
Speaker 5: cap of the company. But what we continue to see
Speaker 5: is that the overall spending on hyperscular capex continues to
Speaker 5: go up. Since May, we've noticed there's been a twenty
Speaker 5: percent upward revision in the overall street consensus view for
Speaker 5: the four major hyperscalers. If we look at that in
Speaker 5: terms of potential server capbex next year for AI, we
Speaker 5: think that's going to be more enough to cover and
Speaker 5: videos growth, at least for the going into next year.
Speaker 2: Frank, We've got to talk about the source of that
Speaker 2: demand and how strong you believe that biggest customers are
Speaker 2: and whether those customers you think have demonstrated and done
Speaker 2: a good enough job of justifying their investment over the
Speaker 2: last few years. Do you think they're doing that?
Speaker 5: Yeah, No, I think that's a great question. I mean
Speaker 5: the question that everyone comes back to is you know
Speaker 5: the investment that's going on, you know, what's the return,
Speaker 5: what's a moneization? It is a fair question, and it's
Speaker 5: not a question that I think has been fully answered.
Speaker 5: But I think from what we can see is that
Speaker 5: the spending continues and into twenty twenty five, there's no
Speaker 5: sign of any slowdown. And we've also seen I think
Speaker 5: collaboration from what we're seeing on a supply chain in Asia,
Speaker 5: we've continue to see many companies out here that continue
Speaker 5: to see upward revisions from the in video supply chain.
Speaker 5: So it seems to be going hand in hand in
Speaker 5: terms of the investments we're seeing from the hyperscalers as
Speaker 5: well as we're seeing in a supply chain.
Speaker 4: But just given that, Frank, I mean, is there not
Speaker 4: some form of concentration risk for Nvidio when Microsoft makes
Speaker 4: up nearly twenty percent of your revenue meta another ten,
Speaker 4: aren't these real risks if any of them pull back
Speaker 4: even slightly?
Speaker 5: That's a good question. I think, you know, the risk
Speaker 5: constitution risks are still there, but it is diversifying. So
Speaker 5: as an example is if you look at the enterprise,
Speaker 5: which is a non Hyperscaler's right, they're becoming a bigger
Speaker 5: and bigger part of this market. You know, if you
Speaker 5: look about eighteen months ago, I would say hyperscalar spending
Speaker 5: is probably eighty percent of the market. Now it's probably
Speaker 5: looking to be about sixty percent of the market, so well,
Speaker 5: it is still a very high concentration that risks is
Speaker 5: coming down. You're seeing further expansion into the corporate world
Speaker 5: in terms of spending there. So that's why you see
Speaker 5: companies like Dell, which are traditionally not leveraged to the
Speaker 5: hyperscalar growth, they're seeing very strong growth dijector in AI
Speaker 5: as well.
Speaker 4: So, Frank, we're going to from the company in about
Speaker 4: five days time on the twentieth for their earnings, options
Speaker 4: markets pricing and something like an eight percent move either way.
Speaker 4: What sort of fireworks are expecting on the day?
Speaker 5: Yeah, I mean, I think you know, they will have
Speaker 5: a beat on their revenues. We expect they'll beat on
Speaker 5: the current quarter as well as give a better guide
Speaker 5: relative to consensus. That being said, though, the share prices
Speaker 5: have had a very good run into the earnings, and
Speaker 5: so whether that's going to be enough to really give
Speaker 5: the market an extra boost, I think it still remains
Speaker 5: to be seen. But I think we're taking a view
Speaker 5: that you know, it's not just the next two quarters,
Speaker 5: but if you look at all of twenty all of
Speaker 5: next year, we do feel that confident that they'll still
Speaker 5: be further upside in terms of the market expectation.
Speaker 3: I wanted to ask you about what was going on
Speaker 3: with the DOJ they sent Sepedas to Navidia in September.
Speaker 3: For Nvidia is do you see a change of an
Speaker 3: environment with the election and potentially what policy regulation could
Speaker 3: look like for the company next year.
Speaker 5: I think it's uh, there's going to be a lot
Speaker 5: more probably uncertainty and noise now, but I think it
Speaker 5: doesn't change the fundamentals. The fundamentals is that you know,
Speaker 5: the company's dominant position in AI is unchanged. We don't
Speaker 5: see any immediate competition. In fact, I think the hyperscolas themselves,
Speaker 5: who have every interest to try and develop their own
Speaker 5: chip to reduce their dependency on Nvidia, is not able
Speaker 5: to do that. In fact, I think you know some
Speaker 5: of their own ships are designing. The momentum is actually
Speaker 5: slower next year, So it shows you that, you know,
Speaker 5: in terms of being the compete, we still don't see
Speaker 5: anybody naring that gap yet. So I think the fundamental
Speaker 5: is not going to be changed. There will be probably
Speaker 5: a lot more I think just headlines, but I think
Speaker 5: if you just look at the overall earnings growth and expectations,
Speaker 5: I think that remains largely entering what.
Speaker 3: About outside the United States geopolitical concerns, especially when it
Speaker 3: comes to the fact that the chips are made in
Speaker 3: Taiwan and we have a president elect who's very hawkish
Speaker 3: and his rhetoric is very hot when it comes to China.
Speaker 5: Yeah, so I think, you know, if you think about
Speaker 5: the China exposure for Nvidia's whole, it is coming down.
Speaker 5: You know, at its peak, you know, China was probably
Speaker 5: more than twenty percent of its revenues. It's now at
Speaker 5: a point where I think China itself is only going
Speaker 5: to account probably for somewhere around ten percent of its revenue.
Speaker 5: So it's come down in terms of that as being
Speaker 5: an end market. As far as I think where the
Speaker 5: chips are made, you know, I think that's not something
Speaker 5: that's going to change in the near term. You know
Speaker 5: that the TSMC is building fat factories in the US,
Speaker 5: but it's going to take some time before they able
Speaker 5: to build increased production there. So I think, you know,
Speaker 5: reality is is that well, there's going to be some
Speaker 5: rhetic around it. It doesn't change the fact that the
Speaker 5: manufacturing base is going to still stay in Taiwan given
Speaker 5: the dominance of TSMC, and that's not something that's going
Speaker 5: to change in probably anytime soon.
Speaker 4: Fank. When it comes to the politics for the Chips Act,
Speaker 4: out of one hundred and twenty three million dollars, a
Speaker 4: total of thirty three billion has ad sorry. Out of
Speaker 4: a total thirty three billion dollars for the Chips Act,
Speaker 4: only one hundred and twenty three million has been announced.
Speaker 4: As we head into the twilight of the Biden administration,
Speaker 4: what sort of pushes do you expect them to make
Speaker 4: with the Chips Act? Can anything else get done?
Speaker 5: Yeah, there's not going to be that much time left.
Speaker 5: And I think if you think about, you know, the
Speaker 5: Chips Act, you know, there hasn't been that much money
Speaker 5: as you said, as you pointed out, actually been given out.
Speaker 5: I think we're the majority of the Chips Act associated
Speaker 5: Chips Act. That's helped companies like Intel has been the
Speaker 5: tax credit, so they've been able to get I think,
Speaker 5: you know, the the the advantages on tech credit, but
Speaker 5: they haven't really gotten enough substitution. In fact, no one's
Speaker 5: really has, so I think if you think about I
Speaker 5: don't think it changes the tackleus of things. I think
Speaker 5: at the end day, you know, the on shoring trend
Speaker 5: is going to continue, will continue to take time, But
Speaker 5: I don't think it really changes, you know, the trajectory
Speaker 5: where you know there will be that people will be
Speaker 5: looking to change their investment cycle. I think that's I
Speaker 5: think the longer term geopolitical events is here to stay.
Speaker 5: Uh and and I think company is going to build
Speaker 5: regardless of how much funding to get.
Speaker 2: Frank good to catch you up, appreciate it gun into
Speaker 2: when video annings a week away, frankly that of HSBC.
Speaker 2: So here's the laces. This morning, retailer is reporting over
Speaker 2: the next week, facing down the prospect of higher tariffs
Speaker 2: and a shortened holiday shopping period. Greg Melick of Evercore
Speaker 2: airsie remaining optimistic. Election clarity is hopefully a cheap form
Speaker 2: of stimulus. Trump tariffs and tax cuts should prove neutral
Speaker 2: to positive. Greg joins us now for more, Greg, Before
Speaker 2: we get into holiday shopping and the consumption boom we
Speaker 2: might see over the next few months, can we just
Speaker 2: talk about how these retailers might manage inventory between now
Speaker 2: and inauguration of President elect Donald Trump, whether we're going
Speaker 2: to see these massive imports come from China, whether that's
Speaker 2: already started to get ahead of those tariffs.
Speaker 6: Yeah, I don't think there's any surge ahead of teriffs
Speaker 6: for a lot of large retailers and even smaller ones.
Speaker 7: We went through this a few.
Speaker 6: Years ago, so they have a playbook as to what
Speaker 6: they're going to need to do ahead of those sort
Speaker 6: of shifts.
Speaker 7: And I guess what I would say is right now
Speaker 7: they're still.
Speaker 6: Dealing with remembering very recently the problems we have at
Speaker 6: the ports on the West Coast a few years ago
Speaker 6: and getting that inventory in time. So I think they're
Speaker 6: still there being cautious in terms of how much inventory
Speaker 6: they bring in earlier quick ahead of some theoretical tariff
Speaker 6: change which will be very basically country and product specific.
Speaker 7: Probably at the.
Speaker 2: End of the day, Greg, how much more resilient other
Speaker 2: supply chains now have that diverted traffic away from China
Speaker 2: or is it going through somewhere else away from Mexico.
Speaker 2: What are the big changes that you can identify.
Speaker 6: It's a great question, I think from if we go
Speaker 6: back to pre the tariffs, so it's back twenty seventeen,
Speaker 6: twenty eighteen, it looks like what retailers are bringing in
Speaker 6: from China is down probably twenty five to thirty percent.
Speaker 6: A lot of that hasn't moved back to the US.
Speaker 6: It's moved to Mexico, it's moved to Vietnam, it's moved
Speaker 6: to India. So there's been a broadening out of the
Speaker 6: global supply chain. And basically this will probably further accelerate
Speaker 6: that trend to go to where products can come in
Speaker 6: with higher quality at a lower costs. And there might
Speaker 6: even be some reshoring as well, or near shoring that
Speaker 6: has been part of the trend, but not the major movement.
Speaker 4: Greg The date I want to know about not Trump's inauguration,
Speaker 4: but January fifteenth. That's when the deadline for the Long
Speaker 4: Shortman Association expires and they need to come up with
Speaker 4: a new deal. What is the risk that we have
Speaker 4: a repeat or something worse than we did in months prior,
Speaker 4: especially with the new administration that's for all accounts, less
Speaker 4: friendly to unions.
Speaker 6: Look, that's a great question, and factically, I'm glad you
Speaker 6: brought it up, because as we talked to retailers and vendors,
Speaker 6: we're finding that that date hopefully.
Speaker 7: Will get sorted, but that's still a very real.
Speaker 6: And relevant date without any theoretical tariff changes in the future.
Speaker 6: So making sure that we have the products that we
Speaker 6: need if there is a disruption and if a final
Speaker 6: deal isn't signed by then is important.
Speaker 7: So look at there's a lot of moving pieces. And
Speaker 7: that's why I would say even the.
Speaker 6: We think the consumers in a better spot and we'll
Speaker 6: be slightly better into next year, it's certainly not a
Speaker 6: V shaped recovery by any stretch the imagination.
Speaker 4: Let's talk about that better spot for the short term.
Speaker 4: What do you anticipate the holiday season demand to look like.
Speaker 6: We're looking for retail sales to settle out at this
Speaker 6: three to three and a half percent nominal growth rate.
Speaker 6: We'll get October numbers later today, which we think will
Speaker 6: be in that range, and the things we're watching. If
Speaker 6: there's certainly the categories that we think are starting to
Speaker 6: have rolling recoveries, we think home improvement is one that
Speaker 6: after fourteen quarters of negative traffic at home, deep Bone
Speaker 6: lows that that's a category that will start to term
Speaker 6: positive next year, maybe not by.
Speaker 7: First quarter, but certainly later in the year.
Speaker 6: Because our home improvement lead indicator has had a pretty
Speaker 6: sharp acceleration the.
Speaker 7: Last six months.
Speaker 3: Ahead of the holiday period, though, I'm looking at names
Speaker 3: like Target, Walmart, Amazon, when people are going to potentially
Speaker 3: go and buy some of these big ticket Christmas items,
Speaker 3: who do you think is going to fare the best?
Speaker 3: You know?
Speaker 7: I think it's the trend that we've seen all this
Speaker 7: year continues.
Speaker 6: The consumer is willing to spend, but they're very cautious
Speaker 6: and value focused, and they want to see newness. And
Speaker 6: what we've seen from that is Amazon, Walmart, and Costco
Speaker 6: so far have combined for seventy percent of retail dollar
Speaker 6: growth this year, So retail sales are up a little
Speaker 6: over three percent. If you x out those three retailers,
Speaker 6: retail sales are growing one percent. So I think for
Speaker 6: a lot of the other ones, it's really catching the
Speaker 6: right trend, having the right product, having the newest, making
Speaker 6: sure you lean into value. That's how some of those
Speaker 6: other retailers can hold through this. But I think those
Speaker 6: three Amazon, Costco, and Walmart are in a very good spot.
Speaker 3: Apparently, those five fewer holiday shopping days when it comes
Speaker 3: to this season, do you think that's going to affect
Speaker 3: the outlook.
Speaker 6: Yes, I have the gray hair to remember when this
Speaker 6: bigger impact. I think that e commerce growth and now
Speaker 6: twenty two to twenty three percent of US retail sales
Speaker 6: has changed it. And maybe it's a little less of
Speaker 6: an act because there's more flexibility on how people shop
Speaker 6: and acquire goods for holiday.
Speaker 7: But at the end of the day, I would say
Speaker 7: it might.
Speaker 6: Be fifty BIPs of pressure all else equel, just because
Speaker 6: there's there's fewer days between Thanksgiving and Christmas to get
Speaker 6: stuff done.
Speaker 2: They're trying to wedd days. Trust me, Greg, we went
Speaker 2: to bloom Mindow's day after Halloween straight away. Christmas music
Speaker 2: didn't stop?
Speaker 3: Did they jingle bows? It was ridiculous.
Speaker 2: Yeah, appreciate your time. Let's catch up again soon, Greg Malick.
Speaker 2: There of Evercore. This is the Bloomberg Surveillance podcast, bringing
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