Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the
Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am
Speaker 1: Eastern on Apple, Cocklay and Android Auto with the Bloomberg
Speaker 1: Business App. Listen on demand wherever you get your podcasts,
Speaker 1: or watch us live on YouTube.
Speaker 2: Let's get to Dana Diorio, a co chief investment officer
Speaker 2: at Investment, joining us from Hartford, Connecticut.
Speaker 3: Okay, so what do you do?
Speaker 2: It's been a crazy twenty four hours within the market.
Speaker 3: How do you position?
Speaker 4: Yeah, that's that's the big question.
Speaker 5: It's so funny because so actually I met our conference
Speaker 5: in Las Vegas, our Investment Elevate conference, and I was
Speaker 5: just on stage yesterday literally as the pause was happening
Speaker 5: telling everyone to stay the course. It was the timing was,
Speaker 5: you know, madness and kind of showing what had happened
Speaker 5: on Monday when we had you know, this false report
Speaker 5: of a reprieve and stop, you know, skyrocket and only
Speaker 5: to come back down. And when you're a financial advisor
Speaker 5: trying to trade on this, it's absolutely impossible, of course,
Speaker 5: and so you know, the messaging then and now is
Speaker 5: you know, kind of you've got to stay put I mean,
Speaker 5: certainly if you have clients who are not diversified and
Speaker 5: they're super concentrated, or you know, a lot of people
Speaker 5: let their equity positions get a little bit big in
Speaker 5: this hopes of a pro growth, pro you know, corporate
Speaker 5: corporate uh type of policy from the administration. That's obviously
Speaker 5: all you know, kind of been obliterated and now we're
Speaker 5: looking at a picture that's very different. And so you
Speaker 5: had people who are high in equities, if you're if
Speaker 5: you're too high inequities, you know, take them off the
Speaker 5: table for sure. But you know, you really these are
Speaker 5: the times that you that you need to ultimately stay
Speaker 5: the course and wait it out, or you turn the
Speaker 5: paper losses into a real loss.
Speaker 6: Conference in Vegas. Nobody is conferences in like Sheboygan. They're
Speaker 6: always in Vegas or Miami, Scottsdale, Danis.
Speaker 3: I mean, they know what they're doing data. So what
Speaker 3: about earnings here?
Speaker 6: I think, you know, I have not seen earning assesstments
Speaker 6: really come down that much. But I've got companies left
Speaker 6: and right pulling their guidance and all that kind of stuff.
Speaker 6: How much earnings how much earnings risk is out there?
Speaker 3: Do you think?
Speaker 5: Yeah, I mean, your last speaker said it, right. I mean,
Speaker 5: what's going to be crazy right now is you're going
Speaker 5: to have the first quarter earnings come out, You're going
Speaker 5: to have you know, March economic reports come out, and
Speaker 5: of course all of these are going to paint this
Speaker 5: incredibly rosy picture that's not reality anymore.
Speaker 7: Right.
Speaker 3: In fact, they'll.
Speaker 5: Probably be rosier even than they normally would have because
Speaker 5: you have folks, you know, pulling forward consumption, pulling forward demand,
Speaker 5: and so things will look great and you'll have this
Speaker 5: series of reports and earn and this earning season is
Speaker 5: going to be part of that, and so paying attention
Speaker 5: to that, of course, it gives you no information.
Speaker 4: It's really what is the guidance?
Speaker 5: And if you're a corporate planner, I'm not sure you
Speaker 5: can give great guidance, right, I mean the volatility of
Speaker 5: you know, just what you have to potentially plan for
Speaker 5: in the short run. And then you know, if you're
Speaker 5: you know, the idea. Some of the idea here, of course,
Speaker 5: is hey, look let's bring you know, some of the
Speaker 5: manufacturing back to the States. Let's let's you know, kind
Speaker 5: of encourage people to have capex here. But how do
Speaker 5: you do a long term plan. I mean, it takes years,
Speaker 5: right to bring this stuff here?
Speaker 4: Yeah, how do you?
Speaker 5: How do you plan around that? So I think Guidance
Speaker 5: is going to be probably overly I'll almost say might
Speaker 5: likely be overly pessimistic, because nobody really knows what they're
Speaker 5: dealing with.
Speaker 2: Which to that point, Delta yesterday with Drew Guidance, stock
Speaker 2: pop Today CarMax does something similar, I mean, and pulled
Speaker 2: back its financial goals because of the volatility. But same thing,
Speaker 2: and that stacks down twenty percent. So where are we
Speaker 2: in valuations?
Speaker 5: Yeah, well, I mean, obviously we started the year very high.
Speaker 5: We've shaved a good piece of that, you know, but
Speaker 5: that was part of the problem, right. We came into
Speaker 5: the air with that expectation of a goal market with
Speaker 5: high valuations as a start, not not everywhere, but certainly
Speaker 5: as an index, right, market cap weighted basis, valuations were high,
Speaker 5: and so you know, when you come in with high valuations,
Speaker 5: really everything has to go well. And if you have
Speaker 5: this exogenous shock, you know, and everybody knew tariffs are coming,
Speaker 5: it's not as though you know, this was entirely unexpected,
Speaker 5: and that's why you have that pull forward of consumption
Speaker 5: but the magnitude, right, the breadth of it, how quickly
Speaker 5: it all was was intended to come to pass, that
Speaker 5: did catch everybody off card and you know, kind of
Speaker 5: wiped out that picture that rationalized those higher valuations that
Speaker 5: we were sitting with.
Speaker 6: Dana, Thank you so much for joining us. Always appreciate
Speaker 6: getting a few minutes of your time.
Speaker 3: Dany de Aoria.
Speaker 6: She is co chief investment officer at invest Net, joining
Speaker 6: us from Hartford, Connecticut.
Speaker 3: Via that zoom thing here Vegas, remember, oh Vegas, that's right?
Speaker 4: Time? Is Ava for you?
Speaker 3: Exactly? Oh a Vegas. There we go.
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live
Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android
Speaker 1: Auto with the Work Business Up. Listen on demand wherever
Speaker 1: you get your podcasts, or watch us live on YouTube.
Speaker 2: Michael McKee, Bloomberg International Economics and Policy Correspondent, joins us. Now, So, Mike,
Speaker 2: it was interesting with the CPI. Bloomberg Economics had a
Speaker 2: note out that said this wasn't about falling prices necessarily,
Speaker 2: but it was more about falling demand in travel, leisure
Speaker 2: and apparel and furniture sales and stuff like that.
Speaker 3: Walk me through the details.
Speaker 8: Well, the biggest drop was in gasoline prices, which is
Speaker 8: sort of a combination of anticipated falling demand by the
Speaker 8: gasoline producers and refiners, etc.
Speaker 3: Given the impending tariffs.
Speaker 8: And then we also saw some declines as you mentioned,
Speaker 8: in travel prices, and that was definitely terriff related, But
Speaker 8: the rest of it was sort of mixed news. Food
Speaker 8: prices were up by food at home, grocery store prices
Speaker 8: were up by half a percent of fairly large gain
Speaker 8: than two months in a row where food prices are up,
Speaker 8: and we saw apparel prices rise, but is that just
Speaker 8: a natural move or was that also an anticipation of tariffs.
Speaker 8: Furniture prices we get Furnit love furniture from China, those
Speaker 8: were also up.
Speaker 9: So the.
Speaker 8: Report is kind of a mixed news thing, except that
Speaker 8: the overall good news as it went down. And if
Speaker 8: you were not going to have tariffs, if none of
Speaker 8: this had happened, it would be exactly what the Fed
Speaker 8: would love to see.
Speaker 6: Right, So, when do we expect to see any inflation
Speaker 6: impact in these CPI numbers and the other the pc deflator.
Speaker 6: When do we expect if there's going to be any
Speaker 6: inflation impact. When do we expect to see that.
Speaker 3: It's a little hard to say.
Speaker 8: Probably probably maybe could be hedged enough here next month,
Speaker 8: this month's data when it comes out next month, because
Speaker 8: it could reflect tariffs that the President has already put on,
Speaker 8: But it's probably going to take a couple of months.
Speaker 3: Maybe we get something in the May numbers.
Speaker 8: First of all, companies have to figure out whether their
Speaker 8: products are tarra affed or not.
Speaker 3: That seems to be bouncing around.
Speaker 8: And then it's a question of how many how much
Speaker 8: stuff people have an inventory they can sell that they
Speaker 8: bought at the lower prices, how soon inventory actually docks
Speaker 8: at a port, and is the tariffs are applied. So
Speaker 8: it's kind of hard to say exactly when we're going
Speaker 8: to see this, but it would be coming. And given
Speaker 8: the fact that we still have ten percent tariffs on
Speaker 8: everybody and now these huge shafts in China, you will
Speaker 8: see it.
Speaker 2: When is the biggest what are you looking at next
Speaker 2: in terms of the biggest indicator? Is it going to
Speaker 2: be inflation expectations? Like is that going to be the
Speaker 2: thing that's going to sort of give us that kind
Speaker 2: of insight?
Speaker 3: Yeah, because that's tomorrow.
Speaker 8: So I'm pitching ahead to all the appearances I will
Speaker 8: do with you guys tomorrow.
Speaker 2: Well, John Ticker's in charge tomorrow, sol you on the show,
Speaker 2: but University of Michigan tomorrow.
Speaker 8: The FED has sort of downplayed the long term inflation
Speaker 8: expectations number is suggesting that it doesn't quite reflect reality
Speaker 8: in the history of the Michigan numbers. But they do
Speaker 8: worry about the short term and that has gone up significantly,
Speaker 8: and they have said, and Jay Pole said that we
Speaker 8: are obligated to keep prices down and we are very
Speaker 8: worried about the short term inflation expectations should they become unanchored.
Speaker 8: So that'll be somewhat big news tomorrow.
Speaker 3: But I think.
Speaker 8: We're redefining what big news in economic data brings here
Speaker 8: because everybody's once we get to the point that you
Speaker 8: asked about, when does this hit. Once we get to
Speaker 8: that point, then markets are going to react to every
Speaker 8: little data bit. But anything that is up to this point,
Speaker 8: people are gonna say old news PPI tomorrow.
Speaker 6: How do we interpet PPI versus well, PBI is.
Speaker 8: The easy difference to know is that CPI is what
Speaker 8: you pay to buy things and PPI is what companies
Speaker 8: charge to sell things. And we may see some of
Speaker 8: the China impact in the PPI because we saw those
Speaker 8: big inventory builds in terms of industrial supplies and things
Speaker 8: like that in the past couple of months.
Speaker 3: And so if you were a Chinese company.
Speaker 8: Or from anywhere else in the world selling to the
Speaker 8: United States and there was this rapid rise in demand,
Speaker 8: you might raise prices.
Speaker 3: So we could look for some of that tomorrow.
Speaker 8: But so far producer prices have been much better behaved
Speaker 8: than consumer prices. So overall, it hopefully is a continuation
Speaker 8: of the good news that no longer matters.
Speaker 7: Can you clear something up for me? This is the
Speaker 7: stupid question for me from the peanut gallery. A guy
Speaker 7: picking up stuff at the port. That's the person who's
Speaker 7: going to pay for the town. It's not the exporter
Speaker 7: often whatever it's trying to the exporter. This is a
Speaker 7: guy in Newport Elizabeth, Ork, New Jersey.
Speaker 8: This is the silly thing that the administration keeps pushing
Speaker 8: that what they're talking about is that not that the
Speaker 8: exporter is going to pay anything, but that currencies, the
Speaker 8: dollars should rise and that makes their currency cheaper, and
Speaker 8: so they you know, there's an impact on them in
Speaker 8: that case. And sure, but it's the person, it's the
Speaker 8: company that is bought the stuff.
Speaker 3: So this is the whole story for me.
Speaker 2: Yesterday there was like a back channel one thing that
Speaker 2: he wanted to buy some guy at blooms Oh yeah yeah,
Speaker 2: go back and listen.
Speaker 3: Yeah yeah, it don't even go into the whole different thing.
Speaker 2: Mike.
Speaker 4: Thanks a lot, Mike.
Speaker 2: M keep moving to National Economics and Policy corresponding.
Speaker 1: Joining us now, you're listening to the Bloomberg Intelligence podcast.
Speaker 1: Catch us live weekdays at ten am Eastern on Apple,
Speaker 1: Cocklay and Android Auto with the Bloomberg Business app. Listen
Speaker 1: on demand wherever you get your podcasts, or watch us
Speaker 1: I've on YouTube.
Speaker 2: All right, we're debating in the last hour, like if
Speaker 2: John Tucker is Versace and Michael McKee is Prada, now
Speaker 2: they're going to be uniting. So it's like Mike Tucker
Speaker 2: Prada Versaci thing, all right, track and Boomberg Intelligence luxury
Speaker 2: goods analyst joined us.
Speaker 5: Now.
Speaker 2: It's funny because neither of them are those things. So
Speaker 2: Prada is going to buy Versus a chip for about
Speaker 2: one point three eight billion dollars. Walk us through the
Speaker 2: intricacies of this deal.
Speaker 4: Hi.
Speaker 9: Yeah, So it's been talked about for quite a while
Speaker 9: and we already last night heard maybe that the acquisition
Speaker 9: price would be done by a couple of hundred million.
Speaker 9: The big thing here has been that under Capri, Fasachi
Speaker 9: is not hard enough investment in it over the last year,
Speaker 9: particularly in the field of the Tapestry bid for Capri
Speaker 9: which didn't go ahead and which took a lot of
Speaker 9: the headlines last year and where all brand under the
Speaker 9: Capri banner suffered. We've had chairman John Idel come back
Speaker 9: into the business as CEO for Capri, and with the
Speaker 9: focus really on Michael Corese, which is seventy percent of
Speaker 9: the sales and after a difficult year last year one
Speaker 9: hundred percent of the profitability of the company leading into
Speaker 9: this this year. So it's all about turning around Michael
Speaker 9: cause which has seventy percent of its business in Americas,
Speaker 9: is at accessible price point and where actually we think
Speaker 9: that they'll be much more pressure given the tariff situation
Speaker 9: and the cost of living on all consumers. And also
Speaker 9: in the US if we turn over to the Versace
Speaker 9: acquisition and what's going on there with Prada. Prada has
Speaker 9: been one of the top performing companies. It's really done
Speaker 9: ever so well with Proud of the last few years
Speaker 9: and gone to normalized single digit growth. And then it
Speaker 9: has a brand Meo Meu within its portfolio doing ever
Speaker 9: so well. It's number one on the list index for
Speaker 9: luxury brands in terms of brand equity brand heat, with
Speaker 9: Praderate number three, and during the December quarter Versaci dropped
Speaker 9: three places to number fourteen. So we think it shifts
Speaker 9: Forsaci into the right hands into Italian luxury owners who
Speaker 9: can really work well to try to reinvigorate this brand
Speaker 9: and the brand equity behind Fasaci.
Speaker 6: Hey, dab, I'm really interested in evaluation here, being a
Speaker 6: former banker myself. They're selling this thing for one point
Speaker 6: three eight billion US dollars in twenty eighteen, they paid
Speaker 6: two billion dollars for this, so a lot of value destruction.
Speaker 6: Is that a Versace specific issue or does that reflect
Speaker 6: lower valuations in luxury Generally.
Speaker 9: I would say it's both, but it's mostly Versaci specific
Speaker 9: because if we look at the Asarchi then to now
Speaker 9: the fact that it's given double digit declines in organic
Speaker 9: sales growth through the couple of years, where actually the
Speaker 9: market was growing five percent or so, and that one
Speaker 9: point seven, to put it into perspective on an EV,
Speaker 9: would have been against traditionally a market for a very
Speaker 9: solid brand for Sarti with a lot of heritage, running
Speaker 9: from anywhere from three to five times, probably three times
Speaker 9: for Versargi, given it isn't particularly big. Under the what
Speaker 9: was Michael Cause and then became the Capri Group. The
Speaker 9: expectation was that they would run it from one billion
Speaker 9: in sales toward two billion, and that just didn't happen. Yeah,
Speaker 9: So that's partly why. I think also because of the
Speaker 9: state of the market. We started twenty twenty five with
Speaker 9: the luxury market focusing for low to mid single digit growth.
Speaker 9: With everything that's going on, we pull that back towards neutral.
Speaker 6: Hey, deb, thanks for joining us. Aways appreciate getting your
Speaker 6: thoughts there. Deb eight the lead voice on all things luxury.
Speaker 6: She gets luxury goods analysts for Bloomberg Intelligence. She's based
Speaker 6: in London.
Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android
Speaker 1: Auto with the Bloomberg Business app. Listen on demand wherever
Speaker 1: you get your podcasts or watch us live on YouTube.
Speaker 3: All right, here's my Janice story.
Speaker 6: The first time I ever went to a Starbucks, like
Speaker 6: twenty years ago, was waiting to go into a meeting
Speaker 6: of Janis out in Denver, Colorado. I'm not a coffee guy,
Speaker 6: so I had no idea what to order, So I
Speaker 6: just ordered what the person in front of me ordered.
Speaker 6: There you go, that's my Janis story. Lara Castleton joins
Speaker 6: us US head of Portfolio Construction and Strategy Janis Henderson,
Speaker 6: based in Denver.
Speaker 3: Laura, you sit.
Speaker 6: Back and you think about portfolio.
Speaker 3: Construction and strategy.
Speaker 6: How do you do that with this volatility that we're
Speaker 6: dealing with this year?
Speaker 4: Well, thank you for having me.
Speaker 10: There's a couple more Starbucks that have popped up over
Speaker 10: she said, sure, you were here. Yeah, there's a little
Speaker 10: bit of volatility going on the market, making our conversations
Speaker 10: a lot more in demand. You should say very clearly,
Speaker 10: planning long term is what we need to be focused
Speaker 10: on for our clients. Near term volatility is very extremely difficult.
Speaker 10: Heading into the tariff announcement a couple of weeks ago,
Speaker 10: we were talking to clients about really staying the course,
Speaker 10: not panicking, but being more diversified than what we had
Speaker 10: maybe been in the past.
Speaker 4: What does diversified mean?
Speaker 2: And I know that's a stupid question, but I say that,
Speaker 2: and you.
Speaker 3: Know the thirty year.
Speaker 2: If I on the thirty year for diversification, I just
Speaker 2: got burned.
Speaker 4: Correct.
Speaker 10: So on diversification, what we're talking about in our client consultations,
Speaker 10: it's diversification of that typical sixty forty portfolio, absolutely, but
Speaker 10: then it's also diversification within the sixty and within the
Speaker 10: forty and when we actually survey, so we work with
Speaker 10: We've worked with over twenty five thousand model portfolios over
Speaker 10: sixty five hundred clients globally, and recently came out with
Speaker 10: a piece just kind of isolating the average moderate portfolio
Speaker 10: that we come across. One of the biggest topics of
Speaker 10: conversation we're talking about right now today is actually the
Speaker 10: diversification within the US equity allocation because that concentrations reached
Speaker 10: north of eighty percent of investor portfolios. So it's not
Speaker 10: just across assets, but it's also within Hey.
Speaker 6: Laura, how about international markets? You know in the first quarter,
Speaker 6: the rest of the world's markets really outperformed the US.
Speaker 6: The S and P five hundred and that doesn't happen
Speaker 6: very often. Is that kind of a short term blip
Speaker 6: or is that something that we need to, you know,
Speaker 6: think about longer term.
Speaker 4: That's a very good question.
Speaker 10: It was very interesting to me to actually get some
Speaker 10: incoming calls from clients asking about international because to your point,
Speaker 10: that has never happened before. I do believe with the
Speaker 10: tariff policy that's come in, Obviously we don't know what's
Speaker 10: going to happen long term, but it is signaling a
Speaker 10: structural shift in what we're trying to accomplish longer term.
Speaker 4: With our budget deficits.
Speaker 10: To me, that does warrant potentially diversifying away from only
Speaker 10: the US dollar. And so while international market have been
Speaker 10: strong this year, there's a shift in how they're spending abroad,
Speaker 10: they're stimulating their economies, and that warrants having some diversification
Speaker 10: only outside of just only that heavy concentration of the
Speaker 10: US dollar.
Speaker 2: What do you expect in terms of this volatility? Like, clearly,
Speaker 2: diversification is good for all, I mean, the idea is
Speaker 2: that it should be good for all investing climates.
Speaker 4: However, the longer the.
Speaker 2: Volatility goes on, the harder it is for investors to.
Speaker 4: Stomach that absolutely.
Speaker 10: So that's exactly what we're coaching our clients through.
Speaker 4: Is very clearly, even.
Speaker 10: In the past week, if you wanted to make some
Speaker 10: pretty big bets on going into certain areas of the market,
Speaker 10: let's talk even fixed income markets, you could easily get
Speaker 10: whipsod the next day, the next week. And so when
Speaker 10: you're talking about diversification, you need to be spread across
Speaker 10: the yield curve, across sectors within fixed income, across regions,
Speaker 10: within equities, and you should start to see some bounces
Speaker 10: from some of these other areas while other ports of your.
Speaker 4: Portfolio are kind of dipping.
Speaker 10: So we're really talking about staying to it's that long
Speaker 10: term goal. And luckily a lot of the clients that
Speaker 10: we work with are managing money for clients I have
Speaker 10: a long term financial plan. So while they're getting headlines
Speaker 10: every day about the volatility, for the most part, they're
Speaker 10: being able to coach their clients that volatility happens, this
Speaker 10: is not outside of the norm, but on a long
Speaker 10: term basis that you're still well within your reach of
Speaker 10: your goals.
Speaker 6: Laura, are the folks that Jenna Senderson are you guys?
Speaker 6: You know is there a base case of recession or
Speaker 6: maybe we can skirt past it.
Speaker 10: So base case is not recession that obviously has been
Speaker 10: coming up into conversations quite a bit. More so, it's
Speaker 10: not out of the picture this year. And remember before
Speaker 10: the tariff announcements, growth was already slowing. There was already
Speaker 10: that lack of confidence within the economy that could bleed
Speaker 10: into slower growth leading to a recession this year.
Speaker 4: So it's not without the.
Speaker 10: Realm of possibilities, but it's not a base case, and
Speaker 10: it's also not necessarily a doomsday scenario for portfolios. Recessions happen,
Speaker 10: it doesn't necessarily mean it will be the exact recession
Speaker 10: we experienced the past two times, which were quite severe,
Speaker 10: and there are ways to plan around that, namely, be
Speaker 10: high quality within your names, focus on the fundamentals within
Speaker 10: your company balance.
Speaker 4: Sheets and within fixed income.
Speaker 10: Really shore up the quality in your fixed income portfolios
Speaker 10: as well.
Speaker 3: Before we let you go.
Speaker 2: Corporate credit spreads have blown out, they're continuing to blow out,
Speaker 2: particularly in high yield.
Speaker 4: Does corporate credit play a role.
Speaker 10: Here, Yeah, that was one of our biggest overweights we
Speaker 10: saw in a lot of client portfolios leading into these
Speaker 10: events was the heavy allocation to corporate credit, and really
Speaker 10: one direction spreads could go was wide. We've started to
Speaker 10: see that, although they've maybe started to trickle back in
Speaker 10: a little bit, that is still an ongoing risk and
Speaker 10: easily avoidable in our minds to be diversified across yield curve.
Speaker 10: So on the shorter end of the corporate credit spread curve,
Speaker 10: you do get a little bit more insulation from spreads widening.
Speaker 10: And then within the securitized area of the market, spreads
Speaker 10: were already a little bit wider.
Speaker 4: We weren't able.
Speaker 10: To insulate ourselves from that area by hiding into securitize.
Speaker 10: But corporate credits are typically that canarying the coal mine,
Speaker 10: and it's something to watch for that recession indicator going forward.
Speaker 3: All Right, Laura, thank you so much for joining us.
Speaker 6: Laura Castleton, US head of Portfolio Construction and Strategy. Janie
Speaker 6: Henderson Investors out there in Denver, Colorado, great offices out there,
Speaker 6: A great firm actually was when I was on the
Speaker 6: south side. It was the biggest account in Denver. You
Speaker 6: had to get the vote from Janie, and I did.
Speaker 1: This is the Bloomberg Intelligence podcast available on Apple, Spotify,
Speaker 1: and anywhere else you get your podcasts. Listen live each weekday,
Speaker 1: ten am to noon Eastern on Bloomberg dot Com, the
Speaker 1: iHeartRadio app, tune In, and the Bloomberg Business app. You
Speaker 1: can also watch us live every weekday on YouTube and
Speaker 1: always on the Bloomberg terminal