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Speaker 1: Yeah, I want to bring an Ivan fine Seth, research
Speaker 1: director and chief investment officer at Tiger's Financial Partners. The
Speaker 1: firm has more than five hundred million dollars under management.
Speaker 1: Ivan has a by rating on the company's stock. Ivan
Speaker 1: does just very like your immediate knee jerk reaction to this.
Speaker 1: Does your rating? Well, I know you can't answer that question,
Speaker 1: but your knee jerk reaction. I'm not gonna ask your
Speaker 1: knee jerk reaction to the numbers here. You're shaking your head.
Speaker 3: It's not this quarter. It's not a quarterly story. It
Speaker 3: is a major shift in the company. It's and they
Speaker 3: have I think turned a major corner. But the stock
Speaker 3: is also run up significantly from a lower twenty. It
Speaker 3: hit fifty five dollars, so I think it may have
Speaker 3: gotten a little bit ahead of itself and it may
Speaker 3: pull back, but I think everything that's going on and
Speaker 3: then the new CEO, lip Pretan is is as planned.
Speaker 3: I mean, they are well positioned to benefit from AI
Speaker 3: data center demand, AI computer demand, their partnership with Intel,
Speaker 3: money from the US government, so they are plenty flush
Speaker 3: to invest in all of their key growth initiatives.
Speaker 4: So fundamentally, what's changed Ivan when it comes to this company?
Speaker 4: You obviously sound really upbeat? Is it just a case
Speaker 4: of having the backdrop because you know of the United
Speaker 4: States government?
Speaker 5: Is that what's done it? You know, kind of see
Speaker 5: the ship everything.
Speaker 3: Okay, it's the it's first of all, it's the it's
Speaker 3: President Trump's push on what's sold here is made here,
Speaker 3: investing in US semiconductor manufacturing capacity here, expanding the Intel
Speaker 3: foundry business, as well as the growth of data centers,
Speaker 3: the growth of AI enabled PCs. So they are positioned,
Speaker 3: I think perfectly to benefit from what it was in
Speaker 3: the early innings of it going to be a long
Speaker 3: game of the AI driven growth in both the tech
Speaker 3: sector and the US and the global economy.
Speaker 1: So, okay, I just want to this is a different
Speaker 1: company than it was six months ago as a result
Speaker 1: as a result of the US investment. And I'm wondering
Speaker 1: what that position, what that type of what that investment
Speaker 1: does for Liputan's position. Like you know, when you're the
Speaker 1: CEO of a company and you come out with a report,
Speaker 1: you're you're obviously you got to worry about the board,
Speaker 1: you got to worry about shareholders. Now he's got to
Speaker 1: worry about a phone call from President Trump because the
Speaker 1: President likes to talk about how well the stock has
Speaker 1: done since the US made that investment. What does that
Speaker 1: change the dynamic?
Speaker 6: It doesn't.
Speaker 3: But it's really funny that President Trump wanted to go
Speaker 3: from deporting the guy to giving the guy money.
Speaker 1: Hey, that's the power of a conversation, right, But.
Speaker 4: It also shows but it also shows how quickly things
Speaker 4: can change, certainly from the White House perspective.
Speaker 3: Well, it highlights Trump's perspective on driving the US manufacturer
Speaker 3: and infrastructure US leadership in all key areas, and semiconductors
Speaker 3: is a very important area, especially that Intel makes semiconductors
Speaker 3: for the defense industry.
Speaker 1: Interesting, Okay, so does it make the defense business stronger?
Speaker 3: Absolutely? Hey, there's no better partner. One number one partner.
Speaker 3: I don't.
Speaker 6: Well, it could be a tie US government and Nvidia.
Speaker 1: Okay, so let me go to the partners. Yeah, let
Speaker 1: me let me ask this question a different way than Ivan.
Speaker 1: And that's about where Intel would be right now. If
Speaker 1: the US government had not made that investment. Would this
Speaker 1: be a completely different picture? Would it have been a
Speaker 1: completely different quarter?
Speaker 3: Well?
Speaker 6: Yeah, I think this has helped.
Speaker 3: I think this removes concerns, balanceet concerns that moved and
Speaker 3: allows the company and the CEO to focus on business.
Speaker 3: A partnership with Nvidia is great, and partnership with the
Speaker 3: USK it opens up doors. They're back working with Apple,
Speaker 3: They're going to be working with everybody. And I think
Speaker 3: you're going to see Intel as a major contender as
Speaker 3: a semi conductor foundry semiconductor manufacturer to take on Taiwan Semiconductor.
Speaker 4: So, okay, going back to Intel under sure in the aftermarket,
Speaker 4: we continue to track the share price, I think down
Speaker 4: about four or five percent as we speak. The forecast
Speaker 4: for the first quarter top and bottom line disappointing. At
Speaker 4: the same time, it's talking about the CEO saying demand
Speaker 4: is quite strong, says the chip maker missed a lot
Speaker 4: of opportunities, says production yields not up to his standards,
Speaker 4: and then he goes on to say making our intel says,
Speaker 4: the company making good progress in fourteen A production on
Speaker 4: track for volume production in twenty twenty eight, has multiple
Speaker 4: engineering engagements on fourteen A.
Speaker 5: Help me understand what that means.
Speaker 3: These are different chips, the fourteen A, the eighteen A
Speaker 3: that they and the announcements that they made earlier this
Speaker 3: month at the CEES they got their latest semiconductors on
Speaker 3: track to go into production to meet a huge demand
Speaker 3: for all semiconductors is outstripping supply. There's in fact, concerns
Speaker 3: of memory shortage and process or shortage. So they got
Speaker 3: the demand wind. Is that is a tailwind, and they
Speaker 3: are back to innovating and developing and you know, winning
Speaker 3: customers and working with key you know computer manufacturers, Key Hyperscaler,
Speaker 3: you know cloud service providers. And I think that they
Speaker 3: got a tremendous tailwind. The stock ringing up a lot.
Speaker 3: It went from twenty to fifty five. Even if it
Speaker 3: pulls back to forty five, you know, it's a buying
Speaker 3: opportunity because I think that long term they are going
Speaker 3: to be back I mean, I don't think even be
Speaker 3: back to their former glory. I think they are going
Speaker 3: to be one of the world's leading semiconductor developers, designers,
Speaker 3: and manufacturers.
Speaker 4: So the Foundry Services division their factory unit revenue of
Speaker 4: about four and a half billion. It was a gain
Speaker 4: of about three point eight percent ivan from.
Speaker 5: The year before.
Speaker 4: It currently relies on almost exclusively, as you know, Intel
Speaker 4: product divisions for orders. It's looking to expand beyond that.
Speaker 4: Is that crucial for the company's future growth.
Speaker 3: It's crucial, But that is the opportunity, okay, to work
Speaker 3: with everybody, because you got to realize that most of
Speaker 3: the other semiconductor companies, even in Vidia, Apple, all of
Speaker 3: the companies like Google, Facebook, Amazon, that want their own
Speaker 3: processors qualcom, they're all virtual manufacturer. They don't actually manufacture.
Speaker 3: They outsourced to companies like todd One semi Conductor and
Speaker 3: hopefully companies like Intel to manufacture their processors.
Speaker 1: You know, is the US The US is, at least
Speaker 1: from an investment protective, things have kind of quieted down
Speaker 1: a little bit since the summer. But are there any
Speaker 1: other companies, particularly companies within your universe that you follow
Speaker 1: that could see in your view and investment by the
Speaker 1: US government.
Speaker 3: You know that I don't know. The other companies that
Speaker 3: I like in the semiconductor sector are in Vidia and Quailcom.
Speaker 3: And you know Invidia is pretty flush.
Speaker 1: Yeah, they don't need so okay, they could they could
Speaker 1: make an investment in the US government.
Speaker 3: Yes, I really think it was great how it turned
Speaker 3: around after the meeting with Trump and Tan that Grump
Speaker 3: wrote a check. And and also we have a lot
Speaker 3: of government incentives to build UH semiconductor manufacturing capacity here. Yeah,
Speaker 3: we have projects in Arizona, projects in Ohio. So ideally
Speaker 3: the US could be the semiconductor manufacturing capital for the world.
Speaker 4: So in terms of going back to and you right, rightfully, so,
Speaker 4: I even point out the run up that we've seen
Speaker 4: in Ivan shairs and Intel shares. You know, the Information
Speaker 4: put out a story and it says Intel's forward even
Speaker 4: a multiple has lifted to twenty times highest level since
Speaker 4: twenty twenty one, well above the twelve and a half
Speaker 4: times at which TSMC currently trades. This is what I
Speaker 4: was trying to get to before with our simulcast, I
Speaker 4: was talking market caps, but it has to do with valuation.
Speaker 5: Intel now pricier than TSMC. Does that make sense?
Speaker 3: Well, I always say I wish we could solve the
Speaker 3: mysteries of the stock market by dividing two numbers like
Speaker 3: cash flow MO or even pe. Stocks go up for
Speaker 3: everything that you really can't measure. And this is about
Speaker 3: Intel's future. So we are going to see if all
Speaker 3: goes well, a huge ramp up in revenue, in an
Speaker 3: expansion in margin and increasing cash flow, and then an
Speaker 3: increase in profitability. So I think their foundry business will
Speaker 3: ramp up significantly, and as their new processors come to market,
Speaker 3: revenue and cash flow and profitability will ramp up also
Speaker 3: ramp up significantly.
Speaker 4: Yeah, Li Bhutan saying, you know, Intel face is an
Speaker 4: execution challenge. We are laser focused as a team to
Speaker 4: improve that. To be candid, it's just our execution that
Speaker 4: needs to improve. Ivan finds that great stuff as always
Speaker 4: so appreciated. He's, of course, chief investment officer over at
Speaker 4: Tiger's Financial Partners, joining us on Intel.
Speaker 1: Stay with us more from Bloomberg Business Week Daily coming
Speaker 1: up after this.
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Speaker 1: The World Economic Forum in Davos. I heard of it, okay,
Speaker 1: he's called it quote boring. He slammed the group as
Speaker 1: a body that's increasingly becoming an unelected world government that
Speaker 1: people never asked for and don't want.
Speaker 4: So he's like, I'm never going to go to that thing.
Speaker 4: That's ridiculous. Why, like, who would waste their time there?
Speaker 1: He were talking about is Elon musk Coright? Those are
Speaker 1: things that he said about the World Economic Forum in
Speaker 1: the past. Yet today, for the first time we made
Speaker 1: an appearance.
Speaker 5: He showed up, didn't he?
Speaker 1: He showed up, And do you think he was nice?
Speaker 3: On news?
Speaker 4: Hey, it's Elon busy at the factory. But listen, I'd
Speaker 4: like to come to David.
Speaker 1: I don't know how it works. He was confirmed at
Speaker 1: the last minute edition for a Thursday afternoon session. He
Speaker 1: spoke to Blackrock CEO Larry Fink. Here's just part of
Speaker 1: that conversation.
Speaker 7: We do have some the Tel's Optimus robots doing simple
Speaker 7: tasks in the factory, except probably.
Speaker 6: Later this year.
Speaker 7: By the end of this year, I think they will
Speaker 7: be doing more complex tasks and still deployed in an
Speaker 7: industrial environment, and probably sometime next year, I'd say that
Speaker 7: by the end of next year, I think would be
Speaker 7: selling humanoid robots to the public. That's when we are
Speaker 7: confident that it's very higher liability, very high safety, and
Speaker 7: the range of functionality is is also very high. You
Speaker 7: can basically ask it to do anything you'd like.
Speaker 8: You're already seeing that in Tesla car. Is this the
Speaker 8: software changes that you're doing?
Speaker 6: And what is it? Every quarter now?
Speaker 8: A software change that upbrates the ability of the robot
Speaker 8: within the car.
Speaker 7: Yes, the tails A full self driving software we updated
Speaker 7: sometimes once a week. And recently some of the insurance
Speaker 7: companies have said that it is actually so safe. When
Speaker 7: tells a full self driving so safe that, uh, they're
Speaker 7: they're offering customers half price insurance if they if they
Speaker 7: use tess a full self driving in the car and.
Speaker 8: That could be monitored by the insurance company, can they
Speaker 8: Is that part of the agreement?
Speaker 7: Yeah? But I think self driving cars is essentially a
Speaker 7: solved problem at this point, right, And Tesla's rolled out,
Speaker 7: uh sort of robot taxi service in a few cities,
Speaker 7: and well, I be very very widespread by the end
Speaker 7: of this year within the US, and then we hope
Speaker 7: to get supervisor for self driving approval in Europe hopefully
Speaker 7: next month quickly, yeah, and then maybe a similar time
Speaker 7: timing for China hopefully.
Speaker 3: Well.
Speaker 1: There you have it. That was Elon Musk along with
Speaker 1: Larry Fink, the CEO of Black Rock. For more on
Speaker 1: that appearance at Davos, we're joined by Max Chafkin. He's
Speaker 1: Bloomberg Business Week senior reporter. He's co host of the
Speaker 1: Everybody's Business podcast. He's also the author of the contrarian
Speaker 1: Peter Teel and Silicon Valley's Pursuit of Power. He joins
Speaker 1: us here in the Bloomberg Interactive Broker's studio. A lot
Speaker 1: of a lot of timelines laid out just in that
Speaker 1: two and a half minutes, and that was just part
Speaker 1: of what he said today. Uh, I know you're excited,
Speaker 1: Carol for the Optimist robots to be sold at the
Speaker 1: next year because.
Speaker 5: That room for one at my own.
Speaker 1: They don't need a better method about just got to
Speaker 1: plug him in right, charge them. They just do the dishes.
Speaker 1: Is that a real sick thing? Based on your observations
Speaker 1: of Tesla and where they are right now with these
Speaker 1: optimist robots.
Speaker 9: I don't think it's a realistic thing for any humanoid robot,
Speaker 9: whether it's Elon Musk's humanoid.
Speaker 1: Robots or not.
Speaker 9: I mean, there are prototypes of these things, but of
Speaker 9: course it's a big jump from going from a prototype
Speaker 9: to putting these in environments where unpredictable things have happened.
Speaker 9: That's the reason why Elon Musk, for you know, ten
Speaker 9: years or so, has been saying self driving cars are
Speaker 9: going to happen next year and we're still not quite
Speaker 9: there yet. There was a demo today in Austin, another demo,
Speaker 9: but again, these are very controlled. We're not seeing the
Speaker 9: kind of mass you know, mass market adoption, unsupervised kind
Speaker 9: of robotics that Elon Musk that had been talking about
Speaker 9: and that we're all, you know, frankly hoping for. It
Speaker 9: would be nice to have a dishes doing robot in
Speaker 9: our in our home, do.
Speaker 5: It all, take the garbage out and everything. But you know,
Speaker 5: it's interesting.
Speaker 4: We had a conversation with Hannah Elliott today, the auto columnist.
Speaker 4: It'll be in our weekend show, it will be in
Speaker 4: our weekend show, and she recently went out in a
Speaker 4: Mercedes that has kind of their two different programs really
Speaker 4: when it comes to self driving, and she was blown away, but.
Speaker 1: It doesn't she drew a distinction for us and then,
Speaker 1: you know, giving a preview for our conversation that is Saturday.
Speaker 1: There's a distinction between Mercedes technology that runs on Nvidia
Speaker 1: and Tessela's technology for FSD, which is fully supported by cameras.
Speaker 1: Mercedes technology that she writes about away has the cameras
Speaker 1: but also additional sensors. It's more akin to a Weimo.
Speaker 9: Right, Yeah, Weimo is betting on this, and as you said,
Speaker 9: many other people are betting on these kind of multisensor approaches.
Speaker 9: There are a lot of critics of Tesla, including some
Speaker 9: very strong critics who basically say this is impossible. Elon
Speaker 9: Musk's argument has been all along, hey, you drive with
Speaker 9: two eyes, therefore cameras should be fine. I don't think
Speaker 9: we know the.
Speaker 1: Answer that question. I mean that is that is the
Speaker 1: argument he might. But I will say the brain, for
Speaker 1: for uh as challenging as a lot of interpersonal relationships are.
Speaker 1: The brain is so powerful when it comes to making
Speaker 1: these split second decisions that having been proved I mean the.
Speaker 4: Elon just now and yeah, the brain causes us to
Speaker 4: often get distracted picking up our phone or reaching and
Speaker 4: doing things.
Speaker 1: So it's that's a good point.
Speaker 9: I don't know, well, I mean, I do think that.
Speaker 9: And Musk made the point about insurance rates and full
Speaker 9: self driving, right, we are seeing, whatever your view is,
Speaker 9: in terms of the realistic nature of these kind of
Speaker 9: robotaxi timelines, we're seeing huge advances in driver assistants. And
Speaker 9: and that is where Elon Musk, you know, to his credit,
Speaker 9: he doesn't he doesn't talk about it this way. But
Speaker 9: if you just see Tesla's autopilot and full self driving
Speaker 9: as a driver assistance system, you know, it's pretty promising.
Speaker 9: You do have to be engaged, you have to be looking.
Speaker 9: It's not a substitute for for your own eyes and
Speaker 9: your own judgment, but it could augment that process. And
Speaker 9: and you're seeing kind of a distinction in terms of
Speaker 9: how some automakers are sort of focusing on that path
Speaker 9: while others are going the kind of weimow, you know,
Speaker 9: full self driving route. Musk I think is essentially keeping
Speaker 9: both options open. He has the sort of robotaxi demo
Speaker 9: in Austin but also there are many normal cars with
Speaker 9: this software built in.
Speaker 4: I guess, and I think part of the reason I
Speaker 4: brought up Hannah is just how she was blown away,
Speaker 4: But I think by the technology and how great it was,
Speaker 4: and I just think about we talk about these robots,
Speaker 4: could they possibly though I'm looking at advancements in technology
Speaker 4: AI moving along pretty fast that it could actually happen
Speaker 4: sooner rather than later, like is I.
Speaker 6: Mean, anything's possible.
Speaker 9: But you know, but even you know, Elon Musk even
Speaker 9: even talks about this. There is this thing where getting
Speaker 9: ninety nine percent of the way is very easy, and
Speaker 9: that last one percent no one quite knows just how
Speaker 9: it is. And we're talking again about big heavy machines,
Speaker 9: industrial robots. They are very advance and industrial robots in
Speaker 9: factories that can do you know, fine motor skills. But
Speaker 9: the factories have you know, red yellow tape around them
Speaker 9: because you don't want to get too close to the
Speaker 9: robot because these are heavy machines. They could hurt somebody.
Speaker 9: And there's going to be a very high bar before
Speaker 9: putting one of these optimists optimize in your home. It's
Speaker 9: not especially it only has to do the dish, it
Speaker 9: has to be better than your current dishwasher.
Speaker 1: We'll see what the consequence is if you do not
Speaker 1: call it by the.
Speaker 4: Proper name, if they don't stack the dishes the way
Speaker 4: I like it.
Speaker 1: Yeah, there's a problem. They talk about relationship challenges. The
Speaker 1: self driving car is a solved problem, is what Elon
Speaker 1: Musk said to Larry Fink earlier today. If if maybe
Speaker 1: from a technological perspective, it's a solve problem, but you're
Speaker 1: only seeing Waymos in a handful of cities. The robotaxis
Speaker 1: from Tesla are only available in a handful of cities.
Speaker 1: And is it a solve problem in your view?
Speaker 9: No, it's obviously not a solve problem. It will be
Speaker 9: a solve problem. We all have self driving cars. But
Speaker 9: you know, if from the point of view of Elon Musk,
Speaker 9: from the point of view of Tesla investors, they have
Speaker 9: a big lead. Elon Musk, in his mind, they are
Speaker 9: just going to get there. You brought up the why
Speaker 9: is he going to Davos right now? I think part
Speaker 9: of the reason he's going to Davos is because a
Speaker 9: lot of eyes are on Davos, because Donald Trump was there.
Speaker 9: Elon Musk is really good at figuring out where the
Speaker 9: news cameras are pointed where the kind of conversation is
Speaker 9: and putting himself there. So he's going there and he's
Speaker 9: talking his book, he's talking about driverless cars. While there's
Speaker 9: a lot of focus on this conference.
Speaker 4: But having said that too, coming off of CES twenty
Speaker 4: twenty six, right, we talked too about the focus on
Speaker 4: robots or robotics, and it does feel like that's where
Speaker 4: the world is going next.
Speaker 1: Oh yeah, there's definitely a lot.
Speaker 9: I mean, there's tons of investment here. And part of
Speaker 9: the reason is there are these amazing advancements in AI
Speaker 9: and yet we haven't quite figured out how to commercialize them.
Speaker 9: So they are all sorts of efforts to find a
Speaker 9: commercial you know, a way to make money on this thing.
Speaker 9: And of course humanoid robots want to these these options.
Speaker 9: There are lots of humanoid robot companies in China right
Speaker 9: now that are also racing to compete with optimists.
Speaker 1: So mission accomplished for Elon at Davos, we're talking about
Speaker 1: he made a lot of news, a lot was written
Speaker 1: about him. We're talking about him right now. He got
Speaker 1: the attention, but he could do that anywhere he goes.
Speaker 9: It's true, although I think he likes to, you know,
Speaker 9: put himself at the center. And again, I mean Davos
Speaker 9: has in a way that that it's hard for me
Speaker 9: to remember. It's been been a few years where with
Speaker 9: Trump making these Greenland threats, him flying there, there was
Speaker 9: just so much attention on this thing, and it almost
Speaker 9: feels like Musk is trying to get himself, you know,
Speaker 9: back close close to Trump as well, being in the
Speaker 9: kind of even though they I think they just passed
Speaker 9: like ships in the night, but but it's hard not
Speaker 9: to see, you know, their proximity is getting They didn't.
Speaker 5: Fly there together, no, not yet, not yet.
Speaker 4: Having said that, you know, we wrapped up the year
Speaker 4: doing a really fun conversation with you, like kind of
Speaker 4: the Elon Year in Review twenty twenty five, because there
Speaker 4: was a lot if you think about when President Trump
Speaker 4: gave me to the White House in doge. How are
Speaker 4: you thinking about Elon this year right now?
Speaker 9: Well, I think the big question on the business side
Speaker 9: is SpaceX and the possible space X I PO. I mean,
Speaker 9: we're we're going to see a lot of companies try
Speaker 9: to do I POS. I think in the next year
Speaker 9: or so for for lots of reasons.
Speaker 4: You say possible, Is it a given or we shouldn't
Speaker 4: assume that it's definitely going to happen.
Speaker 1: I mean it hasn't happened. Yeah, I mean until they file,
Speaker 1: I wouldn't.
Speaker 6: I wouldn't assume it.
Speaker 9: Lots of companies sort of talk about that, and and
Speaker 9: you know, if the market changes, you know, I think
Speaker 9: I think watching that SpaceX I PO, how much demand
Speaker 9: is there? You know, how much is it worth? How
Speaker 9: does that affect the rest of Elon Musk's empire, how
Speaker 9: does that play with Tesla and the challenges of Tesla?
Speaker 9: And then the other story, the big one is the
Speaker 9: midterm and what is Elon Musk's role going to be
Speaker 9: as we head towards this election.
Speaker 5: Yeah, I thought I heard already some money.
Speaker 9: Ten million dollars in Kentucky Center race.
Speaker 5: Yep, off and running. We'll be We'll be coming back
Speaker 5: to Max. We know that. Max Chapkin, Thank you so much.
Speaker 4: Bloomberg Business Week senior Report or co host of Everybody's
Speaker 4: Business Podcast.
Speaker 5: Check it out on the weekend.
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Speaker 4: Let's drive to the close, because certainly on our minds
Speaker 4: is what's going on with the consumer. We did get
Speaker 4: some data today, US consumer spending rising solidly in back
Speaker 4: to back games.
Speaker 5: You kind of have that going on.
Speaker 4: We had jobless claims steady at two hundred thousand dollars
Speaker 4: in a sign of low layoffs, and the US economy
Speaker 4: expanding at a revised four point four percent.
Speaker 5: In the third quarter.
Speaker 4: So you know, some reads on the economy, and we'll
Speaker 4: see whether or not this is all good for a consumer.
Speaker 5: It feels like it should be, but it isn't always.
Speaker 1: We'll see what Joe Feldman has to say, Senior managing
Speaker 1: director and assistant director of Research at tells the advisory
Speaker 1: he joins us this afternoon. So consumer spending rises solidly
Speaker 1: in back to back gains. Carol went through some other
Speaker 1: data that we got today. Everything's fine for consumers.
Speaker 6: So far. The consumer seems pretty resilient.
Speaker 10: We continue to hear that word from all the retailers
Speaker 10: we speak with and you continue to really see it
Speaker 10: in the data.
Speaker 8: Now.
Speaker 10: I know there's some that are suggesting that it's really
Speaker 10: the bifurcation of the consumers, so that more affluent consumer is.
Speaker 6: Really doing a lot of the driving of the spend.
Speaker 10: But you know, when you aggregate it together, the numbers
Speaker 10: look okay, hey.
Speaker 4: You know, I love that you went there with the
Speaker 4: affluent consumer, Joe, But what about Sacks which filed bankruptcy?
Speaker 4: I mean they play into the affluent consumer.
Speaker 1: Is that idiosyncratic or is that.
Speaker 5: Like what's what's?
Speaker 4: And I understand retails, you know, can have the wrong
Speaker 4: product line or strategy, but what happened with Sax and
Speaker 4: we've been talking about that a lot here at Bloomberg.
Speaker 6: Yeah, you know, I think management is a big part
Speaker 6: of it.
Speaker 10: You know, it really had not been managed quite well
Speaker 10: under Richard Baker, who's that was the owner. I know
Speaker 10: there was another, you know guy running at Mark Metric
Speaker 10: was the CEO. However, Richard Baker really owned the company.
Speaker 10: He was behind the whole thing, and everything he's touched
Speaker 10: has not done well. Lord and Taylor's gone now Sacks
Speaker 10: is gone, you know, and he's really not done a
Speaker 10: very good job of running a retailer. He gets the
Speaker 10: real estate portfolio, and I think he's very good at
Speaker 10: real estate and understands that.
Speaker 6: So what happened?
Speaker 10: You know, look, prices maybe went a little too high
Speaker 10: during the pandemic. I think the luxury brands thought they
Speaker 10: could get away with more.
Speaker 6: They raised prices way too.
Speaker 10: High, and they've been paying the piper since then as
Speaker 10: things have started to recover.
Speaker 6: And that sort of in the more affluent.
Speaker 10: Consumer, not the high high end, but like that that
Speaker 10: sort of aspirational customer is really what fell off.
Speaker 1: And that's like the mass affluent. Like, how would you
Speaker 1: describe that person?
Speaker 6: Joe, Yeah, sort of that mass half and I think
Speaker 6: is how you would describe it.
Speaker 10: It's probably you know, if you think in terms of
Speaker 10: income death stiles, maybe that you know that the seventy
Speaker 10: to eighty, seventy to ninety those death siles right there,
Speaker 10: that might you know, splurge on an item every now
Speaker 10: and then, but not really be the true you know,
Speaker 10: luxury customer.
Speaker 1: You know, it's interesting that you say that, I that
Speaker 1: that customer and this is anecdotal, it's not you know,
Speaker 1: we're not necessarily seeing this data. But in this low
Speaker 1: higher low fire environment. It seems like that group is
Speaker 1: having a tough time finding a new job.
Speaker 10: I think you're correct. The wage growth has started to
Speaker 10: slow down a little bit. You know, when we speak
Speaker 10: to like the retailers that we've covered, some of the grocers,
Speaker 10: for example, they've talked about that middle income consumer feeling
Speaker 10: more stress and seeing some change behavior in the way
Speaker 10: they've been shopping. So if you're seeing that at grocery,
Speaker 10: you know you're are definitely seeing that across the board.
Speaker 6: Now, we did have a good holiday season.
Speaker 10: We've heard from a lot of retailers who pre announced
Speaker 10: a few a week ago and numbers were better than expected.
Speaker 6: To number wasn't so bad.
Speaker 10: So I don't mean to paint such a negative picture here,
Speaker 10: but it's not all, you know, rosy as rosy as
Speaker 10: it might seem.
Speaker 5: Yeah, you know, it's so funny.
Speaker 4: I was just looking at a couple of names. Walmart's
Speaker 4: up almost six percent so far this year. TJ max
Speaker 4: Is down slightly, not even one percent. Retail stocks as
Speaker 4: a whole were up only three percent last year, in
Speaker 4: a year where we knew the S and P five hundred.
Speaker 4: We you know, strong gains double digit gains for the
Speaker 4: US stock market overall. As for retail stocks this year,
Speaker 4: Joe up nearly four percent year to date versus less
Speaker 4: than a one percent gain in the.
Speaker 5: S and P five hundred. Where's the strength in retail?
Speaker 11: You know?
Speaker 4: And as you start to look at twenty twenty six
Speaker 4: and how it might play out, can you make some
Speaker 4: definitive calls or do you have to kind of wait
Speaker 4: to see based on White House policy, the FED and
Speaker 4: all that good stuff.
Speaker 10: Yeah, you know, well, coming out of twenty twenty five,
Speaker 10: we know that the value oriented retailers did quite well,
Speaker 10: so Walmart, TJ actually two big ones that you just mentioned,
Speaker 10: but that whole discount world really perform quite well. We
Speaker 10: think heading into this year, at least right now the
Speaker 10: first half of the year, you may see those continue
Speaker 10: to outperform. But from a stock perspective, investors are trying
Speaker 10: to make that pivot towards discretionary. The one big, beautiful
Speaker 10: tax bill should yield higher refund checks for most people
Speaker 10: in the US, So there's an optimistic view that well,
Speaker 10: if there's higher tax refunds, spring might not be so
Speaker 10: bad in terms of spending, and there'll be a little
Speaker 10: more capability for everyone in the US to spend, and
Speaker 10: so that pivot back towards discretionary is really what you've
Speaker 10: seen with some of the stocks. You've also seen as
Speaker 10: the Trump administration's talked a lot about trying to stimulate
Speaker 10: housing in some ways, Home Depot, Low's Florin decre You've
Speaker 10: seen those stocks really start to rebound. Everybody wants to
Speaker 10: see that happen and see some better strength in those
Speaker 10: sectors for those stocks to really continue to work.
Speaker 1: We're going to get Intel learnings a little later, and
Speaker 1: we're not getting retailer yet at this point. But I'm
Speaker 1: curious from you where what are the companies you know,
Speaker 1: we got we got a lot of good picks from
Speaker 1: from Dana at the end of last year. What is
Speaker 1: a pick from you like to avoid? Where would you
Speaker 1: suggest people avoid?
Speaker 10: Well, the avoid I still think you kind of want
Speaker 10: to be careful in the middle, and that's where like
Speaker 10: the companies that are doing well, like a Walmart at
Speaker 10: the cater day to that load a middle. But the
Speaker 10: middle is trading down a little bit. They're okay, I worry.
Speaker 10: You know, there's a lot of question about Target. Are
Speaker 10: they going to be able to turn things around. You know,
Speaker 10: they have an analyst day coming up in March, and
Speaker 10: I think there's some hope that they will be able
Speaker 10: to get to write the ship a little bit. But
Speaker 10: there's been pressure there. Cole's is another one Dana talks
Speaker 10: about that really has you know, not been able to
Speaker 10: transform itself and keep pace. So those are a couple
Speaker 10: of names like that. There may be some concern, but
Speaker 10: I think there's a lot of hope around some of
Speaker 10: the bigger discretion a like home Peoples.
Speaker 6: Like I said, we still like Costco, we like Walmart,
Speaker 6: So hey, what is definitely some room perhaps you run
Speaker 6: up Target.
Speaker 4: And I was trying to remember in my read in
Speaker 4: this morning, and Target does report earnings on March fourth.
Speaker 5: March fifth, we get Costco.
Speaker 4: February twenty fourth, we get Home Depot, February nineteenth, we
Speaker 4: get Walmart.
Speaker 5: So we're going to be getting a good read.
Speaker 4: But on Target, there's a great story, interesting story, troubling
Speaker 4: story on the Bloomberg how Target is facing a political
Speaker 4: maelstrom in its hometown of Minneapolis due to that immigration crackdown,
Speaker 4: disrupting operations and prompting calls for the company to take
Speaker 4: a stance. But you've got staff skipping work over that crackdown.
Speaker 4: I mean, once again we see policy out of the
Speaker 4: White House impacting companies. That's a real thing. And just
Speaker 4: got about forty seconds here just quickly, if you would.
Speaker 6: No, I absolutely agree, it is a real thing.
Speaker 10: You know, Trump administration policies have a big effect on
Speaker 10: how consumers feel and about sentiment.
Speaker 6: Target in particular, to your point, has had this issue.
Speaker 10: There's been a lot of so social issues that somehow
Speaker 10: they're square in the center of it, and you know,
Speaker 10: they're always upsetting somebody for some reason, which is quite frustrating.
Speaker 10: I think for the management team, I'm sure it is.
Speaker 10: You know, they get that taken out on them a
Speaker 10: bit more than some other companies, all.
Speaker 4: Right, And it does look like management, including the CEO,
Speaker 4: is looking to kind of meet with some of the
Speaker 4: officials involved in some of this stuff.
Speaker 5: Joe, thank you so much.
Speaker 4: I always appreciate you folks over at Telsey of course,
Speaker 4: Joe joining us there.
Speaker 5: This is Bloomberg.
Speaker 1: Stay with us. More from Bloomberg Business Week Daily coming
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Speaker 1: New York City poised to get pummeled with more than
Speaker 1: a foot of snow this weekend. It's a test for
Speaker 1: new Mayor Zoro and Mom Donnie. A massive weather system
Speaker 1: landing on the region, threatening power outages, airline delays, and
Speaker 1: transit system of problems. We bring back Craig Allen, Bloomberg meteorologist.
Speaker 1: He joins us from America, New York on a long
Speaker 1: island Craig. As of Thursday morning, the winter storm watch
Speaker 1: has stretched more than eighteen hundred miles from eastern Arizona
Speaker 1: western New York, affecting one hundred and twenty five million people.
Speaker 1: How has it moved just since this morning?
Speaker 11: It has expanded all the way to the eastern seaboard now,
Speaker 11: so the I ninety five corridor is caught up in
Speaker 11: the winter storm watch. And what's happening on the map
Speaker 11: since I spoke to you yesterday afternoon at this time
Speaker 11: is that the colors are deeper, they're brighter, there's more
Speaker 11: of it, and that's never a good thing, because now
Speaker 11: you're talking about intensity problems that will develop from it,
Speaker 11: and it's now upgraded to a winter storm warning already
Speaker 11: from New Mexico and Texas all the way across into
Speaker 11: the Ohio and the Tennessee Valley. I am sure New
Speaker 11: York and our entire corridor here is going to be next.
Speaker 11: There's no way in my mind that we could miss
Speaker 11: out on at least six inches of snowfall here. And
Speaker 11: I would think at this point that you know, twelve
Speaker 11: would be our top number early on, But I would
Speaker 11: not be surprised if we start looking at areas just
Speaker 11: to the west of let's say, New York City, or
Speaker 11: to the north of Washington, or just to the south
Speaker 11: southwest of Boston that could see anywhere from twelve to
Speaker 11: eighteen in terms of snow, depending upon the track of
Speaker 11: the storm.
Speaker 1: Let's focus on the New York City region just for
Speaker 1: a second here, for selfish reasons. Twelve inches of snow
Speaker 1: in New York. Would that all happen as of now,
Speaker 1: based on your projections on Sunday, or would that go
Speaker 1: into Monday too.
Speaker 11: It'll go into Monday. This will be a long duration
Speaker 11: storm once it redevelops. Because you're taking this storm that
Speaker 11: I just gave you the parameters from all the way
Speaker 11: across from the West coast over to the East coast,
Speaker 11: and then redeveloping this storm right along the eastern seaboard
Speaker 11: before it leaves on Monday. So this could turn out
Speaker 11: to be almost a twenty four hour event. So there
Speaker 11: may be times when the snow is coming down very heavily,
Speaker 11: and then there may be times when there's a lull
Speaker 11: and it's light and flurry ish and there's not too
Speaker 11: much accumulating. It may even during those times it may
Speaker 11: even mix with a little bit of freezing rain or sleep.
Speaker 11: Not a good thing, but it holds down the snow
Speaker 11: snow accumulations and then pick up again. So, yes, this
Speaker 11: is going to be a long duration type of event,
Speaker 11: and the plows will be cleaning and cleaning and cleaning,
Speaker 11: and that's our area. Think about the cascading effect that
Speaker 11: goes all the way back through the rest of the
Speaker 11: nation at the same time, because of all the snow
Speaker 11: and the ice that they are going to see as well.
Speaker 4: How crucial are the next twenty four hours or next
Speaker 4: forty eight hours.
Speaker 11: Very Okay, let me tell you what they've done this
Speaker 11: is almost unprecedented. They've taken Noah Air Force aircraft, and
Speaker 11: they've taken hurricane hunters that usually go out during the
Speaker 11: summer season and invest a fly into the hurricanes. They
Speaker 11: have flown them out on the Pacific coast and down
Speaker 11: in the Gulf of Mexico today and last night. They
Speaker 11: started all these runs just to get more data into
Speaker 11: the system and try to get all the weather maps
Speaker 11: on the same page here. And that's why these next
Speaker 11: twenty four hours, the data that they're taking in today,
Speaker 11: the next twenty four hours will be so critical to
Speaker 11: see the exact track of the storm because again, if
Speaker 11: you don't change over to any kind of freezing rain
Speaker 11: of sleet, this will easily be a foot or more.
Speaker 11: If you do, then you're dealing with extreme ice and
Speaker 11: power problems. So there's no win here. It's just a
Speaker 11: matter of whether or not you're going to be digging
Speaker 11: out from snow or trying to get your power back.
Speaker 1: Is there any chance? Yeah? I mean, I was just
Speaker 1: gonna ask you which is worse, but it sounds like
Speaker 1: it kind of doesn't matter. They're both. They're both No, Yeah,
Speaker 1: they're both pretty bad here.
Speaker 6: What is it?
Speaker 1: Just very briefly, what is it about the system that
Speaker 1: makes it so big?
Speaker 11: It has as three pieces of all coming together. With
Speaker 11: these ingredients. You've got the Pacific system. Yesterday, Carol, you
Speaker 11: mentioned that there was you saw the moisture down in
Speaker 11: the Gulf of Mexico. It's going to pick up that,
Speaker 11: and then it's going to get a shot of that
Speaker 11: cold air that's coming down behind the system coming out
Speaker 11: of Canada. You put the three together at the right time,
Speaker 11: and it all phases together, and you've got yourself one
Speaker 11: whopper of a storm and that's being stages right now.
Speaker 5: Yeah, I feel like that cold temperature.
Speaker 4: I feel like growing up when you really had cold temperatures,
Speaker 4: that's when the storms were kind of the trickiest. Well, Craig,
Speaker 4: I'm sure we'll be reaching out to you tomorrow, So
Speaker 4: thanks so much.
Speaker 5: For the lt US update on that.
Speaker 4: Craig Allen, of course, he is Bloomberg Meteorologist joining us
Speaker 4: from Merrick, New York out there on Long Island.
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