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Speaker 2: All Eyes on Jackson holl As the FED kicks off
Speaker 2: its Economic Symposium. It's the flagship event for the US
Speaker 2: Central Bank. Vetcher J Powell set to speak tomorrow. Before that,
Speaker 2: former Federal Reserve Governor Betsy Duke was on Bloomberg Surveillance
Speaker 2: earlier today. She gave her expectations for the chair speech
Speaker 2: Friday at the symposium.
Speaker 3: Jay Powell, in terms of his legacy, is looking at
Speaker 3: what happens to his mandate, what happens to inflation, what
Speaker 3: happens to employment, and how well does he manage that.
Speaker 3: It's not any single speech. He's one of fos focus
Speaker 3: primarily on the decision framework and not give any indication
Speaker 3: of where he's leaning for September. Inflation expectations are going
Speaker 3: to be the key over the next year.
Speaker 4: Or two.
Speaker 3: If inflation expectations get out of line, then the FED
Speaker 3: will be very concerned.
Speaker 2: That's Betsy Duke, former FED governor on Bloomberg Surveillance earlier today.
Speaker 2: Joining us now from Jackson Hole, Wyoming is Bloomberg Surveillance
Speaker 2: co host Tom Keen. Tom the event it's supposed to
Speaker 2: be about policy, about economics, about this economy, but happening
Speaker 2: at the same time the Justice Department signaling possible plans
Speaker 2: to investigate Federaliser of Governor Lisa Cook.
Speaker 5: How is that hanging over the event?
Speaker 6: Oh, it's hanging over to exec correct language, There's no
Speaker 6: question about it. You still have the normal cadence of
Speaker 6: Jackson Hole. For example, there's six, seven, eight papers that
Speaker 6: come out. Michael McKee prints them out perfectly, and he
Speaker 6: reads every page of the academic papers. Guess what I
Speaker 6: don't do that. I'm talking to the reporters here gathered,
Speaker 6: and you're right at the top of a pile of topics.
Speaker 6: Here is Lisa Cook.
Speaker 2: So what's what's she's I spoke to Mike earlier. He
Speaker 2: said she's expected to arrive. She hasn't arrived yet. Does
Speaker 2: it does it take away from FED chair Powell's message tomorrow.
Speaker 2: Does it distract from what he says about this economy
Speaker 2: and what he indicates or not about September.
Speaker 6: It's a really fair question. I don't think so. I
Speaker 6: think Michael McHugh is better at this than I am
Speaker 6: would say exactly the same thing. What is different here,
Speaker 6: and our Simon Flint in Singapore absolutely nails it in
Speaker 6: an essay today. What's different here is the hard facts
Speaker 6: of the moment are catching up with the Chairman. I
Speaker 6: don't know if they're rewriting the speech tonight with the
Speaker 6: stars out above the tetons, or maybe they're writing it
Speaker 6: on the airplane. But what is very clear here is
Speaker 6: the hard facts, as mister Flint says, have caught up.
Speaker 6: You have the economic today, you got concern about inflation
Speaker 6: and tim The number one thing I'm launching off the
Speaker 6: Bloomberg year is the thirty year bend. Once again we're
Speaker 6: making a dash up near five percent. That's the kind
Speaker 6: of inflation whispers that have to change the speech.
Speaker 7: Tom Of course, you mentioned the Chairman will speak tomorrow
Speaker 7: at Jackson Hole. Can you just tell us a bit
Speaker 7: more about what attendees are really looking to hear from him.
Speaker 6: It varies every year. There was one year here I'm
Speaker 6: going to say three years ago. I can't remember where
Speaker 6: we were prepared for a fifteen minute twenty minute speech,
Speaker 6: and I believe he spoke for eight minutes. So every
Speaker 6: year is different. I think the pageantry will be here,
Speaker 6: there'll be an international audience here, Christin mcguartier, mister Nagel
Speaker 6: of Germany is here. Bailey of the Bank of England
Speaker 6: scheduled as well. But what's interesting is within the pageantry,
Speaker 6: what do you expect from a speech? And the answer
Speaker 6: is they'll be looking for certain nuances and certain single
Speaker 6: sentences that will be different. You're not going to get
Speaker 6: a lot of is what's he going to do in September?
Speaker 6: That would be rude. He's not going to do that.
Speaker 8: Here.
Speaker 7: You mentioned a lot of those international voices, I mean
Speaker 7: the ECB, We've got Bank of Japan, Emerging Markets. How
Speaker 7: are they playing a part of the conversation this year?
Speaker 5: In particular, Nora, you know my theme.
Speaker 6: You're already stealing my theme as we go to tomorrow
Speaker 6: with Lisa A. Bramo. It's to me the international angle
Speaker 6: here is the importance point.
Speaker 5: William Rhodes Bill Rhoads.
Speaker 6: Of City Group Iconic at City Bank, it's called City
Speaker 6: Bank back then had this great phrase central banker to
Speaker 6: the world. He took it from academics. This is a
Speaker 6: Jackson hole where Jerome Powell is the central banker to
Speaker 6: the world is he defends delicately the way we've done
Speaker 6: banking for years, pushing against President Trump. The theme internationally
Speaker 6: here of central bank independence will be key.
Speaker 2: I think also the theme of labor tom and it's
Speaker 2: something that we've spent a lot of time I'm talking
Speaker 2: about in recent weeks, especially since that shocking report came
Speaker 2: out earlier this month about those numbers for the month
Speaker 2: of July, and it's really shifted the conversation about what
Speaker 2: employment in the United States and what healthy employment numbers
Speaker 2: look like in the United States where borders are closed,
Speaker 2: immigration legal and illegal is down, and growth among American
Speaker 2: families is not what it was a couple generations ago.
Speaker 2: What does that picture look like in terms of reshaping
Speaker 2: the American workforce.
Speaker 6: Well in reshaping the speech as well. It's a movable
Speaker 6: feast right now. Tim. The number one thing is we've
Speaker 6: seen a trend in the data. The conceit is labor
Speaker 6: data always lags. Okay, fine, and we've seen this trend,
Speaker 6: including continuing claims. Today Bramo put out on Twitter, I
Speaker 6: was stuck in an airport somewhere. Bramo put out on
Speaker 6: Twitter that great continuing claims chart which shows this explosion
Speaker 6: up in the weekly data. That's the kind of tea
Speaker 6: leaves that gets have fed the shift. President Trump wants
Speaker 6: them to shift quicker. And let's remember we've got that
Speaker 6: jobs report early September before Mike McKee's in that press
Speaker 6: conference September seventeenth.
Speaker 7: Well, I want to just talk about the energy. I mean,
Speaker 7: you've been to so many of these symposiums. What's the
Speaker 7: energy like on the ground this year? In particular?
Speaker 6: Quiet? First thing I noticed when I walked in. There's
Speaker 6: a whole new quiet tone to the Mike McKinnon. I remember,
Speaker 6: I remember August of seven, which was I think i'll
Speaker 6: say seven days after libor or Ois went out four
Speaker 6: standard deviations. This place was chaos.
Speaker 5: My guess is a lot.
Speaker 6: Of people are coming in tomorrow morning, and tomorrow morning
Speaker 6: here at the Jackson Lake Lodge will not be quiet.
Speaker 6: There'll be a real turnout for the speech. With that said,
Speaker 6: it's one party, academic, but it is one part about
Speaker 6: this attack on the Central Bank by President Trump.
Speaker 2: Tom'm gonna have to leave it there. We're gonna speak
Speaker 2: to you throughout in the next couple of time days.
Speaker 2: Appreciate your time, and we're glad you arrived safely. I
Speaker 2: know it was a long journey to get there. Tom Keen,
Speaker 2: Bloomberg Surveillance co host out there at the Jackson Hole
Speaker 2: Economic Symposium.
Speaker 5: Stay with us.
Speaker 2: More from Bloomberg Business Week Daily coming up after this.
Speaker 1: You're listening to the Bloomberg Business Week Daily Podcast. Catch
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Speaker 2: Also watching the economics imposium in Jackson is Ali McCartney,
Speaker 2: Managing director of wealth management and private wealth advisor with
Speaker 2: Alignment Partners at Ubs. She and the team managed just
Speaker 2: over one billion dollars in assets. She joins us from
Speaker 2: Rehoboth Beach, Delaware this afternoon. Ali, good to have you
Speaker 2: back on the program. What do you think Fed Chair
Speaker 2: Jay Powell will communicate tomorrow?
Speaker 9: I think, as usual, you will probably not communicate exactly
Speaker 9: the things that the market is looking for. But I
Speaker 9: think that what he will communicate you just spoke about briefly,
Speaker 9: which is this tension between the dual mandate, specifically that
Speaker 9: they are now looking more at weakening softening data in
Speaker 9: a labor market than they are at long term inflation expectations,
Speaker 9: which although Tom talked about the movement in the thirty year,
Speaker 9: seemed to be quite consistent. The last thing I'll leave
Speaker 9: you with is to remember that last year was in
Speaker 9: a sense of quite an epic meeting, and that that
Speaker 9: was the beginning of the long awaited pivot. I think
Speaker 9: that this meeting will be in a sense less revelatory
Speaker 9: than that one.
Speaker 7: When we look at the market performance this past year
Speaker 7: thus far, it's we have the S and P five hundred,
Speaker 7: that's up about eight percent. Of course, that's a bit
Speaker 7: different from what we saw in the past couple of
Speaker 7: years where we were seeing double digit gains to end
Speaker 7: the year here. So what do you think the market
Speaker 7: really needs to hear to maintain this moment some here
Speaker 7: as we go into the second half of this year.
Speaker 9: So I think we are at we're a bit in
Speaker 9: a bit of a waiting game, right, that's a normal thing.
Speaker 9: In late August, volumes are really low. You know, people
Speaker 9: are on vacation less trading. We also happen to be
Speaker 9: awaiting Jackson Hole on Friday and in video earnings next week,
Speaker 9: in video being the largest contributor from a market cap
Speaker 9: and from an earnings perspective to the S and P
Speaker 9: five hundred, and that being the conversation that is being
Speaker 9: you know, discussed now about you know, has AI pulled
Speaker 9: back which have been driving the market. My sense is
Speaker 9: that from an equity perspective, as you said, we've had
Speaker 9: two twenty plus year return two years of twenty plus
Speaker 9: year returns. We you know, are up thirty percent from
Speaker 9: the tariff day low and ten percent as you said,
Speaker 9: a couple of days ago year to date, and we're
Speaker 9: at multiples that we really have only seen twice in
Speaker 9: my trading life, the first being one very unique day
Speaker 9: during the pandemic and the other during the height of
Speaker 9: the Internet bubble. So you know, what we need, I
Speaker 9: think is stability to keep us in this range and
Speaker 9: going higher. And I think the bull market will remain
Speaker 9: in tac I think it will likely be driven by
Speaker 9: a continued expansion in the AI trade, both in terms
Speaker 9: of infrastructure buys and builds, data and power picks and shovels.
Speaker 9: Both margins going up and productivity going up. And I
Speaker 9: think it will also be very much supported by a
Speaker 9: decreasing interest rate cycle. But we're certainly in a more
Speaker 9: precarious position than we have been in a number of
Speaker 9: years from a multiple perspective.
Speaker 2: Ali, I'm trying to figure this out and I'm hoping
Speaker 2: you can help help out with this. It's something I've
Speaker 2: been thinking a lot about lately, and it's this idea
Speaker 2: of a weakening consumer. And in just a few minutes
Speaker 2: were actually gonna speaking with the CFO of Kava Trisia Tolliver.
Speaker 3: Yeah.
Speaker 2: So Cabstock Film, you know, more than twenty percent in
Speaker 2: a single day last week because the company pulled back
Speaker 2: its guidance, essentially talking about a fogginess with the American
Speaker 2: consumer out there. At the same time, you have these
Speaker 2: high margin AI companies that are essentially just printing money,
Speaker 2: whether we talk about it from an Nvidia perspective, from
Speaker 2: a meta platforms perspective, with margins such as those, what's
Speaker 2: the tension there in a world with a weakening consumer?
Speaker 9: I think you nailed it. I think that bifurcation and
Speaker 9: that tension really exists. I think it exists in terms
Speaker 9: of goods and services. I think it exists in terms
Speaker 9: of consumer discretionary ver staples, and I think it exists
Speaker 9: in terms of, you know, the vast difference in wealth
Speaker 9: and earning potential in this country. So what I am
Speaker 9: seeing in my high end clientele, who are looking at
Speaker 9: portfolios that are the highest they've ever been, and what
Speaker 9: I'm seeing in my own neighborhood is the same. People
Speaker 9: are definitely more reticent to spend, both simply the cost
Speaker 9: of goods and the tiriff implications which we're starting to
Speaker 9: get wind of, are real, and people are going to
Speaker 9: have to make choices and decisions. The consumer has managed
Speaker 9: on all levels to hold up extraordinarily well. It's like
Speaker 9: the little engine that could, but it cannot last forever.
Speaker 9: And so I think that the next number of quarters
Speaker 9: there is going to continue to be exactly what you
Speaker 9: said with this bifurcation. In many ways that you slice
Speaker 9: the data, whether it's demographics, whether it's earnings, whether it's
Speaker 9: sector between the haves and the have nots.
Speaker 7: What are the opportunities here in the market. How are
Speaker 7: you advising your clients? What's the safe have in trade
Speaker 7: right now?
Speaker 9: Yeah? So look, I think all of this year it
Speaker 9: has paid to be diversified, which have not been the
Speaker 9: case in a very long time. So you see right now,
Speaker 9: you see equities that have recovered and gone up no
Speaker 9: matter which area you're looking at and which geography. Largely
Speaker 9: you see gold, which has done its job at protecting
Speaker 9: but also continues to provide upside. And you see fixed
Speaker 9: income you know, ig in the US trading at twenty
Speaker 9: five year tights as people try to get ahead of
Speaker 9: the FED moving down. So there are a lot of opportunities. However,
Speaker 9: each is very expensive. So I think the first is
Speaker 9: to continue to be diversified and even though it feels
Speaker 9: like things are expensive, to continue to be invested. The
Speaker 9: second is to look for areas that still have room
Speaker 9: to grow from a relative perspective, whether that's healthcare, whether
Speaker 9: that's utilities which can also provide some defense, whether that's financials,
Speaker 9: which again are trading high but have a number of
Speaker 9: tailwinds from a regulatory and an interest rate perspective. So
Speaker 9: there most certainly are opportunities out there, but you know
Speaker 9: what we've been finding and especially finding this week, is
Speaker 9: it may not be the time to play all beta
Speaker 9: or buy the SMP. This may be a time to
Speaker 9: be much more discreete and disciplined about what you buy
Speaker 9: and when you buy it.
Speaker 5: We only have about a minute left.
Speaker 2: But I was talking to a colleague a little earlier
Speaker 2: and she sort of explained the sense out in Silicon
Speaker 2: Valley right now when it comes to the AI and
Speaker 2: the AI race and what private companies are doing. And
Speaker 2: she described it as being on this roller coaster, but
Speaker 2: there's this lack of understanding about where we are on
Speaker 2: the roller coaster on the way up, if we're close
Speaker 2: to the top or not are we.
Speaker 9: It's a really great question. And I have found in
Speaker 9: my career, being both on the East Coast and the
Speaker 9: West Coast, that there is always a difference in opinion,
Speaker 9: o bulliance and understanding of various technologies that are coming
Speaker 9: out of Silicon Valley. I think that we probably remain
Speaker 9: in the second early third inning. We are not even
Speaker 9: close to there yet. What I think the major difference
Speaker 9: is by people that live, traffic and work out there,
Speaker 9: is that they are thinking many steps ahead in storms
Speaker 9: of large scale effects on data on businesses, whereas I
Speaker 9: find that my clients and the people that I work
Speaker 9: with on Wall Street, outside of let's say the analyst community,
Speaker 9: are much more focused on sort of large language models
Speaker 9: chat GPT, and that's why I think there is extreme
Speaker 9: room to run in the next decade.
Speaker 2: Alan McCartney, Managing director, Wealth Management and private wealth Advisor
Speaker 2: at Alignment Partners at UBS.
Speaker 5: This is Bloomberg. Stay with us.
Speaker 2: More from Bloomberg Business Week Daily coming up after this.
Speaker 1: This is the Bloomberg Business Week Daily Podcast. Listen live
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Speaker 2: There's been this renewed interest on rare earths and critical
Speaker 2: minerals as trade attentions between the US and China have
Speaker 2: flared up. On that We've spent quite a bit of
Speaker 2: time over the last few months talking about them with
Speaker 2: CEOs of companies in the space. Jim Litinski over at
Speaker 2: MP Materials, whose company is set to have the Defense
Speaker 2: Department take a four hundred million dollar preferred equity stake.
Speaker 2: For more on rare earths, we're joined by Oliver Friesen,
Speaker 2: CEO at Guardian Metal Resources. It's a London based metals
Speaker 2: exploration and development company. It's looking to bring production of
Speaker 2: tungsten back to the US. Oliver joins US from Toronto. Oliver,
Speaker 2: we've been learning a lot about rares lately. I think
Speaker 2: my geology one oh one professor would be very happy
Speaker 2: with what we've been talking about. We Gary Evans from
Speaker 2: US antimony on last week talking about the importance of
Speaker 2: antimony when it comes to ballistics. That was something that
Speaker 2: was new to me. Your focus is tungsten. Why is
Speaker 2: tungsten important because it's not classified as a rare earth.
Speaker 8: Yeah, well, first of all, thanks for having me on, Tim,
Speaker 8: It's great to be here to talk more about tungsten.
Speaker 8: Funny enough, you mentioned antimony in the use within munitions
Speaker 8: and ballistics. It's the same reason you need tungsten. Tungsten
Speaker 8: is one of the most dense metals on the planet
Speaker 8: and also has the highest melting point, so it's been
Speaker 8: used in the production of munitions for decades and decades
Speaker 8: and decades. Now that's just one small use case, but effectively,
Speaker 8: when you look at the entire critical metals supply chain,
Speaker 8: if even one of those metals isn't there, that can
Speaker 8: shut down manufacturing in the United States of America. So
Speaker 8: it's important that we focus on not only just rare earths,
Speaker 8: which as you mentioned, are very important antimony, but tungsten
Speaker 8: is definitely up there, considering the fact that we're very
Speaker 8: reliant on unfriendly adversaries for global tungsten supplies.
Speaker 7: So I want to talk a bit more about your
Speaker 7: company in particular here which end markets you know, maybe
Speaker 7: eves defense renewables are really driving the most urgency for
Speaker 7: your business right now?
Speaker 8: Yeah, I would say probably the most urgent use cases
Speaker 8: is a cross defense because of that density, it's ubiquitous,
Speaker 8: and it's very important in the productions and ammunitions and
Speaker 8: things like tank armers as well. So really, right now,
Speaker 8: given the geopolitical landscape, we're seeing a huge amount of
Speaker 8: a surgeon demand and increasing demand across the defense industry
Speaker 8: for this metal. But as you pointed out, you know,
Speaker 8: it's not just a defense metal. This is a metal
Speaker 8: that's used in a lot of other industries. Some that
Speaker 8: come to mind aerospace, automotive, green energy is another one.
Speaker 8: It's a really important metal. It's almost irreplaceable in a
Speaker 8: lot of these technologies. So Defense is driving the narrative
Speaker 8: right now. But the same time, you know, we're hearing
Speaker 8: major manufacturers in the United States of America are actually saying,
Speaker 8: we can't get this tungsten. If we don't get it,
Speaker 8: we're going to be shutting down.
Speaker 2: So the Pentagon in July provide it as six point
Speaker 2: two million dollar ward to Golden Metal Resources. It's the
Speaker 2: US unit of your company to perform a pre feasibility
Speaker 2: study for a tungsten mind near Hawthorne, Nevada. Is this
Speaker 2: is this all the financing that you will need? Will
Speaker 2: you need more from the DoD, Will you need more
Speaker 2: from the government? Will you need to raise more?
Speaker 8: Yeah, So it's it's part of the puzzle for sure.
Speaker 8: So that six point two million dollar award that we've
Speaker 8: received from the Department Defense, which obviously we're very grateful
Speaker 8: to the current administration for that award, will cover some
Speaker 8: of the key engineering workstreams as part of that PFS study.
Speaker 8: But you're right, there are other expenditures associated with bringing
Speaker 8: that project and our projects into production. But concurrently with that,
Speaker 8: with that award from the Department of Defense, we raised
Speaker 8: twenty one million dollars US dollars, predominantly with existing shareholders,
Speaker 8: almost all institutional. So we use those funds to then
Speaker 8: cover the other additional costs and all the funding combined.
Speaker 8: Really the focus is on delivering two key tungus and
Speaker 8: minds to the US market, of which it's a metal
Speaker 8: the US has not mined for over a decade.
Speaker 2: Do you need government support when it comes to this project.
Speaker 5: We don't.
Speaker 8: And you know, for instance, we acquired Pilot Mount, which
Speaker 8: is a project that's received the award from the Department
Speaker 8: Defense almost five years ago, so it was a much
Speaker 8: different market than the land Escape was much different. And
Speaker 8: even at that time, we acquired it because we felt
Speaker 8: like it would be an economic tungsten operation. At previous
Speaker 8: pricing norms, which is around three hundred dollars, what's called
Speaker 8: an metric ton unit are about thirty thousand dollars a ton.
Speaker 8: That being said, the price, you know, fast forward five years,
Speaker 8: China has completely banned the exports of all tunks into
Speaker 8: the US market. The price is closer to fifty thousand
Speaker 8: dollars a ton right now. But even at historic norms,
Speaker 8: you know, this project in our projects, we believe makes sense.
Speaker 8: But obviously you know the tailwinds we're seeing now across
Speaker 8: the federal funding landscape, but also permitting gives us that
Speaker 8: much more confidence to push these projects forward and deliver
Speaker 8: minds in America to the US industrial base and defense partners.
Speaker 7: Oliver, let's talk a little bit about China.
Speaker 9: You brought it up here.
Speaker 7: How do you see China's dominance in the rare earth
Speaker 7: processing cheaping your strategy here?
Speaker 8: Yeah, No, it's a really good point, Noraen. I'm glad
Speaker 8: you brought it up, because what what sort of sets
Speaker 8: tungsen apart from you know, the antimonies and the rarest
Speaker 8: says we've discussed, is the fact that the downstream processing
Speaker 8: capacity actually fully exists on US soil. It's one of
Speaker 8: the kind of the very few critical metals of which
Speaker 8: the US has the ability to actually take what's called
Speaker 8: a tungsten concentrate and turn it into actual usable finished
Speaker 8: products for defense and for industry. So the benefit that
Speaker 8: we have is that the only thing missing in the
Speaker 8: US right now is a domestic mind source. You know,
Speaker 8: we import in the US, all of our concentrates from
Speaker 8: other countries, and just to give you a data point, China,
Speaker 8: Russian North Korea combined represent ninety percent of total global
Speaker 8: supply of tungsen. I'm mean, just let that kind of
Speaker 8: data point sit in. But the thing that's missing right
Speaker 8: now in the US is the mind supply. The processing
Speaker 8: is there. So as soon as we can plug in
Speaker 8: R two Nevada based tungs and minds, you have a
Speaker 8: fully circular tungsten supply chain that exists within the bounds
Speaker 8: of the United States of America.
Speaker 7: So where do you see demand for rare earth materials
Speaker 7: and all of that, just more broadly over the next
Speaker 7: say five to ten years.
Speaker 8: Yeah, So tungsten specifically, we're seeing very very healthy compound
Speaker 8: and annual growth rates across the different sectors.
Speaker 5: That need it.
Speaker 8: Defense is certainly leading the charge right now. You know,
Speaker 8: we're seeing we're seeing the EU and NATO and the US.
Speaker 8: You know, defense budgets up or up across the board,
Speaker 8: So that drives the demand for tungsten, as you can
Speaker 8: probably imagine. But also you know, we mentioned automotive, aerospace,
Speaker 8: these are all other other sectors that are the demand
Speaker 8: for tungsten is increasing quite considerably, so we're seeing healthy
Speaker 8: growth across the different growth areas. And another use case
Speaker 8: that many of your listeners probably are not aware of
Speaker 8: is nuclear fusion, so not to be completely confused with
Speaker 8: nuclear fission, but effectively trying to harness the energy of
Speaker 8: the sun here on Earth. And the only metal with
Speaker 8: a high enough melting point to contain a nuclear fusion
Speaker 8: reactor is tungsten. So we see longer term considerable demand
Speaker 8: growth from this this very important energy supply excuse me,
Speaker 8: technology that should be come in line in the next
Speaker 8: couple of years here in next maybe decade.
Speaker 2: One of the most read stories on the Bloomberg Terminal
Speaker 2: this week was about the Trump administration, or President Trump's
Speaker 2: new brand of economic state craft deals like you know
Speaker 2: we might see with Intel, for example, or the Department
Speaker 2: of Defense deal with MP materials. I mean you could
Speaker 2: throw other companies into that as well, AMD and Nvidia.
Speaker 2: With fifteen percent of certain ship sales in China going
Speaker 2: to the government, maybe even US steal with that so
Speaker 2: called golden share that the US government has with US steel.
Speaker 2: What's in your view, because you've taken some money from
Speaker 2: the government this year what's the difference between a deal
Speaker 2: like the one that MP Materials got in which the
Speaker 2: DoD will take a stake and the stake that the
Speaker 2: Trump administration is contemplating taking an intel. Do you see
Speaker 2: a difference in those deals?
Speaker 8: Yeah, for sure. So the MP Materials deal is pretty
Speaker 8: groundbreaking for this sector. And I think this is really
Speaker 8: a strong signal to the US critical medals industry that that,
Speaker 8: you know, the administration is serious about mind in America,
Speaker 8: which is really encouraging to see. So the MP Materials deal,
Speaker 8: there's lots of different parts to that. One of them
Speaker 8: is the price floor of the direct investment and also
Speaker 8: the federal award as well. So we've received just an award,
Speaker 8: So this is that this is money that we can
Speaker 8: go and use to fast track key engineering steps as
Speaker 8: part of our project. But what I'll say is that
Speaker 8: you know, there there's you know, there's there's speculation that
Speaker 8: some of these unique uh and new sort of benefits
Speaker 8: that MP has had with this deal could could be
Speaker 8: applied across the sector. So effectively, the doors have opened
Speaker 8: up for this this this type of deal to be
Speaker 8: done across the defense supply chain, but also the critical
Speaker 8: metal supply chain. So anyways, I think that all in all,
Speaker 8: it's it's a really strong signal to the market. It's
Speaker 8: a really strong signal to myself as a CEO of
Speaker 8: a critical metals company that the US administration is serious
Speaker 8: about minds in America and that obviously means that we
Speaker 8: have these projects at exactly the right time and trying
Speaker 8: to over this key metal to the US market.
Speaker 2: We're speaking with Oliver Freesa and the CEO at Guardian
Speaker 2: and Metal Resources, to London based metals exploration and development company.
Speaker 2: It's looking to bring production of tungskin back to the US. Oliver,
Speaker 2: you mentioned the door is open. Is your door open
Speaker 2: for an investment from the US government where the government
Speaker 2: or the Department of Defense would actually take an equity
Speaker 2: stake in the company.
Speaker 5: Would you welcome that?
Speaker 8: Of course, yeah, we'd be We'd more than welcome that.
Speaker 8: Like I said, we all we have right now is
Speaker 8: the award from the Deity, which is incredibly important for
Speaker 8: the business. But you know, we're we're we're Our goal
Speaker 8: here is to deliver these minds to the US market.
Speaker 8: So anything that we can do to help get support
Speaker 8: from the current administration and across the industry. We will
Speaker 8: absolutely have that conversation, but the time is so critical
Speaker 8: right now. Like I said, the US has no domestic
Speaker 8: mind supply, and we believe that we are the leading
Speaker 8: company when it comes to tungsten expression development. So we're
Speaker 8: absolutely looking to have any conversation that will help us
Speaker 8: get to our goal.
Speaker 7: Quicker, are you having conversations right now about that?
Speaker 8: I can't speak to that. What I can say is that,
Speaker 8: you know, the award that we received from the Department
Speaker 8: of Defense was only about three weeks ago, so we're
Speaker 8: now really focused on getting that money and focusing it
Speaker 8: in the ground and towards towards creating US jobs at
Speaker 8: our projects. So that's the focus right now. But obviously,
Speaker 8: you know, we're looking to tap into anytail ones that
Speaker 8: can be available to defense and critical metals companies that
Speaker 8: are focused on US projects.
Speaker 7: Oliver, how do you navigate trade tensions and resource nationalism
Speaker 7: and markets where you operate?
Speaker 8: Yeah, I mean we try to get too focused on that.
Speaker 8: You know, it's uh, there's a lot of noise out there.
Speaker 8: There's a lot of movement across tariffs and and and
Speaker 8: you know trade relationships. Right now, I think the main
Speaker 8: signal to to to our company and to myself is
Speaker 8: the CEO is that there's a huge push for minds
Speaker 8: in America. We want to see these metals actually being
Speaker 8: mined on American soil. So we try not to get
Speaker 8: too kind of caught up in the day to day.
Speaker 8: You know, we have a job here, which is to
Speaker 8: deliver these projects to the US market. But it's encouraging
Speaker 8: to see some of these things that I think really
Speaker 8: once again point to the fact that the current administration
Speaker 8: is very focused on mind in America and nowhere else
Speaker 8: in the world. So that's obviously a huge benefit benefit
Speaker 8: to us as owners of two key tunks and projects
Speaker 8: that are both on US soil and also in the
Speaker 8: great state of Nevada, which is a very mining friendly
Speaker 8: place to be operating.
Speaker 2: Oliver, Yes or no, how quickly? Or can I should
Speaker 2: say the US become rare with independent from China?
Speaker 8: Oh man, it's a good question. I mean, yes, we can.
Speaker 8: I mean there's some great geology here. We need a
Speaker 8: huge amount of support from the administration, which we're seeing now.
Speaker 8: We have to carry through. That's the biggest thing. We
Speaker 8: can't stop start, stop start if we have this same
Speaker 8: sort of support push forward over five, ten, fifteen years,
Speaker 8: the landscape will look a lot different and the US
Speaker 8: will become a lot less reliant on unfriendly countries. For
Speaker 8: these key input medals.
Speaker 2: Oliver Fries and CEO at Guardian Metal Resources, stay with us.
Speaker 2: More from Bloomberg Business Weekday coming up after this.
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Speaker 7: It's been a big week of retail earnings and it's
Speaker 7: telling us a lot about the state of the US
Speaker 7: consumer Home depot sales, missed expectations, Walmart reporter rere miss
Speaker 7: on profit expectations, Target delivered a discouraging full year sales outlook,
Speaker 7: and the list goes on and on. But we've got
Speaker 7: two wonderful reporters here to shed light on this and
Speaker 7: a lot more this afternoon. Janette Newman, Bloomberg News Consumer reporter,
Speaker 7: and Jennifer Bartasha's Bloomberg Intelligence Consumer team leader and senior
Speaker 7: retail staples and packaged foot food analysts are here to
Speaker 7: discuss that is a long title. Sounds like she does
Speaker 7: a lot here, But Jeanette, I'll start with you one
Speaker 7: of the latest retail earnings telling you about the state
Speaker 7: of the US consumer right now.
Speaker 10: I think over all that the US consumer is actually
Speaker 10: doing okay. I think there's there's a note of caution
Speaker 10: looking forward because a lot of what's been you know,
Speaker 10: sold in the in the last couple quarters, price price
Speaker 10: increases has not hit those goods, and so there's concern
Speaker 10: about when price increases really do start to flow through,
Speaker 10: what how consumers will will react. But despite some of
Speaker 10: the you know what you what you mentioned Noura with
Speaker 10: the results, I mean, Walmart did have a profit miss
Speaker 10: that's very rare. That had to do with some claims,
Speaker 10: but they actually raised their sales guidance for the year,
Speaker 10: which was already which was already pretty high. So that
Speaker 10: shows that there they do have some confidence in the
Speaker 10: consumer in the year in the year ahead.
Speaker 2: A Jen come on in here, because we spoke earlier
Speaker 2: with the CFO of KAVA, Tricia Toliver joined us and
Speaker 2: she said last week and she kind of reiterated today
Speaker 2: that there's this fluid macroeconomic environment that these are her words,
Speaker 2: she said, it creates a fog for consumers and during
Speaker 2: those times they tend to step off the gas. Would
Speaker 2: you say that that the view you have at Bloomberg
Speaker 2: Intelligence about the consumer, that it's foggy and as a
Speaker 2: result of that fog, consumers are pulling back a little bit.
Speaker 4: Yeah. I think that's a pretty good insight. You know,
Speaker 4: when we look at the consumer and you look at
Speaker 4: sort of the bigger numbers in terms of the economy,
Speaker 4: the consumer is hanging in there. But the consumer has
Speaker 4: been conservative for a long time. It really started when
Speaker 4: we had high food inflation, and as soon as that
Speaker 4: started to roll back, we had pressure from tariffs, and
Speaker 4: there's just uncertainty. And when that consumer is uncertain, they
Speaker 4: still buy the things that they need to buy. They're
Speaker 4: still going on vacation, but they're just being a little
Speaker 4: bit more prudent. And until we have a little bit
Speaker 4: more clarity, we're not expecting that to really change.
Speaker 2: Jen, what is the bifurcation that you're seeing at Bloomberg
Speaker 2: Intelligence when it comes to consumers, those at the higher
Speaker 2: end of the income spectrum versus what those at the
Speaker 2: lower end of the income spectrum are doing and We've
Speaker 2: talked a lot for years about the K shaped recovery.
Speaker 2: Kind of sounds like we're still there. Maybe it's even
Speaker 2: more pronounced.
Speaker 4: It's pretty pronounced. You know, lower income consumers continue to
Speaker 4: be pressured when you look at retailers that really have
Speaker 4: a lot of those customers in their base, and that
Speaker 4: would be the Walmart's of the world, it would be
Speaker 4: Dollar Generals of the world. You know, you see that
Speaker 4: the spending and the average ticket and the traffic into
Speaker 4: those stores in some instances is a little bit pressured.
Speaker 4: At the same time, you know, higher income households are
Speaker 4: almost kind of going along as normal. They're still seeking value,
Speaker 4: but they're taking advantage of all the value that's being
Speaker 4: offered out to the broader economy and they're saving money
Speaker 4: that way. So it's an interesting thing to track and
Speaker 4: how those two different parts of the consumer base are
Speaker 4: really behaving a little bit differently.
Speaker 10: And everybody loves a deal, right and Walmart has actually,
Speaker 10: you know, to what Jen's saying, Walmart has has benefited
Speaker 10: from everyone loving a deal and is attracting increasingly more
Speaker 10: higher income consumers and that's part of what's helped boost
Speaker 10: its its sales and that's been a strategy. You know
Speaker 10: a lot of those consumers went to Walmart during the
Speaker 10: pandemic to get groceries and then have increasingly kind of
Speaker 10: bought more and more. Walmart is stepping up. You know,
Speaker 10: it's clothing offering, and so that's also you know, that's helping,
Speaker 10: that's helping Walmart.
Speaker 5: Are those consumers sticky with Walmart?
Speaker 10: Yes, they are, They are sticky, and that's been that's
Speaker 10: been part of the that's been part of Walmart's success
Speaker 10: because they go to the grocery, they go and they
Speaker 10: get the groceries, and then they see, actually, like Walmart
Speaker 10: has great genes. Now Walmart has knows that these consumers.
Speaker 5: Well, that was an American Eagle reference, wasn't it.
Speaker 1: Know.
Speaker 2: We're not going to definitely, we're not going to get
Speaker 2: We're not aget talking Sidney.
Speaker 5: Not moving on. Sorry, go ahead, chapter, next chapter.
Speaker 10: And that that also is you know, Walmart has been
Speaker 10: seizing on that and Target has been missing out. Target
Speaker 10: has not been doing well. They obviously just appointed a
Speaker 10: new CEO. He's an insider.
Speaker 5: It's an amazing story.
Speaker 10: It is an amazing story. It is an amazing story.
Speaker 10: But the market's not that impressed.
Speaker 7: Though, that's what we're seeing. But I mean you also
Speaker 7: come for companies like Sday Latter. We talked about Walmart.
Speaker 7: Of course, we know that has a lot of those
Speaker 7: consumers staples opportunities there. But when we look at Esta
Speaker 7: Latter and a lot of competitors like that on the
Speaker 7: more luxury end, what are the contours of consumer spending
Speaker 7: in that space right now?
Speaker 10: You know, beauty overall is doing okay again, kind of
Speaker 10: still slowing down a little bit, but still writing a
Speaker 10: post pandemic boom when we all got into you know,
Speaker 10: lots of different lots of different beauty products at one
Speaker 10: at one time. But Stay Latter is not doing that well.
Speaker 10: So that's kind of like even though the consumer right
Speaker 10: now is okay, a little bit conservative, like like Jen said,
Speaker 10: but Walmart is doing overall really well. Target is not
Speaker 10: doing great. That's also because of differences with the two
Speaker 10: companies and how they're run. Similarly, Loreal, huge beauty company,
Speaker 10: obviously is actually doing really well. Stay Latter. No, their
Speaker 10: sales in the most recent fiscal year that just ended,
Speaker 10: we're down eight percent, and those are kind of internal
Speaker 10: internal problems that they've been that they've been dealing with Jennifer.
Speaker 10: I want to bring you back into the conversation here.
Speaker 10: Are we seeing any sense of consumer fatigue right now,
Speaker 10: especially when we know inflation is super high and if
Speaker 10: you were to ask the average person, they do think
Speaker 10: that things are kind of tight right now.
Speaker 4: I don't know that we're seeing a lot of fatigue.
Speaker 4: I think people have sort of adjusted to what is
Speaker 4: sort of almost a new normal, and that's a little
Speaker 4: bit post food inflation. They've seen prices come down in
Speaker 4: different ways, especially on the grocery side and some of
Speaker 4: the general merchandise, like entry level fashion, and so I
Speaker 4: think that gives the perception of a little bit of relief.
Speaker 4: So I don't think people are really pulling back anymore,
Speaker 4: but they're not also simultaneously really loosening the purse strings.
Speaker 4: It seems like we've sort of settled into kind of
Speaker 4: this new normal, this new normal range. One other note
Speaker 4: on Walmart that I think is pretty interesting. When you're
Speaker 4: talking about retention, you can't you can't not talk about
Speaker 4: Walmart Plus, which is a huge loyalty program and they're
Speaker 4: generating a lot of incremental revenue off of it, and
Speaker 4: people who get in there, they keep renewing and it
Speaker 4: just locks in loyalty and locks in spending, and we're
Speaker 4: seeing that across all income cohorts.
Speaker 2: Wait wait, wait, can you talk a little bit more
Speaker 2: about that? And I think, I think what this is
Speaker 2: not an ad for American Express, but I will say,
Speaker 2: if you have a certain American Express card, you can
Speaker 2: get a free membership to the program.
Speaker 7: Which one do you want to.
Speaker 5: I think it's the Platinum card. I believe, Yeah, I
Speaker 5: believe that's what it is. Thanks for calling you.
Speaker 4: Actually just completed a survey of one thousand Walmart Plus subscribers,
Speaker 4: and what's really interesting is that eighty three percent of
Speaker 4: Walmart Plus subscribers also have an Amazon Prime membership, but
Speaker 4: that doesn't stop them from maximizing their Walmart Plus value.
Speaker 4: And so I think that it really illustrates how Walmart
Speaker 4: has very uniquely carved out a survey and a recurring
Speaker 4: revenue stream that is really pretty remarkable. And that the
Speaker 4: fact that a lot of the people who are in
Speaker 4: that program are making digital orders, that's driving their digital
Speaker 4: revenue for advertising, and it's really adding to just the
Speaker 4: overall flywheel of Walmart. So there's a lot of really
Speaker 4: interesting things happening that are really stemming from some of
Speaker 4: these intelligent decisions they made maybe five years ago to
Speaker 4: introduce that Walmart Plus program.
Speaker 2: That's a fascinating thing to hear because it was always
Speaker 2: sort of an out also ran when it comes to
Speaker 2: Amazon Prime, So it's interesting to hear that. Jen Janette,
Speaker 2: I want to bring you back in here and talk
Speaker 2: a little bit about Target. You mentioned the CEO change
Speaker 2: the news we got earlier this week. You said investors
Speaker 2: didn't love it. A lot of the conversation around Target
Speaker 2: over the last couple of years, well, actually really over
Speaker 2: the last year or so has had to do with
Speaker 2: backlash against DEI efforts and to what extent, in your view,
Speaker 2: that actually affected company sales or the image of what
Speaker 2: that looked like for consumers.
Speaker 5: What do we know about this?
Speaker 10: The company executives at Target have said that the backlash,
Speaker 10: like black, black consumers not shopping at Target, has had
Speaker 10: an impact on sales. They have not quantified that, and
Speaker 10: so we don't really know. These kinds of boycotts don't
Speaker 10: often have a huge effect, but they have said that
Speaker 10: it had that it had an effect, and I think
Speaker 10: also more more importantly, even in some of the analyst notes,
Speaker 10: and you hear investors talking about the staff at Target.
Speaker 10: We've had some reporting it's nearly sixty percent of staff
Speaker 10: at Target are people of color, and so the staff
Speaker 10: itself has been upset by everything that's been going on
Speaker 10: with Target pulling back on DEI and that is that
Speaker 10: is something that some people think is kind of behind
Speaker 10: some of this tumult with with staff. Job in retail
Speaker 10: is so difficult, and you need especially now, and you
Speaker 10: need great staff, and you need people who are going
Speaker 10: to stick around and they know how.
Speaker 2: The stores work.
Speaker 10: So that has also been a problem, whereas you don't
Speaker 10: hear those same complaints from staff at Walmart, for example.
Speaker 10: Excuse me. They've also been increasing the salaries that they're
Speaker 10: paying their their top employees, so that is also an
Speaker 10: issue at Target. Is the issue with staff.
Speaker 2: Well, we love talking retail and the consumer with both
Speaker 2: of you. Thank you so much for joining us. Jene Newman,
Speaker 2: Bloomberg News Consumer reporter and Jennifer Bartasha's Bloomberg Intelligence Consumer
Speaker 2: Team leader and senior Retail Staples and Package of Food analysts.
Speaker 2: Check out Janette's reporting on the Bloomberg terminal and Jennifer's
Speaker 2: research on the Bloomberg Terminal, also, of course, at bloomberg
Speaker 2: dot com.
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