WEBVTT - GM Slashes Guidance, Kohl’s Fires CEO 0:00:02.720 --> 0:00:10.520 Bloomberg Audio Studios, podcasts, radio news. You're listening to the 0:00:10.560 --> 0:00:14.520 Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 0:00:14.560 --> 0:00:17.840 Eastern on Apple, Cocklay and Android Auto with the Bloomberg 0:00:17.880 --> 0:00:21.000 Business App. Listen on demand wherever you get your podcasts, 0:00:21.320 --> 0:00:23.040 or watch us live on YouTube. 0:00:23.440 --> 0:00:25.880 It's the Bloomberg Intelligence Radio. We are broadcasting to you 0:00:25.920 --> 0:00:29.440 live from our Interactive broker studio right here in midtown Manhattan. 0:00:29.440 --> 0:00:32.160 All right, So two days later, we finally get GM's 0:00:32.240 --> 0:00:35.240 conference call slashing guidance with up to five billion dollar 0:00:35.400 --> 0:00:38.280 hit from taruffs. Joining US now David Well to Bloomberg 0:00:38.320 --> 0:00:39.560 Detroit Bureau chief. 0:00:39.960 --> 0:00:40.240 David. 0:00:40.280 --> 0:00:43.280 I thought that these offsets that were announced on Monday 0:00:43.360 --> 0:00:45.519 or Tuesday, I forget, my time has no meaning, were 0:00:45.520 --> 0:00:48.080 supposed to help this part from the administration. 0:00:49.720 --> 0:00:52.120 They did. I mean, some analysts had they hit to 0:00:52.200 --> 0:00:55.560 General Motors from tariffs being as high as ten billion dollars. Wow, 0:00:55.960 --> 0:00:58.120 so it did help some. You still have a twenty 0:00:58.120 --> 0:01:02.360 five percent tariff on imported vehicle. This does help offset 0:01:02.600 --> 0:01:05.720 some of the parts tariffs. And I think what GM's 0:01:05.760 --> 0:01:09.039 hoping for here is that eventually the Trump administration gets 0:01:09.080 --> 0:01:13.520 trade deals with South Korea for example, and some something 0:01:13.560 --> 0:01:17.480 new with USMCA, because that's where GM's really taking a 0:01:17.480 --> 0:01:20.080 big hit. Here are those countries in terms of where 0:01:20.080 --> 0:01:24.840 they get imported vehicles from, and so it's four to 0:01:24.920 --> 0:01:26.880 five billion dollars. Two billion of that is from the 0:01:26.959 --> 0:01:30.680 vehicles they important, the rest is parts. So if the 0:01:30.720 --> 0:01:33.960 automotisy wants to escape heavy hit from tariffs, there's still 0:01:33.959 --> 0:01:35.920 a lot more to be done in terms of either 0:01:36.000 --> 0:01:38.440 resourcing parts or getting some new trade deals. 0:01:39.080 --> 0:01:41.640 So, David, is the expectation this is kind of a 0:01:41.640 --> 0:01:46.479 worst case scenario, or this is a company positioning that as, hey, 0:01:46.520 --> 0:01:47.960 this is kind of what we know when this is 0:01:48.040 --> 0:01:49.320 kind of our best guess. 0:01:51.120 --> 0:01:53.880 It's what they know based on the structure of the 0:01:53.920 --> 0:01:59.320 tariffs right now. So let's say next week the Trump 0:01:59.360 --> 0:02:02.240 administration cut a deal to lower tariffs with South Korea. 0:02:02.920 --> 0:02:06.360 GM gets a couple hundred thousand vehicles, all entry level 0:02:06.440 --> 0:02:12.359 models from its factories in Korea. That would lower this burden. 0:02:12.480 --> 0:02:16.800 If they got something that would reduce the tariffs on 0:02:16.840 --> 0:02:20.600 the non US parts in vehicles. GM makes some Canada 0:02:20.680 --> 0:02:24.760 and Mexico that would also give them some relief. But 0:02:24.880 --> 0:02:27.080 right now those are the so called Ventanyl tariffs with 0:02:27.520 --> 0:02:30.600 Canada and Mexico. Those are still hanging out there. Those 0:02:30.639 --> 0:02:34.320 are still in force here, So they would need something 0:02:35.040 --> 0:02:36.960 that would either lower that or get rid of those 0:02:37.040 --> 0:02:39.799 to really get this burden down unless they start relocating 0:02:39.880 --> 0:02:41.400 vehicles and doing things like that. 0:02:42.000 --> 0:02:45.400 David earlier the Wall Street Journal reporting that the board 0:02:45.520 --> 0:02:49.200 at Tesla may have started efforts to take a look 0:02:49.240 --> 0:02:51.840 at a search for a new chief executive officer to 0:02:51.919 --> 0:02:54.960 succeed Elon Musk. What's your take on. 0:02:54.880 --> 0:03:01.400 That big company denied it about these things when there's 0:03:01.440 --> 0:03:05.920 there's a story written with conviction, uh, and then a 0:03:06.000 --> 0:03:09.919 denial with conviction. You know, you do wonder if maybe 0:03:10.040 --> 0:03:13.480 some people on the board started talking to other executives 0:03:14.000 --> 0:03:16.320 or executive search firms out there to get some ideas. 0:03:16.320 --> 0:03:19.960 But it wasn't maybe an official board search. That's me speculating, 0:03:20.040 --> 0:03:24.519 But look, Elon Musk has a lot of interest here 0:03:24.560 --> 0:03:27.880 and this has always been an issue with Tesla's shareholders. 0:03:28.320 --> 0:03:31.360 And this is well before he was in the Trump 0:03:31.400 --> 0:03:35.480 administration and politically active with Doge. He had the boring 0:03:35.600 --> 0:03:39.680 company of course has SpaceX. Then he got Twitter now 0:03:39.960 --> 0:03:42.800 X and he's got Tesla, and then you add him 0:03:42.920 --> 0:03:45.800 to a big government role, and this is somebody who 0:03:45.960 --> 0:03:49.280 has a lot of different things going on. And when 0:03:49.320 --> 0:03:53.560 Tesla starts to struggle shareholders and the board has to 0:03:53.600 --> 0:03:56.840 do it's fiduciary duty. If shareholders are asking questions, maybe 0:03:56.840 --> 0:03:59.360 there's maybe they're asking questions about when this guy is 0:03:59.400 --> 0:04:01.800 going to come back in the chair, and if he's not, 0:04:01.840 --> 0:04:03.600 then they need someone who's going to really take a 0:04:03.640 --> 0:04:05.560 look at getting their sales turned around. 0:04:06.760 --> 0:04:08.960 If Elon Musk goes back, as it looks like he 0:04:09.040 --> 0:04:12.640 will to Tesla, does all the problem just go away? 0:04:14.600 --> 0:04:14.680 Now? 0:04:14.800 --> 0:04:17.480 It doesn't mean Tesla's got some real issues here. The 0:04:17.520 --> 0:04:20.239 product line is very stale, right. Most of these vehicles, 0:04:20.360 --> 0:04:23.240 the model esc goes back twelve years and the other 0:04:23.680 --> 0:04:26.080 vehicles in the lineup, with the exception of cyber truck, 0:04:26.200 --> 0:04:29.600 all kind of carry the same basic styling on the exterior, right, 0:04:29.720 --> 0:04:32.320 So nothing looks fresh. The cyber truck is obviously very 0:04:32.320 --> 0:04:34.280 fresh and different, but it's a niche product. It's an 0:04:34.320 --> 0:04:37.320 expensive pickup truck that a lot of people think is 0:04:37.360 --> 0:04:41.640 pretty weird looking. So this is a company with stale product. 0:04:41.680 --> 0:04:45.400 A lot of new competition from the Korean automakers in 0:04:45.440 --> 0:04:50.120 the US from General motors, heavy competition in China. European automakers, 0:04:50.200 --> 0:04:52.640 especially on the high end, have a lot of new 0:04:52.680 --> 0:04:56.120 EV's in Europe, so they don't have an Olagaboli like 0:04:56.160 --> 0:04:59.000 they did five years ago, and they just haven't freshened 0:04:59.080 --> 0:05:01.400 up the product line. And then there's there's the AI 0:05:01.520 --> 0:05:05.600 and the autonomy UH strategy of Tesla's. I think that's 0:05:05.640 --> 0:05:07.719 going to take a while. It took Waynwell a very 0:05:07.720 --> 0:05:12.240 long time of testing vehicles on public roads to actually 0:05:12.279 --> 0:05:15.200 launch a service. Tesla hasn't done any of that yet. 0:05:15.240 --> 0:05:18.840 So you're looking at turning around a product line that's 0:05:18.880 --> 0:05:21.320 pretty stale in the face of tough competition, and you're 0:05:21.360 --> 0:05:26.559 looking at going from you know, an announcement last year 0:05:26.880 --> 0:05:31.680 on autonomous vehicles to robotaxis on the road, which took 0:05:31.720 --> 0:05:35.839 Waymewell about at least a decade. These are things that 0:05:35.680 --> 0:05:39.960 that are difficult to do, and you know, getting an 0:05:40.000 --> 0:05:42.440 active CEO back in the chair helps, but it's still 0:05:42.520 --> 0:05:45.000 it's still a lot of heavy lifting to get those 0:05:45.000 --> 0:05:45.800 initiatives going. 0:05:46.720 --> 0:05:48.480 All right, David, thank you so much. Appreciate a lot 0:05:48.520 --> 0:05:51.360 going on in the world of the automobile. David Walsh, 0:05:51.360 --> 0:05:53.360 Bloomberg Detroit, a bureau chief. 0:05:55.200 --> 0:05:58.919 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:05:59.000 --> 0:06:02.359 weekdays at ten an on Apple, colocklay and Android Auto 0:06:02.480 --> 0:06:05.560 with the Bloomberg Business App. Listen on demand wherever you 0:06:05.560 --> 0:06:08.560 get your podcasts, or watch us live on YouTube. 0:06:09.279 --> 0:06:12.000 All right, let's get more on Cole's here. That stock 0:06:12.560 --> 0:06:18.680 readjusting after we saw the CEO being ousted from inappropriate 0:06:18.720 --> 0:06:21.400 behavior and a probe that uncovers personal ties to the vendor. 0:06:21.480 --> 0:06:23.680 Yet but overall, like the stock's not done well, as 0:06:23.720 --> 0:06:26.400 Nora was saying, Mary Ross Gilbert s Bloomberg Intelligence senior 0:06:26.440 --> 0:06:29.720 equity analyst who covers retail for us. Hey, Mary, if 0:06:29.760 --> 0:06:32.159 we just take out this ten minute pop, ten minute, 0:06:32.160 --> 0:06:36.120 ten percent pop on the CEO ouster, how is Coles 0:06:36.160 --> 0:06:36.880 actually doing? 0:06:38.440 --> 0:06:42.200 So that's a good question, Alex, So really, what's happening here? Yes, 0:06:42.279 --> 0:06:45.279 we had the news that the CEO was ousted, but 0:06:45.360 --> 0:06:48.880 that that's a big It's big news, right because now 0:06:48.880 --> 0:06:52.400 we have Michael Bender stepping in as CEO, and he's 0:06:52.440 --> 0:06:55.160 the fourth and under three years. But let's give you 0:06:55.200 --> 0:06:58.440 a little bit of a backdrop since twenty twenty one, 0:06:58.520 --> 0:07:02.280 when the company added so far Warris shops to their stores. 0:07:03.160 --> 0:07:06.320 Their revenues have fallen two point two billion, but in 0:07:06.360 --> 0:07:09.360 the meantime, so Fura added one point eight billion, So 0:07:09.360 --> 0:07:12.880 that means that their revenues are down almost five billion 0:07:13.280 --> 0:07:16.160 away from Beauty, So that kind of gives you the 0:07:16.160 --> 0:07:21.640 backdrop of what's happening operationally here and with these different CEOs, 0:07:21.640 --> 0:07:24.560 nobody has seemed to find the formula of how to 0:07:24.600 --> 0:07:27.760 get back to growth. The reason why the stock has 0:07:27.800 --> 0:07:30.200 popped today is really because they came out with their 0:07:30.240 --> 0:07:34.000 first quarter preliminary figures showing that their comp sales were 0:07:34.000 --> 0:07:37.000 down four to four point three percent, when the company 0:07:37.080 --> 0:07:40.640 was guiding down six percent and consensus was at down 0:07:40.840 --> 0:07:45.320 six point four percent, and earnings were even higher. So 0:07:46.200 --> 0:07:49.560 what I mean by higher is from an operating income perspective, 0:07:49.600 --> 0:07:53.920 consensus was at six million, and they're guiding to, you know, 0:07:54.000 --> 0:07:57.480 somewhere around forty million, So that's much better. And so 0:07:57.680 --> 0:08:00.280 from an EPs perspective, the loss is going to be 0:08:00.280 --> 0:08:03.480 about half of what analysts expected, and that's really the 0:08:03.520 --> 0:08:06.400 pop and the good news here is that the company 0:08:06.520 --> 0:08:09.440 is rich in real estate, and so if you look 0:08:09.480 --> 0:08:12.200 at the value potential value of the real estate holdings, 0:08:12.240 --> 0:08:15.360 which could be nearly six billion, And if you look 0:08:15.400 --> 0:08:17.640 at their stock and where it's trading and how it's 0:08:17.720 --> 0:08:21.200 valuing the business, that's under five billion. So that kind 0:08:21.200 --> 0:08:23.680 of gives you, I sort of a framework. 0:08:23.760 --> 0:08:25.640 When you start going to the value of the real estate, 0:08:25.960 --> 0:08:28.440 then you know the business. It's never a good sign trouble. 0:08:28.640 --> 0:08:31.040 We did that with Macy's and the value of their 0:08:31.040 --> 0:08:35.360 air rights in Manhattan. That's not good. So, Mary, what 0:08:35.720 --> 0:08:37.920 is Cole saying? What are some of the retailers that 0:08:37.920 --> 0:08:41.880 you cover. What are they saying about tariffs, their ability 0:08:41.920 --> 0:08:44.360 to manage terrorsts, how much they will take in their 0:08:44.360 --> 0:08:46.920 profit margin versus how much they'll try to pass along 0:08:46.920 --> 0:08:47.640 to consumers. 0:08:48.600 --> 0:08:52.360 Paul, You're right, tariffs is really a big issue, and 0:08:52.400 --> 0:08:56.000 there was no commentary regarding that, neither in this call 0:08:56.080 --> 0:08:56.960 and neither in their. 0:08:56.880 --> 0:08:57.760 Fourth quarter call. 0:08:57.840 --> 0:09:01.600 But we do know that roughly thirty over thirty percent 0:09:01.760 --> 0:09:07.120 of their revenues they directly import. So there is going 0:09:07.160 --> 0:09:09.680 to be a hit here or some sort of exposure. 0:09:10.120 --> 0:09:13.200 And we're still early in the earnings for the first quarter, 0:09:13.320 --> 0:09:15.360 because that's where we're going to really get an update. 0:09:15.440 --> 0:09:19.520 Because when these companies reported their fourth quarter earnings. We 0:09:19.559 --> 0:09:22.559 were talking about tariffs in that sort of twenty percent 0:09:23.200 --> 0:09:26.160 range and now we're at one forty five for China. 0:09:26.880 --> 0:09:31.400 So yeah, so we're going to learn more obviously when 0:09:31.480 --> 0:09:34.360 we get the call, but for now there's not a 0:09:34.400 --> 0:09:36.560 lot of disclosure around it, but we do know there 0:09:36.640 --> 0:09:37.280 is an impact. 0:09:37.520 --> 0:09:39.480 All right, Mary, thank you so much. We always appreciate 0:09:39.480 --> 0:09:42.240 getting your thoughts on the global retailers here, Mary Ross, 0:09:42.280 --> 0:09:45.880 Gilbert Bloomberg Intelligence Senior Equdannilysty covers the retail space. 0:09:47.640 --> 0:09:51.320 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:09:51.440 --> 0:09:54.520 weekdays at ten am Eastern on appleclock Lay and Android 0:09:54.520 --> 0:09:57.840 Auto with the Bloomberg Business App. Listen on demand wherever 0:09:57.880 --> 0:10:01.400 you get your podcasts, or watch us live on YouTube. 0:10:02.040 --> 0:10:03.880 One of the big stories here today from an earning's 0:10:03.920 --> 0:10:07.440 perspective is Facebook. Some of the kids call it meta 0:10:07.920 --> 0:10:10.920 metaight stocks up six percent here today on some pretty 0:10:10.920 --> 0:10:13.560 solid numbers. And you want to talk about this company, 0:10:13.679 --> 0:10:15.480 There's really only a couple of folks you want to 0:10:15.480 --> 0:10:17.880 talk to, and one of them is David Kirkpatrick, founder 0:10:17.920 --> 0:10:20.679 of Techomanie in New York, and of course he is 0:10:20.720 --> 0:10:24.120 the author of what I think remains the definitive book 0:10:24.160 --> 0:10:26.439 about Facebook in the early days of Facebook. It's called 0:10:26.480 --> 0:10:29.880 The Facebook Effect. It's a great book, highly recommended. Hey David, 0:10:30.400 --> 0:10:32.760 what do you make of the numbers coming out of 0:10:33.080 --> 0:10:34.200 Meta these days? 0:10:34.880 --> 0:10:36.840 Well, thanks, Paul, thanks for your nice comments. 0:10:37.480 --> 0:10:40.800 Well, Meta really is the kind of Bellweather I think 0:10:40.840 --> 0:10:44.840 for what's happening with the digital economy, and their numbers 0:10:44.920 --> 0:10:48.760 were quite surprisingly good, almost spectacular, you might say. 0:10:48.960 --> 0:10:51.600 I mean, they've been delivering very steadily for a long time. 0:10:52.120 --> 0:10:56.800 But I think the most important thing that their numbers indicated, 0:10:56.800 --> 0:11:00.560 in the comments that Zuckerberg made yesterday, indicated are that, 0:11:00.720 --> 0:11:06.000 you know, this very crazy, unpredictable economic environment we're in 0:11:06.080 --> 0:11:10.440 right now, which you were just discussing regarding retail, is 0:11:10.559 --> 0:11:11.560 not likely. 0:11:11.400 --> 0:11:14.600 To affect these companies as much as some feared, at 0:11:14.679 --> 0:11:17.320 least in the near term. And that's really good news. 0:11:17.520 --> 0:11:19.880 There's a whole lot about AI and other stuff that 0:11:19.920 --> 0:11:23.320 we learned about what they're doing that was quite spectacular also. 0:11:23.640 --> 0:11:25.520 Yeah, so let's get to that. So, as you mentioned, 0:11:25.559 --> 0:11:27.560 the advertising business, which is ninety eight percent of the 0:11:27.559 --> 0:11:29.160 company's revenue, is continued to grow. 0:11:29.280 --> 0:11:30.200 So check that box. 0:11:30.480 --> 0:11:32.520 Let's get to the AI because they unveiled a new 0:11:32.600 --> 0:11:36.840 standalone AI app called Meta AI. What is that? What's 0:11:36.880 --> 0:11:37.600 it going to do for me? 0:11:38.960 --> 0:11:41.480 Well, thanks, Alex Meda. 0:11:41.520 --> 0:11:43.920 You know, Meta is one of the top players in AI, 0:11:44.000 --> 0:11:44.760 there's no question. 0:11:45.200 --> 0:11:48.200 And they are spending an extraordinary amount on this. 0:11:48.360 --> 0:11:52.440 I mean they up their capital expenditure estimate to up 0:11:52.480 --> 0:11:55.319 to seventy two billion from a high of sixty five billion, 0:11:55.360 --> 0:11:58.880 and that's like a huge percentage above last year which 0:11:58.960 --> 0:12:03.760 was under forty billion. So they're really really ranking really 0:12:03.800 --> 0:12:07.800 hard on data center investment and AAR. And what they 0:12:07.840 --> 0:12:09.520 want to do is they want to compete head to 0:12:09.559 --> 0:12:13.240 head with chat, GPT and all the other claud et cetera, 0:12:13.320 --> 0:12:16.640 all the other AIS that are directed particularly at consumers. 0:12:17.160 --> 0:12:20.400 And they have a unique advantage in doing that because 0:12:20.520 --> 0:12:24.880 they have this extraordinary, unique trove of data about all 0:12:24.920 --> 0:12:28.080 of us that they have been accumulating for decades and 0:12:28.160 --> 0:12:30.760 they can use that in the training of the AI 0:12:30.880 --> 0:12:34.720 to customize and personalize the results they give to people 0:12:35.040 --> 0:12:38.800 in a way that could be a major competitive differentiator 0:12:38.800 --> 0:12:40.720 down the road. And of course they'll use it in 0:12:40.760 --> 0:12:42.880 all the normal ways, you know, they bring it into. 0:12:42.640 --> 0:12:44.040 A WhatsApp, Chat, et cetera. 0:12:44.480 --> 0:12:48.240 But they I think are extremely well positioned to become 0:12:48.480 --> 0:12:52.760 a very very major force in especially consumer AI. 0:12:53.360 --> 0:12:55.480 And Alexander Cockter parties. People often come up to me 0:12:55.520 --> 0:12:58.000 and say, hey, Paul, give me an example of AI. 0:12:58.559 --> 0:13:01.520 An example I give is just what David explained to you. 0:13:01.600 --> 0:13:04.880 So long these advertising companies like Google and Facebook, they 0:13:04.960 --> 0:13:08.520 can really get to know who the consumer is better 0:13:08.559 --> 0:13:10.440 and better and better and then charge more for the ads. 0:13:10.520 --> 0:13:12.240 I mean, and that's what kind of what I think, right. 0:13:12.080 --> 0:13:15.000 Well, that's true too, yeah, I mean, they're customizing the 0:13:15.040 --> 0:13:16.000 ads using AI. 0:13:16.120 --> 0:13:18.199 That's the thing I didn't even mention. I'm talking about the. 0:13:18.160 --> 0:13:21.320 Results before, but the ads themselves will be far more 0:13:21.320 --> 0:13:22.320 accurately targeted. 0:13:22.320 --> 0:13:24.360 And they're already doing that tremendously often. 0:13:24.559 --> 0:13:26.480 And isn't that just like free training because you have 0:13:26.559 --> 0:13:30.920 all the input from Instagram and threads and Facebook and 0:13:30.920 --> 0:13:31.200 all that. 0:13:32.480 --> 0:13:35.160 Absolutely, they have the best train one of the best 0:13:35.160 --> 0:13:39.640 training maybe the best training purpose for consumer. 0:13:39.160 --> 0:13:41.160 AI that anybody has. 0:13:41.200 --> 0:13:43.720 I mean, this is the thing that has differentiated Facebook 0:13:43.720 --> 0:13:47.400 and Meta from the beginning was the depth and volume 0:13:47.559 --> 0:13:51.320 of their data about individuals. It continues to get more 0:13:51.360 --> 0:13:54.040 and more rich and they're figuring out new ways to 0:13:54.120 --> 0:13:56.320 mine it in the age of AI, and that is 0:13:56.360 --> 0:13:58.200 going to be a huge advantage. 0:13:58.360 --> 0:14:00.880 Hey, Dave, you look at this stock chart. Since it's IPO, 0:14:00.960 --> 0:14:03.920 the only thing that's ever derailed this stock has been 0:14:04.120 --> 0:14:08.400 the metaverse. What's the latest on that whole thing? How 0:14:08.400 --> 0:14:09.320 are you positioning it? 0:14:10.320 --> 0:14:12.679 Well, they don't talk about it nearly as much as 0:14:12.720 --> 0:14:16.240 they did, but you know, I think what they're finding 0:14:16.440 --> 0:14:19.400 is that there may be an overlap between the metaverse 0:14:19.440 --> 0:14:21.920 and AI. And you know, they're they're one of the 0:14:21.920 --> 0:14:24.760 things that I'd say they got into because of their 0:14:24.760 --> 0:14:28.200 metaverse obsession is hardware, and they are now saying that 0:14:28.240 --> 0:14:32.760 their hardware business, their ray Ban AI glasses, their Quest 0:14:33.160 --> 0:14:37.560 gaming and other virtual reality headsets, those are going to 0:14:37.600 --> 0:14:40.680 be an incredible entree into the world of AI. And 0:14:40.720 --> 0:14:44.120 I think what we'll see is that they dovetail their 0:14:44.160 --> 0:14:48.400 work in metaverse in immersive content. 0:14:48.640 --> 0:14:51.000 With their work in AI. I don't think we can 0:14:51.080 --> 0:14:52.800 exactly predict how that's going to. 0:14:52.840 --> 0:14:56.840 Happen, but certainly, you know, glasses that sort of look 0:14:56.880 --> 0:15:01.160 at the world around you and make give you answers 0:15:01.200 --> 0:15:04.120 and information about everything you see. That's something we can 0:15:04.160 --> 0:15:07.040 all use, and it's starting to happen, and they would 0:15:07.120 --> 0:15:10.120 not be in that position had they not made that many, 0:15:10.240 --> 0:15:13.200 many tens of billions dollar investment in Metaverse. 0:15:13.320 --> 0:15:15.280 Now was that a good investment? I don't know. I 0:15:15.280 --> 0:15:16.720 don't think Zuckerberg. 0:15:16.280 --> 0:15:19.320 Would today say that metaverse is their future the way 0:15:19.360 --> 0:15:22.680 he did not very long real clearly AI is the future, 0:15:22.720 --> 0:15:23.720 but there will be an. 0:15:23.640 --> 0:15:26.920 Overlat Just some breaking news here for you. Apparently the 0:15:27.040 --> 0:15:30.920 US is now weighing easing Navidia Chip curbs on the UAE. 0:15:31.040 --> 0:15:34.240 This comes as Trump is planning a visit to the region. 0:15:34.240 --> 0:15:36.960 Apparently it's his first overseas trip aside from going to 0:15:37.000 --> 0:15:40.320 the Pope s funeral, so that is definitely quite interesting. 0:15:40.440 --> 0:15:42.440 In Vidia and other tech companies have been pushing for 0:15:42.480 --> 0:15:45.920 this us A rule change, and Trump said President Trump 0:15:46.040 --> 0:15:49.320 sad to visit the UAE on a golf trip coming 0:15:49.440 --> 0:15:51.920 later this month. All right, David, we're gonna leave it there. 0:15:52.000 --> 0:15:55.280 David Kirkpatrick joining us one of the best. He literally 0:15:55.320 --> 0:15:58.160 wrote the book on Facebook, founder of Teconomy, helping us 0:15:58.160 --> 0:16:02.240 to break through meta earnings. Here's my question. Oh well, 0:16:02.320 --> 0:16:04.560 went away, look at that question. Oh video and video 0:16:04.560 --> 0:16:06.600 got a celebrating yesterday from Seagate. Did you see that? 0:16:06.640 --> 0:16:07.400 I did not see that. 0:16:07.440 --> 0:16:10.120 Say AI is priced in and their customers are going 0:16:10.160 --> 0:16:11.520 to start making their own AI check. 0:16:11.640 --> 0:16:15.160 Interesting. The stocks up five percent today, so a good 0:16:15.200 --> 0:16:17.680 move here, and again seems like when you think about 0:16:17.680 --> 0:16:20.360 these TIFFs, I think what we learned from the first 0:16:20.440 --> 0:16:23.760 Trump presidency to now is a very fluid situation. There's 0:16:23.800 --> 0:16:27.000 an announcement, then there's some negotiation, then there's some walk back, 0:16:27.000 --> 0:16:29.560 there's some change, and you're not really sure where you're 0:16:29.560 --> 0:16:31.920 going to end up. I just go back and look 0:16:31.920 --> 0:16:33.720 at kind of how everybody behaved back in the first 0:16:33.800 --> 0:16:37.400 Trump administration. Stock market did okay? I mean, it's just everything. 0:16:37.400 --> 0:16:38.280 It just relaxs. 0:16:38.280 --> 0:16:41.360 Really with the UA is not China, I don't know. 0:16:41.560 --> 0:16:45.600 I would suggest maybe those conversations are ongoing and we'll see, 0:16:45.640 --> 0:16:47.480 but it gives us something to talk about. 0:16:49.040 --> 0:16:52.760 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:16:52.840 --> 0:16:55.920 weekdays at ten am Eastern on Apple, Cocklay and Android 0:16:55.960 --> 0:16:59.240 Auto with the Bloomberg Business App. Listen on demand wherever 0:16:59.280 --> 0:17:02.600 you get your pod, or watch us live on YouTube. 0:17:03.080 --> 0:17:05.800 Let's check in with the professional here, Marsha McGregor, head 0:17:05.840 --> 0:17:09.639 of Portfolio Strategy, where the CIO at Meryl and Bank 0:17:09.760 --> 0:17:13.840 of America Private Bank. I like keeping the Meryl name 0:17:14.080 --> 0:17:18.119 because the Meryl names wanted the great names on the 0:17:18.160 --> 0:17:20.040 makes a title really long. But I would have kept 0:17:20.080 --> 0:17:23.280 Marylyn the name. I worked at Maryland, so the Thundering 0:17:23.359 --> 0:17:25.040 heard all that kind of stuff. I think when I 0:17:25.040 --> 0:17:26.960 worked at Meryl's a biker, I felt like we could 0:17:26.960 --> 0:17:29.720 get any deal. I don't care who I was competing against. 0:17:29.760 --> 0:17:32.160 I felt like we could beat them because that's how 0:17:32.200 --> 0:17:34.800 good I thought the Meryl folks were. So Marshie, thanks 0:17:34.800 --> 0:17:38.160 so much for joining us here. Boy volatility, I mean, 0:17:38.640 --> 0:17:40.440 if you like it, this is your kind of market. 0:17:40.480 --> 0:17:42.520 I guess what kind of conversations are you having with 0:17:42.560 --> 0:17:43.880 your clients these days? 0:17:44.840 --> 0:17:46.960 Yeah, I mean we're trying to help our clients kind 0:17:47.000 --> 0:17:49.400 of navigate through what I think of almost as this 0:17:49.520 --> 0:17:53.240 dense fog of uncertainty of course, on the policy front, 0:17:53.280 --> 0:17:55.679 on the macro front, and really trying to get our 0:17:55.720 --> 0:17:59.560 clients to take a step back understand that being really 0:17:59.600 --> 0:18:03.280 well to versified, being really disciplined in a market that 0:18:03.320 --> 0:18:05.880 can be can probably continue. 0:18:05.440 --> 0:18:06.200 To feel choppy. 0:18:06.240 --> 0:18:09.320 From here is the most important thing we can do 0:18:09.359 --> 0:18:12.800 with investors. So I say, like, stay diversified, stay invested, 0:18:12.920 --> 0:18:15.919 really stick to our knitting here. This fog will lift 0:18:15.960 --> 0:18:18.200 and we'll be able to see through to the other side. 0:18:18.680 --> 0:18:21.640 When you say diversify, everyone says that what does diversify 0:18:21.880 --> 0:18:24.560 mean to you over there at Bank of America, Meryl. 0:18:25.200 --> 0:18:27.840 Yeah, when I think about our portfolio positioning right now, 0:18:28.040 --> 0:18:30.959 we do have a preference for equities over fixed income, 0:18:31.240 --> 0:18:34.480 and its global equities, so we have a pretty significant 0:18:34.520 --> 0:18:39.280 strategic weighting both to international developed equities and emerging markets. 0:18:39.560 --> 0:18:42.240 And then on the fixed income side, we're actually not 0:18:42.400 --> 0:18:45.119 taking huge positions on the fixed income side. We like 0:18:45.160 --> 0:18:48.399 to use fixed income as a diversifier, kind of as 0:18:48.480 --> 0:18:50.879 that ballast of the portfolio. And then, of course, for 0:18:50.920 --> 0:18:55.960 our clients that are qualified investors, alternative investments makes a 0:18:56.000 --> 0:18:58.160 lot of sense, private markets makes a lot of sense 0:18:58.200 --> 0:19:01.639 in a well diversified portfolio, and of course those big 0:19:01.680 --> 0:19:05.000 overarching themes. So yes, we're in this moment of you know, 0:19:05.080 --> 0:19:08.120 I think peak uncertainty is behind us, fortunately, but we're 0:19:08.119 --> 0:19:12.000 in this moment of uncertainty about what the economy looks 0:19:12.080 --> 0:19:14.679 like going forward. But I think there's a lot of 0:19:14.760 --> 0:19:18.560 trends and themes that aren't changing, like the innovation in 0:19:18.600 --> 0:19:22.920 our economy, like investment in infrastructure, data centers, areas like that. 0:19:23.400 --> 0:19:26.680 I don't think those big picture trends are necessarily going 0:19:26.720 --> 0:19:28.760 to change because they're so long term. 0:19:29.800 --> 0:19:31.840 Marshie, we've seen over the list, I think, just here 0:19:31.840 --> 0:19:34.280 in twenty twenty five and maybe late twenty four kind 0:19:34.280 --> 0:19:37.480 of a move into international equities, maybe even fun flows 0:19:38.160 --> 0:19:40.560 material fun flows out of the US market into other 0:19:40.600 --> 0:19:41.920 parts of the world. How do you guys think about 0:19:41.920 --> 0:19:43.480 the US versus non US? 0:19:44.520 --> 0:19:47.159 Yeah, when I think about international markets, certainly a dollar 0:19:47.520 --> 0:19:49.480 coming off the way I think of it like the 0:19:49.600 --> 0:19:53.240 eye popping strength that we had seen recently. So we 0:19:53.240 --> 0:19:55.760 have this dollar that's moderating. Our few is that the 0:19:55.800 --> 0:20:00.040 dollar likely continues to moderate from here, really kind of 0:20:00.119 --> 0:20:03.320 lending some support to international markets. But what keeps me 0:20:03.400 --> 0:20:06.639 from getting outright bullish outside of the US is we 0:20:06.720 --> 0:20:10.479 haven't seen the earnings come through. While the US earnings 0:20:10.520 --> 0:20:15.000 picture expectations have clearly been trimmed over the last several weeks, 0:20:15.200 --> 0:20:18.440 we still think US corporate earnings stay positive in terms 0:20:18.480 --> 0:20:21.919 of a growth rate through all of this uncertainty, So 0:20:22.640 --> 0:20:24.800 I need to see the green shoots on the earning 0:20:24.880 --> 0:20:27.840 side to get me a lot more positive on international markets. 0:20:28.119 --> 0:20:31.160 But a dollar that is moderating I think will likely 0:20:31.240 --> 0:20:34.840 continue to help international from here, probably for the balance 0:20:34.880 --> 0:20:37.040 of this year. So the answer is I want to 0:20:37.040 --> 0:20:39.480 own both, but I do still have a preference for 0:20:39.680 --> 0:20:41.480 US relative to the rest of the world. 0:20:42.920 --> 0:20:46.480 What about other themes that we've seen. Energy has just 0:20:46.520 --> 0:20:51.080 gotten crushed, Utilities were kind of rising with the AI play. 0:20:51.119 --> 0:20:53.600 They became a growth story even though they're also considered 0:20:53.640 --> 0:20:55.600