1 00:00:05,800 --> 00:00:08,720 Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm pim Fox. 2 00:00:08,760 --> 00:00:11,520 Speaker 1: Along with my co host Lisa Abramowitz. Each day we 3 00:00:11,600 --> 00:00:15,120 Speaker 1: bring you the most important, noteworthy, and useful interviews for 4 00:00:15,200 --> 00:00:17,800 Speaker 1: you and your money, whether you're at the grocery store 5 00:00:17,920 --> 00:00:20,720 Speaker 1: or the trading floor. Find the Bloomberg p m L 6 00:00:20,840 --> 00:00:27,480 Speaker 1: Podcast on Apple Podcasts, SoundCloud and Bloomberg dot Com. I 7 00:00:27,600 --> 00:00:30,320 Speaker 1: want to introduce John Killdoff. He is the founding partner 8 00:00:30,320 --> 00:00:33,760 Speaker 1: of Again Capital. Joins us to talk about energy markets. 9 00:00:34,000 --> 00:00:37,760 Speaker 1: John always a pleasure. Happy holidays. Does OPEQ really control 10 00:00:37,840 --> 00:00:41,879 Speaker 1: the price of oil? Happy holidays to you, pim Um. 11 00:00:42,200 --> 00:00:46,320 Speaker 1: They they certainly, you know, come together with Russia to 12 00:00:46,560 --> 00:00:49,600 Speaker 1: try to to write the ship of state here this 13 00:00:49,720 --> 00:00:52,720 Speaker 1: past year. I think what people shouldn't lose sight of 14 00:00:52,720 --> 00:00:54,760 Speaker 1: the fact of though, is that they got helped out 15 00:00:55,200 --> 00:00:59,520 Speaker 1: by several exogenous events this year. UM big pipeline adage 16 00:00:59,520 --> 00:01:01,800 Speaker 1: out of Camp, the key Stone pipeline was down for 17 00:01:01,840 --> 00:01:05,200 Speaker 1: a while, the hurricanes this summer UH did a lot 18 00:01:05,240 --> 00:01:08,000 Speaker 1: of damage to global production. And for the past several 19 00:01:08,040 --> 00:01:11,360 Speaker 1: weeks now we've had a major oil pipeline outage in 20 00:01:11,360 --> 00:01:14,640 Speaker 1: the North Sea that has kept about four thousand barrels 21 00:01:14,680 --> 00:01:17,000 Speaker 1: a day off the market and we'll come back until 22 00:01:17,560 --> 00:01:20,000 Speaker 1: mid next week at the earliest. It looks like so 23 00:01:20,560 --> 00:01:24,039 Speaker 1: they've had a lot of help. But they certainly achieved 24 00:01:24,040 --> 00:01:26,920 Speaker 1: a big objective here in terms of getting global supplies 25 00:01:26,959 --> 00:01:30,440 Speaker 1: to Titan. So did they control it. No, but they 26 00:01:30,440 --> 00:01:33,480 Speaker 1: are certainly not irrelevant either, I would say, Okay, So, 27 00:01:33,600 --> 00:01:36,039 Speaker 1: having said that, do you buy the idea that seventy 28 00:01:36,760 --> 00:01:41,119 Speaker 1: a barrel bye looks plausible? It seems like a little 29 00:01:41,120 --> 00:01:45,440 Speaker 1: bit of a rich valuation to me, uh, particularly when 30 00:01:45,480 --> 00:01:50,320 Speaker 1: you see the growth plans for production that's out there, uh, 31 00:01:50,440 --> 00:01:55,720 Speaker 1: for Russia, for Iraq, for Iran, even and even overlooked 32 00:01:55,720 --> 00:01:58,279 Speaker 1: because they've had so many problems over the past several years. 33 00:01:59,360 --> 00:02:02,640 Speaker 1: Is Brazil and Petrobras finally getting their act back together 34 00:02:03,040 --> 00:02:05,680 Speaker 1: with their offshore production. Wanted to have nothing to do 35 00:02:05,760 --> 00:02:08,720 Speaker 1: with this OPEC non OPA agreement that's persisted for the 36 00:02:08,760 --> 00:02:11,600 Speaker 1: past year. And of course the US shell guys seems 37 00:02:11,600 --> 00:02:13,320 Speaker 1: to still be in the early innings of what they 38 00:02:13,320 --> 00:02:15,680 Speaker 1: can do. So there's still gonna be a lot of supply, 39 00:02:16,280 --> 00:02:18,680 Speaker 1: you know, being put onto this market. And will that 40 00:02:18,800 --> 00:02:21,680 Speaker 1: supply come in the form of crude or natural gas 41 00:02:21,680 --> 00:02:25,440 Speaker 1: are both. It's certainly going to be both. And interestingly, 42 00:02:25,520 --> 00:02:28,440 Speaker 1: the low super low costs that US consumers are enjoying 43 00:02:28,440 --> 00:02:31,600 Speaker 1: for natural gas is one thing that may may come 44 00:02:31,600 --> 00:02:33,320 Speaker 1: to an end at least to a degree as we 45 00:02:33,440 --> 00:02:36,920 Speaker 1: as we start to export more and more liquefied natural gas. 46 00:02:36,919 --> 00:02:39,320 Speaker 1: But there is going to be certainly a lot of 47 00:02:39,360 --> 00:02:42,800 Speaker 1: crude oil. The other interesting thing him is that and 48 00:02:43,000 --> 00:02:45,320 Speaker 1: the oil industry seems to do this. They all seem 49 00:02:45,400 --> 00:02:48,000 Speaker 1: to get the same business plan idea from time to time. 50 00:02:48,040 --> 00:02:50,839 Speaker 1: Everybody has the same power point. Uh, And right now 51 00:02:50,880 --> 00:02:54,520 Speaker 1: everybody is getting into the refined products business and ramping 52 00:02:54,600 --> 00:02:57,400 Speaker 1: up that production. And that's one thing that's sort of 53 00:02:57,480 --> 00:03:00,680 Speaker 1: quietly weighed on the markets increasingly as well. You have 54 00:03:00,720 --> 00:03:04,000 Speaker 1: you have China who's a huge net exporter of diesel 55 00:03:04,080 --> 00:03:07,720 Speaker 1: fuel and gasoline. US refiners have just been killing it 56 00:03:07,800 --> 00:03:11,160 Speaker 1: this year in terms of upping their levels of exports, 57 00:03:11,400 --> 00:03:14,960 Speaker 1: and the Saudis haven't you know not let this go 58 00:03:15,080 --> 00:03:19,880 Speaker 1: one noticed they have also ramped up they're refined production capacity. 59 00:03:20,000 --> 00:03:22,760 Speaker 1: So again, this is a market that has been you know, 60 00:03:23,080 --> 00:03:25,160 Speaker 1: reacting now for a couple of years to the super 61 00:03:25,240 --> 00:03:27,240 Speaker 1: high price environment we had when oil was over a 62 00:03:27,280 --> 00:03:30,239 Speaker 1: hundred bucks of barrel um and so we're still seeing 63 00:03:30,280 --> 00:03:32,639 Speaker 1: the fruits of that being born out here in terms 64 00:03:32,680 --> 00:03:36,720 Speaker 1: of more supply of everything. So are refined product producers 65 00:03:36,760 --> 00:03:40,000 Speaker 1: are they still considered to be good investments or are 66 00:03:40,080 --> 00:03:44,400 Speaker 1: they too expensive? They're a little rich. But the US 67 00:03:45,400 --> 00:03:48,800 Speaker 1: producers in particular, the US refiners, the pure players, but 68 00:03:48,920 --> 00:03:53,280 Speaker 1: even x On Mobile and and and Conaco are really 69 00:03:53,320 --> 00:03:56,520 Speaker 1: in the in the catbird seats still because the Saudias 70 00:03:56,520 --> 00:03:58,960 Speaker 1: and some of these others that I've mentioned are still 71 00:03:59,000 --> 00:04:01,520 Speaker 1: in the process of to catch up to them. So 72 00:04:01,600 --> 00:04:04,720 Speaker 1: they have a domestic crude oil that's much cheaper. The 73 00:04:04,760 --> 00:04:06,880 Speaker 1: b t I has been upwards to five or six 74 00:04:06,920 --> 00:04:10,080 Speaker 1: dollars cheaper than Brent and other international markers, so they 75 00:04:10,120 --> 00:04:13,520 Speaker 1: have that huge input advantage. Uh So they are still 76 00:04:13,920 --> 00:04:17,920 Speaker 1: I think a place where sort of the bright spot 77 00:04:17,960 --> 00:04:21,160 Speaker 1: of the energy sector. Now you mentioned natural gas, and 78 00:04:21,240 --> 00:04:24,120 Speaker 1: we currently enjoy natural gas at around two dollars and 79 00:04:24,200 --> 00:04:29,960 Speaker 1: sixty seven cents per million BTU. How long before you 80 00:04:30,000 --> 00:04:34,080 Speaker 1: believe that price will increase enough to make people stand 81 00:04:34,120 --> 00:04:37,159 Speaker 1: up and take notice. I think when you start to 82 00:04:37,160 --> 00:04:40,880 Speaker 1: crunch the numbers actually for the end of even you're 83 00:04:40,880 --> 00:04:44,400 Speaker 1: going to see that the export volumes of liquefied natural 84 00:04:44,480 --> 00:04:48,159 Speaker 1: gas via liquified natural gas obviously via ship, but also 85 00:04:48,240 --> 00:04:51,000 Speaker 1: we've been exporting increasing the amounts of natural gas to 86 00:04:51,080 --> 00:04:54,359 Speaker 1: Mexico via traditional pipeline. That's going to register with the 87 00:04:54,400 --> 00:04:57,440 Speaker 1: inventories this year at this winter, for the first time 88 00:04:57,480 --> 00:04:59,640 Speaker 1: in several years, we do not have a record amount 89 00:04:59,680 --> 00:05:02,359 Speaker 1: of gas us in storage as we start the winter, 90 00:05:03,160 --> 00:05:06,120 Speaker 1: and we're and we're below last year's amounced by double digits. 91 00:05:06,120 --> 00:05:09,520 Speaker 1: So you're already seeing, uh, some of that cushion get 92 00:05:09,520 --> 00:05:12,440 Speaker 1: eaten away by the l en G export, the trains 93 00:05:12,480 --> 00:05:14,640 Speaker 1: that are already online, and you're going to see more 94 00:05:14,680 --> 00:05:17,480 Speaker 1: of that. So this this real surf feed of gas 95 00:05:17,480 --> 00:05:20,200 Speaker 1: that we've enjoyed for the past several years, UH, is 96 00:05:20,279 --> 00:05:22,960 Speaker 1: likely to be going away, I believe, just to to 97 00:05:23,080 --> 00:05:25,679 Speaker 1: kick off next winter. Okay. So if that's the case, 98 00:05:25,760 --> 00:05:27,960 Speaker 1: then does that your mind mean that we're going to 99 00:05:28,080 --> 00:05:35,080 Speaker 1: see higher electric generating prices. Yes, because they're going to 100 00:05:35,120 --> 00:05:38,880 Speaker 1: have a higher input cost. UH. And I don't believe 101 00:05:38,920 --> 00:05:41,280 Speaker 1: even with the higher natural gas prices that will be 102 00:05:41,400 --> 00:05:43,960 Speaker 1: enough to bring sort of call back into the picture. 103 00:05:44,240 --> 00:05:47,760 Speaker 1: By the way it once was um and also to Pam, 104 00:05:47,800 --> 00:05:50,000 Speaker 1: I think with the sort of shifting away a bit 105 00:05:50,320 --> 00:05:56,240 Speaker 1: by the administration from promoting alternatives like solar and wind, 106 00:05:57,120 --> 00:05:58,920 Speaker 1: although there's a there's a lot of wind now in 107 00:05:59,240 --> 00:06:02,560 Speaker 1: place already, uh, that that too is going to push 108 00:06:02,760 --> 00:06:05,839 Speaker 1: the needle more towards it, or consumption more towards natural gas, 109 00:06:05,839 --> 00:06:07,720 Speaker 1: which you're gonna get those prices up, So that's your 110 00:06:07,760 --> 00:06:11,240 Speaker 1: feet stopped going up. That's obviously going to cause electrical 111 00:06:11,680 --> 00:06:14,640 Speaker 1: uh prices to go up as well. So just as 112 00:06:14,680 --> 00:06:17,920 Speaker 1: we've gotten hooked on natural gas, just in time for 113 00:06:18,200 --> 00:06:20,240 Speaker 1: a price increase a year from now at least, that's 114 00:06:20,480 --> 00:06:23,040 Speaker 1: that's what you're betting on. All right, Thanks very much, 115 00:06:23,200 --> 00:06:26,720 Speaker 1: very much. Again, it's just become a beloved fuel, and 116 00:06:26,800 --> 00:06:30,000 Speaker 1: now this race to export it is really making a 117 00:06:30,040 --> 00:06:32,919 Speaker 1: difference here. It's going to be an interesting phenomenon to 118 00:06:32,960 --> 00:06:35,880 Speaker 1: see how much I wonder if we're going to regret 119 00:06:35,880 --> 00:06:39,640 Speaker 1: promoting the export of this particular commodity here down the road. 120 00:06:39,960 --> 00:06:42,600 Speaker 1: You're gonna help us understand the topic in the future. 121 00:06:42,600 --> 00:06:47,000 Speaker 1: As always John Kilduff, he is founding partner of Again Capital. 122 00:06:51,400 --> 00:06:54,039 Speaker 1: Our focus on fixed income is brought you by PIMCO 123 00:06:54,160 --> 00:06:57,159 Speaker 1: for investors who demand more than the markets deliver. All 124 00:06:57,240 --> 00:07:00,480 Speaker 1: investments contain risk and may lose value. Consult your investment 125 00:07:00,480 --> 00:07:05,359 Speaker 1: professional before investing. Well, to consult a professional about what 126 00:07:05,480 --> 00:07:07,600 Speaker 1: the future holds, we have Brad McMillan. He is the 127 00:07:07,640 --> 00:07:11,760 Speaker 1: Chief Investment Officer for Commonwealth Financial Network. They have more 128 00:07:11,800 --> 00:07:15,760 Speaker 1: than a hundred and ten billion dollars under management, based 129 00:07:15,800 --> 00:07:19,119 Speaker 1: in Waltham, mass And of course you can follow Brad 130 00:07:19,200 --> 00:07:24,080 Speaker 1: McMillan on Twitter at Brad McMillan c f A. All right, 131 00:07:24,120 --> 00:07:27,800 Speaker 1: Brad McMillan c f A, the Year of the rollover, 132 00:07:27,960 --> 00:07:31,560 Speaker 1: that's what you're describing eighteen as. What does that mean, 133 00:07:31,600 --> 00:07:35,680 Speaker 1: the year of the rollover? Well, pim I think we're 134 00:07:35,800 --> 00:07:38,920 Speaker 1: ending the year on an unmistakable high note. You know, 135 00:07:39,040 --> 00:07:42,040 Speaker 1: markets are close to record as we've seen growth being 136 00:07:42,080 --> 00:07:45,600 Speaker 1: revised upwards, we've seen corporate earnings grow and all of 137 00:07:45,640 --> 00:07:48,320 Speaker 1: that's terrific, and we're carrying a lot of momentum in 138 00:07:48,360 --> 00:07:51,840 Speaker 1: the next year. The problem is everything is just about 139 00:07:51,880 --> 00:07:54,280 Speaker 1: as good as it gets, so at some point during 140 00:07:54,320 --> 00:07:56,400 Speaker 1: the year, probably in the second half, we're gonna start 141 00:07:56,440 --> 00:07:58,960 Speaker 1: to see a lot of things roll over, and by 142 00:07:59,000 --> 00:08:01,200 Speaker 1: the end of the year. Why what what nearly is good? 143 00:08:01,480 --> 00:08:04,160 Speaker 1: So what would be an example of something that would 144 00:08:04,240 --> 00:08:07,400 Speaker 1: roll over. Well, let's look at job growth. For example, 145 00:08:07,760 --> 00:08:11,120 Speaker 1: we've seen tremendous job growth. We've seen the unemployment rate 146 00:08:11,400 --> 00:08:14,720 Speaker 1: down to levels we haven't seen since the dot com boom. 147 00:08:14,760 --> 00:08:18,440 Speaker 1: In fact, we're actually running out of people to employ. 148 00:08:18,520 --> 00:08:20,400 Speaker 1: So when you look at that, you say to yourself, 149 00:08:20,440 --> 00:08:23,000 Speaker 1: my god, we've we've done very, very well. But what 150 00:08:23,120 --> 00:08:26,559 Speaker 1: happens is we're actually starting to see hiring ticked down. 151 00:08:26,640 --> 00:08:29,840 Speaker 1: It's slow, but it's happening. And when we get hiring 152 00:08:29,880 --> 00:08:32,680 Speaker 1: growth to a slow enough pace, that typically leads to 153 00:08:32,720 --> 00:08:35,400 Speaker 1: a change of confidence. It's not that we're not doing well, 154 00:08:35,400 --> 00:08:37,839 Speaker 1: it's we're running out of room to do better. Well, 155 00:08:38,000 --> 00:08:42,480 Speaker 1: would that change of confidence be changed once again? If 156 00:08:42,880 --> 00:08:45,319 Speaker 1: while they don't necessarily hire, the same number of people 157 00:08:45,320 --> 00:08:49,760 Speaker 1: are continuing hiring, what about they just increased wages. That 158 00:08:49,800 --> 00:08:52,120 Speaker 1: would be great. And in fact, when you see consumer 159 00:08:52,160 --> 00:08:54,800 Speaker 1: confidence again right now, where at levels we last saw 160 00:08:54,800 --> 00:08:57,000 Speaker 1: in the dot com boom. But we still have some 161 00:08:57,120 --> 00:09:00,960 Speaker 1: room to go. Okay, So but you look at consumer 162 00:09:01,000 --> 00:09:03,600 Speaker 1: confidence and you say, okay, we're gonna top out. When 163 00:09:03,600 --> 00:09:06,120 Speaker 1: people were just as confident as they were just before 164 00:09:06,160 --> 00:09:09,200 Speaker 1: the dot com boom burst. That means we got about 165 00:09:09,240 --> 00:09:12,360 Speaker 1: a year ago. So again we've got some running room. 166 00:09:12,400 --> 00:09:14,880 Speaker 1: But unless you think things are gonna get much much 167 00:09:14,920 --> 00:09:17,880 Speaker 1: better than even they were in the dot com boom, 168 00:09:17,960 --> 00:09:20,360 Speaker 1: we're running out of room. Okay. So if we're running 169 00:09:20,360 --> 00:09:22,320 Speaker 1: out of room and you say maybe a year to go, 170 00:09:22,640 --> 00:09:25,760 Speaker 1: and let's say it takes you as an institutional investor, 171 00:09:25,960 --> 00:09:29,120 Speaker 1: or even as an individual investor, it takes you maybe 172 00:09:29,160 --> 00:09:33,280 Speaker 1: six months to really change your portfolio, do you recommend 173 00:09:33,280 --> 00:09:38,320 Speaker 1: that people start taking profits. I don't think so. I 174 00:09:38,320 --> 00:09:39,840 Speaker 1: think what we're gonna see is we're going to see 175 00:09:39,840 --> 00:09:42,800 Speaker 1: the market continue to rise for the first half. You know, 176 00:09:42,880 --> 00:09:45,079 Speaker 1: we still have a lot of good things going on, 177 00:09:45,160 --> 00:09:48,280 Speaker 1: and confidence really has room to run. But then we're 178 00:09:48,320 --> 00:09:50,120 Speaker 1: gonna have to start thinking in the back half. You 179 00:09:50,200 --> 00:09:52,240 Speaker 1: might want to say, okay, maybe we want to get 180 00:09:52,240 --> 00:09:56,440 Speaker 1: a little bit more defensive. So yeah, but not right now. 181 00:09:56,840 --> 00:10:00,480 Speaker 1: What does defensive look like? To Brad McMillan, I think 182 00:10:00,520 --> 00:10:03,520 Speaker 1: cash is underrated as an asset class. I think it 183 00:10:03,640 --> 00:10:06,840 Speaker 1: gives you optionality, it gives you a sleep at night factor. 184 00:10:07,200 --> 00:10:10,040 Speaker 1: I think moving back towards areas where you're not going 185 00:10:10,120 --> 00:10:12,600 Speaker 1: to need growth. I think value stocks are gonna they're 186 00:10:12,640 --> 00:10:15,840 Speaker 1: starting to come back. They've really underperformed relative to growth, 187 00:10:16,040 --> 00:10:17,880 Speaker 1: but I think their day is coming again. I think 188 00:10:17,880 --> 00:10:21,280 Speaker 1: those two components help a lot. Earlier in the program, 189 00:10:21,640 --> 00:10:26,079 Speaker 1: we're speaking with shrine of Us Twodoor van Dantae of 190 00:10:26,200 --> 00:10:30,240 Speaker 1: the Jerome lev Forecasting Center, and he outlined this had 191 00:10:30,280 --> 00:10:32,640 Speaker 1: to do really with bitcoin, but I want to apply 192 00:10:32,679 --> 00:10:35,440 Speaker 1: it here, which is that because we're in a yield 193 00:10:35,520 --> 00:10:39,080 Speaker 1: starved environment, people have been chasing capital gains in order 194 00:10:39,120 --> 00:10:42,160 Speaker 1: to make up for that. Do you agree. I think 195 00:10:42,160 --> 00:10:44,640 Speaker 1: there's a lot of truth to that. I think the 196 00:10:44,800 --> 00:10:47,320 Speaker 1: fear of missing out there is no alternative to the 197 00:10:47,360 --> 00:10:51,440 Speaker 1: stock market. That's true. If interest rates start to rise again, though, 198 00:10:51,520 --> 00:10:54,720 Speaker 1: that becomes no longer true, and when that trade reverses, 199 00:10:54,800 --> 00:10:57,640 Speaker 1: that could be ugly. You mean there's an actual possibility 200 00:10:57,679 --> 00:11:01,800 Speaker 1: that people will buy CDs for income once again, Well, 201 00:11:01,840 --> 00:11:04,880 Speaker 1: when you look at what you're getting paid for the 202 00:11:05,000 --> 00:11:07,880 Speaker 1: risk you're taking in the market, Yeah, c d s 203 00:11:07,960 --> 00:11:11,000 Speaker 1: at two if and when we get there, are gonna 204 00:11:11,040 --> 00:11:14,160 Speaker 1: look like a fairly compelling alternative. What effect do you 205 00:11:14,160 --> 00:11:18,400 Speaker 1: believe that the tax overhaul plan will have on your thesis, 206 00:11:18,440 --> 00:11:21,280 Speaker 1: not much. What we're gonna do is we're gonna have 207 00:11:21,320 --> 00:11:24,120 Speaker 1: a one shot deal. We are going to see a 208 00:11:24,160 --> 00:11:26,760 Speaker 1: tremendous amount of cash brought back, and now, of course 209 00:11:26,760 --> 00:11:29,480 Speaker 1: we'll cheer the markets up. We're going to see the 210 00:11:29,559 --> 00:11:33,400 Speaker 1: market repriced to reflect weller tax rates, but it doesn't 211 00:11:33,440 --> 00:11:37,400 Speaker 1: meaningfully affect overall growth rates. So once we get that 212 00:11:37,440 --> 00:11:40,040 Speaker 1: one adjustment, we're going to be back to where we were. 213 00:11:40,600 --> 00:11:44,240 Speaker 1: Well the federal reserves shrug off that one time adjustment, 214 00:11:44,520 --> 00:11:48,040 Speaker 1: or will they continue to raise interest rates. I think 215 00:11:48,040 --> 00:11:51,240 Speaker 1: they're gonna keep raising interest rates, and this will probably 216 00:11:51,280 --> 00:11:53,280 Speaker 1: be a part of it, but the bigger part of 217 00:11:53,280 --> 00:11:55,400 Speaker 1: it will be the piece that you mentioned earlier, once 218 00:11:55,440 --> 00:11:58,480 Speaker 1: we start to see wage growth increase again. From the 219 00:11:58,480 --> 00:12:00,880 Speaker 1: Fed's point of view, inflation has been too well and 220 00:12:00,960 --> 00:12:03,600 Speaker 1: they've been trying to drive it up. Well, be careful 221 00:12:03,640 --> 00:12:06,079 Speaker 1: what you wish for. I think eighteen is the year 222 00:12:06,120 --> 00:12:08,960 Speaker 1: we start to see inflation cook. And between that and 223 00:12:08,960 --> 00:12:11,800 Speaker 1: the fact that the incoming FED that the voting board 224 00:12:12,200 --> 00:12:15,160 Speaker 1: is actually going to be considerably more hawkish, I think 225 00:12:15,200 --> 00:12:17,560 Speaker 1: you got a price. You've got a recipe for more 226 00:12:17,640 --> 00:12:21,360 Speaker 1: rate increases. Does that mean a stronger US dollar? It 227 00:12:21,480 --> 00:12:24,679 Speaker 1: certainly could. It certainly could. I think the US dour 228 00:12:24,840 --> 00:12:27,520 Speaker 1: is probably at relatively high levels, but it still has 229 00:12:27,600 --> 00:12:30,439 Speaker 1: more room to appreciate given the pullback over the past 230 00:12:30,440 --> 00:12:33,520 Speaker 1: several months. And that means what that oil prices or 231 00:12:33,559 --> 00:12:36,480 Speaker 1: commodity prices in general will remain muted, at least for 232 00:12:36,480 --> 00:12:40,280 Speaker 1: those that actually have to pay for them by earning dollars. Well. 233 00:12:40,320 --> 00:12:43,559 Speaker 1: I think from from a market perspective, oil is an 234 00:12:43,559 --> 00:12:46,839 Speaker 1: interesting case because what you're actually seeing is you're seeing 235 00:12:46,880 --> 00:12:50,360 Speaker 1: the re oligopalization of the market. In other words, there's 236 00:12:50,360 --> 00:12:53,880 Speaker 1: no longer the market is no longer a market as such, 237 00:12:53,960 --> 00:12:58,280 Speaker 1: prices are increasingly being set by large actors, by opec, 238 00:12:58,720 --> 00:13:02,280 Speaker 1: by large companies are operating in the US. It's no 239 00:13:02,400 --> 00:13:04,680 Speaker 1: longer every man for himself. This is much more of 240 00:13:04,720 --> 00:13:07,480 Speaker 1: a managed market. And to that extent, I think greennacy 241 00:13:07,520 --> 00:13:10,720 Speaker 1: prices keep tripping up, but the US dollar will help. Yes, 242 00:13:10,880 --> 00:13:13,280 Speaker 1: all right, so prices keep tripping up. With that mean 243 00:13:13,440 --> 00:13:16,600 Speaker 1: an investment in the energy sector or are you staying away? 244 00:13:16,800 --> 00:13:19,560 Speaker 1: I like the energy sector. I've liked it for a while, 245 00:13:19,640 --> 00:13:22,400 Speaker 1: although I was early on that one when you look 246 00:13:22,400 --> 00:13:27,440 Speaker 1: at where where energy companies are priced relative to oil prices, 247 00:13:27,760 --> 00:13:31,040 Speaker 1: unless you're expecting them to revert back to you know, 248 00:13:31,080 --> 00:13:33,680 Speaker 1: the very well levels we've seen, it makes no sense. 249 00:13:34,000 --> 00:13:35,920 Speaker 1: There's some running room there. I think that's a growth 250 00:13:36,000 --> 00:13:38,520 Speaker 1: sector going forward. All right, And what about you mentioned, 251 00:13:38,520 --> 00:13:41,560 Speaker 1: you know this idea that growth versus value. Are there 252 00:13:41,600 --> 00:13:44,920 Speaker 1: any industry groups in value or in growth that you 253 00:13:45,000 --> 00:13:48,560 Speaker 1: believe have missed out and deserve a second look? Well, 254 00:13:49,040 --> 00:13:51,400 Speaker 1: this is this is hardly a missdout trade. But when 255 00:13:51,400 --> 00:13:54,160 Speaker 1: you look at financials, a lot of the narrative out 256 00:13:54,200 --> 00:13:57,280 Speaker 1: there has been around the interest rate curve, and that's valid. 257 00:13:57,320 --> 00:13:59,400 Speaker 1: But I think the bigger story here, the one that 258 00:13:59,520 --> 00:14:04,480 Speaker 1: is being mist is the deregulatory Okay, financials as a 259 00:14:04,559 --> 00:14:08,600 Speaker 1: group have been really crippled by regulation ever since the crisis. 260 00:14:09,320 --> 00:14:12,320 Speaker 1: They simply have not been able to operate in the 261 00:14:12,360 --> 00:14:14,960 Speaker 1: way that they did pre crisis and buying large that's 262 00:14:14,960 --> 00:14:17,599 Speaker 1: been a good thing. But with deregulation, you're going to 263 00:14:17,679 --> 00:14:21,200 Speaker 1: see these companies unshackled and a lot of business opportunities 264 00:14:21,280 --> 00:14:23,920 Speaker 1: they've had to pass on will now be doable. I 265 00:14:23,960 --> 00:14:27,160 Speaker 1: think the deregulation is the big story for financials and 266 00:14:27,240 --> 00:14:29,160 Speaker 1: I think you'll hear about that more and more. What 267 00:14:29,320 --> 00:14:31,280 Speaker 1: we look forward to hearing about it from you as well. 268 00:14:31,320 --> 00:14:35,480 Speaker 1: Brad McMillan, Chief Investment Officer, Commonwealth Financial Network managing more 269 00:14:35,480 --> 00:14:39,680 Speaker 1: than a hundred and ten billion dollars from Waltham, mass 270 00:14:39,680 --> 00:14:47,240 Speaker 1: This is Bloomberg. I'm pim Fox and joining me now 271 00:14:47,240 --> 00:14:49,800 Speaker 1: a Shara over Day are Bloomberg gad Fly columnists covering 272 00:14:49,880 --> 00:14:53,600 Speaker 1: all things technology. Apple shares down two and a half percent, 273 00:14:54,160 --> 00:14:56,520 Speaker 1: and we've got a little bit of confusion in the market. 274 00:14:56,560 --> 00:14:58,560 Speaker 1: On the one hand, we have an analyst from Rose 275 00:14:58,640 --> 00:15:02,440 Speaker 1: and Blatt saying that the press reports of order cuts 276 00:15:02,440 --> 00:15:06,560 Speaker 1: of iPhone ten units by Apple could be confusing, maybe 277 00:15:06,560 --> 00:15:13,520 Speaker 1: referring to previously mentioned iPhone eight and eight plus production cuts. Oops, 278 00:15:13,600 --> 00:15:16,360 Speaker 1: maybe not the ten. Sure can you make sense out 279 00:15:16,360 --> 00:15:19,320 Speaker 1: of this force? I'll try the best I can. But look, 280 00:15:19,520 --> 00:15:22,920 Speaker 1: the fact is this happens every year around this time 281 00:15:23,440 --> 00:15:26,800 Speaker 1: for Apple, that there's going to be all kinds of reports, 282 00:15:26,840 --> 00:15:30,120 Speaker 1: mostly from Asia where Apple has all of its suppliers 283 00:15:30,160 --> 00:15:33,120 Speaker 1: and the companies that assemble the iPhones, and there there 284 00:15:33,160 --> 00:15:35,800 Speaker 1: tends to be these sort of conflicting push pull reports 285 00:15:35,880 --> 00:15:40,560 Speaker 1: about cuts in production or increases in production, or Apple's 286 00:15:40,680 --> 00:15:44,320 Speaker 1: making fewer of the new iPhones than they expected are more. 287 00:15:45,120 --> 00:15:48,120 Speaker 1: It's a lot of noise, and those kind of reports 288 00:15:48,120 --> 00:15:51,040 Speaker 1: out of the supply chain are wrong, let's say, fifty 289 00:15:51,080 --> 00:15:54,520 Speaker 1: percent of the time, So I wouldn't put too much 290 00:15:54,960 --> 00:15:56,840 Speaker 1: too much faith in any of them. But look, the 291 00:15:56,880 --> 00:16:02,440 Speaker 1: fact remains that the closest, most important question for the 292 00:16:02,480 --> 00:16:04,960 Speaker 1: most valuable public company in the world, which is Apple, 293 00:16:05,400 --> 00:16:09,440 Speaker 1: is what is demand like for the newest version of 294 00:16:09,480 --> 00:16:12,200 Speaker 1: the iPhone, the iPhone tent. And we still don't really 295 00:16:12,240 --> 00:16:14,760 Speaker 1: know the answer to that question. And it's not an 296 00:16:14,760 --> 00:16:17,160 Speaker 1: exaggeration to say that the market value of Apple, the 297 00:16:17,240 --> 00:16:20,520 Speaker 1: nine billion dollar plus market value of Apple, is highly 298 00:16:20,560 --> 00:16:24,480 Speaker 1: dependent on the answer to that question, clearly, but anecdotally, 299 00:16:24,480 --> 00:16:26,320 Speaker 1: I'm wondering whether you could share with us, you know, 300 00:16:26,360 --> 00:16:30,000 Speaker 1: anybody that bought the iPhone ten. Actually, in my in 301 00:16:30,080 --> 00:16:34,120 Speaker 1: my own household, my father just replaced his aging, I 302 00:16:34,160 --> 00:16:36,880 Speaker 1: think five year old iPhone that was literally held together 303 00:16:36,880 --> 00:16:39,680 Speaker 1: with a rubber band. He replaced it this week with 304 00:16:39,720 --> 00:16:42,080 Speaker 1: an iPhone tent. So there's one for Apple at least, 305 00:16:43,040 --> 00:16:44,920 Speaker 1: all right. The reason the reason I ask it is 306 00:16:44,960 --> 00:16:49,560 Speaker 1: because when someone sees the new the iPhone tent and 307 00:16:49,600 --> 00:16:52,360 Speaker 1: they see the old screen and they see some of 308 00:16:52,400 --> 00:16:55,480 Speaker 1: the features that are being offered and the speed, because 309 00:16:55,520 --> 00:16:57,640 Speaker 1: I think it's only being offered in a sixty four 310 00:16:57,800 --> 00:17:01,880 Speaker 1: and a two hundred and fifty six gig format, which 311 00:17:02,120 --> 00:17:04,080 Speaker 1: allows you to drive a mack truck through the middle, 312 00:17:04,400 --> 00:17:08,119 Speaker 1: but that that would create even greater demand because people 313 00:17:08,280 --> 00:17:10,639 Speaker 1: themselves go, oh, I like the way that looks. I've 314 00:17:10,680 --> 00:17:12,480 Speaker 1: got to get my hands on one of those. It's 315 00:17:12,600 --> 00:17:14,919 Speaker 1: entirely possible. And you're right, there is this kind of 316 00:17:15,000 --> 00:17:17,679 Speaker 1: viral effect when people see new phones. Um, and we'll 317 00:17:17,720 --> 00:17:20,320 Speaker 1: see what happens, you know, over the holiday, the important 318 00:17:20,400 --> 00:17:24,720 Speaker 1: holiday shopping season. Look at the big the big doubt 319 00:17:24,760 --> 00:17:28,920 Speaker 1: in my mind is if you look globally at trends 320 00:17:28,920 --> 00:17:34,240 Speaker 1: and smartphones, they're getting the improvements are becoming more marginal. 321 00:17:34,600 --> 00:17:38,200 Speaker 1: And part of it is our expectations that we got 322 00:17:38,320 --> 00:17:42,520 Speaker 1: used to for several years just seeing, uh, each new 323 00:17:42,560 --> 00:17:45,280 Speaker 1: smartphone generation that came out as so much better than 324 00:17:45,320 --> 00:17:48,199 Speaker 1: the last one. And it's still sort of true, but 325 00:17:48,320 --> 00:17:51,359 Speaker 1: I think our expectations have gotten so high that it 326 00:17:51,480 --> 00:17:55,159 Speaker 1: no longer feels like this dramatically cool moment when a 327 00:17:55,240 --> 00:17:57,359 Speaker 1: brand new iPhone comes out, and you can see it 328 00:17:57,400 --> 00:17:59,600 Speaker 1: in the numbers that in many countries in the world, 329 00:17:59,680 --> 00:18:02,600 Speaker 1: include in the United States, people are holding onto their 330 00:18:02,640 --> 00:18:05,680 Speaker 1: existing phones for longer and longer. Part of that, of course, 331 00:18:05,720 --> 00:18:07,960 Speaker 1: is price. I was going to say, because they're more 332 00:18:08,000 --> 00:18:11,159 Speaker 1: expensive and the carriers are not subsidizing the West. That 333 00:18:11,280 --> 00:18:13,239 Speaker 1: is definitely true. But part of it is also just 334 00:18:13,280 --> 00:18:16,439 Speaker 1: this kind of feeling of incrementalism and the phone that 335 00:18:16,480 --> 00:18:19,880 Speaker 1: I have today is good enough, particularly because a lot 336 00:18:19,920 --> 00:18:22,080 Speaker 1: of things we do on our phones are not that 337 00:18:22,160 --> 00:18:25,040 Speaker 1: dependent on having the latest and greatest model. Right If 338 00:18:25,040 --> 00:18:29,600 Speaker 1: I'm using Facebook or Instagram or email or things like that, 339 00:18:29,800 --> 00:18:31,960 Speaker 1: do I really need to do it on you know, 340 00:18:32,000 --> 00:18:34,840 Speaker 1: the latest process or the latest oh let screen? Is? 341 00:18:34,840 --> 00:18:37,679 Speaker 1: Is it? Because also that that the learning curve gets 342 00:18:37,720 --> 00:18:40,720 Speaker 1: deeper every time you get a new phone, because the 343 00:18:40,800 --> 00:18:42,760 Speaker 1: way you know there's not gonna be there's no home button, 344 00:18:42,800 --> 00:18:45,399 Speaker 1: for example, on the new Apple phone. There is no 345 00:18:45,720 --> 00:18:49,440 Speaker 1: way to plug in an audio jack into many of 346 00:18:49,480 --> 00:18:52,320 Speaker 1: the new smartphone. I'm sure on the margins that those 347 00:18:52,359 --> 00:18:54,520 Speaker 1: things matter, right, it gets kind of harder and harder 348 00:18:54,560 --> 00:18:56,920 Speaker 1: to transfer our lives from an old phone to the 349 00:18:56,960 --> 00:18:59,040 Speaker 1: new phone, and You're right, particularly with the iPhone tent, 350 00:18:59,440 --> 00:19:01,720 Speaker 1: there is kind of a learning curve because, as you said, 351 00:19:02,320 --> 00:19:04,720 Speaker 1: people there's no home button. People kind of have to 352 00:19:04,840 --> 00:19:09,760 Speaker 1: learn these new modes of navigating. Your hands are physically 353 00:19:09,800 --> 00:19:12,800 Speaker 1: going to have to learn how to swipe and move 354 00:19:13,000 --> 00:19:16,520 Speaker 1: in a different way. Yes, that is all true. And 355 00:19:16,560 --> 00:19:19,639 Speaker 1: also there's this kind of facial recognition technology to unlock 356 00:19:19,680 --> 00:19:22,679 Speaker 1: the phone, and and yeah, those might be barriers for 357 00:19:22,760 --> 00:19:25,199 Speaker 1: some people. But look, there's also a good amount of 358 00:19:25,280 --> 00:19:29,080 Speaker 1: enthusiasm for the iPhone time. But again, my question broadly 359 00:19:29,160 --> 00:19:31,440 Speaker 1: is is it enough to counter this sort of tendency 360 00:19:31,560 --> 00:19:34,399 Speaker 1: for people to feel like the existing phone they have 361 00:19:34,600 --> 00:19:37,920 Speaker 1: is good enough. Is it good enough to watch every 362 00:19:37,960 --> 00:19:41,800 Speaker 1: bit of television on a small screen now as opposed 363 00:19:41,840 --> 00:19:43,720 Speaker 1: to a big screen? I mean the people really watch 364 00:19:43,760 --> 00:19:48,400 Speaker 1: on a big maybe sports, but any kind of entertainment. Look, 365 00:19:48,440 --> 00:19:51,879 Speaker 1: I I think the transfer are clear that there was 366 00:19:51,960 --> 00:19:54,399 Speaker 1: a thinking for a long time that people won't do 367 00:19:54,760 --> 00:19:57,600 Speaker 1: X on their smartphones. Right, there was a feeling for 368 00:19:57,600 --> 00:20:00,320 Speaker 1: a long time people wouldn't really shop on their phones. 369 00:20:00,359 --> 00:20:02,480 Speaker 1: I think we've killed that notion that people are going 370 00:20:02,520 --> 00:20:04,560 Speaker 1: to shop on their phones. I think Amazon has put 371 00:20:04,560 --> 00:20:07,359 Speaker 1: that Amazon has definite as any app you buy or 372 00:20:07,400 --> 00:20:11,359 Speaker 1: anything you would buy. If you look at things like YouTube, 373 00:20:11,480 --> 00:20:15,120 Speaker 1: the majority of viewing on YouTube now is on smartphones. 374 00:20:15,640 --> 00:20:19,320 Speaker 1: So I think the tendency, particularly among young people who 375 00:20:19,320 --> 00:20:22,200 Speaker 1: are the future, let's face it, is to do more 376 00:20:22,240 --> 00:20:25,480 Speaker 1: and more on their phones, including watching television and movies 377 00:20:25,800 --> 00:20:28,800 Speaker 1: and other things that people a few years ago didn't 378 00:20:28,840 --> 00:20:31,120 Speaker 1: think that people would want to do on their smartphones. 379 00:20:31,160 --> 00:20:33,040 Speaker 1: I think the answer is people are going to want 380 00:20:33,040 --> 00:20:35,720 Speaker 1: to do everything on the small screen. I'm still trying 381 00:20:35,760 --> 00:20:37,679 Speaker 1: to figure out what to do with Pinterest on the 382 00:20:37,760 --> 00:20:39,840 Speaker 1: small screen because that seems to absorb a lot of 383 00:20:39,840 --> 00:20:44,640 Speaker 1: attention as well. Yeah, your Pinterest household. Yes, I still 384 00:20:44,680 --> 00:20:47,000 Speaker 1: don't know how it works. Maybe you'll show me. Thank 385 00:20:47,040 --> 00:20:50,280 Speaker 1: you very much. Siravi Day is our Bloomberg Gadfly columnists 386 00:20:50,560 --> 00:20:58,280 Speaker 1: covering technology. Is it really the best holiday season since 387 00:20:58,320 --> 00:21:01,200 Speaker 1: before the recession? Well left to ask an expert. We've 388 00:21:01,240 --> 00:21:04,520 Speaker 1: got Craig Johnson. He is the president of Customer Growth Partners. 389 00:21:04,560 --> 00:21:08,159 Speaker 1: He joins us from New Canaan, Connecticut. Craig, thank you 390 00:21:08,280 --> 00:21:11,440 Speaker 1: very much for being with us today. So I used 391 00:21:11,440 --> 00:21:14,240 Speaker 1: this quote to bring us into this topic. Is that 392 00:21:14,600 --> 00:21:16,640 Speaker 1: a business owner said to you that this is literally 393 00:21:16,680 --> 00:21:21,920 Speaker 1: the best season since before the recession? Is it? Well, Pam, 394 00:21:21,920 --> 00:21:23,919 Speaker 1: good to be with you have the Boxing day, and 395 00:21:24,160 --> 00:21:27,000 Speaker 1: yes it is. But by our metrics, UM, all the 396 00:21:27,080 --> 00:21:31,840 Speaker 1: numbers appointing that way. So sales through Christmas Eve, um 397 00:21:32,359 --> 00:21:36,840 Speaker 1: uh we're up about five point seven over last year 398 00:21:37,080 --> 00:21:40,600 Speaker 1: for the same period UM, and that that came to 399 00:21:40,640 --> 00:21:43,119 Speaker 1: a total five hundred eight billion dollars. And then this 400 00:21:43,240 --> 00:21:46,600 Speaker 1: Christmas week Christmas to New Year's Week UM, which we 401 00:21:46,720 --> 00:21:50,879 Speaker 1: call retail second season, will add another seventy three billion 402 00:21:50,920 --> 00:21:53,320 Speaker 1: dollars to which that begs grant hold of six and 403 00:21:53,359 --> 00:21:56,080 Speaker 1: seventy one billion dollars for the season ended in the 404 00:21:56,200 --> 00:21:59,280 Speaker 1: ending on the thirty one, and that is about five 405 00:21:59,440 --> 00:22:03,440 Speaker 1: five points x five points adversent above UH last year 406 00:22:04,000 --> 00:22:05,960 Speaker 1: and last but not least that is the best of 407 00:22:06,119 --> 00:22:11,440 Speaker 1: two thousand five six to what do you attribute this uh? 408 00:22:11,640 --> 00:22:15,920 Speaker 1: This performance um pens three major factors. First and most 409 00:22:15,960 --> 00:22:20,600 Speaker 1: important is rising disposable in real personal income that has 410 00:22:20,600 --> 00:22:23,159 Speaker 1: been basically flatlining for most of the last decade. It 411 00:22:23,280 --> 00:22:25,280 Speaker 1: began turning up about a year and a half ago, 412 00:22:25,720 --> 00:22:28,320 Speaker 1: and this year real income growth has been has been 413 00:22:28,359 --> 00:22:32,760 Speaker 1: fairly decent. UH. Second factor is UH the wealth effect, 414 00:22:33,400 --> 00:22:37,119 Speaker 1: primarily from rising UH stock markets. Everybody's seen them the 415 00:22:37,200 --> 00:22:40,239 Speaker 1: last year. And then the third effect is more of 416 00:22:40,280 --> 00:22:44,520 Speaker 1: a little bit different angle. UM. The single biggest deterrent 417 00:22:44,560 --> 00:22:49,280 Speaker 1: to spending if people have money is fear of job 418 00:22:49,359 --> 00:22:53,000 Speaker 1: loss UM. And right now, job losses as in the 419 00:22:53,119 --> 00:22:56,840 Speaker 1: unemployment new unemployment claims are at a forty four year 420 00:22:56,880 --> 00:22:59,920 Speaker 1: low since the nineties seventies, and so people feel much 421 00:23:00,400 --> 00:23:03,320 Speaker 1: more securing their jobs and they're so they're willing to spend. 422 00:23:04,080 --> 00:23:07,040 Speaker 1: Well this continue. You can only I mean, for so 423 00:23:07,080 --> 00:23:09,000 Speaker 1: long can you just believe that you're not going to 424 00:23:09,119 --> 00:23:11,920 Speaker 1: lose your job and therefore you will always make enough 425 00:23:11,960 --> 00:23:14,679 Speaker 1: money to cover your bills? Is that really something that 426 00:23:14,720 --> 00:23:18,080 Speaker 1: can be counted on? Well, nothing can be a hund 427 00:23:18,440 --> 00:23:20,840 Speaker 1: counted on for sure. But the one thing we do 428 00:23:20,880 --> 00:23:23,760 Speaker 1: know in terms of whether this strong you know this, 429 00:23:23,760 --> 00:23:26,480 Speaker 1: this has really been a cracker jack Christmas for for 430 00:23:26,600 --> 00:23:30,000 Speaker 1: retailers and consumers PAM, and we think that this will 431 00:23:30,040 --> 00:23:33,359 Speaker 1: continue because all the ingredients are in place. One, we 432 00:23:33,400 --> 00:23:38,439 Speaker 1: have a very broad based UH retail UH the season 433 00:23:38,520 --> 00:23:42,640 Speaker 1: this year, all merchandise categories. It's across all fourmats. Whether 434 00:23:42,640 --> 00:23:46,040 Speaker 1: it's discount, big box, specialty, department store. Everybody is doing 435 00:23:46,040 --> 00:23:48,840 Speaker 1: better or at least less worse. And then last but 436 00:23:48,920 --> 00:23:53,320 Speaker 1: not least, there is there's strength at all income quintiles. 437 00:23:53,359 --> 00:23:55,719 Speaker 1: All five income quintiles are spending more than they did 438 00:23:55,800 --> 00:23:59,240 Speaker 1: last year. That that shows that there's a broad based thing. 439 00:23:59,280 --> 00:24:01,399 Speaker 1: And this is even for the tax cuts. So with 440 00:24:01,480 --> 00:24:03,719 Speaker 1: a new Trump tax cut bill, that should be an 441 00:24:03,720 --> 00:24:07,720 Speaker 1: added you know, an added booster that should sustain through 442 00:24:07,720 --> 00:24:11,359 Speaker 1: two thousand eighteen and maybe maybe beyond. So why all 443 00:24:11,440 --> 00:24:17,280 Speaker 1: of the negativity surrounding the retail investment world, in other words, 444 00:24:17,320 --> 00:24:21,280 Speaker 1: investing in Nordstrom, investing in Macy's, Calls and so on. 445 00:24:21,480 --> 00:24:26,680 Speaker 1: Why is there such negativity around investing in retail outlets. Well, 446 00:24:26,720 --> 00:24:30,040 Speaker 1: the examples you all used, You just used Calls North 447 00:24:30,119 --> 00:24:33,440 Speaker 1: from Macy's. They're all department stores. And the department store 448 00:24:33,480 --> 00:24:36,840 Speaker 1: sector is one of the weaker sectors. It's not you know, 449 00:24:36,920 --> 00:24:40,040 Speaker 1: anything home related does very well, home improvement, home furnishings, 450 00:24:40,240 --> 00:24:43,440 Speaker 1: but the department store sector is still lagging. But even 451 00:24:43,480 --> 00:24:47,920 Speaker 1: even department store sector is less worse than it used 452 00:24:47,960 --> 00:24:50,280 Speaker 1: to be in some places are actually, we believe, breaking 453 00:24:50,320 --> 00:24:54,280 Speaker 1: into the positive you mentioned Nords from for instance, UM, 454 00:24:54,400 --> 00:24:57,720 Speaker 1: which will have positive comps for for the season. So 455 00:24:58,359 --> 00:25:01,640 Speaker 1: we're we we don't we don't do market psychology. That's 456 00:25:01,640 --> 00:25:04,879 Speaker 1: above my pay grade. We just see what consumers are 457 00:25:04,920 --> 00:25:07,600 Speaker 1: actually doing in the stores, what they're spending, what they're 458 00:25:07,600 --> 00:25:10,120 Speaker 1: spending it on. And right now this is a very 459 00:25:10,280 --> 00:25:14,000 Speaker 1: very strong holiday season. Are there any particular areas of 460 00:25:14,040 --> 00:25:17,960 Speaker 1: the retail industry that are strong that For example, the 461 00:25:18,000 --> 00:25:22,439 Speaker 1: electronics business, well, the consumer electronics has been has been 462 00:25:22,720 --> 00:25:25,240 Speaker 1: been strong. There's there's a lot of price compression there 463 00:25:25,640 --> 00:25:27,840 Speaker 1: on the on the TV side, so that pulls down 464 00:25:27,840 --> 00:25:30,120 Speaker 1: the numbers a little bit. But some of the hottest 465 00:25:30,119 --> 00:25:32,919 Speaker 1: products that are out there, whether it's the Nintendo Switch, 466 00:25:33,119 --> 00:25:36,240 Speaker 1: whether the Apple iPhone x iPhone Tana, or the Apple 467 00:25:36,520 --> 00:25:39,320 Speaker 1: eight plus or the Apple Series three Watch where they 468 00:25:39,320 --> 00:25:41,560 Speaker 1: finally got it right, those are all very strong and 469 00:25:41,560 --> 00:25:44,240 Speaker 1: those are all of course selling at full price. And 470 00:25:44,280 --> 00:25:47,080 Speaker 1: then the other thing that's been very strong anything home related. 471 00:25:47,119 --> 00:25:50,879 Speaker 1: I mentioned home improvement, mentioned home furnishings, UM and even 472 00:25:50,960 --> 00:25:53,480 Speaker 1: in the digital world, some of the hottest products where 473 00:25:53,520 --> 00:25:56,840 Speaker 1: the Amazon Echo, the ECU Dot, Google Home, the Google 474 00:25:56,880 --> 00:26:00,000 Speaker 1: Home many all have been very very strong sellers. This year. 475 00:26:00,440 --> 00:26:03,600 Speaker 1: I think for example of a company like Wayfair based 476 00:26:03,600 --> 00:26:06,800 Speaker 1: in Boston, is that kind of a poster child for 477 00:26:06,920 --> 00:26:12,400 Speaker 1: what does really well retailing household goods online. Absolutely, Wayfair 478 00:26:12,440 --> 00:26:14,560 Speaker 1: has been one of the one of the standouts over 479 00:26:14,600 --> 00:26:17,280 Speaker 1: the last year, you know, well before Christmas. Uh and 480 00:26:17,119 --> 00:26:19,959 Speaker 1: and it is having we believe, a very strong season, 481 00:26:20,280 --> 00:26:25,080 Speaker 1: as are almost all the the major home players. Uh. 482 00:26:25,160 --> 00:26:27,280 Speaker 1: You know, whether it's Williams Sonoma, you know, whether it's 483 00:26:27,480 --> 00:26:31,560 Speaker 1: r H Restoration Hardware, UM, deadbat Beyond is a little 484 00:26:31,880 --> 00:26:33,679 Speaker 1: is one of the ones that's been more hurt by 485 00:26:33,720 --> 00:26:38,359 Speaker 1: the migration to places like uh, Wayfair. But if you're 486 00:26:38,400 --> 00:26:41,280 Speaker 1: in home, and if you're online, you're probably gonna do 487 00:26:41,359 --> 00:26:44,560 Speaker 1: pretty well. Well done. Thanks for learning us to all 488 00:26:44,560 --> 00:26:48,359 Speaker 1: of this. Craig Johnson is the president of Customer Growth Partners. 489 00:26:48,359 --> 00:26:52,800 Speaker 1: They're based in New Canaan, Connecticut. Thanks for listening to 490 00:26:52,800 --> 00:26:55,679 Speaker 1: the Bloomberg p m L podcast. You can subscribe and 491 00:26:55,760 --> 00:26:59,680 Speaker 1: listen to interviews at Apple Podcasts, SoundCloud, or whatever podcast 492 00:26:59,680 --> 00:27:02,760 Speaker 1: plaque form you prefer. I'm pim Fox. I'm on Twitter 493 00:27:03,040 --> 00:27:06,560 Speaker 1: at pim Fox. I'm on Twitter at Lisa Abramo. It's 494 00:27:06,600 --> 00:27:09,640 Speaker 1: one before the podcast. You can always catch us worldwide 495 00:27:09,640 --> 00:27:10,600 Speaker 1: on Bloomberg Radio.