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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the

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Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am

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Speaker 1: from our flagship New York station just say Alexa playing

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Speaker 1: Bloomberg eleven thirty.

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Speaker 2: Let's get back to that consumer confidence number, super strong

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Speaker 2: coming in one of three point three. The estmate was

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Speaker 2: for one hundred point seven. It's a better view of

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Speaker 2: the economy and inflation, it looks like. So we wanted

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Speaker 2: to go right to the source. Here, Stephanie Guchard, a

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Speaker 2: senior economistic Global Indicators at the Conference board, joining us. Stephanie,

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Speaker 2: what led the optimism?

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Speaker 3: Well, so let me get this trait. It's an improvement,

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Speaker 3: but I wouldn't qualify it as a strong improvement. The

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Speaker 3: index is still in this narrow range, right, it has

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Speaker 3: been for the past two years. So that's the first

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Speaker 3: thing I wanted to say. But if we go into

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Speaker 3: the improvement, so what has been driving the improvement is

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Speaker 3: more positive views by consumers about business conditions right now

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Speaker 3: and business conditions in the future. So this is really

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Speaker 3: what us driving has driven the improvement in August.

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Speaker 4: And looking at the measure of expectations for the next

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Speaker 4: six months, it looks like the increase, so that's an

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Speaker 4: eighty two point five from an eighty one point one

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Speaker 4: similar increased relative to present conditions. Kind Of, how do

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Speaker 4: you view the consumer right now, given you know, six

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Speaker 4: months from now we could have three, four, five six

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Speaker 4: interest rate cuts and on election in the rearview mirror.

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Speaker 3: So consumer feelings about the economy are really mixed. So yes,

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Speaker 3: they views about business condition improved, but at the same time,

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Speaker 3: if you look into the details, they are getting more

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Speaker 3: dicerned about employment both currently and in the future. So

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Speaker 3: this is kind of it's really a mixed view about

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Speaker 3: the economy. There are still concerned about high prices. At

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Speaker 3: the same time, the inflation expectations have declined, the more

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Speaker 3: they're expecting rate cuts more than they were a month ago.

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Speaker 3: So some things are moving on the positive size and

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Speaker 3: something are moving on the less positive sides, especially regarding employment.

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Speaker 2: All right, we really appreciate you breaking that down and

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Speaker 2: you know, putting it all into perspective for us, particularly

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Speaker 2: the job's part, it feels like that's very much what

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Speaker 2: the Fed's also worried about. Stephanie Gushard, senior economist Global

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Speaker 2: in Caters at the conference board. It's interesting. It's like

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Speaker 2: the FED seems to be pivoting to be worried about jobs,

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Speaker 2: and it looks like that is very similar now to

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Speaker 2: how consumers are feeling.

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Speaker 4: Yeah, and it does make sense as she put it,

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Speaker 4: that it's kind of mixed read and that's why the

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Speaker 4: S and P is still down one to one percent.

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Speaker 4: I mean, sure, it's summer Friday vibes on a Tuesday,

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Speaker 4: but we're taking it Instriday.

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Speaker 2: It is my Friday, so it definitely Friday vibes for me.

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Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on Apple Card playing Android

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Speaker 1: Auto with the Bloomberg Business app. Listen on demand wherever

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Speaker 1: you get your podcasts, or watch us live on YouTube.

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Speaker 2: Let's get to some of the market moves here. Super

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Speaker 2: micro computer shares just just humbling like crazy today. This

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Speaker 2: is after Hindenberg Research said it's short the maker of

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Speaker 2: service or of server equipment. We want to get more

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Speaker 2: on this with Woujin Hoo Bloomberg Intelligence, a senior technology analyst,

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Speaker 2: did you read, Like, what did you make of the report?

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Speaker 2: It said it was glaring accounting red flags, evidence of

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Speaker 2: undisclosed related party transactions, sanctions and export control failures, and

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Speaker 2: customer issues.

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Speaker 5: Yikes, there was a lot in there. I'm actually glad

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Speaker 5: they sided our report than Jay.

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Speaker 2: I didn't know that one.

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Speaker 5: Okay, look a lot of the stuff that we've what

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Speaker 5: I've read, they're non issues, right. They've been in the

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Speaker 5: ten K and the ten Q filings as part of

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Speaker 5: the risk and disclosures. They sided the delisting back in

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Speaker 5: twenty nineteen. They also cited a related party issues as well,

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Speaker 5: and these are all all known. I almost get a

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Speaker 5: sense that they're trying to kick a dog while the

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Speaker 5: dog is down. A short report because they had gross

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Speaker 5: margin issues because of some aggressive pricing and supply chain issues.

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Speaker 5: So you know, I do question the timing of this report.

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Speaker 4: Yeah, just keeping in mind super Micro from July twelfth

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Speaker 4: down more than forty percent. But my question automatically goes

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Speaker 4: to there's a difference between known issues and issues that

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Speaker 4: people actually factor into their valuation or their expectations, Like,

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Speaker 4: does Hindenberg releasing this report in your view make analysts

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Speaker 4: maybe revisit the Bear case.

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Speaker 5: And that's a great question, Bailey, and I do think so, right,

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Speaker 5: because there were some I guess questions in terms of

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Speaker 5: who they were selling to in terms of sanction related

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Speaker 5: uh parties, Uh, the Russia in particular, and that's going

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Speaker 5: to raise yellow flags or red flags of the US government, right,

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Speaker 5: And and if that's going to draw a greater scrutiny,

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Speaker 5: you never know what might behind that be behind that closet.

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Speaker 2: So you said that they cided your research. What what

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Speaker 2: else did you guys pick out from like the ten

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Speaker 2: K and stuff in terms of their risks for super Micro.

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Speaker 1: Yeah.

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Speaker 5: Look, one of one of the things that that I

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Speaker 5: picked out was the the related parties.

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Speaker 1: Right.

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Speaker 5: Two of their suppliers, Uh, the CEOs of two of

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Speaker 5: the suppliers are the CEO brothers of the super Micro CEO, right,

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Speaker 5: And that's something that I'm not thrilled about quite frankly.

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Speaker 5: You would like a little bit of diversity in terms

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Speaker 5: of the supply chain versus some of an episistic relationship.

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Speaker 5: And you know, uh, that's the big glurring one. But

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Speaker 5: also they've had accounting issues in the past which prompted

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Speaker 5: the uh, the delisting the hope is is that with

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Speaker 5: the CFO that they have currently, they've cleaned all of

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Speaker 5: that mess up.

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Speaker 4: Well, because if it feels like in super Micro obviously

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Speaker 4: everyone knows in video, but this is a stock that

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Speaker 4: from over three years is up fifteen hundred percent, went

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Speaker 4: from you know, one point six billion to a peak

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Speaker 4: at fifty eight billion. Like when these companies go from

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Speaker 4: small cap to large cap, it feels like incorrect me

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Speaker 4: if I'm wrong. It feels like investors sometimes gloss over

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Speaker 4: diving in Dick's disclosures and just kind of take them

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Speaker 4: as a component, yes and B five hundred and let

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Speaker 4: that be their investment.

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Speaker 5: Well, well, let me take that a stuff further. When

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Speaker 5: when you go for a management team from a small

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Speaker 5: cap management team to and SAP five hundred listed company,

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Speaker 5: you know, you're you're still in your preteen years, and

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Speaker 5: all of a sudden you have to act like a

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Speaker 5: grown up.

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Speaker 2: Right, that's so brilliant analogy.

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Speaker 5: Right, So when you have that like a grown up,

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Speaker 5: the management team have to act like a grown up,

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Speaker 5: the irt IR has to act a little bit more professionally,

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Speaker 5: would sense. And then look, you you have a broader

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Speaker 5: range of investors that are looking at the company right now.

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Speaker 5: I'm not saying that they didn't do the work right,

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Speaker 5: but there probably was some momentum in there, because.

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Speaker 4: I do want to call out. So super micro nine

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Speaker 4: buys nine holds one cell. That's nineteen analysts with the

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Speaker 4: biggest shops on the street covering it. You look back

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Speaker 4: in twenty twenty one, five buys, it was Northland, Loop Capital,

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Speaker 4: SUSQUEHANNASCJS and vertical groups. So to your point, your management

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Speaker 4: growing up, and also I imagine the street following has

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Speaker 4: to get caught up to speed on a stock very quickly. Yes, right,

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Speaker 4: does that enable some of these things to maybe be

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Speaker 4: glossed over?

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Speaker 5: And I will tell you if I see if I

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Speaker 5: saw some of the research reports for this past earning

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Speaker 5: season after they had that gross morgin, let's just say hiccup.

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Speaker 5: Theoretically right, the commentary behind that was a lot more

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Speaker 5: critical than somebody who may have been let's just say,

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Speaker 5: an avid supporter of super micro over prior to the

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Speaker 5: big AI boom.

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Speaker 2: I think the preteen adult thing is like perfect analogy,

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Speaker 2: and I think that that just sums it all up.

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Speaker 2: And for a question, because I know you can't actually

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Speaker 2: answer it. But how much more downside do you think

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Speaker 2: that there is? Based on the fundamentals? Like, where's a

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Speaker 2: good way to think about it?

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Speaker 5: So I'll answer it in this way. Yes, if I

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Speaker 5: look at the valuation of the stock right now, right,

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Speaker 5: we're talking about zero point three times forward sales, I

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Speaker 5: you know, give given the AI momentum. Typically I like

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Speaker 5: one time's forward sales. But historically they've traded at points

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Speaker 5: seventy five forward sales, so they're playing their their value

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Speaker 5: at a discount to the historic evaluation.

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Speaker 2: That's a great answer to that question. I love that.

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Speaker 2: All right, Booge, thanks a lot. Also, good to see

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Speaker 2: you in studio. I think it's been a minute, all right.

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Speaker 2: Ujinho joining us from Bloomberg Intelligence. He is a senior

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Speaker 2: technology analyst over there talking about Hindenburg research report that

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Speaker 2: quoted Wu Jinho's research in Bloomberg Intelligence. Let's not forget that,

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Speaker 2: so get your information there first.

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Speaker 1: You're listening to the Bloomberg Intelligence Podcast live weekdays at

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Speaker 1: ten am Eastern on applecar Play and Android Auto with

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Speaker 1: a Bloomberg Business at You can also listen live on

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Speaker 1: Amazon Alexa from our flagship New York station. Just say

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Speaker 1: Alexa play Bloomberg eleven thirty.

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Speaker 2: You got the equity market doing a whole lot of nothing.

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Speaker 2: Volume also quite light as well. What do you do

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Speaker 2: when you wind up having Nvidia and you also have

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Speaker 2: the jobs at a next Friday and liquidity is going

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Speaker 2: to be super late at the same time. All right,

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Speaker 2: let's get a professional view Kathy and Whistle Managing director

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Speaker 2: Morgan Stanley Private Wealth Management joins us. Now, Kathy your

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Speaker 2: private wealth management right, like, you're looking for the longer term.

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Speaker 2: You're not a trader yet. How are you looking at

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Speaker 2: the results on four to twenty on Wednesday afternoon when

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Speaker 2: Nvidia comes out.

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Speaker 6: Thanks for having me, Bailey, great to be with you both.

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Speaker 7: I would say, look at anytime you've got a company

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Speaker 7: that has or you know, any sort of companies that

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Speaker 7: have an edge in their industry, you have to consider

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Speaker 7: that for the long term as well. So I would

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Speaker 7: say in terms of you know, people who are holding

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Speaker 7: the types of stocks are coming out with earnings today

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Speaker 7: that might have you know, special access to parts of

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Speaker 7: the market, or you know, you know, like a technology

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Speaker 7: that other companies do not.

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Speaker 6: You have to that's.

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Speaker 7: Important and listen if you own it or any company

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Speaker 7: in an IRA or returnment account, it's easy to sell

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Speaker 7: it and take your games off the table because you

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Speaker 7: don't have any tax consequences.

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Speaker 6: You really have to think about that when you.

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Speaker 7: Own it in an individual account. So that's something that

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Speaker 7: we think about when we're thinking about our clients with

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Speaker 7: their long term view and also how to leg out

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Speaker 7: of positions as well as leg into positions.

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Speaker 4: Well, how are you positioning for an advising clients to

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Speaker 4: position for this AI wave When we look at obviously

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Speaker 4: Nvidia the most important company in the US market, if

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Speaker 4: not the global market. But we have super Micro, we

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Speaker 4: have arm we have Broadcom, you name it that are

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Speaker 4: either beneficiaries or have some exposure to a print that

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Speaker 4: not only will move the stock in the market, but

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Speaker 4: all of these peers.

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Speaker 6: Yeah.

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Speaker 7: So for companies that I think are going to, you know,

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Speaker 7: do well for the long term and have a competitive edge,

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Speaker 7: I would say holding it in retirement accounts is probably

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Speaker 7: a better way to go at the moment because of

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Speaker 7: the large tax implications when and if you need to take.

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Speaker 6: It out, you shouldn't be a trader. You shouldn't be

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Speaker 6: going in and out.

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Speaker 7: People don't realize what that does in terms of the

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Speaker 7: tax impact and how it affects your overla over all

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Speaker 7: profit margins. So in terms of that, yeah, I want

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Speaker 7: clients to have access to AI, and it's not just

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Speaker 7: the companies that are providing AI, but it's the companies

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Speaker 7: that are using AI as well. Right now, the market

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Speaker 7: has you know, had quite a run up, and we

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Speaker 7: want to be more cautious. We're a little bit more

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Speaker 7: underweight on equities as a whole, and we're also you know,

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Speaker 7: trying to keep people away from the quote unquote over

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Speaker 7: indulging in you know, the top seven or ten stocks

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Speaker 7: that are out there. But at the same time, it's

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Speaker 7: very hard to do when we see some of these

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Speaker 7: companies running up. So it's a balancing act and it's

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Speaker 7: important to really think about how that affects, you know,

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Speaker 7: your full portfolio and not just one part of it.

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Speaker 7: I always say never put more than five percent of

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Speaker 7: your assets into one holding anyway, So you want to

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Speaker 7: really be that you're not overextended in any one stock.

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Speaker 2: So you mentioned that it's not like you were crazy

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Speaker 2: invested in the equity market. What is your allocation right now?

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Speaker 7: Well, you know, I don't take clients out of their

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Speaker 7: equities that are in there for the long term unless

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Speaker 7: there's a specific reason why we're doing so. So I'm

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Speaker 7: typically looking for clients to have fifty to sixty percent

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Speaker 7: in equities, to have twenty percent to twenty five percent

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Speaker 7: in you know, taxble accounts, municial bonds typically, and the

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Speaker 7: balance in some sort of alternative investment. There's a lot

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Speaker 7: of liquid investments alternative investments available now to clients, and

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Speaker 7: I've you know, heard a few times today people talking

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Speaker 7: about the bank stocks and you know banks in general,

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Speaker 7: and basically with all of the regulations that are out there,

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Speaker 7: we're seeing a lot in the private market come in

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Speaker 7: and take over for some of that credit access.

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Speaker 6: So it's interesting too.

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Speaker 4: And when you talk about some of those alternative investments

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Speaker 4: a little bit more detail on that. Are you talking

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Speaker 4: about like you know, privately funded companies investing in hedge funds?

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Speaker 4: Like what are those opportunities?

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Speaker 8: Like?

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Speaker 7: No, different opportunities for different different people, different you know,

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Speaker 7: levels of sophistication and also of wealth. So you want

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Speaker 7: to make sure that you're targeting your asset allocation and

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Speaker 7: the actual implementation according to that client's particular situation. But

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Speaker 7: generally speaking, I would say, I'm talking about private equity,

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Speaker 7: private markets, you know, different types of private credit, and

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Speaker 7: there's ways for clients. They've democratized it in a sense

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Speaker 7: alternative investments, and they've brought the industry has created investments

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Speaker 7: that are now accessible to clients that were not accessible

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Speaker 7: to three four years ago. So that's very interesting and

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Speaker 7: it's a great way for individuals to add differentiation into

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Speaker 7: their portfolio non correlated assets. And I'm a big fan

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Speaker 7: of that.

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Speaker 2: When you take a look at what the Fed Willer

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Speaker 2: won't do, do you care in your investor allocation whether

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Speaker 2: it's twenty five or fifty in September, and whether it's

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Speaker 2: seventy five or one hundred this year, or is the

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Speaker 2: moment for you just when they start doing it.

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Speaker 6: No, I care ahead of the game.

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Speaker 7: I think that perception is really baked into the numbers,

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Speaker 7: and if you don't start making some moves ahead of

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Speaker 7: the decisions, you'll probably miss out on a big opportunity.

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Speaker 7: And for example, municipal bonds still look really attractive right here.

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Speaker 6: At some point they're.

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Speaker 7: Going to become less and less attractive as those rate

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Speaker 7: cuts start to happen. So for clients with cash, I

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Speaker 7: am putting them in municipal bonds, not legging in, and

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Speaker 7: trying to get them in as thoughtfully and as quickly

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Speaker 7: as possible, because I think that's a great opportunity for

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Speaker 7: clients right now.

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Speaker 4: Do you think the market's ahead of its skis when

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Speaker 4: we're looking at six cuts being priced in between now

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Speaker 4: in March?

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Speaker 6: It's possible, it will be interesting. I think that.

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Speaker 7: I think we're definitely getting cuts. You know, this year

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Speaker 7: we're getting we are expecting cuts this year. We're expecting

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Speaker 7: about three.

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Speaker 6: Cuts this year.

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Speaker 7: And then I would say I would just take a

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Speaker 7: pause and see what's going on in the reaction, you

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Speaker 7: know what the Fed is saying. But it is likely

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Speaker 7: that we could have those cuts as well. And again

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Speaker 7: with the economic environment, political environment, everything that's going on,

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Speaker 7: there's a lot of stake in terms of your personal

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Speaker 7: portfolio and your individual wealth, and we really want to

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Speaker 7: be mindful and thoughtful about that for clients and make

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Speaker 7: sure we're addressing it and we're discussing it.

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Speaker 2: When you're talking to clients right now, what are they

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Speaker 2: asking in relation to the election?

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Speaker 7: Just basically, is there a way to position the portfolio

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Speaker 7: one way or another based on like what the potential

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Speaker 7: outcome would be. And I think you know, certainly overall

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Speaker 7: clients are invested like clients are invested, and we don't

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Speaker 7: want to make any huge moves ahead of the election.

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Speaker 6: We can make some thoughtful moves.

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Speaker 7: I think minimizing tax impact for clients at any time,

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Speaker 7: regardless of who's running the country or what the economic

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Speaker 7: position is is a great idea. So menis are a

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Speaker 7: great idea right now using you know, direct indexing, where

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Speaker 7: you have portfolios that are trying to minimize tax impact

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Speaker 7: by you know, sort of buying and selling and matching

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Speaker 7: those off throughout the year in order to minimize gains

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Speaker 7: going forward. I think that's also a great way to

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Speaker 7: help clients get a little bit more alpha in their portfolio.

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Speaker 7: And the last thing I would say too is there's

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Speaker 7: you know, there's going to potentially be some tax changes

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Speaker 7: sunsetting of some tax laws that.

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Speaker 6: Occurred a few years ago.

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Speaker 7: And if you have an estate or you know net

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Speaker 7: worth over you know, five six seven million dollars, you

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Speaker 7: want to you might want to start thinking about some

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Speaker 7: speaking your estate planning attorney about some trust you know,

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Speaker 7: sort of implementation.

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Speaker 4: And to bring it back to the equity market. Since

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Speaker 4: I'm a I'm a big stocks guy, that's what I do.

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Speaker 2: I'm like talking about tax and trust and you're like equities, man, Like.

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Speaker 4: What about the lines that go up and down? You

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Speaker 4: talk about taking a measured approach. Are there industries sectors

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Speaker 4: that you see more kind of fairly valued or at

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Speaker 4: least more of a better buying opportunity instead of chasing

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Speaker 4: some of those growth e tech names.

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Speaker 6: Yeah, I do.

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Speaker 7: I think basically, anytime you look at different companies, you know,

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Speaker 7: growth at a reasonable price.

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Speaker 6: So you want to look at.

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Speaker 7: The valuations of a company and see whether or not,

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Speaker 7: you know, it's overpriced for what they're earning at the moment.

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Speaker 7: But we like healthcare, we like financials, we like you know,

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Speaker 7: consumer So there's other areas that you can look at,

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Speaker 7: I would say, dividend paying growth a reasonable price, and

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Speaker 7: income producing.

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Speaker 6: It's interesting.

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Speaker 7: I know you like stocks and we all do. We

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Speaker 7: love equities. We're owners, right, not owners. But at the

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Speaker 7: end of the day, there could be some really interesting

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Speaker 7: opportunities in the fixed in code market as well.

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Speaker 6: Don't dismiss that.

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Speaker 2: Don't discount that, all right, Kathy, thanks a lot. We

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Speaker 2: really appreciate it Kathy and Whistle, Managing director at Morgan

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Speaker 2: Stanley Private Wealth Management, with her outlook on the market.

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Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on fo car Play and

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Speaker 1: Android Auto with the Bloomberg Business App. Listen on demand

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Speaker 1: wherever you get your podcasts, or watch us live on YouTube.

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Speaker 2: One of the top stories of the day is also

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Speaker 2: Eli Lilly now selling some zepbound bials at a fifty

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Speaker 2: percent discount to the shots. Michael Shatz, Bloomberg Intelligence Senior

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Speaker 2: Pharma biotech analysts, can we just make help me understand

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Speaker 2: why this is easier for Eli Lilly to produce than

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Speaker 2: the actual shots?

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Speaker 8: Absolutely, I mean the announcement state doesn't really come as

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Speaker 8: a supply surprise on the aack of you know, the

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Speaker 8: type supply. So yeah, they're providing a valve for relation.

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Speaker 8: It's something that they've talked about, you know, for a

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Speaker 8: while now on their calls. Now, the reason why these

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Speaker 8: are easier to produce produce is you know, the fill

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Speaker 8: and finished capacity, So the capacity needed to actually put

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Speaker 8: the drug in the pens and the capacity needed to

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Speaker 8: manufacture at the pens of the subcutaneous ejection. So overall,

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Speaker 8: I think, you know, the move is you know positive

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Speaker 8: for Lily clearly broaden's access or patients access you know

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Speaker 8: to ze bound and also from you know, compounding pharmacy standpoint.

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Speaker 8: The fact that the improved supply means that could you know,

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Speaker 8: possibly combat you know, competition from you know, companies such

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Speaker 8: as Hymns, Hymns and Hers.

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Speaker 4: Yeah, Lily not so subtly saying that they want to

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Speaker 4: aim to protect patients from quote, counterfeit, fake unsafe for

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Speaker 4: untested knockoffs. So how does that impact kind of the

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Speaker 4: business and demand If we're seeing a cheaper version being

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Speaker 4: sold and maybe try and to court some of those

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Speaker 4: Hymns and Hers g LP one users, how does that

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Speaker 4: impact kind of the total addressable market and expectations for

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Speaker 4: sales of zepp out.

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Speaker 8: Well, I think if there's you know, if there's a

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Speaker 8: branded bile formulation out there and there's obviously guarantees around

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Speaker 8: kind of purity, et cetera, I think that's going to

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Speaker 8: be the preferred choice. The fact that you're introducing these

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Speaker 8: valves into the market would suggest that you know, some

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Speaker 8: of that supply burden and supply shortage which is needed

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Speaker 8: for a compounding pharmacy to produce a drug that is

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Speaker 8: on pattern. You know, some of that will be alleviated there.

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Speaker 8: So that's kind of why we think it's positive for Lily.

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Speaker 8: As to whether you know, companies like him and hers

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Speaker 8: will continue producing you know, their versions of the GEO

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Speaker 8: beyond ones, I mean, that remains to be seen. But

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Speaker 8: I imagine if they do, you know, Lily would you know,

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Speaker 8: probably challenge it.

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Speaker 2: When people then do their own shots, like administer it,

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Speaker 2: like is there a risk in that? Like, well, what

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Speaker 2: what kind of uptake are we expecting from that? Because

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Speaker 2: I would be scared to do it. But maybe that's

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Speaker 2: just me.

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Speaker 8: I mean I think judging by you know, what we

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Speaker 8: saw for uptake of these compounded drugs, there's clearly a

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Speaker 8: appetite for injectable therapy injections. Now, you know, we looked

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Speaker 8: at the diabetes market. You know, some of the incidents

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Speaker 8: used to be injections, So I mean, I think it's

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Speaker 8: not I mean, there's clearly kind of an increased kind

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Speaker 8: of dosing burden associated within these injections, so they're probably

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Speaker 8: not going to be suitable for all. But you know,

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Speaker 8: I think there is going to be an appetite for it.

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Speaker 4: What does this mean for the competitive landscape? So you

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Speaker 4: have Lily, you have Novo. To your point, you have

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Speaker 4: hymns and hers like, is this going to create a

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Speaker 4: pricing war? Am I reading too much into that?

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Speaker 8: I mean when we look at the I mean the

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Speaker 8: headlines had fifty percent you know, discount, but we need

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Speaker 8: to remember that, you know, on a net price basis,

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Speaker 8: so you know, after taking account all the rebates and discounts,

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Speaker 8: you know, the pricing is probably you know, fairly similar

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Speaker 8: to the current net prices that we're seeing now at

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Speaker 8: the moment. You know, it's an under penetrated market. You know,

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Speaker 8: there's massive demand out there, there's tight supply. So I

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Speaker 8: don't think it's gonna change too much in terms of

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Speaker 8: the dynamics between you know, Novo and Lily. I think

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Speaker 8: I think prescribing decisions are you know, less about kind

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Speaker 8: of the profiles of the drug at the moment and

439
00:22:32,280 --> 00:22:34,640
Speaker 8: more about you know, what is ensured, what can people

440
00:22:34,680 --> 00:22:37,400
Speaker 8: get their hands on? So near term, I don't see

441
00:22:37,520 --> 00:22:41,560
Speaker 8: you know that that changing from a Lily perspective. You know,

442
00:22:41,720 --> 00:22:44,400
Speaker 8: as they ramp up supply over the over the midterm

443
00:22:44,480 --> 00:22:49,280
Speaker 8: of their you know, their pens you know, you could

444
00:22:49,359 --> 00:22:53,120
Speaker 8: potentially see you know, patients switching from the injectable onto

445
00:22:53,200 --> 00:22:56,639
Speaker 8: the pen as and when that supply comes comes on board.

446
00:22:57,000 --> 00:22:59,159
Speaker 2: Fair enough, all right, Michael, thanks a lot, really appreciate it.

447
00:22:59,359 --> 00:23:04,119
Speaker 2: Michael Shot joining us Bloomberg Intelligence senior Pharma biotech analyst.

448
00:23:05,600 --> 00:23:09,480
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

449
00:23:09,560 --> 00:23:13,080
Speaker 1: weekdays at ten am Eastern on applecar Play and Android

450
00:23:13,119 --> 00:23:15,879
Speaker 1: Auto with the Bloomberg Business app. You can also listen

451
00:23:16,000 --> 00:23:19,119
Speaker 1: live on Amazon Alexa from our flagship New York station.

452
00:23:19,480 --> 00:23:23,400
Speaker 1: Just say Alexa play Bloomberg eleven thirty.

453
00:23:23,840 --> 00:23:26,760
Speaker 2: So markets are definitely quiet, there are some catalyst in video.

454
00:23:26,840 --> 00:23:28,800
Speaker 2: We still have some data coming out. We get retail

455
00:23:28,840 --> 00:23:31,200
Speaker 2: numbers from many stores coming up the next few days.

456
00:23:31,200 --> 00:23:33,240
Speaker 2: And you have the jobs at a next Friday. So

457
00:23:33,240 --> 00:23:36,399
Speaker 2: we want to check in with Rubin Hovanacion, his general

458
00:23:36,440 --> 00:23:42,399
Speaker 2: portfolio manager at TCW's fixed income group. Hey, Rubin, what's

459
00:23:42,400 --> 00:23:44,440
Speaker 2: my position right now headed into the next week and

460
00:23:44,440 --> 00:23:44,879
Speaker 2: a half.

461
00:23:46,640 --> 00:23:50,160
Speaker 9: Well, good morning, and thanks for having me on. Well

462
00:23:50,200 --> 00:23:53,439
Speaker 9: our position is that, well, I guess it's it's probably

463
00:23:54,280 --> 00:23:57,280
Speaker 9: worth mentioning that we've seen a significant reprising in the

464
00:23:57,359 --> 00:24:00,760
Speaker 9: rates markets over the last month month and a half.

465
00:24:01,160 --> 00:24:04,720
Speaker 9: So we've basically gone from pricing in only two cuts

466
00:24:05,040 --> 00:24:08,760
Speaker 9: this year and a terminal rate of three point seven

467
00:24:08,800 --> 00:24:11,880
Speaker 9: percent in mid twenty twenty six, to pricing in about

468
00:24:12,000 --> 00:24:15,480
Speaker 9: four cuts this year and a terminal rate of about

469
00:24:15,520 --> 00:24:18,879
Speaker 9: three percent again in mid twenty twenty six in the

470
00:24:18,880 --> 00:24:22,240
Speaker 9: second quard of twenty twenty six. That's a sixty seventy

471
00:24:22,240 --> 00:24:26,080
Speaker 9: basis points repricing in the forward rate curve. And what

472
00:24:26,119 --> 00:24:28,639
Speaker 9: we find interesting is that when you look at the

473
00:24:28,720 --> 00:24:31,840
Speaker 9: credit markets and equity markets, there was some weakness in

474
00:24:32,080 --> 00:24:35,440
Speaker 9: the first week of August in those markets as well,

475
00:24:35,480 --> 00:24:38,680
Speaker 9: which would be consistent with that reprising, but by now

476
00:24:38,800 --> 00:24:41,040
Speaker 9: all of that weakness has been retraced. So if you

477
00:24:41,080 --> 00:24:43,800
Speaker 9: look at the credit markets, for example, credit sprates both

478
00:24:43,840 --> 00:24:47,480
Speaker 9: IG and high yield have retraced all the widening and

479
00:24:47,520 --> 00:24:50,320
Speaker 9: they're back to their mid July levels or end of

480
00:24:50,400 --> 00:24:52,960
Speaker 9: July levels. And if you look at equity markets, equities

481
00:24:52,960 --> 00:24:55,640
Speaker 9: are retesting the old time highs reached in mid July.

482
00:24:55,800 --> 00:24:58,000
Speaker 9: So we look at that and we think there's a

483
00:24:58,000 --> 00:25:01,120
Speaker 9: little bit of a disconnect, a little bit of discontent inconsistency,

484
00:25:01,840 --> 00:25:05,200
Speaker 9: because if you believe that the rates market has reprised

485
00:25:05,240 --> 00:25:09,480
Speaker 9: because the investment community thinks the economy is weaker now

486
00:25:09,520 --> 00:25:11,600
Speaker 9: and it's going to be weaker on a go forward basis,

487
00:25:11,600 --> 00:25:14,200
Speaker 9: in fact, so much weaker that would require the FED

488
00:25:14,240 --> 00:25:17,960
Speaker 9: to intervene, intervene sooner and cut more. Then you would

489
00:25:18,000 --> 00:25:20,120
Speaker 9: think that some of that weakness should also be reflected

490
00:25:20,160 --> 00:25:23,240
Speaker 9: in equity markets and credit markets. But we don't see

491
00:25:23,240 --> 00:25:28,960
Speaker 9: that currently, so that I guess one reasonable one explanation

492
00:25:29,119 --> 00:25:31,480
Speaker 9: for that would be that the market or one takeaway

493
00:25:31,520 --> 00:25:33,720
Speaker 9: from that, is that the market has gone from price

494
00:25:33,840 --> 00:25:36,760
Speaker 9: pricing in no lending to pricing in some sort of

495
00:25:36,800 --> 00:25:40,040
Speaker 9: a perfect soft lending. In other words, this notion that

496
00:25:40,080 --> 00:25:41,600
Speaker 9: the FED has a lot of room to cut, the

497
00:25:41,640 --> 00:25:43,920
Speaker 9: FED will be able to navigate the cycle, the slate

498
00:25:43,960 --> 00:25:47,280
Speaker 9: cycle perfectly and calibrate the rate just right to the

499
00:25:47,359 --> 00:25:51,000
Speaker 9: right level to forestall the slowing economy and not not

500
00:25:51,200 --> 00:25:54,760
Speaker 9: and at the same time not cause reacceleration of inflation.

501
00:25:55,160 --> 00:25:58,560
Speaker 9: Excuse me, and obviously, yes, were.

502
00:25:58,400 --> 00:26:01,880
Speaker 4: We surprised at all when we hear jaypow Will say

503
00:26:01,920 --> 00:26:04,280
Speaker 4: the time has come. I mean it seemed like maybe

504
00:26:04,320 --> 00:26:08,080
Speaker 4: with the expectations around Jackson Hall would be keeping kind

505
00:26:08,119 --> 00:26:11,000
Speaker 4: of giving the all clear, but maybe not necessarily signaling

506
00:26:11,040 --> 00:26:13,040
Speaker 4: that we're going to have at least as the rate

507
00:26:13,119 --> 00:26:16,159
Speaker 4: market is implying what five or six straight cuts.

508
00:26:18,280 --> 00:26:20,800
Speaker 9: We at t CW were not surprised because we have

509
00:26:21,440 --> 00:26:23,439
Speaker 9: been of the opinion for a long time that the

510
00:26:23,480 --> 00:26:27,640
Speaker 9: economy has been slowing, although the headline numbers sometimes may

511
00:26:27,680 --> 00:26:29,920
Speaker 9: not lead you to that conclusion. But when you peel

512
00:26:29,920 --> 00:26:31,600
Speaker 9: off a few layers and you look under the hoot,

513
00:26:31,880 --> 00:26:35,320
Speaker 9: you would you would see slowing, you know, labor market

514
00:26:35,400 --> 00:26:39,359
Speaker 9: for example, based on the forward looking indicators, you know,

515
00:26:39,400 --> 00:26:42,639
Speaker 9: starting from the from for a year now, I guess

516
00:26:43,040 --> 00:26:46,160
Speaker 9: we have been seeing slowing off consumption. For six months now,

517
00:26:46,480 --> 00:26:49,639
Speaker 9: we've been seeing we've been seeing the slowing of the

518
00:26:49,800 --> 00:26:53,000
Speaker 9: credit creation in the economy, and all of those were

519
00:26:53,320 --> 00:26:56,880
Speaker 9: indicative of slowing economy for some time. Yet I think

520
00:26:57,160 --> 00:27:00,720
Speaker 9: I tend to agree with you that declaring victory over

521
00:27:00,800 --> 00:27:03,600
Speaker 9: inflation and telling that the time has come to shift

522
00:27:03,600 --> 00:27:06,680
Speaker 9: to the second mandate of the Fed at the time

523
00:27:06,680 --> 00:27:09,399
Speaker 9: when core CPI is a three point two percent and

524
00:27:09,480 --> 00:27:12,760
Speaker 9: core PCE as a two point six percent indicates that

525
00:27:12,800 --> 00:27:15,280
Speaker 9: they get it. They do understand that the downside risks

526
00:27:15,320 --> 00:27:17,800
Speaker 9: are now real and they have to shift and they

527
00:27:17,840 --> 00:27:22,040
Speaker 9: have to act to try to arrest the declining economic growth.

528
00:27:22,880 --> 00:27:24,560
Speaker 2: All right, Rubin, we're gonna leave it there, Thank you

529
00:27:24,600 --> 00:27:28,640
Speaker 2: so much. Rubin Hovnacian a general portfolio manager with TCW's

530
00:27:28,680 --> 00:27:30,399
Speaker 2: Fixed Income group. And just to point out, we get

531
00:27:30,400 --> 00:27:33,399
Speaker 2: the two year auction today coming at sixty eight billion dollars,

532
00:27:33,440 --> 00:27:35,720
Speaker 2: then we get a five year for seventy billion, seven

533
00:27:35,760 --> 00:27:37,639
Speaker 2: year and forty four billion, So lots of ways to

534
00:27:37,720 --> 00:27:40,280
Speaker 2: kind of wager on the FED and supply over the

535
00:27:40,359 --> 00:27:41,480
Speaker 2: next couple of days as well.

536
00:27:43,000 --> 00:27:46,879
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

537
00:27:46,960 --> 00:27:50,480
Speaker 1: weekdays at ten am Eastern on applecard Play and royd

538
00:27:50,520 --> 00:27:53,680
Speaker 1: Outo with the Bloomberg Business. You can also listen live

539
00:27:53,760 --> 00:27:56,960
Speaker 1: on Amazon Alexa from our flagship New York station, Just

540
00:27:57,000 --> 00:27:59,919
Speaker 1: Say Alexa, playing Bloomberg eleven thirty.

541
00:28:01,160 --> 00:28:05,160
Speaker 2: Dlex Steel here alongside the Ellipshalaltz. Paul Sweeney is off today.

542
00:28:05,200 --> 00:28:07,800
Speaker 2: This is Moving Intelligence Radio. We are broadcasting to live

543
00:28:07,800 --> 00:28:11,200
Speaker 2: from an interactive broker studio right here in Midtown Manhattan,

544
00:28:11,240 --> 00:28:13,000
Speaker 2: so Paul's not here so we can talk about shopping.

545
00:28:13,119 --> 00:28:15,440
Speaker 2: I love shopping. I love shopping on sales. I will

546
00:28:15,440 --> 00:28:17,720
Speaker 2: only shop on sales. I will only pay full price

547
00:28:18,000 --> 00:28:21,240
Speaker 2: for face care, birkenstocks and bionics because I have to.

548
00:28:22,320 --> 00:28:24,639
Speaker 2: I have bad feet, so I like I don't have

549
00:28:24,680 --> 00:28:28,280
Speaker 2: a choice discretionary spending. Not I can wear heels or

550
00:28:28,359 --> 00:28:32,760
Speaker 2: birkenstocks are bionics? That's it, John Twners details. You don't

551
00:28:32,800 --> 00:28:35,840
Speaker 2: really have to tell everybody about do you want? I'm no,

552
00:28:36,080 --> 00:28:38,240
Speaker 2: come on, I love it. Didn't you talk about the

553
00:28:38,240 --> 00:28:40,360
Speaker 2: whole fan and ice thing or was that in commercial break?

554
00:28:40,640 --> 00:28:42,080
Speaker 1: I think there's a commercial excellent.

555
00:28:42,160 --> 00:28:44,280
Speaker 2: Okay, that's a different story. I've had a cool year

556
00:28:44,280 --> 00:28:46,560
Speaker 2: home without air conditioner. Anyway, I wanted to get an

557
00:28:46,600 --> 00:28:49,320
Speaker 2: expert on this because I'm personally interested in what the

558
00:28:49,360 --> 00:28:51,080
Speaker 2: sales are going to be like for the summer, which

559
00:28:51,080 --> 00:28:54,000
Speaker 2: just begs the question how much our luxury and other

560
00:28:54,040 --> 00:28:56,360
Speaker 2: goods and other stores have to cut prices to get

561
00:28:56,360 --> 00:28:58,480
Speaker 2: consumers in there in the store when they really are

562
00:28:58,480 --> 00:29:01,760
Speaker 2: trying to splice and dice where they're spending is Sarani

563
00:29:01,800 --> 00:29:04,720
Speaker 2: I said Home is managing partner at said Home Law Group.

564
00:29:05,120 --> 00:29:07,640
Speaker 2: She joins us now. The law group provides the ability

565
00:29:07,680 --> 00:29:11,480
Speaker 2: to immediately access counsel to provide practical solutions on critical

566
00:29:11,520 --> 00:29:15,960
Speaker 2: issues for all kinds of kinds of companies, particularly though

567
00:29:16,440 --> 00:29:19,800
Speaker 2: most of their clients tend to be in fashion, luxury goods, technology,

568
00:29:19,840 --> 00:29:21,960
Speaker 2: and food and beverage. It's good to have you in

569
00:29:21,960 --> 00:29:23,600
Speaker 2: the studio. Thank you so much for joining us.

570
00:29:23,680 --> 00:29:24,000
Speaker 1: Thank you.

571
00:29:24,400 --> 00:29:26,560
Speaker 2: So, what's the common question you're getting right now?

572
00:29:28,120 --> 00:29:30,400
Speaker 10: Everyone is asking when is the economy going to improve?

573
00:29:30,440 --> 00:29:34,120
Speaker 10: And how can I mitigate any risks because people are

574
00:29:34,320 --> 00:29:36,280
Speaker 10: afraid they're going to have to file for bankruptcy.

575
00:29:36,600 --> 00:29:38,320
Speaker 2: Wow, okay, so it's that bad for some of these

576
00:29:38,320 --> 00:29:40,600
Speaker 2: guys that bankruptcy is on it is.

577
00:29:40,680 --> 00:29:43,280
Speaker 10: I mean, retail is hurting. If you just walk down

578
00:29:43,320 --> 00:29:46,560
Speaker 10: the street. Most people are walking around without bags. There's

579
00:29:46,560 --> 00:29:49,480
Speaker 10: a lot of window shopping or whatever it's called when

580
00:29:49,520 --> 00:29:52,320
Speaker 10: you enter and don't buy other kinds of shopping. But

581
00:29:52,960 --> 00:29:56,680
Speaker 10: buying is on hold. And I think consumers are being

582
00:29:56,720 --> 00:29:59,800
Speaker 10: pickier because they don't have as much disposable income.

583
00:30:00,240 --> 00:30:03,360
Speaker 4: And we've been tracking and talking to economists about the

584
00:30:03,440 --> 00:30:06,280
Speaker 4: k shape recovery post pandemic, So people who are affluent

585
00:30:06,360 --> 00:30:09,800
Speaker 4: can still buy whatever they want, and others are having

586
00:30:09,840 --> 00:30:13,000
Speaker 4: to seek deals how does that impact potential clients or

587
00:30:13,040 --> 00:30:16,360
Speaker 4: companies that could be going bankrupt? Is that kind of

588
00:30:16,440 --> 00:30:18,479
Speaker 4: skewing more towards the middle of the road, those are

589
00:30:18,520 --> 00:30:19,720
Speaker 4: the companies that are worse off.

590
00:30:20,080 --> 00:30:23,400
Speaker 10: I think so, yes, you know, it's it's very dangerous

591
00:30:23,440 --> 00:30:25,520
Speaker 10: in the middle. Those who are catering to the one

592
00:30:25,560 --> 00:30:29,480
Speaker 10: percent or the point one percent generally or fine like

593
00:30:29,640 --> 00:30:33,040
Speaker 10: Ermez and Chanel and those brands, and those who are

594
00:30:33,080 --> 00:30:37,480
Speaker 10: catering to people with no disposable income that sell food

595
00:30:37,560 --> 00:30:40,080
Speaker 10: or things like that are generally okay because you have

596
00:30:40,120 --> 00:30:42,640
Speaker 10: to eat. But when you're going into the mid market

597
00:30:42,920 --> 00:30:45,920
Speaker 10: and trying to get Henry's or you know, middle class,

598
00:30:45,920 --> 00:30:48,520
Speaker 10: whether it's middle middle class or upper middle class, it's

599
00:30:48,840 --> 00:30:49,840
Speaker 10: very very difficult.

600
00:30:49,920 --> 00:30:52,680
Speaker 2: So what's the strategy before we get to bankruptcy here?

601
00:30:52,720 --> 00:30:54,440
Speaker 2: Because that's where the price cuts come into play.

602
00:30:54,520 --> 00:30:54,680
Speaker 8: Right?

603
00:30:54,720 --> 00:30:57,440
Speaker 2: Can they cut enough to get enough consumers in the

604
00:30:57,480 --> 00:30:59,760
Speaker 2: stores to buy enough to make up for the revenue

605
00:30:59,800 --> 00:31:01,200
Speaker 2: lot from the margin cut.

606
00:31:01,480 --> 00:31:04,880
Speaker 10: Well, it's been working for Target. You know, Target cut

607
00:31:04,880 --> 00:31:10,920
Speaker 10: about fifteen hundred of their goods buy substantial amounts, you know,

608
00:31:11,000 --> 00:31:14,200
Speaker 10: over twenty percent, and I think they just reported earlier

609
00:31:14,280 --> 00:31:17,920
Speaker 10: this week or maybe last week, last week. Yeah, because

610
00:31:17,920 --> 00:31:21,440
Speaker 10: it's only a lens. Yeah, it's only Tuesday. Yes, that

611
00:31:21,720 --> 00:31:25,120
Speaker 10: they're up finally, and they have a better forecast for

612
00:31:25,160 --> 00:31:27,120
Speaker 10: the remainder of the year. So it does seem to

613
00:31:27,160 --> 00:31:30,600
Speaker 10: be working for them. Whether it's working for luxury brands,

614
00:31:31,000 --> 00:31:33,360
Speaker 10: it's too soon to say, but you know Burbery and

615
00:31:33,520 --> 00:31:37,760
Speaker 10: YSL for example, Saint Laurent, they've cut their prices I

616
00:31:37,760 --> 00:31:41,280
Speaker 10: would say by at least ten percent on many products,

617
00:31:41,320 --> 00:31:45,640
Speaker 10: and I don't know yet whether it's going to help them.

618
00:31:45,840 --> 00:31:47,720
Speaker 4: I'm just gonna ask the dumb question to someone who

619
00:31:47,760 --> 00:31:50,240
Speaker 4: is not buy a lot of nice goods. Does ten

620
00:31:50,280 --> 00:31:54,560
Speaker 4: percent really move the kind of people who would be

621
00:31:54,600 --> 00:31:57,880
Speaker 4: buying a four hundred dollars belt off the sidelines to

622
00:31:57,920 --> 00:31:58,320
Speaker 4: buy one?

623
00:31:58,760 --> 00:32:02,000
Speaker 10: It certainly can be because the ten percent also reduces

624
00:32:02,120 --> 00:32:04,680
Speaker 10: your tax in New York, right, so we're spending what eight,

625
00:32:05,000 --> 00:32:07,720
Speaker 10: eight or nine percent, So ten percent reduction is more

626
00:32:07,760 --> 00:32:11,120
Speaker 10: than a ten percent reduction in a way. So yeah,

627
00:32:11,240 --> 00:32:12,120
Speaker 10: it can move the needle.

628
00:32:12,400 --> 00:32:14,320
Speaker 2: It wouldn't move my needle, But I guess I'm just

629
00:32:14,320 --> 00:32:17,120
Speaker 2: thinking from my put. I'm not their customer like to

630
00:32:17,200 --> 00:32:20,920
Speaker 2: begin with, but you know, I like sales like you know,

631
00:32:21,040 --> 00:32:23,160
Speaker 2: fifty percent like ten percent, ain't gonna cut it.

632
00:32:23,280 --> 00:32:26,880
Speaker 4: That's why I asked, because like Macy's had underwhelming results.

633
00:32:26,880 --> 00:32:28,640
Speaker 4: If I go to Macy's, I immediately go to the

634
00:32:28,680 --> 00:32:31,560
Speaker 4: sale section, and if it's twenty percent to me, I'm

635
00:32:31,680 --> 00:32:33,920
Speaker 4: like skeptical, so I think they aren't actually giving me

636
00:32:33,960 --> 00:32:35,680
Speaker 4: a deal. But if you give me fifty or seventy

637
00:32:35,680 --> 00:32:37,920
Speaker 4: five percent off like the last shirt in my size,

638
00:32:37,920 --> 00:32:38,520
Speaker 4: that I'm gonna buy it.

639
00:32:38,680 --> 00:32:40,920
Speaker 10: Yes, Well, this is the issue, right, These are the

640
00:32:41,040 --> 00:32:46,240
Speaker 10: questions we're constantly discussing. At what point do the consumers

641
00:32:46,240 --> 00:32:48,440
Speaker 10: think you're going to keep reducing your prices and wait

642
00:32:48,480 --> 00:32:51,600
Speaker 10: and not purchase. You know, it's not holiday season yet.

643
00:32:52,120 --> 00:32:55,760
Speaker 10: When holiday season comes around, people will be buying. What

644
00:32:55,800 --> 00:32:57,720
Speaker 10: it is they're going to be buying. We're gonna find out.

645
00:32:58,120 --> 00:33:00,760
Speaker 10: But you do have to ask yourself, how how many

646
00:33:00,800 --> 00:33:03,040
Speaker 10: cuts do you need? Is it better to keep cutting

647
00:33:03,080 --> 00:33:05,080
Speaker 10: a little bit at a time, you know, sort of

648
00:33:05,080 --> 00:33:07,120
Speaker 10: like the FED with interest rates, a quarter point at

649
00:33:07,120 --> 00:33:09,520
Speaker 10: a time, a teaser, or is it better to just

650
00:33:10,040 --> 00:33:13,280
Speaker 10: cut the price. But these price cuts that we're discussing today,

651
00:33:13,280 --> 00:33:16,040
Speaker 10: they're permanent, They're not on sale. These are the new

652
00:33:16,160 --> 00:33:19,360
Speaker 10: prices that you will be paying, so when you walk

653
00:33:19,400 --> 00:33:21,800
Speaker 10: into these stores when it's on sale, it should be

654
00:33:21,840 --> 00:33:22,320
Speaker 10: even lower.

655
00:33:22,600 --> 00:33:26,880
Speaker 2: Well, that's interesting to Bailey's point earlier, does any of

656
00:33:26,920 --> 00:33:30,320
Speaker 2: this do you expect M and A and where?

657
00:33:30,880 --> 00:33:33,200
Speaker 10: Yeah, that's a great question. I think that if you're

658
00:33:33,200 --> 00:33:37,160
Speaker 10: in a niche market, your product is niche or your

659
00:33:37,160 --> 00:33:40,080
Speaker 10: messaging is niche, you likely get picked up an M

660
00:33:40,120 --> 00:33:44,360
Speaker 10: and A. But otherwise no, I think it's more you know,

661
00:33:44,480 --> 00:33:48,720
Speaker 10: cannibalization and you know, Darwinism with.

662
00:33:48,680 --> 00:33:52,280
Speaker 2: The niche guys. Aren't the niche guys doing okay because

663
00:33:52,360 --> 00:33:54,360
Speaker 2: for the fact that their niche or it just still depends.

664
00:33:54,640 --> 00:33:58,200
Speaker 10: No, it depends because the niche brands typically don't sell

665
00:33:58,280 --> 00:34:02,000
Speaker 10: high volume, and so their cost of goods is high

666
00:34:02,080 --> 00:34:05,320
Speaker 10: and they can't manipulate their pricing as much as larger

667
00:34:05,360 --> 00:34:06,320
Speaker 10: corporations can.

668
00:34:06,960 --> 00:34:10,160
Speaker 4: Well, you mentioned target cutting prices in that bringing consumers

669
00:34:10,600 --> 00:34:12,680
Speaker 4: through the door. We spoke with Brooks Southerland about a

670
00:34:12,680 --> 00:34:16,400
Speaker 4: story on commercial real estate and pointing out that fast

671
00:34:16,400 --> 00:34:19,560
Speaker 4: food chains are being able to kind of weather different

672
00:34:19,680 --> 00:34:22,120
Speaker 4: trends from a return to office, whereas maybe a mom

673
00:34:22,120 --> 00:34:25,200
Speaker 4: and pop shop can't handle that as well. With target

674
00:34:25,280 --> 00:34:27,959
Speaker 4: cutting prices and drawing and consumers and seemingly more people

675
00:34:28,000 --> 00:34:31,120
Speaker 4: going to stores like Walmart or a Costco or Sam's Club.

676
00:34:31,360 --> 00:34:35,520
Speaker 4: How does that impact some of these other either small

677
00:34:35,520 --> 00:34:40,160
Speaker 4: businesses or even just less global retailers.

678
00:34:41,440 --> 00:34:43,680
Speaker 10: I think it's tough out there, and I think it's

679
00:34:43,680 --> 00:34:47,560
Speaker 10: going to get tougher. And unfortunately, where we stand right now,

680
00:34:47,560 --> 00:34:50,640
Speaker 10: the economy is so uncertain because we don't know who

681
00:34:50,760 --> 00:34:53,200
Speaker 10: the next president will be, and once we do know that,

682
00:34:53,239 --> 00:34:56,239
Speaker 10: people can start planning. This is probably the worst time

683
00:34:56,680 --> 00:34:59,960
Speaker 10: typically in any election year, because there's so much uncertain

684
00:35:00,360 --> 00:35:04,359
Speaker 10: and this election in particular, we have two candidates who

685
00:35:04,360 --> 00:35:07,719
Speaker 10: are on complete opposite sides of the economic spectrum, and

686
00:35:07,760 --> 00:35:10,840
Speaker 10: so we are in a wait and see holding pattern,

687
00:35:11,200 --> 00:35:13,840
Speaker 10: and that makes everything a lot more difficult.

688
00:35:14,040 --> 00:35:17,000
Speaker 2: You mentioned Target. What other companies do you think have

689
00:35:17,080 --> 00:35:20,240
Speaker 2: been doing the price cutting and managing this environment?

690
00:35:20,320 --> 00:35:24,480
Speaker 10: Well, certainly Ikia. I mean they not only cut their prices.

691
00:35:24,480 --> 00:35:26,680
Speaker 10: You can go online and you can see the price

692
00:35:26,800 --> 00:35:30,080
Speaker 10: before and the price now, so they're really speaking to

693
00:35:30,120 --> 00:35:32,359
Speaker 10: consumers and showing them, you know, you no longer have

694
00:35:32,400 --> 00:35:35,279
Speaker 10: to pay. I'll make these numbers up three hundred dollars

695
00:35:35,320 --> 00:35:38,400
Speaker 10: for this lamp you can pay, you know, two twenty

696
00:35:38,400 --> 00:35:40,279
Speaker 10: five and this is our permanent new price. So I

697
00:35:40,280 --> 00:35:44,640
Speaker 10: think they're doing a great job in showing the consumers

698
00:35:44,680 --> 00:35:48,239
Speaker 10: exactly what it is they're doing to help them and

699
00:35:48,560 --> 00:35:49,360
Speaker 10: drive their own sales.

700
00:35:49,400 --> 00:35:52,319
Speaker 4: Of course, about ten seconds, if we're shopping, should we

701
00:35:52,360 --> 00:35:54,719
Speaker 4: be going to the stores now or waiting for some

702
00:35:54,760 --> 00:35:55,680
Speaker 4: of those holiday sales.

703
00:35:56,600 --> 00:35:58,920
Speaker 10: That's such a tough question. I mean, I try not

704
00:35:59,000 --> 00:36:01,480
Speaker 10: to buy things at full price if I can help it, so, I,

705
00:36:01,960 --> 00:36:03,279
Speaker 10: you know, confession.

706
00:36:02,840 --> 00:36:05,600
Speaker 2: Usually wait for sales, but if you need something.

707
00:36:06,120 --> 00:36:08,400
Speaker 10: Try to go to those stores that have already reduced

708
00:36:08,400 --> 00:36:09,040
Speaker 10: their prices.

709
00:36:09,160 --> 00:36:11,600
Speaker 2: Yeah, she sees me, she sees me, She gets me.

710
00:36:12,120 --> 00:36:14,399
Speaker 2: All right, thanks, not really appreciate a Runnias at home

711
00:36:14,560 --> 00:36:17,359
Speaker 2: managing partner at set Home LG Group joining us. There

712
00:36:17,400 --> 00:36:19,759
Speaker 2: are you done, Bailey with your home furnishing? I mean,

713
00:36:19,800 --> 00:36:20,359
Speaker 2: it's been a year.

714
00:36:20,400 --> 00:36:23,280
Speaker 4: It's never it's never never ending. Well, because we got married,

715
00:36:23,320 --> 00:36:25,279
Speaker 4: so we had to plan the wedding and then we're

716
00:36:25,360 --> 00:36:27,880
Speaker 4: still as JT know is trying to address a leaky

717
00:36:28,000 --> 00:36:29,600
Speaker 4: roof fireplace to the living room.

718
00:36:29,640 --> 00:36:32,440
Speaker 2: Still, yeah, he's not helping. He already said that.

719
00:36:32,600 --> 00:36:37,080
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720
00:36:37,280 --> 00:36:40,960
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721
00:36:41,080 --> 00:36:44,040
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722
00:36:44,160 --> 00:36:47,399
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723
00:36:47,520 --> 00:36:50,640
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724
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