WEBVTT - Bloomberg Surveillance TV: May 15th, 2026

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News.

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<v Speaker 2>This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along

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<v Speaker 2>with Lisa Bromwitz and Amrie Hordernt. Join us each day

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<v Speaker 2>for insight from the best in markets, economics, and geopolitics

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<v Speaker 2>from our global headquarters in New York City. We are

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<v Speaker 2>live on Bloomberg Television weekday mornings from six to nine

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<v Speaker 2>anywhere else you listen, and as always on the Bloomberg

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<v Speaker 2>Terminal and the Bloomberg Business app. This came from Emily

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<v Speaker 2>Goodwin of The New York Post. You'll be told this

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<v Speaker 2>was a great meeting. The relations between the two nations

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<v Speaker 2>have improved. Take a listen to this. American staff took

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<v Speaker 2>everything that the Chinese officials handed out, credentials, bernafones from

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<v Speaker 2>White House staff, pins for delegations, collected them before we

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<v Speaker 2>cut on Air Force one and threw them in a

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<v Speaker 2>bin at the bottom of the stairs. Nothing from China

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<v Speaker 2>was allowed on the plane. That's the real state of

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<v Speaker 2>the relationship between China and the United States.

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<v Speaker 3>There is a lot of speculation about exactly what was

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<v Speaker 3>accomplished and potentially how ten some of these relations have

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<v Speaker 3>remained despite some of the niceties, and that clearly is

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<v Speaker 3>the uncertainty feeding out through a lot of the different importing.

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<v Speaker 2>Joining us, Natzi discussed very lovely of the Pinniston Institute.

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<v Speaker 2>She writes the following, the summit has succeeded in maintaining

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<v Speaker 2>a tactical truce, but failed to achieve resolution in the

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<v Speaker 2>major irritance in the relationship. Mary joined us. Now for more, Mary,

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<v Speaker 2>welcome to the program. Let's just start with those major irritants,

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<v Speaker 2>because there will be another summit, potentially in September.

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<v Speaker 4>What are they, Well, Emriy just talked about chips.

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<v Speaker 5>Clearly, the Chinese have barked at the US export controls.

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<v Speaker 4>They have since moved on.

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<v Speaker 5>They are now devoted to their own development of their

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<v Speaker 5>own domestic chips. But if we look back at the

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<v Speaker 5>last year, we can see that the main irritants were

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<v Speaker 5>the most proximate erarands were President Trump's acceleration of the

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<v Speaker 5>tariffs that had been placed on China and his first term,

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<v Speaker 5>and then the Chinese invoking new export controls on critical

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<v Speaker 5>minerals potentially very disruptive move for US industry and the

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<v Speaker 5>US moved to rearm following the war in Iran, So

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<v Speaker 5>where did we get with any of that? As far

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<v Speaker 5>as we know. There may have been some trade discussed,

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<v Speaker 5>particularly by Secretary Vessant in his Chinese counterpart, but between

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<v Speaker 5>the two principles, I think we have seen that there

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<v Speaker 5>was no discussion of export controls and very little accomplished

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<v Speaker 5>on the trade front.

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<v Speaker 4>So the irritants really are still there.

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<v Speaker 3>Mary, I've heard conflicting reports about whether this was a

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<v Speaker 3>good meeting or a bad meeting, So people say, at

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<v Speaker 3>least nothing bad happened in terms of some sort of

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<v Speaker 3>big blow up. On the flip side, there wasn't even

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<v Speaker 3>an affirmation of some of the truces that we've seen

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<v Speaker 3>when it comes to tariffs and rahere Earth's over the

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<v Speaker 3>past couple of months.

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<v Speaker 4>What's your take on this president?

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<v Speaker 5>She's stressed stability, but he wasted absolutely no time in

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<v Speaker 5>giving the American president the tun lashing over Taiwan, which

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<v Speaker 5>means that what we saw in China earlier this year,

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<v Speaker 5>a sense of confidence and growing power clearly was on display.

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<v Speaker 5>The relationship we're always framed in exactly the terms that

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<v Speaker 5>Beijing likes to use. The First is primacy. The US

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<v Speaker 5>China relationship is the most important in the world? Is

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<v Speaker 5>it the most important to the United States? What about

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<v Speaker 5>our allies?

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<v Speaker 4>Win win? President she always likes.

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<v Speaker 5>To talk about the relationship in win win or mutually

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<v Speaker 5>gainful terms. Yet the President Trump since twenty seventeen has

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<v Speaker 5>been talking about China as someone who's ripped the United

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<v Speaker 5>States off?

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<v Speaker 4>So how is that going to be win win?

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<v Speaker 5>And then lastly, the president she likes to describe the

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<v Speaker 5>relationship as one of partners, not rival. What about the

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<v Speaker 5>AI race? What about actions in the South China? See

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<v Speaker 5>how have we suddenly become partners and these issues that

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<v Speaker 5>have to do with conflicting goals are suddenly papered over?

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<v Speaker 4>So I think rather than just.

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<v Speaker 5>A visit that accomplished nothing, this actually set us back

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<v Speaker 5>in terms of where we are with the.

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<v Speaker 3>Chinese In the meantime, What actually happened with all the

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<v Speaker 3>CEOs from the United States who went over there. Do

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<v Speaker 3>you have a sense of whether they accomplished anything or

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<v Speaker 3>involved in any of these meetings?

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<v Speaker 4>We don't have any sense of that. I think.

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<v Speaker 5>You know, Amory talked about how the chip sales, there's

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<v Speaker 5>been crickets on that, so we really don't know why

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<v Speaker 5>they stop to pick up Jensen Wang in Alaska. The

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<v Speaker 5>other CEOs were there, I suppose to show their support

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<v Speaker 5>for the US China commercial relationship, which remains important and

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<v Speaker 5>is a good thing. But as far as addressing some

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<v Speaker 5>of the problems these firms have experience in serving.

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<v Speaker 4>The Chinese market, I think we've heard nothing.

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<v Speaker 2>Mary, What do you suppose the future is of the

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<v Speaker 2>political question around this relationship Domestically in the US. The

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<v Speaker 2>President did such a powerful job many years ago of

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<v Speaker 2>really highlighting how damaged people and communities were in this

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<v Speaker 2>country from Chinese overcapacity and the hollowing out of manufacturing

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<v Speaker 2>domestically in the US. That became a rare bipartisan issue

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<v Speaker 2>in Washington, d C. Is that a political priority anymore

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<v Speaker 2>going into the midterms later this year and ultimately for

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<v Speaker 2>the next general.

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<v Speaker 5>Well, I've always thought the harm was real, but the

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<v Speaker 5>diagnosis was flawed.

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<v Speaker 4>There.

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<v Speaker 5>We know that just attacking China is not an answer

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<v Speaker 5>to what the US needs to be doing to heal itself.

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<v Speaker 4>So I think that now.

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<v Speaker 5>The President has decided that we need stability in this relationship,

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<v Speaker 5>that going in an alternative route will actually cause more

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<v Speaker 5>harm than good. We need to turn at home and say, okay,

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<v Speaker 5>then what are we doing at home to meet the

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<v Speaker 5>challenges that are before us, the same challenges we had before.

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<v Speaker 6>Stay with us.

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<v Speaker 2>More Bloomberg surveillance coming up after this. We begin this

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<v Speaker 2>out with stock's pulling back from record highs as bond

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<v Speaker 2>yields push higher. Alista Pindrov HSBC still bullish, writing, we

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<v Speaker 2>revise our year end price target on the SMP to

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<v Speaker 2>seventy six fifty on. We've heard this so many times,

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<v Speaker 2>earnings strength, but we could see it breaching eight k

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<v Speaker 2>Alistair joined us now for more Alistair.

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<v Speaker 6>Good morning to see.

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<v Speaker 2>Having us seen so many upgrades to price targets, can

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<v Speaker 2>you just take a step back before we get into

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<v Speaker 2>all of the details. How stellar impressive has this earning

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<v Speaker 2>season been.

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<v Speaker 1>It's been amazing.

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<v Speaker 7>I mean, you know, to put it into context, we're

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<v Speaker 7>getting you know, twenty seven percent earnings grow for the

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<v Speaker 7>S and P five hundred this year. That's going to

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<v Speaker 7>be its strongest really since post COVID. The number of

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<v Speaker 7>companies that are beating has also, you know, basically been

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<v Speaker 7>since post COVID. Hires and I think the really interesting

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<v Speaker 7>aspect here. This is just not just a tech on

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<v Speaker 7>MAG seven. The story strip out tech and Mag seven.

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<v Speaker 7>You're still getting thirteen fourteen percent earnings growth from these companies,

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<v Speaker 7>again very recilent, much higher than expectations. So it's the

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<v Speaker 7>breadth of earnings which has been the most surprising to us.

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<v Speaker 7>But again, you know what continues to drive the market

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<v Speaker 7>higher here is the tech and the AI narrative.

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<v Speaker 2>There's a phrase that I'm going to borrow from a

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<v Speaker 2>colleague of yours at HSBC danger zone max changer zone. Yeah,

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<v Speaker 2>talks about the danger Zigner were in the danger zone

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<v Speaker 2>of the bond market.

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<v Speaker 7>We are, We're in the danger zone. And this is

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<v Speaker 7>the trade off now for markets which as soon as

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<v Speaker 7>we get you know, the US ten year bond yord

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<v Speaker 7>pushing above one and a half percent, the market's going

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<v Speaker 7>to have to weigh, you know, the challenge between higher

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<v Speaker 7>bond your squeezing valuations and the earnings numbers which have

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<v Speaker 7>been so phenomenal. But it is a concern, and that

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<v Speaker 7>is the downside risk here that if we don't get

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<v Speaker 7>oil coming down, if we don't see clear signs of

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<v Speaker 7>the de escalation in the Middle East, and you know,

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<v Speaker 7>progress towards opening the street of her moves. If this

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<v Speaker 7>continues through June July, you know, the downside starts becoming

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<v Speaker 7>more apparent for the s and P five hundred here.

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<v Speaker 3>So just taking your advice and looking right now at

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<v Speaker 3>a ten year yield of four point five to three percent,

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<v Speaker 3>and I'm.

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<v Speaker 4>Ready to hit sell.

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<v Speaker 1>Why shouldn't I? Right? I mean, if we're in the

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<v Speaker 1>danger zone, why is that not the World war?

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<v Speaker 7>Our view is that our base case is that there

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<v Speaker 7>will be some normalization of the strait of her moves

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<v Speaker 7>in the next month or so. Our view is that

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<v Speaker 7>oil will start to creep back down towards the end

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<v Speaker 7>of the year, and that's should start to put some

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<v Speaker 7>of the pressure off bond yields. So, you know, the

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<v Speaker 7>base case here is that the market is already pricing

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<v Speaker 7>in a pretty panicky kind of scenario, and we don't

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<v Speaker 7>think we're there just yet. I think that you know,

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<v Speaker 7>what makes us more concerned is again, if this persists

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<v Speaker 7>throughout the summer, and you know, from an economic perspective,

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<v Speaker 7>a good way to frame it is that, you know,

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<v Speaker 7>US consumers have received almost fifty billion dollars in tax

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<v Speaker 7>refunds this year. You know more so than twenty twenty five.

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<v Speaker 7>The cost of oil at one hundred dollars a barrel

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<v Speaker 7>is fourteen billion dollars every month. So back of the

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<v Speaker 7>envelope math is if we continue to get oil at

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<v Speaker 7>one hundred until June July, that to me is when

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<v Speaker 7>things start to turn a lot more negative. The impact

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<v Speaker 7>on the US consumer, the impact on the US economy

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<v Speaker 7>starts to turn more negative, and that's when we might

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<v Speaker 7>see more serious Sarnings downgrades.

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<v Speaker 3>One of the biggest debates right now seems to be

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<v Speaker 3>putting Parl Quincy versus Sebastian Page. Parl Quincy try to

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<v Speaker 3>diversify away from AI and different geographies but also different

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<v Speaker 3>types of companies, so really doubling down saying ultimately he

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<v Speaker 3>wants to get more into AI and more into the

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<v Speaker 3>US specifically, where do you sit on the whole diversification issue.

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<v Speaker 7>I mean, in a global context, we're overweight emerging markets

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<v Speaker 7>and overweight the US. Will we kind of like a

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<v Speaker 7>bit of both. In the emerging markets side that we're

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<v Speaker 7>still playing you know, tech, where we're overweight Taiwan. We're

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<v Speaker 7>also overweight materials in latter which benefit, by the way,

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<v Speaker 7>from all of this AI cape spend from higher copper demand,

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<v Speaker 7>higher aluminium demand, So you know, I'm actually leaning into

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<v Speaker 7>AI almost everywhere. I think what we are really focused

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<v Speaker 7>on though, in a global context is two things.

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<v Speaker 6>One is AI.

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<v Speaker 7>I think that's how you diversify, go into the banks

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<v Speaker 7>which are clearly using AI, seeing productivity benefits from this.

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<v Speaker 7>And the other theme as well is trying to avoid

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<v Speaker 7>these stocks which are going to be disrupted by AI.

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<v Speaker 7>So again, you know, some of these sectors like SaaS, etc.

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<v Speaker 7>Where we think there's going to be an overhang. Whether

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<v Speaker 7>it's true or not, I think it's hard to disprove

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<v Speaker 7>in this current environment. But we want to avoid the

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<v Speaker 7>areas which we think there's going to be fears around disruption.

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<v Speaker 7>So in the kind of diversifications perspective, I'm fine diversifying

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<v Speaker 7>out of the tech but when we go into the

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<v Speaker 7>you know X tech names, I still want to be

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<v Speaker 7>looking into the areas that get the biggest productivity gains

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<v Speaker 7>from AI adoption.

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<v Speaker 2>When I hear EM, I always smile because it doesn't

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<v Speaker 2>mean what it used to mean. It's now two countries,

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<v Speaker 2>three names making up a call of the index, the

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<v Speaker 2>MSCI EM Index Taiwan Semiconductors fourteen percent. A little bit

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<v Speaker 2>more than that, Sam Sung, it's about six percent of

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<v Speaker 2>the index. Sk Highenex is a little more than four

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<v Speaker 2>percent of the index. We're reducing things down to just

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<v Speaker 2>a handful of names. I just got this note from

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<v Speaker 2>CIBC Chris Harvey. I'm sure you know him. Chris said this.

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<v Speaker 2>By our calculation is SPX SPX attribution. Tech and communications

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<v Speaker 2>services have accounted for ninety percent of the returns of

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<v Speaker 2>SPX since the end of jan until yesterday. On an

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<v Speaker 2>individual basis, nine names accounted for roughly ninety percent of

0:11:14.040 --> 0:11:16.480
<v Speaker 2>the return over that period until yesterday, but a video

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<v Speaker 2>responsible for twenty to twenty five percent of the overall return.

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<v Speaker 6>Do you think that's a problem. Is not necessarily a problem?

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<v Speaker 7>I mean, you know, I do laugh about this conversation

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<v Speaker 7>about concentration.

0:11:26.320 --> 0:11:26.760
<v Speaker 1>It's a risk.

0:11:26.920 --> 0:11:28.679
<v Speaker 7>I'm like, well, it's a risk in both way. It's

0:11:28.679 --> 0:11:31.360
<v Speaker 7>downside and upside. If you think that this concentration, the

0:11:31.440 --> 0:11:34.640
<v Speaker 7>names that are driving you know, the upside here are

0:11:34.640 --> 0:11:35.920
<v Speaker 7>going to continue to outperform.

0:11:36.000 --> 0:11:36.480
<v Speaker 1>That's great.

0:11:36.800 --> 0:11:38.440
<v Speaker 7>And so you take the em story and it's kind

0:11:38.440 --> 0:11:40.000
<v Speaker 7>of funny because you're saying that you know, EM is

0:11:40.000 --> 0:11:41.840
<v Speaker 7>not what it used to be. I would disagree a

0:11:41.840 --> 0:11:45.320
<v Speaker 7>little bit. What was EM in two thousand to twenty ten.

0:11:45.440 --> 0:11:49.640
<v Speaker 7>It was a commodity cycle. Well, d ram and semiconductors

0:11:49.720 --> 0:11:52.640
<v Speaker 7>are the commodity of the AI era smart So is

0:11:52.679 --> 0:11:54.280
<v Speaker 7>it not just that we're in a different kind of

0:11:54.320 --> 0:11:57.600
<v Speaker 7>commodity play here for emerging markets? And I'm totally bullish

0:11:57.679 --> 0:12:00.400
<v Speaker 7>on that, And so I'm totally leaning into this if

0:12:00.440 --> 0:12:01.839
<v Speaker 7>I think there's going to be more capex from the

0:12:01.880 --> 0:12:05.400
<v Speaker 7>hyperscalers one hundred and fifty billion dollars in capex estimates

0:12:05.440 --> 0:12:08.000
<v Speaker 7>just being added for twenty twenty seven and twenty twenty eight.

0:12:08.120 --> 0:12:10.480
<v Speaker 7>Twenty percent of that goes to the Korean memory names.

0:12:10.720 --> 0:12:13.680
<v Speaker 7>I'm leaning into this, so I don't have any issue,

0:12:13.800 --> 0:12:16.120
<v Speaker 7>particularly when you know the Korean stocks and the Korean

0:12:16.120 --> 0:12:18.520
<v Speaker 7>memory names trade on six times earnings. To me, it

0:12:18.559 --> 0:12:20.840
<v Speaker 7>feels like a bit of no brainers to go into.

0:12:20.640 --> 0:12:23.120
<v Speaker 2>That's prices go up of those commodities, those new commodities.

0:12:23.160 --> 0:12:25.439
<v Speaker 2>How elastic is that demand for these particular goods.

0:12:25.480 --> 0:12:29.120
<v Speaker 7>I mean, I mean it's there's almost it's completely priced inelastic.

0:12:29.120 --> 0:12:31.520
<v Speaker 7>I mean you're seeing you know that the memory name

0:12:31.559 --> 0:12:33.960
<v Speaker 7>is basically saying that entering into three to five year

0:12:34.320 --> 0:12:37.439
<v Speaker 7>long term agreements with the hyperscalers because there's so much

0:12:37.440 --> 0:12:39.920
<v Speaker 7>demand for it right now. And why that's so important

0:12:40.000 --> 0:12:43.560
<v Speaker 7>is because it reduces the you know, price volatility, and

0:12:43.640 --> 0:12:46.080
<v Speaker 7>it gives us much more earnings visibility than we've ever

0:12:46.120 --> 0:12:48.760
<v Speaker 7>had before three to five years of you know, the

0:12:48.800 --> 0:12:50.920
<v Speaker 7>big hyperscaler saying hey, we're going to take out all

0:12:50.960 --> 0:12:53.840
<v Speaker 7>of your supply to me, that is is a very

0:12:53.880 --> 0:12:55.079
<v Speaker 7>bullish narrative here.

0:12:55.280 --> 0:12:55.920
<v Speaker 6>Stay with us.

0:12:56.240 --> 0:13:08.600
<v Speaker 2>More Bloomberg surveillance coming up after this, let's talk about

0:13:08.600 --> 0:13:11.280
<v Speaker 2>the K shaped economy. Turning to retoun investors a waiting

0:13:11.320 --> 0:13:14.520
<v Speaker 2>earnings next week for another reading on consumer spending, the RAYN.

0:13:14.559 --> 0:13:17.080
<v Speaker 2>Hutchinson of Bank of American writing, we expect t JX,

0:13:17.440 --> 0:13:20.120
<v Speaker 2>Ross and Burnington to speak to a strong start to

0:13:20.160 --> 0:13:23.640
<v Speaker 2>the year supported by elevated tax refunds and trade down

0:13:23.920 --> 0:13:26.080
<v Speaker 2>driven by gas inflation. The Rain joins us now for

0:13:26.120 --> 0:13:28.040
<v Speaker 2>more the Rank of morning Warnie, I'm going to see

0:13:28.040 --> 0:13:29.480
<v Speaker 2>how squeezed the consumers right now?

0:13:30.400 --> 0:13:33.200
<v Speaker 1>Got is squeeze? Does I think people fear? And remember

0:13:33.200 --> 0:13:35.040
<v Speaker 1>we're getting first quarter earning, so it's a little bit

0:13:35.040 --> 0:13:38.679
<v Speaker 1>of a backward looking data point, but consumers were receiving

0:13:39.320 --> 0:13:42.000
<v Speaker 1>very high levels of tax refunds throughout the first quarter,

0:13:42.400 --> 0:13:45.440
<v Speaker 1>so that served to more than offset any squeeze they

0:13:45.520 --> 0:13:48.880
<v Speaker 1>felt from gasoline. I think what's really important and brace

0:13:48.960 --> 0:13:52.800
<v Speaker 1>yourselves for a big week next week. The forward outlook is,

0:13:53.160 --> 0:13:57.600
<v Speaker 1>you know, as these tailwinds wean, what happens because gas

0:13:57.640 --> 0:13:59.920
<v Speaker 1>prices are still very high. What do you think the wallet?

0:14:00.160 --> 0:14:02.520
<v Speaker 1>I think that the consumer takes a little bit of

0:14:02.520 --> 0:14:06.199
<v Speaker 1>a decelerating trend. I think they trade down. I think

0:14:06.240 --> 0:14:08.560
<v Speaker 1>they use their dollars a little more wisely, and they

0:14:08.559 --> 0:14:09.600
<v Speaker 1>really search for value.

0:14:09.840 --> 0:14:11.520
<v Speaker 2>TJX the last time they had it down, yere, I

0:14:11.520 --> 0:14:13.280
<v Speaker 2>think you've got to go back to what seat hasan today?

0:14:13.400 --> 0:14:15.280
<v Speaker 2>Something like that, they find a fantastic run.

0:14:15.440 --> 0:14:17.080
<v Speaker 1>I didn't say TJX would be down.

0:14:17.320 --> 0:14:19.400
<v Speaker 6>Now I'm going to site they can have another round.

0:14:19.560 --> 0:14:22.400
<v Speaker 1>Yeah, no, I think absolutely not. And when you look

0:14:22.480 --> 0:14:25.040
<v Speaker 1>at you know, we've gone back twenty years and looked

0:14:25.040 --> 0:14:27.880
<v Speaker 1>at times when gas price is spiked and you look

0:14:27.920 --> 0:14:32.800
<v Speaker 1>at clothing spending, it falls, jewelry spending, it falls off price.

0:14:32.920 --> 0:14:36.920
<v Speaker 1>Retail behaves much more like a necessity and goes at

0:14:36.960 --> 0:14:40.040
<v Speaker 1>its normal trajectory, and the reason is their customer may

0:14:40.080 --> 0:14:43.880
<v Speaker 1>have to trade down, and then an upward upper income

0:14:43.920 --> 0:14:47.800
<v Speaker 1>customer trades down into their stores looking for that value. Right,

0:14:48.000 --> 0:14:51.040
<v Speaker 1>everybody's wallets are squeezed, they end up taking share.

0:14:51.280 --> 0:14:53.280
<v Speaker 3>How much are we seeing a case shaped retail sector?

0:14:53.400 --> 0:14:56.000
<v Speaker 3>And it doesn't have to do with necessarily the income

0:14:56.040 --> 0:14:59.240
<v Speaker 3>strata of the clients as much as the success of

0:14:59.320 --> 0:15:02.120
<v Speaker 3>management team to really put forward a story that either

0:15:02.120 --> 0:15:03.360
<v Speaker 3>works or really doesn't.

0:15:03.600 --> 0:15:05.360
<v Speaker 1>Yeah, I mean what we've seen in a time of

0:15:05.560 --> 0:15:07.760
<v Speaker 1>a little bit of consumer duress over the past year

0:15:07.880 --> 0:15:10.800
<v Speaker 1>or so is that if your brand is hot, you

0:15:10.840 --> 0:15:13.920
<v Speaker 1>are really able to get that share of wallet you

0:15:14.480 --> 0:15:17.360
<v Speaker 1>Coach the Coach brand is a great example of that. Right,

0:15:17.400 --> 0:15:19.640
<v Speaker 1>They just put up a twenty nine percent growth rate

0:15:19.680 --> 0:15:21.520
<v Speaker 1>in North America. I don't think any of us would

0:15:21.520 --> 0:15:24.040
<v Speaker 1>have expected that a few years ago, but they made

0:15:24.040 --> 0:15:27.160
<v Speaker 1>some great investments in marketing. They've really elevated their brand

0:15:27.680 --> 0:15:30.680
<v Speaker 1>and they've been successful. You can contrast that with a

0:15:30.720 --> 0:15:33.400
<v Speaker 1>lot of other players, both in the handbag and footwear space.

0:15:33.640 --> 0:15:35.000
<v Speaker 1>They're not seeing the same success.

0:15:35.040 --> 0:15:36.880
<v Speaker 3>Well, I'm going to talk about Nike and Lulu Lemon,

0:15:36.880 --> 0:15:39.120
<v Speaker 3>for example, which have been underperforming, and we've talked about

0:15:39.120 --> 0:15:41.240
<v Speaker 3>it a lot on the show. John's been talking about

0:15:41.320 --> 0:15:43.800
<v Speaker 3>Nike and how they really lost some of their vigor,

0:15:44.000 --> 0:15:48.360
<v Speaker 3>of the athletic heartbeat that they used to be driven

0:15:48.400 --> 0:15:49.640
<v Speaker 3>by going forward.

0:15:50.320 --> 0:15:51.760
<v Speaker 1>How much can we look.

0:15:51.640 --> 0:15:55.000
<v Speaker 3>At earnings as giving a read on the consumer versus

0:15:55.080 --> 0:15:57.680
<v Speaker 3>a read on strategy. Given the results that we've had

0:15:57.720 --> 0:15:59.800
<v Speaker 3>so far, and given the consumer spending numbers that we've

0:15:59.800 --> 0:16:01.480
<v Speaker 3>seen from some of the big cards.

0:16:01.640 --> 0:16:06.840
<v Speaker 1>Yeah, the results have been so bifurcated. Right. You'll see retailer,

0:16:07.600 --> 0:16:11.240
<v Speaker 1>even footwear retailers like on Holdings or Hoka, putting up

0:16:11.240 --> 0:16:13.720
<v Speaker 1>growth and then you see Nike putting up decline. So

0:16:14.040 --> 0:16:16.520
<v Speaker 1>it's really a big share shift. And I wouldn't say

0:16:16.560 --> 0:16:18.760
<v Speaker 1>I wouldn't use Nike as a gauge for the consumer.

0:16:19.360 --> 0:16:22.400
<v Speaker 1>Nike just didn't innovate like it needed to. And when

0:16:22.480 --> 0:16:26.040
<v Speaker 1>you have competition nipping at your heels, you really need

0:16:26.080 --> 0:16:29.200
<v Speaker 1>good product. They relied on some of their old stalwarts

0:16:29.240 --> 0:16:32.360
<v Speaker 1>instead of really going out and doing what Nike usually does,

0:16:32.400 --> 0:16:34.000
<v Speaker 1>which is lead the market with innovation.

0:16:34.520 --> 0:16:35.800
<v Speaker 6>You don't want to be apologizing.

0:16:36.320 --> 0:16:38.240
<v Speaker 2>I just feel like Nike as a brand has completely

0:16:38.320 --> 0:16:40.920
<v Speaker 2>lost its attitude and We were talking to the commercial

0:16:40.920 --> 0:16:43.880
<v Speaker 2>brand before we came on about the Boston Marathon and

0:16:43.920 --> 0:16:47.840
<v Speaker 2>that commercial they had walking tolerated, right old school Nike

0:16:47.960 --> 0:16:50.320
<v Speaker 2>sort of get at it, do it, get aggressive, and

0:16:50.320 --> 0:16:53.400
<v Speaker 2>then they were apologizing for the walking tolerated. People were offended.

0:16:53.400 --> 0:16:55.480
<v Speaker 2>They pulled the at and went with something else. That's

0:16:55.520 --> 0:16:57.240
<v Speaker 2>kind of where Nike's at today. That is not what

0:16:57.360 --> 0:16:59.760
<v Speaker 2>Nike used to be. What changed are that company?

0:17:00.040 --> 0:17:03.240
<v Speaker 1>You know, look, they're much bigger and they now target

0:17:03.560 --> 0:17:05.840
<v Speaker 1>not just runners but walkers, and I think they need

0:17:05.840 --> 0:17:09.800
<v Speaker 1>to remember that. So what changed. They've had a few

0:17:09.840 --> 0:17:13.240
<v Speaker 1>different management teams come in, and again I think they

0:17:14.040 --> 0:17:17.160
<v Speaker 1>lost their focus a little bit on sport. They got

0:17:17.200 --> 0:17:20.760
<v Speaker 1>into a lot more casual, a lifestyle product, and now

0:17:20.760 --> 0:17:25.520
<v Speaker 1>they're actually completely refocused on performance product. It will take

0:17:25.560 --> 0:17:28.680
<v Speaker 1>more time because that's a smaller part of the market,

0:17:28.760 --> 0:17:30.560
<v Speaker 1>but I think it is the right strategy.

0:17:30.160 --> 0:17:33.600
<v Speaker 2>For my branding perspective. Who's got it right right now?

0:17:33.600 --> 0:17:36.399
<v Speaker 2>We mentioned American Egg have sort of unapologetic founded, some

0:17:36.480 --> 0:17:38.680
<v Speaker 2>people did not apologize, sales went up.

0:17:38.760 --> 0:17:40.000
<v Speaker 6>Who's got it right at the moment?

0:17:40.320 --> 0:17:42.840
<v Speaker 1>You know, I think I think there are several brands.

0:17:42.920 --> 0:17:46.800
<v Speaker 1>Ralph Lauren coach certainly having a bit of a moment.

0:17:46.840 --> 0:17:50.480
<v Speaker 1>Birkenstock put up really strong growth earlier this week, so

0:17:50.560 --> 0:17:53.760
<v Speaker 1>there are some brands that are doing quite well. The

0:17:53.880 --> 0:17:58.840
<v Speaker 1>Gap brand is showing a resurgence that I certainly hadn't predicted,

0:17:58.920 --> 0:18:02.119
<v Speaker 1>but it's been really fun to watch. So yeah, there

0:18:02.119 --> 0:18:05.000
<v Speaker 1>are several of them with great marketing and good product

0:18:05.040 --> 0:18:07.120
<v Speaker 1>and they're kind of coming back from where they used

0:18:07.119 --> 0:18:07.280
<v Speaker 1>to be.

0:18:08.200 --> 0:18:11.760
<v Speaker 2>This is the Bloomberg Surveillance podcast, bringing you the best

0:18:11.800 --> 0:18:14.840
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