WEBVTT - Trump is Upending Global Politics 0:00:02.400 --> 0:00:06.720 Bloomberg Audio Studios, podcasts, radio news. 0:00:11.920 --> 0:00:16.320 This is the Bloomberg Surveillance Podcast. Catch us live weekdays 0:00:16.320 --> 0:00:19.799 at seven am Eastern on applecar Player, Android Auto with 0:00:19.840 --> 0:00:23.280 the Bloomberg Business App. Listen on demand wherever you get 0:00:23.320 --> 0:00:26.160 your podcasts, or watch us live on YouTube. 0:00:26.280 --> 0:00:30.200 Tina Fordham has been a huge benefit to us geopolitical 0:00:30.240 --> 0:00:32.360 strategist for him Global Foresight. 0:00:33.320 --> 0:00:35.960 Tina, just a window into this. How did you end. 0:00:35.960 --> 0:00:39.000 Up with Ibraham Robari? The guy is a triple a 0:00:39.159 --> 0:00:42.199 horse at City Group. He's out there. How did you 0:00:42.240 --> 0:00:43.800 and Ibrahim Robari get together? 0:00:45.159 --> 0:00:46.080 Well, aberm and I. 0:00:46.040 --> 0:00:49.760 Work together on William Bowder's Global Macro team, and is 0:00:50.280 --> 0:00:53.639 our immense good fortune to have him working with us 0:00:53.680 --> 0:00:55.040 as a senior advisor. 0:00:55.160 --> 0:00:57.640 So I'm absolutely thrilled. 0:00:57.480 --> 0:00:59.960 Just absolutely wonderful. I want to take a bigger, broader 0:01:00.000 --> 0:01:03.200 approach here. And you go into the wonderful work up 0:01:03.600 --> 0:01:06.399 of Harvard the book, folks, it really became part of 0:01:06.440 --> 0:01:11.240 international relations. How democracies die. Stephen Levitsky and Daniels iblet 0:01:11.840 --> 0:01:15.200 up at Harvard and you pick up their phrase norm 0:01:15.480 --> 0:01:18.039 erosion and say we're living it? 0:01:18.200 --> 0:01:21.600 What norm erosion? Tina Fordham? Are we going to see 0:01:21.680 --> 0:01:24.440 next year, well, we're. 0:01:24.280 --> 0:01:25.320 Already seeing it. 0:01:25.400 --> 0:01:28.360 And this is part of my you know, my my 0:01:28.640 --> 0:01:32.959 pledge to try to prevent us from seeing all of 0:01:33.000 --> 0:01:37.720 these you know, disparate developments as idiosyncratic and one off. 0:01:37.760 --> 0:01:41.560 Norm erosion can be everything from why our nieces and 0:01:41.600 --> 0:01:45.280 nephews don't send us thank you notes for Christmas presents, 0:01:46.319 --> 0:01:53.639 to the role of unelected advisors in the White House 0:01:54.240 --> 0:01:58.680 to the end of kind of customs. Norms are not 0:01:58.880 --> 0:02:03.520 necessarily rule. There's certainly not laws, and I'm going to 0:02:03.680 --> 0:02:07.520 argue that they matter as much to our ability to 0:02:07.600 --> 0:02:10.799 conduct business as laws do. 0:02:12.400 --> 0:02:18.640 So for twenty twenty five, Tina given norm erosion, geopolitical 0:02:18.680 --> 0:02:22.080 denihalism is another theme. I know you're focused on, what 0:02:22.160 --> 0:02:25.040 are your themes for twenty twenty five for investors as 0:02:25.040 --> 0:02:28.720 I think about geopolitics and the impact on markets. 0:02:29.639 --> 0:02:32.240 I'm not sure how many investors want to think about 0:02:32.280 --> 0:02:37.440 geopolitics because we've already seen the you know, the euphoria 0:02:37.760 --> 0:02:41.560 you know now tempered to focus on the positive aspects 0:02:41.600 --> 0:02:45.000 of Trump's agenda deregulation, and these are you know, these 0:02:45.040 --> 0:02:47.000 are no doubt going to be positive, They're going to 0:02:47.040 --> 0:02:51.960 be especially positive for US markets. But as you know, 0:02:52.040 --> 0:02:55.680 I'm based in London. I have coined the concept of 0:02:55.760 --> 0:03:01.120 geopolitical denialism, borrowing a little bit from climate denihilism, and 0:03:01.160 --> 0:03:03.840 I'm suggesting that this is like being a flat earther 0:03:04.880 --> 0:03:08.360 when it comes to thinking about geopolitics, because take the 0:03:08.440 --> 0:03:13.240 example of Syria, not a market moving event, nor one 0:03:13.280 --> 0:03:15.440 that we would expect to be, but it's the second 0:03:15.480 --> 0:03:20.720 and third order effects of geopolitics that matter. So times 0:03:20.760 --> 0:03:26.280 are good in US markets, But I'm suggesting developments like 0:03:26.600 --> 0:03:32.720 Trump's recent comments, shall we say, questioning the validity of 0:03:32.840 --> 0:03:38.080 Greenland belonging to Denmark and the Panama Canal belonging to 0:03:38.400 --> 0:03:42.000 Panama are important. 0:03:42.120 --> 0:03:43.119 They are significant. 0:03:43.200 --> 0:03:45.720 They're not going to move markets, but they are extremely 0:03:45.760 --> 0:03:49.560 important because they suggest challenges to the rules of the 0:03:49.600 --> 0:03:53.920 game and indeed something potentially more significant, And they're also 0:03:54.240 --> 0:03:56.280 big geostrategic implications. 0:03:56.280 --> 0:03:59.000 Those are not two random choices. 0:04:00.520 --> 0:04:03.680 For investors in just markets in general. Does that suggest 0:04:04.320 --> 0:04:07.880 over the next year, if not four years, maybe investors 0:04:07.960 --> 0:04:10.320 kind of rein in some of the risk taking because 0:04:10.320 --> 0:04:13.480 some of the geopolitics, maybe emanating from the US White 0:04:13.520 --> 0:04:15.880 House could be really problematic. 0:04:17.760 --> 0:04:18.640 I think You're going. 0:04:18.560 --> 0:04:22.520 To see a lot of changes in stance, a lot 0:04:22.560 --> 0:04:26.839 of developments that maybe more behind the scenes than say an. 0:04:26.640 --> 0:04:29.640 Event risk like a terrorist attack or a hot war. 0:04:30.720 --> 0:04:33.760 What would the US need to do to, as Trump 0:04:33.800 --> 0:04:38.159 would put it, regain control of the Panama Canal? Could 0:04:38.200 --> 0:04:41.839 this be done through non military means? I think looking 0:04:41.880 --> 0:04:46.120 at what military strategists called gray zone actions, which can 0:04:46.200 --> 0:04:51.880 be commercial, they can be legal, and through kind of 0:04:51.920 --> 0:04:56.040 salami tactics can really change the facts on the ground. 0:04:56.120 --> 0:04:59.040 Right now, Russia and China have made clear that they 0:04:59.040 --> 0:05:02.640 don't believe that US hedge of money should continue. And 0:05:02.680 --> 0:05:06.440 what means will they use for that? Maybe more important 0:05:06.680 --> 0:05:11.040 to your question for our CEO clients, for anyone with 0:05:11.120 --> 0:05:15.440 a complex supply chain. But these are big, great power 0:05:15.600 --> 0:05:19.560 challenges being played out through these small places. 0:05:20.240 --> 0:05:22.960 Tina Fordham with is Fordham Global Foresight here as we 0:05:23.000 --> 0:05:27.279 look at international relations into next Yearatina, just a question 0:05:27.360 --> 0:05:31.799 that came up this weekend. I think it's an amateur 0:05:31.839 --> 0:05:36.920 I'm saying, there's a presidential tradition of giving ambassadors to 0:05:37.120 --> 0:05:38.160 people that gave. 0:05:37.960 --> 0:05:40.080 You a lot of money to get elected. Get it. 0:05:40.600 --> 0:05:43.760 In all that, how do you, as a grizzled pro 0:05:44.000 --> 0:05:50.520 respond to the ambassador's selections we're seeing from President elect Trump. 0:05:50.560 --> 0:05:54.559 We got a football player in the Bahamas, we got 0:05:54.800 --> 0:05:57.120 a father in law son in law kind of thing 0:05:57.160 --> 0:05:58.960 in Paris, and on and on. 0:05:59.120 --> 0:06:01.880 How do you respond? And is it just business usual? 0:06:02.240 --> 0:06:05.600 Is there something different going on in our ambassadorships? 0:06:07.120 --> 0:06:10.520 First of all, I would like to reject the characterization 0:06:10.640 --> 0:06:13.080 of myself as grizzled on anything pro. 0:06:13.279 --> 0:06:20.440 Yes, I missrizzled, grizzled you know you can, yeah, Lisa later. 0:06:20.680 --> 0:06:23.400 And I said it, and Lisa threw a gluten free 0:06:23.480 --> 0:06:24.000 role at me. 0:06:24.440 --> 0:06:27.880 You're thank you, Lisa, Thank you, Lisa. Someone we have 0:06:27.960 --> 0:06:30.359 to stick up for each other. But oh right, So 0:06:30.480 --> 0:06:33.520 what's this getting on? That there's a lot of eye 0:06:33.600 --> 0:06:35.880 rolling going on? You know. 0:06:35.960 --> 0:06:41.600 The expectation is that UK US and France, US and 0:06:41.880 --> 0:06:46.400 German US relations, you know, will continue, even if there 0:06:46.480 --> 0:06:50.600 is someone less than a grizzled old pro in the ambassadorship. 0:06:51.120 --> 0:06:54.159 It hasn't always been the case, by the way that. 0:06:54.080 --> 0:06:58.000 Donors were awarded these plum kinds of post. I mean, 0:06:58.520 --> 0:07:03.200 I'm thinking about people Pamela Harriman and Paris and others, 0:07:04.320 --> 0:07:08.359 but Europe is not pushing back on any of this, 0:07:08.600 --> 0:07:13.720 and you know, taking a stoic approach because you have 0:07:13.760 --> 0:07:17.240 to choose your battles. Everyone wants to work with this administration, 0:07:18.160 --> 0:07:21.480 and we will see just how robust the you know, 0:07:21.520 --> 0:07:26.000 the relationships are and the channels of communication and the 0:07:26.040 --> 0:07:27.720 areas of cooperation. 0:07:28.880 --> 0:07:31.000 Tina, as we kind of think about twenty twenty five, 0:07:31.000 --> 0:07:34.280 what are the what's maybe the key question you're getting 0:07:34.320 --> 0:07:36.880 from your clients these days about your remit, which is 0:07:36.960 --> 0:07:38.560 again geopolitics. 0:07:40.240 --> 0:07:42.720 It couldn't be more broad. It is what's going to 0:07:42.800 --> 0:07:44.560 happen because. 0:07:44.680 --> 0:07:46.720 You know, again at the you know, purely at the 0:07:46.760 --> 0:07:51.520 market level, everyone you know buys the positive story, but 0:07:51.600 --> 0:07:56.280 there's a lot of worry about what could possibly go wrong. 0:07:56.640 --> 0:08:01.800 And even you know, tracking and monitoring risks as we do, 0:08:02.520 --> 0:08:06.720 there are so many wild cards. And that's you know, 0:08:06.760 --> 0:08:11.160 got to be part of the playbook here to kind 0:08:11.200 --> 0:08:13.680 of sow discontent and confusion. 0:08:14.080 --> 0:08:15.240 I'm looking a lot. 0:08:15.120 --> 0:08:19.320 At these small data points, developments that don't grab headlines, 0:08:19.680 --> 0:08:24.040 like why is the Slovak president Robert Fico in Moscow? 0:08:24.240 --> 0:08:25.000 Hello? 0:08:25.840 --> 0:08:31.360 That is not something that the European Union agrees with. 0:08:32.280 --> 0:08:35.880 It's not a game changer. In the narrowest sense. But 0:08:35.920 --> 0:08:41.480 when you combine that with Hungarian President Victor Ravon seeing Putin, 0:08:42.240 --> 0:08:45.440 what's been happening in Romania, none of these you know, 0:08:46.000 --> 0:08:51.680 major economies. It adds up to Leaveridge that Putin has though, 0:08:51.720 --> 0:08:55.280 because these countries are all on the receiving end or 0:08:55.360 --> 0:08:57.600 were of Russian gas supplies. 0:08:58.080 --> 0:09:00.800 So if we wait until old blown. 0:09:00.520 --> 0:09:05.880 Event risk transpires, then we're not prepared for these downside surprises. 0:09:06.360 --> 0:09:07.640 Tina, thank you so much. 0:09:07.760 --> 0:09:14.479 Tina Fordham with his Fordum Global Foresight. 0:09:16.480 --> 0:09:20.319 You're listening to the Bloomberg Surveillance podcast. Catch us live 0:09:20.440 --> 0:09:23.760 weekday afternoons from seven to ten am Easter Listen on 0:09:23.800 --> 0:09:27.040 Apple CarPlay and Android Auto with a Bloomberg Business app, 0:09:27.160 --> 0:09:28.840 or watch us live on YouTube. 0:09:28.880 --> 0:09:31.000 We're thrilled to get smarter with andrews Slimon. 0:09:31.360 --> 0:09:35.360 Had a love come on applied to equity advisors. 0:09:35.440 --> 0:09:38.880 I don't have no idea that is at Morganeselli. What 0:09:38.920 --> 0:09:39.960 Andrew Slimon. 0:09:39.679 --> 0:09:44.400 Will give you as the courage to participate in the market. Andrew, 0:09:44.480 --> 0:09:47.440 how do we get to a third double digit bull 0:09:47.559 --> 0:09:48.240 market year? 0:09:50.080 --> 0:09:54.160 Well, I think you have a combination of lower rates. 0:09:55.080 --> 0:09:59.320 Seven trillion sitting in the money markets that will search 0:09:59.360 --> 0:10:02.000 for a new home or some of it will and 0:10:03.040 --> 0:10:06.880 pro growth policies, and that's how you could get to 0:10:07.160 --> 0:10:09.760 another double digit year for the equa market. 0:10:09.840 --> 0:10:11.880 I look at it and as double digit earnings. Here 0:10:12.160 --> 0:10:15.480 Gena Martin Adams of Bloomberg Intelligence talking up fourteen percent. 0:10:15.640 --> 0:10:20.280 Maybe it comes down to the security analysts at Morgan 0:10:20.440 --> 0:10:24.240 Stanley get you to a double digit earnings growth year. 0:10:25.520 --> 0:10:27.480 Yeah, I mean, I you know. One of the things Tom, 0:10:27.480 --> 0:10:29.360 that you know I've been on your show a lot. 0:10:29.400 --> 0:10:32.040 I have been all pretty optimistic the last couple of years 0:10:32.120 --> 0:10:36.360 is that it's not about valuation. It's about the direction 0:10:36.559 --> 0:10:39.679 of the change. And what's you know. I tell you know, 0:10:39.880 --> 0:10:43.160 especially younger investors all the time, be very wary of 0:10:43.920 --> 0:10:48.680 valuate pure valuation tools as a methodology to evaluate the 0:10:48.760 --> 0:10:52.200 stock market or a stock is cheap or extensive, because 0:10:52.200 --> 0:10:56.520 sometimes analysts don't get the denominator the estimate right. And 0:10:56.600 --> 0:10:58.319 really what's been going on in the last couple of 0:10:58.360 --> 0:11:02.960 years is earnings have been stronger than what is expected 0:11:03.880 --> 0:11:07.160 so far we have. I've seen a lot of predictions 0:11:07.160 --> 0:11:09.560 that earnings are too strong for next year, but I 0:11:09.600 --> 0:11:13.080 haven't seen those numbers come down yet. Uh and that 0:11:13.320 --> 0:11:17.120 you know that does that's that falls into the positive camp. 0:11:17.240 --> 0:11:19.280 I mean, Paul, that's Andrew Slayman says, Look, you got 0:11:19.320 --> 0:11:20.040 to participate. 0:11:20.200 --> 0:11:22.440 Yep, go to cash. It's not going to work. 0:11:23.080 --> 0:11:26.160 Not gonna work. Hey, Andrew, we've got the FED cutting rates. 0:11:26.200 --> 0:11:27.920 But now it looks like in twenty twenty five at 0:11:27.960 --> 0:11:31.800 a slower pace than maybe the market had been anticipating. 0:11:32.640 --> 0:11:34.559 How does that impact your view of the equity market. 0:11:34.800 --> 0:11:37.280 Yeah, I think this is good news, good news. And 0:11:37.360 --> 0:11:41.160 let me articulate why. What I have been worried about 0:11:41.480 --> 0:11:46.760 is if you look at what's worked since July when 0:11:46.800 --> 0:11:48.520 the FED said they're going to start to cut weight, 0:11:48.640 --> 0:11:52.080 what has worked in the market is the is the 0:11:52.200 --> 0:11:56.400 low quality what I would call junk growth stocks. A 0:11:56.400 --> 0:11:59.280 lot of companies that don't you know, have high revenue estimates, 0:11:59.320 --> 0:12:03.000 but nowhearn are very little earning very high multiples. High. 0:12:03.120 --> 0:12:06.040 The more risk you have taken in the last six months, 0:12:06.280 --> 0:12:09.240 the better you have done. And that's a that scares 0:12:09.320 --> 0:12:13.000 me because that screens of the year twenty twenty one, 0:12:13.160 --> 0:12:15.800 and we know what happened in twenty twenty two. The 0:12:15.800 --> 0:12:19.160 market fell apart, so to the extent that I think 0:12:19.240 --> 0:12:24.079 the FED has kind of encouraged that risk taking by saying, hey, 0:12:24.080 --> 0:12:27.840 we're going to cut rates. If they say, hey, you 0:12:27.880 --> 0:12:30.400 know what, we're going to go a little slower, good 0:12:31.040 --> 0:12:34.440 rates going up. That takes the heat out of the 0:12:34.520 --> 0:12:38.480 bubble that I think is occurring in the specostock. I 0:12:38.480 --> 0:12:41.959 think that's healthy for the stock market in many ways, 0:12:42.040 --> 0:12:46.920 might extend the bull market longer than just twenty twenty one. 0:12:47.200 --> 0:12:49.360 And just slimon with us and we will continue with them. 0:12:49.360 --> 0:12:50.480 He's with Morgan Stanley. 0:12:50.480 --> 0:12:51.080 Of course, we're. 0:12:50.960 --> 0:12:53.720 Welcome all of you accross the nation, if you're working, 0:12:53.800 --> 0:12:57.040 if you're computing, Apple CarPlay, Android Auto, of course, Serious 0:12:57.200 --> 0:13:01.199 x M Channel one twenty one, Good Morning, Bloomberg Television 0:13:01.600 --> 0:13:04.960 worldwide and on YouTube, all of our distribution on YouTube. 0:13:05.320 --> 0:13:08.000 Subscribe to Bloomberg Podcasts. 0:13:08.160 --> 0:13:12.199 It's the only way to observe Lisa Mateo. It's a constructive. 0:13:12.240 --> 0:13:16.400 Exercise, to say the least. And a slimon. Last week 0:13:16.440 --> 0:13:18.559 we had in the Giant a free cash flow. 0:13:18.600 --> 0:13:19.520 You and I read. 0:13:19.600 --> 0:13:24.319 Free cash Flow and Shareholder Yield with William Priest of Epic. 0:13:24.320 --> 0:13:25.120 It was iconic. 0:13:25.160 --> 0:13:28.640 Then, how do you study free cash flow? In this 0:13:28.720 --> 0:13:30.880 great bullmarket. What's the Slimon method. 0:13:31.320 --> 0:13:33.560 Well, I'm you know, it's interesting. I hear a lot 0:13:33.600 --> 0:13:35.480 of people come on shows like this and talk about 0:13:35.559 --> 0:13:39.640 how you have to have expansion beyond the MAG seven 0:13:40.520 --> 0:13:43.400 and how it's dangerous that these socks are very high 0:13:43.400 --> 0:13:46.120 weighting the S and P and I certainly agree with that. 0:13:46.200 --> 0:13:48.120 But at the end of the day, these are the companies. 0:13:48.160 --> 0:13:51.040 If I look at what's worked, undation from a kind 0:13:51.040 --> 0:13:54.760 of factor stapwork, corporate buybacks, companies that are buying back 0:13:54.840 --> 0:13:59.040 socking brass, many more general outperformed, and that's the big boys. 0:13:59.480 --> 0:14:02.760 So to the extent that your question about cash flow, 0:14:02.840 --> 0:14:05.160 I look and say, well, what companies are generating a 0:14:05.200 --> 0:14:07.480 lot of cash flow? It's some you know, some of 0:14:07.520 --> 0:14:11.840 the best are these really big companies. So I would 0:14:11.960 --> 0:14:14.720 I think one of the most consensus trades for next 0:14:14.800 --> 0:14:18.160 year is that the market's going to expand beyond the 0:14:18.240 --> 0:14:20.880 MAG seven. And I think there's plenty of good ideas 0:14:20.880 --> 0:14:24.960 beyond MAG seven. But don't go you have to face 0:14:25.000 --> 0:14:27.520 the reality these companies are generally a lot of cash 0:14:27.600 --> 0:14:31.080 flow and they're buying backstock, and that is positive. That's 0:14:31.120 --> 0:14:35.360 a big difference toime to nineteen ninety nine, two thousand 0:14:35.480 --> 0:14:35.720 and now. 0:14:35.840 --> 0:14:36.480 Thank you so much. 0:14:36.480 --> 0:14:39.600 Andrew Simon with this Morgan Stanley this morning on the 0:14:39.760 --> 0:14:41.720 Courage to stay in the market. 0:14:42.040 --> 0:14:46.280 This is the Bloomberg Surveillance Podcast. Listen live each weekday 0:14:46.400 --> 0:14:49.600 starting at seven am Eastern on applecar Play and Android 0:14:49.640 --> 0:14:52.480 Auto with the Bloomberg Business app. You can also listen 0:14:52.600 --> 0:14:55.720 live on Amazon Alexa from our flagship New York station, 0:14:56.080 --> 0:14:59.680 Just say Alexa playing Bloomberg eleven thirty right now. 0:15:00.000 --> 0:15:02.880 And this is an immense honor. Data Telsea's scheduled to 0:15:02.960 --> 0:15:06.720 join us on a holiday, but we must pause for 0:15:06.800 --> 0:15:10.240 the end of an era. Nordstrom's Always in Forever of 0:15:10.360 --> 0:15:13.800 Seattle will go private. This on the same day as 0:15:13.840 --> 0:15:18.840 a container store files for bankruptcy. Lisa Montela that story earlier, 0:15:19.480 --> 0:15:24.200 and the emotion of a family running a store defines 0:15:24.320 --> 0:15:28.240 Dana Telsea as no one else on the island of Manhattan. 0:15:28.360 --> 0:15:31.960 She was intimately involved with a small store at fifty 0:15:32.040 --> 0:15:36.400 seventh Street at Fifth Avenue, name of Bergdorf Goodman. As 0:15:36.440 --> 0:15:41.119 a child, Dana the emotion of a family running retail 0:15:42.160 --> 0:15:46.600 and then it's over. Describe your thoughts as you hear 0:15:46.680 --> 0:15:50.239 of the privatization of Nordstrom. 0:15:50.160 --> 0:15:52.720 A couple things. So first of all, Tom, thank you 0:15:52.880 --> 0:15:54.760 very much for having me, and it's an honor to 0:15:54.760 --> 0:15:57.320 be here with you, and happy holidays too in your family. 0:15:57.840 --> 0:16:00.920 And you're right exactly. The privatization of a family run 0:16:01.000 --> 0:16:04.280 business that's been around for over one hundred years is 0:16:04.360 --> 0:16:07.720 definitely a spark of change. I think the new environment 0:16:07.760 --> 0:16:10.520 today is different than it was in the past, and 0:16:10.560 --> 0:16:13.720 you have to give Nordstrom credit for all that it's accomplished, 0:16:14.000 --> 0:16:18.720 but the go forward environment requires big changes, and whether 0:16:18.800 --> 0:16:21.600 it is a reduction in the number of full line 0:16:21.600 --> 0:16:24.920 stores they have, the acceleration of what may be for 0:16:25.000 --> 0:16:29.560 the rack, the continuous pursuit of new and curated brands 0:16:29.560 --> 0:16:33.560 and their assortment, and for all what we know about Nordstrum, 0:16:33.760 --> 0:16:37.400 the service element and the loyal customers they have is 0:16:37.440 --> 0:16:41.080 something that needs to be expanded and accelerated go forward. 0:16:41.360 --> 0:16:43.360 After all that they've accomplished. 0:16:42.880 --> 0:16:47.080 For Nordstrom and for your Bergdorf Goodman and as Joe 0:16:47.080 --> 0:16:51.880 Feldman at Telsey Advisory Group covers big box, what are 0:16:52.080 --> 0:16:55.440 customers choosing to do this holiday season? 0:16:56.640 --> 0:16:59.520 Well, this holiday season, I think overall it is continues 0:16:59.560 --> 0:17:02.480 to be that innovation and newness. You look at Birkenstock 0:17:02.520 --> 0:17:05.520 would very good sales increases in their own stores and 0:17:05.560 --> 0:17:09.960 wholesale stores. That's newness and differentiation with their closed toed shoes. 0:17:10.440 --> 0:17:12.640 I'm thinking of other winners, and you take a look 0:17:12.680 --> 0:17:17.040 frankly at Lululemon, where the newness and colors is driving demand. 0:17:17.600 --> 0:17:21.640 We're still not seeing the luxury world see any real acceleration. 0:17:22.119 --> 0:17:25.480 There are certain brands at certainly the super upper end 0:17:25.560 --> 0:17:28.959 like Ermez that's always different than everyone else. But what 0:17:29.119 --> 0:17:32.240 people are searching for and where they're going continues to 0:17:32.280 --> 0:17:35.320 be value, particularly at the lower and middle income tier, 0:17:35.800 --> 0:17:39.000 whether it be at TJ Max, whether it be at Walmart. 0:17:39.320 --> 0:17:42.080 That's where we're seeing certainly some of the strength lately. 0:17:42.840 --> 0:17:44.960 So, Dana, what are some of the retailers that you 0:17:45.119 --> 0:17:47.479 follow and followed for such a long time. What are 0:17:47.480 --> 0:17:50.200 they telling you about this holiday shopping season? 0:17:50.359 --> 0:17:50.760 This year? 0:17:51.720 --> 0:17:55.160 Compressed holiday season is a factor. You're seeing five fewer 0:17:55.240 --> 0:17:59.920 days between Thanksgiving and Christmas. Consumers started earlier. There were 0:18:00.119 --> 0:18:03.640 promotions that began earlier, but the state of promotions isn't 0:18:03.680 --> 0:18:06.800 greater than what was expected. The other thing that happened 0:18:06.800 --> 0:18:10.320 with Christmas on a Wednesday. The digital shopping days where 0:18:10.359 --> 0:18:13.800 you can get even same day delivery that many companies 0:18:13.840 --> 0:18:16.440 are putting in place with door dash, and you only 0:18:16.480 --> 0:18:19.080 have one more day to be able to take advantage 0:18:19.119 --> 0:18:19.359 of that. 0:18:20.359 --> 0:18:24.200 Anything kind of jumping out as the go to gift 0:18:24.320 --> 0:18:26.439 this year. I know some years it's we've definitely had 0:18:26.440 --> 0:18:28.120 those types of stories. Is this one of those years? 0:18:29.080 --> 0:18:31.720 I think it's a little bit wider spread. I think 0:18:31.800 --> 0:18:35.320 keep in mind we've had Taylor Swift's concert ending, but 0:18:35.520 --> 0:18:37.960 Target had the Book of the Errors tour. You have 0:18:38.040 --> 0:18:42.080 the closed toed Birken shoes that basically happen to be 0:18:42.200 --> 0:18:46.280 very popular. And if you're into denim jeans, barrel leg 0:18:46.400 --> 0:18:49.320 jeans are what it's all about. And you're still seeing 0:18:49.400 --> 0:18:52.760 newness and cosmetics occur, and I think that's some of 0:18:52.800 --> 0:18:55.320 the independent brands that are driving demand. 0:18:55.560 --> 0:18:57.600 I noticed that the fam was it all to and 0:18:57.880 --> 0:19:00.440 so for it was a double did you Day? 0:19:01.160 --> 0:19:01.360 Dan? 0:19:01.359 --> 0:19:04.080 And I got a nine, nine hundred and fifty dollars 0:19:04.160 --> 0:19:07.480 jacket over It's Chanelle and the news here, and I 0:19:07.520 --> 0:19:10.800 think of you know, the Devilwar's Prada where Meryl Street 0:19:10.800 --> 0:19:13.080 walks in and throws the purses in the bags, and 0:19:13.119 --> 0:19:17.560 all the fanciness met you blazy. I know I'm butchering 0:19:17.640 --> 0:19:20.960 the name, but the guy from Botega, Venada goes over 0:19:21.000 --> 0:19:25.040 to quote unquote save Chanell. What does that signal to 0:19:25.080 --> 0:19:30.600 you that something as iconic as Coco Chanel's franchise needs saving. 0:19:31.680 --> 0:19:34.879 Well, keep in mind, ever since Carl lager Felt passed away, 0:19:34.920 --> 0:19:37.760 who was the icon of the Chanell brand, and you 0:19:37.920 --> 0:19:41.520 had his long standing colleague basically take over for the 0:19:41.520 --> 0:19:45.000 past few years, you need to have a marker. And 0:19:45.040 --> 0:19:47.879 I think what we've seen this year is many brands 0:19:47.920 --> 0:19:52.360 are getting new designers. Obviously, you've had things happen at Gucci, 0:19:52.400 --> 0:19:55.840 which it's needed to happen. We have changes going on 0:19:56.040 --> 0:19:59.400 at other of lv's brands with the whole change in leadership. 0:19:59.440 --> 0:20:02.280 That's a current. And I've always believed that typically for 0:20:02.400 --> 0:20:06.639 many it's fifteen years that a designer has the eye 0:20:06.720 --> 0:20:09.399 of the consumer, and that their eye doesn't get tired 0:20:09.440 --> 0:20:12.600 of the brand. Carl Lagerfeld did it much longer, and 0:20:12.640 --> 0:20:14.680 I don't see anyone else like him out there. 0:20:15.720 --> 0:20:17.480 Fascinating Dana. 0:20:17.720 --> 0:20:20.280 The holidays season here and I got all these gloom 0:20:20.400 --> 0:20:23.800 articles out about retail, and yet we're still. 0:20:23.520 --> 0:20:29.320 Aspirational after the pandemic. Have we changed? Is consumption beasts? 0:20:30.520 --> 0:20:30.600 No? 0:20:30.720 --> 0:20:32.879 I think we're always going to be consumption beasts, And 0:20:32.920 --> 0:20:37.080 you know why. There's a point of excitement and socialization 0:20:37.560 --> 0:20:40.720 that consumption brings. And look what we're saying in terms 0:20:40.720 --> 0:20:45.639 of discretionary spend. Where could twenty twenty five see resumption 0:20:45.760 --> 0:20:49.200 of acceleration of discretionary spend. Think of what we've seen 0:20:49.240 --> 0:20:53.040 in twenty twenty four, where old brands becoming new again, 0:20:53.320 --> 0:20:58.040 where the cultural relevance of gap taking hold. And is 0:20:58.160 --> 0:21:00.800 Victoria's Secret going to be a name for twenty twenty 0:21:00.840 --> 0:21:03.800 five given the lines we've seen so far in twenty 0:21:03.840 --> 0:21:07.600 twenty four with the arrival of Hillary Souper's CEO. In 0:21:07.680 --> 0:21:09.040 September of twenty. 0:21:08.760 --> 0:21:12.400 Four, Dana Great article out on the Bloomberg terminal entitled 0:21:12.480 --> 0:21:18.040 Kirkland for Christmas shoppers ditch logos for store brands. I 0:21:18.040 --> 0:21:19.040 didn't know that was a thing. 0:21:19.080 --> 0:21:20.000 What are you seeing out there? 0:21:20.760 --> 0:21:23.040 I think overall, when you think about private label and 0:21:23.119 --> 0:21:26.520 store brands, there's no one more successful in the essentials 0:21:26.560 --> 0:21:30.399 world than Costco's Kirklands and one of the interesting things 0:21:30.440 --> 0:21:34.639 about their own brand there everyone knows the name, so yes, 0:21:35.040 --> 0:21:38.520 store brands matter. You're even seeing some of the department 0:21:38.560 --> 0:21:42.640 stores in apparel looking to activate and enhance their own 0:21:42.680 --> 0:21:46.560 private label brands. It's also value and that it typically 0:21:46.640 --> 0:21:49.440 has a lower price than any regular brands. 0:21:49.600 --> 0:21:52.080 You got Joe Joy as an outperformer on Costco. 0:21:52.280 --> 0:21:53.520 Costco to the moon data. 0:21:54.720 --> 0:21:58.399 You know what a competitive mode that scale, that can scale. 0:21:58.480 --> 0:22:02.520 Think of what Costco has, more stores, more products, more 0:22:02.560 --> 0:22:04.720 customers and really loyal members. 0:22:04.920 --> 0:22:07.280 Dana, we finished strong here today. Thank you so much 0:22:07.359 --> 0:22:11.480 for your perspective, particularly on JW Nords term they will 0:22:11.520 --> 0:22:16.000 go private after a decade of price decline. 0:22:15.720 --> 0:22:16.639 To say the least. 0:22:23.359 --> 0:22:27.640 This is the Bloomberg Surveillance Podcast. Listen live each weekday 0:22:27.720 --> 0:22:30.920 starting at seven am Eastern on applecar Play and Android 0:22:30.960 --> 0:22:33.879 Auto with the Bloomberg Business app. You can also watch 0:22:33.960 --> 0:22:37.200 us live every weekday on YouTube and always on the 0:22:37.240 --> 0:22:38.159 Bloomberg terminal. 0:22:38.240 --> 0:22:40.840 Here, Jerry, look at the front pages around the world. 0:22:40.960 --> 0:22:43.879 The Lisa Mateo week. We call it Lisa, what do 0:22:43.920 --> 0:22:44.119 you have? 0:22:44.359 --> 0:22:46.920 I have all the scams that are happening this holiday 0:22:46.960 --> 0:22:48.800 season to steal your money. I don't know if you've 0:22:48.800 --> 0:22:52.240 gotten some of those weird text messages like click the link, 0:22:52.280 --> 0:22:55.480 all that kind of stuff. Well, they're using AI to 0:22:55.560 --> 0:22:58.080 do a lot of this stuff, and that's what's why 0:22:58.119 --> 0:23:00.280 you see it a lot more this season. In the 0:23:00.320 --> 0:23:03.439 text messages, right, the baiting victims to write programs testing 0:23:03.520 --> 0:23:07.600 huge volumes of stolen credit card information. They're helping scammers 0:23:07.600 --> 0:23:10.919 generate fake online ads, so you're seeing more online ads, 0:23:10.920 --> 0:23:12.520 so the fake ones to click the link and then 0:23:12.560 --> 0:23:16.240 they steal your credit card information using AI to impersonate 0:23:16.320 --> 0:23:18.960