Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney. Along
Speaker 1: with my co host of Bonnie Quinn. Every business day
Speaker 1: we bring you interviews from CEOs, market pros, and Bloomberg experts,
Speaker 1: along with essential market moving news. Find the Bloomberg Markets
Speaker 1: Podcast on Apple Podcasts or wherever you listen to podcasts,
Speaker 1: and on Bloomberg dot com. With President elected Biden just
Speaker 1: weeks away from entering the White House, markets are discounting
Speaker 1: what it means for financial assets, particularly from a tax
Speaker 1: adjusted basis, and that is obviously very important for the
Speaker 1: wealthy and ultra wealthy in the market to get a
Speaker 1: sense of kind of what they're thinking. We're fortunate to
Speaker 1: welcome back to the show Michael Son and Felt, chairman
Speaker 1: and founder of Tiger One. Tiger twenty one is a
Speaker 1: peer membership organization for high net worth creators and preservers
Speaker 1: of wealth, helping to navigate through the challenges and opportunities
Speaker 1: that success that success creates. Michael, thanks so much for
Speaker 1: joining us again here. Uh you know, we're now back
Speaker 1: to having a Democrat in the White House. One of
Speaker 1: the assumptions is that taxes maybe going up. What are
Speaker 1: some of your members Uh, what are they reacting? What
Speaker 1: are they saying about a Biden presidency. Well, first of all,
Speaker 1: thanks for having me back. It's great to be with you.
Speaker 1: Our members are very focused on taxes historically, though what
Speaker 1: they said is it was more about whether the money
Speaker 1: was being well spent by the government, uh, and less
Speaker 1: about the absolute level of taxes. We just did a
Speaker 1: recent survey across our membership and hum, a difference of
Speaker 1: as much as five or ten as little as five
Speaker 1: or ten percent in the tax rate would get some
Speaker 1: of our members to move to lower tax states, a
Speaker 1: lot of people moving out of California and New York.
Speaker 1: So it's really a warning that there are limits on
Speaker 1: a state basis and on the federal basis. Most of
Speaker 1: our members think that if you have a divided government,
Speaker 1: if the Republicans maintained control of the Senate, the most
Speaker 1: sweeping tax changes are a little less likely. Why do
Speaker 1: they a certain point stop trusting government so they'll play
Speaker 1: a certain amount of tax But then suddenly they've decided
Speaker 1: that what the government was on the rest of the
Speaker 1: extra tax on is not what they would want the
Speaker 1: government to spend it on. Is that is? So there's
Speaker 1: obviously a wide range of opinion among our membership. Most
Speaker 1: of our members come from very middle and lower middle
Speaker 1: class backgrounds and have started with very little and bootstrapped
Speaker 1: into great success. These are some of the great entrepreneurs,
Speaker 1: so there is a sense of individualism and wanting to
Speaker 1: create incentives. So the topic that comes up the most is,
Speaker 1: of course, a government needs to pave the roads and
Speaker 1: have a military. But when taxes start becoming instruments of
Speaker 1: policy of wealth redistribution, some of our members think that
Speaker 1: goes beyond what prudent tax policy should be. But others
Speaker 1: are frankly quite aware of the inequality in our society
Speaker 1: and are struggling to think about how the dispersion of
Speaker 1: wealth the inequality can best be addressed. So, Michael, given
Speaker 1: the pandemic uncertainty, given the political uncertainty which now seems
Speaker 1: to be more certain, how have your members been preparing
Speaker 1: their portfolios for beyond sure um. Earlier in the year,
Speaker 1: we had a historic rise in cash. Over the last decade,
Speaker 1: our members have generally held about twelve percent in cash,
Speaker 1: never more than percent and never less than eleven percent,
Speaker 1: And all of a sudden and in the first quarter
Speaker 1: of this year, members rose cash two levels close to
Speaker 1: high teams. It was not only the largest shift, but
Speaker 1: the fastest shift we ever recorded. So once the pandemic hit,
Speaker 1: people were really battening down the hatches. And when you
Speaker 1: have complicated portfolios, making sure you have enough cash becomes
Speaker 1: far more important than what your returns are because you
Speaker 1: don't want to default on obligations and you don't want
Speaker 1: to miss opportunities. UM. You know, as the year has progressed, obviously,
Speaker 1: the markets have been extraordinary and our members have recorded
Speaker 1: really amazing returns and that was before November. November returns
Speaker 1: are coming in. Uh. Just this morning, I was looking
Speaker 1: at the first three hedge funds to report in my
Speaker 1: own portfolio with ten plus percent returns. UH. So our
Speaker 1: members are reporting over ten percent returns for the year.
Speaker 1: My guess is they'll end up at mid teens depending
Speaker 1: on December, and they're back to technology and healthcare on
Speaker 1: the public sector side, technology particularly as the long term
Speaker 1: best bet UM. I think we've talked about in prior
Speaker 1: shows that our members have had a bias towards technology
Speaker 1: for the last couple of years as the number one
Speaker 1: area of focus intensified with alternative UM UH with AI
Speaker 1: artificial intelligence, and that was that turned out to be
Speaker 1: an amazing bet. Our single largest stock has historically been Apple,
Speaker 1: but all of the fangs have been favorites among our members.
Speaker 1: And what a year they've had, real quick Michael, But
Speaker 1: what was the hard asset of choice for people deploying
Speaker 1: some of that cash that they raised at the beginning
Speaker 1: of year. Uh So, you know, real estate is still
Speaker 1: the largest asset class, but there's no asset class that's
Speaker 1: had more turmoil within real estate. On the industrial side,
Speaker 1: it's just been on fire. The entire shift to online
Speaker 1: sales has created needs for warehousing from which all those
Speaker 1: online purchases get delivered. So that's been the top page. Well,
Speaker 1: it is funny you should mention that because we just
Speaker 1: had a headline costs in the Bloomberg that kk R
Speaker 1: is nearing a deal for a portfolio of US warehouses.
Speaker 1: It would be an eight hundred million dollar deal. Michael.
Speaker 1: We're out of time, but thank you for joining. Always
Speaker 1: a pleasure. Michael Sonontelt is chairman and founder of Tiger
Speaker 1: twenty one and as a group, it has seventies seven
Speaker 1: billion dollars in assets under management. Taking care of the
Speaker 1: old toy, wealthy and really just chatting among one another
Speaker 1: about how things should get done on on all sides
Speaker 1: of the table. So we thank Michael very much. Let's
Speaker 1: bring in somebody who was listening to that interview now
Speaker 1: and who knows all about this, Sam Fazali, senior pharmaceutical
Speaker 1: analysts for Bloomberg Intelligence. And Sam, we were listening to
Speaker 1: the BioNTech guests who talked about about this wonderful news
Speaker 1: that Britain's will start getting shot. Why Britain first? This
Speaker 1: this stac scene was made in the US and in Germany,
Speaker 1: and what it's great that anybody is getting it. This
Speaker 1: is this is the beginning of the argument. You know,
Speaker 1: who goes first? Yeah, so, um, I mean, I mean
Speaker 1: the speed with which regulators wanting to get to look
Speaker 1: at drugs and and and make the decisions is different.
Speaker 1: Some have more, um layers of approval requirements, etcetera. So
Speaker 1: there's a lot of arguments and discussion going on about
Speaker 1: why the UK went first and got there first before
Speaker 1: the EMA. When it comes to distributing, you know, the press.
Speaker 1: The press conference that the UK had was pretty clear
Speaker 1: about the direction they're going, and that is healthcare workers
Speaker 1: and then m at risk people, which are usually the
Speaker 1: all the folks who live in often in the care homes, etcetera.
Speaker 1: So it will be by age, and I think it
Speaker 1: will be the same in the United States. And I
Speaker 1: suspect you were pretty much him as in Europe. I
Speaker 1: think everyone's kind of made up their minds on that one. Hey, Sam,
Speaker 1: here in the United States we have a fairly large
Speaker 1: percentage of the population that is generally anti vaccine for
Speaker 1: a variety of reasons. Is that is that a typical
Speaker 1: is that you have a similar issue in the UK
Speaker 1: and across Europe. UM. Yeah, you know, Paul, I think
Speaker 1: it varies depending on geography and even within a country.
Speaker 1: So I've even heard, for instance, eastern Massachusetts being likely
Speaker 1: to go into the level, but then you go further
Speaker 1: west and the numbers dropped massively. We've also got the
Speaker 1: situation in UM in France that after the European countries,
Speaker 1: it appears to be in surveys at least one of
Speaker 1: the more reticent countries. So it will vary country by country.
Speaker 1: We basically need about fifty to six people to take
Speaker 1: this vaccine UM, given that there's ten to tent who
Speaker 1: would have been infected along the way anyway to get
Speaker 1: us to that HERD immunity number. So it's not like
Speaker 1: we need to vaccinate everybody. Yeah, and it's great news
Speaker 1: that it's starting quickly. Though on the regulators approving this.
Speaker 1: Did the European Union regulators not have to get this
Speaker 1: approved as well? Explained? Was how weird managed to get
Speaker 1: us all done sort of unilaterally? Yeah, but the UK
Speaker 1: is UM you know, within within the rules of their
Speaker 1: during emergencies etcetera. They do have the option to go
Speaker 1: away from the European unions e m A European Medicine
Speaker 1: Association which is UM, which is what they've done. So
Speaker 1: this is and I think what the process was and
Speaker 1: why the UK was faster than europe versus the s
Speaker 1: d A. I think a lot of that comes down
Speaker 1: to how much resources you throw at it. I can't
Speaker 1: I cannot accept that the European that the UK regulator
Speaker 1: cut corners to get to this UM. They've been engaged
Speaker 1: with FIGHTER and other regulators since June looking at manufacturing
Speaker 1: all the other work that needs to be done. So
Speaker 1: I just can't believe that this one week difference will
Speaker 1: make an enormous amount of difference to people in terms
Speaker 1: of what data they see. Suddenly they're going to see
Speaker 1: a lot more data than the UK has. Hey Sam,
Speaker 1: you're you've been covering as pharmaceutical game for decades. Here
Speaker 1: you actually have a PhD in the crazy science behind
Speaker 1: all this. Do you personally care and you think patients
Speaker 1: in general should care which vaccine they get? Or are
Speaker 1: you going to take just the first thing that gets
Speaker 1: offered to san Fazelli? Yeah, so I think Paul, that
Speaker 1: will come down to the efficacy. But but and so
Speaker 1: we need to see the data, the data I've seen
Speaker 1: so far from fiser BioNTech versus moderna. You know, I
Speaker 1: will take either one of them that's offered to me.
Speaker 1: The fier BioNTech one appears to be. And those are
Speaker 1: carefully chosen words until we see more data, more tolerable
Speaker 1: in terms of you get less fever, you get less
Speaker 1: body aches. But frankly, if it comes down to it,
Speaker 1: and says Sam, you're gonna have to wait a year
Speaker 1: that one, but we can give you more there no now,
Speaker 1: and I think I'll just that would be a very
Speaker 1: easy question to answer. Of course I'll say yes to that.
Speaker 1: So this is then honestly just fantastic news. We're beginning
Speaker 1: to get the roll out of the vaccine. The vaccine works,
Speaker 1: and you know, can we all go home and rest
Speaker 1: peacefully or are there things that still stick out and
Speaker 1: bother you like, do we know, for example, if they're
Speaker 1: going to be longer term effects, we know we're going
Speaker 1: to need another vaccine in nine months. Yes, so there
Speaker 1: are what what does bother me? One is is not?
Speaker 1: Is not long term side effects and all that. I
Speaker 1: think you know, We've had a lot of vaccines developed
Speaker 1: and it's essentially they have pretty similar, very rare side
Speaker 1: effect issues which are related to the immune system, but
Speaker 1: very rare. So I'm not worried about that. What I
Speaker 1: am worried about is that the virus as soon as
Speaker 1: we start putting pressure on it, I pushing people to
Speaker 1: be vaccinated, and therefore they have an immune response that
Speaker 1: we end up what's called colonal selection. We end up
Speaker 1: selecting a version of the virus that's less susceptible to
Speaker 1: our vaccine. Now, as you just heard biotic Um, Alex
Speaker 1: and Guy were asking the Biotic executive about mutations. They
Speaker 1: said they've studied ten mutations and the vaccines equally efficacious
Speaker 1: in those settings. I don't know, he didn't really answer
Speaker 1: the question about that particular mutation I asked about, But
Speaker 1: it doesn't really matter. There are others that will come
Speaker 1: along that might escape our vaccine. But remember that we've
Speaker 1: got a technology that you can go back and change
Speaker 1: the sequence, change the RNA that you give people and
Speaker 1: get a new vaccine out. I mean, it would take time,
Speaker 1: but we have to watch out for that. Hey, Sam,
Speaker 1: thank you so much for joining us. We always appreciate
Speaker 1: your perspective and your experience Here. Santa Zelli senior pharmaceutical analyst,
Speaker 1: and it's also the head of the entire Bloomberg Intelligence
Speaker 1: European research operations. So who's a busy person these days?
Speaker 1: Giving us his latest thoughts on the vaccine. Well, let's
Speaker 1: welcome in now a very special guest joining us from
Speaker 1: the University of Missouri's Law school. Frank Moment as professor
Speaker 1: at missour Law and has written a book on well,
Speaker 1: let's give the title, High Crimes and Misdemeanor is a
Speaker 1: History of impeachment for the Age of Trump. Thank you
Speaker 1: for so much joining us, Frank. Frank, you know a
Speaker 1: lot of talk about presidential pardons these days, and the
Speaker 1: potential for the president to pardon really anybody in his
Speaker 1: family or even himself. Can he do that? We have
Speaker 1: to distinguish between two possible types of partners, one pardon
Speaker 1: of himself and the other pardon of other people. In
Speaker 1: my view, a president cannot constitutionally pardoned himself. Um. There's
Speaker 1: a complex array of reasons why that's so, Um, although
Speaker 1: it's never mentested. Um. Now with respect to partnering members
Speaker 1: of his family, are people around him that I think
Speaker 1: is clearer. I think he can do that, although it's
Speaker 1: possible that um, depending on the circumstances of such a pardon,
Speaker 1: the pardon itself might be a crime. So, Professor, for
Speaker 1: pardons to be issued, don't they have to be issued
Speaker 1: against someone who's been convicted of something as opposed to
Speaker 1: kind of preemptively issuing blanket pardons. No, Um, Actually, a
Speaker 1: pardon can be issued for any conduct that occurred prior
Speaker 1: to the insurance of the pardon, whether it was it
Speaker 1: has been investigated or indicted. We have several very significant
Speaker 1: instances about occurring in our own history. For example, after
Speaker 1: the Civil War, Andrew Johnson pardoned many thousands of former
Speaker 1: Confederates who would potentially have been liable for the very
Speaker 1: serious crime of treason, but who had never been charged
Speaker 1: for it. Similarly, after Vietnam War, first President Ford and
Speaker 1: then President Carter gave a series of amnesties or pardons
Speaker 1: to people who would have been esecutable for and sometimes
Speaker 1: had been prosecuted for draftivation. So there's plenty of precedent
Speaker 1: for that. Now. One thing that can't be done is
Speaker 1: you can't pardon somebody for a crime that hasn't yet
Speaker 1: been committed. Um nor I think can you pardon somebody
Speaker 1: or a crime which is ongoing. So imagine, just for
Speaker 1: the sake of argument, that someone in the Trump orbit
Speaker 1: was currently engaging in some kind of crime that continued
Speaker 1: after he left office. He wouldn't be able to pardon
Speaker 1: that person for a crime that that continued, yeah, or
Speaker 1: hasn't started yet. We're getting very minority report here. But Frank,
Speaker 1: you mentioned earlier that the pardon itself might be a crime.
Speaker 1: I'm interest in that because if that wasn't a deterrent,
Speaker 1: then why wouldn't an outgoing president who doesn't really you know, mind,
Speaker 1: just issue a blanket pardon for anybody that he thinks
Speaker 1: might ever have or you know, be implicated in some
Speaker 1: kind of claim that you know, might have to deal
Speaker 1: with that after he's left the presidency. So why would
Speaker 1: a pardoner itself be a clime Potentially, Well, it's only
Speaker 1: going to be a crime in a very limited set
Speaker 1: of circumstances. Actually, although we don't yet know. There of course,
Speaker 1: as a report about the details. But there's of course
Speaker 1: a report out of Washington's at the Justice Department is
Speaker 1: investigating a essentially country campaign contributions for pardon bribery scheme,
Speaker 1: and anybody involved in an exchange like that, up to
Speaker 1: and including the president would be guilty of the separate
Speaker 1: crime of bribery. Now there's we don't have any of
Speaker 1: the details, We have no indication whatsoever who's involved in
Speaker 1: certainly no indication that the president himself is involved in
Speaker 1: such a thing. But just assume hypothetically that a president
Speaker 1: were to agree to take a bribe in response to
Speaker 1: which he would issue a pardon, that would be a
Speaker 1: freestanding crime. Now, simply issuing a pardon that is broadly
Speaker 1: self interested and unseemly is not going to be criminal.
Speaker 1: And lots of presidents, unfortunately have done that kind of thing.
Speaker 1: I mean, the President Clinton, for example, issues a series
Speaker 1: of pardons at the end of his presidency that we're
Speaker 1: very ugly. Indeed, indeed, at least one of them, the
Speaker 1: Mark rich pardon, I suppose, could have been argued to
Speaker 1: have been overtly corrupt because Richard made contributions to the Clintons.
Speaker 1: But generally speaking, even unseemly pardons are going to stand
Speaker 1: and aren't going to be separately prosecutable. Well, can pardons
Speaker 1: be challenged in any scenario there, Professor, or they pretty
Speaker 1: much uh you know etgten Stone once they are in
Speaker 1: fact issued. There's a little disagreement about that. My own
Speaker 1: view is once the pardon is issued, regardless of the
Speaker 1: reason where it's having been issued, then the pardon itself stands,
Speaker 1: at least as to the person pardoned. Now are there
Speaker 1: are some people who disagree with that, who suggests that, um,
Speaker 1: there are certain ways or certain occasions on which what
Speaker 1: they characterize is really self interested pardons, pardons that in
Speaker 1: some way benefit the president, that denigrate from his his
Speaker 1: obligation to ensure that the laws be faithfully executed, that
Speaker 1: those might be challengeable in court. I very much doubt that.
Speaker 1: I think once the pardon is issued, it is almost
Speaker 1: certainly going to stand. The President has suggested that they
Speaker 1: might want to again in four years. Would any history
Speaker 1: of pardons impact any kind of potential future run well,
Speaker 1: I think. I think in a prior universe, in in
Speaker 1: the political universe, that we inherit and inhabited you know,
Speaker 1: eight times twenty years ago for the for the remainder
Speaker 1: of our history. Back to Yeah, I think there would
Speaker 1: be a problem if a president issued a bunch of
Speaker 1: obviously self interested partons, including pardons of himself. I think
Speaker 1: that would be almost automatically disqualifying. But in our current
Speaker 1: media environment, wherever where both sides are so heavily siloed,
Speaker 1: you've already got people within what I might call that
Speaker 1: the Trump universe, Fox News and other places actively suggesting
Speaker 1: that Trump pardoned himself in order to, you know, protect
Speaker 1: himself against the evil liberals and the operation of the
Speaker 1: deep state. I think, at least among Trump's face, a
Speaker 1: series of grotesquely self interested partons, including one of himself,
Speaker 1: might not be disqualifying. Whether you know that would be
Speaker 1: true for the larger Electorate's another question, Professor, what gives
Speaker 1: a sense of timing here. Should we expecting some of
Speaker 1: these pardons really at the last minute, or can they
Speaker 1: happen at any time? Well, because a pardon only covers
Speaker 1: conduct that's already occurred, the safest time are the most
Speaker 1: inclusive times usha pardon is at the very end of
Speaker 1: the president's term. Certainly, if you pardons himself, I would
Speaker 1: expect he'll do that on the very last day, pactly
Speaker 1: the very last minute. Um. But you know, some other cases,
Speaker 1: as we've already seen with the Mr Flynn, are not
Speaker 1: I don't seem to have that kind of time angle.
Speaker 1: And uh, you know, we might see a series of
Speaker 1: pardons leading up the last day. But I think it's
Speaker 1: not unreasonable to at least imagine that you would get
Speaker 1: a series of pardons from Mr Trump issued on the
Speaker 1: morning of January. Frank, thanks so much for joining us.
Speaker 1: We really appreciate it. Frank Bowman the Floyd Art Gibson
Speaker 1: Missouri and dowed Professor of Law at the University Missouri
Speaker 1: School of Law based in Colombia, Missouri, talking to us
Speaker 1: about the pardons, and that certainly presidents have done that
Speaker 1: pardons made pardons in the past rather routinely. The expectation
Speaker 1: is that President Trump will continue to make them as
Speaker 1: he winds his way down to the last days of
Speaker 1: his presidency. So what can we expect for the holiday
Speaker 1: shopping season. We've been talking about it now for a
Speaker 1: few weeks pre Black Friday, but of course typically it
Speaker 1: would remain hot right through the end of the year.
Speaker 1: Let's bring in Craig Johnson, president of Customer Growth Partners,
Speaker 1: to tell us exactly what his surveys are telling him. Craig,
Speaker 1: you've been doing this for a couple of decades now,
Speaker 1: how things grown to a hold this year? Or do
Speaker 1: anticipate that people will spend even if it's on their
Speaker 1: credit cards? Well, people are spending. U They may not
Speaker 1: be spending on Black Friday or Cyber Monday Monday as
Speaker 1: much as some people thought, but they are spending. So
Speaker 1: we went into the season with our nineties annual now
Speaker 1: preseason forecast up five, which is above consensus and based
Speaker 1: on what we saw for November as a hole. I'm
Speaker 1: not talking about Friday, but for November is an entirety
Speaker 1: through through Monday, sales were up about seven UM and
Speaker 1: for November they week three hundred and three billion dollars,
Speaker 1: and that's entirely consistent with our forecast to five eight.
Speaker 1: In fact, the season overall may come in a little
Speaker 1: bit above six. So those numbers are craict Those numbers
Speaker 1: are really really interesting. And um, given that when you
Speaker 1: were so much unemployment out there and so much angst
Speaker 1: in the marketplace and so much uncertainty, what do you
Speaker 1: attribute uh those growth numbers? Two? Well, they it's a
Speaker 1: couple of things going on, but the most important is
Speaker 1: the consumer fundamentals are overall are very very strong. Disposable
Speaker 1: personal income. I'm not talking about the people have a job,
Speaker 1: but as a heart, as a whole growth and disposedment
Speaker 1: coming as the single biggest particular retail sales, it's up
Speaker 1: about six percent year of a year. UM, that's very strong.
Speaker 1: Consumer household financials balance sheets are the healthiest ever with
Speaker 1: an eight point seven percent household debt service a show
Speaker 1: for the FED. And the personal savings rate is about
Speaker 1: and that personal savings is key because consumers have dry
Speaker 1: powder of two point four trillion dollars on their balance
Speaker 1: sheets right now, so they don't have to tap into
Speaker 1: credit cards. Uh, they can buy just out of current
Speaker 1: cash flow and that's what's really driving the growth. Are
Speaker 1: we talking about particular strata of customers though, Craig, surely
Speaker 1: those on food lines and visiting countries can't be doing this. Um. Again,
Speaker 1: it's it doesn't extend to everybody. Obviously, if you're if
Speaker 1: you're in a household where nobody has a job, you're
Speaker 1: focusing just on needs and not wants. But for the
Speaker 1: ninety plus percent of the American public, uh, that is
Speaker 1: financially healthy. Um, they are spending and uh and again
Speaker 1: they have a lot of available cash on hand to spend. UM.
Speaker 1: And you know, we're all hoping that you know, some
Speaker 1: of the financial aid coming out of Washington actually eventuates.
Speaker 1: But in the meantime, the consumers, you know, in the
Speaker 1: up four of the upper five, of the of the
Speaker 1: five quintiles, Uh, they are spending very sharply increase year
Speaker 1: of the year. So it's interesting. Correct, we've seen obviously
Speaker 1: a big pullback in UH, travel, hospitality spending by consumers.
Speaker 1: Do you think some of that's getting redirected into just
Speaker 1: buying stuff? Well, Uh, there is, there is a major
Speaker 1: rotation and spending and um. And with at the margin
Speaker 1: from the categories you mention entertainment, travel, hospitality, et cetera.
Speaker 1: UH is clearly down UM and about two hundred and
Speaker 1: sixty billion dollars UH has been shifted from those services
Speaker 1: into the good sectors. And that's a that's a big
Speaker 1: that's a big number. Now, it's obviously not as big
Speaker 1: as the anywhere near as big as the two point
Speaker 1: four trillion dollars they already have you on hand at
Speaker 1: home UM, which is about a doubling of what it
Speaker 1: was last year at one point to a trillion, So
Speaker 1: they have an intriminal one to point to a trillion.
Speaker 1: And then when you add in the two sixty billion
Speaker 1: dollars from from the services from the discussionary services sector UM,
Speaker 1: that is an additional boost UM, as is lower gasoline
Speaker 1: prices which are around, you know, abouts last year. So
Speaker 1: are you're getting a variety of favorable tail winds behind
Speaker 1: the spending. So, Craig, do you dive in to see
Speaker 1: exactly what they're spending on? Are they buying codes? Are
Speaker 1: they replenishing durable goods? Are they buying toys? Well, yes
Speaker 1: to all the but but this is overwhelmingly a hardlines Christmas.
Speaker 1: Soft lines means you know apparel and you know, and
Speaker 1: Lenen and so forth. But the hard lines, and this
Speaker 1: is you know, whether consumer electronics Nintendo switched the other,
Speaker 1: you know, the other new video gainst the Sony PS four,
Speaker 1: T vs iPhone, twelves. Um household appliance to either major appliances,
Speaker 1: refrigerators are sold out a lot of places until delivery
Speaker 1: in January, if not February. UM, So it's mainly herdlines
Speaker 1: and that means toys, means games, exercise gears, major appliances
Speaker 1: out a. Propane heaters, patio heaters are impossible to find, UM,
Speaker 1: and all those are getting sold, long air fryers, etcetera.
Speaker 1: You know, there is some you know, some apparel is
Speaker 1: getting sold, but hot product, but it's mainly in the
Speaker 1: footwear categories. You know, the Nike Airmax through seventy of
Speaker 1: the air vapor match, etcetera. Those are still very very hot. So, Craig,
Speaker 1: this is at digital Christmas buying online. Is this just
Speaker 1: accelerating a trend that we've kind of been seeing here
Speaker 1: for you know, parts of a decade. Absolutely for for
Speaker 1: the last ten years, every year the penetration of digital
Speaker 1: penetration of overall sales has gone up about a point.
Speaker 1: So in other words, last year penetration was about eight. Well,
Speaker 1: the COVID jumped in immediately up to you know, to
Speaker 1: penetration as of uh, you know, the March April May periade,
Speaker 1: and now it's going up another two or three points.
Speaker 1: So we have basically almost a decade of increase in
Speaker 1: online penetration all squeezed into less than a year, which
Speaker 1: is an interesting Yeah, just extraordinary numbers, uh that we're
Speaker 1: seeing on the retail sales fronts. Looks like it's going
Speaker 1: to be a pretty solid holiday sales despite all the
Speaker 1: uncertainty out there. Craig Johnson, President of Customer Growth Partners,
Speaker 1: we thank you for joining us here sharing that data again.
Speaker 1: Strong strong November sales looks like again bringing in a
Speaker 1: pretty solid holiday shopping season. Thanks for listening to Bloomberg
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