WEBVTT - Adobe CEO to Step Down in Face of Investor Concerns Over AI 

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

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<v Speaker 2>Adobe out with earnings today on RAG. But it's the

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<v Speaker 2>departure of their longtime CEO. He was in that seat

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<v Speaker 2>for eighteen years. You say that's overshadowing what were otherwise

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<v Speaker 2>pretty good results.

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<v Speaker 3>Yeah, I mean this is this was a quarter wasn't

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<v Speaker 3>bad at all. I mean, if you see look at

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<v Speaker 3>what's happening with Adobe over the last two and a half.

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<v Speaker 4>Years or so, is this is the poster child.

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<v Speaker 3>That AI is going to disrupt the software industry and

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<v Speaker 3>basically take over what Adobe does as a software product. Now,

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<v Speaker 3>we don't think that's going to be the case. They're

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<v Speaker 3>going to maybe lose some work on the lower end

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<v Speaker 3>or the periphery, but I think they're still going to

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<v Speaker 3>remain a healthy company. But having said that, since the

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<v Speaker 3>beginning of last year, their fundamentals has remained intact. Yet

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<v Speaker 3>stocks down over forty percent, and which is partially the

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<v Speaker 3>reason why most likely the CEO is leaving.

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<v Speaker 5>And okay, so what investors want to hear about the

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<v Speaker 5>profile of Adobe's next CEO to maybe restar confidence because

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<v Speaker 5>to your point, it's really overshadowing and otherwise really good earnings.

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<v Speaker 3>Yeah, I think the next CEO has to be in

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<v Speaker 3>a completely AI first CEO, which is somebody who understands

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<v Speaker 3>the large language models a lot more then let's say

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<v Speaker 3>the older, you know generation CEOs. Now I'm not saying

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<v Speaker 3>that CHA didn't understand. This is probably one of the

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<v Speaker 3>most well respected CEOs in the software landscape, made massive

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<v Speaker 3>improvements in Adobe's market position in this eighteen year period.

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<v Speaker 3>You can look at any metric and it's it's you know,

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<v Speaker 3>beyond comparison. But I think the next CEO has to

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<v Speaker 3>be somebody who is just you know, day and out

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<v Speaker 3>absolutely in AI products.

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<v Speaker 6>Anrag.

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<v Speaker 2>I'm a little surprised that a succession plan was not

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<v Speaker 2>in place. I mean, the current CEO, he's sixty two,

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<v Speaker 2>been there for eighteen years. You know, you'd think that

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<v Speaker 2>maybe they had thought about it and had somebody in

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<v Speaker 2>the wings, unless that somebody is not the right person

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<v Speaker 2>for this moment in time, which is the moment about AI.

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<v Speaker 4>Yeah.

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<v Speaker 3>Now I would say is when you have a large

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<v Speaker 3>company like this, they have to do the due diligence

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<v Speaker 3>of bringing people in and out. You know, we think,

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<v Speaker 3>for example, the leader David Wadwani, who's the head of

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<v Speaker 3>the creative products, I think he is very capable of

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<v Speaker 3>running this company. But you know, the same thing happened

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<v Speaker 3>with Microsoft even though Satya was in house.

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<v Speaker 4>You know, they had to go out and give a full.

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<v Speaker 3>Search, both internal and external, and then they decided to

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<v Speaker 3>go in house. So I won't be surprised if they

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<v Speaker 3>run the search and eventually you know, in the end

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<v Speaker 3>they decide with an internal candidate.

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<v Speaker 5>So an AI first CEO. So that's what you want

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<v Speaker 5>to see. Where do you see the biggest competitive threat

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<v Speaker 5>coming in from AI creative tools in the next years

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<v Speaker 5>And what do you want to hear specifically from the

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<v Speaker 5>CEO or just the direction of Adobe.

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<v Speaker 3>Yeah, the AI creative tools are already out there. I mean,

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<v Speaker 3>you and I can go on Google today and you know,

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<v Speaker 3>create our own image and videos and other things.

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<v Speaker 4>But the key part of Adobe is it's not just the.

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<v Speaker 3>Creation of digital assets, but how those digital assets go

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<v Speaker 3>into your workflow. And that's where Adobe's products come in,

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<v Speaker 3>and I mean they have done a very good job

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<v Speaker 3>of integrating external tools. For example, if you go into

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<v Speaker 3>the Adobe suite right now, you can use Google models

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<v Speaker 3>to create your images. One of the things they talked

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<v Speaker 3>about on the call yesterday was they have a product

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<v Speaker 3>call Adobe Stock, which is basically a repository of hundreds

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<v Speaker 3>of millions of images. They're saying that people's use of

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<v Speaker 3>those already made pictures have gone down and people are

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<v Speaker 3>using more LLM produced images. So what we want to

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<v Speaker 3>see from the next CEO is they want to make

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<v Speaker 3>We want to make sure that they are using all

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<v Speaker 3>the models to create the image and models, but keeping

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<v Speaker 3>intact the integrity of the workflow.

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<v Speaker 2>When you look at Adobe and then other application software

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<v Speaker 2>companies like a salesforce, they're struggling to win new customers

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<v Speaker 2>in the face of these AI upstarts. Who do you

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<v Speaker 2>feel as best positioned at the moment.

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<v Speaker 3>So you know, we created a big framework around this

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<v Speaker 3>and published a report a few weeks ago. One of

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<v Speaker 3>the big things we are talking about is if you

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<v Speaker 3>are a big system of record, you know, somebody like

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<v Speaker 3>an SAP or a workday SAP does a lot of

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<v Speaker 3>supply chain and ERP related stuff, or a workday which

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<v Speaker 3>is the core HR system of record for most larger enterprises,

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<v Speaker 3>you know, you have a lot less disruption risk then

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<v Speaker 3>let's say a smaller company that's out there. The other

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<v Speaker 3>thing that we talk about is are you just a

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<v Speaker 3>one product company or do you have a suite of

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<v Speaker 3>multiple products? Because I think that matters a lot as well.

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<v Speaker 3>So you know, on our frameworks see some of these

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<v Speaker 3>larger companies with absolutely massive market sharees. I think they

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<v Speaker 3>are the ones that are less at risk compared to that,

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<v Speaker 3>say something that's just you know, giving one one product function.

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<v Speaker 5>Out there and rob don't be maintained. It's pricing power.

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<v Speaker 5>If generative AI tools make creative production cheaper and faster, like,

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<v Speaker 5>will people still go to Adobe before that?

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<v Speaker 3>I think that's probably the most important question right now

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<v Speaker 3>for investors. And one of the things we talk about

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<v Speaker 3>it is it's not just a question of as I said,

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<v Speaker 3>creating images. When you think about just the image creation

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<v Speaker 3>part of it, you know that's not what you should

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<v Speaker 3>be going to ADO before, but creating an entire marketing campaign.

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<v Speaker 3>They're adding so much AI capabilities into that entire workflow,

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<v Speaker 3>so For example, if you are on California, your product

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<v Speaker 3>may have a completely different marketing campaign compared to somebody

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<v Speaker 3>you know on the East Coast or in Canada, and

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<v Speaker 3>you can change those marketing campaigns at a very fast

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<v Speaker 3>pace because the entire supply chain of every asset state

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<v Speaker 3>you can think about can now be changed because of AI.

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<v Speaker 3>So you're not just buying Adobe for you know, creating images,

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<v Speaker 3>but the entire workflow is the most important aspect.

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<v Speaker 1>Stay with us.

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<v Speaker 2>More from Bloomberg Intelligence coming up after this.

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<v Speaker 1>You're listening to the Bloomberg Intelligence podcast. Catch us live

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<v Speaker 2>Alexis Christaph for us, in for Paul Sweeney, Isabell Lee

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<v Speaker 2>doing duty for Scarlet Foo on this Friday. We want

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<v Speaker 2>to talk a little housing market before we get to

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<v Speaker 2>the top of the hour here because Lenar, the homebuilder

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<v Speaker 2>out with earnings today. Revenue and earnings per share missed

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<v Speaker 2>the mark, but Lenar's shares are actually up nearly four

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<v Speaker 2>percent right now. So here to help us make sense

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<v Speaker 2>of it. Is Drew reading Bloomberg Intelligence US home building analyst.

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<v Speaker 2>First off, I'm just to start with the stock, Drew.

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<v Speaker 2>Why the positive reaction when the top and bottom line

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<v Speaker 2>missed the mark?

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<v Speaker 6>Yeah, thanks for having me.

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<v Speaker 7>So keep in mind Lenar stock has been down about

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<v Speaker 7>thirty five percent since September. The whole group has really

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<v Speaker 7>been under pressure since mid February, so, you know, I

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<v Speaker 7>think part of it is just the fact that it's

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<v Speaker 7>been so beaten down. You know, when you look at

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<v Speaker 7>the results for the quarter, when you're talking about the builders,

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<v Speaker 7>there's really two things you're looking at. You're looking at

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<v Speaker 7>orders and gross margins. So while their orders did hit

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<v Speaker 7>the midpoint of guidance for the quarter, their outlook for

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<v Speaker 7>two Q was about seven percent below consensus, and gross

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<v Speaker 7>margin was probably a little bit weaker than what people

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<v Speaker 7>were looking for. So all in all, two Q earnings

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<v Speaker 7>are about fifteen percent below expectations. But it really goes

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<v Speaker 7>back to how Lenar's running their business, which is a

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<v Speaker 7>volume first focus. So they're willing to sacrifice and carry

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<v Speaker 7>a lower gross margin in this environment in order to

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<v Speaker 7>gain the efficiencies with delivering higher volumes.

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<v Speaker 5>How much of that's low it on is being driven

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<v Speaker 5>by higher mort get rich versus just a broader economic

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<v Speaker 5>uncertainty overall.

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<v Speaker 6>Yeah, that's that's a great question. It's really a combination

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<v Speaker 6>of the two.

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<v Speaker 4>You know.

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<v Speaker 7>Obviously, affordability has been the major challenge in the market

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<v Speaker 7>since twenty twenty two, really when Moorg's rates skyrocket it

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<v Speaker 7>but it's not just rates, it's you know, the massive

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<v Speaker 7>run up in home prices we've had since twenty nineteen.

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<v Speaker 7>Prices are up, you know, over fifty percent or more,

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<v Speaker 7>depending on what market you're talking about.

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<v Speaker 4>But to your.

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<v Speaker 7>Point, what we've heard increasingly from the builders is just

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<v Speaker 7>this overall sense of uncertainty in the market, whether it's

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<v Speaker 7>you know, less certainty about the outlook for the direction

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<v Speaker 7>of the economy. You have more people concerned about maybe

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<v Speaker 7>the outlook for employment, which is actually something that Lenar

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<v Speaker 7>referenced on their call today. And you know, basically, while

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<v Speaker 7>traffic has remained pretty stable, there's just not a lot

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<v Speaker 7>of urgency in the market. I think you have people

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<v Speaker 7>out there maybe sitting on the fence. We're saying to themselves, look,

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<v Speaker 7>maybe mortgage rates are going to come down a little bit,

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<v Speaker 7>maybe home prices are going to fall and now it's

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<v Speaker 7>not a great time to buy.

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<v Speaker 6>So to your point that the uncertainty.

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<v Speaker 7>From the macro environment as well as the geopolitical environment

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<v Speaker 7>more recently is certainly weighing on buyers.

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<v Speaker 2>Would Drew tell us more about what they had to

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<v Speaker 2>say on the call about the job market, because I mean,

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<v Speaker 2>I think that's the driver, right. If you feel good

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<v Speaker 2>about your job and confident in the paycheck, you might

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<v Speaker 2>be willing to take on what is really the largest

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<v Speaker 2>purchase in your life for many folks, right their home.

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<v Speaker 7>Yeah, so at the end of the day, the labor

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<v Speaker 7>market is really the most important driver of housing demand. Certainly,

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<v Speaker 7>you know, mortgage rates get all the attention on a

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<v Speaker 7>daily basis, But if the employment picture is strong, that

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<v Speaker 7>usually drives demand for housing. And you're seeing in different

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<v Speaker 7>parts of the market relative strength or relative weakness, you know,

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<v Speaker 7>whether it's employment in the tech market making things more

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<v Speaker 7>challenging on the West Coast, and you know, to your

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<v Speaker 7>question directly that it is something that Lenar pointed out

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<v Speaker 7>on the call, is just that that brought uncertainty that

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<v Speaker 7>consumers aren't necessarily certain you know about the employment picture

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<v Speaker 7>over the next twelve months, And interestingly enough one of

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<v Speaker 7>the things they pointed to is what we've heard from AI,

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<v Speaker 7>all of the headlines that have been out there in

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<v Speaker 7>terms of AI disrupting the labor market.

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<v Speaker 6>So it's certainly something that's weighing on the market.

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<v Speaker 5>And despite your term pressure, Lennar says that it's positioned

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<v Speaker 5>for long term growth. What's the key thing that could

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<v Speaker 5>turn them around or turn the market around for them?

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<v Speaker 7>Right, So, Leonard's strategy, as I mentioned before, has been

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<v Speaker 7>on driving volume over margin, and really what they're trying

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<v Speaker 7>to do is create a more efficient business model to

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<v Speaker 7>prepare for an eventual market rebound. They've they've certainly gained scale,

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<v Speaker 7>They're doing a lot of investments in technology, they're driving

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<v Speaker 7>down costs, they have a more asset light land strategy.

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<v Speaker 6>So all of these things will ultimately help.

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<v Speaker 7>But at the end of the day, in order to

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<v Speaker 7>see a rebound in their growth, they need to see

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<v Speaker 7>improvement in the broader market. And that's really the same

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<v Speaker 7>for all the home builders. So they are putting themselves

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<v Speaker 7>in a better position for the long term, but they,

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<v Speaker 7>like everyone else, need to see, you know, the market

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<v Speaker 7>turn higher.

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<v Speaker 2>So does this earnings report from Lenar basically reinforce the

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<v Speaker 2>fact that in this expensive housing market, people need deals

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<v Speaker 2>and incentives, you know, to get in the door.

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<v Speaker 7>Yeah, I mean you hit the nail on the head

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<v Speaker 7>their affordabilities the issue. Lenar is offering incentives which total

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<v Speaker 7>about fourteen percent of the delivered home price. Now to

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<v Speaker 7>provide some contact for that in a normal market and

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<v Speaker 7>centives are typically about four to six percent of the

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<v Speaker 7>home price, so you could see just how massively important

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<v Speaker 7>incentives have been to get buyers through the door. I

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<v Speaker 7>think a lot of the optimism, you know, coming into

0:11:47.920 --> 0:11:50.200
<v Speaker 7>the year was that if mortgage rates came down, they'd

0:11:50.200 --> 0:11:52.120
<v Speaker 7>be able to take their foot off the gas pedal

0:11:52.240 --> 0:11:55.040
<v Speaker 7>a little bit. But you know, to this point, what

0:11:55.080 --> 0:11:57.040
<v Speaker 7>we've heard from most of the builders is that incentives

0:11:57.080 --> 0:12:00.600
<v Speaker 7>have remained stubbornly high. Lenard did tell it that their

0:12:00.679 --> 0:12:05.199
<v Speaker 7>incentives on new orders, which are a better leading indicator,

0:12:05.280 --> 0:12:07.480
<v Speaker 7>are a little bit below where they were on deliveries,

0:12:07.800 --> 0:12:10.560
<v Speaker 7>but we still expect them to remain pretty elevated as

0:12:10.559 --> 0:12:12.960
<v Speaker 7>we get through the spring selling season, because, as you mentioned,

0:12:13.160 --> 0:12:15.679
<v Speaker 7>buyers are aware of these incentives and they're looking for

0:12:15.720 --> 0:12:16.080
<v Speaker 7>a deal.

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<v Speaker 2>What are you expecting from pending home sales in about

0:12:19.280 --> 0:12:22.000
<v Speaker 2>twenty seconds. Next week we get pending home sales for February,

0:12:23.400 --> 0:12:23.880
<v Speaker 2>so I think.

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<v Speaker 7>It's going to be more of the same for the

0:12:25.160 --> 0:12:29.000
<v Speaker 7>existing home market and pending home sales. Last month, pending's

0:12:29.000 --> 0:12:31.480
<v Speaker 7>home sales were at the lowest level on record. I

0:12:31.559 --> 0:12:34.920
<v Speaker 7>think you'll have a little bit of weather still impacting results,

0:12:34.920 --> 0:12:36.520
<v Speaker 7>but by and large, it's still going to be the

0:12:36.559 --> 0:12:38.840
<v Speaker 7>affordability constraints that we're seeing out there.

0:12:38.720 --> 0:12:39.160
<v Speaker 6>In the market.

0:12:40.480 --> 0:12:41.120
<v Speaker 5>Stay with us.

0:12:41.160 --> 0:12:42.840
<v Speaker 8>More from Bloomberg Intelligence coming.

0:12:42.720 --> 0:12:43.280
<v Speaker 2>Up after this.

0:12:46.679 --> 0:12:50.360
<v Speaker 1>You're listening to the Bloomberg Intelligence podcast. Catch us Live

0:12:50.480 --> 0:12:53.559
<v Speaker 1>weekdays at ten am Eastern on Apple, Cocklay and Android

0:12:53.559 --> 0:12:56.880
<v Speaker 1>Auto with the Bloomberg Business app. Listen on demand wherever

0:12:56.920 --> 0:13:00.440
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0:13:01.120 --> 0:13:03.839
<v Speaker 5>I think one of the industries really upended by this

0:13:03.920 --> 0:13:06.760
<v Speaker 5>war is the aviation industry and the global travel. We're

0:13:06.800 --> 0:13:09.439
<v Speaker 5>seeing lots of flight being canceled and really a lot

0:13:09.480 --> 0:13:13.160
<v Speaker 5>of TSA disruptions. Let's bring a Jeff Friedman, he's CEO

0:13:13.280 --> 0:13:15.920
<v Speaker 5>of the US Travel Association, to shed some light on

0:13:15.960 --> 0:13:19.080
<v Speaker 5>the situation. Jeff, I'm really scared. I'm really scared, and

0:13:19.120 --> 0:13:21.920
<v Speaker 5>I'm just over winter now. I want it to be summer.

0:13:22.200 --> 0:13:25.400
<v Speaker 5>That said, could higher oil prices translate to weaker demand

0:13:25.400 --> 0:13:27.720
<v Speaker 5>and weaker travel in the US ahead of the summer.

0:13:28.920 --> 0:13:31.880
<v Speaker 8>You're speaking my language. I can't take anymore this winter.

0:13:32.000 --> 0:13:34.640
<v Speaker 8>And obviously all of us as travelers want to get

0:13:34.679 --> 0:13:37.440
<v Speaker 8>out there and see the country, see the world. And

0:13:37.480 --> 0:13:40.560
<v Speaker 8>there's no doubt that there are limitations on travel right now.

0:13:40.600 --> 0:13:43.920
<v Speaker 8>There are issues with international travelers coming to the United States,

0:13:44.160 --> 0:13:47.319
<v Speaker 8>there are issues with travelers moving about the United States. Certainly,

0:13:47.360 --> 0:13:51.640
<v Speaker 8>we're seeing some pressure on prices. That said, travel generally

0:13:51.720 --> 0:13:55.680
<v Speaker 8>has run below general inflation over the past year or so,

0:13:55.679 --> 0:13:59.240
<v Speaker 8>so I think that is a bonus for people across

0:13:59.320 --> 0:14:02.240
<v Speaker 8>the country. One of the best things we saw coming

0:14:02.240 --> 0:14:03.840
<v Speaker 8>out of COVID, and you can't get a lot of

0:14:03.840 --> 0:14:05.880
<v Speaker 8>sentences that way, but one of the best things we

0:14:05.920 --> 0:14:08.760
<v Speaker 8>saw coming out of COVID was a new demand for travel.

0:14:09.240 --> 0:14:14.400
<v Speaker 8>People prioritize travel experiences, creating memories over goods. At this point,

0:14:14.520 --> 0:14:16.960
<v Speaker 8>that's a good thing for us, but only if we

0:14:17.000 --> 0:14:20.160
<v Speaker 8>remove the obstacles to travel, And what's happening at TSA

0:14:20.240 --> 0:14:23.440
<v Speaker 8>right now is the single biggest obstacle the travelers are confronting.

0:14:23.760 --> 0:14:25.720
<v Speaker 2>Yeah, I want to talk about that, because this is

0:14:25.760 --> 0:14:28.840
<v Speaker 2>sort of a double whammy right for travelers. This is

0:14:28.880 --> 0:14:32.120
<v Speaker 2>we've got a record spring travel season upon us, We've

0:14:32.120 --> 0:14:34.600
<v Speaker 2>got a partial government shut down. These TSA workers are

0:14:34.640 --> 0:14:36.760
<v Speaker 2>working without pay for I don't know weeks.

0:14:36.800 --> 0:14:37.479
<v Speaker 4>Now.

0:14:37.600 --> 0:14:40.360
<v Speaker 2>What is the situation like at at the airports.

0:14:41.680 --> 0:14:43.720
<v Speaker 8>Yeah, I'll get to travelers in a second, because it's

0:14:43.760 --> 0:14:45.880
<v Speaker 8>a travesty what's happening for travelers, But I want to

0:14:45.920 --> 0:14:48.200
<v Speaker 8>start with the people who are most affected, the real

0:14:48.280 --> 0:14:50.560
<v Speaker 8>victims here, and that's the TSA workers. You know, we

0:14:50.600 --> 0:14:53.800
<v Speaker 8>have more than fifty thousand TSA officers who go to

0:14:53.880 --> 0:14:55.920
<v Speaker 8>work every day. Last year, they found more than six

0:14:56.000 --> 0:15:00.480
<v Speaker 8>thousand weapons at various checkpoints. These people, for the second

0:15:00.520 --> 0:15:02.720
<v Speaker 8>time now in just a matter of months, are going

0:15:02.960 --> 0:15:07.000
<v Speaker 8>completely unpaid. We're asking these workers to do something that

0:15:07.080 --> 0:15:09.240
<v Speaker 8>none of us do, that no member of Congress does.

0:15:09.480 --> 0:15:12.720
<v Speaker 8>We're asking them to go to work based on an IOU.

0:15:13.280 --> 0:15:15.920
<v Speaker 8>And if you think they're not thinking about their rent,

0:15:16.360 --> 0:15:19.600
<v Speaker 8>their gas, their need for groceries, the other things they

0:15:19.600 --> 0:15:22.160
<v Speaker 8>have to do for their kids while they're trying to

0:15:22.160 --> 0:15:25.440
<v Speaker 8>do their job, then we're kidding ourselves. This will have

0:15:25.920 --> 0:15:28.400
<v Speaker 8>an effect on the aviation system. It is having effect

0:15:28.680 --> 0:15:29.800
<v Speaker 8>on the aviation system.

0:15:30.000 --> 0:15:30.720
<v Speaker 6>And it's a.

0:15:30.520 --> 0:15:34.400
<v Speaker 8>Man made disaster. It doesn't need to be this way.

0:15:34.640 --> 0:15:38.440
<v Speaker 8>The fault lies with Congress. For travelers, it's leading to

0:15:38.600 --> 0:15:42.760
<v Speaker 8>incredible uncertainty. I saw the lines in Austin, Texas earlier today,

0:15:43.320 --> 0:15:46.400
<v Speaker 8>three hour long lines down there. I went through San

0:15:46.440 --> 0:15:49.600
<v Speaker 8>Diego yesterday and I got through in ten minutes. What

0:15:49.640 --> 0:15:51.760
<v Speaker 8>that means is travelers don't know do I need to

0:15:51.840 --> 0:15:53.800
<v Speaker 8>arrive at the airport an hour ahead of time? Do

0:15:53.920 --> 0:15:56.560
<v Speaker 8>I need to arrive five hours ahead of time? It

0:15:56.640 --> 0:16:01.360
<v Speaker 8>creates massive uncertainty, It harms the system, it encourages people.

0:16:01.600 --> 0:16:04.560
<v Speaker 8>It discourages some people from traveling, which will have a

0:16:04.600 --> 0:16:08.600
<v Speaker 8>significant impact on the economy. During the last shutdown, we

0:16:08.680 --> 0:16:13.640
<v Speaker 8>saw travel spending decline by about one billion dollars per week.

0:16:14.520 --> 0:16:16.440
<v Speaker 5>When I'm in the airport and when I go and

0:16:16.560 --> 0:16:19.160
<v Speaker 5>zoom by everything, that's just like I feel like my

0:16:19.280 --> 0:16:21.520
<v Speaker 5>day is made and I'm a superhero. So then if

0:16:21.560 --> 0:16:25.200
<v Speaker 5>we see more travel disruptions, how could that impact the

0:16:25.200 --> 0:16:28.960
<v Speaker 5>broader economy, especially if the conflict dragsone? Do you see

0:16:29.000 --> 0:16:33.720
<v Speaker 5>it affecting maybe the airline costs and ticket prices? And

0:16:33.840 --> 0:16:35.520
<v Speaker 5>I mean, how will that ripple through.

0:16:36.880 --> 0:16:39.640
<v Speaker 8>Yeah, if travelers, and let's look at there are different

0:16:39.640 --> 0:16:42.080
<v Speaker 8>types of travelers. There are leisure travelers who are going

0:16:42.120 --> 0:16:45.440
<v Speaker 8>out for spring break. There are business travelers who are

0:16:45.480 --> 0:16:47.560
<v Speaker 8>going on their third, fourth, sixth trip of the month.

0:16:48.000 --> 0:16:51.160
<v Speaker 8>I think the leisure traveler is generally more resilient. If

0:16:51.200 --> 0:16:54.040
<v Speaker 8>I promised my kids that we're going somewhere warm for

0:16:54.080 --> 0:16:56.600
<v Speaker 8>spring break, I'm going to be irritated, but I'm going

0:16:56.640 --> 0:17:00.800
<v Speaker 8>to tolerate that unnecessarily long line at TSA for the

0:17:00.880 --> 0:17:04.960
<v Speaker 8>frequent business traveler. Frankly, the people who are spending more

0:17:05.000 --> 0:17:07.120
<v Speaker 8>often sitting in the front of the plane, spending more

0:17:07.119 --> 0:17:10.480
<v Speaker 8>at the hotel, spending more at the restaurants in various communities.

0:17:10.840 --> 0:17:14.240
<v Speaker 8>It's the frequent business traveler who we're putting at risk here.

0:17:14.280 --> 0:17:16.919
<v Speaker 8>It's that person who says, I'm going to skip the convention,

0:17:17.160 --> 0:17:20.160
<v Speaker 8>I'm going to skip this meeting. I'm going to move

0:17:20.200 --> 0:17:23.840
<v Speaker 8>it to zoom or an alternative. That's where the effect

0:17:24.040 --> 0:17:28.399
<v Speaker 8>really hits the economy. It's incredibly unfortunate, but that's what

0:17:28.520 --> 0:17:31.879
<v Speaker 8>Congress is doing. I think there's some degree, obviously of

0:17:31.920 --> 0:17:34.840
<v Speaker 8>gamesmanship that's going on on Capitol Hill right now, with

0:17:34.920 --> 0:17:37.080
<v Speaker 8>the sense that there isn't a consequence to the way

0:17:37.080 --> 0:17:40.800
<v Speaker 8>they're behaving. TSA officers have now gone upwards of a

0:17:40.920 --> 0:17:45.800
<v Speaker 8>month without pay. Again, no member of Congress has offered

0:17:45.840 --> 0:17:49.719
<v Speaker 8>to do the same. That is, in my mind, borderline

0:17:49.760 --> 0:17:52.840
<v Speaker 8>criminal in the way that we're treating these TSA officers.

0:17:53.920 --> 0:17:58.600
<v Speaker 1>This is the Bloomberg Intelligence Podcast, available on Apple, of Spotify,

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