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

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

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Speaker 1: Eastern on Apple, Cocklay and Android Auto with the Bloomberg

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Speaker 1: Business App. Listen on demand wherever you get your podcasts,

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Speaker 1: or watch us live on YouTube.

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Speaker 2: We'll switch gears. Get back to the earnings front. Ford

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Speaker 2: stock's up five point seven percent today. Some good numbers here.

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Speaker 2: Let's break it down with Craig Trudel, Bloomberg Managing Editor,

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Speaker 2: Global Business Coverage. First question, why aren't you in London?

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Speaker 2: Did you come back here?

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Speaker 3: I'm back?

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Speaker 2: Oh? Okay, okay, talk to us about Ford here. The

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Speaker 2: stock is hired today.

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Speaker 4: Yeah.

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Speaker 3: Ford and GM really consistent across several fronts. I think

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Speaker 3: the fact that SUVs and pickups have been so strong

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Speaker 3: in this market, the fact that the Trump administration has

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Speaker 3: so relaxed emissions standards and fuel economy rules, able to

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Speaker 3: sort of go a whole hog and sell as many

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Speaker 3: SUVs and pickups as they possibly can, and that does

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Speaker 3: a heck of a deals, a sort of heck of

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Speaker 3: a boost to their bottom line.

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Speaker 5: What surprised you the most when you look at Ford

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Speaker 5: and GM and what they've managed to show as they

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Speaker 5: double down on what works.

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Speaker 3: Yeah, I think the execution has been strong. I think,

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Speaker 3: you know, they have been trying to sort of, you know,

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Speaker 3: pivot in a way that has to be really dramatic

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Speaker 3: considering the degree of change from one administration to the next.

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Speaker 3: The fact that the Biden administration wanted these companies to

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Speaker 3: sell a heck of a lot more electric vehicles, and

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Speaker 3: they built the plants to do so. They not only

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Speaker 3: built the car factories to do so, but the battery plants,

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Speaker 3: and Ford has been trying to sort of, you know,

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Speaker 3: make lemonade out of lemon in the fact that Americans

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Speaker 3: were not ready to buy electric vehicles at the rate

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Speaker 3: everybody was hoping for. Uh. And you know, both of

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Speaker 3: these companies are trying to sort of maybe turn some

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Speaker 3: of these battery plants into uh, you know, factories that

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Speaker 3: can actually make sort of storage units, which we've seen

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Speaker 3: Tesla turn that into a tidy little business. So I

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Speaker 3: think there's there's still you know, some some sort of

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Speaker 3: show there that that we need instead of just tell

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Speaker 3: that they're going to be able to make that transition,

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Speaker 3: but that's going to be something that we're going to

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Speaker 3: watch in in you know, the months and maybe even

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Speaker 3: years to come.

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Speaker 2: I mean, if I'm forward in GM, I think I

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Speaker 2: have to This is just kind of opinion. I think

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Speaker 2: my strategy has got to be maxim my shareholder value.

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Speaker 2: The way I do that is making pickup trucks and SUVs,

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Speaker 2: and my EV strategy has got to be driven by

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Speaker 2: the marketplace as opposed to policy. If that's the case,

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Speaker 2: I'm not sure where we're going to get to a

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Speaker 2: big EV percentage in this country. How are they thinking

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Speaker 2: about it?

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Speaker 3: Yeah, I mean I do think it's it's in interesting

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Speaker 3: that you still do hear Mary Bara you know, say

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Speaker 3: that that she thinks that that electric vehicles and batteries

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Speaker 3: are just the better power train. And I think, you know, candidly,

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Speaker 3: if you sort of drive in my experience, if you

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Speaker 3: drive you know, the same vehicle, one with a battery

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Speaker 3: in it and the other with a combustion engine in it,

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Speaker 3: it's actually a lot of fun to drive an electric vehicle.

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Speaker 3: The you know, the instant torque and the sort of

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Speaker 3: you know, get up is actually pretty great. And I

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Speaker 3: think avoiding you know, the gas pump right now is

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Speaker 3: also a big positive. So I think they're really stuck

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Speaker 3: in the situation of of you know, a lot of

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Speaker 3: consumers still not being ready for this transition, and yet

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Speaker 3: there is this sort of looming question over you know,

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Speaker 3: is the rest of the world going to make this

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Speaker 3: change more successfully and will they be left behind if

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Speaker 3: they don't figure this out eventually.

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Speaker 5: You just mentioned you moved back from London. I mean,

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Speaker 5: looking at the cars on the road, it must be

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Speaker 5: kind of a shock just to see the transition back

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Speaker 5: to gas guzzling SUVs everywhere.

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Speaker 3: I mean the vehicles here. You know, I grew up

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Speaker 3: in Michigan. I've been around these companies a long time.

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Speaker 3: Vehicles have always been much bigger here, but it is

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Speaker 3: a sort of shock to the system to see just

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Speaker 3: how big, even as someone who's covered this industry a

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Speaker 3: long time man, these pickups keep getting bigger, and I

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Speaker 3: think it is also amazing for people who you know,

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Speaker 3: go from here to London. What I hear from people

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Speaker 3: you know who do travel to Europe is man, look

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Speaker 3: at all of these Chinese evs, you know, clonging the

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Speaker 3: streets of Europe and around London.

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Speaker 2: No, it's us in the rest of the world. I

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Speaker 2: don't know how it's going to play out.

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Speaker 1: Stay with us.

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Speaker 5: More from Bloomberg Intelligence coming up after this.

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

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Speaker 1: weekdays at ten am Eastern on Applecarplay and Android Auto

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Speaker 1: with the Bloomberg Business App. Listen on demand wherever you

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

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Speaker 2: Staying on the earnings beat Visa, our good friends at Visa.

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Speaker 2: They beat estimates, but they took a five hundred and

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Speaker 2: sixty three million dollar charge on job cuts. There, let's

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Speaker 2: get the latest on what's going on with Visa. Dickh Gara,

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Speaker 2: Bloomberg Intelligence, Global Fintech and Payments Alyst Joints is here.

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Speaker 2: So what's the takeaway from Visa from your perspective? Diction?

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Speaker 6: Yeah, Hi there, Nice to be here again. I think

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Speaker 6: it was a good set of numbers, modest beat on

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Speaker 6: both top line and bottom bottom line for the third quarter.

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Speaker 6: Physical third quarter for Visa adjusted EPs was about two

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Speaker 6: point seven percent ahead of estimates. But I think what

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Speaker 6: was really notable is all the underlying trends were pretty resilient.

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Speaker 6: So eighteen percent volume gains, thirty four percent services revenue gain,

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Speaker 6: I think, and all of that puts Visa in a

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Speaker 6: very comfortable spot to basically meet their raised fullier twenty

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Speaker 6: twenty six guidance, which they have raised to low end

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Speaker 6: of mid teens for EPs growth. I think what I'd

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Speaker 6: highlight is it really was firing on all finding all engines.

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Speaker 6: Value added services was three point eight billion dollars revenue

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Speaker 6: in third quarter, and Visa Direct, which is their consumer

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Speaker 6: direct point to point money flows, their transactions climb twenty

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Speaker 6: one percent, and new use cases and partnerships are kind

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Speaker 6: of keytail wins there. Sorry, one thing if pat remiss

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Speaker 6: to not point out is the World Cup.

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Speaker 4: It did.

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Speaker 6: It did really well for Visa's third quarter numbers, and

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Speaker 6: management cited very strong volume gains across all categories. So

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Speaker 6: all the US hosts cities, total card present spent accelerated

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Speaker 6: transactions were up twenty percent. You have to understand, like

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Speaker 6: when people are visiting and this is all cross border spend,

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Speaker 6: which is some of the most lucrative or higher margin

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Speaker 6: business for the card network, tap to pay transactions where

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Speaker 6: people are going and using transits, you just have your

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Speaker 6: card and move on your entertainment, your restaurants spend. All

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Speaker 6: of that got a nice Kicker, and the banks launched

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Speaker 6: a lot of programs along as well to kind of

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Speaker 6: bring in more consumers who are traveling for the World Cup.

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Speaker 5: Trisha, this is a dumb question, but are those buy now,

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Speaker 5: pay later companies like Karna competition for Visa? Are they

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Speaker 5: friends or foes?

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Speaker 6: So here's how I put it's called it. When I

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Speaker 6: was covering banks, I actually thought the card networks are

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Speaker 6: done with just because of all the alternative payment trails

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Speaker 6: that were coming. Direct fun and bank to bank transfers

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Speaker 6: were happening. And now BNPL is kind of growing. But

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Speaker 6: if you pay attention all the buy now, pay later

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Speaker 6: companies and I cover the sector, their best selling product

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Speaker 6: is actually a card. So the card networks have very

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Speaker 6: beautifully managed to embed themselves into the buy now, pay

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Speaker 6: later ecosystem as well. So while you go to an

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Speaker 6: Amazon dot com and spend on say Affirm, there a

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Speaker 6: firm is now giving you a card that you can

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Speaker 6: go and swipe at a restaurant for your buy now

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Speaker 6: pay LATA product.

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Speaker 2: So I'm looking at these stocks Diction, Visa, master Card, Affirm,

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Speaker 2: I mean, on a trailing twelveth basis, they're all kind

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Speaker 2: of flatish what's the story in the payment space here.

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Speaker 6: I think the sector overall is beaten down overall, and

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Speaker 6: I think if you just look at the card networks,

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Speaker 6: there somewhere in the middle of that range. The B

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Speaker 6: to B processors are the worst hit, but I think

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Speaker 6: there is the overall sector has kind of been doing

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Speaker 6: poorly in that regard. That said, Visa and MasterCard are

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Speaker 6: steady as they go, like, these are the most resilient,

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Speaker 6: solid cash flow businesses along the sector that I cover.

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Speaker 6: One thing part I would highlight though, and that we've

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Speaker 6: been getting a lot of questions around that is a

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Speaker 6: seven percent job cuts that Visa announced yesterday, and people

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Speaker 6: are like, is that a distress signal? Like, what's going on?

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Speaker 6: They're doing well, then why are they kind of letting

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Speaker 6: people go? I would highlight that that's not Visa in distress.

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Speaker 6: I would read it as modern corporate portfolio management. Visa's

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Speaker 6: portfolio of work was actually tripled over the last decade.

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Speaker 6: And what CEO Ryan mcinnonney is doing today, he's trilling

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Speaker 6: product overhead and monetizing their AI investments.

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Speaker 1: Stay with us.

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Speaker 5: More from Bloomberg Intelligence coming up after this.

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

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Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android

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

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

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Speaker 5: It's all about earnings, and I know that we've got

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Speaker 5: a whole stlew of big tech earnings today and tomorrow.

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Speaker 5: But over in Europe they're focusing on their leading industry,

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Speaker 5: which is luxury, and the luxury guys are kind of

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Speaker 5: going in different directions these days.

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Speaker 2: Hermes and the Gucci folks over there at Caring. I

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Speaker 2: don't think there's a read through there. I don't know.

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Speaker 5: Yeah, certainly says something about China. Certainly says something about inflation.

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Speaker 5: Let's bring in Andrew Felstad. She's our Bloomberg opinion columnist

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Speaker 5: rating on both. Andrew, just give us an overview. Here.

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Speaker 5: We had heard from LVMH. Now we're hearing from Amez

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Speaker 5: and Caring. And I think I mispronounce it Ramaz, because

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Speaker 5: that's how I how you go, not Hermes in.

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Speaker 2: Any cases, Federated Hermes in Pittsburgh.

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Speaker 5: Okay, thank you, This is a dumb American question. Anyway,

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Speaker 5: Andrea walk us through how the tide seems to be

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Speaker 5: turning here Formez and Caring, they're going in different directions

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Speaker 5: than they were before.

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Speaker 7: Absolutely, So Hamez seems to have spooted the market by

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Speaker 7: talking about China and saying that China has stabilized, but

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Speaker 7: it's not yet recovered. And I mean this this isn't

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Speaker 7: really that different from what everyone else has been saying.

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Speaker 7: But he taught the CEO Axel Duma, talked about the

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Speaker 7: pork price and he said that obviously we know about

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Speaker 7: the property market, but he said, the pork price is low,

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Speaker 7: and so that's an indication of less confidence. So the

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Speaker 7: market's really taken this badly and worried about Hermez. Now

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Speaker 7: at the same time, on the backdrop of Hermez, you've

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Speaker 7: also just had this sense that the Burke in the

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Speaker 7: Kelly aren't quite as hot as they used to be.

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Speaker 7: Chanelle has gone a new design and he's been bringing

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Speaker 7: out some bags that are really really in demand. So

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Speaker 7: the Hermes and the Burking and the Kelly, typically you

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Speaker 7: can't you can't just go into a store and buy one.

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Speaker 7: You have to put your name in a weight list,

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Speaker 7: all sort of you know, hurdles that you get one

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Speaker 7: or not, and so most people buy them in the

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Speaker 7: secondary market where they cost more, and the premium to

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Speaker 7: the retail price has been falling. So that's scene as

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Speaker 7: a maybe not not a great thing for Hermez. But

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Speaker 7: the what's the other thing that's happened in the last

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Speaker 7: few weeks is that all the footballers have been carrying

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Speaker 7: these you know, giant Hermes bag, the giant Burking's the

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Speaker 7: hack which isn't a Burken but looks like a b

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Speaker 7: looks very much like a Burkan, And I really do

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Speaker 7: think that's actually given home as a new lease of life,

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Speaker 7: because you know, the Berkan was looking a bit tired

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Speaker 7: and suddenly you've got Earling Harland carrying his giant Hermies

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Speaker 7: bag and I think it has helped them. But obviously

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Speaker 7: that's not going to come through in these numbers.

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Speaker 2: Andrew, just so you know, in this radio studio, we

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Speaker 2: are not buying that pork as a leading indicator issue. Okay,

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Speaker 2: we just not buying it, but it Andrew, what do

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Speaker 2: we know about the geographic element? Here are certain parts

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Speaker 2: of the world doing better than than others.

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Speaker 7: Absolutely, the US is really really on fire when it

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Speaker 7: comes to luxury the stock market wealth up to now. Anyway,

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Speaker 7: the AI wealth that the US demand is very correlated

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Speaker 7: with a stock market performance. Now, what is really interesting

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Speaker 7: is that the people that are you know, enjoying all

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Speaker 7: this wealth, and it's natural when you get a big windfull,

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Speaker 7: you want to treat yourself, and that seems to favor

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Speaker 7: like watches and jewelry rather than a handbag. Maybe you

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Speaker 7: want something that lasts, you want a memento of this,

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Speaker 7: you know, of this wonderful windfall. It's really helping jewelry

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Speaker 7: rather than leather goods. And that's a problem because obviously

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Speaker 7: for brands like Lvia Mahe Carrying, although although Elva Mate

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Speaker 7: has Tiffany and it really you know, it's bread and

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Speaker 7: butter is leather goods, so and they're very profitable. So

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Speaker 7: you really want handbags to come back. But the fact

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Speaker 7: that the US is doing well that's making up the

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Speaker 7: short fall wild China sort of in the dol drums.

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Speaker 1: Stay with us. More from Bloomberg Intelligence coming up after this.

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

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Speaker 1: weekdays at ten am Eastern on Applecarclay and Android Auto

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

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

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Speaker 2: Okay, the World Cup is over. I think it was

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Speaker 2: a fantastic World Cup. I think everybody was generally pretty happy.

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Speaker 2: The fans seemed to be happy. The games were good,

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Speaker 2: we had a great finals there, I thought, I don't know.

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Speaker 2: I think it's important for a lot of companies out there,

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Speaker 2: none more important than Nike and Adidas. And let's break

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Speaker 2: that down. Putnam Goyle, senior US e Commerce and retail

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Speaker 2: analyst for a Bloomberg Intelligence put them just kind of

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Speaker 2: kind of scope out for us. For the big name

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Speaker 2: brands that were really associated with this. Nike and Audi

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Speaker 2: dosk talk to us with what it means for them.

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Speaker 4: Yeah, So for both of them, the World Cup is

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Speaker 4: a real big deal because it allows them to come

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Speaker 4: front and center with their fans and consumers alike. So

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Speaker 4: when you think about who has the ball, who has

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Speaker 4: the kids, who has the teams and ma So when

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Speaker 4: we got to the finals, Adidas had the win already,

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Speaker 4: right because both teams were sponsored or wearing Adida skiar.

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Speaker 4: So at the end of it, who won the World Cup?

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Speaker 4: It's Adidas of the at leisure names and that's great

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Speaker 4: brand heat for them. In fact, they came out saying

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Speaker 4: that they had expected in euros a billion from the

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Speaker 4: World Cup kit sales and jerseys, et cetera, and they

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Speaker 4: topped that by fifty percent. So one point five billion

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Speaker 4: euros is what now the number is for the momentum

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Speaker 4: they got from the World Cup, unjust kits and jerseys

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Speaker 4: and gear ahead of it.

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Speaker 2: Yeah, I mean, you know, we had so many games

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Speaker 2: here in the New York metro area that all throughout

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Speaker 2: the city, throughout the tournament here, there were jerseys all

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Speaker 2: over the place and people were really into it.

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Speaker 4: So do these.

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Speaker 2: Companies did they break out how big soccer is for

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Speaker 2: them amongst all their the sports that they were involved

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Speaker 2: with that.

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Speaker 4: You know, I wish I did, but or they did,

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Speaker 4: but they don't, And we don't know by sport how

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Speaker 4: big it is. Just as you can imagine, you know,

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Speaker 4: when you think about the world of sports, soccer is

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Speaker 4: one of the largest watched and played sports in the world.

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Speaker 4: So it definitely does build momentum in terms of their sales,

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Speaker 4: whether it's the cleats, whether it's the apparel, the jerseys,

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Speaker 4: et cetera. The players, they sponsor matter. You know, Messi

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Speaker 4: being in the game for Adidas was a big deal.

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Speaker 4: In Bappe Ford Nike in the top five running was

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Speaker 4: a big deal. And these players also against the teams

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Speaker 4: that they sponsor, really do raise those ability for them

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Speaker 4: and get to draw traffic into their stores and their brands.

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Speaker 2: We have a sense of like, if Adidas wants to

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Speaker 2: sponsor you know, Spain or in Argentina, what that costs them?

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Speaker 2: Do we know that that kind of number.

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Speaker 4: So those contracts vary and they change, and clearly you

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Speaker 4: know it's pain having won the World's Cup, the price

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Speaker 4: tag goes up once the contracts are up for renewal.

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Speaker 4: Right now, what I can tell you is a soccer

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Speaker 4: ball which Adidas has owned in the World Cup for

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Speaker 4: the last I believe twenty five years, is now being

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Speaker 4: likely taken over by Nike in twenty twenty seven, twenty

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Speaker 4: twenty eight. So it does. So things do change when

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Speaker 4: contracts expire. But for many of the teams, for many

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Speaker 4: of the players, they do have various lengths of contracts

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Speaker 4: and prices do vary.

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Speaker 2: How about for Nike, an American company, how did they

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Speaker 2: fare in a world of global football?

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Speaker 4: It would have been nice to see Nike versus Adidas

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Speaker 4: in the final, I must say, but that wasn't the case.

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Speaker 4: They still did well, they were up in third place,

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Speaker 4: so I think they do still gain the brand visibility.

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Speaker 4: In fact, you know some data sources that we look at,

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Speaker 4: Nike was the top searched kit through April through June

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Speaker 4: with the USA averaging more than fourteen thousand weekly searches.

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Speaker 4: So we do think that even though Nike didn't win

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Speaker 4: the World Cup, they were definitely in the running and

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Speaker 4: they were very visible across the board, and having Imbappe

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Speaker 4: and winning third fourth place does still go a long

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Speaker 4: way for them.

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Speaker 2: How about for a brand like Puma, it feels like

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Speaker 2: they've kind of, at least here in the United States

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Speaker 2: a little bit of a lagging behind. Say that the

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Speaker 2: Nikes and the Adidas of the world talk was about Puma.

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Speaker 4: Yeah, so Puma, you know, they're definitely much smaller right

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Speaker 4: when you think about them in the world of sports,

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Speaker 4: and I think they didn't have as many teams as

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Speaker 4: Nike and Adidas have, so they do lag in that front.

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Speaker 4: But I think what worked out well for them on

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Speaker 4: the World Cup was Morocco and Switzerland's quarterfinals, right. I

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Speaker 4: think that really helped them gain visibility and it did

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Speaker 4: prove positive for them. They're undermissed a big turnaround right

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Speaker 4: now with the brand, and they're really trying to find

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Speaker 4: their place. Where does Puma set relative to Aditas and Nike,

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Speaker 4: And I think where they win is in the smaller

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Speaker 4: sports that Adidas and Nike play in but aren't as aggressive.

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Speaker 4: And if you think about cricket, if you think about

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Speaker 4: the f one, right, those are sports where I think

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Speaker 4: Puma has a larger leg up than Nike and Adidas,

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Speaker 4: but they're smaller.

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Speaker 2: In these companies, they're not just sneaker companies. It's a

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Speaker 2: whole ath leisure thing, right. I Mean that's kind of

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Speaker 2: where the market is now defined or how the market's defined.

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Speaker 4: They're not sneaker companies. When you think about Adidas and

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Speaker 4: Nike Alike, you know, yes, sneakers are where they probably

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Speaker 4: get most of their visibility and their player lineups from.

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Speaker 4: But apparel is an important piece of the business. It's growing.

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Speaker 4: But when you think about Nike and Adidas, Nike wins

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Speaker 4: in the footwear race. Right. Nike's shares over twenty percent

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Speaker 4: of the global footwear market, Adidas is around twelve percent,

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Speaker 4: so almost double. But when you look at apparel, they're

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Speaker 4: very comparable. Nikes about ten percent, Adidas about nine percent.

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Speaker 4: So apparel is the opportunity for both of them to

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Speaker 4: step up and really gain margin.

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Speaker 1: This is the Bloomberg Intelligence Podcast, available on Apple, Spotify,

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