WEBVTT - US Bank Earnings, Tesla Hiring 0:00:02.920 --> 0:00:10.840 Bloomberg Audio Studios, podcasts, radio news. You're listening to the 0:00:10.880 --> 0:00:15.040 Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 0:00:15.080 --> 0:00:18.079 Eastern on Apple Car playing Android Auto with the Bloomberg 0:00:18.120 --> 0:00:21.440 Business App. Listen on demand wherever you get your podcasts, 0:00:21.680 --> 0:00:24.520 or watch us live on YouTube. 0:00:25.079 --> 0:00:27.200 Alex Steele and Paul Sweeney, You're live here in a 0:00:27.200 --> 0:00:30.880 Bloomberger Interactive Brokers studio in sweltering New York City. Are 0:00:30.880 --> 0:00:33.360 also streaming live on YouTube, So head over to YouTube 0:00:33.360 --> 0:00:37.280 dot com search Bloomberg Podcast. A lot of stuff coming out, 0:00:37.360 --> 0:00:40.080 a lot of earnings coming out. We had Eco data today, 0:00:40.120 --> 0:00:42.159 retail sales solid, and on the earnings front, we had 0:00:42.200 --> 0:00:45.040 some of the big investment banks report here, Morgan Stanley 0:00:45.040 --> 0:00:47.839 and Bank of America's Charlie was just reporting stocks at 0:00:47.840 --> 0:00:50.879 fifty two week highs, both of them here today. So 0:00:50.960 --> 0:00:52.760 Allison Williams is going to break it down for She's 0:00:52.800 --> 0:00:55.080 a senior anild. She covers all these big banks for 0:00:55.200 --> 0:00:58.720 Bloomberg Intelligence. She joins us here in our studio. Alison, 0:00:58.760 --> 0:01:03.480 let's start with your former firm, Morgan Stanley. Stocks up 0:01:03.480 --> 0:01:05.959 two and a half percent today, fifty two week high. 0:01:05.959 --> 0:01:07.199 What did the street like here. 0:01:07.800 --> 0:01:11.200 I mean really strong institutional numbers. I mean it was 0:01:11.280 --> 0:01:15.320 a great quarter for trading and investment banking, So equities 0:01:15.360 --> 0:01:18.880 trading really I think a source of strength. Morgan Stanley 0:01:18.959 --> 0:01:22.600 doing better than expected across the board and just really well. 0:01:23.520 --> 0:01:26.640 So equities trading I think was the standout. Fixed income, 0:01:27.040 --> 0:01:31.080 you know, was sort of mixed, but really compared to 0:01:31.120 --> 0:01:35.040 a year ago. I think that's strong that those revenues 0:01:35.080 --> 0:01:37.240 are turning out to be resilient. And on the investment 0:01:37.360 --> 0:01:40.959 banking side, investors are excited that there could be momentum 0:01:41.040 --> 0:01:43.440 coming into the into the next quarter. You know, M 0:01:43.520 --> 0:01:48.200 and A still just historically low, so improving from a 0:01:48.240 --> 0:01:51.440 low base. Same thing with equities, but I think reasons 0:01:51.440 --> 0:01:55.400 for optimism, especially with the stocks in general doing so well. 0:01:55.760 --> 0:01:57.920 Now for Bank of America, when I think a Bank 0:01:57.920 --> 0:01:59.680 of America, I think it a corporate bank, you know, 0:01:59.720 --> 0:02:03.639 making big loans to big corporate customers around the world. 0:02:03.760 --> 0:02:06.480 What did you see there, so, you know, I think 0:02:06.520 --> 0:02:09.760 the demand is for loans is still something that we're 0:02:09.800 --> 0:02:12.160 looking more for the second half. If we do get 0:02:12.200 --> 0:02:14.760 the FED rate cuts, that is definitely going to be 0:02:14.800 --> 0:02:16.960 a help. And I think for Bank of America what 0:02:17.000 --> 0:02:19.560 people are excited about is that it could be the trough. 0:02:19.639 --> 0:02:22.280 So Bank of America saying that it's going to be 0:02:22.440 --> 0:02:25.079 the trough, this will be the weakest quarter. But keep 0:02:25.080 --> 0:02:28.280 in mind that they are baking in the FED rate 0:02:28.320 --> 0:02:31.480 cut expectations and some loan growth in the second half. 0:02:31.520 --> 0:02:35.080 So we'll see if they can deliver that. But definitely 0:02:35.520 --> 0:02:37.880 telling investors what they want to hear today in terms 0:02:38.000 --> 0:02:41.000 of the fourth quarter, a little bit higher entry rate, 0:02:41.040 --> 0:02:44.760 firming that up, and again that the you know, most 0:02:44.760 --> 0:02:46.280 of the weakness could be behind us. 0:02:46.400 --> 0:02:48.120 So does that mean that if we don't get FED 0:02:48.160 --> 0:02:51.000 cuts that were in that Bank of America is going 0:02:51.080 --> 0:02:51.960 to have some problems here. 0:02:52.200 --> 0:02:55.200 I think where the disappointment will come will be loan 0:02:55.240 --> 0:02:59.399 growth spurred by FED cuts. Right, So I think that 0:02:59.600 --> 0:03:01.760 some of the loan growth that they're factoring in is 0:03:01.840 --> 0:03:04.400 based on that we heard from Wells Fargo where they're 0:03:04.840 --> 0:03:07.240 you know, still a lot more cautious on the loan 0:03:07.320 --> 0:03:11.680 growth side. And commercial and industrial has been a weak spot. 0:03:12.280 --> 0:03:14.760 Credit card is has been a strong spot. 0:03:15.320 --> 0:03:15.480 You know. 0:03:15.480 --> 0:03:17.800 When I was in banking, one of our most lucrative 0:03:17.800 --> 0:03:20.560 businesses that the Chase Man had bank was this leverage lending, 0:03:20.639 --> 0:03:23.240 you know, lending to companies that don't have assets or 0:03:23.400 --> 0:03:25.600 inventory and any kind of just lending into cash flow. 0:03:25.600 --> 0:03:27.399 It's a little bit more risky. It's tough to show 0:03:27.400 --> 0:03:30.240 your credit officer where the collateral is for this loan. 0:03:30.919 --> 0:03:33.480 But we made a lot of money doing it's a 0:03:33.639 --> 0:03:37.160 private credit market. How's a private credit market been poaching 0:03:37.200 --> 0:03:37.880 on that business? 0:03:37.960 --> 0:03:40.120 So actually you would have been making this would have 0:03:40.120 --> 0:03:42.400 been a good quarter for you. I know you'd be happy. 0:03:43.400 --> 0:03:46.040 The first quarter was good, second quarter was good. And 0:03:46.120 --> 0:03:48.320 I think that if you look at some of the 0:03:48.560 --> 0:03:52.000 most recent statistics that we've seen, is that banks are 0:03:52.120 --> 0:03:54.600 still doing a lot of that refinancing. Right, So a 0:03:54.640 --> 0:03:57.920 lot of the business that's been happening in the debt markets, 0:03:57.960 --> 0:04:00.400 debt fees, a source of strength across the banks supporter 0:04:01.120 --> 0:04:07.080 has been refinancing, and that leverage lending business has been 0:04:07.160 --> 0:04:10.400 doing well at the bank. So even though private credit 0:04:11.880 --> 0:04:14.480 is certainly raising a lot of funds and a product 0:04:14.480 --> 0:04:18.400 in demand, banks are still getting their share of refinancing 0:04:18.440 --> 0:04:21.120 in their leverage one volumes. And that's you know sort 0:04:21.160 --> 0:04:23.640 of you saw like the huge growth at City Group 0:04:24.400 --> 0:04:26.760 and the numbers at Gold and sachs where they have 0:04:26.920 --> 0:04:31.080 relative strength in those businesses. High yields another area that's 0:04:31.120 --> 0:04:31.880 doing really well. 0:04:32.800 --> 0:04:34.840 Back to the consumer, so we'll have Paul do them 0:04:35.000 --> 0:04:38.400 and banking stuff, all the consumer stuff. What about chargeobs 0:04:38.440 --> 0:04:41.359 on their credit card losses for Bank of America? Was 0:04:41.400 --> 0:04:44.000 that higher lower? Where did that come out in general? 0:04:44.040 --> 0:04:46.920 I would say there, So their provisions overall came in 0:04:46.920 --> 0:04:50.200 in line. We did see, you know, charge offs in 0:04:50.240 --> 0:04:52.599 the car business, charge offs and commercial real estate. So 0:04:52.600 --> 0:04:56.200 those are areas that we're watching, but you know, controlled 0:04:56.240 --> 0:04:59.560 and in line with expectations. I think the area of 0:04:59.600 --> 0:05:02.039 weakness that we saw in card this quarter was at 0:05:02.160 --> 0:05:05.000 City Group. They have a private label business that's it 0:05:05.080 --> 0:05:07.600 tends to skew on the lower income side of things. 0:05:08.040 --> 0:05:12.000 You're seeing losses come in above their targeted range. There 0:05:12.120 --> 0:05:15.920 is a seasonal pattern to that, and so there are 0:05:16.040 --> 0:05:20.000 expectations that that could come in, but I would say 0:05:20.080 --> 0:05:23.840 the second quarter did not give us confidence in those expectations. 0:05:24.360 --> 0:05:26.400 So I think that is continues to be an area 0:05:26.440 --> 0:05:29.400 for watching. It's not necessarily a big area for the 0:05:29.440 --> 0:05:32.000 big banks that we're talking about today and the ones 0:05:32.000 --> 0:05:34.839 that I cover, but I think it's important to watch, 0:05:35.000 --> 0:05:38.800 you know, for the overall economy and to some of 0:05:38.800 --> 0:05:41.039 the other card names such as Synchrony. 0:05:42.279 --> 0:05:45.039 CEO at Morgan Stanley, we have a new CEO, Ted Pick, 0:05:46.279 --> 0:05:48.160 I guess with a little bit of hindsight here does 0:05:48.600 --> 0:05:51.160 it seem like it's kind of working and everybody's kind 0:05:51.160 --> 0:05:52.200 of found their place, and. 0:05:52.760 --> 0:05:56.440 So it seems like, you know, he's talking with conviction. 0:05:56.560 --> 0:05:59.600 I think the boldest statement he made today was with 0:05:59.640 --> 0:06:02.120 regard to the margins and the wealth business. So the 0:06:02.120 --> 0:06:05.280 wealth business, as you know under the former CEO and 0:06:05.400 --> 0:06:08.279 a lot of acquisitions, wealth and asset management is the 0:06:08.400 --> 0:06:12.560 predominant revenue and profit engine. It's what investors are watching. 0:06:13.120 --> 0:06:16.640 The wealth margin was something where Pick early in the 0:06:16.720 --> 0:06:22.040 year took off some of the upside under the prior targets, 0:06:22.120 --> 0:06:24.720 and that thirty percent wealth target, I think is a 0:06:24.800 --> 0:06:26.880 question among investors if they can get there. And Ted 0:06:27.000 --> 0:06:30.680 really trying to instill confidence that he is a believer 0:06:31.240 --> 0:06:34.440 the wealth flows at Morganstone I would say, you know, 0:06:34.480 --> 0:06:37.360 that is the probably the number one thing I think 0:06:37.560 --> 0:06:40.279 that that we watch for them, and that did come 0:06:40.279 --> 0:06:43.200 in week this quarter. The fee based part of those 0:06:43.200 --> 0:06:47.599 flows were relatively resilient, so some puts in takes there, 0:06:48.880 --> 0:06:50.960 but I think the wealth flows do bear watching, and 0:06:51.000 --> 0:06:54.520 that that really has been the engine of optimism investors, 0:06:54.680 --> 0:06:58.000 like you know, the tilt towards the recurring fee based business, 0:06:58.480 --> 0:07:01.440 and so I think that the have to continue to 0:07:01.600 --> 0:07:06.559 deliver and deliver on that thirty percent margin that Pick 0:07:06.600 --> 0:07:07.960 is confident, and. 0:07:07.920 --> 0:07:09.720 Then I'll go to sort of what the macro read 0:07:09.800 --> 0:07:11.800 is from Morgan Stanley because also on the call, Ted 0:07:11.840 --> 0:07:14.120 Pick said that you're going to see normal M and 0:07:14.160 --> 0:07:16.200 A return unless there's a full bown recession, and he 0:07:16.240 --> 0:07:18.600 thinks we're in the early stages of multi year investment 0:07:18.600 --> 0:07:19.520 banking leed cycle. 0:07:19.640 --> 0:07:22.360 Oh yeah, oh yeah, but we've been hearing that for 0:07:22.440 --> 0:07:26.080 so many quarters now and you're starting to definitely, you know, 0:07:26.160 --> 0:07:28.920 feel more of the doubt coming from analysts. Right. So 0:07:30.960 --> 0:07:35.920 the twenty twenty one, amazing twenty twenty two disaster, the 0:07:35.960 --> 0:07:38.640 lift that we got last year did not materialize. I 0:07:38.640 --> 0:07:41.480 would say that so far this year EM and A 0:07:41.640 --> 0:07:45.280 has been disappointing again, and you know you can see 0:07:45.320 --> 0:07:47.880 in terms of the reported fees and the announcements, right, 0:07:47.960 --> 0:07:51.800 so both of those have been disappointing. It does tend 0:07:51.880 --> 0:07:55.600 to pick up late in the year. It does tend 0:07:55.600 --> 0:07:58.840 to pick up after elections, so I think it'll be 0:07:58.920 --> 0:08:03.480 hard to get for that particular business line, you know, 0:08:03.560 --> 0:08:06.200 sort of the momentum people are looking for perhaps until 0:08:06.200 --> 0:08:10.640 after the election. But on the underwriting side, I think 0:08:10.720 --> 0:08:13.240 is where you're seeing, you know, perhaps more of the 0:08:13.320 --> 0:08:16.800 momentum and strength. Goldvinzachs, though who is tends to be 0:08:16.840 --> 0:08:20.920 the biggest and reported revenue, did say significant uptick in 0:08:20.960 --> 0:08:24.560 their pipeline, debt, underwriting and advisory where the areas of strength. 0:08:25.120 --> 0:08:25.240 Right. 0:08:25.320 --> 0:08:27.560 Very good, Allison Williams, Thank you so much. We appreciate that. 0:08:27.640 --> 0:08:31.480 Alsa Williams covers all the big banks for Bloomberg Intelligence. 0:08:31.560 --> 0:08:34.920 Joining us here in our New York studio. 0:08:35.160 --> 0:08:39.040 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:08:39.120 --> 0:08:42.640 weekdays at ten am Eastern on applecar Play and Android 0:08:42.679 --> 0:08:45.439 Auto with the Bloomberg Business app. You can also listen 0:08:45.559 --> 0:08:48.679 live on Amazon Alexa from our flagship New York station, 0:08:49.040 --> 0:08:51.800 Just Say Alexa, playing Bloomberg eleven thirty. 0:08:53.360 --> 0:08:56.360 Alex Steel alongside Paul Sweened is in Bloomberg Intelligence Radio. 0:08:56.600 --> 0:08:58.920 We bring you all the top news and analysis with 0:08:58.960 --> 0:09:01.680 our great Bloomberg Intelligens analyst team. They cover two thousand 0:09:01.720 --> 0:09:04.839 companies and one hundred and thirty industries worldwide, and occasionally 0:09:04.880 --> 0:09:07.040 we go across the pond and check him with Craig Trudell. 0:09:07.320 --> 0:09:10.360 He's Bloomberg Global Autos Editor and he joins us. Now, 0:09:10.400 --> 0:09:13.000 so many fun things to talk about, but let's just 0:09:13.000 --> 0:09:14.920 start with Tesla for a second, because the news was 0:09:14.960 --> 0:09:17.360 quite staggering. They're going to hire nearly eight hundred new 0:09:17.400 --> 0:09:21.520 employees but didn't. Also they just fire a lot of employees. 0:09:22.760 --> 0:09:28.240 Yeah, this is very Elon Muskian of Tesla in that 0:09:28.320 --> 0:09:30.760 it sort of you know, depends on the day of 0:09:30.760 --> 0:09:34.200 what's going on at this company. So yes, a few 0:09:34.240 --> 0:09:39.400 months back on the heels of Tesla selling about twenty 0:09:39.440 --> 0:09:42.520 percent fewer cars than it did in the fourth quarter, 0:09:43.040 --> 0:09:47.640 Elon Musk wasn't particularly happy with that. With that quarterly showing, 0:09:49.080 --> 0:09:53.920 he wanted the company to cut headcount by a commensurate amount, 0:09:53.920 --> 0:09:58.120 so roughly twenty percent. So you know, for contexts, you know, 0:09:58.160 --> 0:10:00.920 this is a company that you know, had quite a 0:10:00.960 --> 0:10:04.440 few employees at that time. They started the year with 0:10:04.480 --> 0:10:06.559 around one hundred and forty thousand, so that would mean 0:10:06.920 --> 0:10:10.720 twenty eight thousand people being let go. It's unclear whether 0:10:10.760 --> 0:10:13.480 they got to that, but it is absolutely clear that, 0:10:13.600 --> 0:10:16.600 you know, certain parts of the company were decimated, I 0:10:16.600 --> 0:10:19.720 think most notably the super Charging team that really turned 0:10:19.760 --> 0:10:21.600 a lot of heads because it was a you know, 0:10:21.720 --> 0:10:24.160 aspect of this company that has been looked at as 0:10:24.400 --> 0:10:27.280 you know, such a sort of feather in their cap 0:10:27.360 --> 0:10:31.800 that they really you know, invested where others didn't and 0:10:32.040 --> 0:10:35.640 built a charging network that worked whereas others have not 0:10:35.720 --> 0:10:39.280 worked very well, particularly in the US, and so it 0:10:39.360 --> 0:10:41.800 is kind of shocking to see you know, such a 0:10:42.120 --> 0:10:47.800 significant you know pulling of people followed by a you 0:10:47.840 --> 0:10:49.400 know hiring spree of sorts. 0:10:49.920 --> 0:10:52.440 So do we know kind of what type of roles 0:10:52.520 --> 0:10:54.040 they're hiring for. Are they hiring. 0:10:53.840 --> 0:10:56.960 People to bend metal or are they looking to like 0:10:57.000 --> 0:10:59.440 some software guys for AI and all that, the. 0:10:59.480 --> 0:11:04.320 Robotax for the superpower people, the superhero Yeah, I think, 0:11:04.400 --> 0:11:06.880 you know, we we did report even weeks back that 0:11:07.080 --> 0:11:10.360 some of the Supercharger people, who are you know, a 0:11:10.400 --> 0:11:12.760 part of the team that was really uh you know 0:11:12.880 --> 0:11:15.880 cut to a very significant degree, were brought back. 0:11:15.720 --> 0:11:19.920 Relatively quickly, notably the woman who was running that group, 0:11:20.160 --> 0:11:23.040 uh you know, was has not been brought back. Uh, 0:11:23.280 --> 0:11:25.720 and there were some reports that maybe she you know, 0:11:25.880 --> 0:11:29.040 kind of tried to protect her team and what was 0:11:29.520 --> 0:11:33.120 you know, dismissed as a result of that. So, uh, 0:11:33.160 --> 0:11:35.680 you know, in terms of what parts of the company 0:11:35.679 --> 0:11:38.319 are hiring, it's it's it's pretty broad, but I would say, 0:11:38.679 --> 0:11:41.680 you know, the data that our very own Kara Carlson 0:11:42.200 --> 0:11:46.720 has has crunched. Service is a big aspect, which is 0:11:46.760 --> 0:11:49.720 maybe no surprise in that, you know, the summer season 0:11:50.679 --> 0:11:53.920 is a busy one for Tesla. People are out, you know, 0:11:54.040 --> 0:11:57.240 driving for vacations. It's warm outs, they're running their air conditioners, 0:11:57.559 --> 0:11:59.080 you know, to the extent that you do need the 0:11:59.160 --> 0:12:01.560 service and electric vehicle, that's one of the things that 0:12:02.480 --> 0:12:05.200 is common. So, you know, one of the interesting aspects 0:12:05.200 --> 0:12:07.360 of this story is that you know, we we did 0:12:07.400 --> 0:12:10.959 speak with with people who were a part of this 0:12:11.520 --> 0:12:14.600 job job cutting who you know, said that they were 0:12:14.640 --> 0:12:18.120 surprised that some of the service and salespeople, you know, 0:12:18.200 --> 0:12:21.080 that that the company you know, clearly needs at a 0:12:21.120 --> 0:12:25.880 time of you know, busy service work and you know, 0:12:26.000 --> 0:12:29.280 a company that's struggling to to sell more cars. Uh, 0:12:29.480 --> 0:12:32.319 you know, we're seeing you know, some people being brought 0:12:32.400 --> 0:12:35.320 back there, but it is very widespread, I think notably 0:12:35.360 --> 0:12:38.920 as well. Uh, you know, AI and robotics is definitely 0:12:39.160 --> 0:12:41.480 you know, an area where everybody is you know, looking 0:12:41.480 --> 0:12:44.320 at very closely because of you know what this sort 0:12:44.360 --> 0:12:48.360 of new priority is or or emphasis is on the 0:12:48.400 --> 0:12:49.280 part of Musk. 0:12:49.679 --> 0:12:49.840 You know. 0:12:50.240 --> 0:12:52.480 Craig Bloomberg is also out with a story David Welch 0:12:53.280 --> 0:12:56.680 that GM's Mary Barris says the automaker won't sell a 0:12:56.720 --> 0:13:00.400 million evs next year, So just another story, another data 0:13:00.400 --> 0:13:03.400 point about kind of maybe where the ultimate demand or 0:13:03.480 --> 0:13:06.640 lack of demand may be for EV's. What's the latest 0:13:06.640 --> 0:13:09.079 feeling within the industry about how this thing's going to 0:13:09.160 --> 0:13:10.240 evolve at what pace. 0:13:11.240 --> 0:13:14.040 Yeah, we've we've seen a really dramatic pullback on the 0:13:14.080 --> 0:13:16.600 part of GM and Ford in particular. I feel like, 0:13:16.720 --> 0:13:20.920 you know, Stillantis, you know, formerly FIA Chrysler. They were 0:13:21.360 --> 0:13:24.439 sort of slow in the first place, you know, making 0:13:24.480 --> 0:13:29.320 this transition and have you know, not necessarily had much 0:13:29.360 --> 0:13:32.160 to pull back from. But I would not be surprised 0:13:32.160 --> 0:13:34.600 if they sort of you know, joined the quote unquote 0:13:34.600 --> 0:13:39.400 party in terms of you know, maybe dialing back sort 0:13:39.440 --> 0:13:43.079 of the ramp at which they you know, try to 0:13:43.760 --> 0:13:47.559 you know, produce more electric vehicles and sell them. But 0:13:47.559 --> 0:13:50.200 but it is very interesting to see you know, GM 0:13:50.240 --> 0:13:53.880 and Ford you know, really be sort of welcomed with 0:13:53.960 --> 0:13:56.600 open arms by the White House, you know, Mary Bara 0:13:56.760 --> 0:14:00.480 being lauded by Bidens as leading the EV trans that 0:14:00.520 --> 0:14:04.400 really you know, ticked off Elon Musk and helps explain why, 0:14:04.559 --> 0:14:06.360 you know, in the last few days we've learned that 0:14:06.400 --> 0:14:09.920 he's been you know, planning to spend quite a bit 0:14:09.920 --> 0:14:12.800 of money on you know, contributing to to packs to 0:14:12.840 --> 0:14:14.360 get to Donald Trump reelected. 0:14:15.000 --> 0:14:17.720 Well that was my thing is that the Musk Trump 0:14:17.760 --> 0:14:21.400 love affair I find to be quite interesting because if 0:14:21.960 --> 0:14:24.160 we can just game out that the love affair is 0:14:24.200 --> 0:14:29.560 also so President Trump would be more nice to evs, 0:14:30.600 --> 0:14:34.120 is the huge change that we're expecting with alternative energy 0:14:34.160 --> 0:14:36.560 and the IRA and a Trump administration maybe not going 0:14:36.600 --> 0:14:38.520 to happen. I mean, just looked at solar stocks yesterday. 0:14:38.560 --> 0:14:41.600 They got smoked because of it, but Tesla didn't. 0:14:42.640 --> 0:14:46.720 Yeah, it is surprising. I mean maybe if you're trading Tesla, 0:14:46.880 --> 0:14:50.880 you sort of reckon that, you know, the CEO very 0:14:51.000 --> 0:14:54.960 very publicly endearing himself to the candidate will sort of, 0:14:55.000 --> 0:14:58.040 you know, come back to benefit him down the line, 0:14:58.480 --> 0:15:00.560 and maybe some of these threats to do away with 0:15:00.680 --> 0:15:04.120 electric vehicle tax credits and so forth will fall by 0:15:04.120 --> 0:15:04.840 the wayside. 0:15:05.240 --> 0:15:05.560 Uh. 0:15:05.760 --> 0:15:09.000 You know. Elon even went so far, you know, in 0:15:09.040 --> 0:15:12.120 the last day or so to to sort of claim 0:15:12.160 --> 0:15:15.560 that that, you know, doing away with subsidies would only 0:15:15.600 --> 0:15:19.560 help Tesla. I don't know how exactly he squares that circle, 0:15:19.920 --> 0:15:23.400 but perhaps it's a matter of Tesla is you know, 0:15:23.720 --> 0:15:26.920 the strongest of the companies that's trying to make this 0:15:27.080 --> 0:15:31.239 work and is for this along, and so taking subsidies 0:15:31.280 --> 0:15:34.600 away would would hurt you know, competitors even more so 0:15:34.680 --> 0:15:37.120 than it would Tesla. But it certainly wouldn't be good 0:15:37.160 --> 0:15:41.160 for for Tesla to lose access to seventy five hundred 0:15:41.160 --> 0:15:43.440 dollars for a lot of its its customers in the 0:15:43.560 --> 0:15:47.280 US or would be customers. And so, you know, I 0:15:47.520 --> 0:15:50.200 do think it's very interesting and we've we've heard very 0:15:50.280 --> 0:15:53.760 similar sort of intev rhetoric on the on the part 0:15:53.840 --> 0:15:57.240 of jd Vance, his running mate, and so I think 0:15:57.240 --> 0:16:00.000 it's it's not only Trump who's you know, sort of 0:16:00.120 --> 0:16:04.760 campaigned against evs, but but his running made as a yesterday. 0:16:05.040 --> 0:16:07.080 Hey Craig, thanks so much for joining us. Always appreciate 0:16:07.160 --> 0:16:09.320 talking to you. Craig Trudell, He's Global autos editor for 0:16:09.320 --> 0:16:12.480 Bloomberg News, joining us via zoom from our London Queen 0:16:12.560 --> 0:16:15.720 Victoria Street headquarters. How about this, Since April twenty second, 0:16:15.760 --> 0:16:19.160 Tesla stock is up seventy eight percent. Such a move 0:16:19.640 --> 0:16:21.880 had there's such a negative sentiment there for you know, 0:16:21.920 --> 0:16:23.840 four or five quarters here again as the market's trying 0:16:23.880 --> 0:16:27.240 to discount what is the demand I really like for 0:16:27.320 --> 0:16:30.600 evs and going forward, and I think definitely a turn 0:16:30.600 --> 0:16:32.640 around here, So take note of that. Now a big 0:16:32.680 --> 0:16:33.840 marketing cap stock as well. 0:16:35.360 --> 0:16:39.240 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:16:39.320 --> 0:16:42.400 weekdays at ten am Eastern on Affo card playing Android 0:16:42.440 --> 0:16:45.520 Auto with the Bloomberg Business app. Listen on demand wherever 0:16:45.600 --> 0:16:49.920 you get your podcasts, or watch us live on YouTube. 0:16:50.360 --> 0:16:52.680 Okay, So the Eco news of the morning was that 0:16:52.720 --> 0:16:56.040 retail sales number coming and better than estimated. So retail 0:16:56.040 --> 0:16:57.800 sales off you back out auto and gas. It was 0:16:57.840 --> 0:17:00.880 about eight tens of one percent in June. That retail 0:17:00.920 --> 0:17:04.040 sales Control group was up nine tenths of one percent. Sure, 0:17:04.320 --> 0:17:07.880 they're like doing it in areas where prices have come down, 0:17:08.000 --> 0:17:09.920 so there's still some price sensitivity to it, but it 0:17:09.960 --> 0:17:11.679 was pretty strong, So we want to get more on 0:17:11.720 --> 0:17:15.199 that with Jill Blindshard, president of Enterprise Client Solutions of 0:17:15.280 --> 0:17:19.080 Advantage Solutions. She joins us now from Chicago, Illinois. What 0:17:19.160 --> 0:17:22.520 did you make on the numbers, Jill, Yeah. 0:17:22.600 --> 0:17:25.320 It's so first of all high and thanks for having 0:17:25.400 --> 0:17:26.480 me back. Boy. 0:17:26.600 --> 0:17:31.600 I am trying to temper predictions, let's say, because consumer 0:17:31.600 --> 0:17:33.600 demand is still a really big concern in the back 0:17:33.600 --> 0:17:36.159 half of this year. A year ago, eighteen percent of 0:17:36.400 --> 0:17:38.399 CFOs said that they were concerned about the effect of 0:17:38.440 --> 0:17:40.000 consumer demand on their business. 0:17:40.240 --> 0:17:42.200 That is now tripled to fifty. 0:17:41.880 --> 0:17:45.639 Four percent, and so prices are up twenty to forty 0:17:45.680 --> 0:17:49.160 percent plus choose your category. In most cases, the wages 0:17:49.240 --> 0:17:51.119 haven't kept that same pace, and so there is a 0:17:51.160 --> 0:17:55.159 big impact on many households across the country. Consumers have 0:17:55.240 --> 0:17:58.800 been notoriously price sensitive even before the pandemic, and that 0:17:58.920 --> 0:18:01.159 waned a bit with cod when they couldn't spend on 0:18:01.480 --> 0:18:03.240 services and they diverted that to goods. 0:18:03.280 --> 0:18:05.479 But now they're both back, and they're back at higher prices. 0:18:05.480 --> 0:18:09.679 And so consumers have to find less expensive alternatives to 0:18:09.880 --> 0:18:13.680 achieve those same outcomes. They're still traveling, they're still eating out, 0:18:13.760 --> 0:18:17.359 but the overall transactional value for those is down. And 0:18:17.440 --> 0:18:20.119 so I'd say I'm trying to temper my predictions for 0:18:20.160 --> 0:18:21.200 the next six months. 0:18:21.600 --> 0:18:22.800 What is upflation? 0:18:24.840 --> 0:18:27.639 I love that, right, so super you know. 0:18:27.720 --> 0:18:29.760 So first of all, I have fallen prey to this, 0:18:29.800 --> 0:18:32.760 and so I'll give you my confession here. Inflation is 0:18:32.760 --> 0:18:36.560 this concept of finding new uses for existing products. So 0:18:36.640 --> 0:18:39.439 think of things like an all over bodied deodorant, cereal 0:18:39.480 --> 0:18:42.640 as an economic option for dinner, frozen vegetables a liua 0:18:42.720 --> 0:18:44.800 fresh vegetables to save on waste. 0:18:44.920 --> 0:18:47.960 How about this ready pickle cupcakes. That's a thing. And 0:18:48.000 --> 0:18:50.480 it's not just the cake, it's the frosting. I've fallen 0:18:50.520 --> 0:18:52.480 prey to dog wipes. 0:18:52.520 --> 0:18:54.160 I don't know how they're different than a regular wipe, 0:18:54.160 --> 0:18:55.920 but I feel better about putting that on her paws. 0:18:57.720 --> 0:19:06.119 Hair sunscreen and TikTokers explain, this is expensive. It's hair sunscreen, 0:19:06.160 --> 0:19:08.160 so you spray it on your on your hair, so 0:19:08.200 --> 0:19:12.480 it doesn't so so the sun doesn't do change it. 0:19:12.840 --> 0:19:15.520 And uh TikTok is riding the social wave. Check out 0:19:15.520 --> 0:19:19.119 the hashtag late night stack. They are virtually creating a 0:19:19.320 --> 0:19:23.320 fourth meal, and manufacturers are eager to ride the that wave. 0:19:23.400 --> 0:19:26.320 So there's a lot of examples of inflation out there 0:19:26.680 --> 0:19:30.040 as manufacturers get really creative and trying to get their 0:19:30.040 --> 0:19:31.600 products into more places. 0:19:32.480 --> 0:19:36.560 I'm I just I don't understand, Like, isn't the point 0:19:36.760 --> 0:19:39.520 like you want the bleachy sun blonde look like people 0:19:39.560 --> 0:19:42.159 pay for that. I don't know what I'm not This 0:19:42.200 --> 0:19:43.600 is gonna get off topic, but I'm gonna do some 0:19:43.680 --> 0:19:45.400 homework on this. I'm gonna do some research. I'm gonna 0:19:45.440 --> 0:19:49.560 talk about my feelings. Okay, So what about these unusual strategies, 0:19:49.600 --> 0:19:52.320 Like are people willing to actually, you know, pay for that? 0:19:52.520 --> 0:19:55.840 How does a traditional retailer just say, guys come to 0:19:55.880 --> 0:19:58.080 my store and buy stuff like basic stuff? 0:19:59.160 --> 0:19:59.359 You know. 0:19:59.600 --> 0:20:01.880 So the word of month I think is creative. 0:20:01.920 --> 0:20:04.000 And so we just heard about a very creative strategy 0:20:04.040 --> 0:20:07.240 from manufacturers and retailers as well as consumers are also 0:20:07.320 --> 0:20:11.440 getting very creative. So retailers are doing the things that 0:20:11.480 --> 0:20:14.919 we've seen before. They're pricing their promotion strategies. You know. 0:20:15.200 --> 0:20:18.440 We'll talk today about some of the significant promotion things 0:20:18.520 --> 0:20:22.160 happening this summer. But let's talk about the unlikely business 0:20:22.200 --> 0:20:25.720 pairings and collaborations that we're seeing across retailers today to 0:20:25.720 --> 0:20:29.240 find new business synergies and drive traffics. So, for example, 0:20:29.359 --> 0:20:32.560 look at Uber joining forces with Instacart and Costco. Coles 0:20:32.600 --> 0:20:34.040 is going to put the babies r us stores and 0:20:34.080 --> 0:20:36.640 some of their stores, much like that they did with Sephora. 0:20:36.920 --> 0:20:39.680 McDonald's has a partnership with Krispy Kreme. And these things 0:20:39.720 --> 0:20:42.400 have dual benefit. So first there is these say things 0:20:42.440 --> 0:20:46.119 on labor and real estate of operating multiple stores as 0:20:46.200 --> 0:20:49.840 one store. And then there's that unique in store experience 0:20:49.880 --> 0:20:53.880 that the younger generations really like and they're great traffic drivers. 0:20:53.920 --> 0:20:56.360 I know that when I take an Amazon package back 0:20:56.400 --> 0:20:59.600 to Coles, I have to pass five departments each way 0:20:59.680 --> 0:21:03.480 to take that package back. So really creative solutions by 0:21:03.520 --> 0:21:04.400