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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside

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Speaker 1: my co host Matt Miller.

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Speaker 2: Every business day we bring you interviews from CEOs, market pros,

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Speaker 2: and Bloomberg experts, along with essential market moving news.

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Speaker 1: Find the Bloomberg Markets Podcast on Apple Podcasts or wherever

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Speaker 1: you listen to podcasts, and at Bloomberg dot com slash podcast.

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Speaker 1: This is another name that kind of was on the

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Speaker 1: radar screen for a lot of investors. They reported numbers

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Speaker 1: last night a little bit better and expected people looking

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Speaker 1: at the streaming business the losses there, we're a little

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Speaker 1: bit lower. That's good. It's all part of Bob Byerker's

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Speaker 1: CEO's plan to cut costs here. But there's as many

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Speaker 1: questions around that company as I've ever seen in my

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Speaker 1: thirty years of covering it. Most you know, when you

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Speaker 1: see a business like ESPN, which is just the rock

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Speaker 1: solid core of this company for twenty twenty five years now,

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Speaker 1: you're wondering whether you even want to own it. Mark

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Speaker 1: Douglas joins, he's the CEO of Mountain. He knows a

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Speaker 1: thing or two about this business, about the media business,

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Speaker 1: about the digital advertising business. Hey, Mark, you take a

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Speaker 1: look at what is a stal war media company like Disney,

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Speaker 1: and boy, there are a lot of question marks there.

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Speaker 1: What did you what are some of the key issues

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Speaker 1: for you when you look at Disney?

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Speaker 3: Well, I think the fundamental issue is Disney. You know,

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Speaker 3: sell has magical prices for everything they do, meaning the

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Speaker 3: prices are generally pretty high, and I think they're not

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Speaker 3: really delivering magical you know, experiences and or magical content

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Speaker 3: right now, and they keep looking externally for whether the

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Speaker 3: factors that are affecting their business rather than just looking internally.

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Speaker 3: And so even if consumers are spending less money, then

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Speaker 3: deliver the magic and take a bigger share of wallet.

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Speaker 3: But you know, I think they're full of excuses right now,

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Speaker 3: and until they look at themselves, I think this kind

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Speaker 3: of like we're not doing as well as we used

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Speaker 3: to is going to continue.

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Speaker 2: So, uh, what's the answer on the whole streaming thing?

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Speaker 2: The streamers really make money?

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Speaker 1: Mark?

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Speaker 4: Because I was listening to Paul interview the head.

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Speaker 2: Of I think Sagraw and she was saying the streamers

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Speaker 2: make thirty billion a year in profits and they want

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Speaker 2: a piece of it.

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Speaker 3: Well, I mean, obviously Netflix is definitely making money, and

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Speaker 3: I think you're gonna say it because Netflix, their ad

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Speaker 3: supported tier is you know, off to somewhat of a

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Speaker 3: slow start, but it's just hugely profitable for them. The

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Speaker 3: what they're doing in password sharing again is just hugely

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Speaker 3: profitable for them. And my opinion is Netflix is going

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Speaker 3: to kind of enter a new era of just increased

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Speaker 3: learnings and I think anyone else can get there, but

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Speaker 3: it starts with you know, people want to be in

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Speaker 3: the parks, people want to watch Star Wars, they want

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Speaker 3: to watch new Disney movies, and they want to do

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Speaker 3: them at the same rates that they have in the past.

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Speaker 3: So I think Disney can absolutely get there. I'm a

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Speaker 3: little concern that, you know, they're talking about reducing their

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Speaker 3: investment in streaming or moving away from ESPN as if

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Speaker 3: people don't want to watch sports anymore. And so it's

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Speaker 3: as you open, it's a little bit of just like

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Speaker 3: everything seems to be in turmoil, where you know, I

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Speaker 3: don't think the consumer has actually changed that much. It's

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Speaker 3: Disney's the one that seems to not know exactly the

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Speaker 3: direction they want to go.

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Speaker 1: Yeah, and that even applies to the film business, which

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Speaker 1: had been you know, ever since they started buying all

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Speaker 1: these great brands like Pixar, like Marvel, like the Star

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Speaker 1: Wars franchises. It was literally guaranteeing them two to three

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Speaker 1: to four movies per year with a global gross in

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Speaker 1: excess of one billion dollars. Now, even that business seems

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Speaker 1: like it might be in a rut. They've delayed and

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Speaker 1: pushed out a lot of release dates. Maybe some people

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Speaker 1: are saying, maybe we're oversaturated with some of these franchises.

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Speaker 1: And then we just look at Barbie kind of a

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Speaker 1: new original movie that's over a billion dollars in box office.

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Speaker 1: So do you think Walt Disney's lost some of their

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Speaker 1: magic when it comes to the film business?

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Speaker 5: Mark?

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Speaker 4: Yeah, I think you know.

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Speaker 3: So this is we've talked about the sports on the show.

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Speaker 3: I mean, when your team's not doing well, everyone needs

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Speaker 3: to remember how they catch the ball and hit right

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Speaker 3: like it's baseball season right now, and the best managers

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Speaker 3: just go back to basics. And I think Disney's problems

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Speaker 3: are not huge if they just go back to basics.

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Speaker 3: And if they go back to basics, they kind of

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Speaker 3: own the segment. There's these huge segments of the market, parents, children, sports,

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Speaker 3: and you know when you see a company that owns

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Speaker 3: segments of the market, I mean, just like dominate segments

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Speaker 3: of the market like that, and they're a little confused

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Speaker 3: as to what they should do, like just go back

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Speaker 3: to basics, get a little less focus on near turn

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Speaker 3: results in Wall Street, and just essentially kind of grow

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Speaker 3: yourself out of that. And and you know, especially when

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Speaker 3: you have the kind of capital that Disney has to

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Speaker 3: do it also, So I mean, they're not at risk

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Speaker 3: of running out of money unless they look their losses

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Speaker 3: continue for a very long time. So I mean that's

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Speaker 3: my advice as a CEO by by gerbviously is a

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Speaker 3: very smart guy, and he and and he's gonna, you know,

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Speaker 3: follow what he thinks his best and so we'll see

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Speaker 3: how this plays out.

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Speaker 2: You have any succession advice for Bob, Well, the last

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Speaker 2: one didn't go well, didn't go any better than the

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Speaker 2: show Succession, So.

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Speaker 3: I think he's gonna have to really fix this before

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Speaker 3: he brings in someone else to grow it. Yeah, so

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Speaker 3: that's it. I don't think he's there for one year.

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Speaker 3: I think this is going to take a few years.

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Speaker 6: I haven't seen the end of Succession, So we won't

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Speaker 6: will spoiler, won't we won't spoiler for you, Hey, Mark,

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Speaker 6: you know, it's just when you think about Disney, there,

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Speaker 6: like all the media companies really exposed to these strikes

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Speaker 6: that we're seeing with the writers and the actors.

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Speaker 1: You're so involved with the you know, the advertising side

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Speaker 1: of the business, the digital side of the business. What's

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Speaker 1: your take on the strikes? Share, because boy, both sides

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Speaker 1: seem really really entrenched.

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Speaker 3: Yeah. Well, I think, first from what I understand, the

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Speaker 3: anything that was already in motion on the movie on

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Speaker 3: the film side is is allowed. That project is allowed

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Speaker 3: to get completed. So it's actually going to take a

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Speaker 3: few more months before like literally everything is truly shut down.

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Speaker 3: And then I think you know, the streamers and you

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Speaker 3: know the studios and things like that. I mean, cash

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Speaker 3: is king. They have a lot of cash to wake

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Speaker 3: this out. So this is it's hard to predict how

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Speaker 3: this is going to go. But if it's a war

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Speaker 3: of attrition on money, you know that's going to favor

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Speaker 3: these big studios just kind of waiting it out to

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Speaker 3: get a deal that they think is reasoned well.

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Speaker 2: And Disney has an added bonus that Netflix doesn't in

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Speaker 2: the parks business, right.

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Speaker 4: I mean I heard yesterday they get seventy percent.

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Speaker 2: Of their operating income operating income from the parks.

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Speaker 1: That's the good news. The bad news is it's because

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Speaker 1: the other businesses have gone down so much, you.

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Speaker 3: Know exactly the the movies in particular, I think have

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Speaker 3: really been hurting them.

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Speaker 7: You're right, then, the parks businesses of rock Solid has

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Speaker 7: always been the big franchises like I don't follow all

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Speaker 7: the superhero movies, but that and Star Wars, uh and

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Speaker 7: even Pixar.

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Speaker 2: They just haven't been as successful as they as they

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Speaker 2: once were, have they?

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Speaker 3: Yeah, and and so I mean that again. You know,

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Speaker 3: the content is a part of the experiences that Disney sells,

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Speaker 3: and so you know they have to look inward and say,

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Speaker 3: you know, is this because consumers don't want to watch

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Speaker 3: Star Wars anymore? Or is it because maybe we're not

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Speaker 3: doing the greatest job and giving them what they want?

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Speaker 3: Because if you give them what they want, they're going

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Speaker 3: to watch. And so you know, it's it's it's I'm

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Speaker 3: going to keep eating that drum. It's back to basics

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Speaker 3: to grow this business.

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Speaker 1: Hey, Mark, give us a sense of kind of the

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Speaker 1: advertising market out there. You're so involved on a day

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Speaker 1: to day basis, I can't imagine it's it's very good

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Speaker 1: because I mean, I'm just thinking the economics, the economic

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Speaker 1: environment is kind of uncertain here. What are you seeing

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Speaker 1: out there just in terms of overall advertising.

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Speaker 3: Yeah, so if you're if your performance advertiser, your Google,

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Speaker 3: your meta you know metas up your over year even TikTok, Amazon,

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Speaker 3: you know, companies in the performance space, you continue to

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Speaker 3: do quite well. If you're in the brand advertising space,

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Speaker 3: more of the big TV networks, they it's a bit

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Speaker 3: up and down. It's just literally I think month to month,

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Speaker 3: the budgets are going up, they're going down. So it's

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Speaker 3: not like this huge era growth right now. But it's

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Speaker 3: also not like a blood bath. I think that the

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Speaker 3: you know kind of retraction and spending on brand advertising

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Speaker 3: has already occurred and it's just a little less predictable.

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Speaker 3: But overall, I think, you know, from everyone I talk

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Speaker 3: in the industry, my own experience at Mountain, it's, you know,

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Speaker 3: it's pretty it's relatively solid. Given the you know kind

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Speaker 3: of how much the economy and the and economic news

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Speaker 3: are just constantly up and down. It's pretty consistent right now, all.

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Speaker 1: Right, Mark great stuff is always Mark Doug As President

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Speaker 1: and CEO of Mountain, giving kind of hists on what

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Speaker 1: we saw from Disney and some of the streamers.

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Speaker 8: You're listening to the team Ken's are live program Bloomberg

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Speaker 8: Markets weekdays at ten am Eastern.

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Speaker 9: On Bloomberg dot Com, the iHeartRadio.

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Speaker 8: App and the Bloomberg Business app, or listen on demand

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Speaker 8: wherever you get your podcasts.

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Speaker 1: Makes a little m and a trade Today in the

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Speaker 1: luxury space. Tapestry again one of the worst names in

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Speaker 1: the business. They own the brands, including Coach and Kate Spade.

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Speaker 1: They agreed to require Michael Core's parent Capri Holdings and

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Speaker 1: an eight point five billion dollar deal to bring it

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Speaker 1: down for us. Kritti Gupta, host of Bloomberg Surveillance Early Edition,

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Speaker 1: joins us here in our Bloomberg Interactive Brokers studio. Pretty

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Speaker 1: big names here, Uh critie, what do you make of it?

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Speaker 3: Yeah?

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Speaker 10: I don't think Tapestry and Capri necessarily resonates with everyone.

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Speaker 1: But when you hear the names Jimmy.

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Speaker 10: Choo Versachi, Kate Spade, Coach, perhaps some bells will ring

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Speaker 10: and look, these are the two parent companies that, frankly

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Speaker 10: have both been struggling. We know luxury. When you think luxury,

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Speaker 10: you don't think the US necessarily. You think you're PM luxury,

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Speaker 10: You think Rimez, you think Louis, et cetera. But it's

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Speaker 10: the same model that these folks are trying to basically

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Speaker 10: make in the US sphere. The problem is that the

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Speaker 10: appetite for luxury in the US is not the same

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Speaker 10: as it is in Europe or the Middle East or China.

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Speaker 11: For example.

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Speaker 1: Why I go down Fifth Avenue, go down Madison Avenue

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Speaker 1: and it seems like all the brands are there.

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Speaker 10: Sure that's not a representation of America, I gotta say.

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Speaker 10: And that's I think where the value get at him.

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Speaker 11: You got to go to Dallas, Texas.

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Speaker 10: I'm going to give you a tour, and I'm going

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Speaker 10: to show you what it's like to live in Middle America.

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Speaker 10: Forwarth America. Forwarth, Texas is great and one of the

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Speaker 10: fastest growing cities in the country, I should say, But.

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Speaker 11: Here's the point.

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Speaker 10: As you have this kind of wealth developing around the country,

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Speaker 10: you need more access to some of these brands. And

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Speaker 10: that's where Michael Cores the basically the founder of Capri Holdings,

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Speaker 10: and Michael Cours the brand comes in handy because one

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Speaker 10: of his major value ads is taking these really well

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Speaker 10: known names Jimmy chou versace, et cetera, and making them

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Speaker 10: more accessible to mainstream Americans by lowering down the price point,

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Speaker 10: increasing the manufacturing. It's no longer an elite exclusive thing

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Speaker 10: to get a pair of Jimmy Chow's shoes. Sure, it's inventive,

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Speaker 10: it is. It's expensive, how much as expensive as they were?

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Speaker 10: I think a pair goes around for like seven hundred dollars.

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Speaker 4: Okay, that's luxury, hold on, that's exclusive.

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Speaker 10: It is one hundred percent, but it's not as expensive

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Speaker 10: as like, say the two thousand they used to go for.

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Speaker 10: That's the point before the acquisition. So the price point

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Speaker 10: has actually come down and become more attainable. And if

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Speaker 10: you go to any mall in America, there is a

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Speaker 10: Michael Core store there.

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Speaker 2: Yes, that's not normal for a luxury Michael Cores. But

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Speaker 2: can you buy Jimmy Chew's shoes also at any mall

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Speaker 2: in America?

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Speaker 5: No?

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Speaker 11: But okay, they're heading in that direction. We are, we were.

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Speaker 4: And we have your no idea.

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Speaker 2: Ohio, I am, but I'm not shopping for Michael Cores

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Speaker 2: or Jimmy Chew.

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Speaker 10: In fact, you will soon now that your girl dad.

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Speaker 2: Well, we were trying to make the distinction between you know,

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Speaker 2: something like Coach, which I don't think they would define

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Speaker 2: themselves as a luxury uh product maker, and something like

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Speaker 2: Versace and they definitely would describe themselves as luxury.

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Speaker 10: Yeah, well used to be and they used to This

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Speaker 10: is I think the point they used to be they

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Speaker 10: thought of as a luxury brand. I'll give you another example

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Speaker 10: with Coach, although they make seventy percent of tapestries revenue.

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Speaker 10: You have Stuart Whitzman and Kate Spade. When do you

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Speaker 10: think Stuart Whitesman do you think luxury?

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Speaker 4: I don't know who's Stuart Whitesman.

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Speaker 10: Oh my god, you're killing me. I'm in a studio

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Speaker 10: full of guys. This isn't fair.

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Speaker 11: I can't make my point.

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Speaker 10: But Kate Spade, Come on, okay, Kate's Spade is luxury.

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Speaker 12: Yet.

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Speaker 10: Now, if you go to any mall in America, you

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Speaker 10: can find Kate's Bade. If you go to a thirty

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Speaker 10: Rock or Rockefeller Plaza, there's Kate's bad.

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Speaker 11: Same thing with Sarrovski.

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Speaker 10: There are these names that used to be very elite

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Speaker 10: very expensive that are now far more accessible, far more

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Speaker 10: household names. And that's because of this kind of move that.

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Speaker 11: Tapestry and Kate's bade. I know, Caprie Holdings well done.

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Speaker 2: The thing is what you're right, You're right about that, right,

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Speaker 2: because Kate Spade coach Michael Core's, these are things that

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Speaker 2: are all in the mall, and not just the mall

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Speaker 2: in the middle of Manhattan, one of the most expensive

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Speaker 2: cities in the world. But I'm all in the middle

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Speaker 2: of Columbus, Ohio, which is where I tend to go

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Speaker 2: to mall's exactly. So, but those things they go down

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Speaker 2: market in order to get mass market, right, right.

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Speaker 10: But that's the value add That's what Michael Core's has

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Speaker 10: done with a lot of these brands. And that's one

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Speaker 10: of his criticisms as well. For the folks who are

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Speaker 10: very high fashion. They're saying, look, you're cheapening the brand

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Speaker 10: by making it so accessible mainstream. But then if you

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Speaker 10: look at the profit and the turnover, well, the top

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Speaker 10: line growth for some of these companies that they're acquiring

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Speaker 10: is immense because all of a sudden you're accessing people

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Speaker 10: in I don't know, Wyoming, Ohio, Illinois, Texas that you

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Speaker 10: wouldn't have ordinarily, and that's a really big deal.

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Speaker 1: Is there a consolidation wave going on in the luxury

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Speaker 1: space and if so, why There.

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Speaker 10: Definitely is, and it's simply because one in the US specifically,

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Speaker 10: I think it's going a bit faster than it is

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Speaker 10: in the likes of Europe, for example. But the wave

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Speaker 10: of consolidation in the US is largely driven by trying

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Speaker 10: to apply the European model to the US and it

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Speaker 10: not really working. So you have seen Tapestry and capre

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Speaker 10: Holdings separately, their stock has been tanking. These are companies

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Speaker 10: that have been struggling relative to some of their international peers.

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Speaker 11: But you're also that wave of consolidation in Europe.

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Speaker 10: You're seeing in some of the Middle Eastern brands as well,

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Speaker 10: because the Chinese consumer, which has been driving a lot

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Speaker 10: of the luxury buying, has been slowing do well.

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Speaker 1: That's why the news coming out of China, which is

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Speaker 1: they're basically going to let the people move about go

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Speaker 1: anywhere they want, So that's going to presumably help Chinese

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Speaker 1: outgoing tourism outside of China, outside of Macau, where they've

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Speaker 1: generally been going to Europe to the US, and I

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Speaker 1: hope to see our Chinese shoppers on Fifth Avenue on

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Speaker 1: Madison Avenue like we used to pre pandemic. Those folks

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Speaker 1: have money and they like to spend on the luxury brands.

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Speaker 1: And I know the stores that are again on Fifth Avenue,

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Speaker 1: Madison Avenue. They depend on those and.

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Speaker 2: I hope they're not buying as much or with as

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Speaker 2: much money as they had been in the past, because

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Speaker 2: they drove the price of some of the products that

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Speaker 2: I like way up. For example, Rolex watches on the

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Speaker 2: secondhand market, those prices were far higher. I'm talking two x,

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Speaker 2: three x four x of manufacturing suggested retail price, and

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Speaker 2: they finally, I have been coming back down high end

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Speaker 2: watch prices. And when I saw that story this morning,

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Speaker 2: the first thing I thought is, oh no.

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Speaker 9: Well.

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Speaker 1: The first thing I thought was Sam Fizzelli, my wine

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Speaker 1: expert and it also covers pharmaceuticals for Bloomberg Intelligence. He's

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Speaker 1: a big wine guy. He lives in London and lives

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Speaker 1: in France. Big wine guy. He was just explaining to

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Speaker 1: me over the last you know, ten years, how the

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Speaker 1: Chinese have just really rocked the wine market and pushed prices,

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Speaker 1: particularly for fine, French wines way higher, but they've been

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Speaker 1: out of the market.

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Speaker 10: Yeah, it's funny how we talk about the Chinese consumer

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Speaker 10: almost like we talked about the American consumer. I mean,

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Speaker 10: of course, the US spending power is still significantly higher,

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Speaker 10: but now we actually have to worry about not just

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Speaker 10: Chinese exports but Chinese imports as well, which I think

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Speaker 10: really really speaks to the strength of the country as well.

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Speaker 10: And to your point on that headline, you saw the

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Speaker 10: European brand specifically, like the Richemont for example, all rally

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Speaker 10: this morning in the European session, so.

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Speaker 11: A massive move there.

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Speaker 10: And I also add, I mean we're talking about China

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Speaker 10: in the US, but I really think the Middle East

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Speaker 10: is worth thinking about as well, because if you go

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Speaker 10: to London, you go to what's the high Street London.

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Speaker 11: I should know this.

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Speaker 4: I mean, I like the King's Road Kensington.

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Speaker 10: If you go to like anywhere in Kensington or Chelsea

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Speaker 10: or whatever, there's so many Middle Eastern people from the

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Speaker 10: Middle Eastern shoppers.

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Speaker 1: And the cars they have, yeah, are pretty cool. So

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Speaker 1: I'm looking at Tapes Street. The stocks down eleven and

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Speaker 1: a half percent, so I guess the market doesn't like

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Speaker 1: I say, paid a big premium here.

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Speaker 10: Yeah, it's like a sixty five percent premium, and.

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Speaker 1: Not that the market's not in it for Tap Street,

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Speaker 1: so maybe a dilution concern there for those Oxford streets.

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Speaker 11: Oxford Street is another one.

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Speaker 4: There are a number of high streets in London.

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Speaker 2: And it's funny to hear that question from you because

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Speaker 2: the term high street, I think, is a British term, right,

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Speaker 2: And you're going to be moving to London soon, I am,

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Speaker 2: So you'll be walking up and down Oxford Street.

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Speaker 1: Youre going to acquire a little bit of an accent,

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Speaker 1: do you think.

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Speaker 11: No, I'm gonna go over. I'm gonna start saying y'all.

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Speaker 2: And I was gonna say, she's from Dallas and she

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Speaker 2: doesn't have an accent from there.

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Speaker 11: So well, that took work, you know, I had to.

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Speaker 10: I went to UVA and the first thing they asked

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Speaker 10: me was did you drive horses to school and Dallas?

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Speaker 10: And I said no, But why would you think? Then

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Speaker 10: they said, because you say you'll every second word.

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Speaker 11: That was the end of it.

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Speaker 1: Sometimes, you know, even in Virginia, go to southern Virginia, it's.

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Speaker 4: To embrace y'all, To be honest, have you.

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Speaker 11: It's a very useful word as opposed to.

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Speaker 4: Oh well, don't ruin it. Oh oh it's a secret.

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Speaker 10: Oh never mind, where Matt plans all my spares? He

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Speaker 10: throw me a little birthday spare.

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Speaker 1: When are you going through? That was the end of

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Speaker 1: the end of August of August.

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Speaker 11: Oh, anyone want to come over and pack because.

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Speaker 1: It's fun, That's right? Okay, all right, So pritty Gupta

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Speaker 1: with the reporting here today, A little M and a

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Speaker 1: trade in the luxury tapestry buying capri.

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Speaker 8: Markets weekdays at ten am Eastern on Bloomberg Radio, the

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Speaker 1: Let's put this in the context. Lydia Bosor can do that.

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Speaker 1: She's a senior economist at e Why Parthenon and she

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Speaker 1: joins us here, Lydia, what's your take here as you

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Speaker 1: dig into some of the inflation data we got today?

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Speaker 5: Sure, I mean the report was encouraging. We saw that

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Speaker 5: back to back, the smallest back to back increasing in

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Speaker 5: core inflation. As you mentioned, since early twenty twenty one.

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Speaker 5: We also look at those three months annual life train

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Speaker 5: for both headline and core inflation, and here as well,

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Speaker 5: we saw a significant slowdown. If we dig a little

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Speaker 5: deeper in the component, we are seeing that these inflation

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Speaker 5: in use car prices which declined in July, and we

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Speaker 5: think that there is more than more pressure coming. And

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Speaker 5: on the housing front, we have also seen a turn

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Speaker 5: in housing inflation and we're starting to see also some

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Speaker 5: gradual disinflation. So overall, I think it's one more step

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Speaker 5: in the right direction when it comes to inflation.

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Speaker 2: Can you look at, for example, car prices coming down.

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Speaker 2: Can you look at the credit that being given out

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Speaker 2: for those kind of loans to help you forecast what's coming,

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Speaker 2: because I noticed that non revolving credit actually jumped quite

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Speaker 2: a bit last month after stagnating for a few months,

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Speaker 2: and a huge part of that was car loans. You know,

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Speaker 2: My concern, LYDIA is that these numbers bounce back as

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Speaker 2: the economy continues to do so well they do.

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Speaker 5: I think what we've seen in the auto sector has

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Speaker 5: been quite unique. We still have this imbalance between the

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Speaker 5: supply and the man and that has created some volatility

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Speaker 5: in the sector. So I think, you know, when we

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Speaker 5: look at auction prices, they tend to lead uscalu prices

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Speaker 5: in the CPI, So I think that we're likely to

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Speaker 5: see more downward pressure, but there's likely to be some

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Speaker 5: volatility as well, as you're pointing out.

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Speaker 1: All right Lydia. Given what we see on inflation coming down,

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Speaker 1: the FED appears to be standing pat maybe one more

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Speaker 1: rate increase. How do you put that on the context

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Speaker 1: with an economic outlook?

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Speaker 9: Here?

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Speaker 1: Are you guys thinking that there is a recession in

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Speaker 1: the near term? I mean, I know what recession is

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Speaker 1: going to come at some point, but are you in

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Speaker 1: the campus as it's near term or can we put

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Speaker 1: this on the on the back burner a little bit sure?

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Speaker 5: In terms of inflation, we're I think we're heading in

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Speaker 5: the right direction. I think the Fed, we look at

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Speaker 5: these numbers, as you know, some convincing progress. I when

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Speaker 5: we look at the economic outlook at the same time,

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Speaker 5: we've seen some economic resilience, but we do expect to

437
00:20:25,520 --> 00:20:29,080
Speaker 5: see softer economic momentum in the second half of the year.

438
00:20:29,200 --> 00:20:32,280
Speaker 5: So if you look at economic growth. We are anticipating

439
00:20:32,320 --> 00:20:37,359
Speaker 5: to see growth, you know, flirting with with essentially zero

440
00:20:37,440 --> 00:20:40,560
Speaker 5: heading into twenty twenty four. And at the same time,

441
00:20:40,960 --> 00:20:43,760
Speaker 5: inflation is also likely to remain in that in that

442
00:20:43,840 --> 00:20:47,200
Speaker 5: this inflation trend and overall that should make the FED,

443
00:20:47,880 --> 00:20:51,040
Speaker 5: you know, comfortable enough to stay on the on the sidelines.

444
00:20:51,080 --> 00:20:53,480
Speaker 5: And we do think that the FED has reached the

445
00:20:53,560 --> 00:20:55,600
Speaker 5: end of its hiking cycle and that the July ry

446
00:20:55,640 --> 00:20:56,720
Speaker 5: type was.

447
00:20:56,680 --> 00:21:01,640
Speaker 2: The last one, even if we don't see core inflation

448
00:21:01,720 --> 00:21:05,760
Speaker 2: continued come down. I mean, everyone's kind of taking a

449
00:21:05,840 --> 00:21:09,320
Speaker 2: victory lap today, but it's still CPI minus food and

450
00:21:09,400 --> 00:21:12,720
Speaker 2: energy year over year four point seven percent. That's more

451
00:21:12,760 --> 00:21:14,840
Speaker 2: than twice as much as the FED wants it to be.

452
00:21:15,200 --> 00:21:18,919
Speaker 2: So don't they need to at least be seen putting

453
00:21:18,920 --> 00:21:22,320
Speaker 2: some pressure on actively driving it down until it gets

454
00:21:22,359 --> 00:21:22,680
Speaker 2: to two?

455
00:21:23,760 --> 00:21:24,399
Speaker 5: Yes, that's right.

456
00:21:24,440 --> 00:21:25,840
Speaker 4: The Fed will be very careful.

457
00:21:26,640 --> 00:21:30,639
Speaker 5: I think that if they do pose in September, they

458
00:21:30,680 --> 00:21:34,200
Speaker 5: will retain a Hockeish bias and they will keep the

459
00:21:34,240 --> 00:21:37,479
Speaker 5: door open to further tightening if the data justifies it.

460
00:21:38,040 --> 00:21:40,960
Speaker 5: The FED is really data dependent. We're going to get

461
00:21:41,000 --> 00:21:44,080
Speaker 5: another CPI report in August. We're likely to see some

462
00:21:44,160 --> 00:21:47,959
Speaker 5: renewed the poor pressure on headline inflation. We're also seeing

463
00:21:49,200 --> 00:21:54,200
Speaker 5: oil prices rise again and that's potentially likely to lift

464
00:21:54,200 --> 00:21:57,359
Speaker 5: headline inflation as well. But we do think that core

465
00:21:57,400 --> 00:22:01,040
Speaker 5: inflation will continue to ease a further towards the end

466
00:22:01,040 --> 00:22:03,600
Speaker 5: of the year. There's a lot of this inflation baked

467
00:22:03,720 --> 00:22:06,320
Speaker 5: in on the housing front and that's likely to pull

468
00:22:06,359 --> 00:22:09,920
Speaker 5: down course services inflation, and the FED will be looking

469
00:22:09,920 --> 00:22:13,560
Speaker 5: at that as some you know, some progress towards getting

470
00:22:13,600 --> 00:22:16,600
Speaker 5: inflation back to their target LYDIA.

471
00:22:16,640 --> 00:22:19,280
Speaker 1: So we've got it. Seems like inflation is you know,

472
00:22:19,359 --> 00:22:21,159
Speaker 1: trending in the right direction here in the US, but

473
00:22:21,200 --> 00:22:23,920
Speaker 1: how about Europe. It just seems so much more entrenched there,

474
00:22:23,920 --> 00:22:27,439
Speaker 1: particularly in the UK. What do you expect the central

475
00:22:27,480 --> 00:22:29,080
Speaker 1: banks across Europe to do?

476
00:22:30,760 --> 00:22:34,480
Speaker 5: Yeah, I think in Europe we're seeing infliction dynamics that

477
00:22:34,560 --> 00:22:38,520
Speaker 5: are still elevated, but we've also started to see some progress.

478
00:22:39,119 --> 00:22:43,080
Speaker 5: We're seeing very tight label market conditions in Europe and

479
00:22:43,119 --> 00:22:47,080
Speaker 5: that's one factor behind you know, the resilience of inflation

480
00:22:47,359 --> 00:22:49,600
Speaker 5: as as we look as we look ahead, I think

481
00:22:50,040 --> 00:22:52,400
Speaker 5: we've seen that slow down in the pace of tightening

482
00:22:52,480 --> 00:22:56,359
Speaker 5: also in Europe and They're likely also to reach the

483
00:22:56,480 --> 00:22:59,399
Speaker 5: end of their titanic cycle this year. I think when

484
00:22:59,440 --> 00:23:02,640
Speaker 5: we look at at the FED, it's a little ahead

485
00:23:03,040 --> 00:23:06,480
Speaker 5: in the cycle. As I said, we're probably at the

486
00:23:06,600 --> 00:23:09,159
Speaker 5: end of the of the hiking cycle. And we do

487
00:23:09,240 --> 00:23:13,359
Speaker 5: see the FED cutting interest rates likely in March, not

488
00:23:13,520 --> 00:23:16,760
Speaker 5: before March, but likely next year as they start with

489
00:23:16,840 --> 00:23:17,920
Speaker 5: calibrating policy.

490
00:23:19,080 --> 00:23:21,840
Speaker 4: All right, So, uh, the economy.

491
00:23:21,920 --> 00:23:24,560
Speaker 2: The economic picture though is different for Europe, right, I mean,

492
00:23:24,880 --> 00:23:28,439
Speaker 2: here we're looking at still more than two percent GDP

493
00:23:28,640 --> 00:23:31,480
Speaker 2: growth and over there they're already stagnating.

494
00:23:31,640 --> 00:23:32,680
Speaker 4: Do they hit a recession?

495
00:23:34,760 --> 00:23:37,439
Speaker 5: There is a high chance I think that that, you know,

496
00:23:37,600 --> 00:23:40,679
Speaker 5: we could see some recessions in in Europe. We are

497
00:23:40,800 --> 00:23:44,920
Speaker 5: likely to see i think, across most advanced economies economic

498
00:23:44,960 --> 00:23:50,120
Speaker 5: growth you know, flirting with full speed growth essentially this

499
00:23:50,119 --> 00:23:53,320
Speaker 5: this year. And so I think that really when we

500
00:23:53,359 --> 00:23:57,960
Speaker 5: look at global growth, Europe, US and are likely to

501
00:23:58,000 --> 00:24:02,359
Speaker 5: be those economies slowing down growth and we're likely to

502
00:24:02,400 --> 00:24:05,440
Speaker 5: see you know, global growth slowing this year and then

503
00:24:05,560 --> 00:24:07,640
Speaker 5: gradually rebound into twenty twenty four.

504
00:24:08,359 --> 00:24:13,120
Speaker 1: LYDIA thirty seconds. What's your economic what's your labor forecast?

505
00:24:13,119 --> 00:24:13,239
Speaker 7: Here?

506
00:24:13,280 --> 00:24:15,960
Speaker 1: I mean, is we're going to see unemployment go above

507
00:24:16,000 --> 00:24:17,520
Speaker 1: four percent anytime soon.

508
00:24:19,560 --> 00:24:22,639
Speaker 5: Yes, we do have you know, a further softening in

509
00:24:23,359 --> 00:24:26,439
Speaker 5: the label market. We think that this gradual rebalancing that

510
00:24:26,480 --> 00:24:29,440
Speaker 5: we have started to see will continue. So we expect

511
00:24:29,440 --> 00:24:32,639
Speaker 5: to see a gradual rise in the unemployment rate towards

512
00:24:32,840 --> 00:24:35,840
Speaker 5: you know, for a little bout four percent by the

513
00:24:35,840 --> 00:24:38,640
Speaker 5: middle of the next year. And that's going to reflect

514
00:24:38,640 --> 00:24:41,639
Speaker 5: the fact that labor demand is going to cool further.

515
00:24:42,000 --> 00:24:45,920
Speaker 5: We're already we're already seeing that happening and hiring slow

516
00:24:45,960 --> 00:24:49,399
Speaker 5: down further, as well as we have your software demand

517
00:24:49,440 --> 00:24:52,480
Speaker 5: and softer economic conditions taking in in the economy.

518
00:24:52,640 --> 00:24:55,360
Speaker 1: All right, Lydia, that's really really helpful. We really appreciate

519
00:24:55,680 --> 00:24:59,160
Speaker 1: checking in with you, Lydia Bosour Senior economists e Hy

520
00:24:59,440 --> 00:25:01,840
Speaker 1: Partha I is the firm.

521
00:25:02,000 --> 00:25:05,360
Speaker 8: You're listening to the team Ken's her live program Bloomberg

522
00:25:05,480 --> 00:25:08,879
Speaker 8: Markets weekdays at ten am Eastern on Bloomberg dot Com,

523
00:25:08,920 --> 00:25:12,080
Speaker 8: the iHeartRadio app and the Bloomberg Business App, or listen

524
00:25:12,119 --> 00:25:14,240
Speaker 8: on demand wherever you get your podcast.

525
00:25:16,800 --> 00:25:18,840
Speaker 1: All right, the markets like what they saw from the

526
00:25:18,880 --> 00:25:21,479
Speaker 1: inflation print today, Let's check with somebody who actually does

527
00:25:21,520 --> 00:25:23,919
Speaker 1: this stuff for living a deal Zaman. He's a partner

528
00:25:23,920 --> 00:25:25,760
Speaker 1: for Wall Street Alliance joint us live here in a

529
00:25:25,760 --> 00:25:29,480
Speaker 1: Bloomberg Interactive broker studio a deal. I like the print today.

530
00:25:29,560 --> 00:25:31,800
Speaker 1: Matt thinks inflation is still too high. I'm a friend

531
00:25:31,840 --> 00:25:34,200
Speaker 1: of the trend. I like the trends coming down. That's

532
00:25:34,240 --> 00:25:36,879
Speaker 1: what I'm focusing on. How did you view the CPI

533
00:25:36,960 --> 00:25:38,879
Speaker 1: print today and how does an impact kind of how

534
00:25:38,920 --> 00:25:40,080
Speaker 1: you're thinking about these markets?

535
00:25:40,480 --> 00:25:42,880
Speaker 13: So great to be with you. So we were very

536
00:25:42,920 --> 00:25:45,600
Speaker 13: positive on this print, and you know the FED vasion

537
00:25:45,640 --> 00:25:48,800
Speaker 13: of war against the forty year high inflation by raising

538
00:25:48,840 --> 00:25:51,000
Speaker 13: interest rates to a twenty two year high. And it's

539
00:25:51,040 --> 00:25:53,879
Speaker 13: clear that the Fed has won this war right. Inflation

540
00:25:54,040 --> 00:25:57,439
Speaker 13: has come down from around nine percent down to around

541
00:25:57,440 --> 00:26:00,280
Speaker 13: three point two percent. I think this is construct for

542
00:26:00,320 --> 00:26:02,439
Speaker 13: the equity markets in the long term.

543
00:26:02,720 --> 00:26:05,480
Speaker 2: Is there are you not concerned that there's a chance

544
00:26:05,480 --> 00:26:06,280
Speaker 2: it comes back.

545
00:26:08,600 --> 00:26:11,840
Speaker 13: Well, what we think is that from this point onwards,

546
00:26:12,240 --> 00:26:14,959
Speaker 13: the inflation will most likely start to cool off on

547
00:26:15,000 --> 00:26:17,640
Speaker 13: its own, because even if you look at the unemployment rate,

548
00:26:18,280 --> 00:26:21,040
Speaker 13: we think that it is understated right now because a

549
00:26:21,080 --> 00:26:23,159
Speaker 13: lot of the layoffs have been in the tech space

550
00:26:23,640 --> 00:26:25,679
Speaker 13: and a lot of those workers are high earners, so

551
00:26:25,720 --> 00:26:29,720
Speaker 13: they're not necessarily claiming unemployment benefits. And also, you know,

552
00:26:29,720 --> 00:26:31,840
Speaker 13: the FED is going to be very careful about not

553
00:26:32,000 --> 00:26:35,800
Speaker 13: damaging the unemployment rate too much in this politically charged environment.

554
00:26:36,200 --> 00:26:37,960
Speaker 13: So we think it's going to start to cool off

555
00:26:38,000 --> 00:26:39,760
Speaker 13: on its own from this point onwards.

556
00:26:39,920 --> 00:26:44,479
Speaker 2: I just saw total consumer credit rose seventeen point eight

557
00:26:44,560 --> 00:26:49,600
Speaker 2: billion dollars last month. There was a small monthly increase before,

558
00:26:49,680 --> 00:26:52,880
Speaker 2: so credit had kind of stagnated, but now it's come

559
00:26:53,320 --> 00:26:59,399
Speaker 2: roaring back, especially student loans and auto loans. And you know,

560
00:26:59,480 --> 00:27:02,719
Speaker 2: if people are able to weather seven or eight percent

561
00:27:02,800 --> 00:27:05,040
Speaker 2: auto loans and are still willing to go pay these

562
00:27:06,000 --> 00:27:10,320
Speaker 2: incredibly high prices for vehicles, I feel like, you know,

563
00:27:10,359 --> 00:27:12,919
Speaker 2: they could push inflation higher, they could bounce it back.

564
00:27:12,840 --> 00:27:14,240
Speaker 9: Up fair point.

565
00:27:14,480 --> 00:27:17,520
Speaker 13: But I also feel that, you know that at some point,

566
00:27:17,720 --> 00:27:22,000
Speaker 13: this excess savings that people have from the pandemic, they're

567
00:27:22,000 --> 00:27:24,000
Speaker 13: going to run out of it. And when they run

568
00:27:24,040 --> 00:27:26,040
Speaker 13: out of it, you know, they'll start cutting back on

569
00:27:26,080 --> 00:27:28,440
Speaker 13: some of the services. Right, So they'll start they'll stop

570
00:27:28,560 --> 00:27:32,560
Speaker 13: going to Bloomingdale's and they'll start going to Costco. Right,

571
00:27:32,600 --> 00:27:34,920
Speaker 13: so they'll they'll become more budget conscious. And I think

572
00:27:34,960 --> 00:27:37,480
Speaker 13: that will also start to bring inflation down, and the

573
00:27:37,560 --> 00:27:38,520
Speaker 13: data is supporting that.

574
00:27:38,840 --> 00:27:39,200
Speaker 9: All right.

575
00:27:39,240 --> 00:27:43,080
Speaker 1: So given that backdrop, a deal of a benign inflation outlook,

576
00:27:43,160 --> 00:27:46,840
Speaker 1: still decent economic growth, although slower than what we've seen.

577
00:27:48,119 --> 00:27:51,560
Speaker 1: What do you do here? Are you equities? Fixed income?

578
00:27:52,119 --> 00:27:53,000
Speaker 1: Where do you start?

579
00:27:53,720 --> 00:27:57,280
Speaker 13: Well, fixed income is also very attractive overhead, but if

580
00:27:57,320 --> 00:27:59,320
Speaker 13: we take a longer term point of view, I think

581
00:27:59,400 --> 00:28:02,080
Speaker 13: equities is where you get the most bang for your buck.

582
00:28:02,920 --> 00:28:04,760
Speaker 13: We are of the school of thought that we think

583
00:28:04,760 --> 00:28:06,479
Speaker 13: in the short term you're going to get a correction

584
00:28:06,560 --> 00:28:09,439
Speaker 13: in the market because seasonally this is a week period

585
00:28:09,480 --> 00:28:12,400
Speaker 13: of the year. So on the equity side, we would

586
00:28:12,440 --> 00:28:16,199
Speaker 13: be looking at opportunities on a pullback. The two parts

587
00:28:16,240 --> 00:28:18,040
Speaker 13: of the market that we like over here is the

588
00:28:18,119 --> 00:28:22,560
Speaker 13: high quality momentum areas and then the less love stocks

589
00:28:22,560 --> 00:28:25,480
Speaker 13: that haven't participated in the rally so far, So we

590
00:28:25,520 --> 00:28:29,360
Speaker 13: would be looking at opportunistically on those areas on a pullback.

591
00:28:29,359 --> 00:28:31,639
Speaker 1: All right. So that means is that the Metas of

592
00:28:31,680 --> 00:28:34,200
Speaker 1: the world, the Googles of the world, the Amazons, you look,

593
00:28:34,240 --> 00:28:36,000
Speaker 1: you buy them on a pullback or kind of what's

594
00:28:36,000 --> 00:28:36,840
Speaker 1: that first group for you?

595
00:28:37,040 --> 00:28:40,520
Speaker 13: Yes, So that would be certainly that's one group of stocks.

596
00:28:40,520 --> 00:28:43,640
Speaker 13: The stocks on our watch list, for example, Apple and Meta.

597
00:28:43,720 --> 00:28:45,800
Speaker 13: You know, Apple just came out with the earnings. The

598
00:28:45,800 --> 00:28:48,880
Speaker 13: street did not like it because the iPhone sales went down,

599
00:28:49,320 --> 00:28:52,320
Speaker 13: but we actually saw strength over there because we saw

600
00:28:52,360 --> 00:28:55,160
Speaker 13: their service business grow, which is, you know, the profit

601
00:28:55,200 --> 00:28:58,520
Speaker 13: margins almost double that of the product business. So those

602
00:28:58,520 --> 00:29:00,880
Speaker 13: are the type of areas that we'd be very interested

603
00:29:00,880 --> 00:29:01,720
Speaker 13: in on a pullback.

604
00:29:02,280 --> 00:29:06,160
Speaker 2: What do you think about I mean rates at this level,

605
00:29:06,360 --> 00:29:08,440
Speaker 2: you're going to want to lock those in. Don't you

606
00:29:08,480 --> 00:29:10,360
Speaker 2: think that a lot of people are going to want

607
00:29:10,360 --> 00:29:12,959
Speaker 2: to lock in four year, four percent, ten years.

608
00:29:13,880 --> 00:29:16,160
Speaker 13: Yes, Actually, we have a lot of clients that have

609
00:29:17,000 --> 00:29:19,640
Speaker 13: cash that are looking to lock in good rates. So

610
00:29:19,760 --> 00:29:22,040
Speaker 13: certainly I think that's in the short term that is

611
00:29:22,080 --> 00:29:25,640
Speaker 13: going to be a headwind in the market, But I

612
00:29:25,680 --> 00:29:28,720
Speaker 13: think that in the long term you get better risk

613
00:29:28,760 --> 00:29:30,480
Speaker 13: adjusted returns on the equities.

614
00:29:30,960 --> 00:29:31,360
Speaker 9: All right.

615
00:29:31,400 --> 00:29:35,160
Speaker 1: So, I mean Matt's been overweight, you know those Magnificent seven.

616
00:29:35,440 --> 00:29:37,560
Speaker 1: Me not so much. So if I'm looking for this

617
00:29:37,640 --> 00:29:39,560
Speaker 1: market to kind of broaden out a little bit, because

618
00:29:39,560 --> 00:29:41,520
Speaker 1: I think I need to see that for just the

619
00:29:41,560 --> 00:29:44,360
Speaker 1: health of the market. If I don't own the magnificent seven.

620
00:29:44,400 --> 00:29:46,480
Speaker 1: If I don't want to go chase those things, where

621
00:29:46,480 --> 00:29:46,840
Speaker 1: do I go?

622
00:29:47,400 --> 00:29:49,680
Speaker 4: Or should I take profits and get in.

623
00:29:49,600 --> 00:29:51,360
Speaker 1: You let it ride, just let it ride.

624
00:29:52,400 --> 00:29:55,040
Speaker 13: Well, I agree with you completely like that. If you

625
00:29:55,080 --> 00:29:56,920
Speaker 13: look at the I SNP five hundred up until the

626
00:29:57,040 --> 00:29:59,320
Speaker 13: end of last month, it was up about nineteen point

627
00:29:59,400 --> 00:30:01,560
Speaker 13: six percent. You look at the equal weight index, it

628
00:30:01,640 --> 00:30:04,280
Speaker 13: was up about nine point six percent. So I would

629
00:30:04,280 --> 00:30:06,800
Speaker 13: be looking at some of the less love stocks like

630
00:30:06,880 --> 00:30:10,280
Speaker 13: for example, another stock on our watch list is home Depot. Right,

631
00:30:10,320 --> 00:30:12,920
Speaker 13: so home Depot did really well during the pandemic because

632
00:30:12,920 --> 00:30:14,800
Speaker 13: we were trapped in our homes and we just wanted

633
00:30:14,840 --> 00:30:18,560
Speaker 13: to improve our living experience. Since then, the demand has subsided,

634
00:30:18,680 --> 00:30:21,800
Speaker 13: but we still see a great long term potential because

635
00:30:21,800 --> 00:30:23,920
Speaker 13: in the US we have a housing shortage and people

636
00:30:23,960 --> 00:30:26,440
Speaker 13: do have to upgrade their homes, which benefits a company

637
00:30:26,480 --> 00:30:27,200
Speaker 13: like home Depot.

638
00:30:27,400 --> 00:30:31,880
Speaker 4: And you own home Depot, you also own Apple. I

639
00:30:32,920 --> 00:30:35,720
Speaker 4: feel like the market has soured a bit.

640
00:30:35,800 --> 00:30:38,160
Speaker 2: Well, clearly they've come down below the three trillion dollar

641
00:30:38,240 --> 00:30:41,120
Speaker 2: value and we see iPhone sales stagnating.

642
00:30:41,840 --> 00:30:43,640
Speaker 4: Why do you own Apple longer term?

643
00:30:44,200 --> 00:30:47,480
Speaker 13: So we think that you know the service business, there's

644
00:30:47,520 --> 00:30:49,800
Speaker 13: a lot of strength over there, so we like that.

645
00:30:50,120 --> 00:30:53,120
Speaker 13: And then also we think that the iPhone fifteen release

646
00:30:53,480 --> 00:30:56,280
Speaker 13: could be a significant upgrade. You know, the quality of

647
00:30:56,320 --> 00:30:59,160
Speaker 13: our phones are improving, so we are holding onto our

648
00:30:59,160 --> 00:31:01,880
Speaker 13: phones longer before we upgrading it. So I think this

649
00:31:02,000 --> 00:31:05,200
Speaker 13: upcoming release of iPhone fifteen could be a good catalyst.

650
00:31:05,400 --> 00:31:07,160
Speaker 13: So and company pays are good dividend.

651
00:31:07,240 --> 00:31:08,480
Speaker 4: So I just don't know what's going to change.

652
00:31:08,480 --> 00:31:11,959
Speaker 2: The phones that Paul and I have are already capable

653
00:31:12,000 --> 00:31:12,880
Speaker 2: of everything we need to do.

654
00:31:13,000 --> 00:31:15,360
Speaker 1: I got an iPhone eleven. Yeah, that's what I got.

655
00:31:15,760 --> 00:31:17,520
Speaker 1: I might upgrade, though, I'm going to take you to

656
00:31:17,560 --> 00:31:20,280
Speaker 1: task on this apple. Every time I see Tim Cook,

657
00:31:20,280 --> 00:31:22,240
Speaker 1: I say you got to raise your dividend. You've got

658
00:31:22,240 --> 00:31:24,000
Speaker 1: to dive it in less than one percent, man, up

659
00:31:24,120 --> 00:31:25,800
Speaker 1: go to three percent, three and a half percent. Are

660
00:31:25,840 --> 00:31:28,520
Speaker 1: you surprised that they don't do that? With all the

661
00:31:28,560 --> 00:31:30,600
Speaker 1: cash they have on the bouncey, all the free cash

662
00:31:30,600 --> 00:31:33,120
Speaker 1: flow they have, I think that they should raise their dividend.

663
00:31:33,920 --> 00:31:36,360
Speaker 13: Well yeah, I mean they're they're entering into a different

664
00:31:36,360 --> 00:31:38,960
Speaker 13: phase of the business, and I think they are doing

665
00:31:39,080 --> 00:31:41,520
Speaker 13: great with the share buybacks, and I think, you know,

666
00:31:42,080 --> 00:31:44,160
Speaker 13: I think they have a lot more going on for

667
00:31:44,240 --> 00:31:46,920
Speaker 13: them in other areas which they want to keep their

668
00:31:46,920 --> 00:31:48,200
Speaker 13: cash to take advantage of.

669
00:31:48,560 --> 00:31:52,640
Speaker 1: How about energy, you know, there's a sector that for

670
00:31:52,640 --> 00:31:54,720
Speaker 1: a decade nobody cared about because you know, it was

671
00:31:54,760 --> 00:31:56,440
Speaker 1: peak oil and we're all going green. And then it's

672
00:31:56,440 --> 00:31:59,080
Speaker 1: had a nice couple three years here, uh, and now

673
00:31:59,080 --> 00:32:01,960
Speaker 1: we've got WTI oil, you know, back up at almost

674
00:32:01,960 --> 00:32:04,200
Speaker 1: eighty four dollars a barrel. Do you guys traffic in

675
00:32:04,240 --> 00:32:05,240
Speaker 1: the energy space at all?

676
00:32:06,000 --> 00:32:08,440
Speaker 13: We actually, you know, we actually think oil is headed

677
00:32:08,520 --> 00:32:12,200
Speaker 13: higher because yeah, because you know the demand for oil

678
00:32:12,400 --> 00:32:15,200
Speaker 13: as the global economies grow, the demand for oil is

679
00:32:15,240 --> 00:32:17,280
Speaker 13: going to continue to increase, and OPEK is going to

680
00:32:17,280 --> 00:32:20,560
Speaker 13: continue to limit production and the transition of it from

681
00:32:20,600 --> 00:32:22,840
Speaker 13: fossil fuels is going to take a lot of time.

682
00:32:23,280 --> 00:32:25,960
Speaker 13: So we actually think that the oil inflation is here

683
00:32:26,000 --> 00:32:28,880
Speaker 13: to stay and that will keep going higher. And that

684
00:32:28,960 --> 00:32:31,920
Speaker 13: benefits some of the larger oil players because their break

685
00:32:31,920 --> 00:32:34,120
Speaker 13: even on oil is very low, and get oil at

686
00:32:34,120 --> 00:32:36,640
Speaker 13: one hundred dollars a barrel, they are making a killing

687
00:32:36,800 --> 00:32:37,120
Speaker 13: a deal.

688
00:32:37,160 --> 00:32:39,520
Speaker 4: Does China play into your investment thesis?

689
00:32:40,680 --> 00:32:43,080
Speaker 13: Certainly, China is a major player, and you know it

690
00:32:43,120 --> 00:32:47,240
Speaker 13: does have an impact but we find opportunities more domestically

691
00:32:47,280 --> 00:32:50,200
Speaker 13: in the United States, you know, and especially I.

692
00:32:50,200 --> 00:32:51,280
Speaker 4: Just mean in that day.

693
00:32:51,880 --> 00:32:54,440
Speaker 2: You know, their economy supports rising prices of oil if

694
00:32:54,440 --> 00:32:55,080
Speaker 2: it does well.

695
00:32:55,360 --> 00:32:58,800
Speaker 13: Yes, so China is definitely a key player there. Global economies.

696
00:32:58,840 --> 00:33:01,560
Speaker 13: India is a key player, and the US also, you know,

697
00:33:01,600 --> 00:33:04,360
Speaker 13: the US economy is improving, so that's also increasing the

698
00:33:04,400 --> 00:33:07,680
Speaker 13: demand for oil. So definitely, we really like some of

699
00:33:07,720 --> 00:33:09,720
Speaker 13: the larger oil companies that benefit from that.

700
00:33:10,200 --> 00:33:12,560
Speaker 1: Thirty seconds, what are you staying away from here?

701
00:33:14,160 --> 00:33:14,240
Speaker 9: So?

702
00:33:14,560 --> 00:33:17,720
Speaker 13: You know, I think that there's a lot of quality

703
00:33:17,760 --> 00:33:20,719
Speaker 13: investments right now that you can take advantage of. So

704
00:33:20,800 --> 00:33:24,320
Speaker 13: I would stay away from the high risk, qualatile meme

705
00:33:24,400 --> 00:33:27,720
Speaker 13: type of investments and just focus more on quality and

706
00:33:27,760 --> 00:33:30,680
Speaker 13: look at it in pullbacks. And like you said, fixed

707
00:33:30,680 --> 00:33:33,320
Speaker 13: income is giving you also an opportunity of a lifetime.

708
00:33:33,320 --> 00:33:35,640
Speaker 13: You know, one year T bill you're looking at close

709
00:33:35,720 --> 00:33:38,480
Speaker 13: to five percent. You've never seen that in a long time.

710
00:33:38,720 --> 00:33:41,160
Speaker 1: Yeah, it's just amazing. I know people that just roll

711
00:33:41,200 --> 00:33:43,960
Speaker 1: those things over all the time. A deal Zaman, he's

712
00:33:43,960 --> 00:33:46,320
Speaker 1: a partner at Wall Street Alliance. We appreciate coming in here.

713
00:33:46,920 --> 00:33:50,520
Speaker 8: You're listening to the tape Cancer Live program Bloomberg Markets

714
00:33:50,600 --> 00:33:53,960
Speaker 8: weekdays at ten am Eastern on Bloomberg Radio, the tune

715
00:33:54,000 --> 00:33:55,720
Speaker 8: in app, Bloomberg dot Com, and.

716
00:33:55,680 --> 00:33:57,000
Speaker 9: The Bloomberg Business App.

717
00:33:57,040 --> 00:33:59,720
Speaker 8: You can also listen live on Amazon Alexa from our

718
00:33:59,720 --> 00:34:03,840
Speaker 8: Play New York station just Say Alexa, playing Bloomberg eleven.

719
00:34:05,600 --> 00:34:07,840
Speaker 2: Hannah Elliott is going to join us right now. She's

720
00:34:07,840 --> 00:34:13,160
Speaker 2: there from Los Angeles. She is prepping for getting ready

721
00:34:13,239 --> 00:34:19,239
Speaker 2: for this great Pebble Beach concourse, concourse to elegance. You've

722
00:34:19,239 --> 00:34:22,120
Speaker 2: been there a few times, there have never you've got

723
00:34:22,120 --> 00:34:25,920
Speaker 2: to ever been for you, And it's like everybody I

724
00:34:25,960 --> 00:34:26,680
Speaker 2: talk to is.

725
00:34:26,640 --> 00:34:28,719
Speaker 4: Like, oh, how can you not go to that?

726
00:34:28,920 --> 00:34:31,640
Speaker 2: I just haven't really ever had time or been allowed

727
00:34:31,680 --> 00:34:35,359
Speaker 2: by my boss. But Hannah is like, it's her job,

728
00:34:35,480 --> 00:34:40,239
Speaker 2: so she joins us now. Also, I think preparing to

729
00:34:40,320 --> 00:34:43,640
Speaker 2: drive a couple of sweet aston Martin's. Hannah talk to

730
00:34:43,719 --> 00:34:46,680
Speaker 2: us first about the concourse elegance, and I saw your

731
00:34:46,680 --> 00:34:50,240
Speaker 2: story about they're building a big barn for some old ferraris,

732
00:34:50,320 --> 00:34:51,360
Speaker 2: What's what's that all about?

733
00:34:52,040 --> 00:34:55,920
Speaker 14: I It's honestly so exciting and cool. I'm really excited.

734
00:34:55,960 --> 00:34:58,320
Speaker 14: I've got I've gone for many years and this is

735
00:34:58,360 --> 00:35:00,360
Speaker 14: the most excited. I've been for a while about a

736
00:35:00,400 --> 00:35:05,000
Speaker 14: bunch of old, rusted out, completely derelic Ferraris that are

737
00:35:05,040 --> 00:35:09,000
Speaker 14: for cell R. M. Sotheby's. The auction house built a

738
00:35:09,280 --> 00:35:12,800
Speaker 14: barn displayed to recreate the way that these twenty Ferraris

739
00:35:12,840 --> 00:35:17,279
Speaker 14: were found in Florida after a hurricane. They might you

740
00:35:17,320 --> 00:35:19,640
Speaker 14: might remember two thousand and four we saw some pictures

741
00:35:19,640 --> 00:35:23,160
Speaker 14: of a bunch of ferraris completely demolished after a hurricane.

742
00:35:23,800 --> 00:35:28,520
Speaker 14: Now we have the Ferraris foresell. They've reappeared, and they're

743
00:35:28,600 --> 00:35:32,160
Speaker 14: actually owned by a very eccentric man you might remember

744
00:35:32,239 --> 00:35:36,439
Speaker 14: named Walter Medlin, who's got quite a colorful history back

745
00:35:36,520 --> 00:35:40,280
Speaker 14: to the nineteen seventies or so. But they're gonna these

746
00:35:40,320 --> 00:35:43,560
Speaker 14: Ferraris are gonna go big, even though they're all twisted

747
00:35:43,600 --> 00:35:44,919
Speaker 14: and completely rusted out.

748
00:35:45,800 --> 00:35:48,080
Speaker 1: Talk to us about the Concourse delegons, What is it

749
00:35:48,719 --> 00:35:51,360
Speaker 1: and who goes there? Tell us about why it's so,

750
00:35:51,400 --> 00:35:53,880
Speaker 1: especially in the world of high end automobiles.

751
00:35:54,320 --> 00:35:57,200
Speaker 14: Okay, well, Concord Delegons is a really snooty way to

752
00:35:57,239 --> 00:35:59,799
Speaker 14: say a car show, yep. And what it is is

753
00:35:59,800 --> 00:36:03,480
Speaker 14: a bunch of really nice, very well washed and detailed

754
00:36:03,600 --> 00:36:07,000
Speaker 14: cars parked on a putting green and a fair way

755
00:36:07,360 --> 00:36:08,560
Speaker 14: of golf course.

756
00:36:09,080 --> 00:36:12,799
Speaker 1: And anue in Carmel by the Sea exactly.

757
00:36:13,080 --> 00:36:17,800
Speaker 14: It's it's actually on the Pebble Beach Car golf course,

758
00:36:18,280 --> 00:36:22,400
Speaker 14: and there is a set amount of cars that are judged,

759
00:36:22,440 --> 00:36:26,160
Speaker 14: of course, you know this Q tip white glove type judging.

760
00:36:26,520 --> 00:36:27,520
Speaker 4: But then also.

761
00:36:27,480 --> 00:36:30,640
Speaker 14: Throughout the week there are auctions, there are other car shows.

762
00:36:31,040 --> 00:36:33,759
Speaker 14: You know, thousands and thousands of people come. There's kind

763
00:36:33,760 --> 00:36:36,799
Speaker 14: of something for everybody. There will be car shows just

764
00:36:36,880 --> 00:36:39,360
Speaker 14: for muscle cars, or just for Porsches, or just for

765
00:36:40,160 --> 00:36:43,239
Speaker 14: I don't know, old trucks from the seventies. It's really fun.

766
00:36:43,320 --> 00:36:46,840
Speaker 14: But yes, to your point, the big climax of the

767
00:36:46,880 --> 00:36:50,480
Speaker 14: week is Sunday's Concord Delegans, the car show on the

768
00:36:50,520 --> 00:36:51,520
Speaker 14: Pebble Beach golf course.

769
00:36:51,560 --> 00:36:54,440
Speaker 1: Yeah, it's just extraordinary. I mean this is big business, Hannah, right.

770
00:36:54,480 --> 00:36:57,400
Speaker 1: I mean I see stories on some of those cars

771
00:36:57,400 --> 00:36:59,200
Speaker 1: that get bought and sold during the week, and particularly

772
00:36:59,239 --> 00:37:02,960
Speaker 1: on Sunday, some huge numbers. Shit, there's real investment here.

773
00:37:03,800 --> 00:37:06,839
Speaker 14: Yeah, this is kind of like art collecting in a way.

774
00:37:06,960 --> 00:37:10,760
Speaker 14: We're talking about blue chip collectibles here. So the most

775
00:37:11,280 --> 00:37:16,360
Speaker 14: expensive and rare vehicles in the world are bought, showed, shown,

776
00:37:16,520 --> 00:37:20,719
Speaker 14: and displayed. Certainly the auction houses will see easily over

777
00:37:20,760 --> 00:37:23,240
Speaker 14: one hundred million dollars in sales just over the weekend,

778
00:37:23,640 --> 00:37:26,480
Speaker 14: all told through a three or four days of auctions.

779
00:37:26,520 --> 00:37:28,520
Speaker 14: But you know, you have things that you know there

780
00:37:28,560 --> 00:37:30,360
Speaker 14: might be two or three of them in the world.

781
00:37:30,400 --> 00:37:33,000
Speaker 14: Some of the racing Ferraris, of course, we remember the

782
00:37:33,040 --> 00:37:36,120
Speaker 14: three hundred sl goal wings, the Mercedes with the doors

783
00:37:36,160 --> 00:37:40,160
Speaker 14: that raise up a like a goal wing, so really

784
00:37:40,400 --> 00:37:44,359
Speaker 14: iconic cars. This is the most prestigious car of it, really,

785
00:37:44,440 --> 00:37:46,640
Speaker 14: certainly in North America. Maybe in the world. You could

786
00:37:46,640 --> 00:37:48,880
Speaker 14: say there might be a few in Italy that compare,

787
00:37:48,920 --> 00:37:51,560
Speaker 14: but this really is if you want to see blue

788
00:37:51,640 --> 00:37:54,759
Speaker 14: chip cars and the best of the best and the

789
00:37:54,840 --> 00:37:56,480
Speaker 14: rarest this is where you go.

790
00:37:56,640 --> 00:38:00,319
Speaker 2: We're showing some of the derelict Ferraris here for those

791
00:38:00,680 --> 00:38:04,440
Speaker 2: people watching on YouTube or streaming us on Bloomberg dot com.

792
00:38:04,880 --> 00:38:07,440
Speaker 2: Some of them look like they're in pretty fantastic shape.

793
00:38:07,480 --> 00:38:10,960
Speaker 2: Others look like they're about to fall apart from all

794
00:38:11,000 --> 00:38:16,280
Speaker 2: the rust, but they're still expected. Even the one that Hannah,

795
00:38:16,320 --> 00:38:18,680
Speaker 2: you know, the one that's completely crumpled and doesn't have

796
00:38:19,080 --> 00:38:22,400
Speaker 2: a roof or maybe even wheels, even that is going

797
00:38:22,440 --> 00:38:25,200
Speaker 2: to go for hundreds of thousands of dollars.

798
00:38:26,400 --> 00:38:30,840
Speaker 14: Yeah, you know, barn finds are very interesting things from

799
00:38:31,040 --> 00:38:33,480
Speaker 14: what I hear the guys that I talk to. Really,

800
00:38:33,760 --> 00:38:37,359
Speaker 14: if you're concerned about money, it's better to just buy

801
00:38:37,400 --> 00:38:42,040
Speaker 14: the car already done. These are not especially at this point.

802
00:38:43,200 --> 00:38:45,640
Speaker 14: You know, you're you're gonna spend a lot of money

803
00:38:45,680 --> 00:38:47,880
Speaker 14: to bring them back, maybe even more than you'd spend

804
00:38:48,000 --> 00:38:51,360
Speaker 14: on a similar car that's already done. So it's really

805
00:38:51,520 --> 00:38:54,520
Speaker 14: at this point it's about the story. It's about the journey.

806
00:38:54,800 --> 00:38:58,760
Speaker 14: The people who buy, you know, these twisted crumple cars

807
00:38:59,160 --> 00:39:04,880
Speaker 14: are people who love the painful relationship of what it

808
00:39:04,920 --> 00:39:06,600
Speaker 14: takes to bring a car back to life.

809
00:39:06,960 --> 00:39:08,960
Speaker 2: Let me ask about a new car, and that is

810
00:39:09,000 --> 00:39:12,720
Speaker 2: the dB twelve. You've already driven the car somewhere else

811
00:39:13,440 --> 00:39:16,520
Speaker 2: besides America, but you're also going to get some seat

812
00:39:16,520 --> 00:39:19,120
Speaker 2: time in a couple of Aston Martin's coming up. What's

813
00:39:19,160 --> 00:39:21,160
Speaker 2: the story with this company, where it is and what

814
00:39:21,200 --> 00:39:21,800
Speaker 2: it's producing.

815
00:39:22,960 --> 00:39:27,279
Speaker 14: You know, Aston Martin is really fascinating this year for

816
00:39:27,360 --> 00:39:31,000
Speaker 14: a number of reasons. We know that they've really struggled

817
00:39:31,000 --> 00:39:33,960
Speaker 14: since their IPO in twenty eighteen. But they've got a

818
00:39:34,080 --> 00:39:37,560
Speaker 14: very dynamic owner and Lawrence Stroll, and of course Aston

819
00:39:37,600 --> 00:39:40,520
Speaker 14: Martin is doing fantastic in Formula One right now, which

820
00:39:41,080 --> 00:39:44,440
Speaker 14: helps a lot at least from public perception and probably

821
00:39:44,440 --> 00:39:47,520
Speaker 14: fundraising too. Of course, Lawrence Stroll's son is a race

822
00:39:47,560 --> 00:39:50,479
Speaker 14: car driver as well, so there's a lot of talk

823
00:39:50,600 --> 00:39:52,960
Speaker 14: about Aston Martin. And then when they bring in the

824
00:39:53,040 --> 00:39:55,920
Speaker 14: dB twelve, which is a successor to the dB eleven,

825
00:39:56,239 --> 00:40:00,960
Speaker 14: excellent vehicle. They've got the DBX sub seven. I think

826
00:40:01,000 --> 00:40:04,640
Speaker 14: I'll be in during Monterey fantastic suv. I actually think

827
00:40:04,680 --> 00:40:08,160
Speaker 14: you could cross shop it against the Lamborghini Urus perhaps,

828
00:40:09,080 --> 00:40:11,560
Speaker 14: and you could throw in the Ferrari Pro song Wet

829
00:40:11,680 --> 00:40:15,239
Speaker 14: as well if you wanted. So they're making really competitive products,

830
00:40:15,440 --> 00:40:18,400
Speaker 14: but also they have really it's been tough. You know,

831
00:40:18,440 --> 00:40:22,640
Speaker 14: they faced liquidity issues. There's been a lot of UH

832
00:40:24,040 --> 00:40:28,080
Speaker 14: there's been a lot of financial UH turnover and executive turnover.

833
00:40:28,880 --> 00:40:31,400
Speaker 14: Now we also know that they're tied in with Lucid,

834
00:40:31,800 --> 00:40:34,160
Speaker 14: so there's just a lot going on at Acid Martin.

835
00:40:34,160 --> 00:40:37,160
Speaker 14: It's a really exciting time and I am looking forward

836
00:40:37,200 --> 00:40:40,560
Speaker 14: to having some time with their executives to get the latest.

837
00:40:41,239 --> 00:40:44,799
Speaker 1: All right, Hannah, great stuff, Enjoy Carmel, Enjoy Pebble Beach.

838
00:40:44,840 --> 00:40:47,480
Speaker 1: Maybe get a little veal at Ilfrenile on a corner

839
00:40:47,480 --> 00:40:50,839
Speaker 1: of Ocean Avenue there in Carmel by the Sea, Hannah Ls,

840
00:40:50,840 --> 00:40:53,200
Speaker 1: staff writer for Bloomberg Business Week. Man, we got to

841
00:40:53,200 --> 00:40:56,840
Speaker 1: get you there, dude, I someday, uh and get you

842
00:40:56,880 --> 00:41:00,000
Speaker 1: go for multiple days, and as Hannah was saying, all

843
00:41:00,080 --> 00:41:03,040
Speaker 1: around the bay, the Monterey Bay area, including Monterey out

844
00:41:03,320 --> 00:41:06,040
Speaker 1: out near Salinas, all over the Monterey Bay area. Each

845
00:41:06,120 --> 00:41:09,160
Speaker 1: day there'll be different shows, and you know it's not

846
00:41:09,280 --> 00:41:12,120
Speaker 1: just there. So it's just amazing that it culminates on Sunday.

847
00:41:12,239 --> 00:41:13,880
Speaker 2: I mean, the next best thing for me is just

848
00:41:13,920 --> 00:41:16,040
Speaker 2: having Hannah cover it, because then I read all of

849
00:41:16,080 --> 00:41:18,520
Speaker 2: her coverage and get deep in it. So I feel

850
00:41:18,560 --> 00:41:21,800
Speaker 2: like if she's out there writing about it, maybe creating

851
00:41:21,800 --> 00:41:24,719
Speaker 2: some video content as well, that's good enough for me

852
00:41:24,800 --> 00:41:25,200
Speaker 2: for now.

853
00:41:25,239 --> 00:41:27,120
Speaker 4: And then one day when I retire.

854
00:41:26,760 --> 00:41:29,680
Speaker 1: Maybe no, please, you can go out there. I'll make

855
00:41:29,680 --> 00:41:30,920
Speaker 1: it happen. Don't worry. I know a couple of.

856
00:41:30,920 --> 00:41:33,960
Speaker 8: People you're listening to the tape Cat's are Live program

857
00:41:34,000 --> 00:41:37,960
Speaker 8: Bloomberg Markets weekdays at ten am Eastern on Bloomberg Radio,

858
00:41:38,120 --> 00:41:40,840
Speaker 8: the tune in app, Bloomberg dot Com, and the Bloomberg

859
00:41:40,880 --> 00:41:43,960
Speaker 8: Business App. You can also listen live on Amazon Alexa

860
00:41:44,040 --> 00:41:47,319
Speaker 8: from our flagship New York station. Just say Alexa play

861
00:41:47,440 --> 00:41:49,480
Speaker 8: Bloomberg eleven thirty.

862
00:41:51,160 --> 00:41:54,120
Speaker 1: Matt Miller, Paul Sweeney here live in the Bloomberg Interactive

863
00:41:54,160 --> 00:41:57,799
Speaker 1: Broker Studio. We are streaming on that YouTube thing. To

864
00:41:57,840 --> 00:42:00,680
Speaker 1: go over there and just search Bloomberglobal News and now

865
00:42:00,719 --> 00:42:03,279
Speaker 1: I'll bring it to the video feed. How fun is that?

866
00:42:03,800 --> 00:42:06,120
Speaker 2: More global news, bloomerglob You've got to put in the

867
00:42:06,160 --> 00:42:10,040
Speaker 2: phrase Bloomberg global news. I'm just saying, like I have

868
00:42:10,200 --> 00:42:12,840
Speaker 2: searched and searched I YouTube and I can't find it.

869
00:42:12,880 --> 00:42:15,800
Speaker 2: But for some reason, that's a magical phrase, Bloomberg Global News.

870
00:42:15,920 --> 00:42:17,840
Speaker 1: I know, I know, I don't know what's crazy. I

871
00:42:17,960 --> 00:42:20,799
Speaker 1: learned that from Carol Masser, you know, because they've been

872
00:42:20,840 --> 00:42:23,440
Speaker 1: streaming Bloomberg Business Week for a long time. So she

873
00:42:23,560 --> 00:42:25,080
Speaker 1: taught me. Well there, so all right, looking at the

874
00:42:25,080 --> 00:42:26,719
Speaker 1: markets here, up four tens to one percent on the

875
00:42:26,800 --> 00:42:28,560
Speaker 1: S and P five hundred, let's se where the action

876
00:42:28,760 --> 00:42:31,400
Speaker 1: is under the hood. Billy Lipscholtz. He covers the markets

877
00:42:31,400 --> 00:42:33,840
Speaker 1: for Bloomberg News. Joins us here in our Bloomberg Interactive

878
00:42:33,840 --> 00:42:35,440
Speaker 1: Broker studio. Billy, what are you looking at?

879
00:42:35,760 --> 00:42:35,960
Speaker 9: Yeah?

880
00:42:36,040 --> 00:42:39,120
Speaker 12: Still seeing quite a bit of weakness for Tapestry after

881
00:42:39,280 --> 00:42:44,640
Speaker 12: the deal to acquire I'm sorry, Yeah, the deal to

882
00:42:44,680 --> 00:42:47,200
Speaker 12: acquire Capri and an eight and a half billion dollar deal.

883
00:42:47,200 --> 00:42:50,200
Speaker 12: Tapestry down thirteen percent, worse performer in the five hundred.

884
00:42:50,560 --> 00:42:53,680
Speaker 12: The biggest driver of the upside though, among them is

885
00:42:53,760 --> 00:42:58,120
Speaker 12: Disney after quarterly results showcasing cost cuts, which will be

886
00:42:58,160 --> 00:43:01,400
Speaker 12: interesting ahead of News Court results after the belt today,

887
00:43:01,480 --> 00:43:03,800
Speaker 12: So getting a bit more detail, Paul, As you mentioned

888
00:43:04,080 --> 00:43:06,880
Speaker 12: in your neck of the woods within the media space.

889
00:43:06,920 --> 00:43:09,400
Speaker 12: One stock that does stand out though, YETI Holdings.

890
00:43:09,440 --> 00:43:11,319
Speaker 1: I don't know if you guys are huge Yetti fan.

891
00:43:11,520 --> 00:43:14,400
Speaker 2: I'm a big I'm a big owner of YETI products.

892
00:43:14,480 --> 00:43:15,760
Speaker 2: Full disclosure here.

893
00:43:16,320 --> 00:43:18,719
Speaker 12: I've got the cooler, I've got a couple of the tumblers.

894
00:43:18,719 --> 00:43:23,360
Speaker 12: Stock up twenty percent right now after better than expected

895
00:43:23,400 --> 00:43:27,439
Speaker 12: second quarter results, boosting their forecast for earnings for the year.

896
00:43:27,560 --> 00:43:30,640
Speaker 12: So biggest entry day percentage gained since November. Trading at

897
00:43:30,640 --> 00:43:33,760
Speaker 12: the highest sense February analysts across Wall Street really praising

898
00:43:33,800 --> 00:43:34,560
Speaker 12: those results.

899
00:43:34,680 --> 00:43:37,080
Speaker 1: It is ridiculous how good those products are. I'll put

900
00:43:37,480 --> 00:43:40,680
Speaker 1: the I'll put the water in my Yetti little container,

901
00:43:40,920 --> 00:43:44,480
Speaker 1: go to the beach. I can barely touch the exterior

902
00:43:44,640 --> 00:43:47,319
Speaker 1: of the bottle because it's so hot from the sun

903
00:43:47,360 --> 00:43:49,720
Speaker 1: on the beach. Drink the water ice cold.

904
00:43:49,960 --> 00:43:51,480
Speaker 4: But why is uh?

905
00:43:51,880 --> 00:43:55,239
Speaker 2: Why is Yeti the only name we know because we

906
00:43:55,280 --> 00:44:00,840
Speaker 2: grew up with coleman or Yeah, Igloo, Iglu, that's the one, exactly,

907
00:44:00,880 --> 00:44:03,200
Speaker 2: And they don't. I don't know if they make the

908
00:44:03,239 --> 00:44:07,080
Speaker 2: same kind of products. But there are other cooler makers

909
00:44:07,239 --> 00:44:11,359
Speaker 2: who make I think what's called Rodo molded coolers right.

910
00:44:12,440 --> 00:44:17,160
Speaker 2: Arctic Coolers is one, Orca is another. I'm pretty sure

911
00:44:17,239 --> 00:44:21,560
Speaker 2: Pelican makes them as well. I don't they don't see

912
00:44:21,640 --> 00:44:24,960
Speaker 2: anything besides YETI. If you go to an Arii, for example,

913
00:44:24,960 --> 00:44:25,960
Speaker 2: it's all about YETI.

914
00:44:26,040 --> 00:44:27,880
Speaker 12: Well, even if you go to Dick's Sporting Goods or

915
00:44:27,960 --> 00:44:32,000
Speaker 12: Lows and Home Depot, there's an entire YETI section. Wine tumblers,

916
00:44:32,040 --> 00:44:35,080
Speaker 12: the regular tumblers, mega ones that are like.

917
00:44:35,040 --> 00:44:39,799
Speaker 4: My brother's fiance has a Yetti Martini glass. No, she's

918
00:44:39,840 --> 00:44:40,319
Speaker 4: welcome in.

919
00:44:40,239 --> 00:44:44,759
Speaker 2: A family, exactly it's essential to her lifestyle.

920
00:44:45,960 --> 00:44:47,840
Speaker 1: It's a lifestyle aspirational brand.

921
00:44:48,239 --> 00:44:51,320
Speaker 11: Well it's interesting too. They make backpacks, now, they make clothing.

922
00:44:51,360 --> 00:44:54,120
Speaker 12: It seems like they're really branching out into kind of

923
00:44:54,160 --> 00:44:57,480
Speaker 12: the mainstream consumer goods outside of just coolers, because I

924
00:44:57,520 --> 00:44:59,480
Speaker 12: remember at one point when the stock was trading down

925
00:44:59,520 --> 00:45:01,520
Speaker 12: back in twenty twenty one, it peaked above one hundred

926
00:45:01,520 --> 00:45:03,759
Speaker 12: and seven bucks right now below fifty, and we were

927
00:45:03,800 --> 00:45:05,920
Speaker 12: kind of calling out, like how many tumblers can a

928
00:45:05,960 --> 00:45:08,160
Speaker 12: person buy? I mean, my brother's got the backpack, he's

929
00:45:08,200 --> 00:45:11,520
Speaker 12: got the twelfth pack cooler, But like, other than once

930
00:45:11,560 --> 00:45:12,560
Speaker 12: you hat kind of Now, does.

931
00:45:12,440 --> 00:45:16,040
Speaker 2: Your brother also wear a white baseball cap and talk

932
00:45:16,080 --> 00:45:18,440
Speaker 2: about his frat all the time and have an.

933
00:45:18,280 --> 00:45:19,360
Speaker 4: Old Roa subscription.

934
00:45:19,640 --> 00:45:22,960
Speaker 12: No, my brother's actually the he's in that blue collar

935
00:45:23,000 --> 00:45:25,040
Speaker 12: working class. So he's one of the construction guys who

936
00:45:25,080 --> 00:45:26,680
Speaker 12: has the cooler loaded.

937
00:45:26,480 --> 00:45:27,440
Speaker 1: Up for gotta have that.

938
00:45:27,640 --> 00:45:30,040
Speaker 2: Yeah, they have it too, But I just I always

939
00:45:30,080 --> 00:45:33,080
Speaker 2: feel like I risk if I put a yetti sticker

940
00:45:33,160 --> 00:45:36,000
Speaker 2: on my truck, or you know, if I wear the hat,

941
00:45:36,080 --> 00:45:39,600
Speaker 2: I risk being lumped in with that whole you know,

942
00:45:39,680 --> 00:45:40,840
Speaker 2: good old boy crowd.

943
00:45:41,080 --> 00:45:42,440
Speaker 1: I don't know it's weird good.

944
00:45:42,960 --> 00:45:45,520
Speaker 2: I don't go to SEC games, you know, I'd love

945
00:45:45,560 --> 00:45:46,920
Speaker 2: to going to SEC game.

946
00:45:46,920 --> 00:45:49,080
Speaker 12: But I feel like Yeti's interesting because it has that

947
00:45:49,200 --> 00:45:53,920
Speaker 12: kind of you know, fraternity vibe, but also the like construction, firefighter,

948
00:45:53,960 --> 00:45:54,760
Speaker 12: police officer.

949
00:45:55,520 --> 00:45:55,759
Speaker 9: True.

950
00:45:55,840 --> 00:45:59,720
Speaker 1: Yeah, yeah, look at that chart. That's another pandemic chart stuck.

951
00:45:59,800 --> 00:46:02,279
Speaker 1: You know, twenty twenty just started ripping, you know, went

952
00:46:02,320 --> 00:46:04,480
Speaker 1: from like twenty bucks up to one hundred bucks, and

953
00:46:04,520 --> 00:46:07,040
Speaker 1: like a lot of those pandemic stocks, at the end

954
00:46:07,040 --> 00:46:09,160
Speaker 1: of twenty twenty one were peaked kind of been coming

955
00:46:09,239 --> 00:46:09,879
Speaker 1: down ever since.

956
00:46:10,000 --> 00:46:12,160
Speaker 12: Another stock and focus though on Matt. I want your

957
00:46:12,200 --> 00:46:15,080
Speaker 12: opinion on luxury not luxury. Ralph Lauren right now down

958
00:46:15,120 --> 00:46:17,680
Speaker 12: two and a half percent, falling for the fifth straight

959
00:46:17,760 --> 00:46:20,680
Speaker 12: session after they reported quarterly results that had a light

960
00:46:20,760 --> 00:46:24,240
Speaker 12: two Q forecast. Our Phil's calm luxury brand, Ralph Larett

961
00:46:24,239 --> 00:46:25,720
Speaker 12: and Luxury are not luxury.

962
00:46:25,360 --> 00:46:27,840
Speaker 4: I mean, to my mind, it's a staple.

963
00:46:27,840 --> 00:46:31,040
Speaker 2: Course to my mind, it's a sort of staple of

964
00:46:31,160 --> 00:46:35,800
Speaker 2: the upper middle class, right, And they do make higher

965
00:46:35,960 --> 00:46:41,520
Speaker 2: end products. The Purple label is one they have RRL,

966
00:46:41,680 --> 00:46:46,440
Speaker 2: but they don't actually achieve full luxury I think because,

967
00:46:46,440 --> 00:46:52,400
Speaker 2: for example, RRL likes flight jackets and you know Japanese

968
00:46:52,480 --> 00:46:56,879
Speaker 2: denim kind of products work where sort of stuff. They

969
00:46:56,880 --> 00:47:00,400
Speaker 2: don't really have the quality that the truly good and

970
00:47:00,440 --> 00:47:01,120
Speaker 2: that space have.

971
00:47:01,280 --> 00:47:02,719
Speaker 4: They just have the design, all right.

972
00:47:02,760 --> 00:47:05,560
Speaker 1: It's a eight billion dollar market cap, up about eighteen

973
00:47:05,600 --> 00:47:07,520
Speaker 1: percent year to date and down two point seven percent

974
00:47:07,560 --> 00:47:09,640
Speaker 1: today on the I guess on that print, right, yeah,

975
00:47:09,680 --> 00:47:10,600
Speaker 1: after those results.

976
00:47:10,760 --> 00:47:11,600
Speaker 9: Yeah.

977
00:47:11,719 --> 00:47:13,160
Speaker 12: One of the things that I thought was interesting is

978
00:47:13,160 --> 00:47:15,520
Speaker 12: that they drive half a bit more than half their

979
00:47:15,560 --> 00:47:17,239
Speaker 12: sales outside of North America.

980
00:47:17,320 --> 00:47:18,000
Speaker 4: Really, Okay, so.

981
00:47:18,040 --> 00:47:20,040
Speaker 1: That's a bread making up a chunk of that interested

982
00:47:20,040 --> 00:47:22,480
Speaker 1: to see I'm gonna be really fascinated to see now

983
00:47:22,480 --> 00:47:26,120
Speaker 1: that China's opening up air travel for its or loosening

984
00:47:26,120 --> 00:47:28,919
Speaker 1: and I guess a little bit for uh it's uh,

985
00:47:29,440 --> 00:47:33,279
Speaker 1: you know, people, whether we'll see an outflow of Chinese uh,

986
00:47:33,680 --> 00:47:35,960
Speaker 1: just visitors and travel. Do they have the same pent

987
00:47:36,120 --> 00:47:37,680
Speaker 1: up kind of revenue they did?

988
00:47:37,760 --> 00:47:41,600
Speaker 4: They allow they're allowing group travel. Yes, so they're allowing like.

989
00:47:41,760 --> 00:47:46,200
Speaker 2: Tour groups now to leave China for destinations like the US.

990
00:47:46,239 --> 00:47:48,520
Speaker 1: So I guess that's a good first step. But maybe

991
00:47:48,520 --> 00:47:50,759
Speaker 1: we'll be seeing some more of a Chinese friends here

992
00:47:51,080 --> 00:47:53,319
Speaker 1: in the big city shopping in some of those big

993
00:47:53,400 --> 00:47:54,880
Speaker 1: luxury stores. We certainly like to see that.

994
00:47:55,120 --> 00:47:57,680
Speaker 11: And gils Bery Hawaiian holding is down four percent.

995
00:47:57,719 --> 00:48:01,160
Speaker 12: This all coming after that news Maui's so we're keeping

996
00:48:01,160 --> 00:48:03,360
Speaker 12: an eye on that. Obviously not a positive update in

997
00:48:03,480 --> 00:48:05,359
Speaker 12: terms of kind of the news that's coming out of there,

998
00:48:05,360 --> 00:48:06,080
Speaker 12: but keeping an eye.

999
00:48:06,040 --> 00:48:08,600
Speaker 1: On that story is unbelievable. I mean the fires a

1000
00:48:08,719 --> 00:48:13,240
Speaker 1: I've never remember seeing them hearing about fires and why before.

1001
00:48:13,400 --> 00:48:14,040
Speaker 4: No, I don't know.

1002
00:48:14,000 --> 00:48:15,680
Speaker 1: If this is a new thing, but boy, and just

1003
00:48:15,680 --> 00:48:18,280
Speaker 1: the destruction of that beautiful area, I guess it's on Maui.

1004
00:48:18,440 --> 00:48:22,040
Speaker 2: You know, crazy yeah story the former capital YEP of

1005
00:48:22,200 --> 00:48:24,799
Speaker 2: Hawaii has been decimated.

1006
00:48:24,880 --> 00:48:27,400
Speaker 1: Yeah, it's just terrible news. All right, Belly, thanks so

1007
00:48:27,440 --> 00:48:29,719
Speaker 1: much for joining us. Are Billy lipstialt He covers all

1008
00:48:29,800 --> 00:48:34,239
Speaker 1: the markets for Bloomberg News. I want to talk about endowments.

1009
00:48:34,760 --> 00:48:36,319
Speaker 1: I know a thing or two amount of Doomans having

1010
00:48:36,320 --> 00:48:38,600
Speaker 1: worked on some boards of schools, and for a lot

1011
00:48:38,640 --> 00:48:42,080
Speaker 1: of schools, it's the lifeblood. Its kind of supports the

1012
00:48:42,120 --> 00:48:45,400
Speaker 1: economics of the school. And some of these big universities

1013
00:48:45,440 --> 00:48:48,200
Speaker 1: report their endowment numbers pretty publicly and Janet lorn Higher

1014
00:48:48,280 --> 00:48:51,160
Speaker 1: education financial report for Bloomberg News joins us here on

1015
00:48:51,200 --> 00:48:54,719
Speaker 1: our Bloomberg Interactive Broker's studio. How did some of these

1016
00:48:54,719 --> 00:48:57,239
Speaker 1: big universities do in this last fiscal year, which I

1017
00:48:57,239 --> 00:48:58,520
Speaker 1: guess ends in June thirtieth.

1018
00:48:58,640 --> 00:49:02,800
Speaker 15: Yes, we'll be starting to hear more school specific returns

1019
00:49:02,840 --> 00:49:04,640
Speaker 15: coming up in the next month or two. Okay, we

1020
00:49:04,920 --> 00:49:08,240
Speaker 15: get a good snapshot and the median is eight point

1021
00:49:08,280 --> 00:49:10,880
Speaker 15: seven percent, which might sound like a terrific return, but

1022
00:49:10,920 --> 00:49:15,120
Speaker 15: we have to keep in mind inflation. So while you know,

1023
00:49:15,800 --> 00:49:18,960
Speaker 15: you have to factor in spending and also what schools

1024
00:49:19,000 --> 00:49:21,719
Speaker 15: are paying out in terms of inflation, they're also paying

1025
00:49:21,800 --> 00:49:26,480
Speaker 15: higher costs for everything from construction to professor salaries. They're

1026
00:49:26,520 --> 00:49:30,399
Speaker 15: even paying more in financial aid. So those it may

1027
00:49:30,480 --> 00:49:32,200
Speaker 15: sound like a great return, but a lot of it

1028
00:49:32,239 --> 00:49:33,600
Speaker 15: is being eaten up by inflation.

1029
00:49:34,040 --> 00:49:37,399
Speaker 2: I have to imagine financial aid spending has gone way

1030
00:49:37,480 --> 00:49:40,560
Speaker 2: up over the past couple of decades because so many

1031
00:49:40,800 --> 00:49:43,400
Speaker 2: I mean I focus on the schools, the big endowments

1032
00:49:43,440 --> 00:49:46,359
Speaker 2: that you write about. You know, so many of those

1033
00:49:46,360 --> 00:49:50,480
Speaker 2: schools have hardly any students who are paying full tuition.

1034
00:49:51,280 --> 00:49:54,160
Speaker 15: Well, a lot of the schools have been trying to

1035
00:49:54,200 --> 00:49:57,560
Speaker 15: make a concerted effort, you know, to showing Congress and

1036
00:49:57,680 --> 00:50:00,560
Speaker 15: the federal government that they are attracting lower income students.

1037
00:50:00,600 --> 00:50:03,719
Speaker 15: Harvard said this year twenty five percent of their entire

1038
00:50:03,760 --> 00:50:06,520
Speaker 15: freshman class it has an income of eighty five thousand,

1039
00:50:06,600 --> 00:50:10,120
Speaker 15: are below and they're giving more financial aid for students.

1040
00:50:10,120 --> 00:50:12,960
Speaker 15: Who are you trying to have a more diverse and

1041
00:50:13,120 --> 00:50:14,799
Speaker 15: economically diverse class.

1042
00:50:15,719 --> 00:50:17,359
Speaker 1: You like Columbia University, don't you?

1043
00:50:17,480 --> 00:50:17,680
Speaker 3: Yes?

1044
00:50:17,760 --> 00:50:18,680
Speaker 11: I did go to school there.

1045
00:50:18,680 --> 00:50:22,640
Speaker 1: I mean undergrad of Columbia, Masters and Journalism Columbia. Then

1046
00:50:22,640 --> 00:50:25,279
Speaker 1: a Spencer Fellow for Columbia, which you finished this year.

1047
00:50:25,360 --> 00:50:25,839
Speaker 4: What is that?

1048
00:50:27,040 --> 00:50:30,640
Speaker 15: So that is a reporting fellowship looking into education.

1049
00:50:30,440 --> 00:50:33,040
Speaker 1: Reported everyone comes in, there's so much smarter than we are.

1050
00:50:33,120 --> 00:50:35,320
Speaker 1: I mean, like everyone from Bloombo News comes in and

1051
00:50:35,400 --> 00:50:37,319
Speaker 1: I'm just like you guys kill me, all right? So

1052
00:50:37,400 --> 00:50:39,759
Speaker 1: going back to like your story here, I mean, talk

1053
00:50:39,760 --> 00:50:42,600
Speaker 1: to us about endownm It's how important are they to

1054
00:50:42,680 --> 00:50:44,560
Speaker 1: these schools because it just seems like, you know, I

1055
00:50:44,600 --> 00:50:47,160
Speaker 1: do a lot of work with Duke and they're Endown

1056
00:50:47,440 --> 00:50:52,040
Speaker 1: monstrous and they get great returns and it's such a

1057
00:50:52,040 --> 00:50:55,440
Speaker 1: big supporter of everything they try to do. But some schools,

1058
00:50:55,480 --> 00:50:57,280
Speaker 1: most schools don't have that right.

1059
00:50:57,200 --> 00:51:00,000
Speaker 15: Well, and there's a handful of schools that are extremely

1060
00:51:00,120 --> 00:51:03,839
Speaker 15: reliant on the returns. Schools like Princeton and Amherst rely

1061
00:51:03,960 --> 00:51:07,040
Speaker 15: on more than half their entire budgets from endowments. I

1062
00:51:07,040 --> 00:51:09,799
Speaker 15: think in some cases they're sixty percent. But you know,

1063
00:51:09,800 --> 00:51:12,320
Speaker 15: when you look at smaller schools, their endowments are smaller,

1064
00:51:12,360 --> 00:51:15,319
Speaker 15: they're in US equities, and you know, they did much

1065
00:51:15,360 --> 00:51:17,680
Speaker 15: better for their returns this year, given that equities were

1066
00:51:17,760 --> 00:51:21,280
Speaker 15: up about eighteen percent in the period. It just depends

1067
00:51:21,320 --> 00:51:26,120
Speaker 15: on the school. And as you know, long term returns

1068
00:51:26,520 --> 00:51:29,359
Speaker 15: were about six percent for the ten year average, which

1069
00:51:29,440 --> 00:51:33,400
Speaker 15: is not a great return considering inflation and what they're spending.

1070
00:51:33,640 --> 00:51:36,200
Speaker 15: They actually have to earn a lot more in order

1071
00:51:36,239 --> 00:51:38,839
Speaker 15: to keep pace. So you know, we'll see as these

1072
00:51:38,920 --> 00:51:41,680
Speaker 15: numbers come out how the schools are doing. Last year

1073
00:51:41,880 --> 00:51:44,839
Speaker 15: was a terrible year, the worst year in returns since

1074
00:51:44,880 --> 00:51:45,600
Speaker 15: the Great Recession.

1075
00:51:45,600 --> 00:51:50,200
Speaker 1: But okay, percent But here alternative investments are, particularly for

1076
00:51:50,239 --> 00:51:53,560
Speaker 1: the larger endowments, are a huge percentage, and it shocks

1077
00:51:53,640 --> 00:51:56,880
Speaker 1: people how much they're putting into hedge funds, private equity,

1078
00:51:56,920 --> 00:51:59,640
Speaker 1: private credit. Thirty forty percent of their endowment. They're putting

1079
00:51:59,640 --> 00:52:02,640
Speaker 1: into these which don't want anymore, probably more some of

1080
00:52:02,640 --> 00:52:06,080
Speaker 1: the bigger ones. They don't have liquidity, that's the downside.

1081
00:52:06,160 --> 00:52:07,000
Speaker 4: But they make retire.

1082
00:52:07,480 --> 00:52:11,200
Speaker 1: Okay, there's a scene called market to market. They did

1083
00:52:11,239 --> 00:52:14,080
Speaker 1: not mark the market the down twenty twenty five percent

1084
00:52:14,160 --> 00:52:16,240
Speaker 1: year we had last year. I didn't see it anywhere

1085
00:52:16,239 --> 00:52:16,880
Speaker 1: in the endowments.

1086
00:52:17,280 --> 00:52:19,319
Speaker 4: Why why would they have to. It's not the same

1087
00:52:19,360 --> 00:52:20,759
Speaker 4: as a bank, No.

1088
00:52:20,680 --> 00:52:23,200
Speaker 1: But it's an endowment, and I would think they would

1089
00:52:23,200 --> 00:52:25,680
Speaker 1: have marked the market regulations as well.

1090
00:52:26,000 --> 00:52:27,040
Speaker 15: I don't believe they do.

1091
00:52:27,239 --> 00:52:28,120
Speaker 1: I don't believe they do it.

1092
00:52:28,160 --> 00:52:28,880
Speaker 4: I can't imagine.

1093
00:52:29,040 --> 00:52:32,399
Speaker 1: That's why. And it's interesting because I kept when I

1094
00:52:32,440 --> 00:52:35,280
Speaker 1: listened to the board meeting and I was like, okay,

1095
00:52:35,400 --> 00:52:37,440
Speaker 1: but what about the forty percent we got in you know,

1096
00:52:37,719 --> 00:52:40,920
Speaker 1: some leveraged thing that's in Zimbabwe or something some you

1097
00:52:40,960 --> 00:52:43,279
Speaker 1: know zinc mine. Where's that? You know?

1098
00:52:43,800 --> 00:52:46,880
Speaker 15: Well, most of the larger schools, you're absolutely right, mostly

1099
00:52:47,080 --> 00:52:49,360
Speaker 15: in alternatives. And that was a big shift starting in

1100
00:52:49,400 --> 00:52:52,439
Speaker 15: the late eighties early nineties when David Swinton, the late

1101
00:52:53,040 --> 00:52:56,080
Speaker 15: CIO at Yale, decided that schools could get a better

1102
00:52:56,120 --> 00:52:59,640
Speaker 15: premium for illiquidity, and most schools really are the big

1103
00:52:59,680 --> 00:53:03,960
Speaker 15: ones shied away from US equities, and in some years

1104
00:53:04,000 --> 00:53:06,960
Speaker 15: it's really paid off. In this year and in years past,

1105
00:53:07,080 --> 00:53:11,320
Speaker 15: you've seen smaller endowments with larger shares in US equities

1106
00:53:11,360 --> 00:53:13,319
Speaker 15: have much better returns, and of course they're not paying

1107
00:53:13,360 --> 00:53:16,080
Speaker 15: the fees that alternatives command.

1108
00:53:16,400 --> 00:53:16,560
Speaker 9: Well.

1109
00:53:16,600 --> 00:53:19,080
Speaker 4: Tuitions across the board continue to rise.

1110
00:53:18,880 --> 00:53:22,320
Speaker 2: Though, right, Janet, And how long can that happen, especially

1111
00:53:22,360 --> 00:53:25,640
Speaker 2: as we as it becomes a national issue that people

1112
00:53:25,719 --> 00:53:26,920
Speaker 2: owe so much money.

1113
00:53:26,680 --> 00:53:29,800
Speaker 15: In student dead Well, I think twenty years ago we

1114
00:53:29,840 --> 00:53:31,960
Speaker 15: would have been surprised at the price tag that it

1115
00:53:32,040 --> 00:53:34,719
Speaker 15: keeps continuing to rise. Now, however, if you look at

1116
00:53:34,719 --> 00:53:38,480
Speaker 15: the share of student loans, the most of the most

1117
00:53:38,560 --> 00:53:41,880
Speaker 15: biggest share is not actually for college, it's for graduate school,

1118
00:53:41,920 --> 00:53:44,040
Speaker 15: because you can really borrow a lot up to the

1119
00:53:44,040 --> 00:53:46,759
Speaker 15: cost of attendance for graduate school, which could be you know,

1120
00:53:46,840 --> 00:53:49,720
Speaker 15: eighty ninety thousand dollars in a year for a federal

1121
00:53:49,719 --> 00:53:52,800
Speaker 15: student loan for your freshman year, you're only you're limited

1122
00:53:52,800 --> 00:53:55,239
Speaker 15: to fifty five hundred dollars, sixty five hundred in the

1123
00:53:55,239 --> 00:53:57,200
Speaker 15: second year, and seventy five hundred in the third and

1124
00:53:57,239 --> 00:53:59,920
Speaker 15: fourth year, so a bit the biggest share of student

1125
00:54:00,080 --> 00:54:03,960
Speaker 15: debt is really graduate school. Yes, yeah, yeah, there's limits.

1126
00:54:04,200 --> 00:54:04,400
Speaker 15: You know.

1127
00:54:04,480 --> 00:54:06,920
Speaker 2: Doctor Joel Fleischmann had one hundred and twenty five thousand

1128
00:54:06,920 --> 00:54:08,320
Speaker 2: dollars of debt, did he really?

1129
00:54:08,360 --> 00:54:10,520
Speaker 15: He paid it off in Alaska, which.

1130
00:54:10,239 --> 00:54:12,120
Speaker 4: Is why he had to go to Alaska.

1131
00:54:12,160 --> 00:54:15,719
Speaker 2: Exactly. He went to Columbia Medical School for that show.

1132
00:54:16,160 --> 00:54:18,520
Speaker 2: The show is called Northern Exposure.

1133
00:54:18,000 --> 00:54:21,239
Speaker 1: Right show. It's now on Netflix. There's a writing campaign.

1134
00:54:21,360 --> 00:54:23,160
Speaker 1: I just bought it, you know.

1135
00:54:23,200 --> 00:54:25,080
Speaker 4: I've been searching for it for you, I know, and

1136
00:54:25,120 --> 00:54:26,040
Speaker 4: I could never find it.

1137
00:54:26,120 --> 00:54:29,080
Speaker 1: He's like, I follow him on Twitter because he does

1138
00:54:29,120 --> 00:54:31,719
Speaker 1: a lot of really good stuff, including he's on Billions now.

1139
00:54:32,320 --> 00:54:34,400
Speaker 1: But I followed on Twitter and he said, you say,

1140
00:54:34,560 --> 00:54:37,480
Speaker 1: everywhere I go, people say, how come Northern Exposure is

1141
00:54:37,520 --> 00:54:37,919
Speaker 1: not on.

1142
00:54:37,840 --> 00:54:41,360
Speaker 4: Netflix's on Netflix? And I just bought it sixty dollars

1143
00:54:41,360 --> 00:54:43,360
Speaker 4: for the whole first season. It's very expensive.

1144
00:54:43,440 --> 00:54:44,960
Speaker 15: Really, can you send that password to me?

1145
00:54:45,160 --> 00:54:49,800
Speaker 1: Yes? But there's password sharing, all right, talk to just

1146
00:54:49,840 --> 00:54:51,880
Speaker 1: about I mean, I've got my last of my offspring,

1147
00:54:51,960 --> 00:54:54,160
Speaker 1: my four offspring coming this freshman year in college, a

1148
00:54:54,239 --> 00:54:57,840
Speaker 1: private university. The tuition starts within eight.

1149
00:54:58,280 --> 00:54:59,200
Speaker 4: Oh my goodness.

1150
00:54:59,239 --> 00:55:02,839
Speaker 1: Exactly, I'm just like Holy Cow. And there's no end

1151
00:55:02,840 --> 00:55:05,480
Speaker 1: in sight, is there. It's me it's gonna take an

1152
00:55:05,480 --> 00:55:07,359
Speaker 1: Act of Congress because it's just.

1153
00:55:07,600 --> 00:55:09,319
Speaker 4: A school in Europe because it doesn't make any sense

1154
00:55:09,320 --> 00:55:09,520
Speaker 4: to me.

1155
00:55:09,840 --> 00:55:12,960
Speaker 15: Well, and when we talk about student loans and you know,

1156
00:55:13,000 --> 00:55:15,920
Speaker 15: you hear this chatter about ten thousand dollars, which of

1157
00:55:15,960 --> 00:55:18,239
Speaker 15: course is not is not happening. It didn't. It never

1158
00:55:18,280 --> 00:55:21,719
Speaker 15: addressed the root cause, which is the increasing cost of college.

1159
00:55:22,200 --> 00:55:24,920
Speaker 15: So you're right, there doesn't seem to be an end

1160
00:55:24,920 --> 00:55:28,680
Speaker 15: in sight, and there's no real regulation. And when schools

1161
00:55:28,680 --> 00:55:31,839
Speaker 15: are when you're looking at default rates for colleges, they're

1162
00:55:31,880 --> 00:55:34,319
Speaker 15: never on the hook. Yeah, they don't have skin in

1163
00:55:34,360 --> 00:55:34,680
Speaker 15: the game.

1164
00:55:34,800 --> 00:55:37,880
Speaker 1: Yeah, it's just extraordinary. It doesn't feel like I mean,

1165
00:55:37,920 --> 00:55:41,399
Speaker 1: it's the best university system in the world arguably, but boy,

1166
00:55:41,480 --> 00:55:43,959
Speaker 1: it's that the economics are tough for the average person

1167
00:55:44,040 --> 00:55:46,319
Speaker 1: out there. Janet Lauren, thank you so much for joining us.

1168
00:55:46,360 --> 00:55:49,600
Speaker 1: Janet Laurence. She's a higher education financial reporter for Bloomberg News,

1169
00:55:50,040 --> 00:55:55,280
Speaker 1: and I mean, no diversity in her education. It's just Colombia, Columbia, Columbia.

1170
00:55:55,360 --> 00:55:57,080
Speaker 1: I mean, it's a good school and all, but you know,

1171
00:55:57,360 --> 00:55:59,560
Speaker 1: try something different. It's pretty good. Yeah, it's pretty good.

1172
00:55:59,560 --> 00:56:01,200
Speaker 4: They have a pretty good journalism school as well.

1173
00:56:01,440 --> 00:56:03,799
Speaker 1: Man, I know they're very good. They in a great

1174
00:56:03,840 --> 00:56:07,200
Speaker 1: business school too. I've been hiring Peel out of the

1175
00:56:07,239 --> 00:56:10,920
Speaker 1: Columbia Busines School forever and a good history department. Good

1176
00:56:10,920 --> 00:56:12,040
Speaker 1: to know. I'm sure everything's good.

1177
00:56:12,040 --> 00:56:12,160
Speaker 5: There.

1178
00:56:12,160 --> 00:56:13,040
Speaker 1: It's Columbia.

1179
00:56:13,200 --> 00:56:16,320
Speaker 8: You're listening to the tape Cat's are live program Bloomberg

1180
00:56:16,360 --> 00:56:19,960
Speaker 8: Markets weekdays at ten am Eastern on Bloomberg Radio, the

1181
00:56:20,040 --> 00:56:22,000
Speaker 8: tune in app, Bloomberg dot Com, and.

1182
00:56:21,960 --> 00:56:23,239
Speaker 9: The Bloomberg Business App.

1183
00:56:23,280 --> 00:56:26,120
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1184
00:56:26,120 --> 00:56:32,080
Speaker 8: flagship New York station. Just say Alexa play Bloomberg eleven thirty.

1185
00:56:31,320 --> 00:56:34,560
Speaker 1: Matt Miller, Paul Sweeney Here in the Bloomberg Interactive Broker Studio.

1186
00:56:34,680 --> 00:56:37,759
Speaker 1: We are streaming live on YouTube. Just head over to

1187
00:56:37,800 --> 00:56:42,560
Speaker 1: YouTube and search Bloomberg Global News. Or you can just

1188
00:56:42,600 --> 00:56:45,799
Speaker 1: go Bloomberg Radio. Now, I believe it's even simple to learn.

1189
00:56:46,320 --> 00:56:47,600
Speaker 4: Just search for Bloomberg Radio.

1190
00:56:47,680 --> 00:56:49,360
Speaker 1: Okay, that's easy. Yeah, all right, you can then you

1191
00:56:49,360 --> 00:56:50,960
Speaker 1: can find that, all right, we can do it anyway.

1192
00:56:51,920 --> 00:56:54,239
Speaker 1: As Charlie was just reporting, Disney reported some numbers there

1193
00:56:54,280 --> 00:56:56,880
Speaker 1: for the closed stocks up four percent. Lots of cross

1194
00:56:56,880 --> 00:56:59,800
Speaker 1: currents there, reflecting a lot of cross currents in the

1195
00:57:00,040 --> 00:57:03,120
Speaker 1: media industry as this industry tries to shift from a

1196
00:57:03,160 --> 00:57:07,120
Speaker 1: traditional model which was based upon lots and lots of

1197
00:57:07,120 --> 00:57:09,920
Speaker 1: people paying the cable companies and satellite companies a lot

1198
00:57:09,960 --> 00:57:14,080
Speaker 1: of money every month to one now everybody's streaming and

1199
00:57:14,160 --> 00:57:16,560
Speaker 1: what does that do to the economics? Ian Whitaker joins us.

1200
00:57:16,560 --> 00:57:20,080
Speaker 1: He's a managing director and owner at Liberty Sky Advisors.

1201
00:57:20,080 --> 00:57:23,000
Speaker 1: He's one He's based in London, England. One of the

1202
00:57:23,240 --> 00:57:26,360
Speaker 1: smarter folks I talked to about the global media business. Ian,

1203
00:57:26,360 --> 00:57:29,040
Speaker 1: thanks so much for joining us here. First, what did

1204
00:57:29,080 --> 00:57:32,000
Speaker 1: you make from Disney's results last night and can you

1205
00:57:32,000 --> 00:57:34,800
Speaker 1: extrapolate that out to just kind of how the global

1206
00:57:34,800 --> 00:57:36,000
Speaker 1: media industry is evolving?

1207
00:57:37,000 --> 00:57:42,800
Speaker 16: Yeah, no, it's very interesting and am I what would say? Well,

1208
00:57:42,880 --> 00:57:45,760
Speaker 16: first of all, in terms of extrapolation, as you say, there's

1209
00:57:45,800 --> 00:57:49,720
Speaker 16: a lot more focused now on cost control and efficiencies.

1210
00:57:50,080 --> 00:57:52,720
Speaker 16: So and this a company divides and interest rates that

1211
00:57:52,800 --> 00:57:56,640
Speaker 16: we saw the market shifted from strategies that were based

1212
00:57:56,680 --> 00:57:59,959
Speaker 16: on growth to ones that assented the emphasize with cost

1213
00:58:00,080 --> 00:58:02,280
Speaker 16: control as well, and that very much was the story

1214
00:58:02,320 --> 00:58:04,920
Speaker 16: that came across from Disney. When you look at the

1215
00:58:05,200 --> 00:58:08,440
Speaker 16: management remarks very much focusing on what they had done

1216
00:58:08,440 --> 00:58:12,880
Speaker 16: about avertucing capex, what they've done about cost control been

1217
00:58:12,880 --> 00:58:16,280
Speaker 16: more ahead of expectations. There is a flip side to that, though,

1218
00:58:16,600 --> 00:58:19,320
Speaker 16: which is if you are going to focus more on

1219
00:58:19,360 --> 00:58:22,200
Speaker 16: that side, then what it does mean is that you're

1220
00:58:22,320 --> 00:58:26,440
Speaker 16: essentially saying the growth of future growth potential is probably

1221
00:58:26,440 --> 00:58:29,440
Speaker 16: lower than you expected. And so I think the message

1222
00:58:29,440 --> 00:58:32,600
Speaker 16: that we're getting, particularly in the streaming space, from all

1223
00:58:32,640 --> 00:58:35,680
Speaker 16: of these companies is the markets want them to be

1224
00:58:35,720 --> 00:58:39,000
Speaker 16: more financially disciplined, and that's fine, and are obviously taking

1225
00:58:39,040 --> 00:58:42,680
Speaker 16: steps to do so. But really the underlying message that

1226
00:58:42,800 --> 00:58:47,200
Speaker 16: is coming through is that we think the potential future

1227
00:58:47,240 --> 00:58:51,280
Speaker 16: growth within the market is far less than we anticipated

1228
00:58:51,320 --> 00:58:54,280
Speaker 16: several years ago. And again you can see that in

1229
00:58:54,360 --> 00:58:57,680
Speaker 16: some of Disney's comments. They were talking about so not

1230
00:58:57,760 --> 00:59:01,080
Speaker 16: all markets will be equal for streaming, their comments on

1231
00:59:01,240 --> 00:59:05,200
Speaker 16: hot Star in India essentially saying we dropped twenty four

1232
00:59:05,200 --> 00:59:08,600
Speaker 16: percent year on year in terms of subscriber numbers, but

1233
00:59:08,760 --> 00:59:11,960
Speaker 16: essentially don't worry because it doesn't have that much impact

1234
00:59:12,320 --> 00:59:15,960
Speaker 16: on the financials. Such a statement probably would never have

1235
00:59:15,960 --> 00:59:17,320
Speaker 16: been made eighteen months ago.

1236
00:59:17,880 --> 00:59:18,120
Speaker 9: Now.

1237
00:59:18,160 --> 00:59:21,560
Speaker 16: I think that has some very interesting implications when it

1238
00:59:21,560 --> 00:59:26,000
Speaker 16: comes to valuations, because maybe not so much for Disney,

1239
00:59:26,000 --> 00:59:28,400
Speaker 16: although it's part in there simply because it's it's a

1240
00:59:28,480 --> 00:59:32,480
Speaker 16: constituent part of different entities. But if you take stots

1241
00:59:32,560 --> 00:59:36,120
Speaker 16: like Netflix, for example, probably the valuations where they are

1242
00:59:36,160 --> 00:59:39,520
Speaker 16: at the moment still very much reflect a consensual view

1243
00:59:40,080 --> 00:59:43,680
Speaker 16: that they are still long term growth stories, and probably

1244
00:59:43,720 --> 00:59:44,440
Speaker 16: long term.

1245
00:59:44,280 --> 00:59:45,320
Speaker 9: High growth stories.

1246
00:59:46,200 --> 00:59:48,120
Speaker 16: I would question whether that's the case for many of

1247
00:59:48,120 --> 00:59:48,680
Speaker 16: these players.

1248
00:59:50,040 --> 00:59:54,600
Speaker 2: What do you think about the profitability of streaming services?

1249
00:59:54,680 --> 00:59:56,680
Speaker 4: Paul was talking to the head.

1250
00:59:56,520 --> 00:59:59,640
Speaker 2: Of sag Aftra I think last week or two weeks ago,

1251
00:59:59,680 --> 01:00:02,439
Speaker 2: and and she was saying, these streaming services make thirty

1252
01:00:02,480 --> 01:00:03,920
Speaker 2: billion dollars a year in profit.

1253
01:00:04,000 --> 01:00:06,960
Speaker 4: They want their take. Did they actually make that much money?

1254
01:00:07,760 --> 01:00:07,840
Speaker 14: No?

1255
01:00:08,000 --> 01:00:13,360
Speaker 16: I have absolutely no idea where she actually got that

1256
01:00:13,440 --> 01:00:16,040
Speaker 16: number one, because that just does not make sense.

1257
01:00:16,080 --> 01:00:16,960
Speaker 9: I mean, if you.

1258
01:00:17,000 --> 01:00:22,280
Speaker 16: Look through the results from these companies, the mainstreaming companies globally, yes,

1259
01:00:22,400 --> 01:00:25,960
Speaker 16: Netflix has an operating profit, but people like Disney is

1260
01:00:26,000 --> 01:00:29,480
Speaker 16: still making losses. Obviously, Peacock several billion dollars losses this

1261
01:00:29,560 --> 01:00:32,520
Speaker 16: year as well, Warner Brothers. Yes, again has brought down

1262
01:00:33,000 --> 01:00:36,240
Speaker 16: the amount of losses, but nobody is near profitability yet.

1263
01:00:36,480 --> 01:00:38,920
Speaker 16: I think this is going to be a very interesting

1264
01:00:39,000 --> 01:00:42,439
Speaker 16: question sort of. My view is in the next five

1265
01:00:42,480 --> 01:00:45,880
Speaker 16: to ten years this will be a core paper when

1266
01:00:45,960 --> 01:00:49,720
Speaker 16: it comes to NBA studies as to how, quite frankly,

1267
01:00:50,400 --> 01:00:53,160
Speaker 16: these companies traded in what was a model that worked

1268
01:00:53,240 --> 01:00:57,160
Speaker 16: very well for them, i the established PATV model, but

1269
01:00:57,320 --> 01:01:00,920
Speaker 16: essentially one where the economics are just a lot tougher

1270
01:01:00,920 --> 01:01:04,200
Speaker 16: because they were not naturally D two C companies. They've

1271
01:01:04,240 --> 01:01:05,600
Speaker 16: had to go out and do a lot more in

1272
01:01:05,680 --> 01:01:09,120
Speaker 16: terms of marketing. It's a proot of the economics of

1273
01:01:09,200 --> 01:01:14,520
Speaker 16: their of their of their content businesses as well. I

1274
01:01:14,560 --> 01:01:17,280
Speaker 16: think the argument that this was inevitable I don't necessarily

1275
01:01:17,320 --> 01:01:19,680
Speaker 16: buy that. I think there could have been sort of

1276
01:01:19,840 --> 01:01:23,280
Speaker 16: areas where some of the companies have been smarter, could

1277
01:01:23,320 --> 01:01:27,240
Speaker 16: have taken different strategies. Sony, for example, I think has

1278
01:01:27,280 --> 01:01:30,560
Speaker 16: adopted the right approach, which is say, look, we don't

1279
01:01:30,600 --> 01:01:32,040
Speaker 16: want to have a D t C business, but what

1280
01:01:32,080 --> 01:01:34,160
Speaker 16: we will be is we will be the arms dealer

1281
01:01:34,200 --> 01:01:36,520
Speaker 16: to everyone else if they want our content, and we

1282
01:01:36,560 --> 01:01:38,600
Speaker 16: will sell it at the highest price and I think

1283
01:01:38,640 --> 01:01:43,320
Speaker 16: that's exactly the right strategy, particularly for let's call them

1284
01:01:43,400 --> 01:01:46,800
Speaker 16: second tier players within it, within the market. But I

1285
01:01:46,840 --> 01:01:49,720
Speaker 16: think what we will find over the next five years

1286
01:01:49,840 --> 01:01:53,120
Speaker 16: is that what will happened with streaming is that streaming,

1287
01:01:53,400 --> 01:01:55,800
Speaker 16: if there is going to be any profits, they're going

1288
01:01:55,840 --> 01:01:56,480
Speaker 16: to be limited.

1289
01:01:57,400 --> 01:01:58,120
Speaker 9: But what's going to.

1290
01:01:58,120 --> 01:02:01,200
Speaker 16: Happen with the major the major media companies is from

1291
01:02:01,200 --> 01:02:04,440
Speaker 16: a financial standpoint, especially in the US, they're going to

1292
01:02:04,480 --> 01:02:07,520
Speaker 16: be outgoinged by the tech companies when it comes to

1293
01:02:07,520 --> 01:02:11,080
Speaker 16: to sports fights. And I think also as well, what

1294
01:02:11,160 --> 01:02:14,439
Speaker 16: I suspect we will then start to see is sort

1295
01:02:14,480 --> 01:02:19,880
Speaker 16: of a reversion back to the idea that streaming doesn't

1296
01:02:20,320 --> 01:02:22,760
Speaker 16: isn't the central focus of everything. I think again, this

1297
01:02:22,840 --> 01:02:25,320
Speaker 16: is what you've seen from warners talking about that the

1298
01:02:25,320 --> 01:02:28,680
Speaker 16: streaming tail should not wag the corporate dog.

1299
01:02:28,800 --> 01:02:30,920
Speaker 1: Well Ian, I mean, then that kind of goes to

1300
01:02:30,920 --> 01:02:34,480
Speaker 1: the question of are these stocks even investable here in

1301
01:02:34,520 --> 01:02:37,080
Speaker 1: the process while these while this industry is trying to

1302
01:02:37,080 --> 01:02:40,360
Speaker 1: figure out how to generate better profits and better returns,

1303
01:02:40,360 --> 01:02:43,360
Speaker 1: it almost seems like you can't invest in this space

1304
01:02:43,400 --> 01:02:44,840
Speaker 1: in general outside of Netflix.

1305
01:02:45,520 --> 01:02:47,800
Speaker 16: I mean, what I would say is that I think

1306
01:02:47,840 --> 01:02:51,600
Speaker 16: there is for each of the particularly each of the

1307
01:02:51,640 --> 01:02:55,200
Speaker 16: streaming companies. I think there was a major question about

1308
01:02:55,280 --> 01:02:59,400
Speaker 16: how how they have come about how they have adopted

1309
01:02:59,440 --> 01:03:01,600
Speaker 16: their strategy. She's over the past several years. And what

1310
01:03:02,200 --> 01:03:05,880
Speaker 16: do I mean by that. Well, let's take a Disney Yeah,

1311
01:03:05,960 --> 01:03:09,440
Speaker 16: what it said yesterday, the three core components are theme park, streaming,

1312
01:03:09,680 --> 01:03:12,200
Speaker 16: and studios. Well, it was only around two and a

1313
01:03:12,240 --> 01:03:15,080
Speaker 16: half years ago that people were pretty much so willing

1314
01:03:15,120 --> 01:03:16,080
Speaker 16: to write off.

1315
01:03:16,280 --> 01:03:17,520
Speaker 9: The film's business. Yep.

1316
01:03:17,680 --> 01:03:19,600
Speaker 16: Since she's saying that the way that we watch films

1317
01:03:19,640 --> 01:03:22,880
Speaker 16: is dead, it's all going to be about director streaming

1318
01:03:23,400 --> 01:03:26,280
Speaker 16: and essentially the idea that people will go in a

1319
01:03:26,280 --> 01:03:29,160
Speaker 16: post pandemic world to go and watch movies in the

1320
01:03:29,160 --> 01:03:29,640
Speaker 16: movie theater.

1321
01:03:29,720 --> 01:03:30,640
Speaker 1: It is just ridiculous.

1322
01:03:31,800 --> 01:03:35,520
Speaker 16: They made strategic decisions, major strategic decisions based on that,

1323
01:03:36,160 --> 01:03:38,160
Speaker 16: and now what they're having to do is reverse those

1324
01:03:38,440 --> 01:03:41,240
Speaker 16: out as they find out that the decisions they made

1325
01:03:41,720 --> 01:03:44,560
Speaker 16: were wrong. I think streaming again is another example. As

1326
01:03:44,560 --> 01:03:46,320
Speaker 16: I've explained before, I think there are ways that they

1327
01:03:46,320 --> 01:03:48,200
Speaker 16: could have each of them could look to their stress

1328
01:03:48,200 --> 01:03:50,560
Speaker 16: She's and gone about this in a different way. So

1329
01:03:50,680 --> 01:03:53,880
Speaker 16: I think, yeah, with none of these companies, I think

1330
01:03:54,600 --> 01:03:58,000
Speaker 16: companies are at different levels as to where they are

1331
01:03:58,080 --> 01:04:02,040
Speaker 16: along their strategy realignment. Me for someone like Disney, YEP,

1332
01:04:02,640 --> 01:04:04,520
Speaker 16: I think there was still a question mark as to

1333
01:04:05,160 --> 01:04:06,520
Speaker 16: have they really got that stress.

1334
01:04:06,560 --> 01:04:08,000
Speaker 1: She fixed all right, We're gonna have to leave it there.

1335
01:04:08,040 --> 01:04:10,440
Speaker 1: Ian appreciate it. Ian Whitaker, Managing director and owner at

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01:04:10,440 --> 01:04:12,800
Speaker 1: Liberty Sky Advisors.

1337
01:04:15,800 --> 01:04:18,880
Speaker 2: Thanks for listening to the Bloomberg Markets podcast. You can

1338
01:04:18,920 --> 01:04:22,720
Speaker 2: subscribe and listen to interviews at Apple Podcasts or whatever

1339
01:04:22,800 --> 01:04:26,520
Speaker 2: podcast platform you prefer. I'm Matt Miller. I'm on Twitter

1340
01:04:26,720 --> 01:04:28,640
Speaker 2: at Matt Miller nineteen seventy three.

1341
01:04:29,080 --> 01:04:31,480
Speaker 1: And I'm Faul Sweeney. I'm on Twitter at pt Sweeney.

1342
01:04:31,600 --> 01:04:34,240
Speaker 1: Before the podcast, you can always catch us worldwide at

1343
01:04:34,280 --> 01:04:36,040
Speaker 1: Bloomberg Radio