WEBVTT - Bloomberg Surveillance TV: December 12th, 2025 0:00:02.400 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.680 --> 0:00:15.480 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.520 --> 0:00:18.720 with Lisa Bromwitz and Amerie Hortenn. Join us each day 0:00:18.760 --> 0:00:22.280 for insight from the best in markets, economics, and geopolitics 0:00:22.440 --> 0:00:24.880 from our global headquarters in New York City. We are 0:00:24.960 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.720 --> 0:00:31.319 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.320 --> 0:00:33.960 anywhere else you listen, and as always on the Bloomberg 0:00:34.040 --> 0:00:35.880 Terminal and the Bloomberg Business App. 0:00:36.240 --> 0:00:38.680 Peter Sheer of Academy Security is writing, now we can 0:00:38.720 --> 0:00:41.320 watch the data and let the countdown to the Santa 0:00:41.440 --> 0:00:44.600 Rally begin, and you put a little smiley emoji and 0:00:44.640 --> 0:00:47.479 there is a real question here. Is this ultimately a 0:00:47.560 --> 0:00:49.800 market that wants to go up and is going to 0:00:49.840 --> 0:00:52.320 go up because there is a garth of other information 0:00:52.600 --> 0:00:54.120 to really prevent it from doing otherwise. 0:00:54.280 --> 0:00:56.080 Yeah, and I think you're seeing it. The Russell two 0:00:56.080 --> 0:00:58.280 thousands doing very well. I think there's still questions around 0:00:58.320 --> 0:01:00.440 and you know the big tech, the AI story, but 0:01:00.480 --> 0:01:02.480 you're seeing the equal weight S and P five hundred 0:01:02.520 --> 0:01:05.280 do better. Russell two thousand. I think it's helpful that 0:01:05.319 --> 0:01:07.040 the FED is buying some T bills up to forty 0:01:07.080 --> 0:01:09.360 billion dollars a month, so you're seeing all that. I think, 0:01:09.400 --> 0:01:11.200 you know, the Oracle earnings yesterday kind of spook the 0:01:11.240 --> 0:01:13.319 market a little bit, and I think that's maybe the 0:01:13.319 --> 0:01:16.000 one susceptibility is there's a lot more questions around the 0:01:16.040 --> 0:01:18.600 AI data center. But it rates are coming down. I 0:01:18.640 --> 0:01:20.959 think we're going to get rate cuts faster than markets pricing. 0:01:21.120 --> 0:01:23.440 That should be really good for small caps and the 0:01:23.440 --> 0:01:24.280 broad economy. 0:01:24.440 --> 0:01:26.520 How much better are you feeling about big tech given 0:01:26.560 --> 0:01:29.240 the fact that you've seen such a lack of enthusiasm 0:01:29.319 --> 0:01:30.959 following some of these earnings, you know. 0:01:30.920 --> 0:01:33.720 I think there's still questions about valuations there. The one 0:01:33.720 --> 0:01:35.680 thing that's I think coming up in every conversation we 0:01:35.720 --> 0:01:38.280 have is more and more questions about the electricity bottleneck. 0:01:38.480 --> 0:01:39.880 How are we going to run some of these things 0:01:39.920 --> 0:01:41.320 if we can't produce the electricity? 0:01:41.520 --> 0:01:42.639 So I think again we're. 0:01:42.520 --> 0:01:45.120 Going to see a lot of investment into electricity next year. 0:01:45.240 --> 0:01:46.119 That's going to be a story. 0:01:46.160 --> 0:01:50.160 I still think that come the next election, electricity and 0:01:50.200 --> 0:01:52.440 electricity costs are going to be an election issue. 0:01:52.480 --> 0:01:54.080 Peter, how much do you look at a company like 0:01:54.120 --> 0:01:57.840 Broadcom or Oracle as a proxy for this nascent industry 0:01:58.040 --> 0:01:58.560 as a whole. 0:01:58.880 --> 0:02:01.000 There's kind of that collection looking at what they're doing. 0:02:01.160 --> 0:02:03.040 You're also trying to figure out how, you know, again 0:02:03.080 --> 0:02:05.800 the Disney announcement yesterday, how are starks reacting to this? 0:02:05.920 --> 0:02:07.520 And you know, it feels that we've kind of gone 0:02:07.520 --> 0:02:09.960 through this period. If you raise your hand say anything AI, 0:02:10.040 --> 0:02:11.079 your stock shoots higher. 0:02:11.320 --> 0:02:12.320 Now there's a lot of questions. 0:02:12.360 --> 0:02:14.040 People are trying to figure out where's this going to work, 0:02:14.040 --> 0:02:16.280 how's it actually going to work? And you know, again, 0:02:16.360 --> 0:02:18.040 you know going to be somewhat facetious. If you spend 0:02:18.080 --> 0:02:20.400 fifty million dollars and you hire ten fewer people, how 0:02:20.440 --> 0:02:21.440 much are you paying those people? 0:02:21.440 --> 0:02:22.520 Maybe you shouldn't have done that. 0:02:22.560 --> 0:02:24.919 So I think the AI story is growing and we're 0:02:24.919 --> 0:02:27.200 seeing the use, but now it's kind of there's a 0:02:27.200 --> 0:02:29.400 little bit more question are you spending it, are you 0:02:29.440 --> 0:02:30.079 getting value? 0:02:30.160 --> 0:02:31.560 How do you want to use it going forward? 0:02:31.600 --> 0:02:33.639 At LISTA mentioned the high expectations that we've had for 0:02:33.680 --> 0:02:36.240 a lot of these companies. Is this a moment to 0:02:36.280 --> 0:02:39.160 recalibrate or rethink what those expectations are. So I look 0:02:39.160 --> 0:02:42.360 at a company like WORKLID, look at a company like Broadcom. 0:02:42.520 --> 0:02:44.440 There's been a lot of happy talk. It has performed 0:02:44.480 --> 0:02:46.440 very well quarter after quarter after quarter. Now we're a 0:02:46.440 --> 0:02:48.600 point where maybe we just can't reach those expectations that 0:02:48.600 --> 0:02:49.960 have been in place for so long. 0:02:49.919 --> 0:02:51.600 Right, it gets much more difficult. So again, one of 0:02:51.639 --> 0:02:54.440 the trades we've liked is you are either underweight QQQ 0:02:54.680 --> 0:02:56.640 or you know, the Nasdaq one hundred, and you overweight 0:02:56.720 --> 0:02:58.600 either the S and P five hundred equal weight or 0:02:58.600 --> 0:03:00.640 the Rustle two thousand. I think that's the performance is 0:03:00.639 --> 0:03:02.720 going to come as we realize all these other companies 0:03:02.720 --> 0:03:05.040 who are benefiting from AI, they should trade maybe at 0:03:05.080 --> 0:03:07.840 better multiples the businesses here, And you're starting to see 0:03:07.919 --> 0:03:09.760 rates come down again, which helps a lot of those 0:03:09.800 --> 0:03:11.880 companies much more than it helps I think the big companies. 0:03:11.880 --> 0:03:13.320 We're kind of walking in tyrope. Though. 0:03:13.400 --> 0:03:15.640 I remember just a couple of months ago people saying 0:03:15.639 --> 0:03:17.600 that if the AI trade doesn't work, it's going to 0:03:17.600 --> 0:03:21.160 bring down everything, because ultimately the entire market and economy 0:03:21.160 --> 0:03:23.839 has been propped up by AI hopes and dreams. Why 0:03:23.880 --> 0:03:27.960 has that changed in terms of a narrative, so substantially well. 0:03:27.760 --> 0:03:29.680 I think we're still seeing the investing going on in 0:03:29.720 --> 0:03:31.519 that part, so the spend is still there. So I 0:03:31.560 --> 0:03:33.880 think if that spend really drops, that's where you start 0:03:33.880 --> 0:03:35.720 really getting the trouble. Then we start questioning, Okay, where's 0:03:35.760 --> 0:03:37.880 this economy had? And I'm definitely not quite saying green 0:03:37.920 --> 0:03:39.760 about the economy. I think there are some risks there. 0:03:39.920 --> 0:03:42.520 I think the jobs data, I think a lot of 0:03:42.520 --> 0:03:45.119 companies are actually going to budget less spending next year. 0:03:45.280 --> 0:03:47.040 I think it's going to start flowing through the economy 0:03:47.040 --> 0:03:49.600 where you slowly see the upticking tears, right, is this 0:03:49.680 --> 0:03:52.160 terar for revenue keeps coming in slowly but surely two 0:03:52.520 --> 0:03:54.760 and forty two hundred and fifty three hundred billion. That's 0:03:54.800 --> 0:03:57.160 when you start feeling the impact on that. I think 0:03:57.200 --> 0:03:59.360 the job market's a little bit sketchy. What I did 0:03:59.520 --> 0:04:01.119 of all the day I saw this week. I still 0:04:01.120 --> 0:04:03.080 look at the jolts quit very very closely. To me, 0:04:03.160 --> 0:04:05.440 that's the closest we get to crowdsourcing. We're back to 0:04:05.520 --> 0:04:07.440 levels in the quits rate. I think it was one 0:04:07.480 --> 0:04:10.160 point eight or something. It goes back to twenty fifteen. 0:04:10.560 --> 0:04:13.800 People aren't comfortable leaving their jobs. That tells you everyone 0:04:13.840 --> 0:04:16.200 knows the job market's a little bit sketchy than maybe. 0:04:15.920 --> 0:04:17.680 The data shows. I'm so glad you went there. 0:04:17.760 --> 0:04:20.279 Next week we get the November jobs report, which of 0:04:20.320 --> 0:04:22.120 course is delayed, and a lot of people in very 0:04:22.160 --> 0:04:24.359 in particular, was really annoyed that we didn't get it 0:04:24.400 --> 0:04:26.640 before the FED meeting, and we seem to get indication 0:04:26.760 --> 0:04:27.560 from fedcher J. 0:04:27.680 --> 0:04:28.520 Powell that there is. 0:04:28.440 --> 0:04:30.560 This weakness in the labor market that you're talking about. 0:04:30.960 --> 0:04:34.240 How pivotal is that report to highlight that things aren't 0:04:34.240 --> 0:04:36.520 falling off a cliff. Yes, if that's going to cut rates, 0:04:36.520 --> 0:04:38.360 but that the economy is actually still hanging in there. 0:04:38.400 --> 0:04:39.880 Well, I hope it's pivotal and shows that we're not 0:04:39.920 --> 0:04:41.320 falling off the cliff. I think there is a risk 0:04:41.360 --> 0:04:44.040 that this data comes in much weaker than we're expecting, 0:04:44.080 --> 0:04:45.960 and it's kind of this wake up call. Okay, we've 0:04:46.000 --> 0:04:48.440 all been talking about this jobless recovery, and yeah, the 0:04:48.600 --> 0:04:50.800 data center spend's been driving a lot of the economy. 0:04:51.080 --> 0:04:53.320 Where are the jobs, who's getting the jobs? Where they come? 0:04:53.360 --> 0:04:55.960 And again, everything I talked to and probably near and 0:04:55.960 --> 0:04:58.200 dear to my heart your kids graduating college. The job 0:04:58.240 --> 0:05:00.440 market looks very bleak right there, from compared to what 0:05:00.440 --> 0:05:03.160 it's been a few years ago. So I think we 0:05:03.240 --> 0:05:05.239 might be starting to get the data that really starts 0:05:05.240 --> 0:05:08.880 confirming whoa something's not quite working, and I think everything's 0:05:08.920 --> 0:05:10.320 been a little bit tall, and let's see how these 0:05:10.320 --> 0:05:10.760 things play out. 0:05:10.800 --> 0:05:12.000 Let's see how the trade deals play out. 0:05:12.080 --> 0:05:14.200 Let's see now we're at that proof is in the pudding, 0:05:14.400 --> 0:05:16.400 and I'm a little bit nervous that the job's data 0:05:16.440 --> 0:05:18.400 is going to show this is not working the way. 0:05:18.240 --> 0:05:19.039 We hoped it would be. 0:05:19.160 --> 0:05:21.600 How are you thinking about FED timing and insurance? I 0:05:21.600 --> 0:05:23.440 think Claire Jones are the fts to question a lot 0:05:23.480 --> 0:05:25.720 of us had going into that meeting, which is, why 0:05:25.720 --> 0:05:26.600 do this cut now? 0:05:26.920 --> 0:05:28.120 Why not wait till January? 0:05:28.200 --> 0:05:30.520 We would have the data that we're talking around because 0:05:30.520 --> 0:05:33.560 we haven't had. Why not wait into Jai or did 0:05:33.600 --> 0:05:35.320 he give you a satisfactory answer to that in that 0:05:35.320 --> 0:05:36.040 press conference? 0:05:36.360 --> 0:05:36.600 You know? 0:05:36.839 --> 0:05:40.120 I think the ultimate reason is they are concerned about jobs, 0:05:40.120 --> 0:05:41.800 and there's just enough out there, I think on the 0:05:41.880 --> 0:05:44.080 jobs data and not just official data. I think it's 0:05:44.160 --> 0:05:47.000 anecdotally right. There's no one I'm hearing talk about, oh, 0:05:47.040 --> 0:05:49.320 there's some great underlying strength, and you. 0:05:49.320 --> 0:05:50.200 Know, it was kind of weird. 0:05:50.240 --> 0:05:52.800 They did raise the GDP forecast, but again they didn't 0:05:52.800 --> 0:05:55.160 seem to know a company that with a big job growth, 0:05:55.279 --> 0:05:57.360 So I think that's why they did it. And honestly, 0:05:57.360 --> 0:05:58.720 I think you're going to see a lot of pressure. 0:05:58.760 --> 0:06:00.440 I think the market is going to get to three 0:06:00.480 --> 0:06:02.720 percent on FED funds way faster. I think we get 0:06:02.760 --> 0:06:04.480 there by the summer, and market it's not pricing in 0:06:04.760 --> 0:06:06.359 two cuts next year until September. 0:06:06.600 --> 0:06:08.240 I think power will have to cave. I think we're 0:06:08.240 --> 0:06:08.920 going to have to move. 0:06:09.000 --> 0:06:11.039 And this is going to be an aggressive cycle where 0:06:11.320 --> 0:06:13.640 we've been maybe a little bit tight too long, too 0:06:13.680 --> 0:06:17.320 dependent on allowing that AI spend to maybe cloud or 0:06:17.360 --> 0:06:19.880 cover up that there's an underlying weekly economy going on. 0:06:20.120 --> 0:06:21.719 Curious if you noticed something that I did during that 0:06:21.720 --> 0:06:24.239 press conference was the Fed cheer very willing to engage 0:06:24.240 --> 0:06:25.760 with AI in a way that he hadn't been able 0:06:25.800 --> 0:06:27.920 to before. So there were a number of colloquies with 0:06:28.160 --> 0:06:31.040 Howard Schneider and Neil Erwin Steve Leisman. They asked about AI, 0:06:31.040 --> 0:06:34.240 how much he's thinking about it, and he was pretty optimistic. 0:06:34.360 --> 0:06:36.279 You know, he talked about the prospects of AI spend 0:06:36.320 --> 0:06:38.920 continuing here at a moment when we are candidly kind 0:06:38.920 --> 0:06:41.720 of wondering about how long that's likely to persist. What 0:06:41.760 --> 0:06:43.560 did you make of that His kind of recognition of 0:06:43.600 --> 0:06:46.560 the fact that this is going to be rather seismic 0:06:46.600 --> 0:06:47.080 going forward. 0:06:47.920 --> 0:06:50.080 I think it's good. I think it all makes sense. 0:06:50.080 --> 0:06:52.960 Again, we are going to continue to use AI, people 0:06:53.000 --> 0:06:54.200 are going to refine how they use AI. 0:06:54.240 --> 0:06:55.600 They're going to admit it. He uses it, which I 0:06:55.600 --> 0:06:56.280 thought was interesting. 0:06:56.320 --> 0:06:58.480 I think, you know, I've used it multiple different ways. 0:06:58.480 --> 0:06:58.640 You know. 0:06:58.640 --> 0:07:00.200 If I'm on Twitter, I didend to use GROCK. 0:07:00.040 --> 0:07:02.080 If I'm on my desktop, I tend to use chat 0:07:02.200 --> 0:07:05.080 GTT or something like that. So I think it's important part. 0:07:05.200 --> 0:07:07.440 But again, I think we also see some of the limitations. 0:07:07.560 --> 0:07:09.960 And I'm still at this concern that we're basically paying 0:07:09.960 --> 0:07:13.040 twenty thirty prices for twenty twenty five technology, and so 0:07:13.080 --> 0:07:14.840 it's not quite where we want it to be, and 0:07:14.960 --> 0:07:16.600 people are going to be a little bit more thoughtful 0:07:16.640 --> 0:07:19.040 on their spend. And I keep coming back to whether 0:07:19.080 --> 0:07:22.080 it's the dats of the digital acid treasury companies. You know, 0:07:22.080 --> 0:07:24.560 when there was this you raise your hand, use raise 0:07:24.600 --> 0:07:26.920 free money. It's going to continue as soon as you 0:07:26.960 --> 0:07:29.440 start really questioning are we getting the value and what 0:07:29.480 --> 0:07:31.440 are the limitations? Again, I keep thinking that it's going 0:07:31.480 --> 0:07:34.000 to be electricity and power generation is the limitation. 0:07:34.160 --> 0:07:36.000 People are going to have to think twice. That's where 0:07:36.000 --> 0:07:37.160 it's going to stall out a little bit. 0:07:37.320 --> 0:07:39.080 David, I'm so glad that Peter talked about this, the 0:07:39.120 --> 0:07:40.840 idea of are we getting the value? I think about 0:07:40.920 --> 0:07:44.080 chat EBT, I look up medical problems with GROCK. I say, 0:07:44.240 --> 0:07:46.400 is this real? And that's what everybody does is real. 0:07:46.440 --> 0:07:47.280 It's real there. 0:07:48.080 --> 0:07:49.520 So it's sort of a certain point you can either 0:07:49.520 --> 0:07:51.280 go to the mark manual or you could actually just 0:07:51.280 --> 0:07:54.400 not have digital manufacturing of concepts, and then all of 0:07:54.400 --> 0:07:56.880 a sudden you clarify those two issues. Are we actually 0:07:56.920 --> 0:07:59.520 solving some of the issues that people think will create 0:07:59.520 --> 0:08:01.920 the product boom that's being priced into the market. 0:08:02.000 --> 0:08:04.120 I've heard skeptics say you can take out a calculator 0:08:04.120 --> 0:08:06.280 and do two plus two is four. If you do 0:08:06.360 --> 0:08:07.960 it through chet GPT, it's going to take I don't 0:08:07.960 --> 0:08:09.160 know how much more energy to do that. Then it 0:08:09.160 --> 0:08:10.880 will be my little solar powered calculator. 0:08:10.880 --> 0:08:11.920 But this is a real issue. 0:08:11.960 --> 0:08:14.160 I think people are kind of I think it's emblematic 0:08:14.240 --> 0:08:16.120 the fact that we're trying to fumble through this figuring out. 0:08:16.040 --> 0:08:17.720 Sort of what the best use case is. 0:08:17.760 --> 0:08:21.480 We're doing that individually, you with your medical interests or whatever, 0:08:21.520 --> 0:08:23.720 and you know, but just why broadst Then there's this 0:08:23.760 --> 0:08:25.520 whole enterprise facet of this as well, which is I 0:08:25.520 --> 0:08:28.640 think companies are still embracing this largely, but in a 0:08:28.720 --> 0:08:30.320 kind of blind way, not knowing how it's going to 0:08:30.320 --> 0:08:31.400 be applicable to what they're doing. 0:08:31.680 --> 0:08:34.480 Yeah, and you know, I again have to jokingly say, 0:08:34.559 --> 0:08:36.320 I think in some cases if they just ask their 0:08:36.320 --> 0:08:37.880 employees have been there three or four years what they 0:08:37.880 --> 0:08:39.560 should do, they'd probably get a really good answer. Maybe 0:08:39.559 --> 0:08:42.000 we should go back to empowering our employees too. Like 0:08:42.120 --> 0:08:44.959 people know the situation and some of this feels a 0:08:45.000 --> 0:08:46.719 little bit like a crutch. And again, there's going to 0:08:46.800 --> 0:08:49.040 be useful parts of it. I think the limitation is 0:08:49.040 --> 0:08:50.800 how much data you have, How useful is your data? 0:08:50.800 --> 0:08:52.520 You got to plug it into there so people are 0:08:52.600 --> 0:08:54.400 using it. I think it's you know, makes people slightly 0:08:54.440 --> 0:08:56.599 more productive. I don't think it's kind of this be 0:08:56.760 --> 0:08:58.640 on end all that ultimately it should get to right. 0:08:58.800 --> 0:09:00.000 It's going to do more and more, it's going to 0:09:00.040 --> 0:09:02.120 get better and better. I just don't see the technology 0:09:02.200 --> 0:09:04.040 quite at that level. And when I try and use it, 0:09:04.040 --> 0:09:07.160 it's great until you realize, oh it hallucinated a ticker symbol, 0:09:07.160 --> 0:09:09.240 and now I'm like, now what else do I have 0:09:09.280 --> 0:09:10.920 to check? What else do I really need to go? 0:09:11.200 --> 0:09:12.880 And also it's how do you learn if you kind 0:09:12.880 --> 0:09:14.040 of rely on it for too much? 0:09:16.040 --> 0:09:19.520 Stay with us multpleinpeg. Savannah's coming up off to this. 0:09:28.160 --> 0:09:30.520 Here's the latest shoppers gearing up for what is expected 0:09:30.520 --> 0:09:34.760 to be a record breaking holiday season, despite consumer confidence 0:09:34.800 --> 0:09:37.560 tumbling to its lowest levels going back to April. Joining 0:09:37.600 --> 0:09:41.360 us now is Elena shall get Cheva of the conference board. Lena, 0:09:41.679 --> 0:09:43.960 could you give us some color around the retail sales 0:09:44.040 --> 0:09:45.719 data that we're going to be getting next week as 0:09:45.720 --> 0:09:47.440 well as this holiday shopping season? 0:09:48.120 --> 0:09:49.000 Is it wonderful? 0:09:49.160 --> 0:09:51.560 Is is people looking for deals and being picky and 0:09:51.640 --> 0:09:54.320 just sort of back ending some of their purchases to 0:09:54.400 --> 0:09:56.160 try to get the best bang for their buck. 0:09:57.120 --> 0:10:01.520 I think so. I think the latest earnings results are 0:10:01.520 --> 0:10:06.960 telling us that consumers are shifting towards value and essentials, 0:10:07.080 --> 0:10:12.160 and you know, clubs and value retailers doing great means 0:10:12.200 --> 0:10:16.600 that consumers are really concerned about what is going on 0:10:16.800 --> 0:10:20.880 in terms of prices, and they are really shifting towards 0:10:21.280 --> 0:10:24.839 those savings. So I think we are looking at a 0:10:24.840 --> 0:10:29.040 healthy holiday season, but not necessarily the best one. So 0:10:29.280 --> 0:10:34.520 I think, you know, probably the results of the Thanksgiving 0:10:34.880 --> 0:10:39.640 holiday was we're a little bit overstating the health of 0:10:39.679 --> 0:10:40.240 the consumer. 0:10:40.440 --> 0:10:41.960 Jih and great to see you, And I'd love for 0:10:41.960 --> 0:10:43.560 you to put in the context for us where we 0:10:43.600 --> 0:10:47.120 are in the capacity the companies have their willingness to 0:10:47.200 --> 0:10:51.000 absorb costs because of these tariffs. I might posit that 0:10:51.080 --> 0:10:54.280 maybe this holiday Christmas season is kind of the last 0:10:54.320 --> 0:10:56.040 gas for them to do this before maybe in the 0:10:56.040 --> 0:10:58.120 new year we begin to see some of that trickling 0:10:58.160 --> 0:11:01.840 down to consumers in anticipating that might be the case, 0:11:01.920 --> 0:11:04.840 or what's the status of that sort their willingness to 0:11:04.840 --> 0:11:05.040 do that. 0:11:05.760 --> 0:11:09.240 Yeah, thanks, thanks for the question. I think you're right. 0:11:09.360 --> 0:11:13.600 I think holidays is probably going to be okay. But 0:11:14.200 --> 0:11:18.640 our modeling and the conference board shows that the bulk 0:11:18.720 --> 0:11:22.600 of the tariffs impact will be evident in the beginning 0:11:22.640 --> 0:11:26.760 of twenty twenty six, so Q one, Q two, and 0:11:26.880 --> 0:11:32.000 that is where we see the biggest softening in consumer demand. Actually, 0:11:32.400 --> 0:11:35.280 so I think despite the fact that you know, the 0:11:35.360 --> 0:11:39.839 new cycle kind of moved away from tariffs a little 0:11:39.880 --> 0:11:43.959 bit in recent months, consumers are still feeling the burden. 0:11:44.080 --> 0:11:49.400 They still failing, prices are elevated, and they are shifting 0:11:50.360 --> 0:11:54.800 their spending patterns. Actually, at the Conference Board, we survey 0:11:55.120 --> 0:12:01.120 consumers by different types of income, so the whole spectrum 0:12:01.240 --> 0:12:06.760 of income groups that we reach out to, and what 0:12:06.800 --> 0:12:10.040 I see in our consumer confidence data is a broad 0:12:10.200 --> 0:12:14.760 based decline in income expectations. I see a broad based 0:12:14.760 --> 0:12:19.160 decline in consumer confidence over the course of twenty twenty five. 0:12:19.559 --> 0:12:21.880 This is the time to kind of like look back 0:12:21.920 --> 0:12:24.920 at the year and assess what's called what happened? And 0:12:24.960 --> 0:12:29.000 there was a twenty four point decline in consumer confidence 0:12:29.120 --> 0:12:34.080 over the course of twenty twenty five. Consumers earning making 0:12:34.480 --> 0:12:37.960 more than one hundred and twenty five thousand dollars a year, 0:12:38.640 --> 0:12:43.200 the decline in their confidence was also sizable, something like 0:12:43.240 --> 0:12:45.760 minus seventeen points. 0:12:46.240 --> 0:12:48.440 I'm still having a hard time kind of squaring the 0:12:48.520 --> 0:12:50.920 sentiment data with the hard data. What we're seeing in 0:12:51.000 --> 0:12:53.120 terms of people, yes out there spending money. I kind 0:12:53.120 --> 0:12:57.120 of imagine Santa Claus filling is sack with gritted teeth. 0:12:57.160 --> 0:12:59.840 He's doing it, but maybe he's not feeling good about 0:12:59.840 --> 0:13:02.200 the crisis that he's paying. Is that reflective of what 0:13:02.240 --> 0:13:04.600 we're seeing here? And what do you make of that 0:13:04.640 --> 0:13:07.600 seeming disconnect between again the hard data and the sentiment 0:13:07.640 --> 0:13:08.800 data that you watch so closely. 0:13:09.840 --> 0:13:13.600 I think it's the timing issue, and you know, to 0:13:13.640 --> 0:13:17.880 a certain degree, we did see some softening in consumer spending. 0:13:18.080 --> 0:13:22.559 The actual data in September already, right, So look at 0:13:22.600 --> 0:13:26.359 the personal income and spending reports for that month. Obviously 0:13:26.400 --> 0:13:30.200 it's very stale, but that shows that, you know, there 0:13:30.280 --> 0:13:34.920 was some softening in spending on non durable butos for example, right, 0:13:35.120 --> 0:13:39.520 and as things are getting more and more expensive. I 0:13:39.559 --> 0:13:42.080 think we do see that. We'll get another piece of 0:13:42.120 --> 0:13:46.960 evidence next week when retail sales data comes out. I 0:13:47.000 --> 0:13:52.480 think it's not a collapse, it's somewhat softer growth in 0:13:52.520 --> 0:13:57.080 consumer spending. But obviously a big risk is the labor market. 0:13:57.200 --> 0:14:00.200 So what happens to the labor market going into Twined 0:14:00.720 --> 0:14:05.360 twenty six will matter the most for the pace of 0:14:05.400 --> 0:14:06.200 consumer spending. 0:14:07.040 --> 0:14:10.360 Elena, good to see you. So the labor differential which 0:14:10.360 --> 0:14:13.480 you're highlighting, I think is key here where people if 0:14:13.520 --> 0:14:15.520 you have a job, you're okay because they also are 0:14:15.520 --> 0:14:18.199 not picking up. But do you think housing affordability is 0:14:18.240 --> 0:14:21.000 another reason why consumer sentiment is that week? Because I'm 0:14:21.040 --> 0:14:23.200 trying to see do the two hundred and one seventy 0:14:23.200 --> 0:14:26.800 five basis points of rate cuts do they help housing affordability? 0:14:27.040 --> 0:14:29.840 Do you think these rate cuts can actually improve consumer 0:14:29.880 --> 0:14:32.920 sentiment or we continue to see this disconnect and sort 0:14:32.920 --> 0:14:34.320 of wait for that timing to play out. 0:14:35.280 --> 0:14:38.440 I apre Yeah, I think that you know, you're referring 0:14:38.520 --> 0:14:41.800 to the level of interest rates, and even if interest 0:14:41.880 --> 0:14:47.760 rates continue to edge lower in terms of mortgage rates, 0:14:48.240 --> 0:14:51.880 that could improve affordability. But the big part of the 0:14:51.960 --> 0:14:57.920 affordability calculation is prices, and prices are still elevated. Well 0:14:57.960 --> 0:15:01.320 maybe they're growing at a slower pace, but they're still growing. 0:15:01.440 --> 0:15:05.040 So you have that one million dollar house and it's 0:15:05.200 --> 0:15:09.880 now a million and five thousand, so it's still it's 0:15:09.920 --> 0:15:13.480 still very unaffordable to a lot of people out there. 0:15:14.640 --> 0:15:17.520 Maybe at the margin it could help, but I think 0:15:18.000 --> 0:15:23.240 we just need continued growth in real wages going forward, 0:15:23.880 --> 0:15:27.440 as Chair Powell mentioned earlier this week, to kind of 0:15:27.560 --> 0:15:31.800 outgrow from you know, the economy needs to grow into 0:15:31.840 --> 0:15:36.360 that kind of state where consumers will be able to 0:15:36.440 --> 0:15:40.360 afford a little bit more and you know, be happy 0:15:40.400 --> 0:15:43.120 again about how they are faring. 0:15:44.560 --> 0:15:48.200 Stay with us Mobilemberg Surveillance Coming up after this. 0:15:56.840 --> 0:16:00.400 Sticking with AI and the application of it is inking 0:16:00.480 --> 0:16:03.680 a billion dollar steak in open AI and licensing more 0:16:03.720 --> 0:16:06.840 than two hundred of its characters to the startup. Jason 0:16:06.880 --> 0:16:09.840 Mazine of City Writing, we suspect Disney views the use 0:16:09.880 --> 0:16:12.680 of its IP as a free form of marketing. The 0:16:12.800 --> 0:16:16.120 use of these characters should help sustain and potentially build 0:16:16.160 --> 0:16:19.040 long term brand value. Jason has a buy rating on 0:16:19.160 --> 0:16:21.280 shares of Disney with one hundred and forty five dollars 0:16:21.360 --> 0:16:23.880 price ticket. These shares are up four tens percent in 0:16:23.920 --> 0:16:26.800 pre market trading. Jason joins us now, Jason. 0:16:26.560 --> 0:16:27.560 Thank you so much for being with us. 0:16:27.560 --> 0:16:29.280 I thought this was a fascinating move and the part 0:16:29.320 --> 0:16:31.360 of Disney, it kind of goes to the heart of 0:16:31.400 --> 0:16:34.880 the anxiety for content creators. Is AI going to be 0:16:34.920 --> 0:16:36.960 a partner? Is it going to be accounibal? Is it 0:16:36.960 --> 0:16:39.760 going to make you obsolete. What do you take from 0:16:39.760 --> 0:16:40.840 this approach from Disney? 0:16:42.480 --> 0:16:44.360 Well, there's part of this deal we like, Lisa, in 0:16:44.400 --> 0:16:47.280 part that we don't. The part that we like is 0:16:47.880 --> 0:16:51.680 we'd rather see a commercial deal than litigation, and so 0:16:51.760 --> 0:16:54.200 we like the idea that they've inked something. We think 0:16:54.200 --> 0:16:55.880 Disney is going to get some cash for the use 0:16:55.880 --> 0:16:58.160 of its IP and we like the idea that the 0:16:58.280 --> 0:17:01.800 use case has been ring fenced these animated characters short 0:17:01.840 --> 0:17:05.240 form video that makes a ton of sense. The part 0:17:05.280 --> 0:17:07.680 I don't like is the billion dollar investment. 0:17:08.840 --> 0:17:11.680 And explain why. I have another question. Let me taste 0:17:11.680 --> 0:17:13.080 that out of here a little bit. Why are you 0:17:13.080 --> 0:17:14.560 sitt down on this investment, which I think some could 0:17:14.600 --> 0:17:16.359 argue is sort of them you know, a solidifying a 0:17:16.400 --> 0:17:18.800 stake here in a company that has had more than 0:17:18.840 --> 0:17:20.600 buzz over the last couple of years, and a lot 0:17:20.600 --> 0:17:22.360 of people are thinking it's kind of the future of tech. 0:17:22.400 --> 0:17:26.359 More broadly, well, Disney has. 0:17:26.520 --> 0:17:28.560 First of all, I've never had an investor tell me 0:17:28.760 --> 0:17:31.000 that they invest in Disney because they haven't a stud 0:17:31.080 --> 0:17:34.080 venture capital arm. It's just not what investors care about 0:17:34.119 --> 0:17:36.920 that are Disney shareholders. The reason I think that is 0:17:36.920 --> 0:17:40.560 is Disney tends to have a propensity to invest it's capital. 0:17:40.640 --> 0:17:42.800 It's sort of the peak of the mania. And so 0:17:42.840 --> 0:17:45.000 I could go back to, you know, the Info Seek 0:17:45.000 --> 0:17:46.960 investments that they made in the nineties. They never went 0:17:47.040 --> 0:17:51.160