WEBVTT - Anglo Opens BHP Talks, Target Earnings, UK Election 0:00:02.960 --> 0:00:10.840 Bloomberg Audio Studios, podcasts, radio news. You're listening to the 0:00:10.880 --> 0:00:15.040 Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 0:00:15.080 --> 0:00:18.079 Eastern on Apple, Cardplay and Android Auto with the Bloomberg 0:00:18.120 --> 0:00:21.440 Business App. Listen on demand wherever you get your podcasts, 0:00:21.640 --> 0:00:23.400 or watch us live on YouTube. 0:00:25.040 --> 0:00:26.680 Malex Deel alongside Paul Sweeney. 0:00:26.760 --> 0:00:29.000 This is Bloomberg Intelligence Radio where we cover all the 0:00:29.000 --> 0:00:31.520 top news and economics and finance and business through are 0:00:31.560 --> 0:00:34.040 a lens of our Bloomberg Intelligence analysts. They cover two 0:00:34.080 --> 0:00:37.199 thousand companies and one hundred and thirty industries worldwide. And 0:00:37.240 --> 0:00:39.040 we're going to go to one right now on BECHP 0:00:39.400 --> 0:00:42.880 and Anglo Americans. So BCHP is one of the world's 0:00:42.960 --> 0:00:46.440 largest metal producers and copper producers are huge, and they 0:00:46.479 --> 0:00:50.000 have made a third bid for Anglo American, which is 0:00:50.080 --> 0:00:52.120 another copper producer but has other stuff. 0:00:52.159 --> 0:00:53.720 They have some South African assets. 0:00:53.760 --> 0:00:56.880 They have De Beer's, for example, the diamond producer, They 0:00:56.920 --> 0:01:00.240 have a fertilizer, etc. And BHP really want wants to 0:01:00.280 --> 0:01:03.080 buy this company for its copper assets. Their third bid. 0:01:03.440 --> 0:01:06.839 The problem is it's complicated. They want to have Anglo 0:01:06.840 --> 0:01:09.680 Americans spin off all of its South African assets before 0:01:09.760 --> 0:01:12.039 the takeover, and that makes things a little daisy and 0:01:12.040 --> 0:01:14.920 Anglo American doesn't really like it. The difference is is 0:01:14.959 --> 0:01:17.960 that Anglo American is now talking to BHP and they 0:01:18.000 --> 0:01:21.319 will talk until May twenty nine. They have not yet talked. 0:01:21.360 --> 0:01:23.880 So let's get more on this. Grants for Bloomberg Intelligence 0:01:23.920 --> 0:01:27.000 Global head of Metals and Mining. So this bid, this 0:01:27.080 --> 0:01:29.520 third bid is almost fifty billion dollars US. 0:01:29.560 --> 0:01:31.720 I'm talking about. What do you think? 0:01:34.800 --> 0:01:37.319 I must be honest, Hi, thank you for having me on. 0:01:37.360 --> 0:01:42.160 It's further than I thought BHP would have gone, and 0:01:42.240 --> 0:01:45.240 it just shows how really keen they are on getting 0:01:45.280 --> 0:01:49.040 hold of Anglers, particularly the copper assets. There are some 0:01:49.160 --> 0:01:52.160 other interesting assets as well, but I think it just 0:01:52.200 --> 0:01:57.600 shows you what value BHP is ascribing to the whole 0:01:57.960 --> 0:02:01.200 Anglo portfolio. I must say, when we do a some 0:02:01.360 --> 0:02:04.960 of the parts valuation, we get to around about twenty 0:02:05.040 --> 0:02:09.120 nine pounds, which is kind of where the offer stands 0:02:09.160 --> 0:02:11.720 today on an undisturbed share price basis. 0:02:13.120 --> 0:02:16.360 An undisturbed share price means what before the bid was, 0:02:17.120 --> 0:02:19.560 before the rumor mill got the bid out, and then 0:02:19.600 --> 0:02:20.280 the price. 0:02:20.120 --> 0:02:23.240 Pace exactly, yeah, exactly, So the price is based on 0:02:23.280 --> 0:02:25.880 the twenty third of April, so before before the news 0:02:25.919 --> 0:02:29.919 came out. Basically on today's numbers, it's closer to thirty 0:02:29.960 --> 0:02:34.520 one pounds. That would be today's offer, which which kind 0:02:34.560 --> 0:02:37.320 of puts it above as some of the parts valuation. 0:02:38.120 --> 0:02:41.640 If you really want to stretch the valuation, I can 0:02:42.120 --> 0:02:45.360 get it to thirty eight pounds, but then you have 0:02:45.400 --> 0:02:48.040 to do some really interesting things. You have to say 0:02:48.400 --> 0:02:51.000 the piers is worth what it is on the book 0:02:51.000 --> 0:02:53.560 which Anglo has, which is around seven point two billion, 0:02:54.520 --> 0:02:58.440 and given today's diamond market, that's a stretch. And you 0:02:58.440 --> 0:03:03.440 also have to ascribe positive value to Woodsmith the fertilizer 0:03:04.120 --> 0:03:06.680 project up in the north of England, which you know 0:03:06.720 --> 0:03:09.919 many would consider it's still a cost to the business 0:03:10.000 --> 0:03:13.520 and and and probably ascribe very little value. So you know, 0:03:13.600 --> 0:03:15.520 it's a it's a I think it's a it's a 0:03:15.560 --> 0:03:18.600 decent offer, but as you mentioned, it's the deal structure 0:03:18.600 --> 0:03:22.160 that seems to be the roadblock for Anglo American. 0:03:22.360 --> 0:03:25.560 Yeah, and on that end, if I were Anglo American, 0:03:25.600 --> 0:03:28.600 I'm like, no, if you want to buy this company, 0:03:28.639 --> 0:03:31.440 this is the company you guys deal with that afterwards, 0:03:31.520 --> 0:03:35.240 why make us go through you know all the process 0:03:35.280 --> 0:03:37.320 of doing it. I mean, is that kind of where 0:03:37.400 --> 0:03:39.240 Anglo American is right now in term position? 0:03:40.720 --> 0:03:43.920 Well, I think two things. One one is yes, you're right. 0:03:45.160 --> 0:03:48.520 The challenge will be that if if Anglos tries to 0:03:48.600 --> 0:03:53.800 spin off both Amplats and Cumber, there will be some 0:03:53.840 --> 0:03:57.280 shareholders who won't be able to hold it in their portfolios. 0:03:57.280 --> 0:04:00.000 Their mandates just won't allow them. And also they probably 0:04:00.160 --> 0:04:02.880 may not want to own pure play Platinum or iron 0:04:02.880 --> 0:04:06.440 Ore companies. So so you know, if you have a 0:04:06.440 --> 0:04:08.880 lot of force sellers, that puts some of the value 0:04:08.920 --> 0:04:14.520 in question for these two businesses. But I would say, look, 0:04:14.680 --> 0:04:17.240 I mean Angler have kind of opened the door a 0:04:17.279 --> 0:04:19.880 little bit because they've said, well, you know, we will 0:04:19.880 --> 0:04:22.720 spin off Anglo Platinum, we will deal with we are 0:04:22.760 --> 0:04:25.000 going to deal with this issue because you know, we 0:04:25.320 --> 0:04:28.320 think that a slimmer version of the company without Anglo 0:04:28.400 --> 0:04:31.560 Platinum is best for both companies. So they've kind of 0:04:31.720 --> 0:04:35.000 slightly opened up the door in terms of, well, we're 0:04:35.000 --> 0:04:37.279 going to do half of that anyway. So perhaps a 0:04:37.320 --> 0:04:40.200 compromise for BHP would be Tosaka, will you do that 0:04:40.480 --> 0:04:44.680 and we'll deal with CUMBA that that's possibly the next 0:04:44.680 --> 0:04:46.360 sort of compromise that may come out. 0:04:46.880 --> 0:04:49.520 I mean, that's why it's so funny because after BHP 0:04:50.040 --> 0:04:52.200 came out with the first offer, then Angler, to kind 0:04:52.200 --> 0:04:53.360 of fend them off, was like, all. 0:04:53.360 --> 0:04:56.520 Right, right, we will divest a couple of these assets. 0:04:56.520 --> 0:04:59.160 So they're like weirdly giving approval to the deal, but 0:04:59.240 --> 0:05:02.280 also not at this same time, it's very odd taking 0:05:02.279 --> 0:05:03.560 a step back for a second ground. 0:05:04.240 --> 0:05:06.560 Why does BHP want Anglo so badly? 0:05:10.240 --> 0:05:13.400 I think, I think, well, there are two reasons. One, 0:05:13.400 --> 0:05:15.320 I think there is a bit of there. There was 0:05:15.360 --> 0:05:19.880 a bit of opportunism because Anglo share price was relative 0:05:19.920 --> 0:05:23.320 to every every everyone else there will the diversified miners 0:05:23.560 --> 0:05:26.440 was under pressure after they cut production guidance and the 0:05:26.480 --> 0:05:28.960 share price reacted badly on the back of that. So 0:05:29.000 --> 0:05:31.599 there was a there is some opportunism. But if you 0:05:31.640 --> 0:05:34.480 look at the sort of scope and the quality of 0:05:34.520 --> 0:05:36.240 their copper assets, if you look at it on a 0:05:36.279 --> 0:05:40.320 margin basis, just a simple margin basis, their copper business 0:05:40.360 --> 0:05:45.160 actually generates better margins than BHP's overall. Now, in part 0:05:45.200 --> 0:05:48.560 because BHP has Olympic Dam in South Australia, which has 0:05:48.560 --> 0:05:51.520 been a challenging asset for them, But nevertheless, the quality 0:05:51.600 --> 0:05:54.320 is really good and they have a lot of expansion 0:05:54.400 --> 0:05:57.840 options within their copper portfolio. So these are really good 0:05:57.880 --> 0:06:01.279 assets and it would be very difficult to get hold of. 0:06:02.960 --> 0:06:05.880 So I think, you know, it's I can see that 0:06:06.040 --> 0:06:10.040 the attractiveness in the whole copper portfolio for BHP. 0:06:10.960 --> 0:06:13.320 Grant, are you as bullish on copper as. 0:06:13.520 --> 0:06:15.480 The rest of the universe? The rest of the universe. 0:06:17.720 --> 0:06:19.920 Let me put it this way, I think the current 0:06:20.000 --> 0:06:23.039 price has got well away from where we are on 0:06:23.080 --> 0:06:25.480 a fundamental basis, So I think there's a lot of 0:06:26.200 --> 0:06:30.880 speculative interest in the metal. And you know, just as 0:06:30.880 --> 0:06:33.120 a as a very rough gauge, the amount of interest 0:06:33.160 --> 0:06:36.200 I'm getting from from more generalists people I haven't spoken 0:06:36.240 --> 0:06:39.279 to before kind of gives me that rough sense that 0:06:39.720 --> 0:06:43.279 you know, I think we're very very squarely in a 0:06:43.320 --> 0:06:45.800 bull market, but there is a lot of speculative interest 0:06:45.839 --> 0:06:47.960 in the in the metal as well, so you know, yes, 0:06:48.120 --> 0:06:50.160 I can see the long term appeal. I just think 0:06:50.200 --> 0:06:52.520 where we are currently, we're a little bit of drift 0:06:52.520 --> 0:06:55.159 from where fundamentals should suggest the price should be. 0:06:55.320 --> 0:06:58.400 Yeah, that's all cyclical structural thing, right, structural shift We 0:06:58.440 --> 0:07:01.800 need copper for the long term data centers, for the grid, 0:07:01.920 --> 0:07:04.320 for the power industry, for the green transition. But it's 0:07:04.320 --> 0:07:06.159 still cyclical, right, Like it's still going to be about 0:07:06.400 --> 0:07:09.600 China's property sector is not so great, et cetera. How 0:07:09.600 --> 0:07:11.600 do you think this plays out? So Anglo is going 0:07:11.680 --> 0:07:14.160 to talk to BHP until May twenty ninth, what do 0:07:14.160 --> 0:07:16.400 you think happens in these seven days? 0:07:18.880 --> 0:07:21.560 Well, there's got to well, there's got to be a 0:07:21.560 --> 0:07:24.080 bit of movement. I think the interesting thing if you 0:07:24.120 --> 0:07:28.239 if you read the Angler response, there wasn't there wasn't 0:07:28.440 --> 0:07:32.840 you know, it wasn't there that the BHP's bid undervalued 0:07:32.880 --> 0:07:35.680 the company. So all it's all going to well, I 0:07:35.720 --> 0:07:37.880 think it all boils down to the deal structure. Now, 0:07:38.320 --> 0:07:40.720 you know, as I say, BHP is willing to compromise 0:07:40.760 --> 0:07:45.120 on perhaps Cumber, they move closer together, or there's some 0:07:45.160 --> 0:07:49.679 sort of adjustment where bhd's BHP does lift an offer 0:07:50.080 --> 0:07:53.560 in lieu of the fact that there's this risk that 0:07:54.040 --> 0:07:57.520 if they have to sell Cumber or spin it off, 0:07:57.680 --> 0:08:01.680 this this flowback risk. So I think that's that's what 0:08:01.800 --> 0:08:05.360 the discussion point is going to be. You know, it 0:08:05.400 --> 0:08:08.080 depends on how on the willingness of of Anglo and 0:08:09.280 --> 0:08:11.600 what both parties to compromise a little bit more. 0:08:11.600 --> 0:08:13.960 I guess all right, Gram really appreciate it. Thank you 0:08:14.000 --> 0:08:14.320 so much. 0:08:14.360 --> 0:08:18.119 Grants for Bloomberg Intelligence, a global head of metals and mining. 0:08:18.160 --> 0:08:20.800 On the latest, you're. 0:08:20.640 --> 0:08:24.920 Listening to the Bloomberg Intelligence Podcast. Catch us live weekdays 0:08:24.920 --> 0:08:28.280 at ten am Eastern on applecar Play and Android Auto 0:08:28.320 --> 0:08:31.280 with the Bloomberg Business. You can also listen live on 0:08:31.360 --> 0:08:34.600 Amazon Alexa from our flagship New York station. Just say 0:08:34.679 --> 0:08:38.000 Alexa play Bloomberg eleven thirty. 0:08:38.600 --> 0:08:41.320 Let's get more on all of those. Jim Bartasha's Bloomberg Intelligence. 0:08:41.320 --> 0:08:44.080 The senior analyst covers retail, staples and packaged food. 0:08:44.480 --> 0:08:47.160 She's joining us, all right, Jennifer, we'll walk us through 0:08:47.559 --> 0:08:48.440 the Target numbers. 0:08:49.679 --> 0:08:52.280 Well, so, when we saw the results today, obviously Target 0:08:52.280 --> 0:08:54.640 missed on profit, which is really one of the catalysts 0:08:54.679 --> 0:08:58.400 behind the stock being down today. But they are very 0:08:58.400 --> 0:09:01.280 optimistic about second quarter and for the rest of the year, 0:09:01.440 --> 0:09:03.320 and so I think there's a little bit of reticence 0:09:03.320 --> 0:09:06.640 about how realistic that is when it comes to second 0:09:06.720 --> 0:09:09.240 quarter in terms of same store sales. You know, Target 0:09:09.280 --> 0:09:11.320 says that they're going to return to profit, like they're 0:09:11.320 --> 0:09:15.240 going to return to growth in second quarter. It's feasible, 0:09:15.320 --> 0:09:18.240 but remember last year second quarter is when they had 0:09:18.240 --> 0:09:20.720 the blowback from all of the boycotts, so they have 0:09:20.760 --> 0:09:24.559 a really easy comparison when you talk about a year 0:09:24.600 --> 0:09:27.720 over year. So that return to growth, yes, but there's 0:09:27.760 --> 0:09:30.280 a caveat around it. That means to me that the 0:09:30.320 --> 0:09:33.480 second half is going to be really important if they're 0:09:33.480 --> 0:09:35.800 going to reach those goals that they put out today. 0:09:36.640 --> 0:09:41.560 Is the Target shopper the same similar, no relation to 0:09:41.600 --> 0:09:42.440 the Walmart shopper. 0:09:43.320 --> 0:09:46.560 Well, historically speaking, the Target shopper has been a slightly 0:09:46.640 --> 0:09:50.040 higher income household. They tend to be a little bit 0:09:50.040 --> 0:09:56.400 more fashion forward, fashion focus type individuals, so there's been overlap. 0:09:56.480 --> 0:09:59.719 But Walmart has slowly been encroaching on what has been 0:09:59.720 --> 0:10:03.199 Target gets kind of main audience, and Target has seen 0:10:03.320 --> 0:10:07.440 that their customers are under a lot of pressure because 0:10:07.440 --> 0:10:10.120 they're sort of middle income households. There's been a lot 0:10:10.120 --> 0:10:13.679 of inflationary pressure, a lot of cutbacks and discretionary spending, 0:10:14.520 --> 0:10:17.200 so there's been kind of pressure from both sides, and 0:10:17.240 --> 0:10:20.000 so Walmart says they're going to up their private label game, 0:10:20.080 --> 0:10:22.720 especially in apparel that could be a threat to Target, 0:10:22.800 --> 0:10:26.319 but it is one of Target's core strengths. So if 0:10:26.320 --> 0:10:29.360 they can get people to come back and start engaging again, 0:10:30.320 --> 0:10:34.160 that's really what historically has helped Target drive their success. 0:10:34.559 --> 0:10:37.040 So reaffirming their guidance for the full year, I mean, 0:10:37.160 --> 0:10:38.720 like you mentioned, that means they're going to have to 0:10:38.760 --> 0:10:40.840 really deliver in the back of what are the levers 0:10:40.960 --> 0:10:42.000 they can pull to do that. 0:10:43.240 --> 0:10:45.720 So from a profit perspective, they have a lot of 0:10:45.760 --> 0:10:47.800 things that are that they've been doing in terms of 0:10:47.840 --> 0:10:50.920 cost control, in terms of streamlining their supply chain. Their 0:10:50.960 --> 0:10:53.800 inventory was down in another seven percent this quarter. Those 0:10:53.800 --> 0:10:56.160 are all great things because it helps make them more 0:10:56.200 --> 0:11:00.240 efficient and cost effective. So from a margin perspective, you know, 0:11:00.280 --> 0:11:05.480 there's still some runway to continue to expand margins. The 0:11:05.600 --> 0:11:07.599 real question is are they going to be able to 0:11:07.679 --> 0:11:11.960 drive sales growth. What's concerning is that the in store 0:11:12.000 --> 0:11:17.000 sales for same store sales are still significantly lower. And 0:11:17.320 --> 0:11:20.439 you know, part of the idea behind the discretionary categories 0:11:20.480 --> 0:11:22.240 is that people come into stores and they browse and 0:11:22.280 --> 0:11:25.319 they find an outfit or they find an accessory. And 0:11:25.520 --> 0:11:28.480 it's great that digital sales are reaccelerating, but if people 0:11:28.520 --> 0:11:31.160 aren't in the store, that's a hard thing for Target 0:11:31.200 --> 0:11:31.719 to deal with. 0:11:32.640 --> 0:11:35.360 Hey, Jen, want to think back to the Walmart releases 0:11:35.400 --> 0:11:37.880 that I've really paid attention to. I always see double digit, 0:11:37.960 --> 0:11:43.040 maybe twenty percent e commerce sales growth. How does Target 0:11:43.040 --> 0:11:43.360 do there? 0:11:44.360 --> 0:11:44.560 Well? 0:11:44.640 --> 0:11:47.920 Target actually does pretty well in terms of digital sales growth, 0:11:47.960 --> 0:11:51.160 but there's a very different strategy. Walmart is pursuing a 0:11:51.200 --> 0:11:54.640 strategy of as many possible items as possible on the 0:11:54.640 --> 0:11:57.199 Walmart dot com. They do a lot of third party sales. 0:11:57.600 --> 0:12:00.640 When it comes to Target, they're broader shurtment is much 0:12:00.679 --> 0:12:04.240 more curated, and so they are very thoughtful about which 0:12:04.320 --> 0:12:07.720 vendors they bring onto the Target dot com to enhance 0:12:07.760 --> 0:12:11.200 the offering that Target has. So it's it's there's there're 0:12:11.240 --> 0:12:15.560 different different approaches to e commerce. Both are seeing some success, 0:12:16.080 --> 0:12:19.360 but you can't really compare them, you know, strictly side 0:12:19.400 --> 0:12:20.000 by side. 0:12:21.480 --> 0:12:24.880 What other company, Like, what did you make of then TJX, 0:12:24.920 --> 0:12:27.760 for example, because in some ways they can be immune 0:12:27.880 --> 0:12:31.400 from the slowdown, right because everyone me included will go shop. 0:12:31.440 --> 0:12:34.240 There are we seeing that reflected in the numbers? 0:12:35.200 --> 0:12:37.400 Yeah, I mean, I think the strong results from TJX 0:12:37.400 --> 0:12:40.400 today just underscore that people still like the treasure Hunt, 0:12:40.600 --> 0:12:43.960 but people are seeking value. And one of the things 0:12:43.960 --> 0:12:46.040 that Target talked about today is that they need to 0:12:46.120 --> 0:12:50.040 reinforce that value proposition. That's part of why they've rejiggered 0:12:50.040 --> 0:12:55.239 their entire Target loyalty program with Target Circle TJX. Everybody 0:12:55.280 --> 0:12:58.200 knows you can go and you have the potential to 0:12:58.280 --> 0:13:01.760 find something that is an amazing deal, and that's enough 0:13:01.760 --> 0:13:05.360 to draw people into stores. Target has has gotten a 0:13:05.360 --> 0:13:06.200 little bit away from that. 0:13:06.480 --> 0:13:08.000 Yeah, yeah, see paulism. 0:13:08.080 --> 0:13:09.880 So Paul's never been in a TJX, so I don't 0:13:09.880 --> 0:13:11.640 think he truly understands the beauty of this. 0:13:11.760 --> 0:13:13.920 I went to my first Walmart last weekend. You didn't, Yeah, 0:13:13.960 --> 0:13:14.520 I'm having. 0:13:14.559 --> 0:13:16.840 So that's like a semi gold star. So they have 0:13:17.480 --> 0:13:20.440 not only just discounted stuff, but they have the runway 0:13:21.120 --> 0:13:24.360 and that's the jam. That is designer stuff on some 0:13:24.480 --> 0:13:26.680 serious sale and you can get that on clearance and 0:13:26.679 --> 0:13:29.359 you're looking at like a ninety percent off a designer 0:13:29.880 --> 0:13:30.640 kind of situation. 0:13:30.880 --> 0:13:32.640 Do you know beforehanded whether it's going to be there? 0:13:32.720 --> 0:13:34.000 No, that's that's that's fun. 0:13:34.360 --> 0:13:36.679 Then you add the treasure hunt and you don't know 0:13:36.840 --> 0:13:39.080 the beauty that will be unveiled as you go in. 0:13:39.320 --> 0:13:40.559 Am I selling this appropriately? 0:13:40.679 --> 0:13:40.839 Jen? 0:13:41.480 --> 0:13:44.160 Absolutely? I mean that is that is some of the appeal. 0:13:44.280 --> 0:13:46.080 You just you never know what you're gonna find, and 0:13:46.120 --> 0:13:48.080 so you go as often as you as you can 0:13:48.200 --> 0:13:50.560 because there's a chance you'll find that amazing deal. 0:13:50.960 --> 0:13:54.880 What's the promotional environment out there, Jenner. Are the Walmarts, 0:13:54.920 --> 0:13:58.040 the tjx's, the targets. Are they putting out a lot 0:13:58.080 --> 0:14:00.480 of promotions to get people in this show store or 0:14:00.480 --> 0:14:01.320 to click that button? 0:14:02.040 --> 0:14:06.920 Yeah, there's the promotional environment has been escalating, and so 0:14:07.120 --> 0:14:10.000 we talk you hear Walmart talk about rollbacks that's basically 0:14:10.280 --> 0:14:14.280 putting things on sale or discounts. Target talked about cutting 0:14:14.280 --> 0:14:17.320 prices on by the end of the summer up to 0:14:17.360 --> 0:14:21.600 five thousand items, all for essential So the idea is 0:14:21.640 --> 0:14:25.720 to try to advertise that there's value proposition there and 0:14:25.720 --> 0:14:27.640 you know in force that they're they're looking at for 0:14:27.680 --> 0:14:30.960 the customer, trying to get people to engage in in 0:14:31.120 --> 0:14:34.000 coming back and perhaps buying a little bit more. And 0:14:34.320 --> 0:14:36.840 let's be honest, it doesn't hurt from a public relations 0:14:36.840 --> 0:14:39.640 perspective when you have the White House talking about retailers 0:14:39.680 --> 0:14:43.040 not being responsible enough and rolling back costs on essentials. 0:14:43.680 --> 0:14:45.960 So there's certainly a little bit of a play there 0:14:46.000 --> 0:14:47.840 to help appease some of that political pressure. 0:14:47.880 --> 0:14:49.080 Is but that doesn't make me want to buy the 0:14:49.120 --> 0:14:50.000 stock though. 0:14:50.800 --> 0:14:54.760 No, But but it does, but it does help it, 0:14:54.880 --> 0:14:57.960 you know, it does help ultimately from a consumer perspective. 0:14:58.120 --> 0:15:00.720 If you're if you if you think that it's a 0:15:00.720 --> 0:15:03.080 better value to shop there, or that you're getting more 0:15:03.120 --> 0:15:05.400 for your money, you're more inclined to shop there, and 0:15:05.400 --> 0:15:07.960 that ultimately leads to your traffic and your sales, and 0:15:07.960 --> 0:15:09.720 that is what is appealing to investors. 0:15:10.240 --> 0:15:10.720 What are the. 0:15:10.680 --> 0:15:14.720 Dollar stores seeing these days? Are they seeing a pickup 0:15:15.200 --> 0:15:18.280 in traffic? Maybe people trading down from a Walmart or Target. 0:15:19.240 --> 0:15:22.000 There's been some trade down into the dollar stores, and 0:15:22.040 --> 0:15:24.000 we tend to see that every time we go through 0:15:24.080 --> 0:15:29.320 sort of an economic depression. But one of the challenges 0:15:29.360 --> 0:15:31.480 for the dollar stores is that people are coming in, 0:15:31.920 --> 0:15:35.840 but they've abandoned the discretionary spending, even though at a 0:15:35.880 --> 0:15:39.800 dollar store the discretionary spending is not that expensive, so 0:15:40.040 --> 0:15:43.680 their consumables mix. For example, a Dollar General is close 0:15:43.680 --> 0:15:46.360 to eighty percent of their sales are what we could 0:15:46.400 --> 0:15:50.800 be considered consumable items. That is good in terms of 0:15:50.840 --> 0:15:52.960 people coming into the store, but it's not great for 0:15:53.040 --> 0:15:56.400 the long term mix for the company because those are 0:15:56.560 --> 0:16:00.400 very low margin sales. They're high frequency, but people have 0:16:00.480 --> 0:16:02.920 been really watching those, you know, watching their wallets, and 0:16:03.000 --> 0:16:07.000 so the basket sizes are a little smaller. The mix 0:16:07.080 --> 0:16:09.760 is more just you know, more consumable. So we'll be 0:16:09.800 --> 0:16:14.320 watching for any signs that they're getting some hiring, hiring 0:16:14.320 --> 0:16:17.400 come households coming in to spend on those more discretionary items, 0:16:17.840 --> 0:16:21.160 or that the their their core consumers are loosening spending 0:16:21.160 --> 0:16:24.280 a little bit. But honestly, this quarter is probably not 0:16:24.280 --> 0:16:25.560 going to be you know, panning out. 0:16:25.800 --> 0:16:26.760 No, definitely not. 0:16:26.880 --> 0:16:28.800 I'm target falling the most I should say, going back 0:16:28.800 --> 0:16:31.240 to Target, the mostion is November of twenty twenty two. 0:16:31.360 --> 0:16:34.200 Does that feel extreme to you, considering that the actual 0:16:34.280 --> 0:16:37.320 numbers weren't like terrible terrible? 0:16:38.400 --> 0:16:42.040 I think the I think there's a you shouldn't dis 0:16:42.200 --> 0:16:45.080 Target for being Target. I guess this is my response 0:16:45.160 --> 0:16:47.880 to that. And what I mean, like, what I mean 0:16:47.920 --> 0:16:50.680 by that is, you know, Target has always been about 0:16:51.200 --> 0:16:54.440 the fashion, It's been about the discretionary categories. It's been 0:16:54.480 --> 0:16:57.840 about home decoor, it's been about things you know, of 0:16:57.880 --> 0:17:01.640 that nature. They've never tried to be, you know, heavy 0:17:01.640 --> 0:17:04.880 on the essentials category. And so when you've got consumer 0:17:04.920 --> 0:17:07.800 weakness and you've got people who aren't spending in those categories, 0:17:08.040 --> 0:17:10.399 it's hard to beat up Target for being true to 0:17:10.440 --> 0:17:13.760 what their values are. And so you know, you know 0:17:14.920 --> 0:17:16.720 what I would say is, you know, if we see 0:17:16.720 --> 0:17:20.600 some improvement in just the discretionary spending, Target will start 0:17:20.640 --> 0:17:23.520 to take off again. You know, their sales will accelerate, 0:17:23.520 --> 0:17:26.439 people will be coming back. It's it seems more of 0:17:26.440 --> 0:17:28.320 a waiting game for when the consumer is ready for 0:17:28.359 --> 0:17:29.040 that at this point. 0:17:29.440 --> 0:17:31.959 All right, Jen, thanks a lot. We think you're just awesome. 0:17:31.960 --> 0:17:32.439 Thanks so much. 0:17:32.520 --> 0:17:36.919 Jim Bartasha's Bloomberg Intelligence senior retail, staples and packaged food 0:17:37.000 --> 0:17:40.560 analysts Paul, So, can you go to a TJX or 0:17:40.600 --> 0:17:43.280 like a target sometimes, like we just do like one every. 0:17:43.119 --> 0:17:46.200 Month space a little bit? Is there stuff for dudes 0:17:46.200 --> 0:17:48.080 in TJX or? Okay? 0:17:48.240 --> 0:17:50.159 Yeah, I mean no, I mean you're definitely gonna hate it, 0:17:50.200 --> 0:17:51.280 like this is not made. 0:17:51.200 --> 0:17:55.920 For you, but here, but go anyway, channel check. 0:17:55.760 --> 0:18:01.760 It you're listening to the Bloomberg and Intelligence podcast. Catch 0:18:01.840 --> 0:18:04.560 us live weekdays at ten am Eastern on Apple car 0:18:04.680 --> 0:18:07.200 Play and then broyd Outo with the Bloomberg Business App. 0:18:07.200 --> 0:18:10.440 Listen on demand wherever you get your podcasts, or watch 0:18:10.520 --> 0:18:12.440 us live on YouTube. 0:18:13.680 --> 0:18:15.080 Let's just be totally clear here. 0:18:15.400 --> 0:18:18.520 Nothing's going to matter until today when Nvidia comes out 0:18:18.520 --> 0:18:21.280 after the closing bill, and then when Future's open later 0:18:21.320 --> 0:18:21.760 on that night. 0:18:21.800 --> 0:18:23.840 That's when we're going to see the action. Okay, let's 0:18:23.840 --> 0:18:24.400 just be all to be clear. 0:18:24.440 --> 0:18:26.560 On Uportunately, we have cow Master Tim Sentovik. They'll be 0:18:26.560 --> 0:18:27.800 breaking it down on Bloomberg Radio. 0:18:28.040 --> 0:18:28.919 That's right, so we'll have that. 0:18:29.119 --> 0:18:32.159 Sylvia Jablonski is chief executive officer and chief investment officer 0:18:32.160 --> 0:18:34.040 over it Defiance ETFs. 0:18:34.040 --> 0:18:34.679 She joins us. 0:18:34.680 --> 0:18:39.359 Now, Hey, Sylvia, how how will Nvidia move the market? 0:18:39.400 --> 0:18:42.200 I know that's such a silly question, but in reality, 0:18:42.320 --> 0:18:45.600 what is its potential to move after hours? 0:18:46.680 --> 0:18:48.800 Good morning, Alex, great to see you. 0:18:48.800 --> 0:18:52.240 You know, I think it certainly has a huge, huge 0:18:52.280 --> 0:18:54.600 impact on how markets move, and we'll have a huge 0:18:54.600 --> 0:18:58.320 impact on markets move on how markets move based on 0:18:58.520 --> 0:18:59.920 what we hear after ours. 0:19:00.240 --> 0:19:01.840 You know, I just like, look back over the couple 0:19:01.880 --> 0:19:02.320 of years. 0:19:02.359 --> 0:19:04.240 I feel like, when you know, we had the tech 0:19:04.280 --> 0:19:06.800 recession in twenty twenty two, Apple was kind of the 0:19:06.880 --> 0:19:09.440 darling that was holding up amongst the others. And then 0:19:09.880 --> 0:19:11.960 you know, last year everything kind of rebounded and then 0:19:11.960 --> 0:19:14.240 the story was you know, Tesla for a while until 0:19:14.280 --> 0:19:17.040 it started to crash, and then it quickly transitioned over 0:19:17.080 --> 0:19:20.160 to chat ChiPT and you know Microsoft and the video 0:19:20.240 --> 0:19:22.240 now and so the video is the. 0:19:22.200 --> 0:19:24.520 Start of the show this year, and whatever Jens M. 0:19:24.560 --> 0:19:27.320 Wong says is going to dictate whether or not we have, 0:19:28.600 --> 0:19:29.520 you know, a rally at. 0:19:29.440 --> 0:19:31.000 Least in the short term, or pull back in the 0:19:31.000 --> 0:19:31.679 short term. 0:19:32.359 --> 0:19:33.879 I don't think, you know, I don't think that the 0:19:33.920 --> 0:19:36.240 result anyone thinks the results are going to be devastating, right, 0:19:36.320 --> 0:19:38.480 and the stock does tend to move around earnings, but 0:19:38.720 --> 0:19:41.160 you know, the future outlook here is great either way. 0:19:42.080 --> 0:19:44.560 Hey, so be one of the many reasons we like 0:19:44.680 --> 0:19:46.280 chatting with you as we get a good feel for 0:19:46.320 --> 0:19:49.160 what's happening in the ETF space. Are we seeing We're 0:19:49.160 --> 0:19:51.600 seeing some big moves in a commodity space, whether it's 0:19:51.640 --> 0:19:55.520 gold or copper or chocolate. You know, are you seeing 0:19:55.560 --> 0:19:57.200 that in the flows in your ETFs. 0:19:58.560 --> 0:19:59.959 Yeah, we're you know, we're seeing that. 0:20:00.119 --> 0:20:03.840 So we actually we actually have a couple of ETFs 0:20:03.840 --> 0:20:05.879