1 00:00:02,120 --> 00:00:05,040 Speaker 1: Happy Thanksgiving everybody, and thank you for joining us on 2 00:00:05,080 --> 00:00:08,799 Speaker 1: this special edition of Bloomberg Daybreak. US markets are closed 3 00:00:08,880 --> 00:00:11,840 Speaker 1: for the holiday. I'm Nathan Hager coming up this hour. 4 00:00:12,080 --> 00:00:14,760 Speaker 1: It's been a voladile November for both the stock and 5 00:00:14,920 --> 00:00:17,759 Speaker 1: cryptocurrency markets. We'll look at what's in store for the 6 00:00:17,800 --> 00:00:20,159 Speaker 1: rest of this year and into twenty twenty six with 7 00:00:20,320 --> 00:00:24,119 Speaker 1: Scott Martin, chief investment officer of Kingsview Wealth Management, and 8 00:00:24,120 --> 00:00:28,560 Speaker 1: Bloomberg Intelligence senior commodity strategist Mike mcgloone. Plus, we'll update 9 00:00:28,600 --> 00:00:31,200 Speaker 1: you on the latest anti trust battles facing high tech 10 00:00:31,520 --> 00:00:35,839 Speaker 1: with Bloomberg Intelligence senior litigation analyst Jennifer Ree. But first, 11 00:00:35,880 --> 00:00:38,560 Speaker 1: we are entering one of the busiest and most important 12 00:00:38,560 --> 00:00:41,639 Speaker 1: times of year for retail. How are things shaping up 13 00:00:41,720 --> 00:00:44,120 Speaker 1: as we get said for Black Friday and the countdown 14 00:00:44,159 --> 00:00:46,960 Speaker 1: to the holidays. Let's ask a couple of our senior 15 00:00:47,000 --> 00:00:50,240 Speaker 1: analysts in the retail space, Punam Goyle and Lindsay Dutch 16 00:00:50,600 --> 00:00:54,480 Speaker 1: of Bloomberg Intelligence. Happy holidays to both of you. And 17 00:00:54,600 --> 00:00:56,960 Speaker 1: I think I saw a report going into this conversation 18 00:00:56,960 --> 00:01:00,440 Speaker 1: from the National Retail Federation. They're predicting that holiday spending 19 00:01:00,480 --> 00:01:03,880 Speaker 1: I think could pass a trillion dollars this year. Punum, 20 00:01:03,920 --> 00:01:05,840 Speaker 1: I'll start with you. Do you see those kind of 21 00:01:05,920 --> 00:01:07,039 Speaker 1: levels from consumers? 22 00:01:07,400 --> 00:01:10,680 Speaker 2: Yes? Absolutely. The consumer has been quite resilient all year, 23 00:01:10,720 --> 00:01:14,160 Speaker 2: to our surprise, despite the tariff dwins, and we do 24 00:01:14,280 --> 00:01:19,640 Speaker 2: think that spending will continue into Thanksgiving weekend especially and 25 00:01:19,680 --> 00:01:23,319 Speaker 2: then into December. But that said, spending will be selective. 26 00:01:23,840 --> 00:01:28,120 Speaker 2: Shoppers are conscious price conscious more notably, and they are 27 00:01:28,160 --> 00:01:31,160 Speaker 2: spending where they find the product that they're looking for. 28 00:01:31,760 --> 00:01:34,520 Speaker 1: Lizzie, let's bring you in. What are you seeing in 29 00:01:34,640 --> 00:01:39,200 Speaker 1: terms of consumer behavior and where they could be spending 30 00:01:39,480 --> 00:01:40,759 Speaker 1: as we head into the holidays. 31 00:01:41,040 --> 00:01:44,120 Speaker 3: Yes, I would agree. I think we're seeing resilience, especially 32 00:01:44,160 --> 00:01:48,520 Speaker 3: coming from that higher income consumer, while the lower income 33 00:01:48,560 --> 00:01:51,080 Speaker 3: consumer might be pulling back just a drop when we 34 00:01:51,160 --> 00:01:55,720 Speaker 3: compare that year over year. But as Puna mentioned, you know, 35 00:01:55,760 --> 00:01:59,440 Speaker 3: we do see growth coming into the season, and although 36 00:01:59,480 --> 00:02:03,520 Speaker 3: there is a focus on value and price, consumers are 37 00:02:03,560 --> 00:02:07,560 Speaker 3: splurging on things that they really want or that they 38 00:02:08,040 --> 00:02:11,399 Speaker 3: need so for a best buy. For example, we see 39 00:02:11,400 --> 00:02:15,720 Speaker 3: strength in gaming, computing, phones and the Dick's sporting goods. 40 00:02:15,760 --> 00:02:19,080 Speaker 3: We see strengths continuing on both footwear and apparel for 41 00:02:19,200 --> 00:02:21,840 Speaker 3: sort of those new trendy sports. 42 00:02:21,440 --> 00:02:23,959 Speaker 1: Items now I'll put them. I knowe you cover a 43 00:02:24,000 --> 00:02:27,640 Speaker 1: lot of apparel retailers as well in your focus at 44 00:02:27,639 --> 00:02:30,400 Speaker 1: Bloomberg Intelligence. How are some of those companies set up 45 00:02:30,400 --> 00:02:31,080 Speaker 1: for the holidays. 46 00:02:31,400 --> 00:02:33,560 Speaker 2: I think they're set up quite nicely. I think the 47 00:02:33,680 --> 00:02:36,040 Speaker 2: product there's a lot of fashion, there's a lot of newness. 48 00:02:36,080 --> 00:02:39,400 Speaker 2: In fact, we ran a sneaker survey just earlier this 49 00:02:39,520 --> 00:02:42,000 Speaker 2: month and what we found is that people want to 50 00:02:42,040 --> 00:02:45,480 Speaker 2: buy sneakers for the holidays, So sneakers are a top category. 51 00:02:45,600 --> 00:02:49,800 Speaker 2: Other top categories based on surveys we've seen are apparel, home, and, 52 00:02:49,880 --> 00:02:53,920 Speaker 2: as a Lindsay said, electronics. So these are still the 53 00:02:54,080 --> 00:02:57,640 Speaker 2: top categories in addition to of course toys where people 54 00:02:57,720 --> 00:02:59,560 Speaker 2: will be spending their dollars this holiday. 55 00:03:00,120 --> 00:03:03,520 Speaker 1: Interesting to bring toys in as well, given some of 56 00:03:03,560 --> 00:03:08,720 Speaker 1: the tariff headwinds those types of products could be facing 57 00:03:09,400 --> 00:03:11,799 Speaker 1: not just in the holidays, but into next year as well. 58 00:03:11,800 --> 00:03:15,320 Speaker 1: Could we be seeing tariff headwinds for retail going into 59 00:03:15,360 --> 00:03:15,760 Speaker 1: next year? 60 00:03:15,800 --> 00:03:18,959 Speaker 3: Lindsay Yeah, So the toy backdrop this year is very 61 00:03:19,000 --> 00:03:22,960 Speaker 3: different than most years prior. You know, typically we see 62 00:03:23,400 --> 00:03:26,400 Speaker 3: big retailers like a Walmart or a target. They're taking 63 00:03:26,440 --> 00:03:30,919 Speaker 3: their holiday toy inventory in July, sort of the mid 64 00:03:30,960 --> 00:03:34,240 Speaker 3: mid middle of the year. This year, we saw a 65 00:03:34,280 --> 00:03:37,360 Speaker 3: significant delay in those orders. They kind of fell into 66 00:03:37,400 --> 00:03:40,760 Speaker 3: the fourth quarter, so there was a delay, and they 67 00:03:40,800 --> 00:03:44,440 Speaker 3: also were taking on smaller shipments than historically they've done, 68 00:03:44,720 --> 00:03:48,000 Speaker 3: thinking that they might replenish some product with you know, 69 00:03:48,400 --> 00:03:52,560 Speaker 3: domestic shipments, you know, in that holiday season. So there's 70 00:03:52,600 --> 00:03:55,600 Speaker 3: a lot of uncertainty heading into twenty twenty six for 71 00:03:55,720 --> 00:03:59,200 Speaker 3: the toy makers and that sort of category as a whole. 72 00:03:59,480 --> 00:04:02,440 Speaker 3: Just because we saw us such a significant delay, you know, 73 00:04:02,480 --> 00:04:05,080 Speaker 3: we don't really know where demand is. And if we 74 00:04:05,080 --> 00:04:08,440 Speaker 3: look at twenty twenty five as the whole, really most 75 00:04:08,480 --> 00:04:11,240 Speaker 3: of the demand has not been driven by kids toys. 76 00:04:11,280 --> 00:04:15,120 Speaker 3: It's really been driven by adults their interest in trading cards, 77 00:04:15,120 --> 00:04:18,480 Speaker 3: collectibles and building sets, and the holiday is quite different 78 00:04:18,480 --> 00:04:19,560 Speaker 3: with a focus on kids. 79 00:04:19,720 --> 00:04:23,280 Speaker 1: We're speaking with Lindsey Dutch, a senior retail analyst at 80 00:04:23,400 --> 00:04:26,720 Speaker 1: Bloomberg Intelligence, along with Punham Goyle, also a senior retail 81 00:04:26,760 --> 00:04:31,000 Speaker 1: analyst at Bloomberg Intelligence. Going into the holidays, of course, 82 00:04:31,640 --> 00:04:34,760 Speaker 1: a lot of customers are thinking about deals going into 83 00:04:34,760 --> 00:04:39,320 Speaker 1: Black Friday and beyond how important PUNAM is this weekend 84 00:04:39,400 --> 00:04:42,039 Speaker 1: in particular for the retailers and what kind of deals 85 00:04:42,080 --> 00:04:43,039 Speaker 1: are we seeing. 86 00:04:43,080 --> 00:04:46,000 Speaker 2: This weekend is very important. It actually kicks off holiday 87 00:04:46,040 --> 00:04:49,320 Speaker 2: despite all the deals we've been seeing prior to today, 88 00:04:49,680 --> 00:04:54,400 Speaker 2: so I think deals will be prevalent. We don't expect steep, 89 00:04:54,480 --> 00:04:57,000 Speaker 2: steep discounts. You know, in the past, it's eight years 90 00:04:57,000 --> 00:05:00,120 Speaker 2: ago when there were inventory issues, we saw fifty six 91 00:05:00,000 --> 00:05:03,120 Speaker 2: seventy person off at sometimes. I think we'll probably stay 92 00:05:03,120 --> 00:05:05,560 Speaker 2: in the range of between thirty and forty person off 93 00:05:05,640 --> 00:05:08,320 Speaker 2: on average. That's what we saw last year. So I 94 00:05:08,360 --> 00:05:11,680 Speaker 2: do expect discounts to be similar at most places. But 95 00:05:11,800 --> 00:05:15,599 Speaker 2: you will have those doorbuster deals to get the shopper 96 00:05:15,680 --> 00:05:17,600 Speaker 2: into the store, and we expect those to be there 97 00:05:17,600 --> 00:05:21,040 Speaker 2: at Walmart and Target and some of these department stores 98 00:05:21,040 --> 00:05:24,239 Speaker 2: where that is how they draw in customers. That said, 99 00:05:24,320 --> 00:05:28,320 Speaker 2: today's Thanksgiving Day and stores are closed, so everyone is shopping, 100 00:05:28,480 --> 00:05:31,880 Speaker 2: likely online and spending time with family, and online sales 101 00:05:31,920 --> 00:05:34,480 Speaker 2: we expect to still outpay store sales. 102 00:05:34,720 --> 00:05:38,400 Speaker 1: That's an interesting return to trend to keep the stores 103 00:05:38,480 --> 00:05:41,320 Speaker 1: closed on Thanksgiving. In past years, we've seen some of 104 00:05:41,320 --> 00:05:45,440 Speaker 1: those doorbusters come Thanksgiving night, but Lindsey, if we don't 105 00:05:45,480 --> 00:05:48,840 Speaker 1: see the kinds of deep discounts that there have been 106 00:05:48,880 --> 00:05:52,120 Speaker 1: in the past for the kickoff of holiday shopping season, 107 00:05:52,120 --> 00:05:53,680 Speaker 1: what could that mean for foot traffic? 108 00:05:55,160 --> 00:05:57,160 Speaker 3: So we do still expect, you know, people to come 109 00:05:57,200 --> 00:06:00,839 Speaker 3: out and shop. I agree with Puna Myke the level 110 00:06:00,920 --> 00:06:05,159 Speaker 3: of discounting might be similar to last year, but rolling 111 00:06:05,200 --> 00:06:08,560 Speaker 3: out those discounts and having those special promotions is really 112 00:06:08,600 --> 00:06:12,240 Speaker 3: the key to driving you know, consumers to your store 113 00:06:12,440 --> 00:06:16,320 Speaker 3: or to your website. And in thinking about foot traffic 114 00:06:16,360 --> 00:06:19,719 Speaker 3: to stores, you know, Best Buy sort of discussed that 115 00:06:19,839 --> 00:06:22,719 Speaker 3: they are seeing a strong interest in in store shopping 116 00:06:22,760 --> 00:06:25,760 Speaker 3: coming from gen Z and we see that also in 117 00:06:25,800 --> 00:06:28,560 Speaker 3: our coverage of All to Beauty. So that younger consumer, 118 00:06:28,760 --> 00:06:30,960 Speaker 3: they like to go to the store, they like in 119 00:06:31,040 --> 00:06:33,839 Speaker 3: person shopping, and I think they'll be out for the weekend. 120 00:06:34,240 --> 00:06:36,440 Speaker 1: That's an interesting point as well, is that kind of 121 00:06:36,440 --> 00:06:41,760 Speaker 1: a shift in trend in terms of shopper behavior overall, poonam. 122 00:06:41,440 --> 00:06:44,800 Speaker 2: The mall has become the new hangout spot, and especially 123 00:06:44,839 --> 00:06:47,239 Speaker 2: the malls that are doing really well and have become 124 00:06:47,400 --> 00:06:50,240 Speaker 2: entertainment hubs. So whether it's coming out you know, last 125 00:06:50,240 --> 00:06:52,560 Speaker 2: weekend aired wicket, So there were a lot of teenagers 126 00:06:52,560 --> 00:06:54,760 Speaker 2: in the mall, or if it's just going to a 127 00:06:54,839 --> 00:06:57,560 Speaker 2: restaurant or with the new Dick sporting goods at the 128 00:06:57,600 --> 00:06:59,360 Speaker 2: mall that I went to was the House of Sports, 129 00:06:59,400 --> 00:07:02,679 Speaker 2: a concept where there's entertainment to build into it. That's 130 00:07:02,720 --> 00:07:04,320 Speaker 2: what's attracting these younger people. 131 00:07:05,000 --> 00:07:10,400 Speaker 1: In terms of the overall outlook for retail, we've gotten 132 00:07:10,480 --> 00:07:15,240 Speaker 1: a lot of reports from the companies themselves from their 133 00:07:15,280 --> 00:07:19,000 Speaker 1: earnings just heading into this weekend, Lindsey. Based on what 134 00:07:19,040 --> 00:07:21,840 Speaker 1: we've seen from the earnings reports so far, what does 135 00:07:21,880 --> 00:07:24,600 Speaker 1: that tell us about what we could get into the holidays. 136 00:07:25,760 --> 00:07:29,480 Speaker 3: I think the companies remain pretty conservative in how they're 137 00:07:29,520 --> 00:07:31,840 Speaker 3: thinking about the fourth quarter. They don't want to get 138 00:07:31,880 --> 00:07:34,600 Speaker 3: over their skis when when they're thinking about, you know, 139 00:07:34,720 --> 00:07:37,000 Speaker 3: what the sales might be. You know, we saw pretty 140 00:07:37,520 --> 00:07:41,239 Speaker 3: you know, low outlooks coming out of Best Buy dis 141 00:07:42,960 --> 00:07:46,240 Speaker 3: meaning a deceleration in same source sales growth from the 142 00:07:46,280 --> 00:07:49,560 Speaker 3: third quarter to the fourth quarter. I think that outlook, 143 00:07:49,640 --> 00:07:53,280 Speaker 3: you know, is conservative. They're not really sure on the consumer. 144 00:07:53,320 --> 00:07:55,840 Speaker 3: There is a lot of uncertainty still out there, but 145 00:07:55,920 --> 00:07:59,000 Speaker 3: I think it does leave room for some surprises. You know, 146 00:07:59,040 --> 00:08:02,160 Speaker 3: we have been seen better than expected sales in the 147 00:08:02,200 --> 00:08:04,600 Speaker 3: third quarter, a lot of that being driven by back 148 00:08:04,600 --> 00:08:07,640 Speaker 3: to school, you know, from many retailers across the board, 149 00:08:08,160 --> 00:08:11,440 Speaker 3: and I think there's definitely reason to be optimistic for 150 00:08:11,520 --> 00:08:13,080 Speaker 3: a strong holiday season. 151 00:08:13,400 --> 00:08:16,640 Speaker 1: If we're seeing those kind of conservative outlooks of from 152 00:08:16,720 --> 00:08:20,080 Speaker 1: the businesses punam, does that point to a sort of 153 00:08:20,080 --> 00:08:22,920 Speaker 1: more of a difficulty for these companies to provide the 154 00:08:23,040 --> 00:08:26,520 Speaker 1: kind of, you know, deep holiday discounts that they'd been 155 00:08:26,560 --> 00:08:27,760 Speaker 1: able to do in the past. 156 00:08:28,720 --> 00:08:31,520 Speaker 2: Yeah, I think the conservative outlook stems from the uncertainty 157 00:08:31,560 --> 00:08:34,160 Speaker 2: of just knowing where consumer behavior will be. But in 158 00:08:34,280 --> 00:08:36,719 Speaker 2: terms of the deep discounts, don't get me wrong, there 159 00:08:36,760 --> 00:08:39,880 Speaker 2: will be discounts. It's just you're not going to see 160 00:08:40,320 --> 00:08:43,360 Speaker 2: the store you know, at these deep discounts that we 161 00:08:43,360 --> 00:08:46,040 Speaker 2: were used to seeing, maybe even prior to the pandemic. 162 00:08:46,559 --> 00:08:49,480 Speaker 2: And the reason why you won't see them is because 163 00:08:49,559 --> 00:08:52,400 Speaker 2: inventory is you could imagine this year being a year 164 00:08:52,520 --> 00:08:56,080 Speaker 2: with tariffs and levies added on to retailers, they didn't 165 00:08:56,120 --> 00:08:58,760 Speaker 2: overbuy right so they've been very cautious on how they're 166 00:08:58,760 --> 00:09:02,120 Speaker 2: buying inventory. And for a lot of them, inventory has 167 00:09:02,240 --> 00:09:05,240 Speaker 2: been right sized, which is what's been driving the healthier 168 00:09:05,320 --> 00:09:08,880 Speaker 2: margin and the healthier sales and also healthier full price selling. 169 00:09:09,720 --> 00:09:12,840 Speaker 2: You will find disconsoled. Nike, for example, is still clearing 170 00:09:12,840 --> 00:09:15,520 Speaker 2: out aged inventory and a lot of the at leisure 171 00:09:15,600 --> 00:09:18,319 Speaker 2: brands that are amiss to turn around. That's where you 172 00:09:18,400 --> 00:09:21,480 Speaker 2: find inventory pals, but on old stuff. The new stuff 173 00:09:21,520 --> 00:09:23,760 Speaker 2: I think will be fairly moderate levels. 174 00:09:24,520 --> 00:09:28,880 Speaker 1: Linzie, how do you see retailers weathering tariff impacts into 175 00:09:28,960 --> 00:09:33,839 Speaker 1: next year? We've seen these companies kind of absorb the 176 00:09:34,200 --> 00:09:36,720 Speaker 1: higher costs at least in the in the short term 177 00:09:36,800 --> 00:09:39,600 Speaker 1: some front loading as well as Puna mentioned, But into 178 00:09:39,600 --> 00:09:42,040 Speaker 1: twenty twenty six. What's your expectation there? 179 00:09:43,080 --> 00:09:48,400 Speaker 3: So, I do expect costs generally to continue rising, you know, 180 00:09:48,520 --> 00:09:51,800 Speaker 3: into the next year, at least through the first half. 181 00:09:52,600 --> 00:09:57,480 Speaker 3: So companies will be continuing with their mitigation strategies, whether 182 00:09:57,520 --> 00:10:00,920 Speaker 3: that's you know, continue movement and how they're sourcing, where 183 00:10:01,040 --> 00:10:04,800 Speaker 3: they're selling, the price points, all of those levers that 184 00:10:04,840 --> 00:10:07,240 Speaker 3: they've been pulling sort of this year. I think that 185 00:10:07,400 --> 00:10:10,800 Speaker 3: cost pressure could continue, but we do we have seen, 186 00:10:10,880 --> 00:10:14,199 Speaker 3: as you've mentioned, you know, some resilience on the profit 187 00:10:14,280 --> 00:10:19,000 Speaker 3: line across many retailers, and that is you know, them 188 00:10:19,080 --> 00:10:21,800 Speaker 3: passing some of those costs on or you know, the 189 00:10:21,840 --> 00:10:24,920 Speaker 3: costs haven't come quite to fruition to the levels that 190 00:10:24,960 --> 00:10:28,840 Speaker 3: they were initially expecting. Also, you know, in some of 191 00:10:28,880 --> 00:10:32,360 Speaker 3: the premium brands, like if you think about a Williams Soonoma, 192 00:10:32,440 --> 00:10:36,680 Speaker 3: for example, they are keeping discounts and promotions even for 193 00:10:36,720 --> 00:10:39,920 Speaker 3: the holiday season, very limited and that does allow them 194 00:10:40,040 --> 00:10:43,800 Speaker 3: to maintain such a strong margin even when they're seeing 195 00:10:43,840 --> 00:10:44,599 Speaker 3: some cost. 196 00:10:44,400 --> 00:10:47,400 Speaker 1: Pick up and put them. How do you see some 197 00:10:47,440 --> 00:10:51,080 Speaker 1: of the companies that you cover mitigating tariffs into twenty six. 198 00:10:51,960 --> 00:10:53,560 Speaker 2: Yeah, I think so there's two things that we have 199 00:10:53,559 --> 00:10:55,320 Speaker 2: to think about when we think of twenty twenty six. 200 00:10:55,400 --> 00:10:57,160 Speaker 2: First and the first half of the year, and last 201 00:10:57,240 --> 00:11:00,040 Speaker 2: year didn't have really tariff pressure. We were just speculating 202 00:11:00,120 --> 00:11:02,600 Speaker 2: is what the tariffs could be. So there is more pressure. 203 00:11:03,080 --> 00:11:06,000 Speaker 2: But that said, the reason we've seen so much resilience, 204 00:11:06,040 --> 00:11:10,000 Speaker 2: in my view, is because they're finding opportunities elsewhere. You know, 205 00:11:10,000 --> 00:11:13,120 Speaker 2: when you think about artificial intelligence generative AI and how 206 00:11:13,160 --> 00:11:17,040 Speaker 2: that's really helped streamline operations create efficiencies. I think part 207 00:11:17,120 --> 00:11:19,880 Speaker 2: of the reason they've been able to offset some of 208 00:11:19,920 --> 00:11:22,960 Speaker 2: this pain, in addition to supplier negotiations, is because of 209 00:11:22,960 --> 00:11:24,360 Speaker 2: the benefit that they're getting from. 210 00:11:24,280 --> 00:11:30,479 Speaker 1: AI in our last minute, Lindsey, are there certain items 211 00:11:30,679 --> 00:11:34,000 Speaker 1: that you think are going to find a big competition 212 00:11:34,240 --> 00:11:37,600 Speaker 1: from consumers sort of fighting each other to get into 213 00:11:37,760 --> 00:11:40,240 Speaker 1: the stores to get under the tree this holiday season? 214 00:11:41,480 --> 00:11:45,000 Speaker 3: You know, I think toys is typically a category where 215 00:11:45,080 --> 00:11:49,120 Speaker 3: you might see something like that. When we looked at 216 00:11:49,320 --> 00:11:52,760 Speaker 3: the toy lists, you know, coming out of Walmart, Target 217 00:11:53,080 --> 00:11:56,240 Speaker 3: and Amazon, you know those top toy lists, you know, 218 00:11:56,280 --> 00:11:58,960 Speaker 3: they look very similar to last year. So I don't 219 00:11:59,000 --> 00:12:01,040 Speaker 3: know that there's a real hot item that you have 220 00:12:01,160 --> 00:12:04,840 Speaker 3: to be at the door when they open to get 221 00:12:04,960 --> 00:12:09,360 Speaker 3: or wait in line. Even Nintendo Switch, the inventory on 222 00:12:09,440 --> 00:12:14,400 Speaker 3: that console is much greater than the original Nintendo Switch 223 00:12:14,440 --> 00:12:16,400 Speaker 3: that was rolled out a couple of years ago, So 224 00:12:16,440 --> 00:12:21,000 Speaker 3: the inventory looks appropriate in that. I don't think retailers 225 00:12:21,000 --> 00:12:24,480 Speaker 3: are over inventory this season, but they have enough for 226 00:12:25,040 --> 00:12:26,480 Speaker 3: the expected demand trends. 227 00:12:27,040 --> 00:12:30,080 Speaker 1: All right, Well, happy holidays to both of you. Really 228 00:12:30,120 --> 00:12:32,400 Speaker 1: appreciate you coming on with us. That's put them Goyle 229 00:12:32,600 --> 00:12:36,880 Speaker 1: and Lindsay Dutch, senior retail analysts at Bloomberg Intelligence and 230 00:12:37,000 --> 00:12:40,200 Speaker 1: up next on the special Thanksgiving edition of Bloomberg Daybreak. 231 00:12:40,320 --> 00:12:42,880 Speaker 1: Is December going to bring any relief to stocks and 232 00:12:42,960 --> 00:12:46,600 Speaker 1: crypto Alaska couple experts in both those spaces. As this 233 00:12:46,720 --> 00:12:50,880 Speaker 1: holiday edition of Bloomberg Daybreak continues, I'm Nathan Hager, and 234 00:12:51,000 --> 00:13:04,319 Speaker 1: this is Bloomberg. Thanks for joining us on this special 235 00:13:04,440 --> 00:13:07,320 Speaker 1: edition of Bloomberg day Break. US markets are closed for 236 00:13:07,320 --> 00:13:11,000 Speaker 1: the Thanksgiving holiday. I'm Nathan Hager. Well, after soaring from 237 00:13:11,080 --> 00:13:13,920 Speaker 1: the spring into the fall, the stock market kind of 238 00:13:13,960 --> 00:13:16,400 Speaker 1: took a breather this month. The S and P five 239 00:13:16,480 --> 00:13:19,360 Speaker 1: hundreds on track for its first monthly decline in seven 240 00:13:19,800 --> 00:13:21,760 Speaker 1: So is there more pain ahead or could this be 241 00:13:21,840 --> 00:13:25,120 Speaker 1: a buying opportunity. Let's ask Scott Martin. He's the chief 242 00:13:25,120 --> 00:13:29,480 Speaker 1: investment officer at Kingsview Wealth Management. Happy holiday to you, Scott. 243 00:13:29,520 --> 00:13:31,719 Speaker 1: I think we all remember what happened seven months ago, 244 00:13:31,880 --> 00:13:35,280 Speaker 1: the April tariff announcement. We did get the bounce back 245 00:13:35,360 --> 00:13:37,480 Speaker 1: since then. Can we be set up for a repeat 246 00:13:37,520 --> 00:13:38,400 Speaker 1: of that this time around? 247 00:13:39,080 --> 00:13:41,200 Speaker 4: Yes, it seems you're less similar, actually, Nathan. And as 248 00:13:41,200 --> 00:13:42,920 Speaker 4: we approach the holidays, I'm certainly in a little bit 249 00:13:42,920 --> 00:13:44,440 Speaker 4: more of a market's been a little bit more of 250 00:13:44,440 --> 00:13:46,199 Speaker 4: a giving mood, let's say, with regards to a give 251 00:13:46,280 --> 00:13:48,240 Speaker 4: back in prices and so I believe that this is 252 00:13:48,240 --> 00:13:49,880 Speaker 4: gonna be one of those stress points again that we 253 00:13:49,920 --> 00:13:52,920 Speaker 4: did experience earlier this year where markets feel broken, they 254 00:13:53,000 --> 00:13:55,480 Speaker 4: feel like they're focusing on the bad versus the good, 255 00:13:55,480 --> 00:13:58,240 Speaker 4: and we're seeing that in price action, mostly across tech 256 00:13:58,280 --> 00:13:59,960 Speaker 4: and but also across some other areas of the market 257 00:14:00,120 --> 00:14:02,760 Speaker 4: that have been bled into by the liquidations that happen. 258 00:14:02,880 --> 00:14:04,960 Speaker 4: So I think, similar to what's gone on in April 259 00:14:05,000 --> 00:14:07,000 Speaker 4: and into even many this year, we're starting to have 260 00:14:07,040 --> 00:14:08,880 Speaker 4: some of those weekends get out of the market. Those 261 00:14:08,920 --> 00:14:11,080 Speaker 4: weekends get out of those areas where there has been 262 00:14:11,120 --> 00:14:13,160 Speaker 4: a little bit of froth, and so I think those 263 00:14:13,160 --> 00:14:15,000 Speaker 4: weekends are going to get out and allow these stronger 264 00:14:15,040 --> 00:14:17,120 Speaker 4: hands to come in where you, the investor, could come 265 00:14:17,160 --> 00:14:18,920 Speaker 4: in and find price levels that are built a little 266 00:14:18,920 --> 00:14:20,960 Speaker 4: bit the same, more attractive than they were just a 267 00:14:20,960 --> 00:14:22,800 Speaker 4: couple of months ago. And that's an opportunity for us 268 00:14:22,800 --> 00:14:25,600 Speaker 4: to reallocate, rebalance, and get ready for next year as 269 00:14:25,600 --> 00:14:26,280 Speaker 4: things go up again. 270 00:14:26,280 --> 00:14:28,720 Speaker 1: In our opinion, Okay, well, I'm going to go ahead 271 00:14:28,720 --> 00:14:31,160 Speaker 1: and play a devil's advocate here just a little bit, 272 00:14:31,280 --> 00:14:34,520 Speaker 1: because there is this debate in the market about whether 273 00:14:34,760 --> 00:14:38,240 Speaker 1: you know the artificial intelligence names. The megacaps have gotten 274 00:14:38,280 --> 00:14:41,560 Speaker 1: too stretched in terms of their valuations. Is it just 275 00:14:42,000 --> 00:14:45,640 Speaker 1: froth or could there be more to give back here? 276 00:14:46,480 --> 00:14:48,280 Speaker 4: I think there's probably some more to give back, certainly 277 00:14:48,280 --> 00:14:50,200 Speaker 4: because the markets have shown they need as they get 278 00:14:50,200 --> 00:14:52,640 Speaker 4: extended to the upside. As we get frothy, the markets 279 00:14:52,680 --> 00:14:55,240 Speaker 4: also get too scared, they get too too fighting, let's say. 280 00:14:55,280 --> 00:14:57,240 Speaker 4: And so I think that's going to be the essence 281 00:14:57,280 --> 00:14:59,800 Speaker 4: of what the market is. As investors ourselves, we have 282 00:14:59,800 --> 00:15:03,000 Speaker 4: to remember that not only are markets nonlinear, they're also 283 00:15:03,200 --> 00:15:05,400 Speaker 4: very emotionally driven. And so when fundamentals kind of get 284 00:15:05,400 --> 00:15:07,240 Speaker 4: thrown out the window here with regards to both on 285 00:15:07,280 --> 00:15:09,840 Speaker 4: the upside and downside, that creates opportunity for us. And 286 00:15:09,880 --> 00:15:11,960 Speaker 4: so what we look longer term here, and that's beyond 287 00:15:12,000 --> 00:15:14,840 Speaker 4: obviously five days, ten days, or thirty days. We tend 288 00:15:14,880 --> 00:15:16,960 Speaker 4: to look at these price levels at a price action 289 00:15:17,440 --> 00:15:21,400 Speaker 4: as opportunities, as points where investors who really like the space, 290 00:15:21,400 --> 00:15:23,200 Speaker 4: who really like the tech space, who really like the 291 00:15:23,240 --> 00:15:27,160 Speaker 4: AI space, if it's servers, if it's servers, if it's AI, 292 00:15:27,440 --> 00:15:29,120 Speaker 4: if it's areas in the market that have really been 293 00:15:29,160 --> 00:15:31,880 Speaker 4: strong and really shown, as we saw with Nvidia earlier 294 00:15:31,880 --> 00:15:33,960 Speaker 4: in November that really have the earnings, and they really 295 00:15:34,000 --> 00:15:36,200 Speaker 4: have the potential to deliver what I believe the market 296 00:15:36,200 --> 00:15:38,640 Speaker 4: expects when it comes to profits. For example, I think 297 00:15:38,680 --> 00:15:40,680 Speaker 4: there's a long term story here in that space, or 298 00:15:40,720 --> 00:15:43,200 Speaker 4: in the tech space, especially which has been hit reasonably 299 00:15:43,200 --> 00:15:45,720 Speaker 4: hard in the last day several weeks. There's opportunities there 300 00:15:45,720 --> 00:15:48,160 Speaker 4: for investors to take a steak here and say that yes, 301 00:15:48,200 --> 00:15:50,160 Speaker 4: things could be a little bit more volatile in the 302 00:15:50,160 --> 00:15:52,440 Speaker 4: next month or two, but overall, in the next day 303 00:15:52,480 --> 00:15:54,680 Speaker 4: six to twelve months, it's our opinion that the prices 304 00:15:54,680 --> 00:15:56,400 Speaker 4: will again rebound and they will go higher. 305 00:15:56,680 --> 00:15:58,920 Speaker 1: Is it going to be an opportunity across the tech 306 00:15:58,960 --> 00:16:00,560 Speaker 1: space or do you think it's going to be like 307 00:16:00,600 --> 00:16:02,760 Speaker 1: a stock pickers market in terms of what we see 308 00:16:02,760 --> 00:16:03,080 Speaker 1: in tech. 309 00:16:03,840 --> 00:16:05,760 Speaker 4: That's a great question. I think we've seen from the 310 00:16:05,800 --> 00:16:07,840 Speaker 4: price action so far in Nathan, it's going to probably 311 00:16:07,840 --> 00:16:09,880 Speaker 4: be more of a stock pickers market in the sense 312 00:16:09,960 --> 00:16:11,840 Speaker 4: of some of the tech has been doing okay. If 313 00:16:11,840 --> 00:16:13,640 Speaker 4: you look at some of the Googles of the world, 314 00:16:13,640 --> 00:16:16,600 Speaker 4: and even in Vidia until most recently, and even Oracle 315 00:16:16,680 --> 00:16:18,640 Speaker 4: until most recently, there has been strength. And so if 316 00:16:18,640 --> 00:16:20,480 Speaker 4: you look at some of the names that maybe have 317 00:16:20,640 --> 00:16:23,680 Speaker 4: relatively stayed stable or relatively been maybe against some of 318 00:16:23,680 --> 00:16:26,280 Speaker 4: the big moves in tech in general, those would be 319 00:16:26,320 --> 00:16:27,960 Speaker 4: areas that I think you can find some strengths. But 320 00:16:28,000 --> 00:16:30,280 Speaker 4: then again, if you look at the corwe's for example, 321 00:16:30,400 --> 00:16:32,560 Speaker 4: if you look at say A M D, those are 322 00:16:32,600 --> 00:16:35,600 Speaker 4: areas that have come on with an additional punishment that 323 00:16:35,720 --> 00:16:38,240 Speaker 4: in our opinion looks a little bit overdone. So when 324 00:16:38,240 --> 00:16:39,800 Speaker 4: you pick the stocks here and you look at some 325 00:16:39,800 --> 00:16:42,320 Speaker 4: of the names that have been say irrepidbly punished, I 326 00:16:42,320 --> 00:16:44,200 Speaker 4: think those are areas where investors can find some of 327 00:16:44,200 --> 00:16:46,560 Speaker 4: the most upside going forward, because those are companies too 328 00:16:46,600 --> 00:16:49,400 Speaker 4: that are getting stay unduly punished because of this liquidation, 329 00:16:49,680 --> 00:16:51,800 Speaker 4: and therefore that's probably where most of the upside exists. 330 00:16:52,160 --> 00:16:55,200 Speaker 1: Is there too much focus on the tech sector right now? 331 00:16:55,240 --> 00:16:59,200 Speaker 1: Do you see any opportunities for either broadening in the 332 00:16:59,360 --> 00:17:03,520 Speaker 1: in the a rotation out of tack? 333 00:17:04,240 --> 00:17:06,320 Speaker 4: We do. I think the rotation of the tech, depending 334 00:17:06,320 --> 00:17:08,560 Speaker 4: on how long it lasts, will obviously spread itself into 335 00:17:08,560 --> 00:17:10,520 Speaker 4: different areas where I've seeing that, and say financials, we're 336 00:17:10,520 --> 00:17:13,480 Speaker 4: seeing that in pharmaceuticals. My goodness, healthcare, which was a 337 00:17:13,480 --> 00:17:15,400 Speaker 4: dead space for the last couple of years has come 338 00:17:15,440 --> 00:17:18,320 Speaker 4: on very strong. Utilities, what i'd like to call a 339 00:17:18,400 --> 00:17:21,240 Speaker 4: very boring sector, have stepped up very well. So yes, 340 00:17:21,280 --> 00:17:24,720 Speaker 4: as the tech let's say tech malay spreads through the 341 00:17:24,960 --> 00:17:26,399 Speaker 4: rest of the year here, I think you're going to 342 00:17:26,480 --> 00:17:28,959 Speaker 4: see those areas step up and take leadership. But as 343 00:17:28,960 --> 00:17:31,200 Speaker 4: we've seen in the past days and the real story 344 00:17:31,200 --> 00:17:32,879 Speaker 4: here though, and the real story for growth and the 345 00:17:32,880 --> 00:17:36,199 Speaker 4: real story for investors that want that long term appreciation 346 00:17:36,560 --> 00:17:38,919 Speaker 4: that still remains in tech. If you just look over history, 347 00:17:39,040 --> 00:17:40,560 Speaker 4: if you look at the healthcare space, if you look 348 00:17:40,560 --> 00:17:44,040 Speaker 4: at pharmaceuticals, if you look at utilities, telecom in fact too, 349 00:17:44,240 --> 00:17:46,360 Speaker 4: those areas have stepped up in times when there has 350 00:17:46,400 --> 00:17:49,880 Speaker 4: been this general fullback area, the general pullback sty attitude 351 00:17:49,920 --> 00:17:52,119 Speaker 4: in the marketplace. But the reality is that over the 352 00:17:52,160 --> 00:17:54,640 Speaker 4: long term, it's tech that's going to provide that long 353 00:17:54,720 --> 00:17:57,760 Speaker 4: term growth potential. And so while tech does stay weak here, 354 00:17:57,960 --> 00:18:00,440 Speaker 4: say in the next short term period, there's going to 355 00:18:00,440 --> 00:18:02,760 Speaker 4: be that long term appreciation in tech that we'll rebound 356 00:18:02,920 --> 00:18:05,040 Speaker 4: and we'll reward investors that take a stake in some 357 00:18:05,080 --> 00:18:05,719 Speaker 4: of these names. 358 00:18:06,040 --> 00:18:08,280 Speaker 1: So is it going to be about a return to 359 00:18:08,760 --> 00:18:11,960 Speaker 1: a fundamental thesis here, the idea of fundamentals coming back 360 00:18:11,960 --> 00:18:15,560 Speaker 1: into play, or is there going to be the need 361 00:18:15,760 --> 00:18:18,760 Speaker 1: for the FED to support this market. 362 00:18:19,720 --> 00:18:21,639 Speaker 4: That's the greatest question that we all are waiting for, 363 00:18:21,680 --> 00:18:23,520 Speaker 4: is that we have a FED meeting coming up in December. 364 00:18:23,520 --> 00:18:25,359 Speaker 4: And in my opinion, I've been one of those that's 365 00:18:25,359 --> 00:18:26,840 Speaker 4: been out there saying the FED shoon out of cut 366 00:18:26,880 --> 00:18:28,639 Speaker 4: rates the last two times in fact, and so I 367 00:18:28,640 --> 00:18:31,840 Speaker 4: believe the FED is definitely being relied upon by the 368 00:18:31,880 --> 00:18:34,560 Speaker 4: markets by certainly the administration to come in and see quote 369 00:18:34,600 --> 00:18:36,879 Speaker 4: unquote as you use the words save this market. And 370 00:18:36,920 --> 00:18:39,400 Speaker 4: it's laty to think about that because if you line 371 00:18:39,440 --> 00:18:42,040 Speaker 4: that up with a fundamental story that you initiated there, 372 00:18:42,359 --> 00:18:44,480 Speaker 4: what really is the FED doing here? Because yes, there's 373 00:18:44,520 --> 00:18:47,080 Speaker 4: been some forced liquidation here. There's been some concerns of 374 00:18:47,200 --> 00:18:49,879 Speaker 4: late about bank credits, about private credit and things like 375 00:18:49,920 --> 00:18:52,760 Speaker 4: that being way too extended. It certainly interest rates being 376 00:18:52,800 --> 00:18:54,960 Speaker 4: too high, I guess, But then again, we still have 377 00:18:55,000 --> 00:18:58,879 Speaker 4: inflation that is not teamed considerably. Inflation that's around her 378 00:18:58,880 --> 00:19:01,240 Speaker 4: about three percent floss. We're supposed to get to two percent, 379 00:19:01,560 --> 00:19:03,160 Speaker 4: never got there. That was the target of the three 380 00:19:03,200 --> 00:19:07,679 Speaker 4: Reserve and Jerome Pal's commentary. We also have GDP growth now, Nathan. 381 00:19:07,680 --> 00:19:10,320 Speaker 4: That's certainly above where it was some months ago when 382 00:19:10,359 --> 00:19:12,840 Speaker 4: the FED was concerned about cutting rates to help support 383 00:19:12,840 --> 00:19:16,280 Speaker 4: the economy. GDP growth for our projections for both Q 384 00:19:16,400 --> 00:19:19,120 Speaker 4: four and some of the first parts of Q one 385 00:19:19,160 --> 00:19:21,439 Speaker 4: and two for twenty twenty six looks like it's going 386 00:19:21,480 --> 00:19:22,560 Speaker 4: to be in the range of three and a half 387 00:19:22,600 --> 00:19:25,520 Speaker 4: to four percent. And so with job growth obviously being 388 00:19:25,520 --> 00:19:27,840 Speaker 4: recently strong as we put too a little pause in 389 00:19:27,880 --> 00:19:29,600 Speaker 4: the job on the job numbers are the last couple 390 00:19:29,600 --> 00:19:31,320 Speaker 4: of months we started to see those come in. It's 391 00:19:31,320 --> 00:19:33,439 Speaker 4: our opinion that the economy is strong enough for the 392 00:19:33,440 --> 00:19:35,280 Speaker 4: FED not to cut rates actually, and so the FED 393 00:19:35,520 --> 00:19:38,240 Speaker 4: is going to probably have to be this red herring, 394 00:19:38,280 --> 00:19:40,919 Speaker 4: if you will, or this savior in the face of 395 00:19:40,960 --> 00:19:43,920 Speaker 4: this emotional investment period where I don't think that's necessary 396 00:19:43,960 --> 00:19:45,720 Speaker 4: really for the FED to do that, and so I 397 00:19:45,760 --> 00:19:47,879 Speaker 4: think actually what's going to end up happening is whether 398 00:19:47,920 --> 00:19:49,800 Speaker 4: the FED cuts or not in December. That's not going 399 00:19:49,880 --> 00:19:53,160 Speaker 4: to be a big I guess, patternshift or if you will, 400 00:19:53,200 --> 00:19:56,119 Speaker 4: for our sake of things as investors ourselves, but it 401 00:19:56,160 --> 00:19:57,720 Speaker 4: is something that if the FED does not cut, that 402 00:19:57,880 --> 00:19:59,480 Speaker 4: that could be taken poorly by the market. But I 403 00:19:59,480 --> 00:20:01,920 Speaker 4: believe over and longer term that's the right move for 404 00:20:01,960 --> 00:20:04,240 Speaker 4: the FED is to step back, let the economy breathe 405 00:20:04,240 --> 00:20:06,159 Speaker 4: a little bit, let everybody kind of calm down, and 406 00:20:06,160 --> 00:20:08,440 Speaker 4: then therefore we can be in a period where going forward, 407 00:20:08,480 --> 00:20:09,720 Speaker 4: I think there's going to be a reason for the 408 00:20:09,720 --> 00:20:12,160 Speaker 4: FED possibly to cut some other time, but certainly not now. 409 00:20:12,520 --> 00:20:15,160 Speaker 1: Interesting view on where things could go in terms of policy. 410 00:20:15,240 --> 00:20:16,800 Speaker 1: Thank you for this, Scott, great you having me on 411 00:20:16,840 --> 00:20:17,119 Speaker 1: with us. 412 00:20:17,640 --> 00:20:18,440 Speaker 4: Thank you very much. 413 00:20:18,640 --> 00:20:22,400 Speaker 1: That's Scott Martin, chief investment officer at Kingsview Wealth Management. 414 00:20:22,840 --> 00:20:26,639 Speaker 1: Even harder hit than stocks this month have been crypto currencies. 415 00:20:26,840 --> 00:20:29,480 Speaker 1: Bitcoin is plummeted from its high of one hundred and 416 00:20:29,480 --> 00:20:31,399 Speaker 1: twenty five thousand back just a little more than a 417 00:20:31,400 --> 00:20:34,520 Speaker 1: month ago in early October. So let's look at what 418 00:20:34,840 --> 00:20:38,560 Speaker 1: might be ahead. We're pleased to welcome Bloomberg Intelligence senior 419 00:20:38,600 --> 00:20:42,040 Speaker 1: commodity strategist Mike mcgloan, and I say might be ahead, Mike, 420 00:20:42,119 --> 00:20:44,560 Speaker 1: because it really is hard to predict what's going to 421 00:20:44,600 --> 00:20:47,080 Speaker 1: happen with bitcoin. I got to think it's tough for 422 00:20:47,119 --> 00:20:47,600 Speaker 1: you as well. 423 00:20:47,680 --> 00:20:50,919 Speaker 5: Is it. It certainly is, But sometimes it's best to 424 00:20:50,960 --> 00:20:53,080 Speaker 5: be a contrarian, and sometimes it's good to go with 425 00:20:53,160 --> 00:20:55,600 Speaker 5: a flow. One mistake I did last year as I 426 00:20:55,680 --> 00:20:59,080 Speaker 5: jumped on the contrarian battle and pass at least think 427 00:20:59,080 --> 00:21:01,120 Speaker 5: a little bit too early. But now I think that's 428 00:21:01,160 --> 00:21:03,280 Speaker 5: working in the right way. Bitcoin just got way too 429 00:21:03,280 --> 00:21:06,280 Speaker 5: expensive wit and all the signs of a classic bull 430 00:21:06,359 --> 00:21:09,679 Speaker 5: market peak with the President's flip and then all the 431 00:21:10,080 --> 00:21:12,439 Speaker 5: ETF inflows and everything, and now look, I think we've 432 00:21:12,440 --> 00:21:15,359 Speaker 5: put in a pretty enduring peak. A key thing was 433 00:21:15,359 --> 00:21:17,880 Speaker 5: breaking back down below one hundred thousand and then back 434 00:21:17,880 --> 00:21:20,160 Speaker 5: down in the year, which is around ninety four thousand, 435 00:21:21,080 --> 00:21:22,960 Speaker 5: and now it's hovering below that level, and I think 436 00:21:22,960 --> 00:21:25,600 Speaker 5: bitcoin's just a good indication of a way overdo a 437 00:21:25,640 --> 00:21:28,560 Speaker 5: bull market that's correcting, and it could easily go back 438 00:21:28,600 --> 00:21:30,520 Speaker 5: to fifty thousand, which is still my base case. 439 00:21:30,800 --> 00:21:33,280 Speaker 1: Wow, what makes you think it could get down that 440 00:21:33,400 --> 00:21:35,919 Speaker 1: low from the current levels that we're seeing right. 441 00:21:35,800 --> 00:21:38,920 Speaker 5: Now on the annual chart. Certainly going back to twenty 442 00:21:39,000 --> 00:21:41,119 Speaker 5: twenty one to fifty thousand has been a key pivot. 443 00:21:41,440 --> 00:21:43,199 Speaker 5: It looks like it can easily go back there. And 444 00:21:43,200 --> 00:21:45,520 Speaker 5: the key thing is What has been happening is Bitcoin 445 00:21:45,600 --> 00:21:50,080 Speaker 5: usually doesn't bottom until stock market bolatile also peaks, and 446 00:21:50,359 --> 00:21:53,280 Speaker 5: stock market ballatley is just buried. It's running very low. 447 00:21:53,400 --> 00:21:55,280 Speaker 5: If it ends the year at a current level around 448 00:21:55,320 --> 00:21:59,160 Speaker 5: eleven percent, it'll be the lowest year and since twenty seventeen. 449 00:21:59,400 --> 00:22:02,399 Speaker 5: And bitcoin it's basically the opposite of vis in stock 450 00:22:02,440 --> 00:22:04,359 Speaker 5: market volatile. So to me, that's the key risk that 451 00:22:04,400 --> 00:22:06,640 Speaker 5: goes back there. What can get it to sustain back 452 00:22:06,640 --> 00:22:08,399 Speaker 5: above one hundred thousand, I don't know, but I have 453 00:22:08,520 --> 00:22:10,800 Speaker 5: to stock start with a higher stock market. I think 454 00:22:10,800 --> 00:22:13,320 Speaker 5: the key risk is Bitcoin's warning on this ahead of 455 00:22:13,320 --> 00:22:16,160 Speaker 5: time that we are way overdue for the third down 456 00:22:16,200 --> 00:22:18,520 Speaker 5: year for the stock market. Since two thousand and eight, 457 00:22:18,560 --> 00:22:21,000 Speaker 5: we haven't had that, but every time we've had down years, 458 00:22:21,000 --> 00:22:23,720 Speaker 5: there's only been two twenty and eighteen twenty twenty two 459 00:22:24,000 --> 00:22:27,400 Speaker 5: that's coincided with the bitcoin to gold racial breaking down 460 00:22:27,480 --> 00:22:27,920 Speaker 5: like it has. 461 00:22:27,960 --> 00:22:31,480 Speaker 1: So far this year, we've seen the correlation sort of 462 00:22:31,480 --> 00:22:34,680 Speaker 1: breakdown as well between bitcoin and what the stock market's 463 00:22:34,720 --> 00:22:37,160 Speaker 1: been doing. We've seen this pretty steady decline in bitcoin 464 00:22:37,280 --> 00:22:40,000 Speaker 1: despite some of the fluctuations that we've seen in the 465 00:22:40,040 --> 00:22:42,520 Speaker 1: equity space. What do you think is behind that breakdown. 466 00:22:43,359 --> 00:22:45,439 Speaker 5: The key thing I think is we just rate a 467 00:22:45,480 --> 00:22:49,080 Speaker 5: pretty significant peak in cryptos. The key the bottom line 468 00:22:49,119 --> 00:22:51,040 Speaker 5: is a lot of crypto people will tell you that 469 00:22:51,119 --> 00:22:53,080 Speaker 5: bitcoin is different from the other ones, But I like 470 00:22:53,119 --> 00:22:54,600 Speaker 5: to point out in two thousand and nine there was 471 00:22:54,640 --> 00:22:58,679 Speaker 5: one cryptocurrency, and now on coin market camp there's listed 472 00:22:58,720 --> 00:23:01,600 Speaker 5: twenty seven million. Almost those don't matter, But the bottom 473 00:23:01,640 --> 00:23:04,320 Speaker 5: line is most of those have billions of dollars tracking them, 474 00:23:04,480 --> 00:23:07,439 Speaker 5: and they basically really track nothing. They're you know, So 475 00:23:07,480 --> 00:23:09,479 Speaker 5: I think what we're doing is finally seeing the purge 476 00:23:09,480 --> 00:23:11,600 Speaker 5: of excesses of a bull market. 477 00:23:11,680 --> 00:23:14,280 Speaker 1: So are you thinking that we might not see the 478 00:23:14,320 --> 00:23:17,040 Speaker 1: peak that we saw just a little over a month ago. 479 00:23:17,200 --> 00:23:19,879 Speaker 1: I mean, we've had some analysts that we've heard from 480 00:23:19,920 --> 00:23:22,480 Speaker 1: saying that they see bitcoin getting as high as two 481 00:23:22,600 --> 00:23:25,159 Speaker 1: hundred thousand. Are are you just out of that camp? 482 00:23:25,800 --> 00:23:28,160 Speaker 5: Definitely? Well, those are kind of things you see near peaks. 483 00:23:27,840 --> 00:23:30,320 Speaker 5: And what I'm looking for is every single time we 484 00:23:30,520 --> 00:23:33,280 Speaker 5: reached loaves, I have people calling for zero. No, I 485 00:23:33,359 --> 00:23:35,760 Speaker 5: haven't seen those yet. But when we initially dropped to 486 00:23:35,800 --> 00:23:38,639 Speaker 5: roun one hundred thousand. My first take for twenty twenty 487 00:23:38,640 --> 00:23:40,639 Speaker 5: six was fifty or one fifty, and I stick with 488 00:23:40,720 --> 00:23:43,080 Speaker 5: one to fifty. Now could happen this year, it's just 489 00:23:43,160 --> 00:23:45,280 Speaker 5: normally how it does. Remember, there's a high spectrum of 490 00:23:45,320 --> 00:23:48,159 Speaker 5: digital ASCID with unlimited competition. Now Bitcoin is supposed to 491 00:23:48,160 --> 00:23:51,760 Speaker 5: have a definable diminishing supply, but there's unlimited competition of 492 00:23:51,840 --> 00:23:54,080 Speaker 5: other cryptocurrencies out there, and that's what we're finding out. 493 00:23:54,080 --> 00:23:56,760 Speaker 5: So one good example is also look at ethereum. Ethereum 494 00:23:56,880 --> 00:23:59,600 Speaker 5: is running has been betrayed between two thousand and four 495 00:23:59,640 --> 00:24:02,560 Speaker 5: thousand for almost five years, and it's probably heading towards 496 00:24:02,600 --> 00:24:04,240 Speaker 5: the other end of the lower end the range. So 497 00:24:04,240 --> 00:24:06,360 Speaker 5: I think that's the key thing to remember. These are 498 00:24:06,600 --> 00:24:09,880 Speaker 5: not even commodities. They're just trading the vehicles, and they're 499 00:24:09,920 --> 00:24:11,840 Speaker 5: trading in ranges, and I think the range is heading 500 00:24:11,880 --> 00:24:14,360 Speaker 5: lower now. Particularly Also, let's look at it this way. 501 00:24:14,480 --> 00:24:17,200 Speaker 5: Since the stock market's been resilient, if the stock market 502 00:24:17,200 --> 00:24:19,360 Speaker 5: starts giving back some of it games, well know this 503 00:24:19,400 --> 00:24:21,359 Speaker 5: is a good leading indicator. And also we do have 504 00:24:21,400 --> 00:24:23,280 Speaker 5: to point out it was the day that bitcoin dropped 505 00:24:23,320 --> 00:24:26,920 Speaker 5: to eighty right before Thanksgiving that we started seeing FED 506 00:24:27,080 --> 00:24:30,400 Speaker 5: rate cut expectations tilting towards a cut in the December meeting, 507 00:24:30,440 --> 00:24:32,280 Speaker 5: so it's potentially a good leading indicator. 508 00:24:32,840 --> 00:24:37,479 Speaker 1: So how does activity in spot crypto ETF's play into 509 00:24:38,160 --> 00:24:41,680 Speaker 1: your thesis about where cryptocurrency could be going from here. 510 00:24:42,040 --> 00:24:44,080 Speaker 5: In the run up to the launch of ETFs, my 511 00:24:44,200 --> 00:24:47,040 Speaker 5: primary focus was we will see a peak in cryptos 512 00:24:47,040 --> 00:24:50,320 Speaker 5: when we have widely disseminated ETFs, and we certainly have that. 513 00:24:50,400 --> 00:24:53,560 Speaker 5: It's not just Bitcoin, it's all the ones now. So 514 00:24:53,640 --> 00:24:57,399 Speaker 5: the average price we've heard from since ETFs were launched 515 00:24:57,400 --> 00:24:59,960 Speaker 5: from bitcoin is around eighty nine thousand, and the markets 516 00:25:00,080 --> 00:25:02,560 Speaker 5: drop below that level. So we're seeing those stops, people 517 00:25:02,560 --> 00:25:04,840 Speaker 5: getting stopped down below that average price, and so now 518 00:25:04,880 --> 00:25:07,480 Speaker 5: we're seeing outflows. But to me, the whole crypto, the 519 00:25:07,560 --> 00:25:10,840 Speaker 5: whole ETF space, that was the indication of the peak, 520 00:25:10,960 --> 00:25:13,040 Speaker 5: you know, going from the ogs to the kind of 521 00:25:13,160 --> 00:25:15,560 Speaker 5: more the tech geeks who got it and passing it 522 00:25:15,600 --> 00:25:18,840 Speaker 5: on to the main people who are basically lambs. Look 523 00:25:18,880 --> 00:25:20,360 Speaker 5: at me, I want to do the same thing, make 524 00:25:20,400 --> 00:25:22,199 Speaker 5: a lot of money, And to me, that's part of 525 00:25:22,240 --> 00:25:25,200 Speaker 5: the peak now, and the question is what shifts that. 526 00:25:25,200 --> 00:25:28,040 Speaker 5: That's my outlook, and my outlook now is I think 527 00:25:28,040 --> 00:25:29,560 Speaker 5: we're going to see a bottom in the space, and 528 00:25:29,680 --> 00:25:32,119 Speaker 5: we see a lot of the millions of cryptos that 529 00:25:32,160 --> 00:25:34,639 Speaker 5: basically track nothing. I just pine the sky spec the 530 00:25:34,680 --> 00:25:37,800 Speaker 5: digital assets go to zero and then eleven bottom Bitcoin. 531 00:25:37,920 --> 00:25:41,439 Speaker 5: I'll mention one number nine on the Bloomberg Cryp page 532 00:25:41,520 --> 00:25:44,720 Speaker 5: is Dogecoin. It's still worth, you know, between twenty and 533 00:25:44,760 --> 00:25:47,119 Speaker 5: thirty billion dollars and it's a joke. It was launched 534 00:25:47,119 --> 00:25:48,520 Speaker 5: as a joke and that tracks nothing. 535 00:25:48,920 --> 00:25:51,720 Speaker 1: Wow. All right, well, really appreciate this. Mike again, thanks 536 00:25:51,720 --> 00:25:53,959 Speaker 1: for being with us, Thanks for having me. That's our 537 00:25:53,960 --> 00:25:58,199 Speaker 1: Bloomberg Intelligence senior commodity strategist, Mike McGlone. And coming up 538 00:25:58,280 --> 00:26:01,440 Speaker 1: next on the special holiday edition Bloomberg Daybreak will update 539 00:26:01,480 --> 00:26:04,520 Speaker 1: you on the latest anti trust cases facing big tech. 540 00:26:04,920 --> 00:26:18,640 Speaker 1: I'm Nathan Hager, and this is Bloomberg. Thanks for being 541 00:26:18,640 --> 00:26:21,560 Speaker 1: with us on this special edition of Bloomberg Daybreak. US 542 00:26:21,600 --> 00:26:24,959 Speaker 1: markets are closed for Thanksgiving Day. I'm Nathan Hager, and 543 00:26:25,000 --> 00:26:27,400 Speaker 1: as we head near the close of President Donald Trump's 544 00:26:27,440 --> 00:26:30,080 Speaker 1: first full year of his second term, we thought this 545 00:26:30,080 --> 00:26:31,800 Speaker 1: would be a pretty good time to get an update 546 00:26:31,880 --> 00:26:36,040 Speaker 1: on the administration's anti trust cases against big tech, and 547 00:26:36,160 --> 00:26:39,280 Speaker 1: for that we're pleased to be joined by Bloomberg Intelligence 548 00:26:39,320 --> 00:26:43,680 Speaker 1: Senior Anti trust litigation analyst, Jennifer Ree, Thanks for taking 549 00:26:43,840 --> 00:26:45,840 Speaker 1: some time out of your holiday to be with us, 550 00:26:46,080 --> 00:26:48,240 Speaker 1: Jen And I know we've had a couple of judgments 551 00:26:48,280 --> 00:26:53,160 Speaker 1: already against Google when it comes to search and ad tech. 552 00:26:53,359 --> 00:26:54,760 Speaker 1: Where do those cases stand? 553 00:26:55,280 --> 00:26:55,480 Speaker 4: Right? 554 00:26:55,520 --> 00:26:58,560 Speaker 6: And finally, because if you think about it, these cases, well, 555 00:26:58,560 --> 00:27:00,399 Speaker 6: at least one of them, the Google search case was 556 00:27:00,400 --> 00:27:03,639 Speaker 6: brought during the first Strump administration, so it just shows 557 00:27:03,680 --> 00:27:05,840 Speaker 6: how long it takes to get to an initial decision. 558 00:27:06,800 --> 00:27:08,800 Speaker 6: So on the search case, you know, we're really at 559 00:27:08,840 --> 00:27:11,560 Speaker 6: the tail end. Google lost on my ability. It was 560 00:27:11,600 --> 00:27:14,760 Speaker 6: found to have a monopoly in search and to have 561 00:27:14,800 --> 00:27:18,920 Speaker 6: abused that monopoly position. But the remedy decision was kind 562 00:27:18,920 --> 00:27:21,600 Speaker 6: of I think largely viewed as a win for Google. 563 00:27:21,720 --> 00:27:24,679 Speaker 6: It was pretty mild, you know, with the Department of 564 00:27:24,800 --> 00:27:29,400 Speaker 6: Justice seeking to have Google force to divest Chrome. They 565 00:27:29,440 --> 00:27:31,600 Speaker 6: did not win that. They won some what we call 566 00:27:31,680 --> 00:27:35,240 Speaker 6: behavioral commitments from Google where it has to just change 567 00:27:35,240 --> 00:27:38,639 Speaker 6: some of its conduct. But what the judge ordered was 568 00:27:38,680 --> 00:27:42,919 Speaker 6: really much closer to what Google had offered up, you know, 569 00:27:43,040 --> 00:27:46,000 Speaker 6: as an appropriate remedy than what the Department of Justice 570 00:27:46,040 --> 00:27:49,000 Speaker 6: was seeking. The final touches are being put on that 571 00:27:49,080 --> 00:27:52,960 Speaker 6: remedy right now as we speak. The framework is out, 572 00:27:53,000 --> 00:27:55,320 Speaker 6: but you know, the actual sort of nitty gritty language 573 00:27:55,359 --> 00:27:57,720 Speaker 6: the judge is working on, and I suspect that'll be 574 00:27:57,760 --> 00:28:00,240 Speaker 6: out fairly soon in the next couple months, and once is, 575 00:28:00,240 --> 00:28:03,080 Speaker 6: Google will probably appeal that case, even though as I said, 576 00:28:03,080 --> 00:28:05,080 Speaker 6: it kind of came out pretty well for Google. I 577 00:28:05,080 --> 00:28:08,720 Speaker 6: think they will appeal on the ad Tech case you 578 00:28:08,800 --> 00:28:12,639 Speaker 6: mentioned now. There were just closing arguments on November seventeenth 579 00:28:13,040 --> 00:28:16,720 Speaker 6: for an appropriate remedy in that case, because yes, liability 580 00:28:16,800 --> 00:28:21,040 Speaker 6: was also found and that was about monopolizing these products 581 00:28:21,040 --> 00:28:24,040 Speaker 6: that most of us as consumers don't really know about. 582 00:28:24,040 --> 00:28:27,400 Speaker 6: But it's these digital products that Google owns that put 583 00:28:27,720 --> 00:28:30,919 Speaker 6: advertisers and publishers together. So when you do a searcher, 584 00:28:31,000 --> 00:28:33,280 Speaker 6: you go onto a website and these ads pop up. 585 00:28:33,640 --> 00:28:36,520 Speaker 6: It's the products the software that put those ads in 586 00:28:36,520 --> 00:28:40,000 Speaker 6: front of you when you were looking at that specific website. 587 00:28:40,400 --> 00:28:44,000 Speaker 6: And here again the Department of Justice is seeking a 588 00:28:44,040 --> 00:28:48,000 Speaker 6: structural remedy that is for Google to sell what's called 589 00:28:48,040 --> 00:28:51,160 Speaker 6: its ad exchange. This is kind of the auction area 590 00:28:51,200 --> 00:28:54,200 Speaker 6: where the publishers and advertisers come together and bid for 591 00:28:54,280 --> 00:28:59,520 Speaker 6: space on a website and advertisers by that space. We 592 00:28:59,560 --> 00:29:02,240 Speaker 6: also don't think it's our opinion after listening to the 593 00:29:02,240 --> 00:29:04,840 Speaker 6: remedy hearings, that that's probably not going to happen either, 594 00:29:05,520 --> 00:29:08,320 Speaker 6: that the remedy is more likely to be behavioral and 595 00:29:08,400 --> 00:29:11,920 Speaker 6: about kind of Google unbundling its products right now. It 596 00:29:12,040 --> 00:29:15,400 Speaker 6: sort of bundles everything it has together and forces publishers 597 00:29:15,400 --> 00:29:18,800 Speaker 6: to use its products rather than rival products, and it'll 598 00:29:19,440 --> 00:29:22,320 Speaker 6: this is unreally simplifying, so I'm really your technical market. 599 00:29:22,480 --> 00:29:25,000 Speaker 6: But we think this will be behavioral too, and probably 600 00:29:25,280 --> 00:29:26,960 Speaker 6: get a decision sometime in the first quarter. 601 00:29:27,080 --> 00:29:30,520 Speaker 1: But it's interesting if it's seen that Google was kind 602 00:29:30,520 --> 00:29:32,480 Speaker 1: of given a bit of a slap on the wrist 603 00:29:32,600 --> 00:29:35,680 Speaker 1: when it comes to the search remedy, why would it 604 00:29:36,120 --> 00:29:41,160 Speaker 1: go ahead and appeal that And is there a possibility 605 00:29:41,480 --> 00:29:44,480 Speaker 1: that we could see, you know, something of a stronger 606 00:29:44,840 --> 00:29:46,880 Speaker 1: remedy when it comes to ad tech. 607 00:29:47,840 --> 00:29:50,120 Speaker 6: Well, I think the appeal is because you have a 608 00:29:50,160 --> 00:29:54,320 Speaker 6: liability decision calling your company a monopolist, and it may 609 00:29:54,360 --> 00:29:56,920 Speaker 6: be that the company would want to appeal that piece 610 00:29:56,960 --> 00:29:59,920 Speaker 6: of it. You know, they don't want that opinion now 611 00:30:00,000 --> 00:30:03,560 Speaker 6: out there, especially as we move into the world of AI, 612 00:30:04,160 --> 00:30:05,960 Speaker 6: you know, which many think is going to kind of 613 00:30:06,000 --> 00:30:09,800 Speaker 6: take over for search and general search engines. And Google 614 00:30:09,840 --> 00:30:14,200 Speaker 6: wants the freedom to operate within that AI marketplace and 615 00:30:14,240 --> 00:30:17,400 Speaker 6: may not want this decision out there, but you know, 616 00:30:17,440 --> 00:30:19,680 Speaker 6: they did. It was really pretty good decision for them, 617 00:30:19,800 --> 00:30:22,440 Speaker 6: and maybe they won't, but they have said that they 618 00:30:22,440 --> 00:30:26,479 Speaker 6: are likely to on the ad Tech decision. You know, 619 00:30:26,520 --> 00:30:29,680 Speaker 6: the thing is a harsher remedy than a behavioral remedy 620 00:30:29,720 --> 00:30:32,760 Speaker 6: would be structural, and it's a real tall order to 621 00:30:32,760 --> 00:30:35,600 Speaker 6: ask a judge to do something like that because it 622 00:30:35,720 --> 00:30:39,960 Speaker 6: is complex. It's not a cautious decision. It's a decision 623 00:30:40,000 --> 00:30:42,800 Speaker 6: that could easily get overturned on appeal, and that's not 624 00:30:43,040 --> 00:30:46,480 Speaker 6: really what most federal judges want to do. They're more 625 00:30:46,640 --> 00:30:49,560 Speaker 6: likely to go for something that they view as a 626 00:30:51,480 --> 00:30:54,440 Speaker 6: safer route for a remedy that could withstand an appeal. 627 00:30:54,680 --> 00:30:57,040 Speaker 1: Well, it's going to be interesting to see how these 628 00:30:57,400 --> 00:31:00,720 Speaker 1: final remedies play out on the Google case is given 629 00:31:00,720 --> 00:31:05,960 Speaker 1: what we saw, you know, just recently from the FTC's 630 00:31:07,320 --> 00:31:11,920 Speaker 1: antitrust case against meta platforms. How big a loss was 631 00:31:11,960 --> 00:31:15,840 Speaker 1: it for the FTC to have meta platforms declared not 632 00:31:15,920 --> 00:31:16,560 Speaker 1: a monopoly. 633 00:31:16,880 --> 00:31:19,520 Speaker 6: You know, I think it was a pretty big loss. Now. 634 00:31:19,560 --> 00:31:22,480 Speaker 6: I'll say this case has been controversial since the beginning, 635 00:31:22,960 --> 00:31:26,320 Speaker 6: and the judge has expressed skepticism of the FTC from 636 00:31:26,360 --> 00:31:29,560 Speaker 6: the very beginning in this case. So it wasn't a surprise, 637 00:31:30,360 --> 00:31:32,560 Speaker 6: but it is a loss because, you know, the FTC 638 00:31:32,640 --> 00:31:35,120 Speaker 6: had some very strong evidence in this case. They had 639 00:31:35,200 --> 00:31:39,680 Speaker 6: documents that were Mark Zuckerberg's words himself saying, hey, we'd 640 00:31:39,800 --> 00:31:42,400 Speaker 6: rather buy our competitors than try to compete with them, 641 00:31:42,480 --> 00:31:46,440 Speaker 6: and that is illegal under the antitrust laws. And this 642 00:31:46,560 --> 00:31:50,760 Speaker 6: judge kind of skirted the need to explain away those 643 00:31:50,840 --> 00:31:54,320 Speaker 6: bad documents by just saying, well, the Federal Trade Commission 644 00:31:54,320 --> 00:31:58,160 Speaker 6: did not define a market in which competition takes place properly. 645 00:31:58,200 --> 00:32:02,800 Speaker 6: The FTC said face Book competes with Instagram and Snapchat 646 00:32:02,840 --> 00:32:05,600 Speaker 6: and that's it, and not TikTok or YouTube, and the 647 00:32:05,680 --> 00:32:08,360 Speaker 6: judge just didn't buy it. And once you put TikTok 648 00:32:08,480 --> 00:32:12,080 Speaker 6: and YouTube into that market, Facebook doesn't have in terms 649 00:32:12,120 --> 00:32:14,720 Speaker 6: of market share, doesn't have a monopoly position. And it's 650 00:32:14,720 --> 00:32:18,200 Speaker 6: the first thing you have to prove in monopolization case 651 00:32:18,240 --> 00:32:20,960 Speaker 6: is that a defendant has a monopoly position in a 652 00:32:21,000 --> 00:32:23,479 Speaker 6: properly defined market, and that's where the failure was. So 653 00:32:23,520 --> 00:32:25,440 Speaker 6: the judge didn't get to that next step. Well what 654 00:32:25,560 --> 00:32:28,600 Speaker 6: about all these bad documents? He just didn't go there. 655 00:32:29,360 --> 00:32:31,440 Speaker 1: So do you see the Federal Trade Commission trying to 656 00:32:31,480 --> 00:32:33,920 Speaker 1: appeal this case? Is it going to be more difficult 657 00:32:34,360 --> 00:32:38,360 Speaker 1: given the parameters that the judge put on how he 658 00:32:38,560 --> 00:32:41,000 Speaker 1: used meta market dominance. 659 00:32:41,240 --> 00:32:43,240 Speaker 6: I think it would be a difficult appeal because the 660 00:32:43,320 --> 00:32:46,960 Speaker 6: judge's decision was based on evidence and testimony and how 661 00:32:47,000 --> 00:32:50,160 Speaker 6: he weighed the documents and how he weighed the testimony, 662 00:32:50,200 --> 00:32:52,760 Speaker 6: and an appellate court gives deference to that kind of 663 00:32:52,800 --> 00:32:55,040 Speaker 6: a decision. They didn't hear the testimony, so they give 664 00:32:55,120 --> 00:32:58,080 Speaker 6: deference to the trial court judge. And I also tend 665 00:32:58,120 --> 00:33:00,960 Speaker 6: to think the FTC may not appeal because when this 666 00:33:01,080 --> 00:33:03,640 Speaker 6: case was brought, it was the tail end of Trump's 667 00:33:03,640 --> 00:33:07,280 Speaker 6: first administration, when there were three Republicans and two Democrats 668 00:33:07,280 --> 00:33:10,280 Speaker 6: on the FTC, and two of those Republicans sort of 669 00:33:10,400 --> 00:33:13,280 Speaker 6: vehemently voted no in terms of bringing this case to 670 00:33:13,320 --> 00:33:17,080 Speaker 6: begin with, So it was controversial. Only one Republican voted 671 00:33:17,200 --> 00:33:19,960 Speaker 6: yes and two Democrats, and so three to two the 672 00:33:20,000 --> 00:33:24,000 Speaker 6: case was brought. Now, we have only two Republicans on 673 00:33:24,040 --> 00:33:26,200 Speaker 6: the Federal Trade Commission, and I think they're more likely 674 00:33:26,280 --> 00:33:28,880 Speaker 6: to say, let's just chalk this up as a loss 675 00:33:28,920 --> 00:33:31,960 Speaker 6: and move to our next case, which is ftcv. Amazon. 676 00:33:32,640 --> 00:33:35,800 Speaker 1: Let's get to it ftcv Amazon and give what we've 677 00:33:35,800 --> 00:33:40,560 Speaker 1: seen so far from the Google and Meta decisions, how 678 00:33:40,600 --> 00:33:41,920 Speaker 1: could this one play out? 679 00:33:42,360 --> 00:33:44,120 Speaker 6: Yeah, I don't think this is a very strong case 680 00:33:44,120 --> 00:33:48,880 Speaker 6: for the Federal Trade Commission and therefore possibly possibly could settle. 681 00:33:48,880 --> 00:33:51,440 Speaker 6: There's a lot of time. Trial is not set until 682 00:33:51,440 --> 00:33:53,120 Speaker 6: twenty twenty seven in this case. 683 00:33:53,440 --> 00:33:55,120 Speaker 1: Well, what's an issue here for Amazon? 684 00:33:55,400 --> 00:33:58,760 Speaker 6: Well, this is about Amazon forcing third party sellers in 685 00:33:58,800 --> 00:34:02,920 Speaker 6: the marketplace to use Amazon's fulfillment services if they want 686 00:34:03,760 --> 00:34:06,720 Speaker 6: the good locations to be in the buybox, to be 687 00:34:06,800 --> 00:34:09,359 Speaker 6: right there, front and center for buyers to buy, which 688 00:34:09,400 --> 00:34:12,920 Speaker 6: is something that the sellers want. They get the users 689 00:34:12,920 --> 00:34:15,880 Speaker 6: a lot more when they're in that position. And also 690 00:34:16,040 --> 00:34:19,160 Speaker 6: Amazon forcing sellers to provide the lowest price on Amazon, 691 00:34:19,200 --> 00:34:22,440 Speaker 6: so they can't offer a cheaper and less expensive price 692 00:34:22,680 --> 00:34:25,120 Speaker 6: on some other website outside of Amazon, even if their 693 00:34:25,200 --> 00:34:27,719 Speaker 6: costs are lower to offer on that other website, such 694 00:34:27,719 --> 00:34:30,640 Speaker 6: as their own Dot Com and that causes a price 695 00:34:30,680 --> 00:34:33,760 Speaker 6: raising effect across the entire market, not just on Amazon 696 00:34:33,760 --> 00:34:36,880 Speaker 6: dot Com. These are the allegations, and the reason I 697 00:34:36,880 --> 00:34:40,000 Speaker 6: think it could settle is because there were very similar 698 00:34:40,000 --> 00:34:43,000 Speaker 6: claims made against Amazon in the UK and in the EU, 699 00:34:43,080 --> 00:34:46,000 Speaker 6: and Amazon made concessions. It basically said that we're not 700 00:34:46,040 --> 00:34:48,359 Speaker 6: going to force sellers to use our fulfillment services. They 701 00:34:48,360 --> 00:34:53,640 Speaker 6: can use anyone they want to, and we won't co work. 702 00:34:53,680 --> 00:34:56,520 Speaker 6: We won't force them to offer lower, lowest prices on Amazon, 703 00:34:56,640 --> 00:34:58,520 Speaker 6: and we'll have to see how those play out in 704 00:34:58,560 --> 00:35:02,239 Speaker 6: the marketplace, because if it looks like they've worked, I'm 705 00:35:02,280 --> 00:35:05,640 Speaker 6: not sure why something like that wouldn't be acceptable in 706 00:35:05,680 --> 00:35:06,640 Speaker 6: the US as well. 707 00:35:06,960 --> 00:35:07,120 Speaker 4: Well. 708 00:35:07,120 --> 00:35:10,279 Speaker 1: We have seen some pushback from the Trump administration on 709 00:35:10,640 --> 00:35:14,120 Speaker 1: the European Union's tech regulations. How does that play into 710 00:35:14,840 --> 00:35:18,400 Speaker 1: whether we could see a settlement, particularly for Amazon. 711 00:35:20,120 --> 00:35:23,000 Speaker 6: You know, I don't know that the pushback on the 712 00:35:23,040 --> 00:35:26,319 Speaker 6: EU with respect to its new laws, its Digital Markets Act, 713 00:35:26,560 --> 00:35:29,160 Speaker 6: and how it's sort of targeting a lot of big 714 00:35:29,280 --> 00:35:33,680 Speaker 6: US companies, I don't know that they really operate fairly separately. 715 00:35:33,719 --> 00:35:37,400 Speaker 6: Our laws are different. Our monopolization laws are quite different 716 00:35:37,400 --> 00:35:42,480 Speaker 6: from the abuse of a dominant position rules in Europe. 717 00:35:42,760 --> 00:35:46,560 Speaker 6: And I think that the reason I think that the 718 00:35:46,640 --> 00:35:48,839 Speaker 6: FTC could look to Europe is just to say, hey, 719 00:35:48,840 --> 00:35:51,479 Speaker 6: they've had this settlement in place now for over a year, 720 00:35:51,960 --> 00:35:54,040 Speaker 6: and if it isn't working in the marketplace, well then 721 00:35:54,080 --> 00:35:56,719 Speaker 6: we shouldn't consider it an acceptable settlement. But if it 722 00:35:56,760 --> 00:35:59,280 Speaker 6: is working, maybe that's something that we could accept here. 723 00:36:00,320 --> 00:36:02,279 Speaker 6: But I think also the FTC is going to have 724 00:36:02,280 --> 00:36:05,320 Speaker 6: to weigh out weigh its case. If it keeps taking losses, 725 00:36:05,360 --> 00:36:07,160 Speaker 6: it's not going to look good because because they have 726 00:36:07,239 --> 00:36:11,520 Speaker 6: also recently lost on a challenge to a merger as well. 727 00:36:11,719 --> 00:36:14,960 Speaker 1: And even longer term, it's not just the Federal Trade 728 00:36:14,960 --> 00:36:19,880 Speaker 1: Commission with antitrust cases against big tech. The Justice Department 729 00:36:19,960 --> 00:36:23,600 Speaker 1: is considering action against Apple. What's going on there, Well. 730 00:36:23,480 --> 00:36:26,000 Speaker 6: The Justice Department did bring a suit against Apple. It 731 00:36:26,040 --> 00:36:30,840 Speaker 6: has moved really slowly, even in terms of typical antitrust litigation. 732 00:36:30,920 --> 00:36:35,360 Speaker 6: It's not yet separate trial. Efforts to dismiss it have failed. 733 00:36:35,560 --> 00:36:39,920 Speaker 6: But it's a strange case because it's really about Apple 734 00:36:40,080 --> 00:36:43,680 Speaker 6: not making its hardware and software as interoperable as it 735 00:36:43,760 --> 00:36:47,960 Speaker 6: should with rival hardware and software. And the DOJ claims 736 00:36:48,000 --> 00:36:50,399 Speaker 6: that this is because Apple wants to keep people within 737 00:36:50,440 --> 00:36:52,680 Speaker 6: its ecosystem make it harder for people who have an 738 00:36:52,719 --> 00:36:55,960 Speaker 6: iPhone to switch to an Android phone. So, for instance, 739 00:36:55,960 --> 00:36:58,279 Speaker 6: if you invest in an Apple Watch, you're going to 740 00:36:58,360 --> 00:37:00,960 Speaker 6: keep that iPhone because the Apple Watch works best with 741 00:37:01,000 --> 00:37:03,280 Speaker 6: the iPhone and it doesn't work well with an Android 742 00:37:03,719 --> 00:37:08,120 Speaker 6: or vice versa. This one is really slow, so I 743 00:37:08,160 --> 00:37:10,279 Speaker 6: think when you have that much time ahead of it, 744 00:37:10,360 --> 00:37:13,960 Speaker 6: there also is some possibility for settlement. The other reason 745 00:37:14,000 --> 00:37:15,920 Speaker 6: I think I do think that this is also a 746 00:37:15,960 --> 00:37:18,440 Speaker 6: case that might settle down the road because Apple has 747 00:37:18,440 --> 00:37:22,319 Speaker 6: slowly been making changes on its own and changing some 748 00:37:22,400 --> 00:37:25,320 Speaker 6: of the policies that the Department of Justice has targeted 749 00:37:25,440 --> 00:37:29,640 Speaker 6: as unreasonable or anti competitive. And eventually, if Apple keeps 750 00:37:29,680 --> 00:37:32,320 Speaker 6: doing that, by the time we would get to a trial, 751 00:37:32,680 --> 00:37:35,160 Speaker 6: there may not be in very many claims left. So 752 00:37:35,560 --> 00:37:38,319 Speaker 6: it's possible if Apple keeps kind of making concessions and 753 00:37:38,320 --> 00:37:41,319 Speaker 6: tweaking its rules as we go forward, that that case 754 00:37:41,360 --> 00:37:42,200 Speaker 6: could also settle. 755 00:37:42,440 --> 00:37:45,480 Speaker 1: Now, I wonder, just looking at the Trump administration's overall 756 00:37:45,520 --> 00:37:49,319 Speaker 1: strategy when it comes to antitrust enforcement against big tech weather, 757 00:37:49,360 --> 00:37:51,560 Speaker 1: it might be looking at settlements simply because as you've 758 00:37:51,560 --> 00:37:54,440 Speaker 1: been mentioning it's been facing a lot of setbacks in 759 00:37:54,480 --> 00:37:57,080 Speaker 1: court with the Meta matter as well as Google. 760 00:37:57,800 --> 00:37:59,759 Speaker 6: Yeah, that's what I'm thinking. I mean, we'll have to 761 00:37:59,760 --> 00:38:02,080 Speaker 6: see what happens with some of the if there are 762 00:38:02,120 --> 00:38:04,680 Speaker 6: any more challenges to mergers. I'm not so sure that 763 00:38:04,719 --> 00:38:07,680 Speaker 6: there will be, because it seems that this administration is 764 00:38:07,719 --> 00:38:10,120 Speaker 6: settling an awful lot of the time when they have 765 00:38:10,200 --> 00:38:13,759 Speaker 6: concerns about two companies that are doing a transaction. But 766 00:38:14,760 --> 00:38:17,440 Speaker 6: if they do have concerns that they will lose in court, 767 00:38:17,640 --> 00:38:20,840 Speaker 6: it sometimes you can read the tea leaves. Sometimes it 768 00:38:20,960 --> 00:38:24,440 Speaker 6: judge is fairly obvious about how they're feeling about a 769 00:38:24,480 --> 00:38:27,279 Speaker 6: certain matter. For instance, in FTCB Meta, the judge was 770 00:38:27,320 --> 00:38:30,600 Speaker 6: clearly skeptical. As we go forward with those other two cases, 771 00:38:30,640 --> 00:38:32,960 Speaker 6: the Amazon case and the Apple case. And by the way, 772 00:38:32,960 --> 00:38:35,720 Speaker 6: we can't forget Department of Justice versus Live Nation, because 773 00:38:35,719 --> 00:38:39,440 Speaker 6: that's coming to it may be that they'd be more 774 00:38:39,440 --> 00:38:40,240 Speaker 6: inclined to settle. 775 00:38:41,160 --> 00:38:43,640 Speaker 1: All right, Well, we'll see where things go as we 776 00:38:43,680 --> 00:38:46,719 Speaker 1: head into twenty twenty six and beyond. Thank you for this, Jen, 777 00:38:46,800 --> 00:38:47,880 Speaker 1: really great having you with us. 778 00:38:47,920 --> 00:38:48,640 Speaker 6: Thank you so much. 779 00:38:48,719 --> 00:38:52,799 Speaker 1: That's Jennifer Ree, Senior Litigation analyst for Bloomberg Intelligence. We'd 780 00:38:52,800 --> 00:38:55,440 Speaker 1: also like to extend our thanks to her fellow Bloomberg 781 00:38:55,440 --> 00:38:59,000 Speaker 1: Intelligence colleagues Punam Goyle, Lindsey Dutch, and Mike mcglohon for 782 00:38:59,040 --> 00:39:01,960 Speaker 1: being with us on this holiday program, along with Scott 783 00:39:02,000 --> 00:39:04,960 Speaker 1: Martin of Kingsview Wealth Management. Thanks of course to you 784 00:39:05,080 --> 00:39:08,200 Speaker 1: as well for spending part of your Thanksgiving holiday with us. 785 00:39:08,200 --> 00:39:12,520 Speaker 1: Here's hoping for a full and meaningful long weekend on 786 00:39:12,680 --> 00:39:16,640 Speaker 1: Nathan Haker Stay with us. Top stories and global business 787 00:39:16,680 --> 00:39:18,840 Speaker 1: headlines are coming up right now