WEBVTT - Daybreak Holiday: Black Friday Sales, Markets, Bitcoin and Antitrust 0:00:02.120 --> 0:00:05.040 Happy Thanksgiving everybody, and thank you for joining us on 0:00:05.080 --> 0:00:08.799 this special edition of Bloomberg Daybreak. US markets are closed 0:00:08.880 --> 0:00:11.840 for the holiday. I'm Nathan Hager coming up this hour. 0:00:12.080 --> 0:00:14.760 It's been a voladile November for both the stock and 0:00:14.920 --> 0:00:17.759 cryptocurrency markets. We'll look at what's in store for the 0:00:17.800 --> 0:00:20.159 rest of this year and into twenty twenty six with 0:00:20.320 --> 0:00:24.119 Scott Martin, chief investment officer of Kingsview Wealth Management, and 0:00:24.120 --> 0:00:28.560 Bloomberg Intelligence senior commodity strategist Mike mcgloone. Plus, we'll update 0:00:28.600 --> 0:00:31.200 you on the latest anti trust battles facing high tech 0:00:31.520 --> 0:00:35.839 with Bloomberg Intelligence senior litigation analyst Jennifer Ree. But first, 0:00:35.880 --> 0:00:38.560 we are entering one of the busiest and most important 0:00:38.560 --> 0:00:41.639 times of year for retail. How are things shaping up 0:00:41.720 --> 0:00:44.120 as we get said for Black Friday and the countdown 0:00:44.159 --> 0:00:46.960 to the holidays. Let's ask a couple of our senior 0:00:47.000 --> 0:00:50.240 analysts in the retail space, Punam Goyle and Lindsay Dutch 0:00:50.600 --> 0:00:54.480 of Bloomberg Intelligence. Happy holidays to both of you. And 0:00:54.600 --> 0:00:56.960 I think I saw a report going into this conversation 0:00:56.960 --> 0:01:00.440 from the National Retail Federation. They're predicting that holiday spending 0:01:00.480 --> 0:01:03.880 I think could pass a trillion dollars this year. Punum, 0:01:03.920 --> 0:01:05.840 I'll start with you. Do you see those kind of 0:01:05.920 --> 0:01:07.039 levels from consumers? 0:01:07.400 --> 0:01:10.680 Yes? Absolutely. The consumer has been quite resilient all year, 0:01:10.720 --> 0:01:14.160 to our surprise, despite the tariff dwins, and we do 0:01:14.280 --> 0:01:19.640 think that spending will continue into Thanksgiving weekend especially and 0:01:19.680 --> 0:01:23.319 then into December. But that said, spending will be selective. 0:01:23.840 --> 0:01:28.120 Shoppers are conscious price conscious more notably, and they are 0:01:28.160 --> 0:01:31.160 spending where they find the product that they're looking for. 0:01:31.760 --> 0:01:34.520 Lizzie, let's bring you in. What are you seeing in 0:01:34.640 --> 0:01:39.200 terms of consumer behavior and where they could be spending 0:01:39.480 --> 0:01:40.759 as we head into the holidays. 0:01:41.040 --> 0:01:44.120 Yes, I would agree. I think we're seeing resilience, especially 0:01:44.160 --> 0:01:48.520 coming from that higher income consumer, while the lower income 0:01:48.560 --> 0:01:51.080 consumer might be pulling back just a drop when we 0:01:51.160 --> 0:01:55.720 compare that year over year. But as Puna mentioned, you know, 0:01:55.760 --> 0:01:59.440 we do see growth coming into the season, and although 0:01:59.480 --> 0:02:03.520 there is a focus on value and price, consumers are 0:02:03.560 --> 0:02:07.560 splurging on things that they really want or that they 0:02:08.040 --> 0:02:11.399 need so for a best buy. For example, we see 0:02:11.400 --> 0:02:15.720 strength in gaming, computing, phones and the Dick's sporting goods. 0:02:15.760 --> 0:02:19.080 We see strengths continuing on both footwear and apparel for 0:02:19.200 --> 0:02:21.840 sort of those new trendy sports. 0:02:21.440 --> 0:02:23.959 Items now I'll put them. I knowe you cover a 0:02:24.000 --> 0:02:27.640 lot of apparel retailers as well in your focus at 0:02:27.639 --> 0:02:30.400 Bloomberg Intelligence. How are some of those companies set up 0:02:30.400 --> 0:02:31.080 for the holidays. 0:02:31.400 --> 0:02:33.560 I think they're set up quite nicely. I think the 0:02:33.680 --> 0:02:36.040 product there's a lot of fashion, there's a lot of newness. 0:02:36.080 --> 0:02:39.400 In fact, we ran a sneaker survey just earlier this 0:02:39.520 --> 0:02:42.000 month and what we found is that people want to 0:02:42.040 --> 0:02:45.480 buy sneakers for the holidays, So sneakers are a top category. 0:02:45.600 --> 0:02:49.800 Other top categories based on surveys we've seen are apparel, home, and, 0:02:49.880 --> 0:02:53.920 as a Lindsay said, electronics. So these are still the 0:02:54.080 --> 0:02:57.640 top categories in addition to of course toys where people 0:02:57.720 --> 0:02:59.560 will be spending their dollars this holiday. 0:03:00.120 --> 0:03:03.520 Interesting to bring toys in as well, given some of 0:03:03.560 --> 0:03:08.720 the tariff headwinds those types of products could be facing 0:03:09.400 --> 0:03:11.799 not just in the holidays, but into next year as well. 0:03:11.800 --> 0:03:15.320 Could we be seeing tariff headwinds for retail going into 0:03:15.360 --> 0:03:15.760 next year? 0:03:15.800 --> 0:03:18.959 Lindsay Yeah, So the toy backdrop this year is very 0:03:19.000 --> 0:03:22.960 different than most years prior. You know, typically we see 0:03:23.400 --> 0:03:26.400 big retailers like a Walmart or a target. They're taking 0:03:26.440 --> 0:03:30.919 their holiday toy inventory in July, sort of the mid 0:03:30.960 --> 0:03:34.240 mid middle of the year. This year, we saw a 0:03:34.280 --> 0:03:37.360 significant delay in those orders. They kind of fell into 0:03:37.400 --> 0:03:40.760 the fourth quarter, so there was a delay, and they 0:03:40.800 --> 0:03:44.440 also were taking on smaller shipments than historically they've done, 0:03:44.720 --> 0:03:48.000 thinking that they might replenish some product with you know, 0:03:48.400 --> 0:03:52.560 domestic shipments, you know, in that holiday season. So there's 0:03:52.600 --> 0:03:55.600 a lot of uncertainty heading into twenty twenty six for 0:03:55.720 --> 0:03:59.200 the toy makers and that sort of category as a whole. 0:03:59.480 --> 0:04:02.440 Just because we saw us such a significant delay, you know, 0:04:02.480 --> 0:04:05.080 we don't really know where demand is. And if we 0:04:05.080 --> 0:04:08.440 look at twenty twenty five as the whole, really most 0:04:08.480 --> 0:04:11.240 of the demand has not been driven by kids toys. 0:04:11.280 --> 0:04:15.120 It's really been driven by adults their interest in trading cards, 0:04:15.120 --> 0:04:18.480 collectibles and building sets, and the holiday is quite different 0:04:18.480 --> 0:04:19.560 with a focus on kids. 0:04:19.720 --> 0:04:23.280 We're speaking with Lindsey Dutch, a senior retail analyst at 0:04:23.400 --> 0:04:26.720 Bloomberg Intelligence, along with Punham Goyle, also a senior retail 0:04:26.760 --> 0:04:31.000 analyst at Bloomberg Intelligence. Going into the holidays, of course, 0:04:31.640 --> 0:04:34.760 a lot of customers are thinking about deals going into 0:04:34.760 --> 0:04:39.320 Black Friday and beyond how important PUNAM is this weekend 0:04:39.400 --> 0:04:42.039 in particular for the retailers and what kind of deals 0:04:42.080 --> 0:04:43.039 are we seeing. 0:04:43.080 --> 0:04:46.000 This weekend is very important. It actually kicks off holiday 0:04:46.040 --> 0:04:49.320 despite all the deals we've been seeing prior to today, 0:04:49.680 --> 0:04:54.400 so I think deals will be prevalent. We don't expect steep, 0:04:54.480 --> 0:04:57.000 steep discounts. You know, in the past, it's eight years 0:04:57.000 --> 0:05:00.120 ago when there were inventory issues, we saw fifty six 0:05:00.000 --> 0:05:03.120 seventy person off at sometimes. I think we'll probably stay 0:05:03.120 --> 0:05:05.560 in the range of between thirty and forty person off 0:05:05.640 --> 0:05:08.320 on average. That's what we saw last year. So I 0:05:08.360 --> 0:05:11.680 do expect discounts to be similar at most places. But 0:05:11.800 --> 0:05:15.599 you will have those doorbuster deals to get the shopper 0:05:15.680 --> 0:05:17.600 into the store, and we expect those to be there 0:05:17.600 --> 0:05:21.040 at Walmart and Target and some of these department stores 0:05:21.040 --> 0:05:24.239 where that is how they draw in customers. That said, 0:05:24.320 --> 0:05:28.320 today's Thanksgiving Day and stores are closed, so everyone is shopping, 0:05:28.480 --> 0:05:31.880 likely online and spending time with family, and online sales 0:05:31.920 --> 0:05:34.480 we expect to still outpay store sales. 0:05:34.720 --> 0:05:38.400 That's an interesting return to trend to keep the stores 0:05:38.480 --> 0:05:41.320 closed on Thanksgiving. In past years, we've seen some of 0:05:41.320 --> 0:05:45.440 those doorbusters come Thanksgiving night, but Lindsey, if we don't 0:05:45.480 --> 0:05:48.840 see the kinds of deep discounts that there have been 0:05:48.880 --> 0:05:52.120 in the past for the kickoff of holiday shopping season, 0:05:52.120 --> 0:05:53.680 what could that mean for foot traffic? 0:05:55.160 --> 0:05:57.160 So we do still expect, you know, people to come 0:05:57.200 --> 0:06:00.839 out and shop. I agree with Puna Myke the level 0:06:00.920 --> 0:06:05.159 of discounting might be similar to last year, but rolling 0:06:05.200 --> 0:06:08.560 out those discounts and having those special promotions is really 0:06:08.600 --> 0:06:12.240 the key to driving you know, consumers to your store 0:06:12.440 --> 0:06:16.320 or to your website. And in thinking about foot traffic 0:06:16.360 --> 0:06:19.719 to stores, you know, Best Buy sort of discussed that 0:06:19.839 --> 0:06:22.719 they are seeing a strong interest in in store shopping 0:06:22.760 --> 0:06:25.760 coming from gen Z and we see that also in 0:06:25.800 --> 0:06:28.560 our coverage of All to Beauty. So that younger consumer, 0:06:28.760 --> 0:06:30.960 they like to go to the store, they like in 0:06:31.040 --> 0:06:33.839 person shopping, and I think they'll be out for the weekend. 0:06:34.240 --> 0:06:36.440 That's an interesting point as well, is that kind of 0:06:36.440 --> 0:06:41.760 a shift in trend in terms of shopper behavior overall, poonam. 0:06:41.440 --> 0:06:44.800 The mall has become the new hangout spot, and especially 0:06:44.839 --> 0:06:47.239 the malls that are doing really well and have become 0:06:47.400 --> 0:06:50.240 entertainment hubs. So whether it's coming out you know, last 0:06:50.240 --> 0:06:52.560 weekend aired wicket, So there were a lot of teenagers 0:06:52.560 --> 0:06:54.760 in the mall, or if it's just going to a 0:06:54.839 --> 0:06:57.560 restaurant or with the new Dick sporting goods at the 0:06:57.600 --> 0:06:59.360 mall that I went to was the House of Sports, 0:06:59.400 --> 0:07:02.679 a concept where there's entertainment to build into it. That's 0:07:02.720 --> 0:07:04.320 what's attracting these younger people. 0:07:05.000 --> 0:07:10.400 In terms of the overall outlook for retail, we've gotten 0:07:10.480 --> 0:07:15.240 a lot of reports from the companies themselves from their 0:07:15.280 --> 0:07:19.000 earnings just heading into this weekend, Lindsey. Based on what 0:07:19.040 --> 0:07:21.840 we've seen from the earnings reports so far, what does 0:07:21.880 --> 0:07:24.600 that tell us about what we could get into the holidays. 0:07:25.760 --> 0:07:29.480 I think the companies remain pretty conservative in how they're 0:07:29.520 --> 0:07:31.840 thinking about the fourth quarter. They don't want to get 0:07:31.880 --> 0:07:34.600 over their skis when when they're thinking about, you know, 0:07:34.720 --> 0:07:37.000 what the sales might be. You know, we saw pretty 0:07:37.520 --> 0:07:41.239 you know, low outlooks coming out of Best Buy dis 0:07:42.960 --> 0:07:46.240 meaning a deceleration in same source sales growth from the 0:07:46.280 --> 0:07:49.560 third quarter to the fourth quarter. I think that outlook, 0:07:49.640 --> 0:07:53.280 you know, is conservative. They're not really sure on the consumer. 0:07:53.320 --> 0:07:55.840 There is a lot of uncertainty still out there, but 0:07:55.920 --> 0:07:59.000 I think it does leave room for some surprises. You know, 0:07:59.040 --> 0:08:02.160 we have been seen better than expected sales in the 0:08:02.200 --> 0:08:04.600 third quarter, a lot of that being driven by back 0:08:04.600 --> 0:08:07.640 to school, you know, from many retailers across the board, 0:08:08.160 --> 0:08:11.440 and I think there's definitely reason to be optimistic for 0:08:11.520 --> 0:08:13.080 a strong holiday season. 0:08:13.400 --> 0:08:16.640 If we're seeing those kind of conservative outlooks of from 0:08:16.720 --> 0:08:20.080 the businesses punam, does that point to a sort of 0:08:20.080 --> 0:08:22.920 more of a difficulty for these companies to provide the 0:08:23.040 --> 0:08:26.520 kind of, you know, deep holiday discounts that they'd been 0:08:26.560 --> 0:08:27.760 able to do in the past. 0:08:28.720 --> 0:08:31.520 Yeah, I think the conservative outlook stems from the uncertainty 0:08:31.560 --> 0:08:34.160 of just knowing where consumer behavior will be. But in 0:08:34.280 --> 0:08:36.719 terms of the deep discounts, don't get me wrong, there 0:08:36.760 --> 0:08:39.880 will be discounts. It's just you're not going to see 0:08:40.320 --> 0:08:43.360 the store you know, at these deep discounts that we 0:08:43.360 --> 0:08:46.040 were used to seeing, maybe even prior to the pandemic. 0:08:46.559 --> 0:08:49.480 And the reason why you won't see them is because 0:08:49.559 --> 0:08:52.400 inventory is you could imagine this year being a year 0:08:52.520 --> 0:08:56.080 with tariffs and levies added on to retailers, they didn't 0:08:56.120 --> 0:08:58.760 overbuy right so they've been very cautious on how they're 0:08:58.760 --> 0:09:02.120 buying inventory. And for a lot of them, inventory has 0:09:02.240 --> 0:09:05.240 been right sized, which is what's been driving the healthier 0:09:05.320 --> 0:09:08.880 margin and the healthier sales and also healthier full price selling. 0:09:09.720 --> 0:09:12.840 You will find disconsoled. Nike, for example, is still clearing 0:09:12.840 --> 0:09:15.520 out aged inventory and a lot of the at leisure 0:09:15.600 --> 0:09:18.319 brands that are amiss to turn around. That's where you 0:09:18.400 --> 0:09:21.480 find inventory pals, but on old stuff. The new stuff 0:09:21.520 --> 0:09:23.760 I think will be fairly moderate levels. 0:09:24.520 --> 0:09:28.880 Linzie, how do you see retailers weathering tariff impacts into 0:09:28.960 --> 0:09:33.839 next year? We've seen these companies kind of absorb the 0:09:34.200 --> 0:09:36.720 higher costs at least in the in the short term 0:09:36.800 --> 0:09:39.600 some front loading as well as Puna mentioned, But into 0:09:39.600 --> 0:09:42.040 twenty twenty six. What's your expectation there? 0:09:43.080 --> 0:09:48.400 So, I do expect costs generally to continue rising, you know, 0:09:48.520 --> 0:09:51.800 into the next year, at least through the first half. 0:09:52.600 --> 0:09:57.480 So companies will be continuing with their mitigation strategies, whether 0:09:57.520 --> 0:10:00.920 that's you know, continue movement and how they're sourcing, where 0:10:01.040 --> 0:10:04.800 they're selling, the price points, all of those levers that 0:10:04.840 --> 0:10:07.240 they've been pulling sort of this year. I think that 0:10:07.400 --> 0:10:10.800 cost pressure could continue, but we do we have seen, 0:10:10.880 --> 0:10:14.199 as you've mentioned, you know, some resilience on the profit 0:10:14.280 --> 0:10:19.000 line across many retailers, and that is you know, them 0:10:19.080 --> 0:10:21.800 passing some of those costs on or you know, the 0:10:21.840 --> 0:10:24.920 costs haven't come quite to fruition to the levels that 0:10:24.960 --> 0:10:28.840 they were initially expecting. Also, you know, in some of 0:10:28.880 --> 0:10:32.360 the premium brands, like if you think about a Williams Soonoma, 0:10:32.440 --> 0:10:36.680 for example, they are keeping discounts and promotions even for 0:10:36.720 --> 0:10:39.920 the holiday season, very limited and that does allow them 0:10:40.040 --> 0:10:43.800 to maintain such a strong margin even when they're seeing 0:10:43.840 --> 0:10:44.599 some cost. 0:10:44.400 --> 0:10:47.400 Pick up and put them. How do you see some 0:10:47.440 --> 0:10:51.080 of the companies that you cover mitigating tariffs into twenty six. 0:10:51.960 --> 0:10:53.560 Yeah, I think so there's two things that we have 0:10:53.559 --> 0:10:55.320 to think about when we think of twenty twenty six. 0:10:55.400 --> 0:10:57.160 First and the first half of the year, and last 0:10:57.240 --> 0:11:00.040 year didn't have really tariff pressure. We were just speculating 0:11:00.120 --> 0:11:02.600 is what the tariffs could be. So there is more pressure. 0:11:03.080 --> 0:11:06.000 But that said, the reason we've seen so much resilience, 0:11:06.040 --> 0:11:10.000 in my view, is because they're finding opportunities elsewhere. You know, 0:11:10.000 --> 0:11:13.120 when you think about artificial intelligence generative AI and how 0:11:13.160 --> 0:11:17.040 that's really helped streamline operations create efficiencies. I think part 0:11:17.120 --> 0:11:19.880 of the reason they've been able to offset some of 0:11:19.920 --> 0:11:22.960 this pain, in addition to supplier negotiations, is because of 0:11:22.960 --> 0:11:24.360 the benefit that they're getting from. 0:11:24.280 --> 0:11:30.479 AI in our last minute, Lindsey, are there certain items 0:11:30.679 --> 0:11:34.000 that you think are going to find a big competition 0:11:34.240 --> 0:11:37.600 from consumers sort of fighting each other to get into 0:11:37.760 --> 0:11:40.240 the stores to get under the tree this holiday season? 0:11:41.480 --> 0:11:45.000 You know, I think toys is typically a category where 0:11:45.080 --> 0:11:49.120 you might see something like that. When we looked at 0:11:49.320 --> 0:11:52.760 the toy lists, you know, coming out of Walmart, Target 0:11:53.080 --> 0:11:56.240 and Amazon, you know those top toy lists, you know, 0:11:56.280 --> 0:11:58.960 they look very similar to last year. So I don't 0:11:59.000 --> 0:12:01.040 know that there's a real hot item that you have 0:12:01.160 --> 0:12:04.840 to be at the door when they open to get 0:12:04.960 --> 0:12:09.360 or wait in line. Even Nintendo Switch, the inventory on 0:12:09.440 --> 0:12:14.400 that console is much greater than the original Nintendo Switch 0:12:14.440 --> 0:12:16.400 that was rolled out a couple of years ago, So 0:12:16.440 --> 0:12:21.000 the inventory looks appropriate in that. I don't think retailers 0:12:21.000 --> 0:12:24.480 are over inventory this season, but they have enough for 0:12:25.040 --> 0:12:26.480 the expected demand trends. 0:12:27.040 --> 0:12:30.080 All right, Well, happy holidays to both of you. Really 0:12:30.120 --> 0:12:32.400 appreciate you coming on with us. That's put them Goyle 0:12:32.600 --> 0:12:36.880 and Lindsay Dutch, senior retail analysts at Bloomberg Intelligence and 0:12:37.000 --> 0:12:40.200 up next on the special Thanksgiving edition of Bloomberg Daybreak. 0:12:40.320 --> 0:12:42.880 Is December going to bring any relief to stocks and 0:12:42.960 --> 0:12:46.600 crypto Alaska couple experts in both those spaces. As this 0:12:46.720 --> 0:12:50.880 holiday edition of Bloomberg Daybreak continues, I'm Nathan Hager, and 0:12:51.000 --> 0:13:04.319 this is Bloomberg. Thanks for joining us on this special 0:13:04.440 --> 0:13:07.320 edition of Bloomberg day Break. US markets are closed for 0:13:07.320 --> 0:13:11.000 the Thanksgiving holiday. I'm Nathan Hager. Well, after soaring from 0:13:11.080 --> 0:13:13.920 the spring into the fall, the stock market kind of 0:13:13.960 --> 0:13:16.400 took a breather this month. The S and P five 0:13:16.480 --> 0:13:19.360 hundreds on track for its first monthly decline in seven 0:13:19.800 --> 0:13:21.760 So is there more pain ahead or could this be 0:13:21.840 --> 0:13:25.120 a buying opportunity. Let's ask Scott Martin. He's the chief 0:13:25.120 --> 0:13:29.480 investment officer at Kingsview Wealth Management. Happy holiday to you, Scott. 0:13:29.520 --> 0:13:31.719 I think we all remember what happened seven months ago, 0:13:31.880 --> 0:13:35.280 the April tariff announcement. We did get the bounce back 0:13:35.360 --> 0:13:37.480 since then. Can we be set up for a repeat 0:13:37.520 --> 0:13:38.400 of that this time around? 0:13:39.080 --> 0:13:41.200 Yes, it seems you're less similar, actually, Nathan. And as 0:13:41.200 --> 0:13:42.920 we approach the holidays, I'm certainly in a little bit 0:13:42.920 --> 0:13:44.440 more of a market's been a little bit more of 0:13:44.440 --> 0:13:46.199 a giving mood, let's say, with regards to a give 0:13:46.280 --> 0:13:48.240 back in prices and so I believe that this is 0:13:48.240 --> 0:13:49.880 gonna be one of those stress points again that we 0:13:49.920 --> 0:13:52.920 did experience earlier this year where markets feel broken, they 0:13:53.000 --> 0:13:55.480 feel like they're focusing on the bad versus the good, 0:13:55.480 --> 0:13:58.240 and we're seeing that in price action, mostly across tech 0:13:58.280 --> 0:13:59.960 and but also across some other areas of the market 0:14:00.120 --> 0:14:02.760 that have been bled into by the liquidations that happen. 0:14:02.880 --> 0:14:04.960 So I think, similar to what's gone on in April 0:14:05.000 --> 0:14:07.000 and into even many this year, we're starting to have 0:14:07.040 --> 0:14:08.880 some of those weekends get out of the market. Those 0:14:08.920 --> 0:14:11.080 weekends get out of those areas where there has been 0:14:11.120 --> 0:14:13.160 a little bit of froth, and so I think those 0:14:13.160 --> 0:14:15.000 weekends are going to get out and allow these stronger 0:14:15.040 --> 0:14:17.120 hands to come in where you, the investor, could come 0:14:17.160 --> 0:14:18.920 in and find price levels that are built a little 0:14:18.920 --> 0:14:20.960 bit the same, more attractive than they were just a 0:14:20.960 --> 0:14:22.800 couple of months ago. And that's an opportunity for us 0:14:22.800 --> 0:14:25.600 to reallocate, rebalance, and get ready for next year as 0:14:25.600 --> 0:14:26.280 things go up again. 0:14:26.280 --> 0:14:28.720 In our opinion, Okay, well, I'm going to go ahead 0:14:28.720 --> 0:14:31.160 and play a devil's advocate here just a little bit, 0:14:31.280 --> 0:14:34.520 because there is this debate in the market about whether 0:14:34.760 --> 0:14:38.240 you know the artificial intelligence names. The megacaps have gotten 0:14:38.280 --> 0:14:41.560 too stretched in terms of their valuations. Is it just 0:14:42.000 --> 0:14:45.640 froth or could there be more to give back here? 0:14:46.480 --> 0:14:48.280 I think there's probably some more to give back, certainly 0:14:48.280 --> 0:14:50.200 because the markets have shown they need as they get 0:14:50.200 --> 0:14:52.640 extended to the upside. As we get frothy, the markets 0:14:52.680 --> 0:14:55.240 also get too scared, they get too too fighting, let's say. 0:14:55.280 --> 0:14:57.240 And so I think that's going to be the essence 0:14:57.280 --> 0:14:59.800 of what the market is. As investors ourselves, we have 0:14:59.800 --> 0:15:03.000 to remember that not only are markets nonlinear, they're also 0:15:03.200 --> 0:15:05.400 very emotionally driven. And so when fundamentals kind of get 0:15:05.400 --> 0:15:07.240 thrown out the window here with regards to both on 0:15:07.280 --> 0:15:09.840 the upside and downside, that creates opportunity for us. And 0:15:09.880 --> 0:15:11.960 so what we look longer term here, and that's beyond 0:15:12.000 --> 0:15:14.840 obviously five days, ten days, or thirty days. We tend 0:15:14.880 --> 0:15:16.960 to look at these price levels at a price action 0:15:17.440 --> 0:15:21.400 as opportunities, as points where investors who really like the space, 0:15:21.400 --> 0:15:23.200 who really like the tech space, who really like the 0:15:23.240 --> 0:15:27.160 AI space, if it's servers, if it's servers, if it's AI, 0:15:27.440 --> 0:15:29.120 if it's areas in the market that have really been 0:15:29.160 --> 0:15:31.880 strong and really shown, as we saw with Nvidia earlier 0:15:31.880 --> 0:15:33.960 in November that really have the earnings, and they really 0:15:34.000 --> 0:15:36.200 have the potential to deliver what I believe the market 0:15:36.200 --> 0:15:38.640 expects when it comes to profits. For example, I think 0:15:38.680 --> 0:15:40.680 there's a long term story here in that space, or 0:15:40.720 --> 0:15:43.200 in the tech space, especially which has been hit reasonably 0:15:43.200 --> 0:15:45.720 hard in the last day several weeks. There's opportunities there 0:15:45.720 --> 0:15:48.160 for investors to take a steak here and say that yes, 0:15:48.200 --> 0:15:50.160 things could be a little bit more volatile in the 0:15:50.160 --> 0:15:52.440 next month or two, but overall, in the next day 0:15:52.480 --> 0:15:54.680 six to twelve months, it's our opinion that the prices 0:15:54.680 --> 0:15:56.400 will again rebound and they will go higher. 0:15:56.680 --> 0:15:58.920 Is it going to be an opportunity across the tech 0:15:58.960 --> 0:16:00.560 space or do you think it's going to be like 0:16:00.600 --> 0:16:02.760 a stock pickers market in terms of what we see 0:16:02.760 --> 0:16:03.080 in tech. 0:16:03.840 --> 0:16:05.760 That's a great question. I think we've seen from the 0:16:05.800 --> 0:16:07.840 price action so far in Nathan, it's going to probably 0:16:07.840 --> 0:16:09.880 be more of a stock pickers market in the sense 0:16:09.960 --> 0:16:11.840 of some of the tech has been doing okay. If 0:16:11.840 --> 0:16:13.640 you look at some of the Googles of the world, 0:16:13.640 --> 0:16:16.600 and even in Vidia until most recently, and even Oracle 0:16:16.680 --> 0:16:18.640 until most recently, there has been strength. And so if 0:16:18.640 --> 0:16:20.480 you look at some of the names that maybe have 0:16:20.640 --> 0:16:23.680 relatively stayed stable or relatively been maybe against some of 0:16:23.680 --> 0:16:26.280 the big moves in tech in general, those would be 0:16:26.320 --> 0:16:27.960 areas that I think you can find some strengths. But 0:16:28.000 --> 0:16:30.280 then again, if you look at the corwe's for example, 0:16:30.400 --> 0:16:32.560 if you look at say A M D, those are 0:16:32.600 --> 0:16:35.600 areas that have come on with an additional punishment that 0:16:35.720 --> 0:16:38.240 in our opinion looks a little bit overdone. So when 0:16:38.240 --> 0:16:39.800 you pick the stocks here and you look at some 0:16:39.800 --> 0:16:42.320 of the names that have been say irrepidbly punished, I 0:16:42.320 --> 0:16:44.200 think those are areas where investors can find some of 0:16:44.200 --> 0:16:46.560 the most upside going forward, because those are companies too 0:16:46.600 --> 0:16:49.400 that are getting stay unduly punished because of this liquidation, 0:16:49.680 --> 0:16:51.800 and therefore that's probably where most of the upside exists. 0:16:52.160 --> 0:16:55.200 Is there too much focus on the tech sector right now? 0:16:55.240 --> 0:16:59.200 Do you see any opportunities for either broadening in the 0:16:59.360 --> 0:17:03.520 in the a rotation out of tack? 0:17:04.240 --> 0:17:06.320 We do. I think the rotation of the tech, depending 0:17:06.320 --> 0:17:08.560 on how long it lasts, will obviously spread itself into 0:17:08.560 --> 0:17:10.520 different areas where I've seeing that, and say financials, we're 0:17:10.520 --> 0:17:13.480 seeing that in pharmaceuticals. My goodness, healthcare, which was a 0:17:13.480 --> 0:17:15.400 dead space for the last couple of years has come 0:17:15.440 --> 0:17:18.320 on very strong. Utilities, what i'd like to call a 0:17:18.400 --> 0:17:21.240 very boring sector, have stepped up very well. So yes, 0:17:21.280 --> 0:17:24.720 as the tech let's say tech malay spreads through the 0:17:24.960 --> 0:17:26.399 rest of the year here, I think you're going to 0:17:26.480 --> 0:17:28.959 see those areas step up and take leadership. But as 0:17:28.960 --> 0:17:31.200 we've seen in the past days and the real story 0:17:31.200 --> 0:17:32.879 here though, and the real story for growth and the 0:17:32.880 --> 0:17:36.199 real story for investors that want that long term appreciation 0:17:36.560 --> 0:17:38.919 that still remains in tech. If you just look over history, 0:17:39.040 --> 0:17:40.560 if you look at the healthcare space, if you look 0:17:40.560 --> 0:17:44.040 at pharmaceuticals, if you look at utilities, telecom in fact too, 0:17:44.240 --> 0:17:46.360 those areas have stepped up in times when there has 0:17:46.400 --> 0:17:49.880 been this general fullback area, the general pullback sty attitude 0:17:49.920 --> 0:17:52.119 in the marketplace. But the reality is that over the 0:17:52.160 --> 0:17:54.640 long term, it's tech that's going to provide that long 0:17:54.720 --> 0:17:57.760 term growth potential. And so while tech does stay weak here, 0:17:57.960 --> 0:18:00.440 say in the next short term period, there's going to 0:18:00.440 --> 0:18:02.760 be that long term appreciation in tech that we'll rebound 0:18:02.920 --> 0:18:05.040 and we'll reward investors that take a stake in some 0:18:05.080 --> 0:18:05.719 of these names. 0:18:06.040 --> 0:18:08.280 So is it going to be about a return to 0:18:08.760 --> 0:18:11.960 a fundamental thesis here, the idea of fundamentals coming back 0:18:11.960 --> 0:18:15.560 into play, or is there going to be the need 0:18:15.760 --> 0:18:18.760 for the FED to support this market. 0:18:19.720 --> 0:18:21.639 That's the greatest question that we all are waiting for, 0:18:21.680 --> 0:18:23.520 is that we have a FED meeting coming up in December. 0:18:23.520 --> 0:18:25.359 And in my opinion, I've been one of those that's 0:18:25.359 --> 0:18:26.840 been out there saying the FED shoon out of cut 0:18:26.880 --> 0:18:28.639 rates the last two times in fact, and so I 0:18:28.640 --> 0:18:31.840 believe the FED is definitely being relied upon by the 0:18:31.880 --> 0:18:34.560 markets by certainly the administration to come in and see quote 0:18:34.600 --> 0:18:36.879 unquote as you use the words save this market. And 0:18:36.920 --> 0:18:39.400 it's laty to think about that because if you line 0:18:39.440 --> 0:18:42.040 that up with a fundamental story that you initiated there, 0:18:42.359 --> 0:18:44.480 what really is the FED doing here? Because yes, there's 0:18:44.520 --> 0:18:47.080 been some forced liquidation here. There's been some concerns of 0:18:47.200 --> 0:18:49.879 late about bank credits, about private credit and things like 0:18:49.920 --> 0:18:52.760 that being way too extended. It certainly interest rates being 0:18:52.800 --> 0:18:54.960 too high, I guess, But then again, we still have 0:18:55.000 --> 0:18:58.879 inflation that is not teamed considerably. Inflation that's around her 0:18:58.880 --> 0:19:01.240 about three percent floss. We're supposed to get to two percent, 0:19:01.560 --> 0:19:03.160 never got there. That was the target of the three 0:19:03.200 --> 0:19:07.679 Reserve and Jerome Pal's commentary. We also have GDP growth now, Nathan. 0:19:07.680 --> 0:19:10.320 That's certainly above where it was some months ago when 0:19:10.359 --> 0:19:12.840 the FED was concerned about cutting rates to help support 0:19:12.840 --> 0:19:16.280 the economy. GDP growth for our projections for both Q 0:19:16.400 --> 0:19:19.120 four and some of the first parts of Q one 0:19:19.160 --> 0:19:21.439 and two for twenty twenty six looks like it's going 0:19:21.480 --> 0:19:22.560 to be in the range of three and a half 0:19:22.600 --> 0:19:25.520 to four percent. And so with job growth obviously being 0:19:25.520 --> 0:19:27.840 recently strong as we put too a little pause in 0:19:27.880 --> 0:19:29.600 the job on the job numbers are the last couple 0:19:29.600 --> 0:19:31.320 of months we started to see those come in. It's 0:19:31.320 --> 0:19:33.439 our opinion that the economy is strong enough for the 0:19:33.440 --> 0:19:35.280 FED not to cut rates actually, and so the FED 0:19:35.520 --> 0:19:38.240 is going to probably have to be this red herring, 0:19:38.280 --> 0:19:40.919 if you will, or this savior in the face of 0:19:40.960 --> 0:19:43.920 this emotional investment period where I don't think that's necessary 0:19:43.960 --> 0:19:45.720 really for the FED to do that, and so I 0:19:45.760 --> 0:19:47.879 think actually what's going to end up happening is whether 0:19:47.920 --> 0:19:49.800 the FED cuts or not in December. That's not going 0:19:49.880 --> 0:19:53.160 to be a big I guess, patternshift or if you will, 0:19:53.200 --> 0:19:56.119 for our sake of things as investors ourselves, but it 0:19:56.160 --> 0:19:57.720